Web 3 on Fire: Binance halts BTC withdrawals for a couple of days
Increased trading activity causes Binance to pause BTC withdrawals over the weekend
GM, frens! Ambire here with our weekly newsletter. This week in crypto has been filled with surprises and major developments. Today we’re discussing Elon Musk and Miladys, Estonia’s new crypto law, BlockFi customers getting some of their money back, Joe Biden slamming “wealthy crypto investors” and Binance halting BTC withdrawals for a couple of days.
Let’s get down to it:
Elon Musk's milady NFT meme sends the collection flying
A couple of days ago Elon Musk tweeted a meme made up of images from the Milady NFTs, reviving the interest in the collection.
Shortly after this, the price of Milady NFTs surged, peaking at 7.3 ETH after having been at 1 ETH floor just before. The Milady NFTs are part of a collection created in 2021 by Remilia, a digital arts collective. It consists of 10,000 anime profile pictures and is “inspired by street style tribes.”
The brains behind the project is artist Charlotte Fang who founded both Remilia, as well as its decentralized autonomous organization (DAO).
Elon's tweets have been credited with driving up the prices of many digital assets in the past, and this one was no different. The price of Milady NFTs have since cooled off a little, but there is still an active market for them and they remain one of the more popular NFTs in the space.
Estonia's crypto law sparks controversy as over 80% of crypto firms lose licenses
A new controversial law in Estonia has had a major impact on the country's crypto industry. Estonia's Financial Intelligence Unit (FIU) announced Monday that around 80% of the firms registered in Estonia before the law was passed have had their licenses withdrawn or rejected.
200 crypto firms in #Estonia have voluntarily abandoned their authorizations after the government enacted a new law to prevent money laundering.
Estonia is punishing crypto firms and VASPs for crimes committed by #tradfi.
— DS (@xspectDS)
May 10, 2023
The new crypto law requires companies to have substantial capital reserves and to have genuine ties to Estonia. This has led to around 200 companies opting out of the registration process, while an additional 200 companies were rejected by the FIU.
The law's critics claim that it will stifle innovation in the cryptocurrency sphere and make it difficult for crypto-related businesses to operate in Estonia. But supporters point out that it will help protect investors and discourage money laundering.
Only time will tell how the law shapes up the crypto industry in Estonia – but for now, as always, it's the regular investors and consumers who are feeling the effects of the new regulation.
Ambire Launches Mobile Apps with Exclusive Beta
You read correctly: the Ambire Wallet mobile apps for iOS and Android are coming soon!
Initially, the apps will only be available for a private beta testing. We know many in the web3 community would like to become early testers - join our Ambire Community on Discord to register your interest now or leave us your email address to be the first one to know when they drop!
BlockFi customers are getting some of their money back
Some good news for a change: BlockFi's customers might be getting some of their money back. Judge Michael Kaplan has ruled that funds in BlockFi's Wallet program, which did not pay interest on customer deposits and was kept separate from the lender's lending businesses, could be returned to customers. This means that $297 million of customer money can now be used to repay creditors. Great news for at least some users that got caught up in BlockFi's bankruptcy.
BlockFi filed for bankruptcy protection in late November after it was caught up in the FTX collapse. The crypto lender had $256.9 million in liquidity, and was neck-deep in debt to the U.S. SEC, FTX US, and other creditors. Now, with the judge's ruling that funds held in BlockFi's Wallet program can be returned to customers, creditors will at least get some of the money owed to them. Of course, not all customers are so lucky, as many are still waiting to hear what will happen with the rest of their funds.
Biden slams "wealthy crypto investors" on Twitter
Current US president, Joe Biden, is calling out the tax loophole that wealthy crypto investors are using to their advantage. This loophole apparently costs American taxpayers around $18 billion annually.
We don’t have to guess what MAGA House Republicans value. They’re telling us.
— President Biden (@POTUS)
May 9, 2023
This is just after Biden proposed the Digital Asset Mining Excise tax, or DAME, which would tax firms equal to 30 percent of the cost of electricity used. The proposal is set to be implemented next year, beginning with a 10-percent rate and increasing to 30-percent by the end of 2026.
It is evident that crypto has been a sore topic for the Biden administration and this is another attempt to try and rein in its perceived negative impacts. At this point, it's safe to say that the White House isn't happy with the growth of crypto and they are trying to do what they can to limit it.
Binance forced to halt BTC withdrawals
Binance has been forced to halt BTC withdrawals over the weekend, due to the incredible amount of trading activity that flooded its platform (according to Binance). This congestion, in turn, has caused backlogs in transaction processing and other issues.
Binance has apparently/reportedly halted withdrawals citing network congestion. Now, I just read an, albeit 100% unconfirmed, report that the halt occurred right after $3.3 billion $BTC in aggregated account withdrawals from multiple exchanges.
No way for me to confirm any… twitter.com/i/web/status/1…
— John Reed Stark (@JohnReedStark)
May 7, 2023
The high fees that BTC transactions now incur became a problem for Binance, so in order to save on the fees Binance also decided to integrate the Lightning Network into their system as well. Lightning is essentially an L2 protocol that works on top of the Bitcoin blockchain, making it much faster and more affordable to process transactions.
BTC's fees are high due to the rapid increase in popularity of the Taproot transactions, which have grown to account for more than 50% of Bitcoin transactions compared to only 2% at the start of 2023.
The fees have become so expensive that they have approached $20 in some cases, which certainly made a lot of BTC maxis very frustrated. Binance is the fattest exchange so the fees hit it the hardest.
The fun page: our weekly meme collection
“It’s only a $10M market cap, we could easily see a 20x from here”
— Alan Carroll (@alancarroII)
May 8, 2023
That's all for now, frens.
We'll see you next week. And remember, the market conditions are temporary, but our commitment to building a better DeFi is here to stay. Thanks for joining us and we look forward to seeing you back next week. Cheers!
Yours, The 🔥 Team
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