The municipal pension plan of Jersey City, New Jersey, will soon invest in bitcoin via exchange-traded funds, according to a Thursday social media post from Mayor Steven Fulop.

While it's not likely to be a gigantic sum, the decision is another symbolic win for cryptocurrency on the road toward wider adoption. The move follows a Wisconsin pension making a similar decision earlier this year.

Read more: As a Pension Embraces Bitcoin, Hope Grows for Cryptocurrency's Long-Term Prospects Even Among Conservative Pros

Fulop, who has been the mayor of Jersey City since 2013, took to X (formerly Twitter) to announce the forthcoming investment, writing: “Not my normal subject matter in a post but I’ll share anyway – the question on whether [c]rypto/Bitcoin is here to stay is largely over [and] crypto/Bitcoin won.”

Fulop, a Democrat, has thrown his hat into the ring for New Jersey’s 2025 gubernatorial election. Incumbent Governor Phil Murphy, also a Democrat, has already served two terms and is ineligible for reelection.

Not my normal subject matter in a post but I’ll share anyway - the question on whether Crypto/Bitcoin is here to stay is largely over + crypto/Bitcoin won. The #JerseyCity pension fund is in process of updating paperwork to the SEC to allocate % of the fund to Bitcoin ETFs… https://t.co/5iNEqRqHGM

— Steven Fulop (@StevenFulop) July 25, 2024

Fulop added that the city’s pension fund, the Employees Retirement System of Jersey City, is currently in the process of updating paperwork with the U.S. Securities and Exchange Commission (SEC) to allocate a percentage of the fund to bitcoin {{BTC}} ETFs. According to Fulop’s tweet, the investment is expected to be completed “by end of the summer.”

Though Fulop did not specify exactly how much of the pension funds' assets under management will be allocated to bitcoin ETFs, he said it would be “similar” to the 2% allocation to bitcoin ETFs made by Wisconsin’s state pension fund earlier this year. Fulop did not specify which bitcoin ETF Jersey City was considering selecting for its investment.

“I’ve been a long time believer (through ups/downs) in crypto but [b]roadly, beyond crypto [I] do believe blockchain is amongst the most important new technology innovations since the internet,” Fulop said.

Interest in bitcoin from public pension funds is growing slowly but surely.

Wisconsin’s public pension plan – the State of Wisconsin Investment Board, which has roughly $156 billion in assets under management – is the biggest pension plan to dive into crypto so far, with a $160 million investment into spot bitcoin ETFs earlier this year. Some small pension funds like the Houston Firefighters’ Relief and Retirement Fund, which has about $5 billion in assets under management, have been invested in crypto for several years.

The pensions of Fairfax County, Virginia, also invested in crypto exposure through VanEck's New Finance Income Fund, which became a creditor to crypto firm Genesis as it filed for bankruptcy last year.

Outside of the U.S., public pension plans including Japan’s $1.4 trillion Government Pension Investment Fund, the largest pension plan in the world, put out a request for information on bitcoin investments earlier this year.

“I’m sure eventually it will be more common,” Fulop said of pension funds allocating to crypto in his tweet.

The Jersey City Mayor’s Office did not respond to CoinDesk’s request for comment by publication time.

By 2050, bitcoin may settle 10% of international trade and 5% of local trade gain with central banks' holding it as a reserve asset, asset manager VanEck said in a report.

Bitcoin layer-2 networks will play a key role to overcome scaling issues and allow BTC to be used as a medium of exchange, the firm said.

There are risks for bitcoin's growth, including rising power demand, concerted government crackdowns and competition with other digital assets, the report said.

Asset manager VanEck, an issuer of spot bitcoin {{BTC}} and ether {{ETH}} ETFs, says that BTC's price may reach $2.9 million by 2050 – assuming some pretty high hurdles are cleared.

Under VanEck's assumptions in a Wednesday report, bitcoin would become an essential part of the international monetary system in the next decades as rising geopolitical tensions and ballooning debt servicing costs erode the current system.

"As we look at the world right now, we see enormous economic imbalances, rising distrust in existing institutions and continued deglobalization," Matthew Sigel, head of digital asset research at Van Eck and one of the report's authors, said in a Wednesday interview on CNBC.

"We think many of these distortions stem from ... a massive misallocation of capital since the global financial crisis as G7 governments have abused the printing press, spending borrowed money on impossible goals," Sigel explained.

"Bitcoin ... is the ultimate hedge against this rising fiscal recklessness," Sigel said.

In the report's base case scenario, BTC would become a key medium of exchange in local and global trade, representing 10% of international trade settlement and 5% of GDP.

Meanwhile, it would also gain as a global reserve asset at the expense of the four largest foreign reserve currencies – the U.S. dollar, euro, British pound and Japanese yen – reaching a 2.5% weight in international currency reserves.

If things play out as VanEck envisions, bitcoin's price will increase in value by 44 times, gaining 16% annually from its current price of just below $65,000. Its market capitalization would soar to $61 trillion.

The proliferation of layer-2 networks will play a key role in overcoming the Bitcoin blockchain's bottlenecks and scaling issues that prevent BTC from being a useful medium of exchange, the report said. The sector could collectively be worth $7.6 trillion by 2050, applying the same valuation framework as for Ethereum layer 2s.

VanEck also warned about potential risks ahead that could stifle bitcoin's expansion.

Increasing energy demand by miners will require innovation, while revenue from processing transactions has to grow dramatically to replace diminishing mining rewards (which get cut in half every four years via halvings) to incentivize miners to sustain the network. Concerted efforts by governments around the world to restrict or outlaw bitcoin are also a threat.

Further risks highlighted in the report include competition from other cryptocurrencies and large financial institutions exerting too much control.

What a difference a week makes. On Thursday, July 18, Donald Trump formally accepted the GOP nomination as its candidate for the 2024 presidential election at the Republican National Convention, just days after he survived an assassination attempt. On Sunday, July 21, at 1:46 pm ET, as President Biden announced his decision not to seek re-election, everything changed. The political landscape became as volatile as a bitcoin price chart.

With an endorsement from Biden, Vice President Kamala Harris has quickly become the presumptive nominee for Democrats, raising small-dollar donations at a pace reminiscent of Barack Obama’s insurgent 2008 presidential campaign. However, the enthusiasm stops at the door of a well-funded crypto industry that has taken an offensive position to protect itself from a hostile regulatory environment and driven it to coalesce around a single-issue voting block set to cast its votes for the GOP nominee.

Almost as soon as the Biden news broke, I began to see social media posts from the crypto community about what a Harris administration’s stance on crypto would be. Would she continue a regulation-by-enforcement and hostile policy position, or embrace the opportunity to reimagine crypto policy with a view toward embracing the new economy? Or set off in a new direction?

Then, I saw a flurry of social media musings that Vice President Harris is considering attending the Bitcoin 2024 Conference, taking place from July 25 to July 27 in Nashville, Tennessee. Trump, Michael Saylor, and Elon Musk are also expected to appear, making it a significant event with high stakes.

On Thursday, July 24, conference organizer and Bitcoin Magazine’s CEO David Bailey shared on X that VP Harris declined to attend. It seemed highly unlikely that she would be able to attend given that scheduling a senior Federal official takes longer than 48 hours. The process involves coordination, review and vetting by multiple offices and the requisite approvals.

Nonetheless, even the consideration is a win. With the crypto industry’s voice on the Harris campaign’s radar, Harris now has an opportunity to address a deeply concerned and invested group of bitcoiners and begin the reparative work of bridge-building to counter the anti-crypto aggression and regulation-by-enforcement initiatives deployed by the current administration.

The Biden Administration’s Anti-Crypto Policy

Under Biden, cryptocurrency regulation has been marked by a confusing and confounding enforcement-heavy approach, largely influenced by Senator Elizabeth Warren (D-MA). Known for her skepticism of the crypto industry, Warren has advocated for strict regulatory measures to protect consumers and maintain financial stability. Her influence is evident in the administration's "Chokepoint 2.0" strategy and in the stance of her ally SEC Chair, Gary Gensler, as well as prudential regulators who restricted the crypto industry’s access to traditional banking services, effectively “de-banking” the sector.

Fueled by misinformation and a kernel of truth, Warren’s approach has focused on addressing the risks associated with cryptocurrencies, including fraud, money laundering, and terrorism financing without right-sizing the discussions to balance risks with the considerable economic justice opportunities and separate fact from fiction.

A Technological Moderate

Vice President Harris's prior approach to technology regulation is characterized by a more moderate tone compared to the current administration’s approach. Throughout her career, she has forged strong relationships with major technology companies such as Facebook and Google. She has been a notable presence at their headquarters and has enlisted employees and allies from these companies to advise her campaign on tech policy. Her approach emphasizes finding a balance between regulation and allowing technological advancement. A strategic policy shift to incorporate past openness to innovation coupled with her campaign’s focus on economic empowerment of the middle class may create an opportunity for a both/and approach that optimizes investor and consumer protections with the support of robust development of the Web3 economy on the rails of blockchain and powered by cryptographically secured digital assets.

But what signals that she would be open to a pivot on crypto policy? For one, billionaire Mark Cuban noted on X this week that Harris’ team has been asking numerous crypto-related questions. That, added to her pro-innovation record and entertaining discussions of appearing at Bitcoin 2024 all bode well for a different approach in a Harris Administration.

Ten Policy Shifts for a New Era

As the Democratic presidential nominee, Harris has the unique opportunity to chart a new course for crypto policy, one I am calling "New Economy 2025," which balances sensible and transparent regulation with robust innovation for investors, consumers and businesses alike. This approach would ensure that the U.S. remains a leader in the digital asset economy while promoting financial inclusion and protecting consumer interests.

To that end, here are ten policy shifts that could redefine the Democratic party’s stance on digital assets and foster a more inclusive financial ecosystem under a Harris presidency:

Amend Securities Laws for Clarity and Innovation

What: Revise existing securities laws to clarify the distinction between a security and a commodity in the context of cryptocurrencies. I advocated strongly for this in my testimony before the House Financial Services Subcommittee on Digital Assets, Financial Technology & Inclusion.

How: Ensure relevant and specific agencies are designated to regulate the crypto industry, preventing overly broad or conflicting interpretations that could hinder market growth and stifle innovation.

Update Banking Regulations for Crypto Integration

What: Modify the Bank Secrecy Act and other banking regulations to create clear guidelines for banks dealing with cryptocurrency businesses.

How: Promote a crypto-friendly banking environment, enabling financial institutions to engage with the crypto sector confidently, reducing perceived and actual risks, and fostering greater integration and accessibility. Additionally, consider the legislative and regulatory shifts needed to add bitcoin reserves as part of the Central Bank’s reserve portfolio.

Reform Tax Policies to Support the Digital Economy

What: Reform tax policies to address the unique aspects of digital assets, providing clear guidelines on the taxation of crypto transactions and holdings.

How: Create a framework for individuals and businesses to comply with tax obligations while participating in the digital economy safely and legally, ensuring fair participation across all economic income levels.

Enhance Consumer Protection Laws

What: Strengthen consumer protection laws specific to the crypto market, ensuring transparent disclosures and protections against fraud.

How: Implement measures to provide clear recourse for victims, building consumer trust and ensuring a safer crypto market, particularly protecting vulnerable populations.

Develop Robust Privacy Laws for Individual Data Protection

What: Formulate strong privacy laws to safeguard individual data in blockchain and digital identity systems.

How: Promote privacy-friendly digital identities and ensure crypto transactions respect individual privacy rights, protecting marginalized communities from exploitation.

Integrate Cryptocurrency and Blockchain Education

What: Incorporate cryptocurrency and blockchain education into national education standards, including financial literacy programs.

How: Equip individuals with the knowledge needed to navigate the digital economy confidently and responsibly through school curriculums and adult education programs, ensuring opportunities for all demographics.

Allocate Federal Funds for Blockchain R&D

What: Allocate funding to support research and development in blockchain technology.

How: Encourage innovation, create jobs, and maintain the U.S.'s competitive edge in the global digital economy by investing in R&D, particularly benefiting underserved communities through job creation and economic inclusion.

Promote DeFi Platforms for Financial Inclusion

What: Encourage the development and adoption of decentralized finance (DeFi) platforms to offer financial services without traditional intermediaries.

How: Increase access to financial services for underserved communities, promoting financial inclusion and bridging the wealth gap.

Form Public-Private Partnerships for Public Good

What: Establish partnerships between government agencies and private blockchain companies for public infrastructure projects.

How: Develop digital identity systems and transparent supply chains leveraging blockchain technology, improving public services and economic opportunities for all. Also, consider regulatory sandboxes to further promote and support innovation in collaboration with government stakeholders to learn so they can effectively lead.

Harmonize International Crypto Regulations

What: Position the U.S. as a global leader in crypto regulation by collaborating with international bodies.

How: Develop harmonized regulations to ensure the U.S. plays a central role in shaping the future of the global digital economy, promoting stability and fostering cross-border innovation.

By implementing these initiatives, the Harris administration can create a regulatory environment that not only protects investors and fosters innovation but also promotes economic justice and opportunity for all, ensuring the U.S. remains at the forefront of the digital asset economy.

"New Economy 2025" vision would emphasize the transformative potential of blockchain and cryptocurrency, harnessing technology to create a more equitable and inclusive financial system that ushers in increase investment opportunities, job creation and economic growth, consumer, investor and industry protection from fraud and scams, tax simplification, financial inclusion and economic justice, and industry stability and confidence.

Crypto is political; not partisan. At least it shouldn’t be. Harris’s track record of championing technological advancement and protecting privacy rights positions her uniquely to harness the transformative potential of blockchain and cryptocurrency.

As we move forward, advocating for regulatory clarity, consumer protections, financial literacy, and global collaboration is essential to solidify the U.S. as a leader in the digital asset economy. By embracing this reimagined approach, we can truly democratize access to financial opportunities, empower marginalized communities, and uphold the values of freedom and privacy, paving the way for a prosperous and inclusive New Economy 2025.

Note: The views expressed in this column are those of the author and do not necessarily reflect those of CoinDesk, Inc. or its owners and affiliates.

Spot ether exchange-traded funds successfully debuted in the U.S. on Tuesday, but regulators didn't let the ETFs generate income for investors by staking their ETH.

The absence represents a disadvantage over directly holding the cryptocurrency, but issuers are hopeful regulators will eventually allow staking.

Eight newly approved spot ether {{ETH}} exchange-traded funds got off to a busy start following their debut this week, despite lacking a key feature of Ethereum's native token: staking income.

While the Grayscale Ethereum Trust (ETHE), which has existed in non-ETF form for years but just converted into an ETF, has seen about $811 million of outflows, new products from the likes of BlackRock saw almost $800 million deposited in the first two days. Issuers say they're pleased.

This early success wasn't a given, especially after several issuers announced that they would not stake ether for yield, which they had initially planned to do in earlier filings. This was likely due to the U.S. Securities and Exchange Commission telling them to remove the feature as staking could potentially violate federal securities laws as it constitutes unregistered securities offerings, as the SEC had previously argued in other cases.

With a new administration taking office in January, things could change quickly and issuers remain hopeful that the feature could eventually become part of the products.

That being said, it is not currently "an active discussion," Rob Mitchnick, head of digital assets for BlackRock, said in an interview with CoinDesk. He added that the SEC made its view on that clear.

BlackRock, the world's largest asset manager, did not initially apply to be able to stake in their application but others, including Fidelity and Franklin Templeton, did.

"I certainly would hope that as an industry, we're going to be able to help to educate and provide perspective on how it is that we can bring staking capabilities to investors in these products," said Cynthia Lo Bessette, head of digital asset management at Fidelity. "Staking is a critical component of the Ethereum ecosystem as it is the activity that secures the ecosystem and so, therefore, it's an important part of the investment experience and being able to invest in your ether."

Former President Donald Trump seems to have won over the hearts of many leaders in the crypto industry and is their favored choice in this year's election given his recent endorsement of the space.

"I believe staking within spot ether ETFs is a matter of when, not if," said Nate Geraci, president of the ETF Store. "That said, there is no question that politics are intertwined with the timing of the 'when.'"

He added: "Indications are that a Trump administration would be much more crypto-friendly, which could certainly accelerate the timeline of when staking might be allowed. Otherwise, ETF issuers could be left waiting on a comprehensive crypto regulatory framework to be put in place, which would likely take significantly longer."

For Franklin Templeton, who, like Fidelity, was keen on making staking a part of the ETFs, starting without that feature seemed natural and made the overall process of getting the product approved easier.

"The easier path or path of least resistance was clearly to do it as an unstaked version," said Christopher Jense, director of digital asset research for Franklin Templeton's Digital Asset Investment Strategies Group. "It just works better, it's simpler, it's easier, and the execution risk was lower, so I think it's very natural that that's where we started."

If staking will be part of the ETFs in the future, it doesn't seem to be up to the asset managers, but is a question of whether the regulatory landscape in the future will be open to it.

"I think it's very tied into the regulatory clarity that we think will happen over time of whether that will or won't happen," said David Mann, head of ETF product & capital markets for Franklin. "This is the framework we're dealing with today and if it evolves, we'll be ready to evolve with it."

Bernstein said bitcoin miners have upside from the power portfolios they control.

Miners that focus on an active power strategy and efficiency are more likely to see a valuation rerating, the report said.

Large miners remain focused on bitcoin production and Riot Platforms, CleanSpark and Iris Energy are best positioned to grow market share, the broker said.

Bitcoin {{BTC}} miners have significant potential upside from the power portfolios that they control, broker Bernstein said in a research report on Wednesday.

“We believe, bitcoin miners by focusing on an active power strategy and pushing the frontiers of power efficiency, can make a stronger case for a valuation re-rating,” analysts led by Gautam Chhugani wrote.

Investors can profit by valuing the companies as “efficient power shells with data center capabilities,” as opposed to just bitcoin mining operations, the report said. Bernstein noted that miners trade at around a 90% discount to general data center valuations.

The bitcoin mining sector has rerated in recent months after Core Scientific (CORZ) inked a 12-year artificial intelligence (AI) deal with cloud computing firm CoreWeave. The market is pricing in the potential AI and high-performance computing (HPC) opportunity and the upside stemming from alternative and more accretive use cases for bitcoin mining sites.

Large miners remain focused on growing bitcoin production and their respective hashrates, the broker noted, and Riot Platforms (RIOT), CleanSpark (CLSK) and Iris Energy (IREN) are best positioned to expand market share.

There is also headroom in power efficiency and uptime, the note said, and miners can benefit from extracting more hashrate from their existing portfolios by upgrading their hardware to the latest generations of ASICs. The hashrate, a measure of computing power, is a proxy for competition in the industry and mining difficulty.

Iris Energy and CleanSpark rate well in terms of power efficiency and uptime, and Core Scientific ranks highly with regards to data center uptime, Bernstein said. Riot’s efficiency should improve as it energizes its large power sites and Marathon Digital’s (MARA) efficiency should recover as it builds out its self-mining portfolio.

“Customization and innovation in mining systems and software can further boost efficiency,” the note said.

The broker has an outperform rating on CleanSpark, Core Scientific, Iris Energy and Riot Platforms, and a market perform rating on Marathon Digital.

Read more: Bitcoin Miners With Attractive Power Contracts Are Potential M&A Targets, JPMorgan Says

Last year, a social experiment called $GREED aimed to teach crypto enthusiasts a lesson, tricking them into tweeting an embarrassing message.

The project is back. This time, there's real money involved – a lot of it.

"In Sh*tcoin Season, any pointless cryptocurrency with a Twitter account can enchant thousands of traders into playing memecoin musical chairs. Throwing money at the wall and reason out the window, they let greed get the best of them. Sometimes literally."

That is how I started my May 2023 story about $GREED, a social experiment that duped crypto traders hoping to score a quick buck into embarrassing themselves on Twitter (now X). It was a lesson in good judgment disguised as a money-making opportunity.

The story's moral did not stick. In less than a year, speculators' memecoin greed prompted them to once again trade their good judgment for too-good-to-be-true returns. Presale scammers pitching exclusive memecoins earlier this year stole $122 million from wannabe get-rich-quick degens, according to on-chain sleuth ZackXBT.

I was interested to see how much SOL has been sent as a result of the presale meta and calculated >655,000 SOL ($122.5M) raised from 27 presales. pic.twitter.com/dvsW4TSoov

— ZachXBT (@zachxbt) March 19, 2024

It was a devolution of the zero-sum casino games that give crypto a shady reputation. Forget about exchange tokens that traders believe have value, or well-known memecoins that have graduated from pure joke to, well, billion-dollar jokes like DOGE or SHIB. These presale tokens were literal scams. But people were willing to suspend their disbelief to get in early.

"This is so stupid, people are just going to get rugged," $GREED's creator, who goes by Voshy, said in an interview. "How do you teach these people a lesson?"

He decided to recreate his social experiment with a twist. Last time, his nonexistent $GREED token made a mockery of its "victims" without costing them any capital: He duped them into giving him access to their Twitter accounts, letting him shame them by posting an embarrassing tweet about their succumbing to their own greed.

This time, like last, $GREED would not cost its participants anything, nor would there be a token at all. Instead it would be the lure for a surprisingly lucrative staking freeze. $GREED's unwitting participants would lock their own SOL in a staking account, safe from presale predators. While their money was working for them, it would also work for $GREED: an education initiative that Voshy hopes will teach the entire space a lesson.

The plan

For part two of $GREED, Voshy started by tweeting vague promises of what seemed like an upcoming airdrop of a GREED token. It caught on. Just like in 2023, crypto traders started angling for a token they knew nothing about.

Soon, Voshy upped the ante with a website with wallet-connection capabilities. People could now seemingly commit their SOL to GREED. But for what? The website didn't say it was conducting a presale. It made no promises about what it was for, or what people would get. Details didn't matter; in the first hour, 1,527 wallets pledged 6,220 SOL (currently worth about $1 million).

That's where Voshy's experiment diverged from the scammy sh*tcoin presales. Instead of taking people's money in exchange for a token (or in exchange for nothing, as scammers do), Voshy's website had prompted them to stake their SOL tokens to a Solana validator. When they signed the transaction, they locked their tokens to this validator for six months, until mid-September.

"Locking it for three days, nobody would care. We wanted the people to notice, we wanted the people to feel something, to remember it just like last $GREED," Voshy said.

Last year's $GREED experiment taught its unwitting participants to be "very careful" about giving out access to their social media accounts lest they be embarrassed again, the prankster said. With this year's $GREED, "we wanted to achieve that people don't just send their assets out."

Those who locked their money in $GREED aren't completely stranded. They can get their tokens out by creating a governance proposal and then convincing 15 other $GREED participants to vote for their assets' release. A couple hundred of the GREEDy have attempted to lobby their way back to liquidity, with mixed success.

"Vote for me if you also hate presale meta and will never send to anyone again," wrote one participant who failed to get their SOL unlocked through a vote last month.

Unlikely moneymaker

One of the benefits of duping people to stake their SOL during presale scam season is, well, protecting their SOL from presale thieves. But another lucrative benefit: staking yield. Staked SOL earns more SOL.

For those who don't get their money out in votes, they'll have the option to withdraw come Solana's Breakpoint conference in September. At that point, the lock freeze will thaw and with it a pile of extra tokens from $GREED's partner protocols: Samoyed memecoin, the Marms NFT collection, Texture, Famous Fox Federation, Racket and Cyberfrogs. They all pitched in an assortment of tokens and NFTs that will go to those who leave their money in $GREED to the end.

"Everybody who put their SOL in there is going to get more" than they had if GREED was actually a token, Voshy said. He mused: A good chunk would have likely lost their SOL tokens to some other scam if their money wasn't stuck. Instead of losing it, they're earning more through staking at an annualized rate near 8%.

Most validators take a commission on the earnings generated by its staked assets, but the $GREED validator, run by Triton, doesn't, Voshy said. All of its staking yield goes to the frozen stakers, the ones who locked their SOL up for months.

$GREED academy

Voshy's $GREED experiment is attempting to teach the whole space a lesson. Though the validator at the heart of it doesn't take a commission, it does collect tens of thousands of dollars in SOL every month from transaction tips. All that money will go toward education initiatives, according to Voshy.

"Mostly we want to empower people in the ecosystem to educate others," Voshy said. He spat out a few ideas: dapps that incentivize learning about crypto, TikToks and YouTube videos, that kind of thing.

"It's going to be fully crypto education and quite Solana-focused," he said.

Altruism turned $GREED's validator into an unlikely success story. Though a couple thousand SOL were staked before the lockup "gotcha" was widely known, a tsunami of SOL poured in after word got out. The $GREED validator currently has nearly 900,000 SOL tokens – a hoard worth roughly $150 million. More continues to pour in ahead of an end-of-July deadline, he said.

BitcoinOS Verifies First-Ever ZK Proof on Bitcoin Mainnet

July 25: BitcoinOS, a network of Bitcoin-based rollup chains, has verified the first-ever zero-knowledge (ZK) proof on Bitcoin's mainchain. ZK cryptography is looked to as a key technology for scaling blockchain throughput and usefulness, but the tech is complicated and computationally intense – meaning it was unclear if or when it would make its way to the comparatively bare-bones Bitcoin network. According to the BitcoinOS team, "This is the first permissionless upgrade of the Bitcoin system and the first time Bitcoin has been upgraded without a soft fork." Bitcoin can now be "infinitely upgradable," the team told CoinDesk, "while requiring no changes to the consensus code." BitcoinOS aims to be the "ultimate implementation of a Bitcoin rollup system," eventually serving as a bridge connecting any number of rollups – quick and cheap layer-2 blockchains that are secured by the Bitcoin blockchain and ZK proofs.

Roxom Raises $4.3M and Launches Bitcoin-Based Stock, Commodities and Futures Exchange

July 25 (PROTOCOL VILLAGE EXCLUSIVE): Roxom raised $4.3 million in pre-seed funding to launch the first stock, commodities, and futures exchange denominated in Bitcoin. The company was founded by CEO Borja Martel and CTO Nick Damico. Martel previously founded the LATAM-based crypto exchange Lemon. Roxom's round was led by Kingsway, Draper, and David Marcus, among others. "Bitcoin native financial markets are an important step for holders to access a wide range of financial services natively. Roxom is an important step in that direction," said Marcus.

P2P Validator Service Integrates with Avail Network

July 25: P2P.org is set to integrate the just-launched Avail Network into its non-custodial staking platform. According to the team, the integration with Avail's data availability network will enable "smoother cross-chain transactions, improving overall blockchain interaction." Key highlights, according to P2P, include a "0% fee incentive for the first three months of staking AVAIL, successful testnet phases managing over 300 million requests and 37,000 concurrent connections, and the deployment of innovative solutions like a proxy balancer for enhanced network capacity."

Elastos Introduces Native Bitcoin Staking

July 25 (PROTOCOL VILLAGE EXCLUSIVE): Bitcoin-based Layer-2 service Elastos says it has introduced native bitcoin staking for the first time ever. From the team: "Using the Elastos BeL2 SDK, partners can develop Native Bitcoin dapps aimed at encouraging the staking of over 1 Trillion dormant Bitcoins." The SDK debuted at Bitcoin Nashville 2024, with the StarBTC demo loan app. "Elastos is the sole L2 with innovative arbiter node technology and smart contracts, facilitating dispute resolution and revenue opportunities to node holders who stake Elastos ELA or BTC," said the team.

Protocol Village is a regular feature of The Protocol, our weekly newsletter exploring the tech behind crypto, one block at a time. Sign up here to get it in your inbox every Wednesday. Project teams can submit updates here. For previous versions of Protocol Village, please go here.

Total value locked on EigenLayer has dropped by 13% to $15.1 billion in the past 30 days, even though ether is trading at a similar level to June.

Outflows can be attributed to the fickle nature of points farming and the limited returns on restaking protocols.

Ether.fi has bucked the trend, experiencing growth in the period.

Billions of dollars worth of ether {{ETH}} has been withdrawn from restaking protocols over the past month as the once trendy sector gets its first taste of the fickle nature of crypto investors.

On June 25, ether {{ETH}} was trading at $3,300, a shade higher than Thursday's price of $3,200. During that period, however, the total value locked (TVL) on EigenLayer – a protocol that links restaking protocols – slumped by $2.28 billion to $15.1 billion. Restaking protocols like Renzo and Kelp have lost 45% and 22% of their TVL, respectively, data from DefiLlama shows.

A portion of the outflows can be attributed to depositors looking to harvest points that will eventually be converted to airdrops subsequently moving on to another project to maximize returns.

For others, the yield is too low when compared with specific yield-generation protocols like Ethena. Renzo offers an annual yield of 3.43%; Ethena offers more than 10%.

Restaking is a strategy that investors use to secure an additional yield on ETH that is already staked on the main Ethereum blockchain. Protocols like Ethena generate a yield by harvesting funding rates, which can be more volatile.

One restaking project that has managed to buck the trend is ether.fi, which has seen a $100 million increase in TVL.

This was another big week in the U.S., with the launch of exchange-traded funds for Ethereum, making the second-largest cryptocurrency by market cap available to investors through a traditional offering.

Have you ever considered how to evaluate crypto projects and what criteria to consider? In today’s issue, Matthew Burgoyne, partner at law firm Osler Hoskin & Harcourt LLP, provides a guide for investment advisors to evaluate crypto projects.

In Ask an Expert, David Ben Kay, president at Function X, answers questions advisors can consider when evaluating investments.

–S.M.

You’re reading Crypto for Advisors, CoinDesk’s weekly newsletter that unpacks digital assets for financial advisors. Subscribe here to get it every Thursday.

How to Evaluate Crypto Projects: A Guide for Investment Advisors

As the momentum of the crypto and blockchain industry continues to grow, securities advisors are undoubtedly facing a greater number of questions from clients about specific crypto assets and the projects that underlie them. Evaluating these projects requires a thorough understanding of several crucial factors to ensure informed investment decisions. The following sections highlight areas for advisors to consider when evaluating the nature and legitimacy of any crypto project and corresponding crypto asset:

Project founder due diligence

Investigate the backgrounds of project founders, including their professional history, previous projects and industry reputation. Look for verifiable expertise and be alert for potential fraud. Red flags include newly created social media profiles and anonymous teams.

Reviewing and critically analyzing tokenomics

Tokenomics refers to the economic model of the token, including its supply, distribution, and utility within the project. Key aspects to analyze include:

Supply and distribution: Understand the total supply of tokens and how they are distributed among stakeholders. Pay attention to the allocation for founders, team members, advisors, and investors. A well-balanced distribution minimizes the risk of market manipulation.

Utility: Evaluate the practical use of the token within the project. Tokens should have a clear purpose, such as facilitating transactions, accessing services, or incentivizing participation. Projects with vague or unnecessary token usage should be approached with caution.

Inflation and deflation mechanisms: Assess whether the project has mechanisms to control token supply, such as token burns (reducing supply). Understanding these mechanisms helps in evaluating long-term value stability.

Evaluating the business plan

A realistic and sound business plan is essential for the viability of any token project. In the crypto industry, a business plan is commonly presented within a white paper, which is a foundational document that outlines the project’s vision, the nature and use of blockchain technology and implementation strategy. Key elements to review include:

Necessity of the token: Determine why a token is essential for the project. The token should solve a specific problem or enhance the functionality of the project, not just serve as a fundraising tool.

Market need and competition: Analyze the market demand for the project’s solution and identify its competitors. As is the case in the traditional finance (“TradFi”) world, a unique value proposition and a well-defined market niche are indicators of potential success.

Revenue model: It is essential to understand how the project plans to generate revenue. Look for sustainable and scalable revenue streams that are realistically achievable within the given market conditions.

Risk factors

Identifying potential risks is crucial in evaluating token projects. Common risk factors include:

Technical risks: Assess the likelihood of technical failures or vulnerabilities; multiple blockchain and software code audits conducted by reputable third parties are positive signs and lessens the likelihood of hacking incidents, which can lead to significant loss for consumers.

Liquidity risks: The liquidity for certain tokens can be heavily concentrated on a few crypto asset trading platforms or liquidity pools. When a significant portion of tokens is held within only a few of these venues, buying or selling them efficiently may become challenging, especially during periods of high trading volume

Risk from competitors: Many tokens face significant competition from other blockchain platforms that offer similar or enhanced functionalities. When analyzing a crypto project, consider whether there are high gas/transaction fees or network congestion associated with the blockchain. There may be competing projects and tokens which offer lower transaction costs and faster processing times, which could attract software developers and users away from the project under review.

Regulatory considerations

Evaluate whether the issuance of the token triggers regulatory requirements, such as anti-money laundering (AML) laws or securities laws; many new projects trigger one or both areas of law, while some older, well-established projects that are sufficiently decentralized do not trigger these laws. It is essential to verify whether the project founders have obtained legal advice and if sales are restricted in major markets like the U.S. and the UK. Such restrictions could indicate an attempt to circumvent securities regulators in those countries, suggesting that the token sale may involve the sale of securities or derivatives.

Conclusion

Evaluating token projects requires a comprehensive approach, considering the credibility of the founders, the economic model of the token, the quality and viability of the business plan, potential risks and regulatory compliance. By thoroughly analyzing these factors, investment advisors can provide informed guidance to their clients, helping them navigate the complex and evolving landscape of crypto assets.

- Matthew Burgoyne, Partner, Osler Hoskin & Harcourt LLP

Ask an Expert

Q: What are the key elements when looking into crypto projects from a legal perspective?

A: From a legal perspective, three key areas that I look at in assessing a crypto project are: compliance, governance and security. Does the team include dedicated, competent individuals looking after these areas? While it is natural and expected that the team has technical and marketing expertise, I would also want to see individuals with strong legal and financial experience to ensure that the company has been established in compliance with local laws to be able to operate as it intends and that it has an awareness about international laws and norms that could impact execution of their proposed business plan. I would prefer to see these individuals in key leadership and decision-making positions, although if the company is in a very early stage, then at least advisors to the company should include lawyers and accountants or those with a strong legal and financial management background. If the company is intending to or has issued a token, I would also expect to see a legal opinion from relevant jurisdictions to ensure compliance with local laws and regulations.

Q: How can advisors help their clients make investment decisions based on this information?

A: Legal compliance and governance are factors included in any investor’s assessment of the risks involved in a proposed project. They are not the only factors by any means, just part of the calculus in assessing whether or not to invest. Particularly in the crypto industry there are still many legal issues which fall into gray areas – and therefore potentially of higher risk. It will depend on the investor’s risk tolerance and judgment as to whether the potential returns on a project outweigh the potential risks.

Q: What is a good example of a project from a legal perspective?

A: Projects that are beyond the startup stage and have a record of good compliance and governance practices are going to be easier subjects for due diligence. Licenses, registrations and required filings will already be in place, as well as guidelines for internal practices and operations that are generally in written form. This is in contrast to early-stage startups. In those cases, more emphasis will be given to the individual team members and their previous experience and track records in other projects as well as the white paper that contemplates the regulatory framework that the project will operate in as well as how governance issues will be handled internally.

While these comments are quite generic and can apply to any project, they are of particular importance in the crypto field where, from a legal perspective, many things are still in a state of flux. Lawyers are tasked with gathering as much objective information as possible to present the prospective investor with an assessment that enables a well informed decision.

- David Ben Kay, President, Function X

Keep Reading

Spot ether exchange-traded funds launched on July 23rd, and trade volumes reached $300 million in the first hour.

Former U.S. President Donald Trump will speak at the Bitcoin 2024 event in Nashville.

On the first day of the ether ETFs, inflows reached over $100 million while trades reached $1 billion.

Solana's march toward restaking took a big leap Thursday, with infrastructure project Jito Foundation releasing the code for a staking and restaking program – the network's first.

Restaking theoretically allows blockchain networks to utilize the value of other staked assets as a form of collateral to ensure they're staying honest.

The yet-to-be-audited code from Jito should allow any protocol building on Solana to set up a mechanism for providing economic security to nearly any on-chain application, or "actively validated service" (AVS). Notably, Jito's code would allow users to secure AVSs using whatever crypto asset they choose.

Jito's brand of restaking differs from the version popularized by EigenLayer on the Ethereum network, which restricts collateral to ETH, certain ETH derivatives and the platform's native EIGEN tokens.

"The flexibility and customization allowed in this architecture will be especially useful for the most important customer of these systems - the AVSs," said Lucas Bruder, a contributor at Jito Network.

A number of protocols and startups are seeking to build restaking services for Solana. Jito's code release puts it in the lead, though people familiar with the project told CoinDesk that it had not implemented the code on the mainnet. That's to come later this year.

Read more: Restaking 'Gold Rush' Spreads to Solana From Ethereum, With Jito and Others Joining In

CoinDesk Indices presents its daily market update, highlighting the performance of leaders and laggards in the CoinDesk 20 Index.

The CoinDesk 20 is currently trading at 2179.06, down 4.4% (-99.18) since yesterday's close.

None of the 20 assets are trading higher.

Leaders: XRP (-0.4%) and ICP (-1.1%).

Laggards: ETH (-6.6%) and LTC (-6.3%).

The CoinDesk 20 is a broad-based index traded on multiple platforms in several regions globally.

Marathon Digital (MARA), one of the largest bitcoin {{BTC}} miners, bought $100 million worth of BTC in the open market and said it will readopt its strategy to hold all mined bitcoin on its balance sheet.

The miner said in a statement on Thursday that it now holds over 20,000 bitcoin, worth nearly $1.3 billion based on current prices, on its balance sheet and plans to buy more in the open market.

"Bitcoin’s recent price decline, coupled with the strength of our balance sheet, afforded us an opportunity to add to our holdings. We look forward to continuing to leverage our technological expertise to support Bitcoin and distributed digital asset ecosystems,” said Marathon's CFO Salman Khan.

The decision to HODL or holding onto bitcoin comes almost year after Marathon started to sell its mined digital assets to pay for the company's operating expenses. Prior to the crypto winter, most miners adopted the strategy to hold on to all the mined bitcoin in their balance sheet, which paid off during the bull market rally. However, as market imploded last year, most miners started to sell their mined bitcoin to pay for operating expenses and Marathon was one of the last one to start monetizing their digital assets in early 2023.

"Adopting a full HODL strategy reflects our confidence in the long-term value of bitcoin," said Fred Thiel, Marathon’s chairman and CEO. "We believe bitcoin is the world’s best treasury reserve asset and support the idea of sovereign wealth funds holding it. We encourage governments and corporations to all hold bitcoin as a reserve asset.”

After the prolonged bear market, bitcoin started to recoup its losses this year after the likes of BlackRock got approval to offer spot BTC exchange traded-funds (ETFs) in the U.S. This move brought more investors into the market and helped the digital asset reach a new all-time-high price. Bitcoin has come off its peak of over $70,000 since then and now trading around $64,000 - still up 51% this year.

“Given Bitcoin’s current tailwinds, including increased institutional support and an improving macro environment, we are once again implementing this strategy and focusing on growing the amount we hold on our balance sheet," Marathon's CFO said.

Marathon held $268 million in cash in its balance sheet as of June 30 and will report its second quarter earnings Aug. 1. The shares of the miner is down about 2.5% in the pre-market trading, while bitcoin fell about the same amount in the last 24 hours. The broader CoinDesk20 Index also slumped 5.4% in the same time period.

Russian-speaking ransomware groups were responsible for at least 69% of all crypto proceeds from ransomware in 2023.

In 2023 Russian-language darknet markets comprised 95% of all crypto-denominated illicit drug sales that occurred on the dark web.

Inflows to Russia-based exchange, Garantex, accounted for 82% of the crypto from sanctioned entities, despite restrictions being imposed due to the war on Ukraine.

Illicit use of crypto for ransomware, drug sales, and sanction evasion was rife in Russia in 2023 according to a report by TRM Labs on Thursday.

Russian-speaking ransomware groups were responsible for at least 69% of all crypto proceeds from ransomware in 2023, which exceeded $500 million. Ransomware is a type of malware that prevents a user from accessing a device until a sum is paid.

The two largest ransomware operators in 2023 were Lockbit and ALPHV/Black Cat, both Russian-speaking groups. However, in February the U.K. National Crime Agency said it had managed to take control of Lockbits services "compromising their entire criminal enterprise," according to an article at the time.

In 2023, Russian exchange Garantex accounted for 82% of the crypto volumes from sanctioned entities internationally, the report said.

Due to Russia's war on Ukraine, nations around the world placed sanctions on the country leading to some turning to crypto to evade them. U.S. sanctions watchdog, the Office of Foreign Assets Control (OFAC) blacklisted a bitcoin and ether address last year tied to sanctions evasion. Plus, U.S. federal prosecutors alleged in 2022 that five Russian nationals had laundered millions of dollars worth of crypto.

In 2023 Russian-language darknet markets comprised 95% of all crypto-denominated illicit drug sales that occurred on the dark web, the report added.

"Russian speaking threat actors are unique in the breadth of their malign activity," the report said.

However, North Korea remains the world’s hacking superpower and has been responsible for stealing close to $1 billion in cryptocurrency in 2023 according to the report.

This article originally appeared in First Mover, CoinDesk’s daily newsletter, putting the latest moves in crypto markets in context. Subscribe to get it in your inbox every day.

Latest Prices

Top Stories

Bitcoin {{BTC}} fell to just above $64,000 amid a stock market rout and weakening sentiment for risk assets, including cryptocurrencies. The plunge led to over $250 million worth of bullish bets being liquidated, the worst hit since early July. Bitcoin is priced around $64,200 at the time of writing, a drop of almost 3.5% in the last 24 hours. The broader digital asset market, as measured by the CoinDesk 20 Index (CD20), has fallen 5.6%. The slump follows the tech-heavy Nasdaq 100 index posting its biggest drop since 2022 after Google parent company Alphabet and Tesla reported mixed quarterly earnings.

Ether {{ETH}} has fallen over 8% in the last 24 hours, faring worse than the wider crypto market, following $810 million worth of outflows from Grayscale's Ethereum Trust ETF (ETHE). Most of the other ETH ETFs continued in the green during the Wednesday session, with BlackRock's ETHA leading the pack at $283.9 million of net inflows, followed by Bitwise's ETHW at $233.6 million and Fidelity's FETH with $145.7 million. ETHE bucking this trend echoes the plight of Grayscale's bitcoin equivalent, GBTC, which experienced heavy outflows when it listed earlier this year. Ether is trading at $3,165 at the time of writing.

The aggregate market capitalization of the stablecoin sector, which includes hundreds of coins, jumped to over $164 billion for the first time since the collapse of Terra in May 2022, according to data source DefiLlama and trading firm Wintermute. It had been languishing around the $160 billion mark. The expansion "indicates growing investor optimism, underpinning a bullish outlook," Wintermute said in a note shared with CoinDesk. "The increase in stablecoin supply indicates that money is being deposited into on-chain ecosystems to generate economic activity, either through direct on-chain purchases that can catalyze price appreciation or yield-generation strategies that could improve [market] liquidity. This activity ultimately fosters positive on-chain growth."

Chart of the Day

Activity in Chicago Mercantile Exchange's ether futures reached new heights on Tuesday as the debut of spot ETH ETFs in the U.S. galvanized investor interest in the second-largest cryptocurrency.

The previous peak of 7,550 contracts was set one month ago. The standard contract is sized at 50 ETH.

CME witnessed 14,736 contracts change hands on Tuesday, which is three times higher than the average daily volume of 5,010 contracts seen throughout July. Tuesday was also one of the top 10 volume days for ether futures.

Giovanni Vicioso, global head of cryptocurrency products at CME Group, attributed the surge in activity to the onset of spot ether ETF trading in the U.S.

Source: Chicago Mercantile Exchange

- Omkar Godbole

Trending Posts

India to Release Its Crypto Policy Stance by September After Stakeholder Consultations: Report

Coinbase Asset Management Plans Tokenized Money-Market Fund, a Hot Area After BlackRock's BUIDL Success: Sources

Deutsche Telekom Joins RWA-Focused XDC as Infrastructure Provider in Digital Asset Push

Coinbase's CB Payments Ltd. (CBPL) was fined 3.5 million pounds ($4.5 million) by the Financial Conduct Authority (FCA) for offering services to high-risk customers.

Despite the restrictions in place, CBPL onboarded and/or provided e-money services to 13,416 high-risk customers, the FCA said.

CB Payments Ltd. (CBPL), an e-money institution and payments processor tied to crypto exchange Coinbase (COIN) was fined more than 3.5 million pounds ($4.5 million) by the Financial Conduct Authority (FCA) for lapses in its money laundering controls.

The London-based company, which is authorized by FCA and doesn't itself offer cryptocurrency services, acts as a gateway for customers to trade crypto on entities within the Coinbase group.

Concerns about the company's controls over financial crime were raised in February 2020 after the FCA visited its offices, and CBPL then entered into a voluntary agreement that prevented it from taking on new high-risk customers while it addressed those issues.

"Despite the restrictions in place, CBPL onboarded and/or provided e-money services to 13,416 high-risk customers," the FCA said in a release on Thursday. "Approximately 31 per cent of these customers deposited around USD $24.9 million. These funds were used to make withdrawals and then execute multiple cryptoasset transactions via other Coinbase Group entities, totalling approximately USD $226 million."

The breaches, which were not discovered for almost two years, resulted from CBPL’s lack of skill in monitoring the controls put in place to ensure that the agreement was effective, the FCA said.

"Coinbase remains committed to high standards of regulatory compliance, and this means partnering with regulators when it comes to compliance and other areas," the company said in the blog post. "We are always willing to acknowledge when we fall short, and to make improvements – which is what we have done here."

China's surprise rate cut signals panic, adds to risk aversion in the market.

The steepening of the U.S. Treasury yield curve is the biggest risk, one observer said.

Risk assets slid Thursday as China's second interest-rate cut in a week sparked concerns of instability in the world's second-largest economy.

Bitcoin {{BTC}}, the leading cryptocurrency by market value, fell almost 2% since midnight UTC to around $64,000 and ether {{ETH}} dropped more than 5%, dragging the wider altcoin market lower. The CoinDesk 20 Index (CD20), a measure of the broader crypto market, lost 4.6% in 24 hours.

In equity markets, Germany's DAX, France's CAC and the eurozone's Euro Stoxx 50 fell over 1.5%, and futures tied to the tech-heavy Nasdaq 100 were slightly lower after the index's 3% slide on Wednesday, according to data source Investing.com.

Early Thursday, the People's Bank of China (PBoC) announced a surprise, off-schedule cut in its one-year medium-term lending facility rate to 2.3% from 2.5%, injecting 200 billion yuan ($27.5 billion) of liquidity into the market. That's the biggest reduction since 2020.

The move, along with similar reductions in other borrowing rates early this week, shows urgency among policymakers to shore up growth after its recent third plenum offered little hope of a boost. Data released early this month showed China's economy expanded by 4.7% in the second quarter at an annualized pace, much weaker than the estimated 5.1%, and slower than first quarter's 5.3%.

"Equity futures are stable after yesterday's bloody session that shook views across all asset classes," Ilan Solot, senior global strategist at Marex Solutions, said in a note shared with CoinDesk. "The decision by the PBoC to cut rates in a surprise move only added to the sense of panic." Marex Solutions, a division of global financial platform Marex, specializes in creating and distributing customized derivatives products and issuing crypto-linked structured products.

Solot noted the ongoing "steepening of the U.S. Treasury yield curve" as a threat to risk assets, including cryptocurrencies, echoing CoinDesk's reporting from early this month.

The yield curve steepens when the difference between longer-duration and shorter-duration bond yields increases. This month, the spread between 10-year and two-year Treasury yields has risen by 20 basis points to -0.12 basis points (bps), mainly due to stickier 10-year yields.

The so-called de-inversion or re-steepening from inversion (or negative spread) has historically coincided with risk aversion.

"For me, the biggest concern is the shape of the U.S. yield curve, which continues steepening. The 2- and 10-year curve is not only -12bps inverted, compared to -50bps just last month. The recent moves have been led by rising back-end [10y] yields and falling short-end ones," Solot said.

That's a sign markets expect the Fed to cut rates but see stickier inflation and expansionary fiscal policy as growing risks, Solot said.

Lumerin, a protocol on the Arbitrum blockchain, announced that its new Morpheus project for decentralized AI computing will go live Friday on a public test network.

The premise of the technology is to avoid pitfalls of centralized AI models, which might be prone to censorship or monopoly control, according to a press release shared exclusively with CoinDesk on Thursday.

The project relies on "personal AIs," referred to as "smart agents," which could be paid for using cryptocurrencies, according to the release. It is being deployed on Arbitrum's Sepolia test network.

"The new Morpheus public testnet will be used to decentralize and more efficiently allocate AI compute power across the Morpheus AI network and enable users to engage in a decentralized Chat GPT-like interface," Lumerin said.

Started in 2021, Lumerin describes itself as an "open-source protocol and foundational layer technology that uses smart contracts to control how peer-to-peer data streams are accessed, routed and transacted."

Lumerin's first use case was a peer-to-peer, decentralized marketplace for trading Bitcoin hashpower – the computing power needed to find and confirm new blocks on the Bitcoin blockchain.

The project is now "leveraging its existing codebase to build the core node software for Morpheus," its website reads.

According to the Morpheus technical documentation, or "white paper," the project is expected to bring functional advantages over existing AI systems such as large language models (LLMs), since it's already in "Web3" – shorthand for technologies that are built on decentralized networks and designed to work with cryptocurrencies. Key capabilities could include running decentralized applications (dapps) and interacting with decentralized finance (DeFi) protocols.

"Being Web3 native, the user can buy or sell crypto, send stablecoins, access smart contracts and use dapps and DeFi services, which no LLM is connected to today," the white paper reads. "Regulatory barriers faced by centralized companies prevent them from offering these tools to users, so their models can chat about tasks but not act on the user's behalf in a Web3 context."

India has seen as many as 92 cases involving dark net and cryptocurrencies in drug trafficking in the past four years, the Home Ministry said.

A special task force has been constituted to monitor such suspicious transactions.

India has seen as many as 92 cases since 2020 till April 2024 involving dark net and cryptocurrencies to purchase drugs, the nation's junior Home Minister Nityanand Rai said to parliament on Wednesday.

Rai's response was to questions about drug trafficking from Jose K. Mani, a minister of parliament (MP) from the opposition. One of the questions posed asked "whether (the) Government has noticed increasing use of technology and other online methods while conducting drug trafficking in the country?"

The Narcotics Control Bureau (NCB), the nodal agency on drug law enforcement matters, booked three of such dark net and crypto-related cases in 2020, 49 in 2021, eight in 2022, 21 in 2023 and 11 until April 2024.

The data did not provide a distinction between how many of the 92 cases were solely dark net related and how many were solely crypto related in terms of methods of transactions.

In the same duration, 1025 cases involving parcels or couriers were reported.

Rai also said along with other prevention methods, a special task force has been constituted to monitor such suspicious transactions related to drugs.

Read More: India to Release Its Crypto Policy Stance by September After Stakeholder Consultations: Report

Indian city of Raipur is bringing building records on Blockchain with AirChains.

The initiative could prevent forgery and reduce processing time from a month to three days.

Raipur, the capital city of the Indian state of Chhattisgarh, has started bringing real estate records on to the blockchain with the help of AirChains, an India based Zero-Knowledge (ZK) roll up.

The Raipur Municipal Corporation administers the area issuing more than 8,000 building permits, work orders, and colony development permissions annually. The corporation floated a tender to have its records on blockchain and AirChain emerged as the partner through that process, Abinash Mishra, Commissioner, Raipur Municipal Corporation told CoinDesk in an interview on Thursday.

"We issue building permission certificates and previously we have had many issues such as forgery of documents," Mishra said. "We developed the solution with the AirChain team and now we are exploring similar digital documentation through blockchain of essential services that urban bodies usually produce which are birth, death and marriage certificates."

AirChains CEO Ankur Rakhi Sinha told CoinDesk that this marks the first use case of Zero-Knowledge Fully Homomorphic Encryption (zk-FHE) in India. "ZK is used to prove that something is true without revealing any additional information, whereas FHE is used to perform computations on encrypted data without needing to decrypt it," Sinha writes in a blog.

The Raipur Municipal Corporation has their own server sets and all the encryption keys are ordered with the government body itself, Sinha said.

"As of now, we are not on chain live yet, we are encrypting the old certificates and have completed around 100,000 certificates on ZK and once we go live we will bring the current (daily) data too," Sinha said. "Every building permission will have its own smart contract, and every update on the building permission will be updated on that similar smart contract."

Mishra of the Raipur Municipal Corporation told CoinDesk that the verification of the facts in the building permission applications takes "at least one month" between "seven days" for a bank to pass a loan and communicating that to the municipal commissioner who will then write to the subordinate. The goal here is to reduce that time to a matter of three days.

"Certification should be secure and decentralization is the future we should work on," Mishra said. "This is small initiative we have taken. I think many people will adopt it."

AirChains has previously worked with other Indian state authorities on similar projects.

Read More: Tribal Groups in Remote Indian Area Get Blockchain Caste Certificates

Revolut received a banking license with restrictions from the Prudential Regulation Authority three years after applying.

The approval means it is en route to becoming a fully fledged U.K. bank that is also licensed to offer crypto services

Revolut, one of the world's most valuable fintechs, finally won a banking license in its native U.K. more than three years after applying.

The London-based company has entered the Prudential Regulatory Authority's (PRA) "mobilization stage," designed for new banks to operate with restrictions, Revolut said Thursday.

The approval means it is on the path to becoming a fully fledged bank in the U.K. that is also licensed to offer crypto services. Revolut has allowed the buying and selling of crypto for several years and introduced a standalone cryptocurrency exchange for experienced traders earlier this year.

Already one of the world's most valuable fintech startups, earlier this week Revolut announced plans to sell $500 million worth of employee-owned shares in a deal that would increase its value to $45 billion.

Read More: Sygnum's First-Half Spot Crypto Trading Doubles, Derivatives Increase 500%