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Top Headlines for 5 May, 2022

Gucci To Accept Crypto Payments

Premium apparel brand Gucci has announced plans begin accepting cryptocurrencies at a few physical stores in the United States in May 2022. The fashion house will debut crypto payments at all of its other locations by the second quarter of the calendar year.

Vogue Business reports that customers will be able to make crypto payments with their cryptocurrency wallet by scanning a QR code sent by Gucci via email. The flagship stores will accept several cryptocurrencies, including Bitcoin, Ethereum, Litecoin, Doge and Shiba Inu.

Some of the Gucci locations that will enable the functionality by this month are The Shops at Crystals in Las Vegas, Rodeo Drive in Los Angeles, and Wooster Street in New York. Gucci appears to be following the lead of other premium fashion brands such as Off-White that have already begun accepting payment in digital currencies. However, this isn’t the brand’s first foray into Web 3. Earlier this year, the company purchased a virtual plot in the Ethereum-based metaverse game, the Sandbox and is reportedly developing a Gucci Vault for its upcoming NFT collection.

Fashion brands Nike, Adidas Balenciaga, and Dolce and Gabbana have also made some significant investments in this emerging technology. Some have even filed for specific trademarks for their products within the metaverse.

Over 300 Crypto Litigations Since 2013

International law firm Morrisson Cohen LLP released a crypto litigation tracker on 3 May 2022, listing over 300 settled and ongoing lawsuits against illicit cryptocurrency and blockchain projects since 2013.

Morrison Cohen also has a crypto division for clients from financial institutions, startups, and entrepreneurs for whom it provides business litigation, real estate and other services. The crypto litigation cases tracked include those affiliated with the Securities and Exchange Commission (SEC), Department of Justice (DOJ) and Commodity Futures Trading Commission (CFTC). According to the report, 17 cases involving cryptocurrency have been heard before U.S. courts. The litigation tracker will be routinely updated to incorporate all of the critical rulings from the listed cases.

The lawsuits involve some of the industry’s biggest scams and hacks, such as DOJ vs. Heather Morgan and Ilya Lichtenstein, in which the couple is accused of laundering 119,756 Bitcoin (BTC) that were stolen from the Bitfinex exchange back in 2016. Another high-profile fraud case is SEC vs. the Barksdale Siblings, in which the brothers allegedly orchestrated a fraudulent Initial Coin Offering (ICO), scamming naive investors out of $124 million.

The company that might steal the limelight from those scams is Safemoon, which was slapped with a class-action lawsuit. The lawsuit claims that the project collaborated with celebrity influencers such as Jake Paul, Soulja Boy, and Lil Yachty to draw in naive investors. In May 2021 security audit firm Hashex identified several critical vulnerabilities in the smart contract that generated Safemoon tokens on the Binance Smart Chain, some of which could expose users to fraud and theft. The tokens have since been delisted from most of the centralized exchanges upon which they were available.

BTC Becomes Risk-Offset Asset

Bloomberg reported that amidst rising inflation and unprecedented financial innovation Bitcoin has become a risk-off asset while its volatility against traditional assets is steadily declining.

“We see great potential for Bitcoin to continue doing what it has been doing for most of its existence – outperforming most traditional asset classes,” it said.

BTC’s performance versus NASDAQ 100 Stock Index further belies the common misrepresentation of Bitcoin as a risk asset. For context, the NASDAQ SI100 dipped 20% in 2021, while the premier cryptocurrency is only down 15%. Bitcoin is well-positioned to capture a greater market capitalization over equities if the Federal Reserve continues its Quantitative Tightening, a contractive monetary policy used by a Central bank to reduce liquidity in its jurisdiction.

According to Bloomberg we can expect another downturn in Bitcoin price as the Fed has just begun its tightening process, but it points out that many new and old investors are still holding their BTC. This hold mindset by investors will significantly diminish the impact of any adverse policy decisions made by the Fed. The Bitcoin community uses the acronymn HODL, originated from a typo in 2013, which now stands for Hold On For Dear Life.

Bitcoin Mining Sector Update

The government of Kazakhstan has issued a ministerial order that requires bitcoin miners to legally register their operations with the authorities.

As per the new directive miners in Kazakhstan are now required to submit information about power consumption, personnel, IP addresses, physical operations, strategic investments, customs clearances and any other document that proves they legally obtained their equipment.

The President of Kazakhstan’s Association of Blockchain and Data Centres, Alan Dorjiyev, claims that the new requirements are the first steps taken by the country’s government to “officially approve of the supply of electricity to bitcoin mining centers”. The administration has previously cut off power to bitcoin miners; the country has been battling energy shortages ever since miners started flocking to its jurisdiction after China called for a crackdown on all mining in May 2021.

Uzbekistan, another emerging market for bitcoin mining, has rolled out a new proposal for miners to gain a tax break by using solar energy. Reuters reports that Uzbek miners will be exempt from paying federal taxes if they install solar powered systems for their operations. Those who linger on the state power grid during energy shortages will be required to pay double the usual tax rate plus purchases.

Meanwhile, a Texas-based crowdfunding platform EnergyFunders has unveiled a new initiative that will enable investors to gain fractional ownership in different bitcoin mining operations. As per the company’s recent filing with the United States Securities and Exchange Commision (SEC), it will sell $10 million worth of equity shares from several bitcoin mining centers for $5000 per share. This arrangement would allow an investor to receive monthly payouts. EnergyFunders claims that investors stand a chance to earn 100 times their initial investment if the price of bitcoin stays above the $45k resistance level.

Another important development is the $70 million loan from New York Digital Investment Group (NYDIG) to Bitcoin Mining company Argo Blockchain in order to finance the purchase of mining rigs for its Texas-based subsidiary Argo Helios. Argo had previously taken a loan of $22 million from the same investment firm in March 2022, giving the company a total market capitalization of $335 million.

NFTs to Raise Funds for Ukraine

Cryptocurrency Investors have donated more than $100 million to Ukraine since the country was invaded by Russia in February.

However, the Russian government has not halted its invasion. Ukraine needs more donations to provide aid for its citizens.

Freedom Squares, a new Ethereum-based Non-Fungible Token (NFT), has volunteered to raise funds for several ground relief projects active in Ukraine. These organisations include CORE, created by Actor Sean Penn, and World Central Kitchen by celebrity chef Jose Andres.

Freedom Squares NFTs are based on Ukraine’s President Vladimir Zelensky’s notable speech on 1 March 2022, when the Russian forces bombed Kharkiv’s Freedom Square. He said, “Every square today, no matter what it’s called, is going to be called Freedom Square, in our country.”

The NFT series is a collection of 6468 tokens. Each NFT from the collection represents an actual square from Ukraine, however, each one has been depicted in 4 different styles.

A single token from the Freedom Square collection would cost around 0.1 ETH ($295) as of 5 May, 2022.