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During a pilot phase, the environment was used to test the eco-friendliness of decentralized ledgers.

The UK government has dismissed the idea of regulating the cryptocurrency sector like gambling. 

UK financial services minister Andrew Griffith told parliament’s Treasury Committee on Thursday that the finance ministry “firmly disagrees” with its recent recommendations to regulate retail trading and investment activity in crypto assets as gambling, Reuters first reported. The ministry wants to oversee the crypto industry in the same manner as other financial services, rather than positioning the country at odds with global regulators.

Regulating crypto like gambling would not address risk factors as demonstrated by the collapse of crypto exchange FTX last year, Griffith added.

‘Happy days’

The UK Treasury Committee made its recommendations in a May report which stated crypto assets like bitcoin and ether “have no intrinsic value and serve no useful social purpose” and should be regulated by the government as gambling instruments. 

Responding to the report, crypto trading firms, in a tongue-in-cheek way, questioned whether such a move would protect their profits from capital gains tax.”From a tax perspective: happy days for anyone invested in crypto because it is completely exempt from a tax perspective,” Nimesh Shah, chief executive of tax and accounting advisory Blick Rothenberg said in May.

The dismissal follows plans announced last month by UK Prime Minister Rishi Sunak to make the country a web3 hub. Sunak is keen on providing regulatory clarity regarding how crypto businesses should register and operate in the UK. “We must embrace new innovations like web3, powered by blockchain technology, which will enable start-ups to flourish here and grow the economy,” Sunak’s office said in a statement at the time.

© 2023 The Block Crypto, Inc. All Rights Reserved. This article is provided for informational purposes only. It is not offered or intended to be used as legal, tax, investment, financial, or other advice.

Canadian police have issued a public warning following what appears to be an emerging trend of home invasion-style robberies in the country targeting large crypto investors.

“The suspects appear to know the victims are heavily invested in cryptocurrency, know where they live and are robbing them in their own homes,” Jill Long, staff sergeant of Delta Police Investigative Services, said in a release published Wednesday by Delta Police and Richmond Royal Canadian Mounted Police (RCMP). Over the past year, several incidents have been reported in Delta and Richmond, where victims were holding “large amounts” of crypto, the police agencies said, without disclosing specific details.

In one case, an arrest has been made, and charges are being recommended. As for suspects’ modus operandi, in each case, they gain entry into victims’ homes by posing as delivery persons or people of authority. Once inside the homes, they seize crucial information that grants access to the victims’ crypto accounts, the police said.

They have asked crypto investors to remain vigilant and take necessary precautions to safeguard themselves and their assets.

Canada is one of the popular nations for growing crypto adoption. The country ranked 22nd in the Global Crypto Adoption Index by Chainalysis in 2022, up from 26th position in 2021 and 24th in 2020.

Canada’s regulatory approach to the crypto industry, however, has been strict, leading to the shutdown of several exchanges like Binance and Bybit in the country in recent months. Canada introduced new guidance in February, mandating crypto companies to seek approval from the Canadian Securities Administrators, subjecting them to rigorous due diligence checks.

© 2023 The Block Crypto, Inc. All Rights Reserved. This article is provided for informational purposes only. It is not offered or intended to be used as legal, tax, investment, financial, or other advice.

Chainlink launched its cross-chain interoperability protocol just a few days ago, in the hope of making it easier to send money between blockchains.

But the founder and CEO of Chainlink has far broader ambitions than simply linking public blockchains together. Sergey Nazarov anticipates that banks and financial institutions will roll out their own blockchains — likely controlled or permissioned in some ways — and that at some point the regulatory environment will let them connect to public blockchains like Ethereum.

And if this thesis is right, he argued, it could bring a huge amount of value to crypto.

“You have this public blockchain and internet of contracts primarily defined by DeFi, and you have this bank-chain world, which I think will be primarily defined by real-world asset tokens. The next stage will be getting these two worlds to overlap,” Nazarov told The Block in an interview at EthCC. “And when that happens, beyond the efficiencies and the gains for each of these groups, then you will see the blockchain industry as a whole, I think grow very, very rapidly by trillions of dollars.”

The recently launched protocol serves as a technical infrastructure designed to transfer tokens from one chain to another. It leverages the Chainlink network, which has a history of providing reliable data to blockchains typically from real-world data, such as pricing information. However, in the context of CCIP, the network facilitates the exchange of information between blockchains, steering the movement of assets in a secure manner. While the network is presently operational on the mainnet, it remains in an early access phase and is being tested in collaboration with crypto projects, including Synthetix and Aave.

The infrastructure has also already been trialed in the traditional banking system prior to its recent launch. Swift, the global inter-bank messaging network, and over a dozen financial institutions, have been exploring CCIP for instructing token transfers across public and private chains through the existing Swift messaging infrastructure.

“So I’ve been selling these banks blockchain stuff for about six, seven years. And the historical pattern has been that when there is a downturn in crypto prices, the banks lose interest. But this time is the first time after the four cycles that I’ve been through that this hasn’t happened. And I think the reason it hasn’t happened is because their clients want blockchain stuff,” Nazarov said.

Why will banks need their own blockchains?

Based on Chainlink’s work dealing with Swift and banks, Nazarov explained why he thinks banks will build their own blockchains. 

Nazarov claimed there are three stages of bank adoption. Stage 1 focuses on custody, and entails simply looking after crypto assets (driven by customer trading demands) on their native chains. Stage 2 encompasses tokenizing real-world assets, in a similar way to making derivative assets, which raises the question: onto which chain will these assets be placed? Nazarov contended that this juncture is when banks recognize the need to establish their own chains to exert full control over their tokenized real-world assets.

Pointing to banks that have set up their own digital asset departments, Nazarov observed, “And what all of those departments are coming to as a conclusion is we have to have our own app chain because why am I going to pay fees to some other one, some other person’s chain? I’ll just have my own chain.” He argued that this is when banks realize they should create their own chains to have complete control over their own tokenized real-world assets.

Stage 3 emerges when banks start the development of financial protocols on their proprietary chains, essentially mirroring the contemporary DeFi landscape but within a tighter, regulated framework. This is where Nazarov reckons Chainlink will come in.

“In that third stage, they’re invariably going to be dealing with us because we power the vast majority of DeFi. They’re going to need market data, they’re gonna need identity data, they’re gonna need automation, they’re going to need functions. All the stuff we make, they’re going to need,” he said. “I know that because I’ve already seen a lot of the designs, and the designs are basically copying the DeFi [protocols] we already power.”

Nazarov also posited that stablecoins could serve as the entry point. He found it notable that Societe Generale developed a stablecoin and put it on a public blockchain. He anticipated that in the future, all banks will introduce their own stablecoins that will operate cross-chain. Nazarov predicted these banks might choose CCIP as they will want their stablecoin used in as many places as possible.

How value could flow to crypto

Should banks build their private blockchains, complete with their own stablecoins and DeFi protocols, a pressing question emerges: Will these chains operate in isolation, or will they connect to the current spectrum of public blockchains, possibly through technologies like CCIP? Nazarov believes the two worlds will eventually merge, but only once regulations have evolved sufficiently.

“So what we’re doing is we’re setting up the technical foundation for them to do it technically, and then doing it legally is something they’re going to work through and figure out within the next three to five years,” he said.

Nazarov elaborated that banks would aim to interconnect their chains to amplify the reach of their financial products. He emphasized that banks could only market such products on chains they are linked to, underscoring the importance of tools like CCIP that enable asset transfers across diverse chains.

He further noted that, as soon as regulations permit, banks would be inclined to link with public blockchains if they present more lucrative market opportunities. He posited that if a bank could fetch a 5% higher return for an asset on a public blockchain compared to traditional banking chains, then they would likely do so.

Nazarov referenced the current experiments that Chainlink is working on with financial institutions. He said the second proof of concept is going successfully and that typically the next stage is to go to a pilot. “If we go to a pilot with real value moving between different bank chains, I mean, then the sky’s the limit.”

© 2023 The Block Crypto, Inc. All Rights Reserved. This article is provided for informational purposes only. It is not offered or intended to be used as legal, tax, investment, financial, or other advice.

The share of bitcoin trade volume on Japanese exchanges rose from 69% to 80% in the first six months of the year, data tracked by Kaiko show

The CCIP protocol is designed to help build cross-chain applications and services and went live for early access users on the Avalanche, Ethereum, Optimism and Polygon blockchains this week.

The National Unity Government bank is set to run on Polygon and do currency swaps via Uniswap v3 pools and USDT stablecoins.

The Treasury says it has learned lessons from FTX’s collapse, and that gambling law doesn’t deal with crypto risks.

French officials boast of crypto-ready laws that contrast with a stuttering enforcement campaign from the U.S. SEC – and are looking to the next generation of Web 3 gaming rules.

Administrators for FTX are seeking to recover more than $71 million from the bankrupt exchange’s philanthropic and life science arms.

The FTX Foundation, and Sam Bankman-Fried’s Latona life sciences fund, received around $71.5 million from FTX and Alameda Research.

Investment was made in the life sciences field, between February and October 2022, in companies such as Lumen Bioscience, GreenLight Biosciences, Genetic Networks and 4J Therapeutics.

Donations were for ‘personal aggrandizement’

In an effort to recover funds for creditors, lawyers representing FTX administrators argue these donations were made “for Bankman-Fried’s personal aggrandizement.”

“The FTX Foundation was the philanthropic arm of the FTX group of companies, and Latona was a sham non-profit company organized in the Bahamas. Together, the FTX Foundation and Latona took over $71 million of commingled funds from Alameda and FTX accounts to make investments in and donations to life sciences companies for Bankman-Fried’s personal aggrandizement,” court documents filed on Wednesday stated.

“While purporting to make these investments for altruistic purposes Bankman-Fried in fact pursued these transactions because he believed that doing so would generate goodwill and amass political capital and influence for himself,” the filing added.

Efforts to recover funds for creditors continue

This is the latest move by the bankrupt firm to recover funds for its customers. Last month, Alameda Research’s lawyers sought the recovery of $700 million that was allegedly transferred by Bankman-Fried to a former aide of Hillary Clinton and the investment firm K5 Global, in 2022. The lawsuit names K5 Global, Mount Olympus Capital, and SGN Albany Capital, as well as affiliated entities and K5 Global co-owners Michael Kives and Bryan Baum, as defendants.

It claims Bankman-Fried sent millions to Kives, K5 Global, and Baum after he attended a social event hosted by Kives in 2022.

“True to Kives’s reputation as a high-profile ‘super-networker,’ the attendees at the dinner party included a former presidential candidate, top actors and musicians, reality TV stars and multiple billionaires,” the suit said.

© 2023 The Block Crypto, Inc. All Rights Reserved. This article is provided for informational purposes only. It is not offered or intended to be used as legal, tax, investment, financial, or other advice.