Daily Digest - 6th October 2022

Headlines

▌The European Union Has Listed Cryptocurrency as the Top Topic of the IMF Annual Meeting, and Will Communicate with the United States on the Development of Encryption Legislation

The European Union is seeking to exchange views with U.S. officials on the development of encryption legislation during next week’s annual meetings of the International Monetary Fund (IMF) and the World Bank to create a more coordinated global regulatory framework, and the European Union listed cryptocurrencies as the top topic of the conference. Mairead McGuinness said: “I believe they want to know what we’ve done, how it’s progressing, what’s wrong, and also want to hear what the U.S. has planned. We’re a frontrunner in this, but it’s not enough to address encryption in the EU, we need global engagement and shared experiences.

Policies

▌U.S. SEC Chairman: Most Encrypted Tokens are Securities, the Law is Clear

Gary Gensler, chairman of the U.S. Securities and Exchange Commission (SEC), answered questions about who should regulate the crypto industry in a recent interview. "We are the agency that oversees this fundamental transaction," he said. "When a group of entrepreneurs raise money from the public and the public expects a profit, they need to disclose — full, fair, and truthful disclosure, which is at the heart of our capital markets.” He also stressed that the law is clear in this regard. It is believed that based on the facts and circumstances, most of these crypto tokens are securities.

▌South Korean Court Rules that Cryptocurrency Loans will not Limit Interest

A South Korean court issued a new rule that stipulates that loans with bitcoin or other cryptocurrencies are not subject to existing laws and regulations related to interest rates. In addition, South Korea is preparing a new cryptocurrency regulatory framework, called the "Digital Assets Basic Law", which will classify cryptocurrencies into security tokens and non-security tokens to facilitate the regulation of cryptocurrencies in South Korea.

Cryptocurrency

▌Three Arrows’ CryptoPunks and Starry Night NFTs will be Liquidated

Starry Night Capital said that the NFTs belonging to Three Arrows Capital through the Starry Night Capital fund are now in the hands of the liquidator Teneo, who plans to sell the assets to pay Three Arrows’ debt. Starry Night Capital spent tens of millions of dollars acquiring high-value NFTs such as Art Blocks, CryptoPunks, and Rare Pepe assets. Business consultancy Teneo said in a statement that it now owns NFTs from Starry Night Capital, a fund set up in 2021 by Three Arrows Capital and pseudonymous investor Vincent Van Dough. Most of the assets were transferred to new wallets in the past two days.

▌Russia Blocks Access to Cryptocurrency Exchange OKX

Russia has blocked access to cryptocurrency exchange OKX - the world’s third-largest crypto exchange by volume - according to Roskomsvoboda, a local NGO that is monitoring online censorship. Roskomsvoboda's registry of blacklisted websites says OKX's website was blocked due to article 15.3 of the Russian Federation Law on Information, Information Technology, and Information Protection.

▌Transit Swap Will Bear 100% of the User's Losses, Returning Hacked Assets on October 7th

Transit Swap, the recently hacked cross-chain decentralized exchange (DEX), expressed its willingness to bear 100% of the user's losses and will refund the hacked asset on October 7th. Transit Swap announced two steps to refund the hacked assets. The first part is to refund the assets that the hackers have returned, and the second part is to return the remaining unreturned users’ assets of the hackers. At the same time, Transit Swap officials further stated that they hope that all hackers, attack imitators, and front-running arbitrageurs who participated in the incident will conduct friendly negotiations according to the bug bounty and refund reward (5% of the relevant amount), and return the remaining users’ assets. As of October 8th, Transit Swap will officially those who have not returned user assets as attackers and assist users to start relevant legal procedures together and seek the intervention of law enforcement agencies, until all hacked funds are recovered.

Key Economic Events

▌The probability of the Fed raising interest rates by 75 basis points in November is 67.8%

As per the CME Fedwatch tool, the probability of the Fed raising interest rates by 50 basis points to the range of 3.50% - 3.75% in November is 32.2%, while the probability of raising interest rates by 75 basis points is 67.8%. The market makers see a 0% chance of the Fed raising interest rates by 100 basis points.