StealthEX & CryptoDaily: Vitalik Buterin, Donald Trump and Do Kwon

January 19, 2024

Crypto World

Maciej Zerelik

Thanks for joining us for this week’s crypto digest, brought to you by StealthEX and CryptoDaily! Our aim is straightforward – to offer a succinct and lucid summary of the most significant events and emerging trends in the crypto universe. Our commitment is to ensure you stay informed about the latest and most noteworthy happenings in the crypto market. Are you excited to dive into the leading stories of the past week in the world of cryptocurrency? Let’s get started!

Vitalik Buterin Suggests Major Ethereum Gas Limit Increase

Ethereum’s co-founder, Vitalik Buterin, has proposed a significant change to the Ethereum network. In a recent AMA, he suggested increasing the Ethereum gas limit by 33%, from 30 million to 40 million. This proposal, the first of its kind in nearly three years, aims to enhance network throughput and scalability.

The gas limit in Ethereum is crucial as it determines the maximum amount of gas that can be used in each block for transactions and smart contracts. An increase in this limit would allow more transactions per block, potentially reducing network congestion and gas prices.

However, this proposal is not without its challenges. A higher gas limit could strain network validators, requiring more robust hardware. It also raises concerns about network security and vulnerability to spam or other forms of attack.

This move by Buterin reignites the ongoing discussion about scalability in the Ethereum community. The decision on this proposal will be pivotal in shaping Ethereum’s future, influencing its scalability, efficiency, and role in the broader blockchain ecosystem.

Singapore’s MAS Blocks Bitcoin ETFs for Retail Investors

The Monetary Authority of Singapore (MAS) has taken a firm stance on Bitcoin Exchange-Traded Funds (ETFs), declaring them unsuitable for retail investors in the country. This decision comes shortly after the U.S. Securities and Exchange Commission (SEC) approved spot Bitcoin ETFs.

In Singapore, ETFs fall under collective investment schemes (CIS), regulated by the Securities and Futures Act. The assets in retail CIS are not under the direct control of the participants and are managed collectively. Due to this, there are strict limitations on the types of assets that retail CIS can include. Since MAS does not recognize Bitcoin or other cryptocurrencies as eligible assets for retail CIS, Singaporean retail investors are barred from participating in spot Bitcoin ETFs.

The U.S. recently approved Bitcoin ETFs, allowing both institutional and retail investors to gain exposure to Bitcoin’s profits without directly purchasing BTC. This approval led to a significant trading volume in these ETFs. However, the SEC’s approval does not imply an endorsement of Bitcoin, which is still viewed as a speculative and volatile asset.

MAS’s decision reflects a cautious approach towards Bitcoin ETFs, advising investors to exercise extreme caution when trading these products in overseas markets.

Donald Trump’s Stance Against CBDCs

In a recent campaign speech, Donald Trump, the former US President and current Republican Party Presidential candidate, made a bold declaration. He promised never to allow the creation of a Central Bank Digital Currency (CBDC) in the United States. This statement was met with enthusiastic cheers and applause from his supporters. Trump emphasized the risks associated with CBDCs, including the potential for de-banking and political weaponization. He expressed concerns that such a currency would grant the federal government complete control over individual finances, posing a significant threat to freedom.

Trump’s stance marks a significant shift from his previous skepticism towards cryptocurrencies. In 2019, he had expressed reservations about Bitcoin and other digital currencies, citing their volatility and potential for illegal use. However, his views have evolved, and he now holds over $2.5 million in Ethereum, as revealed in a 2023 disclosure. Trump’s change in perspective aligns with a broader crypto-friendly approach that he might adopt if re-elected.

The topic of CBDCs has become a hot issue in the presidential campaign, with other candidates like Ron DeSantis also opposing their creation. The Federal Reserve has not yet proposed the introduction of a CBDC, but the debate continues to be a focal point in political discussions.

TrueUSD’s Dollar Peg Loss Triggers Market Concerns

The cryptocurrency market faces a new challenge as TrueUSD (TUSD) loses its dollar peg. On January 16, TUSD’s value dropped to $0.985, deviating from its 1:1 dollar peg. This shift began around January 15, with its value falling to $0.984. The market saw over $340 million in TUSD sales in the last 24 hours, exceeding $296.8 million in buy orders. This resulted in a net outflow of over $43 million. Traders are now concerned about the stability of TUSD’s reserves.

This situation has raised questions about the stability of other cryptocurrencies. Major players like Polygon (MATIC), Solana (SOL), and Polkadot (DOT) might also feel the impact of this instability. The market is on high alert, closely monitoring potential effects on overall market steadiness.

Polygon (MATIC) is gaining attention with its proof-of-stake system and partnerships, such as with Fox Corporation. Solana (SOL) is preparing for the altcoin season, showing a bullish pattern in its price performance. Polkadot (DOT) has shown growth in its staking ecosystem and transactional activities, despite a recent bearish trend in its price.

The depegging of TUSD has set off alarms in the crypto market, highlighting the interconnectedness of virtual assets. A single coin’s instability can affect the entire market, emphasizing the need for careful navigation in these uncertain times.

Do Kwon’s Trial Postponed to April Amid Extradition Delays

The trial of Do Kwon, former CEO of Terraform Labs, has been postponed to April. The U.S. Securities and Exchange Commission (SEC) and the court agreed to delay the trial to ensure Kwon and Terraform Labs are tried together. Kwon faces fraud charges related to the collapse of cryptocurrency TerraLUNA (LUNC) and stablecoin TerraUSD (UST) in May 2022.

Kwon is currently detained in Montenegro on a prior conviction, complicating his extradition to the United States. His legal team requested the postponement to March 18, 2024, to allow time for extradition and trial preparation. The court, recognizing the complexities of the extradition process, approved the delay.

Judge Jed Rakoff of the U.S. District Court for the Southern District of New York emphasized the uncertainty of Kwon’s extradition timeline. The SEC also agreed to the postponement, aiming for a mid-April trial date. This extension will enable Kwon’s team to complete extradition proceedings and prepare for the trial in the United States.

The case highlights the challenges in international legal proceedings involving high-profile figures in the cryptocurrency industry. The outcome of this trial could have significant implications for the regulation and oversight of the crypto market.

This article is not supposed to provide financial advice. Digital assets are risky. Be sure to do your own research and consult your financial advisor before investing.