EU'S AI ACT APPROVED BY MEMBER STATES 

The European Artificial Intelligence Act, known as the "AI Act" in Europe, has been unanimously approved by the representatives of the member states of the European Union. Contrary to previous press reports that Germany, France, Austria and Italy might reject the Act, it was announced on 2 February that the Act had been unanimously approved by the representatives of the Member States. Following the vote, it is stated that a balanced and futureproof text, promoting trust and innovation in trustworthy AI is adopted. Following the approval of the member states in the Council of the EU, the next step is the approval of the bill in the European Parliament. In the European Parliament, the internal market and civil liberties committees will vote on 13 February. After passing the committees, the final plenary vote in the European Parliament is expected to take place on 10 or 11 April. No opposition to the AI Act is expected in the committees or in the Parliament. (IAPP)

1 BILLION CRYPTO RANSOM PAID IN 2023

In a recent report made by blockchain analytics firm Chainalysis, it is announced that payments resulting from ransom attacks linked to crypto assets reached $1 billion in 2023. The year before, the figure was around $567 million. Hospitals, schools and public institutions are among the main targets of software known as ransomware, which locks files on a user's computer and forces them to pay a fee to unlock them. However, there have also been ransomware incidents affecting organisations (e.g. MOVEit) ranging from the BBC to British Airways. These statistics highlight the changing nature of the cyber threat. While ransomware incidents are on the rise, losses from other types of crypto-related crime, such as fraud and hacking, are set to fall in 2023. (Chainalysis)

ETHIOPIA BECOMES THE NEW LOCATION FOR BITCOIN MINERS

Following China's restrictions on bitcoin mining in 2021, Africa, and Ethiopia in particular, has recently become popular with miners looking for new locations. Although Ethiopia has banned the trading of crypto assets, it has given the green light to bitcoin mining operations from 2022. Miners are known to consume a lot of energy as they compete for new bitcoins. Therefore, countries where it is allowed and where electricity is cheap are becoming favourites for miners. For example, Kazakhstan and Iran, which have similar characteristics, were at the forefront of bitcoin mining before turning their backs on the sector due to high energy consumption. More recently, Ethiopia has become the new location for bitcoin miners, especially the Chinese, as it is one of the countries with the cheapest electricity in the world. Over the past 10 years, China has provided $4.8 billion in aid for the construction of the Grand Ethiopian Renaissance Dam, Africa's largest dam. Small-scale mining operations have also sprung up around the dam in recent years. Since last year, deliveries of mining equipment have been arriving at these addresses. (Cryptonews)

BİNANCE LAUNCHES REWARD PROGRAMME TO COMBAT INTERNAL CORRUPTION

Following a series of public accusations over leaks related to the listing of the Ronin (RON) token, cryptocurrency exchange platform Binance has called on the public and announced a reward of up to $5 million for information on any corruptions among employees. In a Twitter post on 5 February, Binance co-founder Yi He addressed the controversy caused by the decline of RON after it was listed on Binance. Yi He announced that internal regulations have been put in place by acknowledging the problem of information leakage, stating that stricter measures will be implemented for team members involved in the listing process who are found to have leaked information, and added that technical monitoring processes will also be improved to detect possible leaks. RON rose more than 30% in the week leading up to Binance's listing announcement; and it lost 18% immediately after Binance the listing actually began. (Coinmarketcap)

PROMETHEUM, THE ONLY SEC-APPROVED CRYPTO PLATFORM, CHOOSES ETHEREUM AS ITS FIRST PRODUCT

Prometheum, the only SEC-approved crypto platform in the US, announced in a Twitter post on 7th February that it will start offering custody services for crypto using Ethereum (ETH). It is stated that the operation will start by the end of next month. In doing so, the company is trying to open up a new route in the industry by holding its clients' ETH.  ETH is said to be considered a security. Prometheum received SEC approval in May 2023. Prometheum's choice of ETH as its launch currency may cause some controversy. Unlike bitcoin (BTC), which the SEC has explicitly stated is not a security and therefore not under its jurisdiction, it is unclear at this stage what the SEC's position will be on whether ETH is a digital token that should be considered a security and therefore under its jurisdiction. (Coindesk)

URGENT CALL FOR ENERGY INVESTIGATION FOR BITCOIN MINERS BY US DEPARTMENT OF ENERGY

The rise in the price of bitcoin over the past year has prompted the US Department of Energy to launch an urgent investigation into crypto miners. The US Energy Information Administration ("EIA") has announced that it is launching an investigation into the energy consumption of US-based cryptocurrency mining companies. The investigation is said to have been requested by the Office of Budget and Management, which operates within the Office of the President under President Joe Biden, under the title of "Urgent Data Collection". As part of the emergency investigation, crypto-mining companies will be asked to provide detailed information and documentation on their energy consumption. In this way, the impact of crypto mining activities on the energy system will be analysed. (Cryptobriefing)

ARGENTINE GOVERNMENT WITHDRAWS TAX REGULATION ON CRYPTO ASSETS

The Argentine government has decided to withdraw the tax regulation on crypto assets from the bill submitted to Congress and included in the 61st edition of the Crypto Bulletin. The regulation did include crypto assets in the tax base, but provided some tax benefits by encouraging taxpayers to declare crypto assets. It is stated that the removal of the crypto tax from the draft bill was done by the government to counter public opposition, national strikes, protests and criticism of the draft. However, it is stated that profits from the purchase and sale of significant amounts of cryptocurrency will be subject to income tax if they exceed certain thresholds. Congress has until 15 February to decide on the future of the bill. (Cryptonews)

DECISION ON DEPORTATION OF TERRA FOUNDER FOUND IN MONTENEGRO REVERSED ON APPEAL

The Montenegrin Court of Appeal overturned the extradition decision of Do Kwon, the founder of the bankrupt cryptocurrency platform Terraform, at the appeal hearing on 7 February, after Kwon's lawyers appealed the decision. This decision was noted as another of the many decisions made in the complicated extradition process. The case for Do Kwon's extradition to the US or South Korea will be reconsidered by the first instance court in Montenegro. Kwon was caught trying to leave the country using false travel documents in March 2023. South Korean and US authorities accuse Terraform Labs and its co-founder Kwon of orchestrating a fraud scheme that cost investors billions of dollars. (Cointelegraph)

THAILAND REMOVES VAT FROM CRYPTO REVENUES

Aiming to make Thailand the region's digital asset hub, the Ministry of Finance has suspended the requirement to pay 7% VAT on income from crypto asset and token transactions. The ministry announced a VAT exemption on digital asset trading, effective from 1 January 2024, to put Thailand on track to become a digital asset hub. The exemption, which previously only applied to authorised digital asset exchanges, will now also apply to brokerage firms registered with the country's stock exchange. In Thailand, which has a crypto-friendly prime minister, Binance had also made a significant investment in Thailand. (Bangkokpost)

FIRST SPOT BITCOIN ETF APPLICATION FILED IN HONG KONG

The Hong Kong Securities and Futures Commission has reportedly received the first spot bitcoin ETF application, just weeks after the US Securities and Exchange Commission approved the first spot bitcoin ETF in the US. According to the news, Harvest Hong Kong, one of China's largest fund managers, applied for a spot bitcoin ETF to the Hong Kong SFC on 26 January. It is reported that Hong Kong's market regulator may take a similar approach to the US SEC and approve multiple spot ETFs at the same time to ensure compliance. Hong Kong has become one of Asia's leading crypto centres thanks to the authorities' pro-crypto approach in 2023. (Cointelegraph)

JP MORGAN CRYPTO ASSET SURVEY OF INVESTORS

According to the results of a survey of 4000 institutional investors conducted by JPMorgan, more than half of institutional investors want to stay away from crypto assets. Only 7% of the institutional investors surveyed believe that blockchain technology is an effective technology. This is a significant drop from the previous year's figure of 25%. 78% of the survey respondents do not plan to trade crypto assets in the next five years. In addition, 61% of institutional investors believe that artificial intelligence and machine learning will shape the future of trading in the next three years. (Coindesk)

GUIDANCE FOR CRYPTOASSET SERVICE PROVIDERS IN THE EU

The European Banking Authority (EBA) has published a guide for crypto asset service providers on the risks of money laundering and terrorist financing. The guidance includes some measures that companies operating in the European Union may adopt in relation to anti-money laundering (AML). The EBA statement underlines that crypto asset service providers are vulnerable to financial crime and that they are at particular risk from an AML perspective. It is stated that the risk is high, especially considering the speed of transactions that users can make and the possibility of concealing identities. For this reason, the EBA states that it is important for crypto asset service providers to be aware of the AML risks and to implement measures to effectively mitigate these risks. In this context, the EBA states that it aims to extend the risk-based approaches of these companies by extending the measures and actions proposed for banks to crypto asset service providers.  (European Banking Authority)

CRYPTO ASSET RISKS OF BANKS IN THE EU TO BE INVESTIGATED

The head of the European Banking Authority (EBA) has announced that the EBA, together with other EU authorities, will take a closer look at the links between banks, funds and other non-bank financial institutions, including crypto-asset service providers, due to growing concerns about the potential spread of risks in the whole economic system. In this context, the EBA, the European Systemic Risk Board (ESRB) and the Financial Stability Board (FSB) will conduct a joint investigation, examining banks and other non-bank financial institutions, such as investment funds, crypto-asset service providers and other financial services firms, with the aim of identifying risks in the system as a whole and taking measures against the possibility of their spreading of those risks. (European Banking Authority)

APPROVAL OF BIOTCOIN ETFS BY THE SEC IN THE USA AND WHAT HAPPENED BEFORE

The United States Securities and Exchange Commission (SEC) announced on 10 January 2024 that they have approved spot bitcoin exchange traded funds (ETFs). It was stated that the SEC has approved 11 different spot bitcoin ETF applications. It was also noted that the vast majority of crypto assets are in the form of an investment contract and therefore subject to the federal securities laws in the US.  (Bloomberg)

However, before the SEC made the above statement, an interesting event took place on 9 January. Following a successful hacking attempt on the @SECGov Twitter account used by the SEC, a fake tweet was sent out announcing the approval of bitcoin ETFs. Following the attack, it was announced that the attack on the SEC's Twitter account was a SIM swap attack and that the two-factor authentication had been disabled by the staff using the Twitter account, resulting in the phone number being captured and the password being reset. (Cointelegraph)

AML AGREEMENT BETWEEN THE EUROPEAN PARLIAMENT AND THE COUNCIL

In line with the preliminary agreement between the European Council and the European Parliament, new regulations on the AML obligations of crypto-asset service providers are envisaged in the European Union. Under the Agreement, crypto assets service providers will be added to the list of entities within the EU that are obliged to prevent the laundering of the proceeds of crime and the financing of terrorism. As a result, crypto-asset service providers will also be required to obtain and verify the identity information of their users for transactions exceeding USD 1,090 or EUR 1,000 under the know your customer obligations. The text of the agreement will then be submitted to the EU and then member states for the approvals. (FT)

CHAINALYSIS 2024 REPORT HAS BEEN PUBLISHED

The "2024 Crypto Assets Crime Trends Report" prepared by Chainalysis has been released this week. In the report, it is stated that the total value of illegal crypto asset transactions and wallets in 2023 is considered to be $24.2 billion, which is significantly down from $39.6 billion in the previous year. However, it was also stated that this amount could increase, as it reflects only those that have been detected from events in 2023. The report also found that illegal transactions involving stable coins have surpassed bitcoin in the last year. The reason for this is believed to be that the increased prevalence of stable coins makes them more likely to be used in illegal transactions. (Chainalysis)

BITCOIN BASED RENTAL AGREEMENT IN ARGENTINA

In Argentina, one of the first contracts involving payments in bitcoin has been signed, marking a milestone in the country's adoption of crypto assets as a means of payment. Following an executive order issued by President Javier Milei on the use of the Argentine peso for payments, one of the first rental agreements in Argentina has been registered using bitcoin. The lease agreement stipulates that the tenant will pay the landlord the equivalent of 100 USDT in bitcoin each month to make rental payments in exchange for the use of the house. Given the state of the currency in the country, it is noted that payments and agreements made in bitcoin may increase in the future. (Bitcoinworld)

DECISION FROM THE US COURT ON THE USE OF BITCOIN

A federal court in the US has allowed the use of information contained in a bitcoin transaction to notify one of the parties to a civil lawsuit. The case, which is said to be the first in which the applicability of this method has been accepted, recognized that the information contained in bitcoin transactions can be used in cases where the identity of the parties cannot be established. This is the first time that bitcoin has been accepted as a means of notification in a civil case. In this context, the text requested by the court was included in a transaction sent to the wallet address of the crypto asset involved, and a Google Drive link to a copy of the case file was also included in the text.  (News Bitcoin)

RESEARCH ON THE NUMBER OF CRYPTO ASSET USERS

In the annual crypto industry report prepared by Crypto.com, it is stated that the total number of crypto asset owners globally, which was 432 million in January last year, increased by 34% in 2023 and reached 580 million as of December. As part of the report, it is noted that bitcoin ownership increased by 33% compared to last year, while Ethereum ownership increased by 39%, experiencing a higher increase than bitcoin. In the report, before entering 2024; It is stated that the number of bitcoin owners reached 296 million, accounting for 51% of the total, while Ethereum owners correspond to 21% of the total number of people as 124 million people. (Crypto com)

PRESIDENTIAL CANDIDATE TRUMP MAKES A STATEMENT REGARDING CBDC

Donald Trump, who is a candidate for the presidential elections to be held in the United States on 5 November 2024, promised during his speech in Portsmouth that "I will never allow the creation of a central bank digital currency (CBDC)" in the US. Communicating that CDBCs would be a major threat to the country's sovereignty, Trump said he would prevent them from coming to America. According to Trump, the establishment of such a currency could undermine the absolute dominance of the federal government's control over the US currency and economy. Trump went on to say, “They can take your money and you won't even know it's gone.” (Politico)

WEB 3 INVESTMENTS IN DECLINE

According to a research report by crypto asset service provider Binance, the top ten leading WEB 3 projects saw a significant decline in venture capital investment in 2023. According to Binance's report, the top ten WEB 3 projects in 2023 raised a total of $1.78 billion in investment. However, this amount is about 70% lower than the $5.87 billion raised in the previous year. According to the report, WEB 3 projects also managed to attract a total investment of $9 billion. However, despite this proportional decline, all of the top ten WEB 3 projects still managed to raise more than $100 million. The report also notes that more than 36 per cent of this investment was in infrastructure projects using WEB 3 technology. (News Bitcoin)

USE OF SUSTAINABLE ENERGY IN BITCOIN MINING

A study conducted by Daniel Batten found that the energy used in bitcoin mining is the highest sustainable energy use percentage ever recorded. According to Batten's research, 54.5 percent of the energy used in bitcoin mining comes from sustainable sources, and the mining industry directly reduces 7.3 percent of all emissions from its operations. It is stated that these rates are record levels for bitcoin mining. Batten also states that the rate of sustainable energy used in bitcoin mining is very high compared to other industries, and that the bitcoin mining sector is the only industry in the world that is largely supported by this type of energy. (News Bitcoin)

ANOTHER STATEMENT FROM MEHMET ŞİMŞEK ABOUT THE REGULATION ON CRYPTO ASSETS:

According to the news made by Anadolu Agency on 10 January 2024, Minister of Treasury and Finance Mehmet Şimşek made some statements about the legal regulations regarding crypto assets. According to the news, Minister Şimşek stated that the technical details of the legal regulation have reached the final stage and stated that the interest in the trading of crypto assets has increased during the pandemic. However, stating that this situation brings its various risks, Şimşek stated that they have taken steps to reduce these risks in accordance with international regulations and that this is important in order to delisted from the grey list under FATF. Noting that the main objective of the study on legal regulation is to regulate the platforms and the transactions carried out on the platforms, Şimşek said, "Crypto asset trading platforms will be licensed by the Capital Markets Board (“CMB”) and obligations regarding minimum operating conditions will be introduced. These conditions; requirements for founders and managers, capital requirements, organizational requirements, and obligations regarding information processing infrastructure. The details on the subject will be determined by secondary regulation. He also stated that the definitions included in the regulation are intended to be created in the most inclusive manner in accordance with international regulations. In addition, Minister Şimşek stated that the tax issue is not the main focus of the regulation and that this issue will be studied separately, and that the CMB has been authorised to determine additional principles and principles regarding the current regulation.

JAPANESE E-COMMERCE APPLICATION ALLOWS PAYMENT WITH BITCOIN:

The e-commerce platform Mercari, which generally sells second-hand goods and similar products and has more than 22 million active users, announced that it will offer its users the opportunity to pay with Bitcoin. Product prices will still be shown in Japanese Yen, but payments can be made in Bitcoin. The system for Bitcoin payments is planned to be implemented by June. Payments to be made in Bitcoin will be made through Melcoin, a Tokyo-based subsidiary of the company. In this context, Melcoin will serve as an intermediary that transfers Bitcoin to the seller in Japanese Yen. Mercari had previously established a platform that allows Bitcoin trading. In this context, the company continues to take steps regarding crypto assets.

APPLE HINDERS CRYPTO-ASSET PROVIDERS:

Technology giant Apple has removed some service providers, including Binance, from the App Store in India, one of the countries where crypto assets are traded the most. In addition to Binance, it is stated that the applications of service providers such as Kucoin, OKX, Huobi, Kraken, Gate.io, Bittrex, Bitfinex have also been removed from the App Store. Indian citizens will no longer be able to access these service providers, which allegedly do not operate as regulations in the country, through Apple. The reason for the removal of the applications from the App Store in India is that the Financial Intelligence Unit (FIU), one of the country's regulatory agencies, requested the Ministry of Information Technology to block access to the platforms in question. In addition to the request to block the "URLs" of the relevant platforms, Apple was also requested to remove the platform applications. However, the apps are still available on the Google Play Store.

OKX COMPLIES WITH UK REGULATIONS:

Crypto asset service provider OKX has published a notification that it will comply with the regulations introduced by the UK Financial Conduct Authority (FCA). According to the published information, it was stated that there will be significant changes in the use of OKX. Accordingly, users must pass two surveys under the name of customer categorization and suitability assessment. Within the scope of these surveys, investors' profiles are classified, users are informed about some risks, and investors are asked a number of questions about investing in crypto assets.

CENTRAL BANK OF SPAIN SELECTS PARTNERS FOR CBDC TESTS:

The Bank of Spain has selected the institutions to cooperate in the tests for the central bank digital currency (CBDC). Among the 24 applications made on the announcement made last year, the Central Bank selected 3 companies named Cecebank, Abanca and Adhara Blockchain. Within the scope of the pilot application, which will be carried out in the next 6 months, a simulation will be made in the form of a single tokenized CBDC of interbank payments and the exchange of other CBDCs issued by different central banks. In addition to this test, an experiment will also be conducted in which the CBDC will be used to pay a tokenized bond.

JAPANESE GOVERNMENT AMENDS CRYPTOCURRENCY TAXES:

In Japan, the government will make changes to the regulation on taxes to be obtained from cryptocurrencies. Accordingly, with the planned change, companies will be under the obligation to pay tax only on realized gains from their earnings from cryptocurrencies. No tax will be due unless the gains are realized. Only the earnings obtained through the sale of owned cryptocurrencies will be subject to tax. The amendment is expected to enter into force on April 1^st, 2024, the beginning of Japan's fiscal year. However, before that, this change must be approved by the parliament.

SOUTH KOREA SEEKS TO RESTRICT CRYPTO ASSET TRANSACTIONS USING CREDIT CARDS:

South Korea foresees a number of risks for its citizens to carry out crypto asset trading transactions with credit cards. According to the announcement made by the Financial Services Commission (FSC) on January 3^rd, 2023, it is stated that in the purchase of crypto assets from foreign crypto asset service providers, illegal money outflows from the country may occur and some risks may arise in money laundering. The FSC recommends changes to the credit finance laws in the country. According to the news, public opinion is being sought for the proposal, which is still in the form of a proposal at this stage. Then, it is planned to take action for implementation in the first half of 2024.

TRADING VOLUME IN CRYPTO EXCHANGES EXCEEDED 1 TRILLION DOLLARS IN DECEMBER:

The crypto asset market, which has undergone turbulent periods in recent years, exceeded $ 1 trillion in trading volume in the last month of 2023, crossing the $ 1 trillion threshold for the first time since September 2022. It is stated that the reason why the transaction volume reached this level again after 1 year is the expectation that the SEC, the US financial regulatory agency, will accept Bitcoin spot EFTs. On the other hand, although the trading volume has exceeded $ 1 trillion after a long break, it is still far from the all-time high volume of $ 4.19 trillion in May 2021.

PARIBU HAS BECOME THE TAX RECORD HOLDER IN ITS FIELD OF ACTIVITY:

The technology company Paribu, a cryptocurrency trading platform, has been named the most taxpaying company in its field of activity in the 2021-2022 corporate tax list announced by the Revenue Administration on 3 January 2024. Paying approximately 700,000,000 Turkish lira corporate tax in 2021, Paribu ranked 23rd among the 100 taxpayers who declared tax in this field. At the same time, Paribu is among the top 10 companies in the ranking of companies providing services in the field of finance. Commenting on the issue, Yasin Oral, CEO of Paribu, said, "Paribu leads the sector in every field. With the trust of more than 6 million users, we will continue our success by acting accurately, transparently and in accordance with our values and responsibilities."

DIGITAL TURKISH LIRA PHASE ONE EVALUATION REPORT PUBLISHED:

The first phase evaluation report of the Digital Turkish Lira Project conducted by the Central Bank of Republic of Türkiye (“CBRT”) was published on the CBRT website. In the report, it was announced that the findings of the R&D studies and the first phase carried out with the Digital Turkish Lira Collaboration Platform stakeholders and the approaches adopted in the project were shared. The 63-page report consists of definitions, central bank digital currency requirements, principles and approaches, digital Turkish lira design, findings and evaluations, next phases and conclusion.

GUIDANCE ON THE USE OF ARTIFICIAL INTELLIGENCE BY JUDGES IN THE UK:

The UK Judicial Office published a guidance dated 12 December 2023 on the use of artificial intelligence in judicial activities. The guidance was prepared by a group of members of the judiciary to assist members of the judiciary. It is noteworthy that the guidance was published despite examples where artificial intelligence has led to bad results in the legal system. The UK Judicial Office, which supervises judges, has published a guidance that reveals how artificial intelligence can be useful in judicial activities. The guidance warns not only the judges, but all the elements involved in the entire judicial activity to be alert to potential risks. It is stated that public versions of AI tools are inherently publicly accessible and therefore no private/confidential information should be entered into them. The guidance also highlights areas where the use of AI is not recommended. For example, it is recommended not to use AI for legal research and legal analysis, as it is weak in finding new information that cannot be independently verified. The report also provides some clues to recognize when a petition has been drafted by AI. According to the statement, as AI technology continues to develop, this study will be reviewed and questions and feedback from members of the judiciary will be considered.

DECISION OF THE TURKISH PERSONAL DATA PROTECTION BOARD ON CRYPTO ASSET SERVICE PROVIDERS:

According to the decision of the Personal Data Protection Board (“Board”) published on 27 December 2023, a complaint was filed on the grounds that a crypto asset service provider processed personal data more than necessary and disproportionately by requesting the photograph of the front and back of the ID card of the persons together with their own photograph to upgrade the membership level on its platform. As a result of the investigation, it was determined that the services offered by the company can be used up to a certain limit with a standard membership (T.R. ID number, name, surname, mobile phone, date of birth and e-mail address information), and for advanced membership, which is required to perform certain transactions such as withdrawing cryptocurrencies, it is necessary to share the front and back side of the ID card and a photograph of a piece of paper on which a certain statement and the date of the day are written together with the photograph. In its assessment, the Board drew attention to the company's field of activity and stated that there is a possibility of money laundering in the crypto asset sector in general. Accordingly, the Board did not take any action regarding the complaint, stating that there is a public interest in identifying the identity of the users in this way, that it is based on the processing condition of "expressly provided by the law" and that it is in accordance with the law.

SPOT: BITCOIN IS CAUSING A STIR IN THE US AS 2023 DRAWS TO A CLOSE:

In the last weeks of the year, the US Securities and Exchange Commission (“SEC”) received spot Bitcoin ETF applications from many companies. Spot ETF (Spot Exchange-Traded Fund) is a tool that allows investors to take a position in an asset or group of assets without physically owning them. Thus, if approved by the SEC, exchange-traded funds that invest directly in Bitcoin will be traded. The decision on Spot Bitcoin ETF applications is expected to be made in the first days of January. RK Invest, BlackRock, Grayscale and 21Shares are among the companies applying for Bitcoin ETF. 7RCC, on the other hand, draws attention with its application for a spot Bitcoin ETF application focusing on environmental, social and governance (ESG) principles. Experts state that if SEC approval is granted as expected, this will be a milestone for crypto investors.

BLOCKCHAIN IS INCREASINGLY BEING ADOPTED IN THE FINANCIAL SECTOR:

By the end of 2023, it is seen that blockchain is increasing its weight in the financial sector despite many reservations. Major financial institutions such as JPMorgan, HSBC and Franklin Templeton are increasing their blockchain-related activities, accelerating the pace of distributed ledger technology (DLT) adoption within traditional finance systems. For example, JPMorgan conducted its first DeFi transaction on a public blockchain in November. HSBC also tested tokenized deposits in November and partnered with Ripple-owned technology firm Metaco to hold tokenised securities on its custody platform. Franklin Templeton executive Sandy Kaul stated that global traditional financial markets would be reshaped for the first time ever.

2023 WAS THE YEAR OF BITCOIN'S RISE:

Bitcoin has gained approximately 165 per cent this year after the previous two challenging years. Shares such as Coinbase, MicroStrategy and Grayscale Bitcoin Trust, which are closely linked to cryptocurrencies and traded on the stock exchange, outperformed Bitcoin, gaining more than 300%. Even some Bitcoin mining companies attracted attention by rising approximately 700%. Bitcoin's share in the crypto market also rose above 50%, while the value of the crypto market in general nearly doubled compared to the end of 2022, reaching $ 1.7 trillion.

EUROPEAN PARLIAMENT BRIEFING REPORT ON THE USE OF BLOCKCHAIN AND CRYPTO ASSETS:

On 13 December 2023, the European Parliament published a briefing on its official website, named "Understanding Crypto Assets: The Use and Challenges of Blockchain Technology". The briefing aims to provide an overview of the areas of usage and challenges of distributed ledger technology ("DLT"), which is now more than 10 years old, based on the information published so far. The report emphasizes that blockchain applications, especially cryptocurrencies, have become very popular, but many people still do not know how this technology works. It is stated that there are various dimensions of blockchain, such as tokens (values in the digital ledger), tokenization (using blockchain for existing assets) and smart contracts (predetermined computer programs that are self-executing when conditions are met); however, in order to understand each crypto asset, it is necessary to examine it specifically. The briefing points out that the use of blockchain for currencies (cryptocurrencies) was born from analyzing the shortcomings in the traditional financial environment. After more than a decade with cryptoassets, a number of controversial issues are addressed, from consumer protection to protecting the economy from criminal proceeds and the carbon footprint impact of cryptoassets.

2.85 BILLION SETTLEMENT BETWEEN BINANCE AND THE CFTC:

A federal court in the US has approved a settlement between Binance and its former CEO Changpeng Zhao and the Commodity Futures Trading Commission ("CFTC"). According to the statement made from the CFTC, the court found that Zhao and Binance violated the Commodity Exchange Act (CEA) and CFTC regulations and imposed a $150 million fine against Zhao personally and ordered Binance to reimbursed $1.35 billion in transaction fees earned while conducting unregistered activities and to pay the same amount ($1.35 billion) as penalty to the CFTC. Binance also recognized that anyone wishing to become a new customer, whether through a primary or "sub-account", must complete KYC procedures. This decision was one of the most important sanctions taken against a crypto exchange up to today.

NEW MOVES FOR WEB3 FROM CHINA:

The Chinese central government has announced strategic plans to guide the development of China's Web3 ecosystem. Accordingly, Web3 technologies such as NFTs and DApps will be supported in multiple directions. Other important areas to focus on include cross-chain interoperability, data security and smart contracts. The government will also support organizations that will conduct technical research in these areas. China also aims to actively participate in global standardization activities related to Web3. Thus, it is thought that China's international influence and rule-making power will increase in Web3 development. On the other hand, China's Ministry of Public Security plans to implement a new blockchain-based platform called RealDID to verify the real identities of its citizens.

CRYPTO REGULATION FROM ARGENTINA'S NEW GOVERNMENT:

Javier Milei, the new president of Argentina, known for his pro-crypto stance in the election campaign and on the agenda with the decisions he took after taking office, continues his efforts to make Bitcoin more widely used. The government has announced a new draft law like tax peace regarding the assets that taxpayers have not declared to the public. Accordingly, crypto assets are among the assets that taxpayers must declare, just like cash or immovable assets. In this regard, citizens who declared their cryptocurrency assets before 31 March 2024 will be subject to a 5% tax rate for them; this rate is expected to increase to 15% as of 30 November 2024. Diana Modino, Argentina's Minister of Foreign Relations and International Trade, announced last week on her X account that they will now authorize contracts with Bitcoin and other crypto asset units in Argentina.

EPIC GAMES HAS CHANGED ITS POLICY TO ONCE AGAIN ACCEPT BLOCKCHAIN AND NFT GAMES:

Epic Games Store, the digital distribution store owned by Epic Games, announced that it will allow some blockchain games to be listed on its platform again. Some blockchain games were characterised as "Adults Only" ("AO") due to the possibility of offering the opportunity to exchange earned cryptocurrencies for "real money". Epic Games had removed AO-rated games from its platform. However, according to a recent announcement by the company, the policy has been changed. Accordingly, an exception is being made for blockchain and NFT games, despite their AO rating. However, these games still must comply with existing guidelines. On Steam, another major digital distribution platform, blockchain and NFT games have been banned since 2021.

CRYPTO ASSET "TRAVEL RULE" DRAFT GUIDELINE IN EUROPE:

The European Banking Authority (EBA) has published a draft guideline on preventing the misuse of funds and certain crypto asset transfers for the purposes of preventing the laundering of the proceeds of crime and the financing of terrorism. The draft guideline sets out the steps to be taken by companies providing services for the transfer of crypto and virtual assets in order to identify the required details to be completed in the transfers. According to the EBA's statement, the draft guidelines aim to ensure a consistent application of EU law and to establish a common code of conduct to strengthen the implementation of the AML and CFT regime. The Guidelines also include provisions to ensure that competent authorities can fully trace these cryptoasset transfers where necessary for detection or investigation in AML proceedings. The comment period on the Guidelines is open until 26 February 2024 (European Banking Authority).

CONSUMER COMPLAINTS REGARDING CRYPTO ASSETS IN CALIFORNIA:

The California Department of Financial Protection and Innovation (DFPI) has released some of the most common crypto asset complaints filed with the Office of Consumer Services. According to the statement, one of the most common incidents is consumers being tricked into transferring their crypto assets from a legitimate platform to scam platforms or wallets. Another common complaint is that consumers mistakenly transfer their crypto assets to wallets they do not recognise. The authority also announced that there has been an upward trend in complaints about crypto assets this year. (News Bitcoin)

EURO-BASED STABLECOIN IN FRANCE:

It was announced by Société Générale, one of France's largest banks, that they will be issuing a stablecoin that will be based on the European currency. Pointing out that existing major stablecoins are based on the US dollar, the bank announced that the euro should also be in this field. At the same time, the bank stated that this stablecoin has been designed to be used in various other transactions involving the transfer of bonds, digital funds and other assets to be used digitally. This means that this stablecoin will not only be used by the bank in its own systems, but also by other service providers. (Financial Times)

RONALDO GETTING SUED FOR NFT PROMOTION:

Famous footballer Cristiano Ronaldo has been sued for promoting and encouraging investment in NFTs on the crypto asset platform Binance. As a result of Ronaldo's advertising on Binance, a class action lawsuit was filed against him in Florida by users who invested on Binance and claimed to have suffered losses as a result of that investment. Binance entered into a long-term partnership with Ronaldo in 2022 to promote three NFT collections associated with the platform. The lawsuit alleges that Ronaldo's promotion of NFTs, which are considered unregistered securities, requires a licensed activity. (Finextra)

BLOCKCHAIN BILL APPROVED IN THE USA:

In the United States, the House of Representatives, in the session held on 5 December, approved the bill aimed at increasing the use of blockchain technology in the US by promoting blockchain applications. Under the Bill, a programme called the 'Blockchain Deployment Programme' will be established to support the use of blockchain technology. In addition to this programme, an advisory committee on the introduction of blockchain technology in the country will be established, which will be attended by representatives of federally represented institutions and experts working in the field of blockchain technology. In addition, if the Bill is adopted, studies will be conducted on the current use of blockchain technology by federal institutions and the institutions' ability to use this technology in the future. In order for the Bill adopted by the House of Representatives to become a Law, it will first need to be approved by the US Senate, and then the Bill will be debated again in the final stage then to be enacted into Law and will come into force on the specified date if it is approved by the US President in the final stage.

RENEWABLE ENERGY PROJECTS FROM TETHER:

In an interview with Cointelegraph, Tether's new CEO Paolo Ardoino, who was appointed on 1 December 2023, announced that Tether will build renewable energy facilities in Uruguay and El Salvador. He also explained that Tether is not just about USDT, but also about becoming an infrastructure provider. He stated that it makes sense to invest in renewable energy, especially for bitcoin mining, as fossil fuels are very expensive and the costs are unpredictable. Instead, the company plans to build hydroelectric plants in Uruguay and geothermal plants in El Salvador. (Coin Telegraph)

STANDARD CHARTERED BANK JOINS DIGITAL YUAN PROJECT:

Standard Chartered Bank (China) has become one of the first foreign banks to join the Digital Yuan pilot project, China's Central Bank Digital Currency (CBDC). Standard Chartered, which has been operating as an international bank in China for 165 years, said they are optimistic about the development prospects of the Digital Yuan and also foresee that the application areas of the CBDC will expand, including the operation of international commercial payments, trade finance and supply chain finance. With the Digital Yuan, China is one of the first countries in the world to work on CBDCs and conduct large-scale pilot projects. There are currently 26 Digital Yuan pilot projects ongoing across China. (News Bitcoin)

US TREASURY DEMANDS FOR MORE POWERS:

In a statement by US Deputy Treasury Secretary Wally Adeyemo, it was announced that the Treasury Department has asked Congress for "more tools and authority to combat illegal activities involving digital assets". In Adeyemo's statement, it was announced that the Treasury Department has asked Congress to create a secondary sanctions regime that would allow other companies that do business with the company to be sanctioned, in addition to sanctions that allow a company that acts illegally to be removed from the US financial system. (News Bitcoin)

BLOCKCHAIN ACADEMY BY THE UNITED NATIONS:

The United Nations Development Programme, together with the Algorand Foundation, aims to establish a Blockchain Academy in the first quarter of 2024. The aim of the Blockchain Academy is to provide information to UNDP staff on the applications of blockchain technology. The training materials prepared within the framework of the Academy will be made available to the staff of the United Nations units, which cover 22,000 people. The programmes to be held within the academy will evaluate the scope of application of blockchain technologies to achieve sustainable development goals within the United Nations, and aim to create new solutions. (Algorand Foundation)

FAILURES OF WEB3 GAMES:

According to a study conducted by Coingecko, of the 2,817 WEB3 games established between 2018 and 2023, 2,127 failed and were not actively used, while only 690 were still actively used. Analysing the failure rate of published games by year, it was 94.3% in 2019 and 94.4% in 2020, showing the lowest levels of game success. In 2021, 339 of the 738 games published with WEB3 support failed, a failure rate of 45.9%. The research found that the most popular active games were Decentraland, The Sandbox and Axie Infinity. (Coingecko)

BITCOIN AND RENEWABLE ENERGY RESEARCH:

According to a new study conducted by researchers at Cornell University, bitcoin can be used to finance renewable energy facilities. The study explains that although the renewable energy facilities are not yet connected to the general US power grid, bitcoin can be used in bitcoin mining by using the existing power that can be generated in the development phase before commercialisation, where it can generate energy and thus add value and help in the development and financing of these facilities. The research found that Texas is one of the states with the most potential regarding this process in the US. (Cornell University)