Crypto wrap: A look at all that happened in the cryptocurrency space last week

The global cryptocurrency market cap stands at $1.54 trillion, up 1.56 percent over the previous day. (Image: Reuters)

From El Salvador accepting bitcoin as legal tender to India’s reportedly softening stance on classifying bitcoin as an asset, a lot transpired in the cryptocurrency world last week. Here is a quick wrap-up that details it all.

El Salvador legalises bitcoin
In a historic first, the Central American country of El Salvador passed a bill to recognise bitcoin as legal tender. With 62 favourable votes out of a total of 84, the country has set open a wide range of possibilities of sovereign nations recognising cryptocurrency as a valid, transactional currency. The proposal by president Nayib Bukele has also voiced support for clean energy to mine bitcoin, conventionally considered a very high-energy consumption activity.

The country, which falls under the 1,500 km long Central American Volcanic Arc (CAVA), which contains several active volcanoes, has vowed to harness geothermal energies to power bitcoin mining. The country is currently developing a mining hub around a newly developed 95MW well of 100 percent clean and zero-emission geothermal energy.

The global cryptocurrency mining market is expected to grow at a CAGR of 7 percent to almost $2.8 trillion by 2024. Hence, Paraguay and Iran are also considering regulating and legalising alternative currency. Paraguayan Congressman Carlos Rejara, an avid crypto-trader himself, will present a bill to advocate for favourable cryptocurrency regulations in the country. This comes in the wake of severe crackdowns that China, the world’s largest crypto mining hub, is imposing on its miners and associated entities. 

China intensifies crackdowns on bitcoin miners

Upping its hard stance on cryptocurrency mining, Chinese officials have reported busting and arresting around 170 groups, comprising almost 1,100 people engaged in money-laundering via cryptocurrencies. Of late, the country, concerned with price speculations associated with bitcoin and immense energy consumptions, has been coming down hard on miners. A recent notice in Yunnan, China’s fourth-largest mining hub to restrain unauthorised use of electricity for mining has set the tone for the country’s view on the issue, where its State Council also vowed to shut down bitcoin trading and mining in the country. 

India may classify bitcoin as an asset class
Departing from its earlier stance, India might classify bitcoin as an asset class. With Securities and Exchange Board of India overlooking its regulation, the Indian cryptocurrency industry is currently consulting with the finance ministry for the same. At present, major players in the Indian crypto space like Coin DCX and Wazir X have decided to go the self-regulation way by setting up an advisory board with the Internet and Mobile Association of India (IAMAI), since the RBi clarified its position on its April 2018 circular, which had discouraged cryptocurrency-related transactions, but which was later struck down by the SC in March 2020.

ED  serves notice to WazirX founder Demanding an explanation for cryptocurrency transactions worth Rs 2,971 crore under the FEMA (Foreign Exchange Management Act) 1999, the Enforcement Directorate (ED) sent a notice to WazirX’s founder Nischal Shetty, accusing him of not complying with adequate KYC (Know Your Customer) verifications. 

As per the directorate, Rs 57 crore was laundered by Chinese nationals, who deposited money in their WazirX wallet and subsequently converted it to Tether.  The company, on their part, has assured investors of the safety of their money, and said that it has been complying with all necessary norms. 

Trojan Shield delivers a heavy blow to the crime world

Landing a solid punch to organised crime, the FBI managed to monitor real-time conversations between criminal gangs, drug peddlers, and assassins through its encrypted app called ANOM. The result? The operation managed to seize more than 32 tonnes of drugs, 250 firearms, and $48 million in fiat and cryptocurrencies. The three-year investigation resulted in the arrest of more than 800 criminals in 16 countries. 

While there were flaring tensions as officials struggled to regulate cryptocurrency, popular investment management company Invesco announced the launch of two cryptocurrency-related ETFs. The Bitcoin Mining Council, helmed by MicroStrategy CEO Micheal Saylor said that this was a  “voluntary and open forum of Bitcoin miners where we promote transparency, share best practices, and educate the public about bitcoin.” Surprisingly, cryptocurrency rockstar Elon Musk did not find a seat on the council board. 

Notably, all major cryptocurrencies have seen a sharp dip in their value over the last few days, except for bitcoin, which is trading at around $36,000, up almost 5 percent.