Weekly Cryptocurrency News. Friday, January 20

Friday, 27th of January. As the week comes to an end, we can focus on the highlights of the crypto industry over the past few days.

EU to tighten requirements for banks regarding crypto investments

European banks owning cryptocurrency will be obliged to comply with stricter standards for the backing of digital assets with capital. As reported by Reuters, such a decision was taken by lawmakers in the European Parliament during the voting.

As introduced in the bill in question, the amendment suggests application of risk weighting factor of 1250% when it comes to crypto assets. Lending and financial institutions will be required to provide full capital reserve coverage and will not be able to use leverage on digital assets.

What is proposed by the document is the highest level of security under Basel III, the Basel Committee on Banking Supervision (BCBS) guidelines, to be precise, that were approved between 2010 and 2011. The bill being considered by the European Parliament aims to implement the remaining elements of the organization’s standards.

There is also another amendment that obliges the European Commission to examine the need for a special prudential regime for crypto assets. Parliamentarians referred to the “significant differences” of digital currencies from traditional financial instruments, which pose an obstacle to the application of existing rules to them. 

If the EU executive body considers it reasonable to implement a separate regulatory and supervisory regime for cryptocurrencies, it is required to introduce a legislative initiative taking into account the experience of BCBS.

In January, experts from the Bank for International Settlements outlined recommendations for regulatory policy to respond to crypto-related risks. Experts suggested three options to apply and mix: prohibition, isolation, and implementation of existing rules.

China named largest supplier of face recognition systems

Harvard and Massachusetts Institute of Technology scientists have acknowledged China as the world leader in terms of export of facial recognition systems. Ranked second is the U.S., Wired says.

Researchers focused on deals related to smart city technology, an area where facial recognition is often used to improve video surveillance. They used information on global tracking projects from the Carnegie Endowment for International Peace and data from AI companies.

According to the report, Chinese businesses accounted for 201 export transactions, compared to 128 for U.S. businesses.

In addition, China dominates the field of artificial intelligence as a whole. Among the 1,636 export deals involving AI in some form, 250 are concluded with 136 importing countries, according to the study. As for the U.S., there have been concluded as many as 215 agreements.

In fact, experts argue that boosting exports of these technologies will allow other governments to strengthen surveillance. This would damage human rights, they added.

Tesla’s Q4 report: bitcoin holdings remain unchanged

By the end of the Q4 of 2022, Tesla had a negative revaluation of 9,720 BTCs on its balance sheet equal to $34 million. During the last reporting period, there were no transactions with the first-ever cryptocurrency.

A 15% drop in the price of bitcoin during the October-December period was no incentive to sell the first-ever crypto bought by an electric car maker averaging $32,099. However, the top management did not respond to the worsening conditions amidst the collapse of FTX.

This contradicts the results for the second quarter. Back then, the company said it had converted about 75% of its own bitcoins into cash, netting it $936 million.

As of the end of 2022, the company estimated the value of digital gold on its balance sheet at $184 million against $218 million at the end of the previous quarter.  

During Tesla’s press conference between top executives and analysts, the topic of bitcoin did not arise.

It reported total quarterly profits of $5.7 billion on revenues of $24.3 billion. For the year as a whole, the figures stood at $20.8 million and $81.4 billion, respectively.

The market showed a positive feedback towards the publication of Tesla reports. The stock climbed 7.8 percent after trading session. Over the last year, the market cap of the electric car manufacturer sank by 53.4%.

Let us remind that in February 2021, it was announced that Tesla invested $1.5 billion in bitcoin. Elon Musk himself referred to these investments as “quite risky”.

Two months later, Tesla sold some of its BTC holdings worth $272 million.

Apple, Google and Amazon turned out to be among the borrowers of FTX

Attorneys for FTX have filed a detailed 100-plus page list of the exchange’s debtors with the bankruptcy court. The list includes a number of government agencies of different countries, tech companies, air carriers and hotel operators.

The ruined platform also owed money to banks, charities, venture capital firms, the media and several crypto startups.

The latter lists Coinbase, Galaxy Digital, Yuga Labs, Circle, Bittrex, Sky Mavis, Chainalysis, Messari, Binance and Anchorage departments.

Some major tech companies like Apple, Netflix, Amazon, Meta, Google, LinkedIn, Microsoft, and Twitter feature on the same list. 

The New York Times, The Wall Street Journal and CoinDesk are all named among the media in the debtors roundup.

You can find the U.S. Internal Revenue Service, several state fiscal departments, and various government agencies in Canada, Japan, Australia, Hong Kong, Gibraltar, Vietnam, and other countries there as well.

O’Leary Productions of Shark Tank TV star and venture capitalist Kevin O’Leary is named on the list. Prior to that, the entrepreneur stood up for FTX founder Sam Bankman-Fried.

No amounts owed to the named entities are listed.

To recap, Changpeng Zhao, CEO of Finance, said that FTX paid $ 47 million to unnamed media for the publication of negative information about the exchange he heads.

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