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Regulators starting to embrace Digital Assets?

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Jonny Fry

In June 2021 in the US, Greg Abbott, Governor of Texas, signed a new law (the Virtual Currency Bill) which came into force on 1st September 2021. The impact of this is, that the state of Texas will now legally recognise virtual currencies, including digital currencies. This makes Texas the second state after Wyoming to recognise cryptos. The fact that Texas now legally recognises cryptos is more evidence of how Digital Assets are being embraced. It also helps partially explain why (along with Texas’s cheap power supplies) so many of the Bitcoin mining firms that have fled…

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Source: https://medium.com/geekculture/regulators-starting-to-embrace-digital-assets-6ce4bc4d9d9f?source=rss——-8—————–cryptocurrency

Blockchain

TA: Ethereum Could Follow Bitcoin, Why ETH Could Rally To $4K

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Ethereum is consolidating above the $3,800 support zone against the US Dollar. ETH must clear the $3,900 and $3,950 resistance levels to continue higher in the near term.

  • Ethereum started a fresh increase above the $3,800 and $3,820 resistance levels.
  • The price is now trading above $3,800 and the 100 hourly simple moving average.
  • There was a break above a key contracting triangle forming with resistance near $3,820 on the hourly chart of ETH/USD (data feed via Kraken).
  • The pair could start a fresh rally if it clears the key $3,900 resistance zone.

Ethereum Price Eyes Upside Break

Ethereum started a fresh increase above the $3,750 resistance zone. ETH gained pace after it broke the $3,800 resistance zone and the 100 hourly simple moving average.

There was also a break above a key contracting triangle forming with resistance near $3,820 on the hourly chart of ETH/USD. The pair even spiked above $3,880, but there was no upside continuation above $3,920. A high was formed near $3,900 and it is now consolidating gains.

There was a break below the $3,850 level. Ether price traded below the 23.6% Fib retracement level of the upward move from the $3,742 swing low to $3,900 high.

It is now trading above $3,800 and the 100 hourly simple moving average. An immediate resistance on the upside is near the $3,880 level. The next major resistance is near the $3,900 level, above which the price might start a fresh rally.

Ethereum Price

Source: ETHUSD on TradingView.com

The next key resistance is near the $3,920 level. Any more gains could increase the chances of a move above the $4,000 level. In the stated case, the price might rise towards the $4,120 level.

Dips Limited in ETH?

If ethereum fails to continue higher above the $3,880 and $3,900 resistance levels, it could start a fresh downside correction. An initial support on the downside is near the $3,820 level.

The 50% Fib retracement level of the upward move from the $3,742 swing low to $3,900 high is also near the $3,820 level. Any more downsides could lead the price towards the $3,780 support and the 100 hourly SMA. The next key support is near $3,750.

Technical Indicators

Hourly MACDThe MACD for ETH/USD is losing pace in the bullish zone.

Hourly RSIThe RSI for ETH/USD is now above the 50 level.

Major Support Level – $3,820

Major Resistance Level – $3,900

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Source: https://www.newsbtc.com/analysis/eth/ethereum-could-follow-bitcoin-4k/

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Mashinsky says USDT is minted for crypto as $1M bounty offered to unpick reserves

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A bounty of up to $1 million has been offered up to anyone who can cast light on the precise backing of Tether’s reserves.

That backing just got a little bit murker, after Celsius Network CEO Alex Mashinsky reportedly said that Tether mints new USDT in exchange for crypto assets — which appears to conflict with Tether’s own terms and conditions.

“Forensic financial research” firm Hindenburg Research tweeted on Oct. 20 to its 171K followers that it holds “doubts about the legitimacy of Tether,” and offered a reward of up to $1 million for important details on Tether’s reserves which it claims could pose a threat to investors on a “systemic” scale.

“Tether is a key underpinning of the multi-trillion-dollar crypto market. Yet despite its repeated claims of transparency, its disclosures around its holdings have been opaque.”

“The company claims to hold a significant portion of its reserves in commercial paper yet has disclosed virtually nothing about its counterparties,” Hindenburg Research added.

But, as more than a few observers noted, $1 million isn’t a lot of money to dish the dirt on a token with a $70 billion market cap.

Tether has been the subject of intense scrutiny, with regulators taking action against the firm on multiple occasions over the composition of its reserves. In May Tether published a loose reserve breakdown in May which showed a large amount of unspecified commercial paper, along with minimal cash or bank deposits.

On Oct. 15 Tether and its sister company Bitfinex reached a settlement to pay $42.5 million to the Commodity Futures Trading Commission, which claimed Tether did not have sufficient cash reserves for two thirds of the period between 2016 and 2018.

Tether settled but it denied the claims noting there was “no finding that Tether tokens were not fully backed at all times—simply that the reserves were not all in cash and all in a bank account titled in Tether’s name, at all times.”

It went on to say: “As Tether represented in the Order, it has always maintained adequate reserves and has never failed to satisfy a redemption request.”

Related: Crypto lending firm Celsius Network raises $400M

Meanwhile Celsius CEO Alex Mashinsky is facing his own regulatory issues after the New York Attorney General’s office began looking into his firm and another stablecoin lending platform this week.

In a subsequent interview, Mashinsky told the Financial Times on Oct. 19 that as part of a lending agreement, Tether minted new USDT tokens in exchange for digital assets:

“If you give them enough collateral, liquid collateral, Bitcoin, Ethereum and so on . . . they will mint Tether against it.”

“New USDT is issued for such loans,” he added, stating that the new USDT is later destroyed after the loan is closed in order to not “permanently increase USDT in circulation”.

Such a lending structure on the face of it would appear in violation of Tether’s terms of service which state:

“Tether will not issue Tether Tokens for consideration consisting of the Digital Tokens (for example, Bitcoin); only money will be accepted upon issuance.”


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Source: https://cointelegraph.com/news/mashinsky-says-usdt-is-minted-for-crypto-as-1m-bounty-offered-to-unpick-reserves

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Senators pressure Facebook to ‘immediately discontinue’ Novi wallet pilot

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Five Senators have called for the immediate closure of Facebook’s new crypto wallet just hours after it was launched in partnership with Coinbase.

Crypto skeptic Senator Elizabeth Warren was one of the five urging Facebook CEO Mark Zuckerberg to “immediately discontinue” the project. In a letter sent to Zuckerberg on Oct. 19, the five Democrat Senators wrote:

“Given the scope of the scandals surrounding your company, we write to voice our strongest opposition to Facebook’s revived effort to launch a cryptocurrency and digital wallet, now branded ‘Diem’ and ‘Novi,’ respectively.”

Diem is Facebook’s ambitious stablecoin project, formerly known as Libra, which has been the subject of heavy scrutiny and regulatory roadblocks for years resulting in a number of key partners pulling out of the venture. Novi is the firm’s crypto wallet, designed to hold the Diem token and other stablecoins.

Novi launched a pilot in the U.S. and Guatemala on Oct. 19 in partnership with Coinbase which will provide crypto custody services. The pilot will enable users to acquire, send and receive Paxos Dollars (USDP) through their Novi account.

On Oct. 20, Coinbase CEO Brian Armstrong congratulated co-creator and a board member of Diem David Marcus, adding “it takes a lot of perseverance to ignore the haters and ship.”

The shot across the bow came from the office of Senator Brian Schatz and was co-signed by Tina Smith, Richard Blumenthal, banking committee chairperson Sherrod Brown, and Elizabeth Warren.

They stated that Facebook has repeatedly made conscious business decisions to continue with “actions that have harmed its users and the broader society,” adding:

“Facebook cannot be trusted to manage a payment system or digital currency when its existing ability to manage risks and keep consumers safe has proven wholly insufficient.”

Related: One currency to rule them all: Facebook’s Diem has global ambitions

In a letter from the company announcing the pilot, Marcus stated “We intend to migrate Novi to the Diem payment network once it receives regulatory approval.”

The firm has far loftier ambitions than just a crypto wallet and stablecoin in the digital space. On Oct. 17 Facebook revealed plans to create 10,000 high-skilled jobs in the EU over the next five years to build its own metaverse.

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Source: https://cointelegraph.com/news/senators-pressure-facebook-to-immediately-discontinue-novi-wallet-pilot

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