Coinpaprika News Overview (March 7th)

Hong Kong suffers surge in crypto scams despite bear market in 2022

Hong Kong suffered a surge in crypto scams, with losses reaching $216.6 million, a 106% increase from the previous year. There were 2,336 cases of crypto-related scams reported, a 67% surge from the year before, and more than 50% of the $407 million stolen from Hong Kong residents in tech crimes were related to crypto. The police force's cybersecurity and technology crime bureau notes that scammers often pretend to be experienced investors, luring victims into fraudulent investment apps showing fake transactions and returns. Using cryptocurrency as a medium for online scams has made tracking criminal funds more complicated for enforcement. Hong Kong's government is developing its cryptocurrency infrastructure, distinguishing its crypto regulation approach from China's blanket crypto ban.

El Salvador's president credits bitcoin for boosting tourism and rebranding country in Tucker Carlson Interview

President Nayib Bukele credits Bitcoin for rebranding El Salvador's legacy and boosting tourism, with a 95% increase in visitors since the country adopted bitcoin as a legal tender in September 2021. Bukele also claims that private investments have increased since its adoption, and bitcoin has helped rebrand the country's image as a violent place. Despite concerns over bitcoin's volatility and its long-term impact on the economy, Bukele remains bullish on its prospects, claiming that it has been a game-changer for El Salvador and predicting that other countries will follow suit.

Centralized exchanges implementing Proof-of-Reserves to improve transparency and solvency

Centralized cryptocurrency exchanges are under scrutiny after the recent FTX liquidity crisis. Many exchanges are adopting Proof-of-Reserves, a method that publicly confirms the possession of sufficient assets to cover liabilities using cryptography. They aim to regain public trust and remain popular. The Proof-of-Reserves system relies on Merkle proofs to match on-chain assets with liabilities and allows users to verify their balance against the liabilities data set. Phemex, a leading cryptocurrency exchange, has recently released its Proof-of-Reserves, liabilities, and solvency to improve transparency. While this system is imperfect, it can increase transparency and invite more users to the industry. However, it is also essential to highlight the importance of eliminating third-party risk by teaching users to manage their private keys to maintain self-custody.

Charles Hoskinson defends contingent staking as Cardano community divides over compliance concerns

Cardano CEO Charles Hoskinson has dismissed criticisms that contingent staking is a compliance protocol to appease U.S. lawmakers, calling it a basic concept that has been misconstrued. Contingent staking is a protocol-level "right to refuse business" that allows Stake Pool Operators to refuse delegated tokens. Hoskinson stressed that this is not a compliance protocol and is simply a multi-sig setup that can be used to "fire" bad customers or eliminate those who don't conform to values. However, the Cardano community is divided over the idea, with some concerned that changes to please America now may lead to further changes down the line.

Former FTX head of engineering Nishad Singh faces lawsuits from SEC and CFTC

Former FTX head of engineering Nishad Singh pleaded guilty to six criminal charges, and the CFTC and SEC have filed civil lawsuits against him. The regulatory bodies are seeking civil monetary penalties and banning Singh from ever trading commodities and securities again. The CFTC accused Singh of fraud and aiding and abetting the fraud committed by FTX, Alameda Research, and Sam Bankman-Fried. Meanwhile, the SEC accused Singh of violating the Securities Act and the Exchange Act. Singh pleaded guilty to one count of wire fraud, three counts of conspiracy to commit fraud, one count of conspiracy to commit money laundering, and one count of conspiracy to defraud the United States by violating campaign finance laws.

BIS completes successful CBDC pilot for cross-border payments

BIS (Bank for International Settlements) has completed Project Icebreaker, a successful CBDC pilot to improve cross-border payments between different currencies. The pilot connected different CBDC ecosystems through a "hub-and-spoke" system, settling cross-border transactions within seconds and reducing counterparty and settlement risk. The system also allows multiple foreign exchange providers to participate and use competitive exchange rates to retail users by automatically choosing the lowest available rate for a transaction. Additionally, the project implemented using "bridge currencies" in case of transactions between two end currencies is unavailable. The Bank for International Settlements collaborated with the central banks of Israel, Norway, and Sweden for the pilot.

Yuga Labs to launch Twelvefold art collection on Bitcoin's Ordinal Protocol

NFT giant Yuga Labs announced a new generative art collection, Twelvefold, to launch on the Bitcoin blockchain using its Ordinal protocol. The 300-piece collection aims to turn individual satoshis into de-facto non-fungible tokens, exploring "the relationship between time, mathematics, and variability" inherent to satoshis. Yuga Labs stated that Twelvefold would depart from its previous offerings, such as the Bored Ape Yacht Club, and will feature highly-rendered 3D elements with hand-drawn features. The studio will auction off the collection before the end of the week.