The Crypto Stories You Need to Know This Week (#171 - 17 March 2024) - Binance Execs Held in Nigeria, ETH's Dencun Upgrade, El Salvador's BTC Holdings

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1. Binance Executives Arbitrarily Held in Nigeria

For the past three weeks, Binance executives Tigran Gambaryan and Nadeem Anjarwalla have been held arbitrarily in Nigeria.

I have known Tigran for many years, starting from his days as a special agent for the IRS fighting crypto crime.

Tigran played a leading role in bringing down the biggest crypto criminal platforms including Silk Road, AlphaBay, Hydra, BTC-E, etc.

There is even a book "Tracers in the Dark" by Andy Greenberg, that details the groundbreaking work he has done.

After his service in law enforcement, he joined Binance as their global head of financial crime compliance.

The Nigerian government invited them both to the country for a meeting and is now arbitrarily holding both Tigran and Nadeem hostage, asking for a $10 billion ransom from Binance.

Yes, $10 billion.

The reason? Due to mismanagement, Nigeria is experiencing hyperinflation (>30% last month), a rapid fall of the currency (lost over 200% vs USD in 2023 alone), and many of the 200m+ citizens of the country are seeking refuge in USD stablecoins to protect themselves (Nigeria is in the top 3 countries globally when it comes to day-to-day crypto usage).

What better way for politicians to blame the country’s policy problems than on cryptocurrencies by arresting two senior executives from the world’s biggest exchange and asking for a somewhat comical $10 billion amount??

This is unacceptable, and both Tigran and Nadeem should be allowed to go home and be with their wives and kids.

For their part, Binance stated that the exchange was working with Nigerian authorities to bring their colleagues home.

2. Ethereum Completes Dencun Upgrade

Ethereum finalized its highly-anticipated Dencun upgrade.

This hard fork of the second-largest blockchain ecosystem marks a strategic move to invigorate layer-2 networks by significantly reducing data fees and fueling growth and innovation across the Ethereum landscape.

This upgrade introduces an innovative data storage paradigm on the Ethereum blockchain, known as "blobs."

These blobs offer a distinct enclave for data, segregated from conventional transactions, thus significantly mitigating costs associated with data handling on the blockchain.

The most consequential Ethereum upgrade since last spring’s Shapella, Dencun lays the groundwork for what's known as "proto-dank sharding," which is meant to optimize data storage, improve scalability, and reduce Ethereum’s relatively high gas fees.

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3. El Salvador Doubles Down on Digital Assets

In a move that underscored its commitment to digital assets, El Salvador significantly bolstered its Bitcoin reserves, relocating more than 5,000 Bitcoin (worth over $400 million) into a secure cold wallet, effectively doubling the country’s previously estimated Bitcoin cache.?

President Bukele took to social media to unveil this strategic shift, coining the term "our first #Bitcoin piggy bank" and hinting at the newfound robustness of El Salvador's digital treasury.

The physical embodiment of this strategy, a vault nestled within the nation's borders, now houses 5,689.68 BTC, a clear sign of El Salvador's confidence in Bitcoin.

Until now, El Salvador’s exact holdings remained a subject of speculation, with estimates barely scratching the surface of this week’s disclosure.

Bukele's announcement, along with new information on revenue streams from passport sales, business conversions, and even Bitcoin mining, paints a picture of a country deeply woven into the fabric of the digital assets ecosystem.?

4. Hong Kong's Central Bank Launches Regulatory Sandbox for Stablecoin Issuers

The Hong Kong central bank invited applicants with a "genuine interest in developing a stablecoin issuance business" to join the sandbox.

Whilst this can be seen as a positive first step, the question will be how HK can attract stablecoin issuers to voluntarily fall into the sandbox when many of them are flourishing without using any regulatory umbrella (like Tether, for example, that just crossed $100b in assets) or with using existing regulatory regimes (like USDC).?

One advantage here could be that the HKD is pegged to the U.S. Dollar, allowing market participants to use the U.S. Dollar via an HKD stablecoin without actually touching the U.S.??

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Henri was previously a partner and global crypto leader at PwC. In that role, he advised many of the world’s leading crypto exchanges, investors, financial institutions, and tech firms on their crypto initiatives and numerous governments, regulators, and central banks on crypto regulatory and policy matters.

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