Here are the leading cryptocurrency and decentralised finance headlines that you might have missed this week
Kraken to pay $1.25 million fine for trading violations
Crypto exchange Kraken is set to pay a $1.25 million fine for allegedly offering unregulated crypto products to consumers. A statement released on Thursday by the CFTC also said that Kraken had been ordered to cease and desist from any further violation of the Commodity Exchange Act.
The issue stems from the CTFC’s findings which showed that Kraken had offered marginal trading to its customers between June 2020 and July 2021. Kraken is charged with various irregularities such as forcing liquidation if repayments were not done within 28 days.
Speaking in regards to the decision, Acting Director of Enforcement Vincent McGonagle of the CFTC said that the action was part of the regulator’s broader efforts to protect consumers. He also added that margin digital asset trading in the US had to comply with the set laws and regulations.
Despite reaching an agreement with the regulators, Kraken has not admitted or denied being guilty. The exchange instead offered a statement in response, saying that it remains dedicated to working with regulatory bodies to level the crypto playing field around the world.
FINMA approves first crypto fund in Switzerland
Crypto Finance became the first entity to gain approval from the Swiss Financial Market Supervisory Authority (FINMA). The Swiss regulator confirmed on Wednesday via a statement that the firm would be offering the “Crypto Market Index Fund”, administered by PvB with custody held by SEBA Bank.
FINMA also said that it has implemented requirements to ensure that the firms it approves are able to wade through the waters of the crypto markets’ risks. For instance, for a firm to gain approval, it must only invest in established crypto assets that have a satisfactorily high trading volume. Further, such a firm would be required to ensure investments are made via counterparties and platforms located in a member country of the Financial Action Task Force, and the approved firms would also be subject to anti-money laundering laws.
The regulator is also keen to apply the present laws around financial markets in a “consistently technology-neutral way” to improve innovation in the country while also ensuring that developing technologies are not used to skirt regulations.
Cardano invests $100 million into DeFi and NFT development
Speaking on Sunday during the Cardano 2021 Summit, Ken Kodama, the CEO of Emurgo, Cardano’s commercial arm, said that the project would be investing $100 million to hasten the development of Cardano’s ecosystem. Kodama also confirmed that from next year, the firm would establish “a dedicated operation” to fund the blockchain ecosystem.
The move would be potentially impactful given that Emurgo has been an integral part of Cardano's engagements with government agencies, developers, start-ups and other enterprises. Being a core contributor to the development of the Cardano ecosystem, users hope that the investment will help scale up use cases of the ecosystem.
Additionally, since the blockchain has been smart contract compatible since the Alonzo upgrade, the injection of cash may also help Cardano develop its own decentralised finance (DeFi) and non-fungible token (NFT) projects. Cardano also plans to use the funds to enhance blockchain awareness. The investment vehicle will be split into Emurgo Ventures and Emurgo Africa. Emurgo Africa will support over 300 start-ups in Africa, while Emurgo Ventures will focus on other developed markets.
Alibaba suspends sale of crypto miners
e-commerce giant Alibaba put forward an announcement on Monday confirming that it was stopping the sale of crypto mining equipment. Alibaba added that it would also place restrictions on any software, tutorials and strategies involved in virtual currencies. The ban takes effect on 8 October, but Alibaba said it would only start punishing any third parties who break the ban from 15 October.
The announcement came in response to China’s decision last Friday, when it stated that all crypto activity in the country had been outlawed. The People’s Bank of China alongside other regulatory bodies reached this anti-crypto decision while warning that entities that offered offshore crypto exchange services to Chinese citizens would be violating the law.
On Tuesday, Bitmain added to the list of firms whose operations have been affected as sources told CoinDesk that the manufacturer was planning to halt sales in China and move a significant portion of operations out of the Shenzhen region. Bitmain will now be seeking investment in more crypto-friendly environments where it has already made inroads, such as Georgia in the US and Istanbul, Turkey.
Europe is the world’s largest crypto market, Chainalysis
Countries within the European continent recorded more than $1 trillion worth of inbound crypto transfers for the period ranging from June 2020 and July 2021, according to a Chainalysis report released on Tuesday. This sum represented 25% of the total global activity and saw the Central, Northern and Western Europe (CNWE) region jump to the top spot, as a result of incredible growth and reduction in activity in Eastern Asia.
Chainalysis attributed the growth to an influx of institutional investors, given that the figures for institutional investment in the region scaled from $1.4 billion in July 2020 to an incredible $43.6 billion in June this year. The growth was led by the UK, which saw $170 billion worth of crypto assets traded into the country, with almost half of the amount, 49%, coming from DeFi protocols.
The report showed that DeFi is slowly becoming integral to this market, considering that it held a significant chunk of the large institutional-sized transfers within the observed period. In fact, DeFi has consistently had three to four of the top five services in most months within the said period. It also highlighted how investors have now increasingly started shifting towards ‘staking’ their crypto via DeFi protocols.