Daily Digest - 28 November 2022

Headlines

▌The International Monetary Fund Calls for Better Supervision of the African Crypto Market

The International Monetary Fund (IMF) called for strengthening the supervision of the African cryptocurrency market. It is reported that the African cryptocurrency market is currently one of the fastest-growing markets in the world. As a result of the FTX debacle and its knock-on effects on cryptocurrency prices, the IMF said it prompted renewed calls for stronger consumer protections and regulation of the crypto industry. According to the International Monetary Fund, 25% of countries in sub-Saharan Africa have formally regulated cryptocurrencies, while two-thirds have implemented some restrictions. On the other hand, Cameroon, Ethiopia, Lesotho, Sierra Leone, Tanzania, and the Republic of Congo have banned cryptocurrencies, accounting for 20% of sub-Saharan African countries. Kenya, Nigeria, and South Africa have the most crypto users in the region.

Policies

▌Putin Calls for International Settlements Based on Blockchain and Digital Currencies

Russian President Vladimir Putin called for the use of digital currency technology and distributed ledgers to create a new international settlement system at an artificial intelligence conference organized by Russia's largest bank Sberbank, independent of banks and third-country intervention. In his speech, he emphasized that in the context of tense relations between Russia and the West, the flow of funds and payments between countries is currently under threat and said that sanctions due to the Russia-Ukraine war have severely limited Russia's access to global finance and markets. Putin further explained that "based on digital currency and distributed ledger technology, it is possible to create a new international payment system that is more convenient, but at the same time completely safe for participants, completely independent of interference from banks and third countries". As previously reported, Russian lawmakers are working on amendments to launch a national cryptocurrency exchange and have the backing of the Ministry of Finance and the Central Bank of Russia.

Cryptocurrency

▌With the Collapse of Centralised Exchanges, Jump Crypto Speaks About the Need for Better Trust Layers in Crypto

Kanav Kariya, president of Jump Crypto, talked about the need for a better trust layer in cryptocurrencies on Sunday. The executive believes that with the collapse of centralized exchanges, there is now increasing collective pressure to build a stronger and faster trust layer. Kanav Kariya added that FTX’s alleged fraud would have been considered fraud 100 years ago. It's a cruel trick to surface in an industry that's predicated on abstracting trust, and in an environment of declining social trust, cryptocurrencies and the abstraction of trust make more sense than ever. The breakup has had a serious negative impact on our industry and, in my opinion, greatly outweighs the positive impact. Low trust dramatically slows innovation and progress.

▌Nearly 100 Customers Sue Coinbase Over Its Wallet App

Nearly 100 customers have filed a lawsuit against cryptocurrency trading platform Coinbase’s wallets, accusing Coinbase of turning a blind eye to a scam that ultimately cost them more than $21 million in cryptocurrencies. The problem stemmed from last fall's Coinbase wallet, which downloaded users to fraudulent or bogus websites that allowed scammers and hackers to take control of their accounts and transfer their digital assets to wallets they owned. As of press time, none of the related lawsuits has resulted in defendants or plaintiffs going to court due to the terms and conditions enforced by Coinbase. In the arbitration request, the client claims that Coinbase was fully aware of what was going on with its wallet app and that executives did nothing to deal with it or minimize the damages. They tried several times to warn Coinbase chiefs of what was happening, but few acknowledged their concerns or the money they lost.

▌Lawyers See Crypto Regulation Coming in 2023 as Industry Needs to Rebuild Trust

Yesha Yadav, a law professor at Vanderbilt University, was disappointed by the implosion of FTX. The sense of disillusionment and disappointment and being duped by FTX runs so deep that it is seen as one of the most compliance-friendly institutions in the crypto economy and will lead the way in regulatory efforts. Now, it’s clear that FTX is the poster child for everything that can go wrong, and its downfall has regulators reworking their plans, Yadav said. They may have to take some different, more far-reaching, more stringent measures to deal with what happened.