The Black Swan events of December may have knocked Bitcoin, the world’s most popular crypto-currency, down 30% in value this month. But, judging from the resilience of the mining activity around the world, which has experienced a full recovery since the Chinese “_ban_”, the cryptocurrency investment community has further evidence to suggest that digital currencies will continue to rebound from whatever may get thrown at them.

## The 'Mecca' of Crypto-Mining

Once upon a time, China was _the_ mecca of cryptocurrency mining with reliable estimates putting the country’s slice of the global crypto-mining pie at the 65% to 75% mark.  Then, September 2021 happened.  The communist nation with a population of 1.4 billion [essentially banned all cryptocurrency transactions](https://www.reuters.com/world/china/china-central-bank-vows-crackdown-cryptocurrency-trading-2021-09-24/), including any mining activity that was happening in the country.  The Chinese ban was thought to be the sound of the death knell for digital currencies, but, again, the cryptocurrency market has shown remarkable “comeback” potential.

The recent rebound in global cryptocurrency mining was declared by measuring what’s referred to as the [_hashrate_](https://www.yahoo.com/now/hash-rate-cryptocurrency-calculated-172307967.html#:~:text=The%20hash%20rate%20is%20the,part%20of%20the%20mining%20operation.), a term that’s used to describe the computational power of all the mining activity taking place on the bitcoin network.  Specifically, it refers to the amount of computing power per second that the cryptocurrency mining process requires.

Getting back to China, once the ban was announced last summer the cryptocurrency market may have plummeted, but the miners simply folded up their tents, packed their gear, and took their operations to countries that demonstrated a more amiable attitude towards digital currencies.  For example, the United States has been a big beneficiary of the Chinese ban – The US is a provider of plentiful, inexpensive electricity and even Kazakstan, where electricity is _even less_ expensive saw a huge migration in cryptocurrency miners.

Cryptocurrency mining has certainly received its fair share of press, especially now that the effects of the Chinese ban have been eclipsed by the market’s recent global mining activity, so it’s worth taking a moment to understand what cryptocurrency mining really is.

## What is cryptocurrency mining?

Most of society believes the cryptocurrency mining process is just a way of creating new coins.  That’s true, but there’s more involved.  Crypto mining is deemed successful once miners have validated cryptocurrency transactions on a blockchain network and then successfully add them to a distributed ledger.  Most importantly, the mining process prevents the “[double-spending](https://www.gemini.com/cryptopedia/double-spending-problem-crypto)” of digital currency.  In the most basic sense, cryptocurrency mining is the process of solving very complicated mathematical puzzles.  If you can solve them fast enough, you’re rewarded with a coin.  However, cryptocurrency miners that solve these puzzles slower than their competition _don’t_.  It’s a process called “[proof of work](https://www.investopedia.com/terms/p/proof-work.asp#:~:text=Proof%20of%20work%20(PoW)%20is,transactions%20and%20mining%20new%20tokens.).”

The most remarkable thing about this story is that a global superpower instituted a countrywide ban of cryptocurrency transactions, and less than six months later the cryptocurrency market is making a “chest thumping” statement with a full recovery.


China Crypto Ban Brushed Off as Mining Recovers

The cryptocurrency _brain trust_ got a chance to speak in front of congress at a House Financial Services Committee hearing this week.  A collection of six of the most influential CEOs in crypto passionately lobbied lawmakers to adopt a “_mostly_ hands off” approach in terms of new regulatory measures being considered as Washington tries to determine how best to regulate a $3 trillion digital assets market – an environment that the Securities and Exchange Commission (SEC) has compared to the “Wild West.”

Since the inception of the cryptocurrency market a decade ago, it’s safe to say that a majority of the adults living in the U.S. now have a basic understanding of what cryptocurrencies like Bitcoin and Ethereum are, and [16% of them have actually invested](https://www.pewresearch.org/fact-tank/2021/11/11/16-of-americans-say-they-have-ever-invested-in-traded-or-used-cryptocurrency/) in the digital assets – this is especially true for men in the 18 – 29 age bracket. 

## A Global Force for Good

The overall tone of the hearing was undoubtedly “pro-crypto” as there wasn’t a single detractor among the witnesses that did speak.  Essentially, the crypto CEOs promoted the digital asset market as a global force for good and urged congress to lead the world in embracing it.

The talking points were many, but one of the most profound messages was that the technology _powering_ the cryptocurrency market can not only expedite and cut the costs of financial transactions, but lawmakers were urged to look at blockchain technology as a “revolutionary innovation” that the U.S. could step in and lead _globally_…if it so chooses and with the right leadership in place.

During the hearing republicans and democrats both showed clear signs of skepticism toward the financial risks associated with the cryptocurrency market, _but it was the Republicans_ who sided with the CEOs in their viewing the approach that the SEC has taken toward the industry as being “distasteful,” at best.  The recent clashes between the SEC and major crypto firms are well documented as agency chair, Gary Gensler, has long tried to paint digital assets as a security or a type of investment contract that merits SEC regulatory oversight.

## Cryptocurrency Leaders Disagree

A future in which the SEC would actually be considered for regulatory oversight means a clear misinterpretation of the market by lawmakers.  Their argument against SEC regulation rests on the fact that blockchain tokens _are not_ securities but rather digital property or a way to record ownership.  Clearly, we are still very early in the regulatory process if the two sides still haven’t been able come up with a list of agreed-upon definitions for key terms like “what _is_ a digital asset?”

All of the rifts discussed at the hearing could be a signal that it may still take years to put together a solid and permanent regulatory framework for cryptocurrencies, but there were very specific comments that would give cryptocurrency investors hope.

For example, Rep. Patrick McHenry (R-N.C.), poised to chair the committee if the GOP wins back the House, said it is a priority to ensure that the "cryptocurrency revolution" happens in the U.S. rather than overseas.

Hopefully, lawmakers will take McHenry’s advice.


Top Crypto CEOs Engage Lawmakers at Hearing

The crypto bull market seems to have stumbled this week? Why?

Earlier this week, the CEO of AMC Theatres, the largest movie theatre chain on the planet, said his company would begin accepting shiba inu coins as payment through Bitpay wallets. This could happen in 60 days.

While a positive news story, it did nothing to prevent the crypto bull market from cratering out over the past 24 hours after a seemingly parabolic rise.

Two of the market’s titans, [Bitcoin](/coins/btc) and[ Ethereum](/coins/eth), led the decline, exhibiting sharp drop-offs in value after setting new all-time highs last week.

## Bitcoin Value Falls

Bitcoin’s value fell below $58,000 on Thursday - a sharp contrast to the digital asset’s achievement the week prior when the price shot up to over $68,000 for the first time.

Some are quick to associate the recent decline in cryptocurrencies with President Biden’s signature on a new $1.2 trillion infrastructure bill, which includes specific language on the tax reporting requirements for cryptocurrency exchanges.

The news that some of the proposed legislation may treat _stablecoin issuers_ like banks didn’t sit well with investors. Still, there are investors that have developed a bit of an appreciation for these ‘corrections’ considering how it aligns with their investment strategy of ‘buying the dip’.

But not all of us are willing to adopt this strategy, and a harsh dip can chase off new investors. Sometimes, permanently.

## Is the Crypto Market Immature?

Consider for a moment that market volatility like we’ve seen in the last day or two can be directly linked to the crypto market’s immaturity. Cryptocurrencies, by and large, have yet to achieve a state of ‘mainstream adoption’, meaning many, _many_ traditional investors are still watching from the sidelines.

Volatility, from a crypto bull market to a bear market, has come to be expected. When a celebrity tweet can send a particular coin upwards of 10% or more, it’s a sign of a market still evolving.

Another bit of news that may have triggered the _flight_ mechanism among some investors had to do with Chinese regulators intensifying their efforts to ferret out those in the country still involved in Bitcoin mining activities, something the Chinese government outlawed earlier this year.

America’s infrastructure bill and China’s clamp down on mining activities both had an obvious impact on Bitcoin. As the key digital asset used in assessing the health of the entire cryptocurrency sector, both announcements had a negative impact that rippled across the entire market.

## Mainstream Adoption of Crypto

Still, there were signs this week that cryptocurrencies will continue making their push towards mainstream adoption.

The Los Angeles sports arena, home of the NBA’s Lakers and Clippers, will be renamed from the “Staples Center,” the formal name of the 20,000- seat arena since 1999, and become the “Crypto.com Arena” in a $700 million deal for the naming rights.

As a result, Crypto.com’s digital coin, CRO, was buoyed to an all-time high of $0.593 on Thursday after the company won the naming rights.

Lastly, the crypto ‘brain trust’ anticipates that more digital coins will become an accepted form of payment for many more vendors in 2022. AMC has jumped on the bandwagon, McDonald’s and Burger King are in the conversation, even charities are embracing cryptocurrencies as more and more investors take their positions in the market.

As this trend evolves, the value of cryptos will likely increase and the market will continue to evolve, not retract.

Infrastructure Bill ~ Crypto Bull Market Stumbles

Let’s talk Ripple and XRP.

Earlier this week, the overall market cap of cryptocurrencies hit $3.3 trillion. It’s an amount that merits attention and has further prompted regulators and financial authorities to accelerate the tempo in writing a regulatory rulebook for the market.

However, first they’ll need to cut through their own confusion on how these financial instruments work.

Can _all_ digital assets be categorised as a form of currency or are some them _securities_ masquerading as currencies? It’s one question among many that regulators are asking.

## Ripple Labs

One blockchain company that knows this all too well is San Francisco’s Ripple. A fintech company that popped up a decade ago, Ripple Labs originally promoted a strategy that would offer financial institutions a new low-cost method of performing expedient trans-border money transfers.

To achieve as much, Ripple Labs built the technical infrastructure on which transactions sped across the globe in the form of a cryptocurrency identified as XRP. Ripple created 100 billion units of XRP in 2012 and allotments were sold off while Ripple remained a majority holder.

This is where Ripple found itself in trouble with the Securities and Exchange Commission (SEC). Because of the way in which XRP was distributed, it appeared, to some, that XRP functioned _more like a stock or security_ rather than a currency. By December 2020, SEC chairman, Gary Gensler, had seen enough and initiated a lawsuit against Ripple Labs for how the company distributed XRP, claiming the company was selling an unregistered security, _not_ a currency.

## Lawsuit Causes Anxiety Among XRP Supporters

The pending case initiated a sequence of negative events that cratered the price of XRP and got the asset delisted from many popular crypto exchanges, the most crippling being Coinbase. The lawsuit has continued to drag on causing anxiety among XRP supporters and investor, and many legal experts have said that the lawsuit is unlikely to have an ending this year.

However, Ripple has demonstrated some legal prowess since the lawsuit was filed, accruing small victories in the proceedings while simultaneously attracting troves of new investors who have faith in a favourable outcome. Frankly, at the current rate of mainstream adoption, a settlement deal could be reached at any time and November 2021 is expected to be particularly revealing in terms of what’s next for the lawsuit.

Today will be a crucial as it marks the deadline for the exchange of _Expert Rebuttal Reports,_ an expert analysis of each opposing party’s claims. Once those reports are submitted, the second half of November should be rife with opinions on where the lawsuit is headed and when it might finally get resolved.

Getting down to brass tacks, it seems that Ripple has the momentum and SEC Chair Gary Gensler can’t be pleased with how things have unfolded with his lawsuit. The inability to close a ‘slam dunk’ case against a gritty crypto start-up hardly has any place on a resume for someone who’s vying to be the next Secretary of the Treasury. Will Gensler broker a settlement deal with Ripple? It’s possible.

If so, not only would it be a move that would put XRP right back on the exchanges that delisted it, including Coinbase, it would be a ‘drinks for everyone’ kind of announcement that would send the whole market upward.

More [Coin news](/news/category/crypto-coin-news).

Ripple, XRP Latest News- The SEC Lawsuit

US lawmakers have urged Facebook boss Mark Zuckerberg to ditch his company’s cryptocurrency plans.

It was announced recently that Novi, a digital wallet, will enter a trial period in Guatemala, allowing cryptocurrency payments. Facebook is also reported to have revived plans to launch a cryptocurrency called Diem.

A letter signed by five Democratic Senators was sent to Zuckerberg outlining concerns about Facebook’s involvement in crypto, and demanding digital currency projects are discontinued.

The letter concludes: ‘Facebook cannot be trusted to manage a payment system or digital currency when its existing ability to manage risks and keep consumers safe has proven wholly insufficient.

## 'Immediately Discontinue Nivot Pilot'

‘We urge you to immediately discontinue your Novi pilot and to commit that you will not bring Diem to market.’

The letter from Brian Schatz (D-Hawai‘i), Senate Banking, Housing, and Urban Affairs Committee Chairman Sherrod Brown (D-Ohio), Richard Blumenthal (D-Conn.), Elizabeth Warren (D-Mass.), and Tina Smith (D-Minn.) reads: ‘We write to voice our strongest opposition to Facebook’s revived effort to launch a cryptocurrency and digital wallet, now branded “Diem” and “Novi,” respectively. In October 2019, Senators Schatz and Brown wrote to members of the Diem Association’s predecessor, the Libra Association, and expressed deep concerns about the risks the project posed to consumers and the financial system. Facebook subsequently shelved Libra amid regulatory scrutiny, but you did not address our concerns before resuming this endeavour.

‘On multiple occasions, Facebook has committed not to launch a digital currency absent federal financial regulators’ approval. In prepared remarks before the House Financial Services Committee in October 2019, you said that Facebook would “not be a part of launching the Libra payments system anywhere in the world unless all US regulators approve it.” More recently, David Marcus, the executive overseeing Facebook’s digital currency efforts, said, “\[w\]e are definitely not going to launch without the proper regulatory framework.”

‘Despite these assurances, Facebook is once again pursuing digital currency plans on an aggressive timeline and has already launched a pilot for a payments infrastructure network, even though these plans are incompatible with the actual financial regulatory landscape - not only for Diem specifically, but also for stablecoins in general. The agencies that oversee the US financial system are studying the risks that stablecoins pose to financial stability. Accordingly, they are considering how to address these inherent risks and clarify regulation and supervision of these products.’

## 'Facebook Cannot be Trusted'

It continues: ‘You have not offered a satisfactory explanation for how Diem will prevent illicit financial flows and other criminal activity. The intergovernmental Financial Action Task Force warned in a report to the G-20 finance ministers that stablecoins’ “propensity for mass-adoption makes them more vulnerable to be used by criminals and terrorists to launder their proceeds of crime and finance their terrorist activities.” The President’s Working Group on Financial Markets said in December 2020 that stablecoins “are likely to attract illicit actors and, without appropriate mitigation measures, allow evasion of key public policy objectives.”

‘Facebook cannot be trusted to manage a payment system or digital currency when its existing ability to manage risks and keep consumers safe has proven wholly insufficient. We urge you to immediately discontinue your Novi pilot and to commit that you will not bring Diem to market.’

[CNBC](https://www.cnbc.com/world/?region=world) carried responses issued on behalf of Facebook and Diem.

The broadcaster said Facebook claims to have already addressed many of the concerns raised by the senators. The social media giant had said that Novi and Facebook accounts are kept separately to ensure privacy and protection and added that the wallet was built to be completely secure.

## Privacy Top of Mind for Customers

The statement is reported to say: ‘We know privacy is top of mind for Novi customers, so it will always be top of mind for us. We prioritise the security and privacy of people’s information by encrypting sensitive financial information'. If we determine a transaction is unauthorised, we provide a full refund back to a person’s Novi balance. People’s Novi accounts and Facebook accounts are separate.’

CNBC added that Diem had highlighted it is not part of Facebook, which is just one of two dozen members of the Diem Association. The association is a network of ‘merchants, payment service providers, social impact partners, and other entities’ that are ‘dedicated to building a blockchain-based payment system that supports financial innovation, inclusion, and integrity’.

A statement carried by CNBC adds: ‘Diem welcomes the opportunity to engage with members of Congress on the robust controls we have spent two years building into our payment system.

‘Unfortunately, today's letter from lawmakers to Facebook misunderstands the relationship between Diem and Facebook. Diem is not Facebook. We are an independent organisation, and Facebook's Novi is just one of more than two dozen members of the Diem Association. Novi's pilot with Paxos is unrelated to Diem.’



Facebook Should 'Discontinue' Crypto Projects

Uzbekistan has identified a number of crypto exchanges that have been operating without a license, according to an official at the country's central bank. This is part of a worldwide crackdown on cryptocurrency exchanges globally.

The crackdown will see exchanges being blocked by internet service providers, said Vassily Sinaisky, who heads up the regulator's policy and strategies department. He added: "We found out that some exchanges were operating without a licence. We sent them written warnings that they need to stop their activities."

## Anonymous Trading to be Blocked

The central bank's move comes after earlier reports suggested Uzbekistan was looking to become the next country in the region to block anonymous trading on crypto exchanges.

The crackdown will see cryptocurrency traders required to provide identification documents when signing up for an exchange, Sinaisky added.

More [Business news](/news/category/crypto-business-news).

Latest Moni

Legal Crypto News

Read the latest Crypto Legal news.

China Crypto Ban Brushed Off as Mining Recovers

Top Crypto CEOs Engage Lawmakers at Hearing

Infrastructure Bill ~ Crypto Bull Market Stumbles

Ripple, XRP Latest News- The SEC Lawsuit

Facebook Should 'Discontinue' Crypto Projects

Uzbekistan Cracks Down on Crypto Exchange Licenses