Tag: coinbase

Nasdaq Refiles BlackRock’s Bitcoin ETF Application With SEC: Details

Nasdaq refiled an application with the U.S. securities regulator to list an exchange-traded fund by BlackRock that will reflect the price of bitcoin to add additional details, according to a filing made public on Monday.

The refreshed filing, submitted to the U.S. Securities and Exchange Commission (SEC) on Thursday, said that Coinbase Global will provide market surveillance in support of the proposed ETF from the world’s largest asset manager.

The move comes after the regulator reportedly had concerns over the initial filings by Nasdaq as being unclear and incomplete. It had flagged similar concerns to Cboe related to a filing from Fidelity.

The digital asset space is looking to regain popularity after a bruising 2022 that saw several crypto ventures collapse, including the spectacular implosion of Sam Bankman-Fried’s FTX.

The SEC last month sued Coinbase for failing to register as an exchange. According to Cboe’s Fidelity bitcoin ETF filing, the company’s platform represented roughly half of U.S. dollar-bitcoin trading in May.

Coinbase said in a letter filed last month in Manhattan federal court that it will ask a judge to toss the SEC lawsuit, arguing the regulator lacks authority to pursue civil claims because the crypto assets trading on its platform are not “investment contracts”, and thus not securities.

The SEC has rejected dozens of spot bitcoin ETF applications in recent years, including one from Fidelity in January 2022.

In all the cases, it said the filings did not meet the standards designed to prevent fraudulent and manipulative practices and protect investors and the public interest.

© Thomson Reuters 2023

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Crypto Investors Grow Cautious After Sudden Collapse of Exchanges Last Year

Cryptocurrency investors have grown more cautious about who they do business with, after being burned last year by sudden collapses of Celsius Network, Voyager Digital, FTX and others, and fearing a regulatory crackdown will put more pressure on remaining firms.

The recent crypto platform bankruptcies trapped customer assets now worth around $34 billion (nearly Rs. 2,78,600 crore), according to Xclaim, which allows creditors to trade such claims.

To protect themselves, institutional crypto investors are switching to exchanges that offer stronger asset protection, boosting due diligence on trading partners, and executing trades in smaller chunks, among other new risk management measures, according to executives and industry data.

“Investors in this asset class have learned their lessons the hard way and now are being much much more picky about who to deal with,” said Samed Bouaynaya, a digital asset portfolio manager at London-based hedge fund Altana Wealth.

Binance.US and Coinbase Global are the latest crypto exchanges to come under scrutiny after the US Securities and Exchange Commission (SEC) sued the pair for allegedly breaching its rules, and industry executives expect more enforcement actions. Binance and Coinbase deny the regulator’s allegations.

Altana now prioritises exchanges that allow it to settle and hold its assets with independent third-party custodians such as the UK’s Copper and US-based Fireblocks. Because Binance does not give Altana that option, the hedge fund rarely leaves balances at Binance overnight, said Bouaynaya.

Binance did not respond to a request for comment but said in a statement last week that “customer funds are always safe.”

Anatoly Crachilov, chief executive of London-based Nickel Digital Asset Management, said nearly all its trading now takes place on exchanges that allow off-exchange settlement, meaning the assets are settled and held separately from the exchange, compared with 5 percent prior to the collapse of FTX.

Declining exchange balances of stablecoins and ether suggest that users are removing their assets from exchanges, although it is difficult to gauge what proportion of assets are moving to custody solutions, said Martin Lee, data journalist at blockchain tracker Nansen.

Spokespeople for Fireblocks and Copper said they were seeing a jump in demand for their services.

Greg Tusar, head of Coinbase’s institutional products, said Coinbase had taken a number of steps to ensure its clients’ assets are safe, including providing user agreements across all of its products guaranteeing clients’ continued rights as owner of those assets in the unlikely event of a bankruptcy.

“There definitely is a sense that people in general are focused on counterparty credit and counterparty risk. We feel like we’re broadly the beneficiary of that.”

‘Uncomfortable’ Binance exposure

Investors piled into cryptocurrencies when interest rates were low, pushing the market to a peak value of $3 trillion (nearly Rs. 2,45,78,100 crore) in 2021. But they turned cautious as rates rose, causing prices to slump and triggering fatal liquidity crunches for several crypto firms. The value of the crypto market has fallen to around $1.1 trillion (nearly Rs. 90,12,000 crore), according to CoinGecko data.

European crypto asset manager CoinShares ramped up its counterparty due diligence in the collapse of FTX. It now quizzes trading partners about their operations, cybersecurity set-up, credit exposure, and exposure to various cryptocurrencies, said CEO Jean-Marie Mognetti.

And while previously CoinShares tiered marketplaces as red, amber or green, the system is “very simple now,” said Mognetti. “It’s like red or green. There is no more amber.”

The crypto industry remains risky with highly volatile assets. Financial regulators like the SEC say many crypto companies flout applicable rules, meaning risk management still lags the traditional financial sector.

While the SEC crackdown on Binance.US has raised questions over its future, traders say dealing with Binance is unavoidable. It is the world’s largest exchange with around 60 percent of trading volumes globally, according to Kaiko data.

Binance’s U.S. affiliate said on Thursday last week it was halting dollar deposits. Two days earlier, the SEC asked a court to freeze its assets. The SEC alleged that Binance and its CEO Changpeng Zhao secretly controlled and diverted customers’ assets.

“This is inevitably risk we’re all carrying in crypto – we have uncomfortable concentration risk on one large exchange called Binance,” said Nickel’s Crachilov.

He warned that any more dramatic exchange failures “would perhaps inflict a nuclear crypto winter”.

When dealing with the riskiest exchanges, US-based crypto investor Arca tries to minimize its exposure by breaking up big trades into small chunks, said Wes Hansen, Arca’s director of trading and operations, without naming specific companies.

Its counterparty information requests are “much more intense and more often,” while the company also monitors Twitter for intelligence on which firms might be in trouble, said Hansen.

“Everyone’s just so scared in the market right now,” he added.

© Thomson Reuters 2023

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India Being Urged to Restore UPI Access for Users of Crypto Exchanges: Report

India is reportedly reconsidering to let crypto investors use Unified Payments Interface (UPI) to purchase digital assets like cryptocurrencies and non-fungible tokens (NFTs). The financial authorities of India have received multiple proposals, urging them to allow the integration of UPI for crypto transactions. These proposals have been sent by crypto advocacy group Bharat Web3 Association (BWA). It is notable that this topic is being brought up now at a time when India is heading the formulation of global crypto rules under its ongoing G20 Presidency.

As part of these proposals to the Indian government, the crypto-advocacy group has pointed out that India’s crypto industry is reeling under high tax pressure as an aftermath of last year’s crypto slump. The country’s shadow ban on the sector severed the ties of traditional banks with crypto exchanges, causing inconvenience to the investor community. The development, citing anonymous sources familiar with the matter, was first reported by Coindesk on Wednesday, May 17

The UPI or the United Payments Interface is an instant online payment technology pioneered by India. Overseen by the NPCI, the UPI is an online payments mode in India, with over 300 million Indians reportedly using UPI to instantly transfer money from one account to another via apps such as BharatPe, Paytm, and Google Pay, among others.

In August 2022, when Coinbase announced that it was going to let Indian users purchase crypto on its app via UPI payments, the National Payments Corporations of India (NPCI) said it did not authorise Coinbase to provide this feature.

Amid regularity unclarity, the government of India as well as its central bank have not been very supportive of promoting crypto-related activities in the country.

After NPCI’s statement, Coinbase halted the release of the feature and to date it remains inaccessible to users.

With one tap, the UPI system lets users make instant peer-to-peer payments from banks or digital wallets. The system was introduced in April 2016, months after Prime Minister Narendra Modi demonetised many currency notes in India as part of financial restructuring.

Between then and now, India has very well adopted the UPI payment system with approximately 74 billion UPI transactions worth $1.5 trillion (roughly Rs. 1,23,56,962 crore) conducted in 2022 alone, as per Worldline’s report, India Digital Payments Annual Report for 2022

Indian authorities are hence exercising caution before allwoing UPI usage for crypto purchases, especially because the digital assets sector is largely unregulated and unstable, which could put investors at financial risks.

“Our submission highlights that VDA (Virtual Digital Assets) service providers are now covered as ‘reporting entities’ under the PMLA (Prevention of Money Laundering Act) and are also registered with the FIU (Financial Intelligence Unit). We believe that these guardrails go a long way in helping secure VDA transactions and arresting malfeasance, if any,” the Coindesk report quoted the source as saying.

The BWA comprises of several members of India’s corporate crypto community. The aim of this organisation is to open discussions with the Indian government around the dos and don’ts that will impact India’s budding crypto ecosystem.

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Coinbase Crypto Exchange Posts Smaller Quarterly Loss After Costs Cuts

Cryptocurrency exchange Coinbase Global posted a smaller-than-feared loss in the first quarter, benefiting from cost cuts and diversification of revenue sources, sending its shares up 7 percent in extended trading on Thursday.

The company has benefited from its deal for One River Digital Asset Management to ramp up product offerings in subscription and services revenue, while it also launched wallet-as-a-service and other products to scale blockchain.

“We’re also seeing the benefits of increased cost efficiencies, and we’ve taken deep lessons from growing too quickly and believe that we are going to be prudent in our spend going forward,” Chief Financial Officer Alesia Haas said.

Coinbase posted a loss of 34 cents a share, while analysts estimated a loss of $1.35 (roughly Rs. 110) as investors tiptoe back to the speculative asset class to hedge against elevated market risks after a brutal selloff last year.

But the trend is yet to power gains for the cryptocurrency exchange as trading volumes more than halved to $145 million (roughly Rs. 1,200 crore) while retail trading volumes, which had been instrumental in making Coinbase a household name in 2021, sank 72 percent.

Earlier this year, the company said it will cut 950 more jobs in its the third round of layoffs since last year.

Haas said the improved cost-structure will help the company hit its 2023 goal to improve core profit year-over-year.

The company lowered operating expenses by 24 percent from last quarter and reported $607 million (roughly Rs. 5,000 crore) in expenses, much lower than its prior range of between $625 million (roughly Rs. 5,100 crore) and $675 million (roughly Rs. 5,500 crore).

“Everyone was expecting disastrous results, and it does not look to be a disaster for Coinbase at all,” said Dave Weisberger, CEO of CoinRoutes, an algorithmic-trading platform for the digital asset industry.

Coinbase shares, which lost 85 percent of their value in 2022, have risen nearly 40 percent this year as of Thursday’s close as cryptocurrencies gain some ground.

© Thomson Reuters 2023

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Coinbase, SEC on Collision Course for ‘Existential’ Clash Over Crypto Industry

Coinbase debuted on the US stock market on April 14, 2021 — the same day US senators confirmed Gary Gensler to lead the Securities and Exchange Commission (SEC), the country’s top markets regulator.

Gensler, who has called the crypto sector a “Wild West” riddled with fraud, is now embroiled in a battle with the world’s largest publicly-traded crypto firm over a core debate: whether digital assets are investment contracts akin to stocks or bonds that should be regulated by the SEC.

Friction between crypto proponents and the regulator have been brewing under Gensler’s leadership, with both sides growing increasingly loud in their criticisms.

The escalating tension exploded into public view on Wednesday when Coinbase CEO Brian Armstrong and the company’s chief legal officer Paul Grewal posted online that the firm had been told that SEC staff intend to recommend enforcement action, adding that Coinbase was willing to fight it in court.

Coinbase shares have tumbled 14 percent since Wednesday’s disclosure.

SEC and Coinbase spokespeople declined to comment. For months, the two have been in discussions over regulation and the agency’s investigation into Coinbase, according to two sources.

In July, the firm disclosed an SEC probe into its asset listing processes, staking programs and yield-generating products.

Discussions between the SEC and Coinbase broke down in recent weeks, with one source saying the two sides had moved “further apart.” The SEC appears to be going after Coinbase’s entire business as operating outside of US laws, the source said.

The crypto industry believes it operates in a regulatory gray area not governed by existing US securities laws — and that new legislation is needed to regulate the industry.

“We continue to think rulemaking and legislation are better tools for defining the law for our industry than enforcement actions,” Coinbase’s Grewal said on Wednesday. “But if necessary, we welcome the opportunity for Coinbase and the broader crypto community to get clarity in court.”

Prior to Gensler’s arrival, the SEC engaged in targeted enforcement, but the Democratic chair has ratcheted up focus on crypto platforms themselves. The SEC’s crackdown on crypto gathered pace after November’s collapse of Sam Bankman-Fried’s FTX exchange.

Gensler has raised questions over whether crypto firms rely on a business model that is fundamentally non-compliant with the law, adding that crypto intermediaries provide a range of functions, such as operating as an exchange, broker-dealer, clearing agent and custodian, that should be regulated by the SEC.

“This is probably existential for Coinbase,” said Joshua White, a finance professor at Vanderbilt University. “It’s perhaps existential for the industry, at least in the U.S.”

The SEC on Thursday issued an investor alert warning that firms offering crypto asset securities may not be complying with US laws.

Kristin Smith, the CEO of the Blockchain Association, voiced the crypto industry association’s support for Coinbase, noting: “The SEC doesn’t make the law – it only makes allegations, which ultimately must be tested in the courts.”

The SEC has gone to court against many crypto firms, including a case against San Francisco-based crypto and cross-border payments company Ripple Labs that some say could offer clarity on when a digital asset is considered a security.

But the SEC and Coinbase debate over an “unspecified portion” of its listed digital assets sets the stage for a more expansive and potentially defining courtroom battle. Coinbase’s website lists over 150 crypto assets for trading.

Coinbase flagged potential regulatory risks when it filed to go public in 2021, and noted on Wednesday that its staking and exchange services are “largely unchanged” since then.

“There couldn’t be a more significant development for crypto markets and crypto investors,” said Philip Moustakis, former SEC enforcement lawyer and partner with Seward and Kissel LLP in New York.

© Thomson Reuters 2023

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Crypto Experts Dismiss Ex-Coinbase CTO’s Prediction of BTC Hitting $1 Mn by June

Bitcoin rallied in its value, starting last week, after investors flocked to the digital asset following the recent collapse of three centralised banks in the US. Former CTO of Coinbase, Balaji Srinivas, made a prediction that Bitcoin price will soar to a whopping $1 million (roughly Rs. 8.25 crore) in the next 90 days — leading to June 2023. Srinivas’ outlandish estimation has seemingly left experts from the field of crypto united in their opinions — against the prophecy.

In conversation with Gadgets 360, Rohas Nagpal said it is close to impossible for the world’s oldest cryptocurrency to prove Srinivasan correct.

“I think it is very unlikely that Bitcoin will reach the massive prediction of $1 million by June. The recent bank closures have highlighted that crypto can be a safe haven for many people — but I think this prediction is not feasible,” said Nagpal, the Chief Blockchain Architect of the Hybrid Finance Blockchain (HyFi).

The back-to-back downfalls of US banks — Silvergate, Silicon Valley Bank, and Signature — has reignited the debate around the importance of DeFi and digital assets, industry experts have noted.

Bitcoin touched its nine-month high on Monday, March 20. From its value of $16,570 (roughly Rs. 13.7 lakh) on January 2, 2023, BTC price currently stands at $27,280 (roughly Rs. 22.5 lakh).

Excited about Bitcoin’s significant recovery in the market, Srinivasan tweeted his prediction over the weekend along with accusations on the US banks for mis-managing funds.

“This time, the central bankers, the banks, and the bank regulators have lied to all dollar holders and depositors. This isn’t your typical fractional reserve situation. The problem is that there isn’t enough in the banks on a mark-to-market basis to cover withdrawals. They knew this through all of last year, and communicated it internally in their coded language,” the former Coinbase CTO wrote along with his estimation.

Adam Cochran, a venture capitalist, statistically weighed-in on the situation and chimed to the same tune as Nagpal.

Cochram, in a tweet thread, claimed that BTC’s rally from 2020 to 2022 was only 547 percent whereas in 2017, the rally at far lower prices was brought in 1105 percent gain. Under the circumstances, he said, Bitcoin may not swell upto Srinivasan’s expectations.

Bitcoin’s last known all-time-high was recorded in November 2021. At the time, Bitcoin was trading at over $68,000 (roughly Rs. 56 lakh).

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Coinbase’s New Wallet-as-a-Service Launched Despite Crumbling Crypto Market: Details

Coinbase has announced the launch of its Wallet-as-a-Service (WaaS) suite of offerings, expecting to add to the adoption of cryptocurrencies amongst the masses. This service will simplify the process of digital wallet onboarding for the next set of crypto investors. The crypto exchange is expecting to usher the next hundred million people into Web3, which will be the next phase of Web2, or Internet as we know today. Based largely on the blockchain networks, Web3 is aimed at bringing more autonomy to the presently existing government-controlled Internet.

Coinbase’s WaaS will offer a programming interface for crypto companies to use and build their custom Web3 digital wallets. The crypto exchange claims to have loaded this service with a range of ‘scalable and secure’ set of infrastructure APIs, for companies to choose the best for their own crypto wallet services.

“Companies can offer their users wallets directly in their apps with onboarding as simple as a username and password. Whether enabling gamers to trade in-game items and currency or creating new avenues for loyalty programs such as token-based rewards, WaaS is a powerful tool for companies looking to tap into the potential of Web3,” Coinbase wrote in its announcement post.

Crypto firms namely Tokenproof, Floor, Thirdweb, and Moonray have already tried Coinbase’s WaaS, the company added in its tweet thread.

While Coinbase has decided to expand its suite of crypto services, some would argue that this is not the ideal market situation that could expediate the use of this service.

Following the crypto winter of 2022 and the recession that follwed us into the post-COVID-19 era, several crypto companies drew the curtains on their operations amid market pressure.

A large number of employees working in the crypto sector were rendered jobless overnight in recent months.

To stabalise the turbulent US economy, President Joe Biden is exploring the possibilities of amending certain crypto rules to favour the national treasury.

Biden’s upcoming budget announcement could double the capital gains tax rate for crypto investors this year. This could mean that long-term crypto holders with a portfolio of over $1 million (roughly Rs. 8 crore) could be asked to pay a higher tax of around 39.6 percent.

Just the speculations about tax changes around crypto in the US have contributed to the current lowered market sentiment.

Additionally, crypto-friendly bank Silvergate also announced the suspension of its services owing to the market tensions, leaving investors ready to run out of the high-risk investment sector.

Despite the ongoing rough days for the crypto sector, Coinbase CEO Brian Armstrong has time and again reiterated that the crypto industry does have the potential to score a glorious future.

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Binance USD Stablecoin to Be Delisted From Coinbase, Trading to Halt Starting March 13: All Details

Coinbase, one of the world’s largest crypto exchanges, has decided to delist the Binance USD (BUSD) stablecoin starting March 13. The decision comes in the backdrop of the BUSD token facing legal challenges in the US. Paxos, the stablecoin issuer that wholly owned and managed the Binance USD stablecoin is facing a lawsuit from the Securities and Exchange Commission in the US. Paxos has been accused of issuing the BUSD token as an unregistered security, Paxos meanwhile, has denied the allegation.

“We’ve determined that BUSD does not currently meet our standards for trading support,” a Coinbase spokesperson reportedly said, not elaborating on the details.

Launched in 2019, the BUSD stablecoin built on the Ethereum blockchain, currently has a market valuation of over $10 billion (roughly Rs. 87,987 crore). As per CoinMarketCap, the market cap for BUSD dropped by three percent in the last 24 hours.

At the time of writing, each BUSD was trading at $1 (roughly Rs. 82), showed the crypto price tracker by Gadgets 360.

Coinbase claims on its website that its digital asset listings group has a vote to get any cryptocurrency listed or delisted.

Assets are regularly analysed on the basis of their legal status, technical security quotient as well as compliance with the laws, violations of which could get assets delisted from Coinbase.

The decision will be executed across Coinbase’s suite of services including Coinbase.com, Coinbase Pro, Coinbase Prime, as well as Coinbase Exchange.

Meanwhile, Coinbase will continue to allow its users to access and withdraw their BUSD funds despite its decision to delist the token. Users, however, will not be able to trade the token on Coinbase after March 13.

BUSD issuer Paxos was served a notice by the New York State Department of Financial Services earlier in February. The financial authority has instructed Paxos to stop issuing BUSD tokens.

Soon after the news broke, Coinbase had noted that stablecoins are not considered as securities in the US.

Pegged against a fiat currency like the US dollar or reserved assets like gold, stablecoins are crypto assets that latch their values to their underlaying assets.

This prevents stablecoins against fluctuations in the volatile crypto industry as compared to other assets.

Tether, USD Coin, and Ripple are among other popular stablecoins pegged against the US dollar just like the BUSD.

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Cryptocurrency is an unregulated digital currency, not a legal tender and subject to market risks. The information provided in the article is not intended to be and does not constitute financial advice, trading advice or any other advice or recommendation of any sort offered or endorsed by NDTV. NDTV shall not be responsible for any loss arising from any investment based on any perceived recommendation, forecast or any other information contained in the article. 

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Big Tech Is Firing Employees by the Thousands. Why? and How Worried Should We Be?

Tech companies are always in the news, usually touting the next big thing. However, the tech news cycle recently hasn’t been dominated by the latest gadget or innovation. Instead, layoffs are in the headlines.

In the last year, more than 70,000 people globally have been laid off by Big Tech companies – and that doesn’t count the downstream effect of contractors (and other organisations) losing business as budgets tighten.

What exactly led to this massive shakeout? And what does it mean for the industry, and you? What’s the damage? Since the end of the pandemic hiring spree, large numbers of employees have been fired from major tech companies, including Alphabet (12,000 employees), Amazon (18,000), Meta (11,000), Twitter (4,000), Microsoft (10,000), and Salesforce (8,000).

Other household names share the spotlight, including Tesla, Netflix, Robin Hood, Snap, Coinbase and Spotify – but their layoffs are significantly less than those mentioned above.

Importantly, these figures don’t include the downstream layoffs, such as advertising agencies laying off staff as ad spend reduces, or manufacturers downsizing as tech product orders shrink – or even potential layoffs yet to come.

And let’s not forget the folks leaving voluntarily because they don’t want to come into the office, hate their managers, or aren’t keen on Elon Musk‘s “hardcore work” philosophy.

The knock-on effects of all of the above will be felt in the consulting, marketing, advertising and manufacturing spaces as companies reduce spending, and redirect it towards innovating in AI.

So what’s driving the layoffs? The canary in the coal mine was reduced advertising spend and revenue. Many tech companies are funded through advertising. So, for as long as that income stream was healthy (which was especially the case in the years leading up to COVID), so was expenditure on staffing. As advertising revenue decreased last year – in part due to fears over a global recession triggered by the pandemic – it was inevitable layoffs would follow.

Apple is one exception. It strongly resisted increasing its head count in recent years and as a result doesn’t have to shrink staff numbers (although it hasn’t been immune to staff losses due to work-from-home policy changes).

What does it mean for consumers? Although the headlines can be startling, the layoffs won’t actually mean a whole lot for consumers. Overall, work on tech products and services is still expanding.

Even Twitter, which many predicted to be dead by now, is looking to diversify its streams of revenue.

That said, some pet projects such as Mark Zuckerberg‘s Metaverse likely won’t be further developed the way their leaders had initially hoped. The evidence for this is in the layoffs, which are concentrated (at least at Amazon, Microsoft and Meta) in these big innovation gambles taken by senior leaders.

Over the past few years, low interest rates coupled with high COVID-related consumption gave leaders the confidence to invest in innovative products. Other than in AI, that investment is now slowing, or is dead.

And what about the people who lost their jobs? Layoffs can be devastating for the individuals affected. But who is affected in this case? For the most part, the people losing their jobs are educated and highly employable professionals. They are being given severance packages and support which often exceed the minimum legal requirements. Amazon, for example, specifically indicated its losses would be in tech staff and those who support them; not in warehouses.

Having a Big Tech employer on their CV will be a real advantage as these individuals move into a more competitive employment market, even if it doesn’t look like it will be quite as heated as many had feared.

What does this mean for the industry? With experienced tech professionals looking for work once again, salaries are likely to deflate and higher levels of experience and education will be required to secure employment. These corrections in the industry are potentially a sign it’s falling in line with other, more established parts of the market.

The recent layoffs are eye-catching, but they won’t affect the overall economy much. In fact, even if Big Tech laid off 100,000 workers, it would still be a fraction of the tech work force.

The numbers reported may seem large, but they’re often not reported as a proportion of overall wage spend, or indeed overall staffing. For some tech companies they are just a fraction of the massive amount of new hires initially acquired during the pandemic.

Big Tech is still a big employer, and its big products will continue to impact many aspects of our lives.

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Coinbase Crypto Exchange to Halt Operations in Japan, Review Business in Country Amid Ongoing Crypto Winter

Coinbase on Wednesday announced that it has halted its operations in Japan. Crypto lenders and exchanges, struggling to emerge victorious of the ongoing crypto slump, are faced with drastic decisions to ensure that their businesses remain operational amid the ongoing crypto winter. Citing the ongoing challenges with the crypto market, Coinbase has given its users in Japan up to February 16 to withdraw holdings from their respective accounts. Not too long ago, popular crypto exchange Kraken , faced with similar market pressure, also exited the Japanese market.

“Due to market conditions, our company has made the difficult decision to halt operations in Japan and to conduct a complete review of our business in the country,” the multi-national crypto exchange said in its official statement.

Coinbase Japan will no longer allow fiat deposits starting from January 20.

After February 16, all of the holdings left in possession of Coinbase Japan will be converted to the Japanese Yen (JPY) and will be handed over to a Guaranty Account at the Legal Affairs Bureau as per the laws of the land.

“Customers can choose to withdraw their crypto holdings to any other Virtual Assets Service Provider, Coinbase Wallet or any other self hosted wallet of their choice. Alternatively, customers can choose to liquidate their portfolio and withdraw their JPY to a domestic bank account. If customers do not take any action before February 16th, they will have to coordinate with the Legal Affairs Bureau to retrieve their JPY balance,” the company added to its note.

Japan, in recent times, has begun to lean towards taking a pro-crypto approach to keep up with global fintech trends.

Despite its efforts to expand in the country, Coinbase is now the second crypto major after Kraken to leave the Asian market.

As per a CoinTelegraph report, the companies recorded a weaker crypto market in Japan in comparison with other nations.

Meanwhille, Japan’s financial regulators have urged that the crypto sector should be controlled just like traditional banks.

As per the Japanese authorities, the crypto technology is not to be blamed for risking the financial stability of crypto investors. Rather, it’s the lack of rules governing the sector that has not been able to make the sector safe to engage with.

In November last year, the Bank of Japan had said that it will be collaborating with mega banks to help finetune its CBDC, named the Digital Yen.

Japan could see a wider roll out of its digital yen by 2026. Prior to that, the BoJ aims to check if the CBDC works efficiently under disaster-lie situation or no Internet connectivity.

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