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Weekly Round-up of Cryptocurrency News 18/03/2022

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  • Optimism aims to invest in hiring following the conclusion of a Series B funding round
  • A FinCEN rep has said it is impossible to move large scale amounts of funds via crypto to avoid sanctions
  • Meta could be legally charged for allowing misleading crypto ads on Facebook that falsely portrayed support by celebrity figures in Australia
  • Sberbank has been licensed to issue and exchange virtual assets in Russia
  • GameStop fans will by the end of July exchange NFTs for free on the retailer’s marketplace

Ethereum L2 scaling solution Optimism raises $150M in a Series B funding round

Optimism, an Ethereum layer two scaling solution, has completed a $150 million Series B funding round co-led by giant venture capital firms Paradigm Capital and Andreessen Horowitz (a16z) at a $1.65 billion valuation. Notably, a16z also led the previous raise last year in February – Series A, which collected $25 million.

According to a blog post published by Optimism, the finances raised in this round will go towards hiring in different spaces such as engineering, marketing, legal, finance, among others.

Optimism is one of several scaling solutions that have come up in recent years with the growth of decentralised application functionality and the boom of the NFT market space. These l2s are designed to ‘defy’ the high gas fees and low performance that the base Ethereum chain suffers.

Optimism launched in 2020 and uses optimistic rollups to bundle up transactions so as to gain improved transaction throughput and a reduced cost of transaction.

It has been recently working on reducing the complexity of its code as it works towards achieving ‘EVM-equivalence.’ The scaling solution aims to eliminate the need for developers to alter their products to become Optimism-compatible.

Russia’s largest bank licenced to issue and exchange digital assets

Sberbank, which was recently forced to exit the European markets due to economic sanctions placed on Russia by the US and its affiliates, has received a license from the Bank of Russia to issue and facilitate the exchange of digital assets.

The approval comes barely two months after the central bank advocated for a blanket ban on the digital assets – their mining, trading and use. Sberbank had applied for its license back in January 2021 and sought to provide its corporate clients with exposure to cryptocurrencies.

It set out to launch its native stablecoin that would enable firms to leverage smart contract functionality via the Hyperledger Fabric blockchain.

Notably, in its stablecoin initiative, Sberbank had said it was working with Wall Street bank JPMorgan & Chase. With the stretch of the sanctions on ‘anything’ Russia, its still unclear how the initiative will be affected.

The absence of liquidity makes digital assets unsuitable for evading sanctions, FinCEN rep

The US has remained keen to ensure that Russia cannot evade the weight of the sanctions – it must bear it all.

A huge concern that has consistently remained is the role of crypto in facilitating evasion of the said penalties. Big enough that it was widely discussed during Thursday’s sitting of the Senate Bank Committee – Understanding the Role of Digital Assets in Illicit Finance.

Current deputy director and digital innovation officer of the Financial Crimes Enforcement Network (FinCEN) Michael Mosier told the committee hearing that the lack of liquidity makes it impossible to simply switch the rails for an economy as large as Russia’s from fiat to crypto.

President of Blockchain Association of Ukraine Michael Chobanian concurred with the FinCEN rep. Chobanian, also the Kuna Exchange founder, explained that “it’s impossible, physically impossible,” to move large amounts of cash between fiat and crypto.

Chainalysis co-founder and chief strategy officer Jonathan Levin, who was also in attendance at the committee sitting, said that there isn’t yet any evidence to suggest that Russia or its president is actively using crypto to evade transactions. Chainlaysis is one of the most widely-reaching blockchain analytics platforms.

Meta (Facebook) is facing legal action from Australian watchdog over crypto ads

Facebook has gotten on the wrong side of the Australian Competition and Consumer Commission (ACCC). Today, the latter published a statement revealing that it has started legal proceedings against Meta, the social media mammoth housing Facebook.

The Aussie regulator alleges Facebook “engaged” in misleading advertisements that falsely portrayed Australian celebrity figures, including TV personality David Koch and retail entrepreneur Dick Smith, with the intent of scamming or defrauding unknowing members of the public.

The ACCC, through its chair Rod Sims insisted that Meta is responsible for the nature of content in the advertisements it publishes. He further complained that while the social media subsidiary (Facebook) was aware of the crypto advertisement scams, it did not take the appropriate measures to contain them.

The ACCC chair noted that Meta uses tech that enables them to target the most ‘vulnerable’ users who would likely click on the ads, which has in the past exposed Australians to “ruthless scammers.

The consumer protection commission also specified one instance in which a user lost as much as $480,000 (650,000 AUD). With all this, the ACC wants “declarations, injunctions, penalties, costs and other orders” against Facebook for violation of the Australian Securities and Investments Commission Act (ASIC) or the Australian Consumer Law (ACL).

GameStop confirms its marketplace is coming this July

Video game retailer GameStop has confirmed that its NFT marketplace is coming at the tail end of July. GameStop established this time frame in its fiscal fourth-quarter earnings report.

The consumer electronics firm had revealed last month that it was collaborating with Ethereum layer two NFT platform Immutable X to develop an NFT marketplace. In the recently released Q4 report, GameStop said it had created a fund worth $150 million of IMX, the official crypto token of Immutable X. A portion of the fund would go towards financing creatives and developers.

GameStop shifted its strategy going into the current year in an attempt to revive its ailing video game business. The Wall Street Journal said that the company had resolved to explore crypto and NFT plans to edge a profit.

Following the price pump led by Reddit traders last year, its stock recovered from a poor extended run. The game-selling company hopes that an NFT marketplace to serve gamers/ crypto enthusiasts would help keep its stock up for another run. Notably, the marketplace would allow users to exchange NFTs at no cost.



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