ban

China Backed Publication: Terra LUNA Crash Vindicates Country’s Ban on Crypto-Related Activities

16/05/2022 by Idelto Editor

An op-ed article published in the state-backed Chinese publication Economic Daily, has suggested that the recent crash of the Terra blockchain’s LUNA and the de-pegging of the UST stablecoin vindicate the Asian country’s decision to ban crypto-related activities. In the article, the author names the interest rate hikes by the U.S. Federal Reserve and the buying and selling of crypto assets by several investment giants as the causes of the recent market crash.

Impact of Recent US Interest Rate Hike

An author writing for China’s state-backed publication, Economic Daily, has argued that the recent crash of Terra’s LUNA and the de-pegging of the UST stablecoin vindicates his country’s decision to block or prohibit virtual currency-related activities. The author, Li Hualin, also claimed that China’s “decisive” and “timely” action helped to “extinguish the ‘virtual fire’ of virtual currency speculation and put ‘protection locks’ on investors’ wallets.”

As reported by Bitcoin.com News, Terra blockchain’s native token LUNA’s troubles started after the network’s other project, the algorithmic stablecoin UST, lost its peg against the U.S. dollar. Initial efforts to rescue the stablecoin precipitated the native token’s plunge from a price of over $87 on May 4, 2022, to a current price of just under $0.0003.

While some crypto experts have placed the blame for the token’s crash on the actions of the project’s leader, Do Kwon, in the opinion piece, the Chinese author appears to attribute the token’s fall mainly to the raising of interest rates by the U.S. Federal Reserve. Explaining how the rate rise caused the token to plummet, the author wrote:

Since the beginning of this year, the Federal Reserve has launched an interest rate hike cycle, and global liquidity has tightened. Especially in early May, the Federal Reserve raised interest rates by 50 basis points at a time, which had a negative impact on capital and market sentiment, and virtual currencies were the first to bear the brunt.

Virtual Currency and the Chinese Law

Following the crash of the two Terra tokens, some within the crypto community are still trying to piece together what may have caused the spectacular collapse. However, others have already accused two firms, Blackrock and Citadel, of being behind LUNA’s woes. These allegations have been rejected by the firms.

The Chinese author, in the meantime, claims in the piece that the involvement of investment giants in crypto markets “can lead to violent fluctuations in currency values, triggering a large number of sell-offs.”

Hualin also reiterated that virtual currency transactions are not protected by Chinese law. These comments appear to contradict the recent Shanghai High People’s Court judgment affirming bitcoin to be a virtual asset protected by Chinese law.

The author ends the article by urging investors to “remain rational, promptly eliminate the greed of bottom-hunting and get rich overnight, and stay away from related trading speculations, otherwise it is very likely that ‘currency will go to the fortune.’”

What are your thoughts on this story? Tell us what you think in the comments section below.

Proposed Crypto Mining Ban in Norway Fails to Gain Support in Parliament

13/05/2022 by Idelto Editor

A push to prohibit the energy-intensive proof-of-work mining of cryptocurrencies in Norway has been rejected by the majority of lawmakers. The ban had been suggested by the far-left Red Party which also didn’t win backing to raise an electricity tax for crypto miners.

Norway Will Not Ban Bitcoin Mining

The parliament of Norway has considered and voted against a draft law banning the minting of digital currencies based on the proof-of-work concept. The legislation, which was proposed by the communist Red Party in March, was supported only by two other leftist parties, SV (the Socialist Left Party) and MdG (the Green Party).

“We are obviously disappointed with the majority here,” Red lawmaker Sofie Marhaug told the E24 news portal. She added that the Norwegian society must determine its priorities regarding power usage. Her party says bitcoin mining is extremely energy-intensive and insists on putting an emphasis on the needs of other industries and climate change goals.

However, as Marhaug pointed out, the majority in the Storting, Norway’s legislature, wants to prioritize the market, and “give the bill to Norwegian electricity consumers.”

The Red also failed to win support for a proposal to revise the electricity surcharge for mining data centers, accusing the Labor Party (Ap) and Centre Party (Sp) of breaching a pre-election promise. The two parties had announced they would seek a full electricity fee for mining farms.

While households, many businesses, and the public sector currently pay 0.15 kroner (approx. $0.02) per kilowatt-hour of spent electricity, the industry, including data centers, enjoys a reduced levy of just 0.0055 kroner per kWh.

In February, the Norwegian government said it will try to avoid imposing a crypto ban, but made it clear it was considering various measures regarding the electricity consumption in the sector. In November, Norway admitted it’s mulling over ways to limit the environmental impact of bitcoin minting and may support a Swedish proposal for a European ban on proof-of-work mining.

“In a time of energy scarcity and challenges with cutting emissions, it is particularly harmful that power is wasted only to enrich individuals rather than being used for socially beneficial purposes,” the three leftist parties said. However, the parliamentary majority has objected to the politically motivated discrimination against mining data centers.

What do you think about the debate in Norway on the future of the crypto mining industry? Share your thoughts on the subject in the comments section below.

Norwegian Bitcoin Mining Ban Was Struck Down

13/05/2022 by Idelto Editor

A bill banning bitcoin mining, authored by the communist party in Norway, was struck down by a majority vote in the Norwegian parliament.

A bill seeking to ban energy intensive mining for cryptocurrencies like bitcoin was struck down by the Norwegian parliament on May 10.
The communist Red Party who authored the bill was supported by both the Green Party and Socialist Left party.
The minority also attempted to create an electricity tax for energy intensive cryptocurrency miners.

A Bitcoin bill seeking to eliminate energy intensive cryptocurrency mining was rejected in Norway with a majority vote passed by the Norwegian parliament on May 10, according to a translated report from local newspaper E24.

The proposal surfaced earlier this March by the Red Party (Rødt) which formed in 2007 from a merger between the Red Electoral Alliance and the Workers’ Communist Party. The Red Party outlines one of its primary goals as achieving a classless society, and was supported by the Socialist Left Party and the Green Party.

“We are obviously disappointed with the majority here. In the future, we will electrify large parts of society. If we do not want to carpet Norwegian nature with wind power, we must actually prioritize what the power is to be used for,” Rødt’s Sofie Marhaug said to E24.

Marhaug continued to cite a need to prioritize energy usage through what would be standard central planning for far-left political parties. In fact, at one point the Rødt party attempted to charge bitcoin miners a fee on-top of standard energy market prices.

Ordinary households, companies and the public sector pay an electricity tax of $2.51 per kilowatt hour, the industry has a reduced electricity tax of around $0.07 per kilowatt hour.

“But it seems that the majority in the Storting will leave the priority to the market, and give the bill to Norwegian electricity customers,” Marhaug reportedly said.

The majority on the other side of the matter reportedly said that it is “in principle questionable to discriminate against data centers on the basis of a politically defined societal benefit.”

Those against the ban discussed a lack of confidence in authority reportedly stating “It is no coincidence that cryptocurrency experienced a particular upswing in the wake of the financial crisis in 2008, when confidence in national and international banks and financial institutions was at a bottom level.”

Central Bank Of Argentina Bans Banks From Offering Bitcoin, Crypto Services

06/05/2022 by Idelto Editor

The ban comes just a few days after Argentina’s largest private bank announced it would start offering bitcoin to clients.

The central bank of Argentina has banned financial institutions from offering any services involving cryptocurrencies like bitcoin.
The ban comes days after the largest private bank in Argentina announced it would begin offering such services to its clients.
An alert released from the central bank last year showed its reluctance to cryptocurrencies, also exhibited in today’s ban.

The Central Bank of the Argentine Republic (BCRA) announced in a Thursday statement that financial institutions in the country are banned from offering clients any services involving Bitcoin or other cryptocurrencies.

The news comes on the heels of a $45 billion loan approval from the International Monetary Fund (IMF) for Argentina in March that stipulated the country should discourage the usage of bitcoin and cryptocurrency.

The largest private bank in Argentina days ago announced they would begin offering these very same products. Burbank, a digital bank in the country, also announced it would offer a line of support for bitcoin and other cryptocurrencies.

The shock of this decision from centralized authorities directly refutes the actions of many Argentinians as the country is reportedly ranked tenth in the world for cryptocurrency adoption, according to a report from chain analytics company Chanalysis.

The ongoing adoption of bitcoin and other cryptocurrencies within Argentina is largely attributed to the towering rates of inflation suffered by citizens. Reuters reported that the inflation data provided by the government last month showed annual inflation rates of 55% for the month. The report also states experts are anticipating 60% inflation for the year, which is set to take a toll on the almost 40% of the population reportedly living below poverty.

BCRA released an alert last year concerning the use of cryptocurrencies and the risks it saw associated with participating in the asset class, including high volatility, money laundering, financing of terrorism and potential non-compliance with foreign exchange regulations.

Bitcoin Proponents Rally To Oppose New York Mining Moratorium

06/05/2022 by Idelto Editor

Bitcoiners and politicians come together in Albany, New York to speak out against a proposed ban on proof-of-work mining and to keep industry jobs in the state.

“This (Bitcoin) isn’t going to stop. Crypto mining may move somewhere where there is little or no concern for the environment.” –Ken Pokalsky, Vice-President of The Business Council of New York State

Pokalsky’s words echoed the sentiments of the half dozen speakers assembled at the New York State Capitol in Albany on May 2, 2022. Gathered on the Capitol’s famed “Million Dollar Staircase” were state legislators, Bitcoin industry leaders and advocates for technology jobs. The occasion was to urge Governor Kathy Hochul and the State Senate to oppose a two-year moratorium on proof-of-work mining. The bill has already passed the State Assembly.

The bill that passed the Assembly would impose a two-year ban on proof-of-work mining unless done with 100% renewable energy sources. Though much mining in the state is done with hydroelectric power, the ban would effectively shut down many mining facilities, including the Greenidge facility on Seneca Lake. Greenidge uses an older gas-fired plant to do its mining.

Both houses of the legislature and the governor’s chair are controlled by Democrats, so the environment is surely one of their biggest concerns.

The event was organized by Foundry Services of Rochester, New York. Foundry is a Digital Currency Group company, focused on mining, equipment sales, financing and staking services. The press conference, hailed by organizers as a “rally/protest,” drew only a couple of dozen supporters and a few legislators. The event was moderated by Cleve Mesidor, executive director of the Blockchain Foundation.

Assembly Member Clyde Vanel, representing the 33rd District in Queens, stated that while his party cares about the environment, they also care about jobs and good salaries. It was a theme touched on by many of the speakers.

State Senator Jeremy Cooney, representing the 56th District in Rochester, focused on how legacy financial institutions have long excluded people of color. “Financial inclusion should not be restricted by one’s zip code,” said Cooney. And an even more powerful statement from the senator, “We can’t stop the conversation with a moratorium.”

Pokalsky, quoted above, also focused on the fact that New York State has struggled to keep up with the nation in terms of job growth. The jobs theme was echoed by Assembly Member Addie Jenne, who also happens to be a regulatory counsel for the International Brotherhood of Electrical Workers union. Jenne said, “New York should not squander the opportunity to lead the nation in innovation.”

*In front: Jenne, Vanel, Mesidor, Cooney, Pokalsky (*Photograph/Rick Mulvey)

Adrian Hale, the director of economic and community development for Foundry, was probably the most powerful speaker at the event. Hale, previously with the Rochester Chamber of Commerce, pointed out that the city is the third-poorest city in the nation. He referenced the New York State “BitLicense” as an impediment to doing business in the state, and as especially hurting opportunities for Blacks and Latinos. He pointed out that there are very few other opportunities for minorities to earn “generational wealth.”

Hale pointed out that Rochester’s Bitcoin community is adopting the already-used slogan for employment fair opportunities, “ROC the block,” to reference local employment by blockchain companies.

The event had an interesting tone to it, as all of the legislative reps on hand were Democrats and most attendees were people of color. This was a point stressed by Jenne, who touted the diversity of the effort. The rally was promoted and attended by the Harlem Bitcoin Community as well. Bitcoin is generally thought of as a right-wing endeavor, but you wouldn’t have known it from this rally.

Hale stated that the goal of nearly everyone involved in the Bitcoin space was “a smart, equitable regulatory framework.”

The bill now moves on to the New York State Senate.

This is a guest post by Rick Mulvey. Opinions expressed are entirely their own and do not necessarily reflect those of BTC Inc. or Bitcoin Magazine.