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Coinbase CEO Claims Non-Custodial Wallet Regulation is Bad for DeFi

In a lengthy tweet, the Coinbase boss has responded to Steve Mnuchin’s plans to rush out new regulations regarding self-hosted crypto wallets before the end of his term. The proposed regulations would require financial institutions and crypto exchanges to verify the recipient and owner of self-hosted or non-custodial wallets. In doing so, they would collect … Continued

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In response to rumors over potential new crypto regulations in the United States, Coinbase CEO Brian Armstrong has stated why this could be bad for the industry, especially decentralized finance (DeFi) which thrives on openness.

In a lengthy tweet, the Coinbase boss has responded to Steve Mnuchin’s plans to rush out new regulations regarding self-hosted crypto wallets before the end of his term.

The proposed regulations would require financial institutions and crypto exchanges to verify the recipient and owner of self-hosted or non-custodial wallets.

In doing so, they would collect identifying information on that party, before a withdrawal could be sent to it. It’s a form of KYC (know your customer) for decentralized wallets that would make them, well, not decentralized.

Detriment to DeFi

Non-custodial wallets are a key element of the DeFi ecosystem because they allow anyone, anywhere to use this new technology to access basic financial services. Armstrong added that the open nature of crypto and DeFi powers innovation and ‘levels the playing field globally:’

“It is what is fueling innovation, such as in Defi. It has the potential to bring down the cost of financial services, and improve accessibility.”

He stated that new identity tracking regulations would be impractical and a bad idea for a number of reasons.

In the case of DeFi, many crypto users and yield farmers send assets to smart contracts so they can use dApps in the ecosystem. A smart contract is not necessarily owned by any individual or business that could be identified to satisfy these new requirements.

In addition, many people now use crypto to make payments online to various merchants, so their identity would be revealed.

Some users in emerging markets that send or receive crypto may find it difficult to provide the required proof these new rules would demand. Armstrong concluded:

“Finally, many recipients (in the U.S. or abroad) who value their financial privacy, may simply not want to upload more identifying documents to various companies, which could be hacked or stolen.”

Coinbase: Walling Off the U.S. a Financial Risk

He stated that this would reduce the number of transactions between non-custodial wallets and crypto exchanges, such as Coinbase which recently halted margin trading, effectively eating into its profits.

It would also put a wall around the U.S., cutting off access to the innovation happening elsewhere. Armstrong added, “I believe this would put America’s status as a financial hub at risk.”

Some hope the new Biden administration would be more open to the crypto industry and its drive for financial innovation. There has been no further confirmation as to when these regulations would come into effect.

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Martin Young

Martin has been writing on cyber security and infotech for two decades. He has previous trading experience and has been actively covering the blockchain and crypto industry since 2017.

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Source: https://beincrypto.com/coinbase-ceo-claims-non-custodial-wallet-regulation-is-bad-for-defi/

Blockchain

Cardano Price Analysis: 28 January

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Disclaimer: The findings of the following analysis are the sole opinions of the writer and should not be taken as investment advice

Cardano‘s price seemed bullish over the medium to longer timeframes. However, switching to a lower timeframe of 1-hour highlighted the opposite. Although ADA was stuck inside a bearish pattern, a bullish breakout can be expected if Bitcoin keeps above its critical support levels. At press time, ADA was registering a -11% drop over the previous week, and more of this might be on its way.

Cardano 1-hour chart

Source: ADAUSD on TradingView

The 1-hour chart highlighted that ADA bounced off the lower trendline of the parallel channel and surged by approximately 10% in the last 10 hours or so. The crypto’s price faced rejection at $0.3318, with the same heading back to the lower trendline.

The cryptocurrency’s price might find intermediate support around the $0.3237-price level, and it could head higher to retest the aforementioned resistance level or head lower.

Moreover, the price charts showed that its way up north was being prevented by two declining trendlines [green and pink], both of which were acting as resistance levels to the price’s upswings. A successful close above the pink line would provide ADA the opportunity to head higher.

Although premature, it would be better to long the price as it faces rejection at the $0.3318-level. The following surge would be worth around 16% and the target will be $0.3597.

Conclusion

A successful breach of the pink line at around $0.3345 and a retest would be the perfect theoretical scenario for taking up a long position. However, a failure to close above these critical levels would result in the downtrend continuing.

It should also be noted that ADA and other altcoins are highly correlated to Bitcoin. Hence, a sudden market move would invalidate the setup presented above. Keeping a close eye on Bitcoin will help in making decisions on this long position.

At press time, ADA and BTC’s correlation was 0.52, a figure that was relatively lower than what was observed during the start of the year. Nonetheless, the correlation exists and care should be advised.

Source: https://ambcrypto.com/cardano-price-analysis-28-january

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Tron, Algorand, Compound Price Analysis: 28 January

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Tron seemed to be trading within a range and could prove to have some short-term bullish momentum if it rises above $0.0296. Algorand defended a region of demand from the market’s sellers, while Compound saw the strength of its uptrend wobble.

Tron [TRX]

Tron, Algorand, Compound Price Analysis: 28 January

Source: TRX/USDT on TradingView

TRX has traded within the range of $0.0272 to $0.0321 (cyan) for over two weeks now. At the time of writing, the price appeared to be heading north to test the mid-point of the range, at $0.0296, as resistance. An advance past this level will see TRX move towards $0.032.

The OBV showed some short-term dominance from buyers and sellers, but overall, the buying and selling volumes have been equal while the price has also been range-bound. This is likely to continue so long as TRX stays within this range.

Finally, the MACD was under zero, but on the verge of forming a bullish crossover.

Algorand [ALGO]

Tron, Algorand, Compound Price Analysis: 28 January

Source: ALGO/USD on TradingView

The $0.54-$0.56 zone has served as a region of demand for ALGO for over two weeks now. There was a four-day stint when ALGO slipped beneath this region, but ALGO later recovered to see this area become a buy-order dominated area on the order books.

However, ALGO did not set a new high on the charts. The $0.61-mark saw sellers step in with force, and ALGO was unable even to test the $0.63-resistance on its previous move.

The RSI also sank towards 50 and threatened to slip below the same. Finally, the trading volume has been steady, and a spike accompanying a drop in price below $0.54 would confirm a move to the downside.

Compound [COMP]

Tron, Algorand, Compound Price Analysis: 28 January

Source: COMP/USDT on TradingView

COMP has been on a steady uptrend throughout January. However, the $247-level of resistance rejected the previous northbound move and could offer significant resistance to another retest.

A rejection at the said resistance will see COMP trade within a range from $210 to $250 over the next few days. Moving above the resistance will see the uptrend resume.

Evidence pointed towards weakening upside momentum. The DMI showed the ADX drop below 20 to indicate the falling trend’s strength, and the Chaikin Money Flow was also reverting to the mean and could soon point to capital leaving the markets if it continues to fall.

Source: https://ambcrypto.com/tron-algorand-compound-price-analysis-28-january

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Wall Street Bets ‘Chairman’ Tweet Sends Dogecoin (DOGE) Soaring 85% in Hours

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The price for the popular meme coin, Dogecoin (DOGE), went flying today. The cryptocurrency skyrocketed by almost 90% in just a couple of hours after the ‘Chairman’ of the now popular Wall Street Bets group tweeted about it.

  • About a couple of hours ago, the ‘Chairman’ of the popular Wall Street Bets group asked whether or not DOGE has ever been trading at $1.
  •  After the Tweet went live, DOGE’s price went for the skies. The cryptocurrency soared by about 85% in a matter of hours and reached an intraday high at around $0.0145. The price has since corrected, but it appears that there’s still momentum in the market.
  • The reason for this excitement is what recently happened with the stock price of GameStop.
  • The Wall Street Bets group on Reddit saw more than 2 million people joining it with the common cause of buying GME stock against the trades of Wall Street hedge funds, who have been shorting it.
  • Not long after that, the price soared by up to 600%, causing mayhem on Wall Street and even getting one large hedge fund out of its position for what was reported as a massive loss.
  • The entire ordeal even saw the CEO of NASDAQ say that they would potentially halt trading in case of increased social media chatter.

“When we evaluate how we would manage through a situation where you see a significant run-up with a stock that is not based on news or fundamentals, we have technology that evaluates social media chatter, and if we see a significant rise in the chatter on social media channels and we also match that up against unusual trading activity – we will potentially halt that stock.”

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Source: https://cryptopotato.com/wall-street-bets-chairman-tweet-sends-dogecoin-doge-soaring-85-in-hours/

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