June 14, 2024 - 3Commas Weekly Update

Another week to navigate the murky waters of regulation as a cryptocurrency trader. Today, we have curated interesting news updates to keep you informed in your journey to financial freedom as a crypto trader.

Let's take a look at the recent regulatory updates.

Bitcoin ETFs Records $200m Outflows

The eleven ETFs recorded $200 million in net outflows on Tuesday, the highest since May 1 figures of $580 million.

The U.S listed spot bitcoin exchange-traded funds (ETFs) recorded the second consecutive day of outflows driven by Grayscale's GBTC without any inflows.

Why it matters: Analysts believe the recent outflows are likely triggered by traders derisking ahead of U.S. CPI and the Fed rate decision on June 12th. The decision was that rates won’t change until possibly December, so we may see more inflows into these ETFs as a result.

Polygon Creates New Grants Program, to Unlock 1B Token in Over 10 Years

The program aimed to encourage builders to build on the Polygon Chain will utilize the funds made available by Polygon’s Community Treasury. 

Polygon team explained that roughly 100 million POL tokens (soon-to-rebrand Matic Tokens) will be given out each year. The program went live on Tuesday with 35 million tokens, worth $23 million at current prices, eligible for distribution.

Why it matters: Polygon is promising to reward builders who add value to their ecosystem. So while they’ll be diluting the coin supply somewhat, in theory the value added to Polygon as a functional service should push up the price more than the increase in supply will lower it. 

Ireland Central Bank Grants VASPs License to Crypto.com and others.

The Central Bank of Ireland has approved 15 different Virtual Assets Providers—VASPs License from June 7, 2024. Beneficiaries include Gemini, Coinbase, Ripple and others.

The approval allows Crypto.com to expand its offering in the country, including crypto-to-fiat exchanges and fiat wallets. There are another 14 entities that secured approval including Ripple, MoonPay, PaySafe, Gemini etc.

Why it matters: Every time another crypto company gains official acceptance into the financial system of any country, it’s a win for everyone in the crypto space. 

Mass-Produced NFTs are considered digital assets in South Korea

According to South Korea’s financial regulator, the Financial Services Commission (FSC), NFTs that are mass-produced, divisible and can be used as payment will be considered virtual assets. 

NFTs with no value will be treated differently. This includes NFTs used in ticketing or digital certificate NFTs. These types of NFTs are classified as general NFTs.

Why it matters: Taxes, mostly. If something is an asset, then the transfer of it during any business transaction can be taxed. 

Solana Foundation clamps down on validator sandwich attacks

The Solana Foundation has removed a group of validator operators who were involved in sandwich attacks on traders which is against its Foundation rules.

The validator operators were identified due to their participation in mempools, which allow sandwich attacks. The guilty validators won’t be getting any delegation work moving forward.

What is a Sandwich Attack: It happens when an order is placed before a transaction and another is placed immediately after, which ensures that retail always gets the worst possible price. The attacker then takes the profit from the price difference. 

Terraform Labs shuts down operations, Terra community will take over.

Terraform Labs will cease all operations following the settlement with the United States Securities and Exchange Commission. Chris Amani, CEO of Terraform Labs, has announced that it will stop all operations after its $4.47 billion settlement with the US SEC. 

Terraform Labs plans to sell major projects within its ecosystem and give the control of Terra blockchain to the community.

Why it matters: Terra is an example of what can happen when you build a solid project that relies on fragile price relationships among multiple tokens where a small fracture can cause a cascade collapse. Here’s to hoping the Terra community can keep the project going and rebuild the mechanisms to be stronger.