Web 3 With FTC for February 10th - " DeFi Unites, Crypto Exchanges Reign, ETH Staking, Small Bitcoin Addresses Soar, DCG Shakes Up, Signature Bank Lawsuit, ConsenSys Backs IRS Lawsuit, JPMorgan Predicts Crypto & Blockchain Boom
"Welcome to Web3 with FTC For February 10th by Fintech Confidential, the place where we keep you up-to-date on the latest developments in the world of Web3, Crypto, Blockchain, NFTs, and Fintech.
"Get ready for some fresh and thrilling insights on the crypto and blockchain world right here on Web3 with FTC! No more stale, regurgitated stories. We've got the hottest and newest updates for you."
Top stories for today.
1️⃣ DeFi protocols unite to promote permissionless Web3 experiences,
2️⃣ Despite Bankruptcies Crypto Users still like Exchanges more than Wallets
3️⃣ Ethereum Testnet Processes First ETH Staking Withdrawals
4️⃣ Bitcoin Small Addresses Have Been Rapidly Growing; what does It Mean?
5️⃣ Digital Currency Group Announces Major Shake-Up: Genesis Trading and Lending Arms to be Sold
6️⃣ Class-action lawsuit alleges Signature bank ‘permitted’ FTX commingling customer funds
7️⃣ ConsenSys Backs Lawsuit Against IRS Over Taxing Staked Crypto
8️⃣ JPMorgan Institutional Survey Says Crypto and Blockchain To Soar in Prominence This Year
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This is a production of Diamond D3 Media, with All Rights Reserved. This is provided for informational purposes only. It is not offered or intended to be used as legal, tax, investment, financial, or other advice. We strive to provide accurate and up-to-date information but will not be responsible for any missing facts or inaccurate information. You comply and understand that you should use any of this information at your own risk. Cryptocurrencies are highly volatile financial assets, so research and make your own financial decisions.
ABOUT:
Tedd Huff: President & Founder of Diamond D3, a professional services consulting firm focused on global payments and marketing. He is also a video podcast host and producer of Fintech Confidential and Head of Corporate Strategy at Corvia.
Over the past 24 years, he has contributed to FinTech startups as an Advisory Board Member, Co-Founder, and Chief Experience Officer, providing strategic and tactical direction for Global Payments OpenEdge, Heartland Payments, Nuvei, and TSYS, among others, focusing on growth while delivering innovation, process improvements and user experience-driven value to simplify the complexity of payments.
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Transcript
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Speaker:Welcome to Web3 with FTC by Fintech Confidential, the place where we
Speaker:keep you up-to-date on the latest developments in world of Web3,
Speaker:Crypto, Blockchain, NFTs, and Fintech.
Speaker:"Get ready for some fresh and thrilling insights on the crypto and blockchain
Speaker:world, right here on Web3 with FTC!
Speaker:No more stale, regurgitated stories, we've got the hottest
Speaker:and newest updates for you."
Speaker:we've got some juicy insights from the folks over at JPMorgan.
Speaker:They're saying that despite a bit of a slowdown in the crypto trading world,
Speaker:electronic trading activity is set to skyrocket this year!.The Global Head
Speaker:of FICC e-Sales, Scott Wacker, says we're about to witness a revolution
Speaker:in the electronic and automation space, with clients getting more and
Speaker:more choices in execution options.
Speaker:It's all about the Dee Fi space!
Speaker:Over 30 projects have teamed up to promote the beauty of Web3 - it's
Speaker:permissionless, interoperable, and here to take on traditional finance.
Speaker:That's right, Dee Fi is coming for you, traditional finance!
Speaker:But don't worry; it's all in the name of providing safer,
Speaker:more transparent financial tools to people all over the world.
Speaker:And in case you were wondering, despite the recent bankruptcy drama
Speaker:in the centralized crypto world, users still prefer exchanges over wallets.
Speaker:But the demand for better security and convenience in wallet
Speaker:solutions is growing by the minute.
Speaker:Ethereum just had a major upgrade, and the testnet has processed its
Speaker:first ETH staking withdrawals.
Speaker:Some traders think this will encourage more staking, while
Speaker:others are predicting a price drop.
Speaker:The market is always a wild ride.
Speaker:Small Bitcoin addresses are rapidly growing, indicating increased interest
Speaker:in the king of cryptocurrencies.
Speaker:Keep an eye on that, because it could have a big impact on the market.
Speaker:We also have some big changes happening at the Digital Currency Group.
Speaker:They're selling off their Genesis trading and lending arms, but
Speaker:unfortunately for Earn users, that means their assets might not be recovered.
Speaker:It wouldn’t be Web3 without some legal drama!
Speaker:A class-action lawsuit has been filed against Signature Bank over the alleged
Speaker:commingling of FTX customer funds.
Speaker:And in a separate case, a Tennessee couple is suing the IRS over taxing
Speaker:staked cryptocurrency, and they just received support from ConsenSys.
Speaker:This one's headed to a federal appellate court for consideration
Speaker:Stay here for the rest of the story, right here on Web3 with FTC."
Speaker:A major development in the decentralized finance (DeFi) ecosystem, where over
Speaker:30 DeeFi projects have come together to showcase the incentive behind
Speaker:operating trustless, interoperable, and permissionless platforms.
Speaker:This collaboration is an effort to counteract the negative sentiments
Speaker:built in 2022 due to numerous CeeFi ecosystem crashes and to
Speaker:rebuild trust among investors.
Speaker:For 24 hours from Feb.
Speaker:6 to 7, these DeFi protocols joined in an initiative to “permissionlessly”
Speaker:share tweets from other protocols.
Speaker:The projects participating in this campaign include Yearn finance, Maker
Speaker:Dao, SushiSwap, and Aavee, among others.
Speaker:The projects collaborating in the campaign defined the “spirit” of DeeFi
Speaker:as a more collaborative ecosystem, rather than a competitive one.
Speaker:Jared Grey, the CEO of SushiSwap, said DeeFi is being built to challenge the
Speaker:current status quo of known financial frameworks, which historically create
Speaker:barriers and reduce economic freedom.
Speaker:He added that the responsibility to portray the true message of DeFei
Speaker:comes first from within the space.
Speaker:Mamun Rashid, the Chief Marketing Officer at Maker Dao said that to realize
Speaker:the “full potential” of DeeFi, there needs to be a collaboration between
Speaker:the ideas and expertise in the space.
Speaker:He said, "Together, we can push the boundaries of traditional finance and
Speaker:build a more inclusive and accessible financial system through DeeFi."
Speaker:Despite the mainstream acceptance of DeeFi, it still has a shaky
Speaker:reputation due to its many exploits.
Speaker:Over the last year, the DeeFi space was a major target for exploits, leading
Speaker:to a 47.4% rise in security losses in 2022 compared with the previous year,
Speaker:which totaled $3.64 billion in losses.
Speaker:However, the space started the year with significant growth,
Speaker:according to a Dapp Radar report.
Speaker:In January, a new $150 million ecosystem fund was created by Injective
Speaker:to boost DeeFi and Cosmos adoption.
Speaker:This collaboration between over 30 DeeFi projects is a significant
Speaker:step in promoting the permissionless and interoperable nature of Web3.
Speaker:It showcases the collaborative spirit of the DeeFi ecosystem and sends
Speaker:a strong message to the world that DeeFi is here to challenge the current
Speaker:status quo of traditional finance and to provide more equitable, safer,
Speaker:and transparent financial tools and products to a global audience.
Speaker:We hope that this initiative will help rebuild trust among investors
Speaker:and pave the way for a more secure and stable DeeFi ecosystem.
Speaker:Next up
Speaker:In a recent research report by imToken, which found that despite the recent
Speaker:collapse of crypto heavyweight FTX, and other Bankruptcies; Crypto Users
Speaker:still like Exchanges more than Wallets.
Speaker:According to the poll, 63% of respondents believe trading on exchanges is easier or
Speaker:less expensive than trading on wallets.
Speaker:Notably, 38% of users thought wallets were less secure than exchanges,
Speaker:citing worries about being hacked or losing cryptocurrency by accident.
Speaker:However, more than 40% of the customers surveyed said they would spend up to $100
Speaker:for a wallet to address these problems.
Speaker:While more than 25% of users surveyed believe that people will
Speaker:begin converting to self-custody in the next 5 years, a quarter of
Speaker:users think that custodial solutions will still be the norm in 10 years.
Speaker:The majority of poll respondents, 51%, said they would choose a new
Speaker:wallet if it offered better security with multifactor authentication.
Speaker:Despite the difficult last quarter for centralized crypto platforms, the report
Speaker:reflects surprising user preferences.
Speaker:According to a previous study by Chainalysis and Bitfinex, the number
Speaker:of thefts and the total amount taken from centralized exchanges
Speaker:has decreased by around 58%.
Speaker:despite the recent collapse of FTX and other centralized crypto platforms, users
Speaker:still prefer exchanges over wallets due to ease of use and perceived security.
Speaker:However, there is still a significant demand for better security and
Speaker:convenience in wallet solutions.
Speaker:the latest developments in the Ethereum ecosystem as the
Speaker:Zhejiang testnet processes its first ETH staking withdrawals.
Speaker:The upgrade on the Zhejiang testnet was the first of three dress rehearsals for
Speaker:the much anticipated Shanghai hard fork.
Speaker:The test network successfully simulated withdrawals of staked ether (ETH),
Speaker:bringing the second-biggest blockchain closer to its transition to a
Speaker:fully-featured proof-of-stake network.
Speaker:The Zhejiang testnet is the first of three testnets that will simulate the
Speaker:Shanghai upgrade, allowing developers and users to test the code changes to their
Speaker:applications in a low-stakes environment.
Speaker:The next testnet upgrade will happen in the coming weeks with
Speaker:the Sepolia and Goerli testnets.
Speaker:The Shanghai upgrade is the first hard fork for Ethereum since its transition
Speaker:to a proof-of-stake network in September.
Speaker:The transition made Ethereum more energy-efficient and secure, as
Speaker:cryptocurrency is staked on the blockchain to help secure transactions.
Speaker:However, until the Shanghai upgrade, the staking mechanism is one-way - users
Speaker:can put ether in but can't take it out.
Speaker:The upgrade has become a highly anticipated event for the
Speaker:crypto community, with traders paying close attention to its
Speaker:potential impact on the market.
Speaker:Some traders believe that the upgrade will encourage more staking, while
Speaker:others anticipate a price drop due to sell pressures when stakers rush
Speaker:to withdraw their long-held funds.
Speaker:Data from on-chain analytics firm Santiment shows that the recent
Speaker:rise in the number of small Bitcoin addresses on the network has increased
Speaker:by 620,000 new small addresses on the network since the 20th of last month.
Speaker:The indicator in question is the "BTC Supply Distribution," which measures the
Speaker:number of Bitcoin addresses that fall inside each wallet group in the market.
Speaker:The wallet group of interest here is the 0 to 0.1 coins band, which covers all
Speaker:small investors in the Bitcoin market.
Speaker:This data can tell us about the general interest in the crypto currency and
Speaker:whether it's attracting new users.
Speaker:In the second half of 2022, the Supply Distribution's value for the 0 to 0.1
Speaker:coins cohort moved sideways, indicating a lack of new small investors entering
Speaker:the network due to the dull bear market.
Speaker:However, following the collapse of crypto exchange FTX in November, the
Speaker:number of wallets falling into this band saw a rapid rise, likely due to
Speaker:the volatility and potential bottom.
Speaker:Although the increase didn't last long, the indicator has seen fresh
Speaker:growth again since the start of 2023.
Speaker:Around 620,000 new Bitcoin addresses belonging to small investors
Speaker:have appeared since BTC reclaimed the $20,000 level in January.
Speaker:This suggests that the latest rally has encouraged new investors to enter the
Speaker:market, and trader optimism has returned to the Bitcoin network this year.
Speaker:Know that the rise in small Bitcoin addresses on the network is a positive
Speaker:sign for the market and shows increased interest in the cryptocurrency.
Speaker:As always, it's important to keep an eye on these indicators and
Speaker:how they may impact the market.
Speaker:.
Speaker:with key creditors that would see the sale of the crypto lending
Speaker:and trading arm of the company.
Speaker:Barry Silbert’s Digital Currency Group (DCG) will exchange its existing
Speaker:$1.1bn promissory note for convertible preferred stock issued by DCG.
Speaker:DCG will also refinance existing 2023 term loans with a new term loan made payable
Speaker:to creditors worth approximately $500m.
Speaker:Genesis Global Trading will be contributed to a holding company called Genesis
Speaker:Global Holdco, effectively selling off the crypto lending and trading arm of Genesis.
Speaker:Crypto exchange Gemini will contribute $100m to its Earn clients under the deal.
Speaker:The agreement is set to maximize value for all Genesis clients and
Speaker:stakeholders, and will bring all Genesis entities under one umbrella.
Speaker:However, the deal means that Earn users will not recover their assets.
Speaker:The shake-up is part of the solution for Genesis’ bankruptcy under
Speaker:Chapter 11 of the US Bankruptcy Code, which was filed on January 19.
Speaker:Signature Bank, known for its crypto-friendly services, has been hit
Speaker:with a class-action lawsuit alleging its involvement in the operations
Speaker:of defunct crypto exchange FTX.
Speaker:The lawsuit claims that the bank permitted the commingling of FTX customer funds
Speaker:within its blockchain-based payments network and aided and abetted the FTX
Speaker:fraud and breach of fiduciary duties.
Speaker:Algorithmic trading firm Statistica Capital filed the lawsuit, stating
Speaker:that the bank was aware of its funds being intended for FTX and
Speaker:failed to prevent their transfer into Alameda-controlled accounts.
Speaker:Statistica further alleges that Signature Bank publicly promoted FTX, facilitated
Speaker:the exchange's fraud, and failed to close its accounts despite knowing
Speaker:they were being used in violation of the firm's terms and fiduciary duties.
Speaker:The firm claims that the bank's due diligence obligations revealed the FTX
Speaker:fraud, including during the onboarding process and ongoing monitoring of the
Speaker:exchange's accounts and operations.
Speaker:Signature Bank has responded to FTX's collapse by stating that the crypto
Speaker:exchange's deposits were less than 0.1% of its overall bank deposits and that
Speaker:it would reduce its deposits tied to crypto assets by up to $10 billion.
Speaker:More recently, Binance reported that the bank no longer supports
Speaker:crypto transactions below $100,000.
Speaker:The class-action lawsuit against Signature Bank highlights the increased scrutiny
Speaker:of financial institutions and their involvement in the crypto industry.
Speaker:the recent support from ConsenSys for an ongoing lawsuit challenging the IRS'
Speaker:ability to tax staked cryptocurrency.
Speaker:A Tennessee couple, Joshua and Jessica Jarrett, filed a lawsuit against
Speaker:the IRS in 2021, alleging that the federal income taxes levied on their
Speaker:staked Tezos should not be considered taxable income under federal law.
Speaker:Midway through the lawsuit, the IRS offered to issue a refund, but
Speaker:the couple refused, hoping for a court's assurance that the issue
Speaker:wouldn't arise in the future.
Speaker:However, the case was dismissed in October by a federal judge.
Speaker:Many in the crypto community were hoping the case would provide
Speaker:clarity on the taxation of staking rewards, which millions of users
Speaker:generate daily through proof-of-stake blockchains such as Ethereum.
Speaker:Staking involves locking up cryptocurrency with a network in exchange for
Speaker:newly generated cryptocurrency.
Speaker:ConsenSys, the blockchain technology company started by Ethereum co-founder
Speaker:Joe Lubin, is closely monitoring the case as the Shanghai upgrade will
Speaker:soon allow Ethereum users to withdraw ETH held through its staking program.
Speaker:Over $27 billion worth of funds are currently staked with the network,
Speaker:and with increased liquidity, more people are expected to start staking,
Speaker:making the proper tax treatment for staking rewards increasingly important.
Speaker:The Jarretts are currently appealing the dismissal of their case and ConsenSys will
Speaker:provide financial support for the effort.
Speaker:The core argument is that staking rewards should be considered "created property"
Speaker:under federal tax code and not taxed until sale, similar to a farmer who grows crops.
Speaker:However, most staking rewards on Ethereum are generated through a third party,
Speaker:such as centralized crypto exchanges like Coinbase, Binance, and Kraken.
Speaker:The case will now be decided by a panel of federal appellate court judges.
Speaker:To cap it off , the lawsuit challenging the IRS' ability to
Speaker:tax staked cryptocurrency has received support from ConsenSys.
Speaker:The case, brought forward by a Tennessee couple, will provide clarity on the
Speaker:taxation of staking rewards and has the potential to impact millions
Speaker:of users generating cryptocurrency through proof-of-stake blockchains.
Speaker:The case is now headed to a federal appellate court for consideration.
Speaker:In a recent survey conducted by JPMorgan, the global banking giant, shows that
Speaker:institutional traders believe that cryptocurrency and blockchain technology
Speaker:will become more mainstream in 2023.
The survey, "The e-Trading Edit:
:Insights from the Inside," reports
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:that 100% of the institutional traders surveyed expect to increase
The survey, "The e-Trading Edit:
:electronic trading activity this year.
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:According to the survey, "Crypto/Digital Coins," "Commodities," and "Credit" are
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:expected to have the largest increases in electronic trading volume over the
The survey, "The e-Trading Edit:
:next year, with "FX" following closely.
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:Despite this, when asked about their plans for trading crypto specifically,
The survey, "The e-Trading Edit:
:72% of traders surveyed said they have no plans to trade, with only 14%
The survey, "The e-Trading Edit:
:predicting they will trade within 5 years.
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:The survey's findings also indicate that institutional traders appear to be more
The survey, "The e-Trading Edit:
:bullish on artificial intelligence (AI) technology than on blockchain technology.
The survey, "The e-Trading Edit:
:When asked about which technology would be the most influential in shaping the future
The survey, "The e-Trading Edit:
:of trading over the next three years, 53% of traders predicted "Artificial
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:Intelligence/Machine Learning" technology would be the most influential, with "API
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:Integration" and "Blockchain/Distributed Ledger Technology" following closely.
The survey, "The e-Trading Edit:
:Despite a lower enthusiasm for crypto trading specifically, the results of
The survey, "The e-Trading Edit:
:JPMorgan's survey are positive for the future of electronic trading, with
The survey, "The e-Trading Edit:
:100% of traders surveyed predicting an increase As we wrap up today's
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:episode of Web3 with FTC by Fintech Confidential, remember that the regulatory
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:environment is still evolving, but the number of way Web3 could provide anew
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:and exciting alternative to traditional centralized prodcuts and aervices.
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:Thank you for joining us on this journey to discover the future of the web.
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:Today we've covered some of the biggest Web3 stories that are shaking up the
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:Web3 world and what they mean for you.
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:From JPMorgan Bullish report to lawsuits against the IRS and Signature Bank
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:to Digital Currency Group shake ups to leadign indictors of the bitcoin
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:market and teh permissionless web3 experience , we've explored the impact
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:these events are having on the industry and what you can expect in the future.
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:Thanks for tuning into “Web3 with FTC”, where we cover what’s behind the
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:disruptive and innovative world of Web3, Blockchain, Crypto, NFTs and Fintech.
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:And remember to follow us on our Telegram Channel, Linkedin, Facebook,
The survey, "The e-Trading Edit:
:and Instagram, and sign up for the latest news delivered straight to your inbox at
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:access dot fintech confidential dot com.
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:The most common cause of bad customer experience Isn't that high
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:tech it's embarrassingly simple.
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:Yup.
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:It's asking the right questions and reviewing some key data points
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:before delivering an answer.
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:Increasing the likelihood of satisfying the customer and
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:delivering a swift resolution.
The survey, "The e-Trading Edit:
:In ecommerce, it's really easy to get bogged down with basic support inquiries,
The survey, "The e-Trading Edit:
:whether that's where is my package, how do I return or exchange this item
The survey, "The e-Trading Edit:
:or just to cancel a subscription.
The survey, "The e-Trading Edit:
:And so what is Solvpath?
The survey, "The e-Trading Edit:
:In a nutshell, Solvpath is an A.I.-driven customer support system that uses a
The survey, "The e-Trading Edit:
:visual format and self-serve technology to quickly and effectively resolve
The survey, "The e-Trading Edit:
:issues, resulting in satisfying support experiences for customers.
The survey, "The e-Trading Edit:
:Customize a visual support experience for your ecommerce brands and
The survey, "The e-Trading Edit:
:increase your overall performance, enhance the customer experience and
The survey, "The e-Trading Edit:
:drastically reduce support costs.
The survey, "The e-Trading Edit:
:Get the best customer support system for your business.
The survey, "The e-Trading Edit:
:Get Solvpath.
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:Get started by visiting get solve path dot com
Emily:This has been a production of Diamond D3 Media,
Emily:with All Rights Reserved.
Emily:This is provided for informational purposes only.
Emily:It is not offered or intended to be used as legal, tax, investment,
Emily:financial, or other advice.
Emily:We strive to provide accurate and up-to-date information, but will
Emily:not be responsible for any missing facts or inaccurate information.
Emily:You comply and understand that you should use any of this
Emily:information at your own risk.
Emily:Cryptocurrencies are highly volatile financial assets, so research and
