South Korea considers permanent crypto investigative unit

Asian Market Surge for XRP Amid Broader Market ImplicationsXRP, the cryptocurrency and native token used by real time gross settlement system, Ripple, has seen renewed activity in recent weeks in terms of trading volume. That trading volume appears to be more pronounced in Asian markets such as South Korea.©Pexels/RODNAE ProductionsThe XRP token has traded up 22% over the course of the past seven days, with a current unit price of $0.54. Trading volume has surged on South Korean exchanges such as Bithumb UpBit and Korbit where volume spiked 18%, 37% and 50% respectively over the past 24 hours. This trading activity is irregular as ordinarily the trading volume of Bitcoin and ether would account for the vast bulk of trading on the three leading Korean exchanges.Speculative interestXRP has under-performed in recent years and at the heart of its difficulties has been a multi-year legal battle with the Securities and Exchange Commission (SEC) in the United States. In its complaint, the SEC has claimed that XRP is an unregistered security. Speculation in recent weeks suggests that this highly litigated battle may be drawing to a conclusion. Many commentators have suggested that either a deal will be struck or the court could soon decide to rule on the matter.During the 2017 bull market, the token reached the heady heights of a $3.40 unit price. That’s a target that the cryptocurrency has never been able to reach ever since. During the last bull market, it rose to around $1.76 for a short time in April 2021. There’s little doubt but the regulatory cloud hanging over it has suppressed the price. Much depends on the outcome of this lawsuit, not just for XRP but for crypto as a whole.Another notion driving speculative interest is the idea that the Commodity Futures Trading Commission (CFTC) may classify XRP as a commodity. That line of thought is more recent and follows the CFTC classifying a number of cryptocurrencies as commodities in its lawsuit against global crypto exchange Binance. In follow up comments earlier this week, CFTC Chair Roistin Behnam reiterated the claim.The very fact that the CFTC has made this claim is significant in terms of the case being pursued by the SEC, potentially weakening the SECs case. Lawyers for Ripple have made the court aware of the CFTCs claims.Crypto moving forwardCrypto traders in South Korea have been notorious in the past for pursuing speculative trends within the industry with the Kimchi Premium on Bitcoin back in the day as a stand out example. Whether speculative or not, the outcome for XRP, Ripple and the broader cryptocurrency space relative to the cryptocurrency’s regulatory status will be significant.A positive result will not just be a fillip for XRP, Ripple and Asian and other crypto traders who have speculated on such an outcome. It will also serve to provide a level of regulatory protection for all other crypto projects within the United States. A negative outcome to the lawsuit will not be ideal for XRP, Ripple and US-based crypto projects. However, Ripple CEO Brad Garlinghouse has said in the past that if innovation is driven overseas, Ripple will focus on developing its product overseas.In an interview this week Ripple President Monica Long suggested that over and above the lawsuit, crypto innovation is generally being pushed outside of the United States. Long cites Asia as taking the lead on “thoughtful crypto policy”. On that basis, it’s likely that one way or another crypto moves forward and maybe South Korean speculators will be proven right regardless of the outcome of the XRP..

Cronos Labs launches zkEVM chain testnetCronos Labs, the developer behind the Cronos blockchain ecosystem, is charting a new path in the blockchain space by launching a zkEVM chain.From Cosmos to EthereumThe Cronos zkEVM chain is being launched in the first instance as a test network. The layer-2 blockchain will rely upon ZK Stack, the software kit developed by Matter Labs. In this way, the project will be extending its scaling roadmap from Cosmos to Ethereum. As Matter Lab’s SVP of Business and Operations, Marco Cora put it:“When we introduced the ZK Stack, we opened up the door for anyone wanting to build on top of Ethereum to do so by deploying hyperchains. Whether you’re building a specialized Rollup or a general purpose one, hyperchains allow you to tap into Ethereum’s extensive userbase base and liquidity while preserving its robust security and decentralization.”The journey began with the creation of the first chain in the Cronos ecosystem — a Cosmos appchain developed in collaboration with Singapore-headquartered crypto platform Crypto.com and launched in 2021. Subsequently, Cronos introduced an EVM-compatible chain in 2022, built using the Cosmos SDK. Notably, these new endeavors complement, rather than replace, the earlier established chains.Photo by Kanchanara on UnsplashThe product of collaborative effortsA significant development in Cronos’ evolution is the introduction of zkEVM, a result of collaborative efforts involving Cronos Labs, Matter Labs and engineering teams from stakeholders Crypto.com and existing dApp developers. The zkEVM testnet is a breakthrough, utilizing Ethereum’s Sepolia testnet and incorporating zkSync’s open-source prover, Boojum — a STARK-based zero-knowledge proof system known for its efficiency in the layer-2 rollup space, with low hardware requirements and fees.The decision to launch a native Ethereum chain stemmed from challenges in bridging EVM chains and bridging between Cosmos and Ethereum, according to Ken Timsit, Managing Director at Cronos. Timsit emphasized the richness and robustness of the Ethereum developer ecosystem for building DeFi and NFT applications.Native account abstractionHyperchains within the ZK Stack share components, including a native bridge to the Ethereum mainnet and zkSync’s trustless bridging mechanism, ensuring assets remain secured by Ethereum. The implementation of zkSync’s native account abstraction allows transaction fee payments in various cryptocurrencies, including Cronos’ native token (CRO).Cronos’ zkEVM is anticipated to progress to the mainnet in the second quarter of 2024, marking a pivotal moment in the evolution of hyperchains.The landscape of hyperchains is expanding, with projects like GRVT and Tradable utilizing the ZK Stack. GRVT, a derivatives exchange, and Tradable, a tech firm focused on bringing private credit on-chain, exemplify the diversity and specialization within this emerging sector. Tradable aims to establish an institutional-focused hyperchain, potentially forming a decentralized chain alongside other institutional partners.Matter Labs views the zkSync hyperchain as a superior option compared to app-specific chains in Cosmos, emphasizing the scalability and security benefits. Hyperchains, a potential alternative to private blockchain frameworks like Hyperledger or Corda, offer technical scalability with the benefits of Ethereum. However, practical scalability remains a challenge due to cost considerations and the social coordination problem.

Report: Can Bitcoin Replace Gold As a Safe Asset?In light of the substantial increase in Bitcoin (BTC) prices this year, a report from KB Financial Group in South Korea examined the potential for BTC to replace gold as a safe asset.©Pexels/Michael SteinbergThe study delves into the factors behind the recent BTC price surge and emphasizes the need for caution when considering BTC as an alternative to traditional safe assets.3 drivers behind BTC surgeFrom January 1 to March 31 this year, BTC experienced an impressive return of 71%. This surge can be attributed to three main factors: an anticipated increase in liquidity due to market expectations of unchanged or falling interest rates; central banks supplying liquidity to mitigate risks in the traditional banking system; and concerns over the potential delisting of cryptocurrencies should the US court’s decision on the Ripple-SEC case classify XRP, Ripple’s native token, as securities, prompting investors to shift their focus to BTC.The report suggests that the current BTC boom is more likely a result of short-term arbitrages and social conformity, given the greater information asymmetry in the crypto market, which lacks the disclosure system present in traditional stock markets.Persisting risk factorsLast month, blockchain tracker Whale Alert spotted a transfer of 11,125 BTC from an anonymous address to Binance. The primary reason for moving assets from a private address to an exchange address is to sell them, indicating that investors should keep a watchful eye on Bitcoin trading volumes, particularly for any signs of large sell-offs.Data from the crypto data analysis platform Glassnode revealed that the percentage of the BTC supply that was active over a year ago reached an all-time high of 68% in late March. Historically, such an increase has been associated with falling BTC prices.This year, the BTC supply is set to grow due to the US government’s liquidation of seized BTC. As detailed in a March 31 Cointelegraph article, the US government seized 51,352 BTC in a case related to Ross Ulbricht, the creator of the online black market Silk Road. The government has already sold 9,861 BTC, with the remaining amount expected to be liquidated in four additional portions throughout the year.Binance, the world’s largest crypto exchange by trading volume, has been struggling to find banks in the US to store client funds after crypto-friendly banks Silvergate and Signature closed their doors.Need for cautionAlthough various media sources often portray BTC as a safe asset, the report advises caution in accepting these claims. Although some liken BTC to “digital gold,” the two assets share little in common beyond their finite and scarce nature. In fact, gold and BTC diverge significantly in terms of social consensus, intrinsic value, price volatility, and investor protection.Gold serves as a highly liquid asset with applications in both jewelry and industrial goods, in addition to its role as an investment vehicle. In contrast, BTC’s intrinsic value is still debatable. The price volatility of BTC is also a concern, as evidenced by its 71% spike in the first quarter of 2023, compared to gold’s modest 8% increase. Additionally, gold investment products are regulated by law, whereas BTC is not. The report thus recommends treating BTC as a high-risk product and incorporating it into a diverse investment portfolio.It is worth noting that since the outbreak of the COVID-19 pandemic, the crypto market has demonstrated a stronger correlation with the global stock market in response to negative signals. This trend can be partially attributed to the growing presence of institutional investors in the crypto market, who often sell risky assets first to secure liquidity in the face of unexpected shocks.