3 July 2020
This week, the crypto markets sparked news surrounding regulatory action as well as a few important developments with Ethereum 2.0. Let’s take a look at some of the most important events of the week.
JPMorgan Pays $2.5 Million Fine for Settling A Crypto Lawsuit
Wall Street banking giant JPMorgan was yet again in the midst of a fresh new controversy in the crypto space. The Manhattan federal court ordered JPMorgan to pay $2.5 million as part of a settlement for overcharging its customers for cryptocurrency transaction fees.
The Plaintiffs – Brady Tucker, Ryan Hilton, and Stanton Smith – accused the bank of treating their crypto purchase expenses as cash advances and thus charged a higher fee and interest rate for them.
The plaintiffs argued that these charges came as a surprise as they were only applicable to fiat transactions. Although JPMorgan tried to defend its position saying that they were “cash-like transactions”, their plea was rejected by the court.
Thus, the court directed JPMorgan to pay a total fine of $2.5 million to the plaintiffs.
Cryptocurrency Derivatives Trading Volumes Hit $602 Billion in May 2020
In a report by the London-based cryptocurrency data aggregator CryptoCompare, it was found that cryptocurrency derivative volumes for the last month of May jumped a massive 32% hitting a new record high of $602 billion.
This indicates a strong surge in the institutional interest and participation in cryptocurrency markets. Nearly 80% of the total volume came from only three exchanges – Huobi, Binance, and OKEx.
The CryptoCompare report shows that there has been a notable increase in the trading of crypto options. The total monthly options contracts on CME stood at 5,986, nearly 16x more than the previous month of April 2020. Similarly, the volume on the Deribit crypto exchange jumped to $3.06 billion last month.
Bitcoin ATMs Are On the Radar for Regulators
The latest report from CipherTrace shows that regulators want to have a massive crackdown on Bitcoin ATMs operating in the U.S. As per CipherTrace, Bitcoin ATMs are the most vulnerable hotspots leading to cross-border money laundering.
Ciphertrace CTO John Jeffries said that regulators should increase their focus on crypto-cash machines in order to crack down on illegal cross-border financial transactions.
The report shows that in 2019, nearly 74% of the transactions through Bitcoin ATMs were cross-border transactions. It also states that 88% of the funds were sent from Bitcoin ATMs to overseas cryptocurrency exchanges.
CipherTrace stated that high-risk exchanges are “nefarious exchanges known for facilitating criminal activities and money laundering”. There are around 8000 Bitcoin ATMs worldwide, with most of them functioning outside the ambit of anti-money-laundering (AML) rules.
Vitalik Buterin Praises Ethereum 2.0 Scaling Strategy
The world’s second-largest cryptocurrency Ethereum was in the news last week as it jumped to $250 levels. This was the first time that Ethereum (ETH) hit this milestone after the crypto market crash of March 2020.
Ethereum co-founder Vitalik Buterin has praised some developments with the Layer 2 scalability solutions of Ethereum. In his Twitter post, Buterin wrote: “While everyone wasn’t looking, the initial deployment of Ethereum’s layer 2 scaling strategy has *basically* succeeded. What’s left is refinement and deployment”.
Buterin says that the Layer 2 scalability systems for Ethereum 2.0 are ‘near-ready’, with most of them supporting payments and decentralized exchange (DEX).
Buterin said that with some considerable development in Ethereum 2.0 scalability, their next focus would be on Sharding implementation that focuses on speed and capacity to carry out a higher volume of transactions.