Token Chronicle - Week 2 October 2024

Top cryptos

Meme of the week

Quick bites:

• Samara Asset Group plans to issue a €30M bond to purchase bitcoin and expand its alternative investment portfolio. CEO Patrik Lowry highlighted the bond’s role in boosting Samara’s balance sheet and liquidity, with Bitcoin as their primary treasury reserve asset.

• A crypto whale lost $35M in a phishing attack on the Blast network, losing 15,079 fwDETH tokens. The fraudulent "permit" message allowed funds to be drained, causing fwDETH's value to plummet over 90% before recovering.

• Paradigm invests $20M in Ithaca, a spinoff creating the Layer 2 blockchain Odyssey! CTO Georgios Konstantopoulos will lead Ithaca, aiming to streamline developer tools and enhance user experience. Odyssey is live on testnet, featuring advanced Ethereum smart contracts.

• Michael Saylor envisions MicroStrategy as the leading Bitcoin bank, aiming for a trillion-dollar valuation! He predicts Bitcoin's share of global financial capital could rise to 7%, driving its price to $13M by 2045.

• 15 years ago, Martti Malmi sold 5,050 Bitcoin for just $5.02, marking the first BTC-to-dollar transaction. This small exchange paved the way for Bitcoin's rise to becoming a global financial force.

• Bitnomial is suing the SEC, claiming the regulator overreached by involving itself in the regulation of XRP futures, which Bitnomial argues fall under the CFTC’s authority. The company disagrees with the SEC's classification of XRP as a security.

• The SEC has hit Cumberland DRW with a $2 billion allegation over mishandling assets it views as securities, naming Solana, Polygon, Cosmos, Algorand, and Filecoin as targets. More could follow.

• The Hong Kong Securities and Futures Commission (SFC) plans to issue more virtual asset trading platform (VATP) licenses this year, following last week's HKVAX license approval. Onsite inspections for 11 VATP applicants were completed, with rectifications underway.

• Taiwan Semiconductor Manufacturing Co (TSMC) reported nearly $24 billion in quarterly revenue, exceeding expectations. Driven by clients like Apple and Nvidia, TSMC's revenue surged 37% year-over-year, cementing its leadership in AI. A 40% increase last month.

• HBO's new documentary suggests Peter Todd, a key Bitcoin developer, might be Satoshi Nakamoto. Todd's contributions, like founding OpenTimestamps, and his role in the 2017 Blocksize War are explored as possible clues to his identity.

Market update: Bitcoin reached $65,000 after Chinese stocks ignored mixed reactions to stimulus plans and ended the day higher. BTC traded near $64,900 in late European morning, up more than 3.4% over the past 24 hours. The broader digital asset market, as measured by the CoinDesk 20 Index, increased by about 2.9%. The latest announcements from the Chinese government regarding stimulus plans disappointed expectations, but the Shanghai Composite Index still closed the day with a rise of more than 2%. "Chinese stocks bounced back after the weekend’s disappointments, so risk sentiment will likely remain in 'buy everything' mode until further notice," said Augustine Fan, head of insights at SOFA, in a Telegram message to CoinDesk. The overall economic outlook remains bullish, driven by Chinese stimulus and improving figures in the U.S.

Main points this week:

International Point:

1. The United Arab Emirates announces a tax exemption on cryptocurrency transfers and conversions.

2. Several years ago, an Irish drug trafficker was arrested and forced to hand over his fortune in Bitcoins (BTC) to authorities. Since then, it has been impossible to locate this treasure. In 2020, when Clifton Collins’ 5,500 BTC were seized, their total value was $56 million. In 4 years, Bitcoin's price skyrocketed, and those same 5,500 BTC are now worth $378 million.

3. Taiwan: 3 banks will offer cryptocurrency custody services starting in 2025: Taiwan's Financial Supervisory Commission (FSC) plans to launch a pilot project in 2025 to allow local banks to offer cryptocurrency custody services. 3 institutions have already expressed interest, marking a shift towards institutional adoption of digital assets in Asia. This project aims to encourage innovation in the financial sector. Interested institutions are invited to submit their applications to the FSC. So far, 3 banks have shown interest. The FSC expects the first application to be submitted in Q1 2025. Additionally, the FSC is working on a bill, expected to be published by the end of 2024, to provide a clear framework for cryptocurrency development, allowing the industry to grow faster and more securely.

Regulation:

1. Nearly 2 years after its bankruptcy, the FTX platform finally sees its reorganization plan validated by the U.S. Bankruptcy Court. A crucial step that will allow creditors to receive the expected funds in the coming weeks. However, it's worth noting that the repayment value is based on the value of the cryptocurrencies held on FTX at the time of the bankruptcy filing. At that time, Bitcoin was valued at around $16,500, Ethereum at $1,250, and SOL at $15. FTX is expected to redistribute between $14.7 and $16.5 billion, justifying the 2-year wait for reimbursements.

2. On Monday, the U.S. Supreme Court declined to rule in a case related to the ownership of $4.4 billion in Bitcoin (BTC) from Silk Road. As a result, the U.S. government may now be free to sell these Bitcoins. According to Arkham data, the U.S. currently holds $13 billion in cryptocurrencies, all seized in various legal cases. The majority of these assets consist of BTC, totaling 203,239 units.

3. Crypto.com filed a lawsuit against the SEC to challenge what it sees as excessive and unauthorized regulation of the crypto industry. This countersuit comes after Crypto.com received a Wells notice from the U.S. regulator. The company denounces this position as illegal, arguing that it is not based on clear and transparent regulation and goes against the principles of public consultation established by the Administrative Procedure Act, a 1946 U.S. federal law that sets out the steps agencies must follow to adopt regulations, such as publishing a notice, consulting the public, and considering comments before finalizing a rule.

4. As part of an investigation into fraudulent crypto companies, the FBI created its own cryptocurrency called NexFundAI. This allowed them to identify market makers artificially maintaining high transaction volumes. In this case, the companies involved are accused of maintaining artificially high activity on certain tokens to create a false sense of popularity among investors. A total of 18 individuals and entities are indicted for "widespread fraud and manipulation in cryptocurrency markets."

5. Gary Gensler, chairman of the SEC, believes cryptocurrencies will never be widely used as a means of payment: In recent years, Gary Gensler, the current chairman of the Securities and Exchange Commission (SEC), has faced strong criticism for leading a strict policy against the cryptocurrency industry. Recently, the SEC head had the opportunity to share his strong opinions on cryptocurrencies. At an event held on Wednesday at the New York University School of Law, Gary Gensler stated, "It’s unlikely that this thing will become a currency."

6. Ripple (XRP) is going on the offensive after the SEC appealed the court decision made against it: The case between the Securities and Exchange Commission (SEC) and Ripple is far from over. As the SEC decided to appeal the court ruling made over the summer against Ripple, the company has decided to counter-attack.

7. This week, CoinGecko shared a study that listed $32 billion in settlements from crypto companies to the SEC or CFTC. With 25 cases under investigation, they represent the majority of penalties and refunds collected by U.S. regulators over the past 5 years. As shown in the chart below, the largest amounts were collected this year or in 2023:

Institutional:

1. Bitcoin at $200,000, Ether at $10,000, and Solana at $700 – This is Standard Chartered's prediction.

2. BNP Paribas acquires a stake in Kriptown, a blockchain-based neo-exchange dedicated to SMEs: A breakthrough for BNP Paribas? The French bank recently participated in a funding round for Kriptown, a blockchain company developing a neo-exchange. Kriptown announced today the completion of a Series A funding round. The company confirms that it was led by BNP Paribas, followed by Bpifrance and Centilux Family Office. The amount raised, €4.2 million, is relatively standard for a company of this size, but its backers are unusually noteworthy.

3. Just days after Bitwise filed its application with the Securities and Exchange Commission (SEC) to launch its spot XRP ETF, Canary Capital is also entering this challenging pursuit. For its spot XRP ETF, Canary Capital will rely on the XRP-USD reference rate designed by CME Group and Crypto Facilities (CF). This is a spot pricing index based on transaction data from various XRP-USD markets operated by several crypto exchanges.

4. Bitcoin spot ETF options are expected to be available by Q1 2025, according to Bloomberg analyst James Seyffart. This new product could boost Bitcoin adoption by institutional investors, offering additional tools to manage volatility and protect portfolios. In September 2024, the Securities and Exchange Commission (SEC) approved trading options on BlackRock’s Bitcoin spot ETF. These options further integrate Bitcoin into the financial sector. Although they don't offer the censorship-resistance benefits of Bitcoin, they attract more capital and facilitate access to investors.

5. Asset manager Fidelity revealed that a cyberattack in August 2024 compromised the personal information of 77,000 customers. While no accounts were affected, this unauthorized access raises significant security concerns, marking the company’s 4th data breach this year. One of Bitcoin's goals is to enable value exchange without intermediaries, allowing users to manage their funds autonomously and exchange value without trusting a third party. Moreover, by holding your BTC yourself, your data remains private as you are the sole owner. This situation is particularly ironic in the case of the Fidelity hack, as it’s the only asset manager that self-custodies its BTC without relying on a third party for this task. In contrast, other Bitcoin spot ETF managers, such as BlackRock, Bitwise, or Grayscale, primarily rely on Coinbase’s custody service.

Tech/Partnerships:

1. A new layer 2 is about to arrive, and it’s a major one. Uniswap Labs, the firm behind the famous decentralized finance protocol Uniswap, has just unveiled "Unichain." Essentially, Unichain is based on the following pillars: reduced fees, decentralization, speed, and interchain exchanges. Interchain exchanges, in particular, seem to be Unichain's cornerstone. Thanks to a partnership with OP Labs, Unichain will benefit from native interoperability with other layer 2s in the Superchain, including Base, OP Mainnet, Mode, Zora Network, Mantle, and Celo.

2. After promising the arrival of this feature last spring, Stripe rolled out USDC payments on its payment application this week. USDC is now officially a payment method for merchants using Stripe. Indeed, Circle's stablecoin can now be accepted in over 150 countries on the Ethereum (ETH), Solana (SOL), and Polygon (POL) blockchains. For now, only USDC is available as a cryptocurrency payment option on Stripe.

3. On Thursday, the teams at World Fiberty Financial (WLF), the crypto project propelled by the Trump family, posted a proposal on Aave’s governance forum to collaborate. If accepted, a World Liberty Financial instance would be created on Aave’s V3 on the Ethereum blockchain (ETH). The first assets to be supported would be USDC, USDT, ETH, and wBTC. In return for this partnership, Aave’s decentralized autonomous organization (DAO) would be rewarded with 20% of the protocol fees collected on this instance and 7% of the total supply of the upcoming WLF token. This allocation could be used for marketing, governance operations, or incentives on the protocol through liquidity mining.

4. Tim Sweeney, CEO of Epic Games, presented his ambitious plan to make the next version of the Unreal Engine a true Swiss Army knife for metaverse development. Tim Sweeney spoke about the future of video games based on the Unreal Engine. He outlined his long-term plan to create new tools dedicated to metaverse development. All these tools will be included in a single solution: the new version of the Unreal Engine, Unreal Engine 6. Currently, Epic Games already provides a simplified version of the creation tools available in Unreal Engine 5 to Fortnite users.

5. After making a name for itself in on-chain data analysis, Arkham is preparing to launch its crypto derivatives trading platform. According to an anonymous source close to the matter, this platform will target retail investors, excluding U.S. residents. So far, Arkham has not confirmed the rumors, but if they prove to be true, the said derivatives platform could be launched in the first half of 2025.

Let’s learn about: Check my article about Devolved AI: Project Presentation - Devolved AI (beehiiv.com)

An ambitious project that promises to make AI more accessible, equitable, and resilient by leveraging the power of decentralized networks.

Through the use of decentralized networks, such as Bittensor, Devolved AI seeks to democratize access to computing power and machine learning (ML) models.

Devolved AI is a concept based on the distribution of AI across a decentralized network. It proposes a model where computing resources and machine learning models are spread across a global network of contributors.

Unlike traditional centralized models, where computing resources and data are concentrated in the hands of a few large companies, Devolved AI allows for broader distribution and collective participation.

The project, launched a few months ago is supported by several strategic partners, including nuco.cloud and Stratos.

Let’s talk about: Symbolic AI (not a crypto project)

Symbolic AI: Overview and Key Differences

Symbolic AI emerged from early theories by philosophers like Thomas Hobbes and René Descartes, who viewed thinking as the manipulation of symbols and reasoning as a form of calculation. Unlike modern AI models that use machine learning (ML) and neural networks to find patterns in data, symbolic AI is based on logic and predefined rules to emulate human thought processes.

Advantages, Disadvantages, and Use Cases

Symbolic AI offers advantages in transparency and consistency. Its rule-based nature ensures that decisions are explainable, making it ideal for applications like legal reasoning, expert systems in healthcare, or even automated customer support, where predictable and logical outcomes are crucial. It also uses less computational power than neural networks, making it efficient for tasks like email filtering, where clear rules (e.g., detecting keywords or phrases) can drive decisions.

However, symbolic AI struggles with tasks that involve unstructured or vast datasets, such as image recognition or speech analysis, where neural networks excel. Unlike ML, symbolic AI cannot adapt to new information without being manually reprogrammed.

Neuro-Symbolic AI: The Future of AI?

A promising hybrid approach, neuro-symbolic AI, combines the strengths of symbolic reasoning with neural networks. For example, IBM is working on systems that use neural AI for interpreting raw data (like images or text) and symbolic AI for applying logical rules to that information. This blend offers potential in fields like fraud detection or autonomous vehicles, where both data-driven insights and logical decision-making are needed.

Conclusion

Symbolic AI remains relevant in specialized use cases where logic and transparency matter most. As AI continues to evolve, neuro-symbolic models could provide a balanced solution, merging the adaptability of neural networks with the clarity of symbolic reasoning. This fusion may redefine how we approach complex problems, delivering more efficient, explainable, and powerful AI solutions.

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Disclaimer: The information disclosed here does not constitute an investment advice ; it is for informational purposes only and does not constitute investment advice. You should do your own research while investing in crypto and only invest money you are ready to lose.