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© Reuters. Crypto Flipsider News – Bitcoin Falls on CPI; SWIFT uses blockchain; Launch on the EDX market; Arrest Kwon; Tornado Cash Update

To read in the Digest:

  • (BTC) Records Biggest Drop Since June Following CPI Report
  • SWIFT is piloting a blockchain project for its corporate communication actions
  • Wall Street-backed crypto exchange EDX Markets to launch in November
  • South Korean court issues arrest warrant for founder Do Kwon
  • US Treasury Department Issues Guidelines for Recovery of Tornado Cash

Bitcoin (BTC) Records Biggest Drop Since June Following CPI Report

The world’s largest cryptocurrency, Bitcoin, posted its biggest drop since June. The price of Bitcoin (BTC) fell 10% when the Consumer Price Index (CPI) report for August 2022 was released.

The Labor Department report showed an 8.3% increase in consumer prices in the past 12 months ending in August, sending Dow, S&P 500 and Nasdaq stocks to their worst day in 2022.

Bitcoin, moving in tandem with traditional markets, fell 10% to end a 4-day winning streak. The sharp decline sent the price of Bitcoin down from a high of $22,673 to lows of $20,062.

The 24-hour price chart for Bitcoin (BTC). Source: CoinMarketCap

Bitcoin losses have now narrowed to 4.27% in the past 24 hours and the asset is now trading at $20,300. Losses could possibly continue as the Federal Reserve may raise interest rates further to curb runaway inflation.

Downside :

  • Despite the recent losses, the Bitcoin hash rate reached a new all-time high (ATH) of 265 Ehash/s. This follows the recent increase in mining difficulty.

Why You Should Care

Bitcoin’s fall highlights increased correlation and movement with traditional financial markets.

SWIFT is piloting a blockchain project for its corporate communication actions

Financial messaging service provider SWIFT (Society for Worldwide Interbank Financial Telecommunication) is leading a project to use blockchain to communicate corporate actions more efficiently.

SWIFT is building the project on Symbiont’s enterprise blockchain platform using its smart contracts to automate and improve the accuracy of corporate actions workflows.

According to SWIFT Chief Innovation Officer Tom Zschach, by leveraging Symbiont’s blockchain solution, they were able to send data from multiple sources of a corporate event in near real time.

The solution is being tested by a group of pilot participants who will provide feedback in September. SWIFT will consider offering the product to its wider community if the test is successful.

Downside :

  • SWIFT recently launched a predictive data intelligence tool that identifies potential issues with cross-border transactions before payments are sent.

Why You Should Care

The announcement signals the growing adoption of blockchain, especially in banking and finance.

Wall Street-backed crypto exchange EDX Markets to launch in November

A group of Wall Street financial and venture capital firms, including Fidelity Digital Assets, which heads Citadel Securities, and Charles Schwab (NYSE:) Corp, among others, on Tuesday announced plans to launch a cryptocurrency exchange, EDX Markets.

EDX Markets (EDXM) seeks to serve the needs of institutional and retail investors across multiple markets using trusted intermediaries. EDXM will integrate digital assets into traditional finance and also meet the demand for digital asset trading.

EDXM will also be powered by the Member Exchange (MEMX). The exchange will seek to reduce spreads, improve transparency and reduce costs for investors by aggregating liquidity from multiple market makers.

According to early reports, EDX Markets will debut as early as November 2022 with a limited number of spot and crypto tokens. The exchange will be led by Jamil Nazarali, a former senior executive at trading giant Citadel Securities.

Downside :

  • Although affiliated with the biggest names on Wall Street, EDX Markets will be autonomous.

Why You Should Care

The move highlights the growing shift from traditional finance to the crypto market despite the downturn. In August, Charles Schwab launched his first crypto-related ETF.

South Korean court issues arrest warrant for Terra founder Do Kwon

A South Korean court has issued an arrest warrant for Do Kwon, the founder of Terraform Labs and Terra. The Terra ecosystem collapsed in May, leading to approximately $60 billion in losses from its LUNA and UST stablecoins.

According to the Financial Crimes Unit of the Supreme Prosecutors Office, the warrant included five additional people charged with breaching the national capital markets law.

The mandate is intended to increase scrutiny of the collapse of the Terra ecosystem. In July, the home of Terraform Labs co-founder Daniel Shin was raided by prosecutors following allegations of illegal activities that led to Terra’s collapse.

The arrest warrant comes three months after Terra employees were banned from leaving South Korea. Do Kwon was also asked to inform the authorities of his return to the country.

Downside :

  • In his first public interview after Terra’s collapse, Do Kwon maintained that he was cooperating with authorities on the investigations.

Why You Should Care

Examining the case thoroughly could possibly answer investors’ questions about the situations that led to the collapse of the Terra ecosystem.

US Treasury Department Issues Guidelines for Tornado Cash Recovery

Breaking a month-long silence since Tornado Cash was blacklisted, the U.S. Treasury Department on Tuesday provided an update on how users can withdraw their blocked funds on the coin mixing tool.

New guidelines provided via the Office of Foreign Assets Control (OFAC) website FAQs state that users with details of their legal Tornado Cash transactions can apply for a special license from OFAC that will allow the withdrawal of their funds.

The FAQ also addressed an anonymous user stalking celebrities by sprinkling (sending small amounts of ETH) via Tornado Cash after the sanctions were announced. According to the guidelines, OFAC will not prioritize enforcement against recipients.

Recall that on August 8, OFAC sanctioned Tornado Cash for facilitating money laundering and terrorism. OFAC alleged that nearly 20% of the mixer’s volume was linked to illicit activity.

Downside :

  • The leading crypto exchange, Coinbase (NASDAQ:), has announcement that he will sponsor the lawsuit filed against the Treasury Department for sanctioning Tornado Cash.

Why You Should Care

The license could help users withdraw their funds, which DefiLlama claims is worth up to $174 million on the Tornado Cash smart contract.

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