There always seem to be people banging their heads in the crypto world, and this week was no different. Cryptocurrency mixer Tornado Cash has been hit with US sanctions and Binance and WazirX disagree on acquiring the Indian exchange (two years after the deal was allegedly struck). A lot of stuff is still up in the air (perhaps due to some Tornado protocol?) so let’s get to it.
Hello and welcome to the Chain Reaction podcast, where we unpack and explain the latest crypto news, drama, and trends, breaking it down block by block for the crypto curious. This week, Jacquelyn and Anita dove into Tornado Cash, Coinbase’s not-so-hot Q2 earnings, and Binance and WazirX deal-or-no-deal drama. (Lucas is on vacation and we hope he is enjoying the time away from the typical crypto craziness.)
The Office of Foreign Asset Control (OFAC), a watchdog within the US Treasury that enforces sanctions violations, upheld sanctions against Tornado Cash on Monday, immediately barring US citizens and businesses from using the service. The cryptocurrency mixer has laundered between $1.5 billion and over $7 billion in digital assets since its inception in 2019, according to separate reports from crypto analytics platform Elliptic and the US Treasury, respectively .
Tornado isn’t the only cryptocurrency blender to have faced regulators head-on – others like Helix and Blender.io have also been sanctioned for similar services, hinting that this could be a sign of the times for this industry. type of crypto activity.
Separately, we dove into weaker-than-expected second quarter earnings from Coinbase that came out on Tuesday. The largest cryptocurrency in the United States saw its net revenue decline by around 60%, from $2.033 billion in the first quarter to $802.6 million in the second quarter. In general, crypto trading activity has slowed on all exchanges around the world, which in turn has impacted their major transaction fee revenue streams. Coinbase also noted that its core retail customers are trading less and shifting to non-investment activities and holding their assets instead of selling. Along the same lines, Coinbase is exploring new offerings such as staking to (hopefully) increase revenue in the future.
Finally, we discussed the public interaction on Twitter between Changpeng Zhaofounder and CEO of Binance, and Nischal Shetty, co-founder of WazirX. Binance, the world’s largest crypto exchange by trading volume, said Friday that it does not own India’s WazirX platform despite the two companies disclosing the acquisition in 2019. This is the latest decision which has baffled industry players, including the Indian company which insists the purchase took place.
Be sure to tune in Tuesday next week for an interview with web3 investor Li Jin, Variant’s co-founder and general partner.
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