Crypto Daily Roundup, 07 Oct: Crypto market thrives on positive data

Crypto News Key Highlights:

In September, US job growth accelerated, posing challenges for future interest rate decisions in the world's largest economy. The Bureau of Labor Statistics reported 336,000 new jobs added, a substantial rise from the revised August figure of 227,000 (up 40,000). Economists expected 170,000 jobs in September. Unemployment held at 3.8%, slightly above the 3.7% forecast.

Hong Kong's troubled cryptocurrency exchange, JPEX, has converted user funds into its native token, JPC, without consulting some users. These affected users will only be able to access their funds in two years. JPEX claims the move is supported by 68% of users, aiming to bolster cash flow amid legal troubles. The exchange faces increasing complaints, now totaling $191 million, and recent arrests, including TV actor Cheng Chun-hei, linked to its operations. Users are reportedly unaware of the conversion rates used for the transition.

Kraken, a cryptocurrency exchange, plans to acquire Dutch crypto broker Coin Meester B.V. (BCM) to strengthen its presence in the Netherlands and expand in Europe. The move aligns with European regulatory compliance, following the introduction of the MiCA framework, as Kraken seeks further registrations in European markets.

Stephen Ehrlich, co-founder of Voyager Digital, is reportedly under investigation by the CFTC for alleged derivatives regulations violations related to customer asset safety. Ehrlich disputes the claims and highlights prior regulatory cooperation. The outcome may set a precedent for cryptocurrency industry accountability. Voyager filed for bankruptcy in 2022 amid financial difficulties.

Ethereum's surge in staking activity has raised centralization concerns, according to JPMorgan analysts. They point to liquid staking providers, particularly Lido, as contributing to Ethereum's increasing centralization, potentially compromising network integrity and user interests. Rehypothecation risks and declining staking rewards are also highlighted.

The Canadian Securities Administrators (CSA) has issued new interim guidelines for the trading and issuance of stablecoins in Canada. The framework allows for trading if issuers meet certain conditions, including maintaining asset reserves with qualified custodians and ensuring transparency in operations and governance. The CSA emphasized that these assets carry inherent risks and their approval does not signify risk-free status.

China, Brazil, Saudi Arabia, India, and the UAE are decreasing their U.S. Treasury holdings, with China alone selling nearly $500 billion in the last decade. Rising Treasury yields, hitting 4.85% after a strong jobs report, have added to financial volatility. About 72.9% of investors expect the Fed to keep rates steady next month.

The surge in crypto and decentralized finance (DeFi) popularity has brought about a corresponding increase in money laundering activities. A recent Elliptic report reveals that cross-chain services have facilitated a record-breaking $7 billion in crypto money laundering. From July 2022 to July 2023, approximately $2.7 billion was laundered through decentralized exchanges (DEXs), cross-chain bridges, and coin swap services. Illicit actors are adopting increasingly sophisticated methods, such as derivatives trading and limit orders, to obfuscate their identities.

In the Sam Bankman-Fried trial, FTX co-founder Gary Wang testified that Bankman-Fried authorized the improper use of FTX customers' funds to cover losses at the affiliated hedge fund, Alameda Research, from the exchange's early days. Wang revealed that Alameda's losses amounted to as much as $14 billion, funded by FTX customer money. Wang, who pleaded guilty to fraud charges, is among several FTX executives cooperating with prosecutors. The trial alleges Bankman-Fried misappropriated customer funds for personal use and political campaigns.