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Ponzi schemes dominated the crypto crime landscape in 2022, with $7.8 billion funneled from victims, blockchain analytics firm said in a new report.

Bitcoin has held firm above the $30,000 level, as the market remains optimistic about a spot bitcoin ETF, but fresh tightening from the European Central Bank could spook investor sentiment.

On Wednesday the world’s largest digital asset by market capitalization was trading at $30,334 by 7 a.m. ET, up 4.9% in the past week, according to Coingecko. Ether gained 2.6% in the same period, trading at $1,861.

Crypto prices have been buoyed by news of a number of major financial institutions plotting bitcoin ETFs — including The Block’s report that Wall Street titan Fidelity is expected to file for a spot bitcoin ETF as soon as Tuesday. Fidelity’s filing would follow BlackRock’s June 15 application, as well as that of Invesco, WisdomTree and Bitwise.

“Bitcoin momentum remains intact as Fidelity joins the quest for the elusive bitcoin ETF with BlackRock, Invesco, WisdomTree, and Invesco. It has been about five years of steady denials of every crypto ETF filing, but now optimism is here that one of these financial giants will get one done before summer’s end,” Ed Moya, senior market analyst at Oanda, noted.

Digital asset fund flows spike

According to the latest digital asset fund flows report from CoinShares, last week saw the largest single weekly inflows since July 2022, totaling $199 million, recovering almost half of the prior nine consecutive weeks of outflows. Bitcoin was the primary beneficiary, seeing $187 million in inflows last week, representing 94% of the total.

However, the report added that this risk-on sentiment didn’t trickle down to altcoins, which saw only very minor inflows. “We believe this renewed positive sentiment is due to recent announcements from high-profile ETP issuers that have filed for physically backed ETFs with the U.S. Securities & Exchange Commission and total assets under management are now at $37 billion, their highest since before the collapse of Three Arrows Capital,” the report added.

Crypto headwinds gather

A major focus for investors this week will be Wednesday’s release of the results of the Federal Reserve’s annual stress test of banks. The yearly test is being especially closely watched this time, after three U.S. lenders failed since March. Questions linger about the ability of other institutions to withstand extreme stress.

Senior analyst at Oanda Craig Erlam said the test results could affect investors’ appetite for risk assets, such as bitcoin. “We still haven’t seen the full effects of tightening credit conditions following the mini-banking crisis and should we see signs of stress, traders may become more risk averse,” he told The Block.

Christine Lagarde in her opening speech at Monday’s ECB Forum said monetary policy in the Eurozone would remain restrictive until “we can be confident that the inflation process has been resolved… and we will continue to raise rates in July.”

The ECB president’s announcement comes after the Bank of England hiked its rate to 5.00% and suggested persistently high inflation in the UK would take longer to fall. With borrowing costs in such restrictive territory, Erlam highlighted the effect on crypto-markets, saying, “people are increasingly coming around to the idea that rates won’t quickly fall back and unless things improve soon, doubts over the economy will grow and that could undermine appetite for risky assets.”

© 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.

Bankrupt crypto exchange FTX is reportedly making a final push for its revival plans as it seeks submissions this week from interested parties.

Any party that wants to help finance or participate in the restart of FTX must submit initial indications of interest this week to the company and its advisers, the Wall Street Journal reported Wednesday, citing people familiar with the matter.

The restart could happen through structures including a joint venture, the report said, quoting unnamed sources. FTX would also likely rebrand as part of any restart, and certain existing users could get stakes in any reorganized entity, per the report.

A potential reboot

FTX, which filed for bankruptcy last November, has been looking to reboot its flagship international crypto exchange, FTX.com. Earlier this month, Kevin Cofsky, partner at investment bank Perella Weinberg Partners — which is tasked with exploring restructuring and capital market opportunities for FTX Group — said that the bank has reached out to a number of third parties about the idea of acquiring, investing into or reorganizing the FTX exchange.

“We have also already engaged in a significant outreach process with respect to solicitation of third party interest in participating in a process to either acquire, invest into or reorganize the FTX exchange and based on those conversations, again it’s our understanding that the existing customers are extremely valuable and valued by folks who would be interested in investing into a reorganized business,” Cofsky said at the time.

He added that the exchange would be regulatory compliant and that creditors would end up as equity owners of a significant portion — or all — of the exchange.

Earlier this year, over 100 parties were interested in buying FTX units, court documents at the time showed. Mike Cagney’s Figure, a blockchain technology company, has also indicated its interest in helping back a restart of FTX, per the WSJ report.

While FTX aims to revive its international exchange, it is reportedly uncertain whether its U.S. exchange, which represented a smaller part of its business, will resume operations. The revival efforts come at a time when regulators are scrutinizing the crypto sector, and recovering misspent customer funds has proven challenging for FTX.

FTX owed customers around $8.7 billion when it filed for bankruptcy last year, according to a new report from the FTX team released earlier this week. The team said it has made “substantial progress” in securing assets and has recovered about $7 billion in liquid assets so far.

© 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.

Horizen says it’s now simply a layer 0 blockchain after depreciating the shielded pools on its main chain.

As of July 15, new customers will be required to complete identification checks to use KuCoin’s services.

Conflux token’s dour reaction is consistent with the prevailing investor disinterest in alternative cryptocurrencies.

Horizen, a blockchain backed by Digital Currency Group (DCG) subsidiary Grayscale Investments, said it would remove support for shielded transactions on its mainnet in an effort to alter the status of its native cryptocurrency, Zen (previously ZenCash), from a privacy coin to a more general digital asset.

This change is slated to take effect with the mandatory software upgrade, Zen 4.1, scheduled for release on the mainnet in September 2023.

Horizen’s shift away from privacy features on its main chain is outlined in the recently approved ZenIP 42204. This proposal targets the elimination of support for shielding — a process involving transactions from transparent addresses to shielded addresses — at the consensus level, which includes the mempool and blocks.

Horizen’s new direction

The Horizen team emphasized that this change signifies its intention to alter the status of Horizen’s native asset. “ZEN will no longer be considered a privacy coin after the deprecation of the mainchain shielded pools. We are actively working with our exchange partners to keep ZEN accessible for our global users,” the team said.

This decision came in response to a global trend in which many privacy-focused cryptocurrencies are facing regulatory scrutiny and being excluded from major exchanges. In September 2022, Huobi Global announced it was delisting multiple privacy assets, Zen being among them. Just last month, Binance indicated it was planning to remove privacy-focused cryptocurrencies, including Zen, from its markets in certain European countries, but later partially reversed this decision. Furthermore, in regions like South Korea, trading of privacy coins on exchanges is already prohibited.

By removing the privacy features, the goal is to make Zen an asset that can be listed on a wider range of exchanges.

Zen is employed to reward network participants, cover transaction fees, and act as a stake for running a node within the Horizen ecosystem.

Grayscale is a digital currency investing firm that provides investors with exposure to digital currencies, such as Bitcoin and Ethereum, through traditional investment vehicles. Grayscale Investments offers a product called Grayscale Horizen Trust for investors interested in Horizen.

Notably, Horizen’s privacy strategy is not completely waning. The focus will be shifting away from privacy transactions on its main chain. At the same time, the network plans to use a sidechain that will support privacy features.

© 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.

Australia’s Treasury said on Wednesday it recognises the seriousness of de-banking and that it understands inaction could drive business underground after instances of banking partners cutting-off crypto platforms in the nation.

Miners sent more than $1 billion worth of bitcoin from their wallets to cryptocurrency exchanges over the last two weeks.

The currency outflows from miners suggest heightened trading activities and potential hedging strategies, according to the on-chain data analytics provider CryptoQuant, coinciding with the timing of BlackRock’s bitcoin ETF filing on June 15. The news was first reported by CoinDesk.

Approximately 33,860 BTC has been sent to derivatives exchanges, though most funds have since returned to the miners’ proprietary wallets. “This could signal that miners may be using their newly minted coins as collateral in derivatives trading activities,” CryptoQuant analyst Cauê Oliveira said. “A good example of this type of trading is known as hedging, which uses bets in the opposite direction to market consensus.”

Miners also saw an approximate 8,000 BTC reduction in their reserves during the period, CryptoQuant added, of which only a small amount was sent to spot trading venues.

Despite the $1 billion worth of transfers, as most coins are not going to spot exchanges, the activity does not significantly impact market selling pressure on the price of bitcoin, Oliveira said, with miners engaging in trading activities within the derivatives market rather than directly selling their holdings.

Yesterday, The Block broke the news that Fidelity is close to submitting its own filing for a spot bitcoin ETF, following similar submissions by Wisdom Tree, Bitwise, Invesco and Valkyrie in the race recently restarted by BlackRock.

Bitcoin is up over 20% since BlackRock’s filing, according to CoinGecko data.

© 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.

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