Welcome to Barmy’s Daily Crypto News – July 15th, 2022
1. UK Judge Allows Lawsuits Submission As NFTs
The company Giambrone & Partners LLP was given permission by a U.K. court last month to serve legal papers on an unnamed person via an NFT airdrop sent to the person’s cryptocurrency wallet. Giambrone’s client, Fabrizio D’Aloia, is suing an unidentified party over the theft of cryptocurrency funds, along with Binance, Poloniex, gate.io, OKA, and Bitkub.
D’Aloia is reportedly working to get his stolen cryptocurrency back, according to the law firm. Additionally, the law firm claimed that lawmakers and regulators are “failing to exert control” over bitcoin exchanges.
The company praised the U.K. government’s decision to permit the start of legal procedures through NFTs in its statement, in part because it thinks it represents a step toward “greater consumer protections and responsible practice.” The enforceability of legal papers delivered by an NFT is, however, not yet evident.
2. Bank Of America Predicts 2022 Recession In The US
Bank of America’s economists are anticipating a recession in the country. In Wednesday report, they elaborated: “Our previous baseline outlook for the U.S. economy featured a growth recession. But a number of forces have coincided to slow economic momentum more rapidly than we previously expected.” The analysts added: “We now forecast a mild recession in the U.S. economy this year.”
They took into account elements including rising mortgage rates, tighter financial circumstances, and food and energy price increases. A U.S. recession next year has a 40% possibility, according to a June assessment from Bank of America.
The U.S. gross domestic product is now anticipated to fall by 1.4% in the fourth quarter compared to the prior year before rising by 1% in 2023, according to economists.
Deutsche Bank is one of the other banks that has predicted a U.S. recession for the near future and believes one will hit the country’s economy in 2019. Nomura predicted a five-quarter, modest recession that would begin in the last quarter of current year.
3. ECB Demands Immediate Regulations For Stablecoins and DeFi
In a recent research seen as a “deep dive into crypto financial risks,” the European Central Bank (ECB) urges for adequate regulation and supervision of stablecoins and decentralized finance (defi). It also addresses the current hot button issue of Bitcoin’s carbon footprint in Europe and makes the case for a potential ban on proof-of-work mining.
The latest issue of the Macroprudential Bulletin published by the European Central Bank focuses on financial risks related to cryptocurrencies, particularly those connected to stablecoins and defi platforms as well as the threat posed to goals for the climate transition by energy-intensive crypto mining techniques (ECB). Patrick Hansen, a crypto venture advisor at Presight Capital, this week highlighted significant sections of the report from July.
The authors of the paper examine the policy implications of these segments of the crypto market and contend that, in order to prevent further integration of stablecoins with the conventional financial system, the regulatory, supervisory, and oversight frameworks, such as the MiCA legislation, must be implemented right away given the global adoption and growth of stablecoins.
4. Celsius Filing Discloses $1.2B Hole In Its Records
According to the complaint, the business owes customers and creditors $5.5 billion. However, even after paying off three significant loans from DeFi protocols Maker, Aave, and Compound in the previous week, which allowed it to recover collateral valued at about $1 billion, its assets still only amount to $4.3 billion.
As a result, Celsius is insolvent and $1.2 billion in the hole. Unnamed sources told The Block in late June that the “$2 billion shortfall” was what prevented FTX CEO Sam Bankman-Fried from seeking to make a transaction with the business.
Without the recent $1 billion in repossessed collateral, its obligations would have exceeded its assets by $2 billion around the time Bankman-Fried, Voyager Digital, and BlockFi were said to have met with Celsius.
5. SEC Chair Gary Gensler Addresses Unrealistic Return Rates From Crypto Lenders
In a recent interview with Yahoo Finance, Gary Gensler, the chair of the Securities and Exchange Commission, criticized cryptocurrency lending companies for their unsustainable yield claims.
Gensler referred to yields on cryptocurrency deposits ranging from 4% to 20% that were provided by several businesses and sold to investors as secure, saying “If it’s too good to be true, then maybe it is. There may be a lot of risk embedded in that.”
His remarks come amid a cryptocurrency market slump that has caused several lending platforms, notably Voyager Digital and most recently Celsius Network, to declare bankruptcy. Despite halting customer withdrawals, Celsius’s website advertises annual returns of up to 18% on deposits for specific cryptocurrencies, and Voyager advertises 12% incentives on deposits for the relatively unheard-of cryptocurrency KAVA.