This Week [In] Crypto: Growing Acceptance, NFT Scams, Musk’s Twitter Purchase, Tighter US Regulations

It’s been an eventful week, from April 25 to May 1, in the crypto-verse and it might be a hassle to keep up with the unfolding events. Be[In]Crypto has curated the leading stories of the past week including Kraken’s new operating license, BAYC’s Instagram hack, Aave’s founder’s ban on Twitter, and New York’s two-year crypto mining moratorium.

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Cryptocurrencies gaining acceptance around the world

Several regions are opening their doors to cryptocurrencies through the issuing of operational licenses and friendly legislation. This past week, Kraken became the latest exchange to be granted the license to operate in Abu Dhabi after FTX and Binance. 

Given the positive legislative climate in Abu Dhabi, Three Arrows Capital, a leading cryptocurrency hedge fund has moved its headquarters from Singapore to Dubai. “The energy in Dubai’s digital asset industry is electric right now,” said Su Zhu, co-founder of the hedge fund as more projects set their sights on the region.

This week, the Cuban central bank attempted to give a structure to digital assets in the country. The apex bank announced via an official gazette that it will begin issuing licenses to virtual asset providers after scrutiny of the legality and economic interest of the project.

In South America, Argentina sent ripples of excitement through the ecosystem after revealing that Buenos Aires would be using blockchain technology to streamline its operations. Horacio Rodriguez Larreta, head of the Buenos Aires government stated that the city would soon begin accepting tax payments in cryptocurrencies.

As NFT adoption rises, criminals are running riot

Criminal activity on the blockchain reached frenetic levels this week with non-fungible tokens (NFTs) being the center of attention. Bored Ape Yacht Club’s (BAYC) Instagram page was hacked leading to the loss of over $2.5 million worth of collectibles stolen.

The attacker resorted to posting phishing links that were a clone of the BAYC website and a link to a fake airdrop that led to the transfer of assets to the scammers’ address. Users were warned not to mint anything while investigations are already in full gear to figure out how the hacker bypassed the two-factor authentication on the platform.

The University of the Philippines suffered a similar fate after its Twitter account got hacked by an NFT scammer. Since the hack, the account has been posting fake links to NFT airdrops to steal the collectibles of unsuspecting investors.

Fabio Panetta, a director of the European Central Bank (ECB) told attendees of a conference at Columbia University that only a concerted global effort can reduce the activities of cryptocurrency hackers. He referred to crypto as the “Wild West of Finance” and global cooperation would ensure that all transactions are in line with anti-money laundering regulations and anti-terrorism legislation.

Elon Musk’s Twitter tales

After weeks of uncertainty, Twitter Inc. has accepted Elon Musk’s offer to take the company private. The deal is worth $44 billion and stockholders will be paid $54.20 per share under the terms of the agreement.

Musk’s sale seems to have garnered support from Jack Dorsey, Twitter’s founder as he stated that “Elon is the singular solution” that he trusts. However, current CEO, Parag Agrawal has expressed uncertainty over the future of the platform saying, he “doesn’t know which direction the platform will go.” 

The post-Musk era of Twitter appears to have gotten its first crypto victim within days of the takeover. Stand Kulechov, the founder of Aave saw his account suspended on Twitter over a joke he shared with his followers. He announced as a joke that he was joining Twitter as the interim CEO with pundits referring to Kulechov’s statement as “shameless plugging” for his own social media site.

US crypto regulators leaving no stone unturned

United State regulators and law enforcement agencies are upping the ante in their quest to rein in the cryptocurrency industry. This week the Department of Justice (DOJ) announced that it was pursuing legal action against two Europeans for their role in organizing a cryptocurrency conference in sanctioned North Korea.

This week, the US  Consumer Financial Protection Bureau (CFPB) has kickstarted the process to increase its control over cryptocurrency firms. The move by the CFPB is coming under the rule against “nonbank companies posing risks to consumers” and would empower the regulator to go after firms deemed risky to consumers.

Top cryptocurrency firms are hesitant to launch interest-bearing offerings to investors given the unclear stance of regulators. A Reuters report stated that firms are in queue to introduce new products but are approaching tentatively because of the Securities and Exchange Commission’s (SEC) treatment of BlockFi and Coinbase in the past over lending products.

New York’s State Assembly has passed new legislation that placed a ban on mining cryptocurrencies with fossil fuels for two years over environmental concerns. Amid the gloom, New York’s pro-crypto Mayor Eric Adams has called on the state to do away with the requirements of a BitLicense for cryptocurrency firms. Adams cited the huge application fees paid by the firm and the stringent requirements that have the downside of stifling innovation.