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Sunday Review 31/03/2024 Observers

The world might be seeing the light at the end of the tunnel for the five-month-long conflict between Israel and Hamas.

This week, the U.N. Security Council voted on a resolution calling for the immediate cease-fire in the Gaza Strip, with 14 council members voting in favor and the U.S. abstaining.

The show of hand is the first sign that Israel’s greatest ally, and the world’s largest military power, is caving to mounting international pressure and frustration over the war and its daring consequences.

Even at Eurovision, the annual European song contest, which demands all of its participants to remain strictly apolitical, is now dealing with a group of contestants from nine different countries who, at the risk of being disqualified, released a joint statement asking for the end of the conflict.

As the Arab world continues its journey through Ramadan and Christians from all corners celebrate Easter, some peace would undoubtedly answer many of their prayers.

Of all the challenges, hopes and ambitions that people ask the Divine to help them with, material well-being is one of the most frequent.

And for those investing in cryptocurrencies right now, they can’t say they are not, at least partially, being listened to.

After a rough past week, Bitcoin is trading at around $69 million again and is taking the rest of the crypto industry with it.

With Bitcoin halving approaching, the market is hyper-active. Miners are investing heavily in new and more competitive equipment and, in some cases, exploring low-cost regions to continue their operations with old hardware after their rewards decreased by half in April.

Bitcoin layer twos are also stepping up their game. The open-source blockchain Stacks launched “Nakamoto Upgrade” on March 25, allowing the network to (finally) add support for smart contracts.

Stellar, which has been in the crypto ecosystem even before Ethereum, made a similar move last month when its Soroban smart contracts went live. To help the blockchain thrive amongst its new DeFi competitors, the Stellar Development Foundation has committed $100 million to its development.

It is not only old projects in the crypto industry that are trying to increase their utility and differentiate themselves from the tone. As the meme coins’ market value keeps growing, several projects are looking into becoming more than just high-price-volatility “memes” and creating a vivid ecosystem that delivers value to its users.

USDT’s parent company, Tether, is also stepping beyond its previous borders. The stablecoin issuer has launched an A.I. branch intending to revolutionize the industry with crypto. A laudable ambition that the firm doesn’t seem to have the resources to accomplish.

The undeniable charm of crypto has traditional finance intoxicated. In the United Kingdom, the London Stock Exchange announced Monday that professional investors can start trading Bitcoin and Ethereum Exchange Trade Notes from May 28 onwards.

On the other side of the Atlantic, Blackrock iShares Bitcoin Trust has already attracted over $13 billion since launching the BTC Exchange Trade Fund in January. Even more impressive, the second crypto venture of the investment management firm - the real-world-assets fund BUIDL, collected over $250 million in the first after launching.

The fund is run in partnership with Securitize and counts with Coinbase as an infrastructure provider. BUIDL’s enormous success, much like Blackrock’s IBIT, wasn’t much affected by Wednesday’s news that a judge in New York allowed the lawsuit of the Securities and Exchange Commission against the country’s largest crypto exchange in the country to follow through.

The case will now go to court, and it might take over three years until there is a verdict if it emulates SEC’s battle with Ripple Labs. Having started in December 2020, the legal battle between the market regulator and the cross-border payment platform is still ongoing, with the former having requested almost $2 billion in fines from the latter at the start of the week.

The SEC is not the only U.S. government institution that is going after crypto businesses. On Tuesday, the Department of Justice accused KuCoin’s Founders, Chun Gan and Ke Tang, of illegally operating in the country by operating an unlicensed money-transmitting business.

In India, the government doesn’t seem bothered by what its U.S. counterpart is up to. Kucoin has been the first platform to regain approval to operate in the country, allowing it to come back from an interregnum forced upon it and nine international crypto exchanges by the country’s financial intelligence unit.

Kucoin’s founders can’t celebrate the victory as they are on the run from the U.S. authorities. If they are to remain hidden away successfully, they better be getting fake passports from another counterfeit agent than the one who got Du Kwon his false identity.

Having served his four months for travelling with fake documents in Montenegro, the co-founder and former CEO of Terraform Labs was set free this week. His extradition process continues to be a matter of diplomatic discussions between the U.S. and South Korea.

Despite legal charges against him, Nadeem Anjerwalla is also enjoying his freedom. The Binance executive in Nigeria fled from prison while en route for Ramadan prayers. The escape was timely as the government of Africa’s largest economy brought new charges against the exchange, this time for aiding customers to evade taxes with its platform.

Not as loose as Kwon, and Anjerwalla is crypto’s number one bad boy, Sam Bankman-Fried. The former FTX CEO was sentenced to 25 years in jail for the crimes of crypto fraud and conspiracy. While SBF could have got 110 years in prison, he still has one coin or two in his pocket to pay his defense lawyers to appeal the verdict.

Who is not so liquid is Bakkt Holdings. The struggle of the crypto custodian firm to remain in business after receiving a delisting warning from the New York Stock Exchange has prompted a change of leadership, with the company having announced that board member Andy Main would step in as CEO.

Despite the capitulation of some of the last bull market’s greatest players, others are gaining ground. Chainlink noted that the total value secured (the cumulative amount of TVL across all protocols and platforms that rely on oracles) is growing, currently at around $25 million.

According to data from Oracle Blockchain, the leading pack is Ethereum, the top contributor to the recovery of DeFi space.

The blockchain co-created by Vitalik Buterin introduced the Dencun update last week. While some of its new tenants (BlobScriptions) are causing network fees to spiral, there was an increase in traffic deriving from the upgrade.

In our Banking and CBDC Weekend Roundup, you can read all about HSBC’s new gold RWA tokenization efforts, Japan’s Nomura Group partnership with Polygon as well as check what are the IMF’s and Kazakhstan's thoughts on CBDCs.

This is all about this week’s news. Tomorrow is April Fools’ Day, the international celebration of foolishness and the only day of the year when lying is slightly allowed. In our ever-growing crypto world, little lies often result in generous gains and massive losses, so be careful!