3Commas Weekly Crypto Industry Updates October 18th, 2024

Let's discuss what has happened in the crypto industry in the third week of October, 2024.

Kraken crypto exchange launches own Wrapped Bitcoin token

Cryptocurrency exchange Kraken has launched its own tokenized version of Bitcoin representing BTC holdings stored by the exchange and audited by Trail of Bits, a security auditing firm that has worked on projects like Worldcoin.

The new kBTC was introduced on Oct 17, and launched across interoperable networks including Ethereum and OP Mainnet (formerly Optimism). The wrapped Bitcoin — kBTC is backed 1:1 by an equivalent amount of Bitcoin in the custody of Kraken Financial, a Wyoming-chartered special purpose depository institution.

Why does it matter?

Bitcoin as the base currency of the cryptocurrency market has made it convenient to have it across DApps — Decentralized Applications. The new kBTC will be reportedly available for the decentralized market, providing the market with more deep liquidity.

Spot Bitcoin ETFs reach $20B in net flows.

The spot Bitcoin exchange-traded funds (ETFs) in the United States has achieved a significant record in net flows, just as Bitcoin nears previous all-time high again.

US-based spot Bitcoin ETFs crossed $20B in total net flows on Oct. 17. It only took spot Bitcoin ETFs 10 months to achieve $20B net flow while it took Gold ETFs roughly five years to record the same net flows.

Why does it matter?

The adoption of cryptocurrency is inevitable, it is also obvious that institutional and traditional investors appear to choose investing in Bitcoin to gold because of its scarcity and limited supply, where only 21M Bitcoin will exist.

Ireland drafting an urgent crypto regulation ahead of EU money laundering laws

Ireland is preparing to draft “urgent” cryptocurrency regulations ahead of upcoming European Union Anti-Money Laundering and terror financing standards.

According to the Irish Examiner, a local news outlet, the Ireland’s Finance Minister, Jack Chambers, made this public to the cabinet stressing the need for an urgent legislation to update crypto regulations before the EU laws take effect on Dec. 30.

The EU’s “Anti-Money Laundering and Countering the Financing of Terrorism Act” will empower financial intelligence units, allowing them to suspend transactions. It will also introduce strict reporting requirements for crypto exchanges and a 10,000 euro ($10,850) limit on cash payments.

Why does it matter?

Traders should be aware of how these new laws will affect tax reporting and crypto asset declarations to adhere to the Anti-Money Laundering laws.

Italy wants to increase capital gains tax on Bitcoin from 26% to 42%.

The Italian government wants to increase the capital gains tax for investments in Bitcoin to 42% from 26%. This was made public by the Deputy Economy Minister, Maurizio Leo. 

During the news conference at Palazzo Chigi on Oct. 16, Leo said that the withholding tax on Bitcoin capital gains should rise to 42% per Italy's new budget bill, which the Council of Ministers approved.

Leo also said that the bill would remove the minimum revenue requirement of 750M Euros for the Digital Services Tax which was introduced as part of the country’s budget in 2019.

Why does it matter?

Traders should be aware of this new development in order to strategically make the right crypto investment decisions.

Crypto companies paid $19B in settlements to US regulators in 2024.

Since 2019, US regulators have collected a total of $31.92B in settlements from 25 crypto companies across various lawsuits. 

Data from CoinGecko shows bankrupt crypto exchange FTX and affiliated trading firm Alameda are majority of the funds after paying $12.7B to the Commodity and Futures Trading Commission (CFTC) in an August settlement. 

The total settlement does not involve individual lawsuits against executives. The total settlement amounts included forfeiture, disgorgement, civil penalties, settlement and prejudgment interest.

Why does it matter?

Traders should take caution when trading on some crypto exchanges. Most of the exchanges on the settlement list have shut down operation. Traders are encouraged to avoid exchanges with shady activities that are against regulatory rules.

Conclusion: 

What we’re seeing is an increased regulatory updates on cryptocurrency activities across countries. Also, we recorded an increased effort by regulators in protecting investors interest and ensuring a safe trading environment for individual crypto users and institutions.