Let’s say you want to lose your Bitcoin (BTC) totally, irretrievably and forever. Hey, it’s not our place to wonder why. Maybe it’s part of some elaborate performance art piece, like the guy who destroyed all his possessions or perhaps you’ve always been big fans of electronic music outfit The KLF, who famously burned 1 million pounds on a remote Scottish island. Or, your reason might be more mundane and you simply don’t want your soon-to-be-divorced spouse to get their share of the investment you both know you own.
Whatever your reason, we’re not here to judge. And, while we’re usually in the business of helping people protect their coins, it’s easy enough to reverse engineer security to help you lose them in the fastest and easiest way possible.
Brag about your Bitcoin
If you’ve got it and wish to lose it, flaunt it. Want to get rid of that Rolex weighing down your wrist? Pair it with a t-shirt, flash it about in a crowded bar and then take a walk through a bad part of town after dark — you’ll soon find yourself relieved of your timepiece.
It’s the same with Bitcoin. You want the world to know you’re a Bitcoiner and, ideally, that you’ve stacked enough sats for it to be worthwhile stealing them. So tell them. Add laser eyes to your social media profiles, keep tweeting those diamond hands and don’t forget about the offline world, either. Be sure to boast about your mastery of Bitcoin to all your friends, family and, most importantly, new acquaintances. You never know who will be tempted to start probing your defenses in order to relieve you of your investment.
In the early Wild West days of Bitcoin, losing your coin was child’s play, as there was no shortage of disreputable exchanges that would help you lose your investment. If you kept your coins in a hosted wallet, it was only a matter of time before the exchange went bust like Mt. Gox, got hacked, lost coins by engaging in fractional reserve banking or the owners absconded (or died) with your keys.
The exchange market has matured significantly in recent years, with enhanced security measures such as two-factor authentication and even published proof-of-reserves and proof-of-custody. Don’t be disheartened: As long as you entrust your keys to a third party, anythingcould happen — and probably will.
Exchanges still go bust with reassuring regularity. Even more encouragingly, governments are now actively targeting Bitcoiners’ wealth. And, not just traditional authoritarians like China and Russia, the Canadian government recently instructed financial institutions — including cryptocurrency custodians — to freeze the accounts of anyone who donates even a small amount to the “trucker protests.”
Deputy PM Chrystia Freeland: “The names of both individuals and entities as well as crypto wallets have been shared by the RCMP with financial institutions and accounts have been frozen and more accounts will be frozen.” pic.twitter.com/iA69DbRJl1
Even if you have a strong password and 2FA protecting your exchange account, you never know what other vulnerability might be exploited to gain access and drain it. If you’ve got your coins on-exchange, relax: They’re in unsafe hands.
Things get a little trickier if you’ve decided to self-custody your Bitcoin offline in a secure hardware wallet. Or do they? After all, when you hold the keys yourself, the power to lose your coins is completely in your hands. Why wait for an exchange to go bust when you can start adopting security “worst practice” today?
The secret to making your wallet insecure lies in your seed phrase, the string of words you use to generate your private key. The simplest way to lose your coins is to memorize your seed phrase and then delete or destroy any record of it. A few months on, hardly anyone has a hope of recalling every word in the correct order.
But, what if you’re cursed with an eidetic memory? Easy: Write it down. Even better, do it twice in physical pen-and-paper form, ideally kept near your hardware wallet. And, for good measure, record it in a cloud-based document where anyone with a will can access it through a brute-force attack. This is particularly effective if you regularly remind people you hold wealth in Bitcoin.
Disinherit the next generation
This one is for those who like playing the long game. You know the phrase “you can’t take it with you?” Well, with Bitcoin, you can. If you haven’t considered inheritance planning, then your entire investment will likely go to the grave with you, joining the estimated 3.7 million Bitcoin (around 18% of the coins there will ever be) that has already been lost forever.
Of course, this requires you to reverse the principles above: If you really want to cheat your children out of their inheritance, you need to make it as difficult for them to gain access to your keys as any attacker. So, if that’s the way you want to go, don’t tell your heirs, don’twrite down your seed phrase, and doget a hardware wallet. Even better, cut your 24-word seed phrase into many pieces and store them in many hidden holes around the world with no recovery instructions whatsoever. Your heirs won’t thank you at all.
Whatever you do, just make sure your Bitcoin storage and security providers don’t have a specific and robust protocol for inheritance planning. You can rest easy in the knowledge that not even the Devil himself will get your wealth when you pass on.
If, for some reason, you dowant to protect your Bitcoin, just ignore everything I’ve written. Even better, do the opposite. But, all you’d be doing is securing your investment in the only censorship-resistant and inflation-proof store of value ever invented. And, why would you want to go and do something as dull as that?
This article does not contain investment advice or recommendations. Every investment and trading move involves risk, and readers should conduct their own research when making a decision.
The views, thoughts and opinions expressed here are the author’s alone and do not necessarily reflect or represent the views and opinions of Cointelegraph.
Jameson Lopp has been actively building in the Bitcoin space since 2015 and has become one of the most respected voices in the Bitcoin developer community. He was previously an engineer at BitGo, developing its high-grade multisig custody service before joining Casa, a company providing secure wallets and plug-in-play infrastructure solutions for Bitcoin.
The proposed European Union Regulation on Markets in Crypto Assets, or MiCA, (hereinafter the “regulation”) was put to a vote in the European Union Parliament’s Committee on Economic and Monetary Affairs on March 14, 2022, and in the end, the proposed amendment to ban or restrict proof-of-work-based crypto assets, which would have effectively resulted in a ban on Bitcoin (BTC), was rejected.
The question of how crypto assets will be assessed from an environmental regulation perspective remains, however, with the Member of the European Parliament in charge of the text indicating that crypto assets will be included, like all other financial products, in the area of the union’s taxonomy (the process of classifying economic activities that have a favorable impact on the environment), without specifying the treatment of these assets in view of this taxonomy.
The proposed regulation is part of the digital finance package that also includes a proposal for a pilot scheme for market infrastructures based on distributed ledger technology (DLT) of interest to the security token sector, adopted by the Parliament’s Economic and Monetary Affairs Committee in January this year and due to come into force by the end of 2022.
The EU Commission has been considering several options for regulating the crypto asset sector. It finally chose the option of full harmonization within the EU of the rules applicable to issuers and service providers in crypto assets, with an EU passport, over the option of an opt-in regime to obtain the EU passport with the application of national regimes. For stablecoins, the Commission has favored a tailor-made legislative regime combined with regulation under the E-Money Directive.
Let us take stock of the main provisions of the MiCA Regulation, which, after the trialogue among the Council, the Parliament and the Commission following the vote on March 14, should also enter into force before the end of the year and which pursues four objectives: legal certainty, support for innovation, consumer and investor protection and market integrity, and financial stability.
In addition to determining the competent authorities and their administrative sanctioning powers, as well as the anti-market abuse rules, the main provisions of the Regulation relate to the purpose and scope of the Regulation (I), the rules applicable to the issuance of utility crypto assets (II), asset-referenced tokens (III), electronic money crypto assets (IV), and the rules applicable to crypto asset service providers (V).
I. Purpose and scope of the regulation
The purpose of the regulation is to establish rules concerning:
Transparency and disclosure requirements for the issuance and admission to trading of crypto assets.
The authorization and supervision of crypto asset service providers, issuers of asset-based tokens and issuers of electronic money tokens.
The operation, organization and governance of asset-based token issuers, electronic money token issuers and crypto asset service providers.
Consumer protection rules for the issuance, trading, exchange and custody of crypto-assets.
Measures to prevent market abuse in order to ensure the integrity of the crypto-asset markets.
The regulation applies to persons in the EU who issue crypto assets or provide services relating to crypto assets. The Regulation does not apply to:
rypto assets that are financial instruments (equity securities issued by companies with shares, debt securities, units or shares in collective investment undertakings and financial futures contracts) or electronic money except where the latter qualifies as electronic money tokens under the Regulation.
ertain entities or persons, such as the European Central Bank and the national central banks of the member states, insurance undertakings, a liquidator or administrator acting in insolvency proceedings, persons providing crypto asset services exclusively for their parent undertaking, their subsidiaries or other subsidiaries of their parent undertaking, the European Investment Bank, the European Investment Bank and public international organizations. Authorized credit institutions and investment firms will only be subject to certain provisions of the Regulation or will have the provisions governing them adapted.
II. Rules applicable to the issuance of crypto utilities
This category, which the Regulation calls “crypto-assets other than tokens referring to assets or electronic money tokens,” corresponds to crypto assets intended to provide digital access to a good or service, available on the DLT system, and which are only accepted by the issuer of this token (“utility tokens”). These “utility tokens” have a non-financial purpose related to the operation of a digital platform and digital services and should be considered as a special type of crypto asset. These may include cryptocurrencies such as Bitcoin, Ether (ETH) or Tezos (XTZ).
The Regulation prohibits offering to the public or seeking admission to trading on a trading venue crypto assets unless the issuer is a legal entity and a white paper complying with the Regulation has been prepared, notified to the competent authority and published.
Rules in terms of fair, honest and professional conduct and communications are provided for, as well as in terms of managing conflicts of interest and compliance with protocol security standards.
The obligation to produce a white paper does not apply when crypto assets are offered free of charge (which is not the case when buyers provide personal data or when the issuer receives payment of third-party fees, commissions or other benefits); are automatically created by mining or transaction validation; when they are unique and nonfungible (nonfungible tokens are, therefore, excluded from the obligation to publish a white paper); offered to fewer than 150 persons per member state; the amount of the offer does not exceed 1 million euro over a period of 12 months; or when the offer is reserved solely for qualified investors.
It should also be noted that the issuer of crypto assets must offer a right of withdrawal to the consumer, which can be exercised over a period of 14 calendar days.
III. Rules applicable to the issuance of asset-referenced tokens
This category of crypto assets consists of tokens that aim to maintain a stable value by referring to several legal tender currencies, one or more commodities, one or more crypto assets, or a basket of these assets. By stabilizing their value, these asset-based tokens are often intended to be used by their holders as a means of payment for the acquisition of goods or services and as a store of value.
An issuer wishing to offer or apply for admission to trading on a trading venue of asset tokens is required to obtain authorization from the competent authority of its home member state unless the average amount outstanding of the asset tokens does not exceed 5 million euro over a period of 12 months, or the offer is intended only for qualified investors.
The authorization gives access to the European passport. A white paper must be prepared.
Such an issuer is subject to a number of obligations, including those relating to marketing communications, conflicts of interest and governance: 350,000 or 2% of average reserve assets, whichever is higher.
These reserve assets must be prudently and efficiently managed, segregated from the issuer’s assets and entrusted to credit institutions or crypto asset service providers. These reserve assets may only be partially invested in highly liquid and low-risk financial instruments.
Furthermore, interest payments to holders of such tokens are prohibited.
Specific rules are provided for acquisitions of issuers of tokens referring to assets, including the obligation to notify the competent authority of the proposed acquisition, which may object to the acquisition.
Finally, there are additional obligations for issuers whose tokens refer to assets that are material. The European Banking Authority shall determine what tokens are material, for example, in view of the market capitalization of the tokens (such determination may also be requested voluntarily by the issuer).
IV. Rules applicable to the issuance of crypto assets of electronic money
This third category corresponds to crypto assets intended primarily as a means of payment with the aim of stabilizing their value by reference to a single fiat currency. Like e-money, these crypto assets are electronic substitutes for coins and banknotes and are used to make payments. They differ from e-money in that holders of e-money always have a claim on the e-money institution and have the contractual right to demand repayment of the e-money held, at any time and at face value, in legal tender fiat currency, which is not necessarily the case for e-money tokens.
The main obligation for the issuer of electronic money tokens is the authorization as a credit institution or as an electronic money institution within the meaning of Directive 2009/110/EC (hereinafter “Electronic Money Directive”), which it must obtain, as well as the publication of a white paper in accordance with the Regulation.
Such authorization and publication of a white paper will not be required if the electronic money tokens can only be held by qualified investors or if the average outstanding amount of tokens over 12 months does not exceed 5 million euro (or such lower threshold as may be set by a member state).
Holders of electronic money tokens have a claim on the issuer of the tokens. Electronic money tokens that do not confer a claim on all their holders are prohibited.
By way of derogation from the Electronic Money Directive, no issuer of electronic money tokens or provider of crypto asset services shall grant interest to the holders of such tokens.
Specific rules are provided for electronic money tokens of significant importance.
V. Rules applicable to providers of crypto asset services
Crypto asset services shall only be provided by legal persons who have their registered office in a member state of the union and who have been authorized as crypto asset service providers.
Authorization as a crypto asset service provider will be valid throughout the union and must enable crypto asset service providers to provide throughout the union the services for which they have been authorized, either under the right of establishment, including through a branch or under the freedom to provide services.
Crypto asset service providers will act honestly, fairly and professionally in the best interests of their clients and potential clients and will provide their clients with fair, clear and not misleading information, in particular in their commercial communications, which must be identified as such. Crypto asset service providers must warn their customers of the risks associated with the purchase of crypto assets. They must make their pricing policy available to the public by posting it in a prominent place on their website.
A crypto asset service provider must at all times have in place prudential safeguards in an amount at least equal to the higher of the following two amounts:
(a) The amount of the minimum ongoing capital requirement applicable to it, depending on the nature of the crypto asset services it provides, either:
For the services of reception and transmission of orders on behalf of third parties, advice on crypto assets, execution of orders on crypto assets on behalf of third parties and placement of crypto-assets: 50,000 euros.
For services of custody and administration of crypto assets on behalf of third parties: 125,000 euros.
For services of operating a platform for trading crypto assets, exchanging crypto assets for fiat currency or for other crypto assets: 150,000 euros.
(b) One-quarter of the previous year’s fixed overheads, which are recalculated annually.
There are a number of specific obligations depending on the crypto asset service. An acquisition regime for crypto asset service providers is also provided.
This article was co-authored by Thibault Verbiest and Jérémy Fluxman.
The views, thoughts and opinions expressed here are the authors’ alone and do not necessarily reflect or represent the views and opinions of Cointelegraph.
This article is for general information purposes and is not intended to be and should not be taken as legal advice.
Thibault Verbiest, an attorney in Paris and Brussels since 1993, is a partner with Metalaw, where he heads the department dedicated to fintech, digital banking and crypto finance. He is the co-author of several books, including the first book on blockchain in French. He acts as an expert with the European Blockchain Observatory and Forum and the World Bank. Thibault is also an entrepreneur, as he co-founded PayFoot. In 2020, he became the chairman of the IOUR Foundation, a public utility foundation aimed at promoting the adoption of a new internet, merging TCP/IP and blockchain.
Jérémy Fluxman has been an associate at international law firms in Paris and Luxembourg in the fields of private equity and investment funds, as well as at a Monaco law firm since 2017. He holds a Master II in international business law and is currently an associate at the Metalaw firm in Paris, France where he advises on fintech, blockchain and crypto finance.
Bitcoin (BTC) saw brisk upwards action during the Wall Street trading session on March 18, conforming to predictions that higher levels would see a retest.
Data from Cointelegraph Markets Pro and TradingView followed BTC/USD as it advanced $1,650 from daily lows to nearly matching the $41,700 high from March 16.
The move buoyed traders, who began to reinforce their short-term view of levels near the top of Bitcoin’s 2022 trading range being challenged.
For popular trader Pentoshi, however, such a result would not mean that BTC/USD had broken its downtrend definitively.
“Macro headwinds still too strong but midterm, I think we rally bc seller exhaustion before any shot at new lows or prev lows. So lean towards up then down imo late Q2,” he told Twitter followers on the day.
Cold feet over macro conditions, as Cointelegraph reported, became a major issue this week, with multiple predictions of a major drawdown across major assets including BTC coming this year.
Analyst Matthew Hyland meanwhile noted that in any case, previous resistance around $40,000 was now increasingly looking flipped to support.
Looks like #Bitcoin has been using previous resistance ($40.3k) as new support the past few days
Earlier, Crypto Ed had delivered a near-term forecast of $43,000 for BTC/USD before a potential fresh consolidation period, only then followed by an exit up or down.
In a subsequent update, he showed the pair breaking out of a “bull flag” formation in place over recent days.
Ether (ETH), however, was a more interesting focus on the day.
The moves reignited talk of “altseason” appearing, with various commentators arguing for a new golden era for altcoins in the coming months.
Popular Twitter account BTCFuel offered the Summer as a potential peak for prices.
2/ To assess when the next #altseason peak will happen, I’ll be looking at charts of #Bitcoin, #Ethereum and the dominance of #altcoins of the different past altseasons. By aligning them “correctly” structure-wise, I found this provisional target zone when the peak should happen pic.twitter.com/8H1MyPONiF
The Australian Competition and Consumer Commission (ACCC) is taking Meta Platforms, Inc. (formerly Facebook) to the Federal Court, alleging that the firm and its Irish branch engaged in “false, misleading or deceptive conduct” by publishing scam celebrity crypto ads.
Some users have lost hundreds of thousands of dollars to the sophisticated and long running scams tied to the ad.
The spotlight on Meta has heated up in Australia since the start of February, with Cointelegraph previously reporting that the ACCC was investigating the firm over allegedly fraudulent crypto ads. Aussie mining billionaire Andrew Forrest also took legal action against the company for hosting ads that allegedly used his name to defraud victims.
In an announcement posted earlier today, the ACCC asserted that Meta “aided and abetted or was knowingly concerned in false or misleading conduct and representations by the advertisers.”
The ACCC highlighted unapproved or endorsed “scam” ads featuring prominent Australian figures such as entrepreneur Dick Smith, TV host David Koch and former NSW premier Mike Baird.
The regulator stated that the ads contained dubious links which directed users off Facebook to a fake media article that featured quotes attributed to the public figure supposedly endorsing a “cryptocurrency or money-making scheme.”
“Users were then invited to sign up and were subsequently contacted by scammers who used high-pressure tactics, such as repeated phone calls, to convince users to deposit funds into the fake schemes,” the announcement read.
ACCC Chair Rod Sims didn’t mince his words as he asserted that, “Meta is responsible for these ads that it publishes on its platform” and that company the stood to gain financially by failing to remove them:
“It is a key part of Meta’s business to enable advertisers to target users who are most likely to click on the link in an ad to visit the ad’s landing page, using Facebook algorithms. Those visits to landing pages from ads generate substantial revenue for Facebook.”
“In one shocking instance, we are aware of a consumer who lost more than $650,000 due to one of these scams being falsely advertised as an investment opportunity on Facebook. This is disgraceful,” he added.
The ACCC is arguing that the firm’s conduct has breached the Australian Consumer Law (ACL) or the Australian Securities and Investments Commission Act (ASIC Act), and is seeking “declarations, injunctions, penalties, costs and other orders.”
As pointed out by Caroline Malcolm, head of international policy at Chainalysis, the transparent nature of blockchain technology makes it relatively easy for crypto intelligence companies to track funds related to sanctioned entities.
“We’re in quite a unique position because of the transparency and the permanency and the immutability of that public record,” explained Malcolm in an exclusive Cointelegraph interview.
Governments around the world have expressed concerns that Russia could use crypto to evade sanctions imposed as a response to its military offensive against Ukraine.
Addressing those concerns, Malcolm pointed out that in the last few years there has been substantial improvement in the crypto industry’s Anti-Money Laundering and counter-terrorism framework.
That means that, depending on their jurisdictions, crypto exchanges are still required to enforce the same sanctions as those imposed on banks and other traditional financial intermediaries.
Even though sanctioned entities could potentially move funds on private wallets, those movements can be easily tracked with blockchain intelligence tools such as those developed by Chainalysis. In most cases, these entities would have to rely on a centralized exit point to cash out.
“We [are] still not living in a world where one can stay in the crypto economy and buy all the goods and services that one might like to buy,” explains Malcolm.
At that point, an exchange equipped with Chainalyisis technology would receive an alert flagging the sanctioned funds, which, in turn, would allow the platform to freeze those funds.
According to Malcolm, these blockchain intelligence techniques make crypto less of a suitable means to avoid sanctions than traditional financial tools.
“The blockchain crypto environment is much more streamlined […] than any tools capable of disrupting Russia’s use of a network of traditional bank wires or frankly, even physical cash to evade sanctions,” said Malcolm.
Concerns remain that sanctioned entities could still rely on permissionless and decentralized protocols that don’t require AML/Know Your Customer procedures.
“We’re also working at the moment on developing new, more lightweight tools to provide an easy way for decentralized protocols and platforms to conduct basic sanctions checks to help manage reputational and sanctions enforcement risks,” Malcolm added.
The blockchain ecosystem is well prepared against Russia’s potential attempts to evade sanctions through cryptocurrency.
The Bank of Canada has partnered with the Massachusetts Institute of Technology (MIT) to work on a 12 month research project focused on the design of a Central Bank Digital Currency.
According to a March 16 announcement, the bank will work alongside the MIT Media Labs’ Digital Currency Initiative (DCI) team to examine how “advanced technologies could affect the potential design of a CBDC.”
The Bank of Canada stated that the project is part of a broader development agenda on digital currencies, fintech and how CBDCs could work in a Canadian context.
It cautions that “no decision has been made on whether to introduce a CBDC in Canada,” but said it would provide an update once the research project has been completed.
This is not the MIT DCI’s first partnership with a bank for CBDC research, with Cointelegraph reporting earlier at the start of February that it had published research on the topic in collaboration with The Federal Reserve Bank of Boston.
Dubbed “Project Hamilton,” it tested a “hypothetical general purpose CBDC” using two potential models, including distributed ledger technology (DLT) and processing transactions in parallel on multiple computers, rather than relying on a single ordering server to prevent double-spending.
In terms of the U.S. President Joe Biden’s Executive Order on Ensuring Responsible Development of Digital Assets outlines that his administration will place “the highest urgency on research and development efforts into the potential design and deployment options” of U.S.-based CBDC.
The Executive Order also directs the Secretary of the Treasury and other relevant officials to produce a research report on a local CBDC, while the attorney general has also been tasked with leading an effort to “to assess any necessary legislative changes” required for a CBDC and to promptly develop a legislative proposal afterward.
Volodymyr Zelenskyy, the president of Ukraine currently based in Kyiv, has signed a law establishing a legal framework for the country to operate a regulated crypto market.
In a Wednesday announcement, Ukraine’s Ministry of Digital Transformation said Zelenskyy signed a bill named “On Virtual Assets,” first adopted by the country’s legislature, the Verkhovna Rada, in February. Crypto exchanges and firms handling digital assets will be required to register with the government to operate legally in Ukraine, and banks will be allowed to open accounts for crypto firms.
The law endows Ukraine’s National Securities and Stock Market Commission with the power to determine the country’s policies on digital assets, issue licenses to businesses dealing with crypto and act as a financial watchdog. The government agency added that Ukraine’s Ministry of Finance was also working towards amending the country’s tax and civil codes to accommodate the legal framework for digital assets.
“The signing of this law by the president is another important step towards bringing the crypto sector out of the shadows and launching a legal market for virtual assets in Ukraine,” said the Ministry of Digital Transformation.
Ukraine has legalized the crypto sector — @ZelenskyyUa signed a law. From now on foreign and Ukrainian cryptocurrencies exchanges will operate legally and banks will open accounts for crypto companies. It is an important step towards the development of the VA market in Ukraine. pic.twitter.com/lqqO1J9r1k
— Міністерство цифрової трансформації України (@mintsyfra) March 16, 2022
Cryptocurrency has become a major issue in the country’s current fight against Russia following the invasion on Feb. 24, with many donating directly to Ukraine for humanitarian causes and funding the military. At that time, the National Bank of Ukraine said that it had limited cash withdrawals at banks, fixed the foreign exchange rate of the country’s hryvnia currency and suspended the issuance of electronic money.
On Monday, Kuna, Ukraine’s largest crypto exchange, helped launch a donation platform with FTX and Kuna, staking platform Everstake, and the Ministry of Digital Transformation to allow users to send several cryptocurrencies “to support people in their fight for freedom.” According to the website, users have sent more than $54 million in crypto at the time of publication, roughly 27% of the platform’s $200 million goal.
Cointelegraph reached out to Kuna, but did not receive a response at the time of publication.
The community behind decentralized stablecoin platform MakerDAO is mulling over a major tokenomics shift that could replace its governance token, MKR.
A proposal was made on the MakerDAO forum by community leader “monet-supply” on March 14, outlining an alternative token economic mechanism. If the proposal passes a full governance vote, the protocol could replace its current governance token, MKR, with a new token called stkMKR.
There were many responses to the proposal within just a few hours of it being posted, most of which were positive and regarding the technicalities of the solution. From the proposal and discussion stage, it will need to be submitted as a MIP (Maker Improvement Proposal) for a formal vote by MKR holders which usually takes two weeks.
The staking proposal addresses some issues and inefficiencies with the current tokenomics model, which operates a “buyback and burn” mechanism. It was suggested by ‘monet-supply’ that there are several drawbacks to the existing mechanism, including a lack of targeted incentives since buyback and burn returns all capital to MKR holders.
There is also a “weak crypto narrative” according to ‘monet-supply’ who said that MKR issuance could be put towards improving the protocol. The current system also has limited deterrence against governance attacks or voting manipulation.
⚒️ @MonetSupply presented an idea of an alternative token economic mechanism that could supplement the current MKR buyback value accrual system.
The proposed solution is a new stkMKR token which would replace MKR as the core governance token of MakerDAO. It would act as a staking or bonding token issued to those who have deposited MKR for governance purposes.
“stkMKR will be non-transferable, and represents MKR staked in governance. Staked tokenholders will receive a share of MKR tokens purchased through surplus auctions, so stkMKR will be backed by an increasing amount of MKR over time.”
‘Monet-supply’ said the rewards mechanism has been improved upon, and there will be greater incentives to stake using the new system.
MakerDAO allows users to deposit crypto assets as collateral to generate the decentralized stablecoin DAI. This can then be used elsewhere, such as other DeFi protocols or liquidity pools. The DAI is burnt when the “loan” is repaid, and the collateral is withdrawn.
MKR prices were trading flat on the day at $1,766 at the time of writing, according to CoinGecko. However, the token has dropped 11% over the past fortnight and is currently down 72% from its May 2021 all-time high of $6,292.
Blockchain security and forensics firm Elliptic has been working with authorities to expose crypto wallets affiliated with sanctioned individuals or organizations.
The United Kingdom-based company has discovered a wallet with “significant crypto-asset holdings” in the millions of dollars that may be linked to sanctioned Russian officials and oligarchs.
Speaking to Bloomberg on March 14, Elliptic co-founder Tom Robinson said that crypto could be used for sanctions evasion. However, it has been widely reported and generally accepted now that Russia is very unlikely to pivot to crypto assets to circumvent them.
The report did not specify the exact value of the crypto in the wallet it discovered or the nature of the assets it held. Robinson added that the scale of the use of crypto is in question, explaining:
“It’s not proving out realistic that oligarchs can completely bypass sanctions by moving all their wealth into crypto. Crypto is highly traceable. Crypto can and will be used for sanctions evasion, but it’s not the silver bullet.”
Elliptic has already identified more than 400 crypto services that let anonymous users trade digital assets with rubles. It also connected more than 15 million crypto addresses to Russian-related criminal activity.
Robinson added that ruble-related activities on some of these services surged the week before the war broke out. Tornado Cash, which anonymizes Ethereum and ERC-20 transactions, is one such provider that has refused to restrict services or comply with sanctions.
“In general, the level of sanction compliance is very high,” Robinson stated in reference to the high profile exchanges such as Coinbase and Binance that have complied with sanction requests from global regulators.
Elliptic has also been tracking crypto donations supporting the Ukrainian humanitarian effort. Its latest update on March 11 at 23.30 UTC revealed that there had been a total of $63.8 million sent to the Ukrainian government and an NGO providing support to the military.
Merkel Science has tapped several sources for its report, which shows a much higher figure of $93.6 million in total crypto donations for Ukraine.
Bitcoin (BTC) has largely been directionless since the start of the year as the bulls have been buying on dips while bears are selling the rallies. This suggests that the price is consolidating in a large range with both the bulls and the bears waiting for the next trigger to establish their supremacy.
The short-term volatility may pick up after the United States Federal Reserve announces its policy decision on March 16 but unless the Fed springs a surprise, the likelihood of a new trending move could be low. Bitcoin could spend some more time in a bottoming formation before breaking out of it.
A positive sign in the range-bound action this year has been evidence of accumulation by both the small investors and select whales. This has coincided with a sustained drop in Bitcoin balances on exchanges. The combined Bitcoin balances on the 21 exchanges it covers have dropped to 2.32 million Bitcoin, the lowest since August 2018, according to CryptoQuant.
Could Bitcoin break above the immediate resistance level and pull the altcoins higher? Let’s analyze the charts of the top-10 cryptocurrencies to find out.
BTC/USDT
Bitcoin has bounced from the immediate support at $37,000, indicating that bulls are attempting to defend this level. The buyers will now try to push the price above the moving averages. If they succeed, it will suggest strong demand at lower levels.
BTC/USDT daily chart. Source: TradingView
The bulls will then try to extend the up-move by clearing the overhead hurdle at $42,594. If they manage to do that, it will be the first indication that the bears may be losing their grip. The BTC/USDT pair could then rise to the overhead zone between $45,400 and the resistance line of the ascending channel.
Conversely, if the price turns down from the moving averages, it will suggest that bears are unwilling to let go of their advantage. The sellers will then attempt to solidify their position by pulling the price below the support line of the channel. Such a move could signal the resumption of the downtrend.
ETH/USDT
The bulls are attempting to defend the support line of the symmetrical triangle. A strong bounce off the current level could push Ether (ETH) to the moving averages where the bears are again likely to mount a strong defense.
ETH/USDT daily chart. Source: TradingView
If the price turns down from the moving averages, it will suggest that the sentiment remains negative and traders are selling on relief rallies. That will increase the possibility of a break below the triangle. The ETH/USDT pair could then resume its downtrend and decline to $2,159.
Contrary to this assumption, if bulls propel the price above the moving averages, it will suggest that the selling pressure may be reducing. The pair could then rise to the psychological level at $3,000 and later challenge the resistance line of the triangle.
BNB/USDT
BNB is attempting to rebound off the support zone between $360 to $350. This suggests that buyers continue to accumulate on dips near the support zone.
BNB/USDT daily chart. Source: TradingView
The buyers will have to push and sustain the price above the moving averages to indicate that the bears may be losing their grip. If the price sustains above the 50-day simple moving average (SMA) ($389), the bulls will attempt to push the BNB/USDT pair to $425.
This positive view will invalidate if the price once again turns down from the moving averages and breaks below $350. Such a move will suggest that the sentiment remains negative and traders continue to sell on rallies. That could pull the price to the critical support at $320.
XRP/USDT
Ripple (XRP) price soared above the downtrend line on March 11 but the rally met with stiff resistance at $0.85. This suggests that the bears have not yet given up and they continue to sell on rallies.
XRP/USDT daily chart. Source: TradingView
The price has pulled back to the 20-day exponential moving average (EMA) ($0.75), which is likely to act as a strong support. If the price rebounds off the current level, the buyers will make one more attempt to push and sustain the XRP/USDT pair above $0.85. If they succeed, the pair could rally to $0.91 and then rise to the psychological resistance at $1.
This positive view will invalidate if the price breaks below the moving averages. Such a move will suggest that the break above the downtrend line may have been a bull trap. A break and close below $0.69 could open the doors for a possible drop to $0.62.
LUNA/USDT
Terra’s LUNA token slipped below $94 on March 11 but the bears could not pull the price to the 20-day EMA ($82). This is a positive sign as it shows that traders are buying on every minor dip.
LUNA/USDT daily chart. Source: TradingView
Although the rising 20-day EMA indicates advantage to buyers, the negative divergence on the relative strength index (RSI) suggests that the bullish momentum may be weakening.
The bulls are attempting to push the price back above $94. If that happens, the buyers will make one more attempt to clear the overhead hurdle at $105 and resume the uptrend. If they do that, the LUNA/USDT pair could rally to $115.
Conversely, if the price turns down from the overhead zone, the bears will try to sink the pair below the 20-day EMA.
SOL/USDT
Solana (SOL) broke and closed below the strong support at $81 on March 11 and followed it up with further selling on March 13. However, the bears have not been able to break the intraday low at $75 made on Feb. 24.
SOL/USDT daily chart. Source: TradingView
The positive divergence on the RSI indicates that the selling pressure may be reducing. The bulls are attempting to push the price back above the breakdown level at $81 on March 14. If they sustain the price above $81, it will suggest that the recent breakdown may have been a bear trap. The buyers will then strive to push the SOL/USDT pair above the 20-day EMA ($87).
This positive view will invalidate if the price turns down from the current level and breaks below $75. That will suggest the bears have flipped the $81 level into resistance. The pair could then drop to $66.
ADA/USDT
Cardano (ADA) is attempting a rebound off the strong support at $0.74 but the effort lacks conviction. A minor positive is that the RSI is showing the first signs of positive divergence, indicating that the selling pressure may be reducing.
ADA/USDT daily chart. Source: TradingView
The bulls will have to push and sustain the ADA/USDT pair above the 20-day EMA ($0.85) to signal that the bears may be losing their grip. That could open the doors for a possible retest of the breakdown level at $1. This level is likely to attract strong selling.
Contrary to this assumption, if the price turns down from the current level or the 20-day EMA, it will indicate that bears are pouncing on every minor rally. That will increase the possibility of a break below $0.74. If that happens, the downtrend could extend to $0.68.
Avalanche (AVAX) broke below the uptrend line on March 13, indicating that the bears have overpowered the bulls. The attempts by the buyers to push the price above the breakdown level on March 14 met with strong selling by the bears.
AVAX/USDT daily chart. Source: TradingView
If bears sink and sustain the price below $64, the AVAX/USDT pair could slide to the strong support at $51. The downsloping 20-day EMA ($74) and the RSI in the negative territory indicate advantage to sellers.
This bearish view will invalidate in the short term if the price turns up from the current level and breaks above the moving averages. The bulls will then try to overcome the barrier at the downtrend line of the descending channel.
This is an important level to keep an eye on because the bulls have faltered at the downtrend line on four previous occasions. If bulls push and sustain the price above the channel, the pair could rally to $100.
DOT/USDT
Polkadot (DOT) once again turned down from the 50-day SMA ($18) on March 13 but the bulls are not allowing the price to sustain below the 20-day EMA ($17).
DOT/USDT daily chart. Source: TradingView
The price has been stuck in a tight range between $16 and $19 for the past few days, indicating indecision among the bulls and the bears. Such tight-range trading is usually followed by a sharp trending move.
If buyers push and sustain the price above $19, the DOT/USDT pair could rally to the next overhead resistance at $23. A break and close above this level will signal that the downtrend may be over.
Alternatively, if the price turns down and breaks below $16, the pair could retest the critical support at $14.
DOGE/USDT
Dogecoin (DOGE) made a strong attempt to start a relief rally on March 14 but the efforts of the bulls met with stiff resistance at the 20-day EMA ($0.12).
DOGE/USDT daily chart. Source: TradingView
If the bulls fail to clear the overhead hurdle, the bears will fancy their chances and try to sink the pair below the psychological support at $0.10. If that happens, the selling could further pick up momentum and the DOGE/USDT pair may slide to $0.06.
Contrary to this assumption, if the price rises from the current level or rebounds off $0.10, it will suggest accumulation by the bulls. The buyers will have to push and sustain the price above the 50-day SMA ($0.13) to signal a possible change in trend.
The views and opinions expressed here are solely those of the author and do not necessarily reflect the views of Cointelegraph. Every investment and trading move involves risk. You should conduct your own research when making a decision.
