ProBit Bits — ProBit Global’s Weekly Blockchain Bits Vol. 67

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 PayPal Marks Entry Into Stablecoin Space With PYUSD

Online payments stalwart PayPal has entered the crypto space by announcing its stablecoin PayPalUSD (ticker: PYUSD). According to press reports, PYUSD is an ERC-20 token issued by Paxos Trust Company, which is fully backed by U.S. dollar deposits, short-term U.S Treasuries and similar cash equivalents. PayPal customers who choose to make use of the stablecoin can transfer PYUSD between both PayPal and external wallets, fund purchases with PYUSD at selected checkouts and convert any of PayPal’s supported currencies to and from PayPal USD.

The launch of PYUSD has received mixed responses from the crypto community, with some quarters heralding the announcement as yet another step towards mainstream adoption. With a userbase of more than 400 million, pundits have suggested that this move will not only shake up the tradfi space, but will also have crypto exchanges on high alert. Others have been more critical of the PYUSD project, pointing to a lack of defined growth plan and no major differentiating factors as barriers to adoption. There have also been concerns around the tech underlying PYUSD, given the limitations around congestion on the Ethereum network during periods of high usage. Twitter users have also pointed out potential issues around source code which allows PayPal to freeze and wipe user funds without warning.

 Nigeria The Latest Country To Boot Out Binance

Binance continues to face regulatory challenges, this time in Africa, as Nigerian lawmakers seek to pressue the exchange into shutting down shop. Nigerian regulator ABCON (Association of Bureaux de Change Operators of Nigeria) claims that customers trading on Binance is the main driver behind the devaluation of the Naira, Nigeria’s reserve currency. This latest development comes only a month after Nigeria’s Securities and Exchange Commission (SEC) issued a statement declaring that operations by Binance in Nigeria are illegal, and that customers are advised to stay away from the platform.

ABCON’s calls to ban Binance stand in contrast to the government’s official stance of promoting crypto adoption, particularly as the government has published its national blockchain policy with citizens embracing central bank digital currency (CBDC) adoption. Figures from the West African colossus show that CBDC transactions have shot up by more than 63% over the past year, while close to 6% of the population hold digital assets.

 Bitsonic CEO Faces Jail Time For $7.5m Worth of Fraud

CEO of South Korean-based crypto exchange Bitsonic is on the hook for defrauding customers to the tune of 10 billion Korean won ($7.5 million), according to local reports. Jinwook Shin, former CEO of Bitsonic, was arrested on 7 August in Seoul, after investigations by the country’s cybercrimes unit. Shin originally founded Bitsonic in 2019, only to halt operations in August 2021 citing “internal and external issues.”

According to South Korean prosecutors, Shin manipulated computer systems to artificially inflate prices of certain tokens and trading volumes, while also siphoning approximately 10 billion won of customer funds, supposedly to cover exchange deficits. Bitsonic’s vice president, a suspect going by the name Mr. A, will also face trial without preliminary detention. Prosecutors have been tracking the case since September 2021, uncovering a paper trail that led them to a paper company which Shin established in Singapore for the purposes of buying large tranches of crypto in order to falsify trading volumes and manipulate prices.

 Riot Platforms Records Net Q2 Mining Losses Despite Revenue Gains

Bitcoin mining company Riot Platforms posted mixed results in its latest quarterly report. The Colorado-based firm posted a revenue increase of 5.2% for Q2, up to $76.6m from Q1, largely thanks to Bitcoin production. Total Bitcoin mined came in at 1,775, a marked increase on the 1,396 BTC which was recorded in the same period last year. This can be attributed to an increase in mining capacity, with the acquisition of MicroBT machines ramping up mining capacity as previously reported on ProBit Bits.

Although the company saw an increase in quarterly revenue, it recorded a net loss of $27.7 million, pointing to the decline in BTC prices despite the increase in Bitcoin mined. Compared to the recorded loss of $353.5 million for the same period last year, the Q2 loss marks an uptick for Riot Platforms which has steadily improved financial performance over the past 12 months. The crypto miner is on track to add another 7.6 exahashes per second (EH/s) to its capacity thanks to its partnership with MicroBT.

 Israeli Bank Blocks Bitcoin HODLer From Depositing Profits

An Israeli retiree with approximately $273,000 worth of Bitcoin profits has been turned away by her bank, with “legal provisions” the reason for not accepting her deposit. Esther Freeman, a 70-year-old member of Hapoalim Bank, has been engaged in litigation with the bank since 2021 as she fights to have her crypto profits accepted.

Freeman originally purchased BTC in 2013, before the days of crypto exchanges, placing an order for approximately $2,700 worth of the largest cryptocurrency by market capitalization through a third-party. She saw hefty returns of 100x on her 10,000-shekel investment. However, despite being a loyal member for 40 years, Hapoalim Bank would not accept the profits she derived from her crypto investments. Freeman then sued the bank for refusing to accept her tender, eventually leading to an out-of-court settlement, the exact terms of which as yet remain unknown. The official stance of the bank is that the profits from the crypto purchase cannot be traced, and as such, the bank can approve such deposits only in cases where buying and selling digital currencies come from the same account.


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