- Bitcoin steadying just below USD 8,000 after Tuesday profit taking takes its toll
- Bithumb has partnered up with Chainalysis in the wake of South Korean legislative amendments that require stricter reporting compliance from Bitcoin and crypto exchanges
- Blockchain lender Figure Technologies claims that US Federal Reserve interest rate cuts have led to a boom in decentralized finance (DeFi) lending on its platform, driving a 300% increase in growth
After breaking past USD 8,000 yesterday, profit taking caused Bitcoin price to drop once more below that key support turned resistance levels, where it currently trades. Altcoins are faring more or less the same, barely holding on to new grounds, like ETH is just above USD 200 right now.
With regulations bringing positive news all over the world, crypto companies are now stepping up to meet the requirements of various new legislations. Now that South Korea has formally legalized crypto trading, exchange giant BitHumb has announced a partnership with blockchain analysis firm Chainalysis. Spefically, it seems to use the analyst’s “Reactor” investigations tool to help analyze suspicious activity on its platform, which is required now under South Korea’s recently updated Special Financial Transactions Information Act.
Although exchanges still have a year to comply with new regulations, with 12 months on the clock till changed come into effect, before full compliance on September 2021, Bithumb does seem keen to be ahead of the curve. The company’s head of compliance, Sungmi Lee, says that lawmakers are likely to put more strength into the new legislative apparatus, so Bithumb had best prepare:
“We anticipate further updates following last week’s vote making it even more important for us to have support available in our local language.”
Last week, a unanimous vote was passed by South Korea’s National Assembly for the revised bill, which now means all virtual asset service providers (VASPs) in the nation will have to abide by a new permit system. All exchanges are also required to provide detailed reports on their operations to the Financial Intelligence Unit, and with “real name-confirmed accounts” needed to be collected from banks. Failure to comply brings a maximum of five years in jail or a fine of USD 42,000.
In addition, the Korean Internet Security Agency (KISA) must audit exchanges’ system and certify their security. This KISA certification isn’t cheap or fast; so far only Bithumb, Upbit, Coinwon and Korbit have successfully obtained it..
Chainalysis chief revenue officer Jason Bonds explained:
“As cryptocurrency use in South Korea continues to grow, new regulations such as this will make blockchain analysis solutions like Chainalysis vital for compliance.”
We’ve covered decentralized finance (DeFi) in the past and they sure do look like they’re not going away.
Now that the US central bank has gone down the route of new interest rate cuts, blockchain lenders are seeing a spurt in total loan growth, recording USD 1 billion, according to Figure Technologies. It said that loan applications have grown by four times since the Federal Reserve move.
Figure Technologies has been operating its Provenance blockchain for two years now to process consumer loans, and recorded USD85 million of loans per month after a year, taking into account business for itself and other major lenders.
Last December, it raised over USD 100 million in a Series C funding round led by Morgan Creek Digital. Renowned commercial bank Mitsubishi UFJ Financial Group’s venture capital arm, MUFG Innovation Partners also participated.
One of its more popular lending solutions is a 5-minute home equity line of credit (HELOC), whereby a borrower puts up an owned house for loan collateral.
CEO Mike Cagney notes that central banks globally will be lowering interest rates even more to delay economic slowdowns, as health cares from coronavirus continue to restrict business and commerce. He explained:
“The 300 percent increase in applications suggests consumers are eager to take advantage of unprecedented lower rates across mortgages, HELOCs and student loan refinancing.”
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