According to CryptoPotato, the U.S. Department of the Treasury has taken a negative stance on crypto mixing services, also known as Convertible Virtual Currency Mixing Services (CVCs). While there are legitimate uses for these services, such as privacy-focused customers seeking to avoid being tracked by blockchain analysis tools, cybercriminals also frequently utilize them. Tornado Cash, a well-known mixer, is currently facing charges in a Manhattan court that could result in a 20-year prison sentence for its founders.

The Financial Crimes Enforcement Network (FinCEN) of the U.S. Treasury has now targeted crypto mixers as a whole, aiming to outlaw them entirely. A Notice of Proposed Rule Making (NPRM) submitted by FinCEN suggests that CVCs should be designated as a class of transactions of primary money laundering concern, building on findings from cases such as the Bitzlato exchange takedown and the Axie Infinity Heist.

Andrea Gacki, FinCEN's director, stated that the proposed NPRM targeting crypto mixers would be the first use of Section 311 Authority against an entire class of transactions. Previously, Section 311 had only been used against individual companies, banks, or countries, such as a private Andorran Bank, Bitzlato, Iran, and North Korea. Section 311 is a part of the Patriot Act that grants the U.S. Department of Treasury the power to remove banking privileges from certain types of accounts, foreign jurisdictions, institutions, or classes of transactions if they are deemed a primary money laundering concern. Once Section 311 is applied, the targeted entity is essentially cut off from the global banking system, significantly hindering its financial survival.

20 October 2023

The Weekly Market Highlights is an initiative from the Binance Research team to round up the week, summarizing key market events and views from the team. 

🔎 Macro/TradFi

Standard Chartered is set to introduce a crypto custody service in Dubai, UAE, catering to institutional clients and supporting Bitcoin and Ethereum.

Metamask announced an integration with Stripe to enable on-ramp service for U.S. users.

After CoinTelegraph released clarification on sharing false spot Bitcoin ETF news, Larry Fink, CEO of BlackRock, acknowledged the global client demand for crypto and attributes recent price action to a 'flight to quality' amidst speculation of spot Bitcoin ETF approvals.

🔎 Crypto

L1/L2:

The BNB Greenfield Mainnet is officially live, introducing a fully public decentralized data storage network and marking a new era for Web3 data ownership.

The 25th quarterly BNB token burn has successfully completed. Over 2.1M BNB have been burned with an approximate value of US$501M.

Manta Network has partnered with Polygon Labs to migrate from Optimism to Polygon as a zkEVM layer-2 using Polygon CDK. Manta Network co-founder has added that the transition would better position the protocol to provide the best-in-class experience for developers and users.

Immutable, an Ethereum layer-2 NFT scaling platform, has postponed the vesting of 125M IMX tokens to July 2024. The decision aims to bolster Immutable's long-term sustainability.

Lightning Labs has launched its Taproot Assets protocol on the main network, facilitating the creation of stablecoins and other assets on Bitcoin and Lightning. The protocol aims to equip developers with tools to expand Bitcoin as a multi-asset network while preserving its foundational values.

The Solana Foundation has joined forces with UAE's Dubai Multi Commodities Centre (“DMCC”). Solana will offer technical and business support, Web3 education, and expand their grant program for DMCC Crypto Centre members. 

DeFi:

Uniswap v3 introduced a 0.15% swap fee on trades involving ETH, USDC, and other tokens. This introduces another revenue source for Uniswap to sustain its operations. In other news, a new hook enabling KYC verification on Uniswap v4 has ignited community debate. This hook allows users to undergo KYC checks before trading on a pool.

BitGo, a cryptocurrency custody solution, has acquired HeightZero, which offers software tools for wealth managers to incorporate crypto and digital assets into client portfolios.

dYdX Trading, the company behind dYdX, will forgo trading fee revenue from its forthcoming v4 platform, transitioning to a public benefit corporation. This move emphasizes dYdX's commitment to aligning closely with its community.

DeBank's Rabby Wallet introduces 'Rabby Desktop,' a DApp security-centric client. The platform facilitates safe dApp access via domain names, IPFS, ENS, or local files, minimizing single-point risks.

Stablecoins:

Crypto market maker Wintermute has partnered with stablecoin issuer Mountain Protocol to strengthen liquidity for USDM, which gives non-U.S. users yield-bearing access to U.S. Treasury bonds.

Others:

The RAK Digital Assets Oasis (“RAK DAO”) has launched, creating an economic free zone focused on supporting businesses in blockchain, digital assets, Web3, and AI.

MyShell, an opBNB-based AI platform, has raised US$5.6M in seed funding, achieving a valuation of US$57M. The funding round, led by INCE Capital, Hashkey Capital, among others, emphasizes the growing interest in AI platforms integrated with tokenomics.

Elixir Protocol secured US$7.5M in a Series A round at a US$100M valuation. Spearheaded by Hack VC, the funding aims to enhance liquidity in decentralized orderbook exchanges.

Account Labs has raised US$7.7M in funding for its Google-enabled UniPass crypto wallet. The wallet, leveraging account abstraction, aims to offer a smarter user experience in the crypto space.

🔎 Latest Binance Research Publications 

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Q3 State of Crypto - Market Pulse

Demystifying the Intent-Centric Thesis

Monthly Market Insights - October 2023

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About Binance Research: Binance Research is the research arm of Binance, the world's leading cryptocurrency exchange. The team is committed to delivering objective, independent, and comprehensive analysis and aims to be the thought leader in the crypto space. Our analysts publish insightful thought pieces regularly on topics related but not limited to, the crypto ecosystem, blockchain technologies, and the latest market themes.

General Disclosure: This material is prepared by Binance Research and is not intended to be relied upon as a forecast or investment advice, and is not a recommendation, offer or solicitation to buy or sell any securities, cryptocurrencies or to adopt any investment strategy. The use of terminology and the views expressed are intended to promote understanding and the responsible development of the sector and should not be interpreted as definitive legal views or those of Binance. The opinions expressed are as of the date shown above and are the opinions of the writer, they may change as subsequent conditions vary. The information and opinions contained in this material are derived from proprietary and non-proprietary sources deemed by Binance Research to be reliable, are not necessarily all-inclusive and are not guaranteed as to accuracy. As such, no warranty of accuracy or reliability is given and no responsibility arising in any other way for errors and omissions (including responsibility to any person by reason of negligence) is accepted by Binance. This material may contain ’forward looking’ information that is not purely historical in nature. Such information may include, among other things, projections and forecasts. There is no guarantee that any forecasts made will come to pass. Reliance upon information in this material is at the sole discretion of the reader. This material is intended for information purposes only and does not constitute investment advice or an offer or solicitation to purchase or sell in any securities, cryptocurrencies or any investment strategy nor shall any securities or cryptocurrency be offered or sold to any person in any jurisdiction in which an offer, solicitation, purchase or sale would be unlawful under the laws of such jurisdiction. Investment involves risks.

According to Foresight News, the ETH leveraged protocol f(x) has adopted LayerZero's Omnichain Fungible Token (OFT) standard, allowing users to transfer fETH, xETH, and FXN tokens across the Arbitrum network. The minting and swapping of fETH and xETH will still only take place on the mainnet, but the token bridging between Ethereum and Arbitrum can be completed through the 'bridge' tab on the official website.

According to Cointelegraph, OpenAI, the creator of the AI chatbot ChatGPT, has partnered with Dubai-based technology holding group G42 to expand AI capabilities in the Middle East. The collaboration aims to utilize OpenAI's generative AI models in sectors where G42 has expertise, such as financial services, energy, healthcare, and public services.

G42 stated that organizations in the United Arab Emirates (UAE) and other regions using its business solutions should now have a more simplified process of integrating advanced AI capabilities into existing businesses. The company plans to prioritize its substantial AI infrastructure capacity to support OpenAI's local and regional inferencing on Microsoft Azure data centers.

Sam Altman, co-founder and CEO of OpenAI, believes that G42's connections in the industry can help bring AI solutions that resonate with the nuances of the region. He said the collaboration will help advance generative AI across the globe. This partnership follows another development in Saudi Arabia, where a local university collaborated with Chinese universities to develop an Arabic-based AI system called AceGPT, built on Meta's Llama 2.

According to CoinDesk, Bitcoin miner Marathon Digital (MARA) has announced that it will store some of its digital assets with Fidelity Digital Asset, adding a second custody partner in an effort to diversify. Previously, Marathon had stored all its bitcoin with a single provider. As part of its broader treasury management strategy, the company has now added a new, enterprise-grade custodian as its second custodian. In a separate filing, Marathon stated that it would open one or more custodial asset accounts with Fidelity.

Marathon may further expand and add more custodians in the future. The company held 13,726 bitcoin as of September 30 and is producing over 1,000 more per month. Marathon CFO Salman Khan said in a statement that it is an opportune time to diversify their bitcoin custody across multiple custodians. Custody plays a crucial role in crypto and other markets, as firms that do not want to store their own digital assets can entrust them with a third party. Having more than one company providing custody ensures that if a single provider encounters issues, not all assets will be lost. Marathon's decision comes after several custodians, including Fortress Trust, have been targeted by hackers who stole some digital assets. In the case of Fortress Trust, the theft led to the custodian attempting to sell itself to blockchain tech company Ripple, but the deal ultimately fell through. Marathon's stock was up 1.3% in post-market trading and has risen 116% this year, while bitcoin has climbed 71%.

According to Cointelegraph, Universal Music Group (UMG) has announced a partnership with social music creation platform BandLab Technologies. The collaboration aims to promote responsible practices with artificial intelligence (AI) in the music industry, focusing on the ethical use of AI and protecting the rights of artists and songwriters. Michael Nash, the executive vice president and chief digital officer of UMG, emphasized the importance of responsible AI use in music creation tools and championing human creativity and culture.

UMG has previously addressed AI-related issues, such as collaborating with Google to combat AI deep fakes and developing a tool for legally creating AI tracks using artists' likenesses. YouTube has also released principles for working with the music industry on AI technology, including the introduction of its new 'Music AI Incubator'. The issue of copyright infringement regarding AI has reached the courts, with a United States judge denying copyright for AI art in August 2023.

According to CryptoPotato, Bitmain, a leading Bitcoin ASIC manufacturer, has reportedly terminated four employees for leaking salary information and violating the company's 'Management Standards for External Information Disclosure.' The company emphasized that employees should not share any company information with external parties without proper authorization.

This development comes a week after some Bitmain employees raised concerns about salary arrears due to cash flow issues, as per information obtained from the Maimai Community, China's workplace networking site, on October 8th. They also noted that the 2022 bonuses remained unpaid and that half of the base salary for all employees and performance-based wages could be withheld due to poor cash flow issues.

In response to the violation of company policy, Bitmain issued an internal disciplinary notice and dismissed the employees who disclosed salary delay information on the social networking platform. The company also reported the incident to the educational institutions where the interns involved in the matter are enrolled, hinting at potential legal consequences.

While Bitmain has not publicly commented on the development, the company made a significant investment of $53.9 million in Core Scientific to support mining operations in September. As part of the purchase agreement, Bitmain will provide Core Scientific with 27,000 Bitmain S19J XP 151 TH bitcoin mining servers. In exchange, Bitmain will receive $23.1 million in cash and $53.9 million in Core Scientific common stock. The company also recently unveiled its newest mining device, the S21 Antminer series.

According to Cointelegraph, Meta AI has developed a new artificial intelligence (AI) system that combines a non-invasive brain scanning method called magnetoencephalography (MEG) with AI to decode imagery from human brain waves. The system can be deployed in real time to reconstruct images perceived and processed by the brain at each instant.

A demonstration of the model's real-time capabilities was showcased on X, formerly Twitter, by the AI at Meta account. The experimental AI system requires pre-training on an individual's brainwaves, interpreting specific brain waves as specific images. There is no indication that the system could produce imagery for thoughts unrelated to pictures the model was trained on.

Meta AI acknowledges that this is early work and further progress is expected. The research is part of the company's ongoing initiative to unravel the mysteries of the brain. While there is no current reason to believe the system could invade someone's privacy, it could potentially provide a quality of life upgrade for some individuals. The Meta AI team hopes that one day it may provide a stepping stone toward non-invasive brain-computer interfaces in a clinical setting that could help people who have lost their ability to speak.

According to Cointelegraph, a bipartisan parliamentary committee in the United Kingdom has called for action to protect creators from potential copyright violations related to nonfungible tokens (NFTs). The committee also requested the government to address possible harms caused by sporting groups issuing digital assets. The members of the committee believe that the most pressing issue is the risk to the intellectual property rights of artists due to the ease and speed at which NFTs can be minted.

In other NFT news, Yemel Jardis, the executive director of the Decentraland Foundation, shared his thoughts on the NFT market slump with Cointelegraph. He believes that as more community education on NFTs takes place, the focus will shift from speculative trading to genuine utility. According to Jardis, a steep decline in NFT prices should not be seen as a sign of distress, but rather as an indication that the market is maturing.

Additionally, the Ethereum wallet MetaMask, popular among NFT collectors, was briefly removed from Apple's App Store on October 14. This raised concerns over a possible permanent removal from the marketplace. At the time, Apple users were also unable to download the application from the MetaMask website. Some speculated that Apple's terms of service were behind the app's disappearance, as the App Store's rules prohibit apps running unrelated background processes, such as cryptocurrency mining.

According to CoinDesk, a CNBC report has revealed more information about Jimmy Zhong, who was arrested last year for stealing over 50,000 bitcoins from the Silk Road marketplace. The case was reopened when Zhong called emergency services in Athens, Georgia, to report that hundreds of thousands of dollars worth of cryptocurrency had been stolen from his home. After some investigation, the U.S. Department of Justice (DOJ) arrested Zhong and seized one of the largest-ever amounts of cryptocurrency from an individual.

Before his arrest, Zhong was known for hiring private jets, throwing lavish parties, and gifting his friends thousands of dollars. He was charged with wire fraud and, after pleading guilty, was sentenced to a year and a day in federal prison. He also forfeited his bitcoin. Zhong, now 33 years old, began his sentence at the federal prison camp in Montgomery, Alabama, on July 14, 2023. Zhong's attorney, Michael Bachner, told CNBC that the government has not been hurt by his client's actions. He pointed out that if the government had seized the 50,000 bitcoins at the time of Silk Road operator Ross Ulbricht's arrest, they would have sold them for about $320 per coin, or roughly $14 million. However, due to Zhong's actions, the government has made a $3 billion profit.

According to CoinDesk, the U.S. Federal Deposit Insurance Corp. (FDIC) has been criticized by its inspector general for leaving banks under its supervision unprepared to navigate the regulator's crypto expectations. As a result, the FDIC has agreed to develop a new strategy by January. The Office of the Inspector General for the FDIC found the agency's performance in preparing the industry for crypto risks to be lacking, according to a report issued on Wednesday.

The report concluded that the FDIC's lack of clear procedures causes uncertainty for supervised institutions in determining the appropriate actions to take. The agency also hadn't concluded its effort to assess whether it could head off systemic banking dangers from crypto. The inspector general noted that the FDIC told some banks to pause their crypto activities last year and this year, but then it didn't tell the banks how long they'd be paused or how it might end.

The FDIC has been suspicious of the digital assets industry and has leaned toward shielding the banking system from deep involvement with crypto. This stance has been felt acutely by crypto businesses struggling to find and maintain banking relationships in the U.S. The agency agreed to inspector general recommendations that it come up with a plan and schedule for figuring out the risks cryptocurrency activity poses to lending institutions, and that it also clarify its process for the crypto reviews at individual banks.

According to CoinDesk, the U.S. Federal Deposit Insurance Corp. (FDIC) has been criticized by its inspector general for leaving banks under its supervision unprepared to navigate the regulator's crypto expectations. As a result, the FDIC has agreed to develop a new strategy by January. The Office of the Inspector General for the FDIC found the agency's performance in preparing the industry for crypto risks to be lacking, according to a report issued on Wednesday.

The report concluded that the FDIC's lack of clear procedures causes uncertainty for supervised institutions in determining the appropriate actions to take. The agency also hadn't concluded its effort to assess whether it could head off systemic banking dangers from crypto. The inspector general noted that the FDIC told some banks to pause their crypto activities last year and this year, but then it didn't tell the banks how long they'd be paused or how it might end.

The FDIC has been suspicious of the digital assets industry and has leaned toward shielding the banking system from deep involvement with crypto. This stance has been felt acutely by crypto businesses struggling to find and maintain banking relationships in the U.S. The agency agreed to inspector general recommendations that it come up with a plan and schedule for figuring out the risks cryptocurrency activity poses to lending institutions, and that it also clarify its process for the crypto reviews at individual banks.

According to CoinDesk, the U.S. Federal Deposit Insurance Corp. (FDIC) has been criticized by its inspector general for leaving banks under its supervision unprepared to navigate the regulator's crypto expectations. As a result, the FDIC has agreed to develop a new strategy by January. The Office of the Inspector General for the FDIC found the agency's performance in preparing the industry for crypto risks to be lacking, according to a report issued on Wednesday.

The report concluded that the FDIC's lack of clear procedures causes uncertainty for supervised institutions in determining the appropriate actions to take. The agency also hadn't concluded its effort to assess whether it could head off systemic banking dangers from crypto. The inspector general noted that the FDIC told some banks to pause their crypto activities last year and this year, but then it didn't tell the banks how long they'd be paused or how it might end.

The FDIC has been suspicious of the digital assets industry and has leaned toward shielding the banking system from deep involvement with crypto. This stance has been felt acutely by crypto businesses struggling to find and maintain banking relationships in the U.S. The agency agreed to inspector general recommendations that it come up with a plan and schedule for figuring out the risks cryptocurrency activity poses to lending institutions, and that it also clarify its process for the crypto reviews at individual banks.

According to CoinDesk, bear markets provide an opportunity for firms to build and position themselves for the next bull run. As a result, features that were once cutting-edge become standard in the next cycle. Crypto exchanges can no longer simply facilitate buying and selling cryptocurrency; they must evolve beyond being mere asset marketplaces, particularly with the rise of decentralized finance (DeFi). Instead, they should construct portals to an entire financial universe.

The opportunity is significant as Gen Z comes of age with crypto familiarity and eagerness to invest. A recent survey by the FINRA Foundation and the CFA Institute found that 44% of Gen Z investors started investing by purchasing crypto, while 32% started with stocks and 21% with mutual funds. Additionally, 65% of Gen Z investors use financial apps and pay attention to their guidance.

Crypto platforms offering 'investment as a service' can take cues from traditional finance giants like Vanguard to welcome the next generation to a home base for wealth development. However, early attempts in this area have been hindered by U.S. regulations, with crypto exchanges no longer able to offer debt-based yield services or retail-friendly staking services.

A compliant path forward involves proactively cooperating with the Securities and Exchange Commission and relying on robust custody partnerships, including tools like separately managed accounts. Direct indexing platforms are the next step to wide adoption of long-tail digital assets beyond bitcoin and Ethereum. Indexes allow for efficient asset allocation, risk management, product development, and performance measurement, enabling crypto to evolve into an institutional financial market.

Advisers will play a crucial role in simplifying Web3, managing client inventory, and maximizing yield with the inevitable proliferation of on-chain protocols, products, and decentralized apps. However, what is missing in the U.S. is regulatory support and index adoption that captures the more nuanced and differentiating aspects of crypto markets, such as proof-of-stake reward rates. While U.S. regulators are hoped to provide clear guidelines, innovation will continue with or without them.

Fellow Binancians,
Binance will open trading for the ATOM/FDUSD, AVAX/FDUSD, BAND/TRY, BCH/FDUSD, LOOM/TRY and MATIC/FDUSD spot trading pairs at 2023-10-19 08:00 (UTC).
In addition, Binance will enable Spot Grid and Spot DCA Trading Bots services for the NTRN/USDT and PENDLE/USDT trading pairs at 2023-10-19 08:00 (UTC).
Start Trading on Binance Spot Now!
Notes:
TRY is a fiat currency and does not represent any other digital currencies.Users will enjoy zero maker fees on FDUSD trading pairs until further notice.Where any discrepancy arises between the translated versions and the original English version, the English version shall prevail.
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Binance Team
2023-10-18

According to Cointelegraph: Bitcoin's price is predicted to hit at least $128,000 by the conclusion of 2025, according to various analytics models. Renowned trader and analyst, CryptoCon, proposed this lofty two-year target on Oct. 17 via X (formerly known as Twitter).

The Bitcoin market forecasts differ regarding the cryptocurrency's price trajectory following next year's block subsidy halving. However, CryptoCon maintains a bullish long-term outlook, with figures around $130,000 emerging as the most popular prediction.

BTC price model data. Source: CryptoCon/X

Forecasts based on multiple Bitcoin price cycles, as well as their peaks and troughs, all point to the $130,000 mark. As CryptoCon notes, early tops in each price cycle, as well as the cycle top constituting new all-time highs, reaffirm this expectation.

The analyst further elaborated that early tops, on average, occur within a three-week frame around July 9, and all-time highs tend to materialize within three weeks around Nov. 28.

CryptoCon devised this prediction by using simple diagonal trendlines from the first early top. The resulting calculation identified the price of the last two cycle tops accurately and suggested a price target of around $138k for the current cycle.

Despite being open to lower prices, CryptoCon's analysis predominantly favors a $130,000 target for Bitcoin during this cycle. According to the model's timeline, 2025 should witness the peak of the next cycle, almost double the current 2021 record.

These four-year halving cycles have shaped the viewpoints of many notable Bitcoin market commentators. Among them is analyst Rekt Capital, who anticipates new local lows in the pre-halving year 2023 before the bull market peaks. In the past, Rekt Capital cautioned about possible price downturns with highs of $32,000 forming a double-top pattern.

As Rekt Capital explains, downturns "should be treated as an opportunity for re-accumulation," suggesting that while the current pattern favors bears, bulls should still view any lows as investment opportunities.