<figure class="wp-block-image size-large"><img loading="lazy" decoding="async" width="820" height="547" src="https://cms.cnbcafrica.com/wp-content/uploads/2021/06/JEAP3R6MHJMMXJOZII2DGPDI5E-820x547.jpg" alt="" class="wp-image-408000" srcset="https://cms.cnbcafrica.com/wp-content/uploads/2021/06/JEAP3R6MHJMMXJOZII2DGPDI5E-820x547.jpg 820w, https://cms.cnbcafrica.com/wp-content/uploads/2021/06/JEAP3R6MHJMMXJOZII2DGPDI5E-300x200.jpg 300w, https://cms.cnbcafrica.com/wp-content/uploads/2021/06/JEAP3R6MHJMMXJOZII2DGPDI5E-120x80.jpg 120w, https://cms.cnbcafrica.com/wp-content/uploads/2021/06/JEAP3R6MHJMMXJOZII2DGPDI5E-768x512.jpg 768w, https://cms.cnbcafrica.com/wp-content/uploads/2021/06/JEAP3R6MHJMMXJOZII2DGPDI5E.jpg 960w" sizes="auto, (max-width: 820px) 100vw, 820px" /><figcaption>The logo of Binance is seen on their exhibition stand at the Delta Summit, Malta&#8217;s official Blockchain and Digital Innovation event promoting cryptocurrency, in St Julian&#8217;s, Malta October 4, 2018. REUTERS/Darrin Zammit Lupi</figcaption></figure>



June 27 (Reuters) &#8211; Britain&#8217;s financial regulator has said Binance, one of the world&#8217;s largest cryptocurrency exchanges, cannot conduct any regulated activity and issued a warning to consumers about the platform, which is coming under growing scrutiny globally.



In a notice dated June 25, the Financial Conduct Authority (FCA) said Binance Markets Ltd, Binance&#8217;s only regulated UK entity, &#8220;must not, without the prior written consent of the FCA, carry out any regulated activities&#8230; with immediate effect&#8221;.



It also issued a warning to consumers about Binance Markets and the wider Binance group.



Binance said in a statement that Binance Markets, which it acquired in 2020, was not yet using its regulatory permissions, and that the FCA&#8217;s move would not impact services offered on its Binance.com website.



&#8220;We take a collaborative approach in working with regulators and we take our compliance obligations very seriously. We are actively keeping abreast of changing policies, rules and laws in this new space,&#8221; a spokesperson said.



Binance announced in June last year that it had bought an FCA-regulated entity and would use it to offer cryptocurrency trading services using pounds and euros.



AUTHORISATION



While trading of cryptocurrencies is not directly regulated in Britain, offering services such as trading in cryptocurrency derivatives does require authorisation.



The FCA has told Binance that by June 30 it must display a notice stating &#8220;BINANCE MARKETS LIMITED IS NOT PERMITTED TO UNDERTAKE ANY REGULATED ACTIVITY IN THE UK&#8221; on its website and social media channels.



It must also secure and preserve all records relating to UK consumers and inform the FCA this has been done by July 2.



The regulator did not explain why it had taken these measures.



British citizens will still be able to access Binance&#8217;s services in other jurisdictions.



The FCA is stepping up its oversight of cryptocurrency trading, which has soared in popularity in Britain along with other countries around the globe.



Since January, the FCA has required all firms offering cryptocurrency-related services to register and show they comply with anti-money laundering rules. However earlier this month it said that just five firms had registered, and that the majority were not yet compliant.&nbsp;<a href="https://www.reuters.com/world/uk/uk-regulator-says-cryptoasset-firms-not-meeting-anti-money-laundering-rules-2021-06-03/">read more</a>



Japan&#8217;s regulator said on June 25 that Binance was operating in the country illegally, a notice posted on Japan&#8217;s Financial Services Agency website showed.



Last month, Bloomberg reported that officials from the U.S. Justice Department and Internal Revenue Service who probe money laundering and tax offences had sought information from individuals with insight into Binance&#8217;s business.&nbsp;<a href="https://www.reuters.com/technology/binance-under-investigation-by-justice-department-irs-bloomberg-news-2021-05-13/">read more</a>



In April, Germany&#8217;s financial regulator BaFin said the exchange risked being fined for offering digital tokens without an investor prospectus. <a href="https://www.reuters.com/technology/germanys-financial-watchdog-warns-crypto-exchange-binance-over-stock-tokens-2021-04-29/">read more</a>



Reporting by Derek Francis in Bengaluru; Editing by Toby Chopra

The logo of Binance is seen on their exhibition stand at the Delta Summit, Malta’s official Blockchain and Digital Innovation event promoting cryptocurrency, in St Julian’s, Malta October 4, 2018. REUTERS/Darrin Zammit Lupi

Britain bans Binance’s UK ops in latest cryptocurrency crackdown

<figure class="wp-block-image size-large"><img loading="lazy" decoding="async" width="740" height="416" src="https://cms.cnbcafrica.com/wp-content/uploads/2021/06/106889865-16222044362021-05-27t195502z_1427218795_rc2jon9mbvz0_rtrmadp_0_usa-funds-ark.jpeg" alt="" class="wp-image-407721" srcset="https://cms.cnbcafrica.com/wp-content/uploads/2021/06/106889865-16222044362021-05-27t195502z_1427218795_rc2jon9mbvz0_rtrmadp_0_usa-funds-ark.jpeg 740w, https://cms.cnbcafrica.com/wp-content/uploads/2021/06/106889865-16222044362021-05-27t195502z_1427218795_rc2jon9mbvz0_rtrmadp_0_usa-funds-ark-300x169.jpeg 300w, https://cms.cnbcafrica.com/wp-content/uploads/2021/06/106889865-16222044362021-05-27t195502z_1427218795_rc2jon9mbvz0_rtrmadp_0_usa-funds-ark-140x80.jpeg 140w" sizes="auto, (max-width: 740px) 100vw, 740px" /><figcaption>LAN network cables plugged into a Bitcoin mining computer server are pictured in Bitminer Factory in Florence, Italy, April 6, 2018. Alessandro Bianchi | Reuters</figcaption></figure>



With China cracking down on cryptocurrencies, it may soon become much easier — and more profitable — to mine&nbsp;<a href="https://www.cnbc.com/bitcoin/">bitcoin</a>.



Last month, Beijing called for measures to stamp out bitcoin mining amid concerns over its environmental impact. This has already resulted in crypto miners&nbsp;<a href="https://www.cnbc.com/2021/06/15/chinas-bitcoin-miner-exodus-.html">fleeing China for other regions</a>, like North America.



China’s crackdown intensified over the weekend, with authorities in the hydropower-rich Chinese province of Sichuan ordering crypto miners to shut down operations.



According to reports, more than 90% of China’s bitcoin mining capacity is estimated to be closed. It is thought that between 65% to 75% of all global bitcoin mining takes place in China.



Though it may not be good news for bitcoin miners in China, others could stand to benefit.



<h2 class="wp-block-heading" id="h-what-is-bitcoin-mining">What is bitcoin mining?</h2>



When you think of mining, the image of a gold mine with picks and shovels is probably the first thing that comes to mind. But bitcoin mining is nothing like hunting for gold or other precious metals.



Digital currencies are underpinned by a vast network of computers around the world. In the case of bitcoin, these computers are racing to solve complex math puzzles in order to make transactions go through. This process also generates new bitcoins, rewarding miners in the cryptocurrency if they’re successful.



Currently, rewards to miners are capped at 6.25 BTC. It used to be 12.5 BTC, but since bitcoin’s total supply is limited to 21 million, the amount of bitcoin rewarded to miners gets halved roughly every four years.



Being the first miner to mine a new block — essentially a list of bitcoin transactions — is “a game of random chance,” explains Alyse Killeen, founder and managing partner of bitcoin-focused venture firm Stillmark.



<h2 class="wp-block-heading">It’s about to get easier</h2>



The total hashrate, or processing power, of the bitcoin network appears to have gone down sharply in the wake of Beijing’s crackdown.



In the last month or so, bitcoin’s hashrate has gone down from a record 180.7 million terahashes per second — a measure of the speed of crypto mining hardware — in mid-May to around 116.2 million as of Wednesday, according to <a href="https://www.blockchain.com/charts/hash-rate" target="_blank" rel="noreferrer noopener">Blockchain.com</a> data.



Crypto experts say that, with more bitcoin miners going offline due to China’s restrictions, other miners’ share of the network will increase, potentially making mining much more lucrative.



“As more hashrate falls off the network, difficulty will adjust downwards, and the hashrate that remains active on the network will receive more for their proportional share of the mining rewards,” Kevin Zhang, vice president of crypto mining firm Foundry, told CNBC.



Meanwhile, the <a href="https://www.blockchain.com/charts/difficulty" target="_blank" rel="noreferrer noopener">network difficulty</a> of bitcoin — a measure of how hard it is to mine bitcoin — went from a record above 25 trillion in May to 19.9 trillion last week. Mining difficulty is adjusted roughly every two weeks, so there is a time lag in the data.



“Network difficulty goes down the less mining equipment is online,” Killeen said. This effectively leads to less competition for other bitcoin miners.



However, another big factor that determines profits to bitcoin miners is the price of bitcoin, which has plummeted from record highs in recent months on the back of&nbsp;<a href="https://www.cnbc.com/2021/05/13/why-elon-musk-is-worried-about-bitcoin-environmental-impact.html">negative comments</a>&nbsp;from&nbsp;<a href="https://www.cnbc.com/quotes/TSLA" target="_blank" rel="noreferrer noopener">Tesla</a>&nbsp;CEO&nbsp;<a href="https://www.cnbc.com/elon-musk/">Elon Musk</a>&nbsp;and China’s crackdown on the industry.



<a href="https://www.cnbc.com/quotes/BTC.CM=">Bitcoin</a>&nbsp;has nearly halved in value since reaching a record high of almost $65,000 in April. The cryptocurrency fell below $30,000 on Tuesday, briefly wiping out its 2021 gains, but has since recovered to trade above $34,000.

106889865-16222044362021-05-27t195502z_1427218795_rc2jon9mbvz0_rtrmadp_0_usa-funds-ark

Mining bitcoin could be about to get a whole lot easier after China’s crypto crackdown

The slump for bitcoin continued on Tuesday morning as the leading cryptocurrency fell below a key level and is trading at its lowest price since January.



<a href="https://www.cnbc.com/quotes/BTC.CM=">Bitcoin</a>&nbsp;was down 8% to $29,674.25, according to Coin Metrics. Traders had warned a break below $30,000 could lead to more losses.



<a href="https://www.cnbc.com/2021/06/08/whats-really-behind-the-bitcoin-decline-and-why-it-could-take-the-cryptocurrency-as-low-as-20000.html">Technical analysts had been watching the $30,000 level</a>&nbsp;as a key support level on the charts after the cryptocurrency had fallen to near that low during its May crash. The analysts, who study charts to make buying and selling decisions, believe the next level to watch for support could now be as low as $20,000.



Now that it is approaching $29,000, the price of bitcoin is threatening to turn negative for the year.



Galaxy Digital CEO Mike Novogratz said on CNBC’s “<a href="https://www.cnbc.com/squawk-box-us/">Squawk Box</a>” that bitcoin could still rebound after Tuesday’s move but there was significant downside to the next support level.



″$30,000, we’ll see if it holds on the day. We might plunge below it for a while and close above it. If it’s really breached, $25,000 is the next big level of support,” Novogratz said. “Listen, I’m less happy than I was at $60,000 but I’m not nervous.”



Bitcoin has been struggling to reclaim its highs from earlier in the quarter. It fell dramatically in May following some market-moving tweets by Elon Musk about&nbsp;<a href="https://www.cnbc.com/2021/06/13/musk-tesla-will-accept-bitcoin-when-miners-use-clean-energy.html">bitcoin-related environmental concerns</a>, and then even further in early June around fears of the cryptocurrency’s use in the Colonial Pipeline ransomware attack.



It’s been on a rollercoaster ride since then, battered by a&nbsp;<a href="https://www.cnbc.com/2021/06/22/china-crypto-crackdown-wipes-nearly-300-billion-off-market-btc-slides.html">stream of headlines out of China</a>, where regulators have imposed new restrictions on energy-intensive mining and ordered financial institutions like Alipay to stop doing business with crypto companies. The price briefly touched $40,000 last week and fell again Monday.



With Tuesday’s losses, bitcoin has slid about 54% from its&nbsp;<a href="https://www.cnbc.com/2021/04/14/bitcoin-btc-and-ether-eth-prices-rally-ahead-of-coinbase-listing.html">all-time high of more than $64,000</a>&nbsp;in mid-April, taking other cryptocurrencies along with it.&nbsp;<a href="https://www.cnbc.com/quotes/ETH=">Ether</a>&nbsp;fell 8% and&nbsp;<a href="https://www.cnbc.com/quotes/DOGE.CM=">dogecoin</a>&nbsp;is dropping more than 16%.



Significant pullbacks have happened before in the cryptocurrency market, with bitcoin falling about 80% from its late 2017 highs at one point. Professional crypto investors have warned that the space should continue to be volatile in the years ahead.



“The only guarantee with the cryptocurrency space is volatility and obviously, that’s what we have right now,” Fairlead Strategies founder Katie Stockton told CNBC. “It’s not new, we’ve had days like this before, it’s just a matter of navigating through this noise.”



Novogratz also noted that despite previous pullbacks, crypto market infrastructure is only becoming more mature, which has helped usher in more institutional support over the past year, with major hedge fund managers, pension funds and banks jumping into crypto, while registered investment advisors seek ways to get clients exposure to cryptocurrencies in a way that’s compatible with their current workflow.



The price of bitcoin rose nearly 500% between mid-September of last year and its April peak. Even with the recent decline, the cryptocurrency is still up about 150% over the past 12 months.

bitcoin

Bitcoin falls again, breaking below key $30,000 level that traders say could lead to more losses

China’s renewed crackdown on the cryptocurrency industry has wiped off nearly $300 billion in value from the total digital currency market since Friday, when a major bitcoin mining hub ordered miners to shut down operations.



<a href="https://www.cnbc.com/quotes/BTC.CM=">Bitcoin</a>&nbsp;was down around 6.6% at $32,735.71 at around 10:47 p.m. ET, coming off its 24-hour low of $31,179.05, according to CoinDesk data.



Over the past few days, China has stepped up its efforts to rein in the country’s cryptocurrency industry.



<h2 class="wp-block-heading" id="h-mining-ban-pboc-warning">Mining ban, PBOC warning</h2>



On Friday, authorities in China’s Sichuan province, ordered cryptocurrency miners to shut down their operations, according to multiple media&nbsp;<a href="https://www.reuters.com/technology/chinas-cryptocurrency-mining-crackdown-spreads-sichuan-2021-06-19/" target="_blank" rel="noreferrer noopener">reports</a>. Sichuan is one of the biggest bitcoin mining centers in China.



Many bitcoin mines in the southwestern Chinese province were closed as of Sunday, according to state-backed tabloid the Global Times.



The move in Sichuan comes after other mining-intensive provinces in China,&nbsp;<a href="https://www.cnbc.com/2021/03/02/china-bitcoin-mining-hub-to-shut-down-cryptocurrency-projects.html">including Inner Mongolia, also shut down crypto mining</a>. In May,&nbsp;<a href="https://www.cnbc.com/2021/06/15/chinas-bitcoin-miner-exodus-.html">Beijing called for a crackdown on bitcoin mining</a>, highlighting how the order has trickled down from the top.



Then on Monday, the <a href="https://www.cnbc.com/2021/06/21/china-central-bank-urges-alipay-banks-to-crack-down-on-crypto.html">People’s Bank of China said it spoke to Alipay</a>, the payments service run by <a href="https://www.cnbc.com/quotes/9988-HK" target="_blank" rel="noreferrer noopener">Alibaba</a> affiliate Ant Group, and some major financial institutions. The central bank said it urged them not to provide services related to cryptocurrency activities, including account openings or clearing and settlement.



These are not new rules, but the PBOC’s comments show how China’s top regulators are stepping up monitoring and pressure on financial institutions related to cryptocurrencies.



<a href="https://www.cnbc.com/2017/09/11/bitcoin-price-falls-on-reports-that-china-is-closing-local-exchanges.html">China banned local cryptocurrency exchanges in 2017</a> forcing them to move offshore. That <a href="https://www.cnbc.com/2021/05/26/chinese-bitcoin-traders-wield-enormous-influence-despite-crackdown.html">did not stop Chinese traders buying and selling digital coins</a>, though it added a layer of complexity to crypto trading.



Chinese traders would have to move their Chinese yuan to a platform to buy crypto. That would be done via a payments service like Alipay or a bank account. So the PBOC’s latest reminder to financial institutions could be looking to stamp this out further.



Since Friday, when the Sichuan authorities notified miners to shut down operations, bitcoin is down around 16%. The central bank notice added further pressure.



Other cryptocurrencies including&nbsp;<a href="https://www.cnbc.com/quotes/ETH.CM=">ether</a>&nbsp;and&nbsp;<a href="https://www.cnbc.com/quotes/XRP.CM=">XRP</a>&nbsp;were also sharply lower late on Monday.

download (5)

China’s renewed crypto crackdown wipes nearly $300 billion off the market as bitcoin slides

<figure class="wp-block-image size-large"><img loading="lazy" decoding="async" width="740" height="416" src="https://cms.cnbcafrica.com/wp-content/uploads/2021/06/105156883-GettyImages-610823798.jpg" alt="" class="wp-image-407347" srcset="https://cms.cnbcafrica.com/wp-content/uploads/2021/06/105156883-GettyImages-610823798.jpg 740w, https://cms.cnbcafrica.com/wp-content/uploads/2021/06/105156883-GettyImages-610823798-300x169.jpg 300w, https://cms.cnbcafrica.com/wp-content/uploads/2021/06/105156883-GettyImages-610823798-140x80.jpg 140w" sizes="auto, (max-width: 740px) 100vw, 740px" /><figcaption>A bitcoin mine near Kongyuxiang, Sichuan, China on August 12, 2016. Paul Ratje | The Washington Post | Getty Images</figcaption></figure>



<a href="https://www.cnbc.com/quotes/BTC.CM=">Bitcoin</a>&nbsp;sank Monday on reports that China has intensified its crackdown on cryptocurrency mining.



The world’s largest digital currency fell 7% to a price of $32,801 Monday morning, dropping below $33,000 for the first time since June 8, according to data from Coin Metrics. It was last trading at $33,243 as of 5:50 a.m. ET. Smaller rivals like&nbsp;<a href="https://www.cnbc.com/quotes/ETH.CM=">ether</a>&nbsp;and&nbsp;<a href="https://www.cnbc.com/quotes/XRP.CM=">XRP</a>&nbsp;also tumbled, down 8% and 7% respectively.



Many bitcoin mines in Sichuan were shuttered Sunday after authorities in the southwestern Chinese province ordered a halt to crypto mining, according to a&nbsp;<a href="https://www.globaltimes.cn/page/202106/1226598.shtml" target="_blank" rel="noreferrer noopener">report</a>&nbsp;from the Communist Party-backed newspaper Global Times. More than 90% of China’s bitcoin mining capacity is estimated to be shut down, the paper said.



<a href="https://www.bloomberg.com/news/articles/2021-06-18/hydro-rich-chinese-city-is-said-to-clamp-down-on-crypto-mining" target="_blank" rel="noreferrer noopener">Bloomberg</a>&nbsp;and&nbsp;<a href="https://www.reuters.com/technology/chinas-cryptocurrency-mining-crackdown-spreads-sichuan-2021-06-19/" target="_blank" rel="noreferrer noopener">Reuters</a>&nbsp;also reported on the move from Sichuan authorities. It follows similar developments in China’s&nbsp;<a href="https://www.cnbc.com/2021/05/26/major-china-bitcoin-mining-hub-lays-out-harsher-crackdown-measures.html">Inner Mongolia</a>&nbsp;and Yunnan regions, as well as&nbsp;<a href="https://www.cnbc.com/2021/06/15/chinas-bitcoin-miner-exodus-.html">calls from Beijing to stamp out crypto mining</a>&nbsp;amid worries over its&nbsp;<a href="https://www.cnbc.com/2021/02/05/bitcoin-btc-surge-renews-worries-about-its-massive-carbon-footprint.html">massive energy consumption</a>.



Separately, China’s central bank&nbsp;<a href="http://www.pbc.gov.cn/goutongjiaoliu/113456/113469/4273265/index.html" target="_blank" rel="noreferrer noopener">said Monday</a>&nbsp;it had summoned Alipay, the payments service run by Alibaba affiliate Ant Group, and some major banks urging them to crack down on crypto trading. China had&nbsp;<a href="https://www.cnbc.com/2021/05/18/china-bans-financial-payment-institutions-from-cryptocurrency-business.html">already banned</a>&nbsp;financial institutions from providing crypto-related services.



China’s crackdown appears to have led to a significant decline in bitcoin’s hash rate — or processing power — which has fallen sharply in the last month, according to data from&nbsp;<a href="https://www.blockchain.com/charts/hash-rate" target="_blank" rel="noreferrer noopener">Blockchain.com</a>. An estimated 65% of global bitcoin mining is done in China.



Bitcoin’s network is decentralized, meaning it doesn’t have any central party or middleman to approve transactions or generate new coins. Instead, the blockchain is maintained by so-called miners who race to solve complex math puzzles using purpose-built computers to validate transactions. Whoever wins that race is rewarded with bitcoin.



This power-intensive process has led to growing concerns over the potential environmental harm of bitcoin, with everyone from&nbsp;<a href="https://www.cnbc.com/quotes/TSLA" target="_blank" rel="noreferrer noopener">Tesla</a>&nbsp;CEO&nbsp;<a href="https://www.cnbc.com/elon-musk/">Elon Musk</a>&nbsp;to U.S. Treasury Secretary&nbsp;<a href="https://www.cnbc.com/janet-yellen/">Janet Yellen</a>&nbsp;<a href="https://www.cnbc.com/2021/05/13/why-elon-musk-is-worried-about-bitcoin-environmental-impact.html">raising the alarm</a>. China, where most bitcoin mining is concentrated,&nbsp;<a href="https://www.cnbc.com/2021/04/29/climate-china-has-no-other-choice-but-to-rely-on-coal-power-for-now.html">relies heavily on coal power</a>. Last month, a coal mine in the Xinjiang region flooded and shut down, taking nearly a quarter of bitcoin’s hash rate offline.



However, miners in China often migrate to places like Sichuan, which are rich in hydropower, in the rainy season. And some industry efforts have been launched — including the Bitcoin Mining Council and the Crypto Climate Accord — in an effort to reduce cryptocurrencies’ carbon footprint.

106887563-1621887067804-gettyimages-843200050-UK_BITCOINS

Bitcoin drops as China intensifies crypto mining crackdown

<a href="https://www.cnbc.com/quotes/BTC.BS=-USS">Bitcoin</a>, the world’s best known cryptocurrency, has a few flaws — and that’s triggered other digital currencies to come up with more viable options, according to a professor at Cornell University.



It isn’t as anonymous as people think it is, and “mining” bitcoin is bad for the environment, pointed out economics professor Eswar Prasad.&nbsp;It also doesn’t work well as a currency, he told CNBC on Thursday.



One interesting aspect is that other cryptocurrencies have come up with solutions to address some of bitcoin’s flaws, said Prasad, who was formerly head of the International Monetary Fund’s China division.



<h2 class="wp-block-heading" id="h-1-mining-harms-the-environment">1. Mining harms the environment</h2>



<a href="https://www.investopedia.com/terms/b/bitcoin-mining.asp" target="_blank" rel="noreferrer noopener">Bitcoin mining</a>&nbsp;refers to the energy-intensive process required to produce new coins and ensure the payment network is secure and verified.



The electricity used when transactions are validated on the bitcoin blockchain, as well as the mining process, is “certainly not good for the environment,” Prasad said.



<a href="https://www.cnbc.com/quotes/TSLA" target="_blank" rel="noreferrer noopener">Tesla</a>&nbsp;CEO&nbsp;<a href="https://www.cnbc.com/elon-musk/">Elon Musk</a>&nbsp;said last month that his electric car company will&nbsp;<a href="https://www.cnbc.com/2021/05/12/elon-musk-says-tesla-will-stop-accepting-bitcoin-for-car-purchases.html">stop accepting bitcoin</a>&nbsp;as a form of payment because of environmental concerns, causing the price of bitcoin to drop 5% in a matter of minutes.



He has since made an about-turn and said in a tweet on Sunday that<a href="https://www.cnbc.com/2021/06/13/musk-tesla-will-accept-bitcoin-when-miners-use-clean-energy.html"> Tesla will accept bitcoin in transactions</a> if it can confirm “reasonable” and “clean energy usage by miners.”



Crypto miners use purpose-built computers to solve complex mathematical equations that effectively enable a coin transaction to go through. The miners are rewarded for their efforts by being paid in the cryptocurrency.



However, the entire process used to create a bitcoin requires a lot of energy and can consume more power than entire countries such as Finland and Switzerland, according to the&nbsp;<a href="https://cbeci.org/cbeci/comparisons" target="_blank" rel="noreferrer noopener">Cambridge Bitcoin Electricity Consumption Index</a>.



On the other hand, <a href="https://www.cnbc.com/quotes/ETH=">Ethereum</a> — the second-largest cryptocurrency sometimes viewed as an alternative to bitcoin — is coming up with a different <a href="https://www.cnbc.com/2021/05/10/how-to-mine-ethereum.html">method of mining</a> that requires less energy, Prasad pointed out. 



Called&nbsp;<a href="https://ethereum.org/en/developers/docs/consensus-mechanisms/pos/" target="_blank" rel="noreferrer noopener">“proof of stake,”</a>&nbsp;it is the underlying mechanism for ethereum that activates so-called “validators” on the network, if they can prove that they hold ether, or a “stake.”



Ultimately, it should remove the need for vast amounts of computing power needed to validate transactions and the&nbsp;<a href="https://blog.ethereum.org/2021/05/18/country-power-no-more/" target="_blank" rel="noreferrer noopener">Ethereum Foundation claims it will use 99.95% less energy</a>&nbsp;than before.



“That is going to be much less energy intensive, and it could deliver a lot of the benefits that bitcoin was supposed to deliver. It could also make transactions much cheaper and quicker,” said Prasad.



However, it’s not there yet, he added.



<h2 class="wp-block-heading">2. Not so anonymous after all</h2>



Earlier this month, U.S. law enforcement officials said they were able to&nbsp;<a href="https://www.cnbc.com/2021/06/07/us-recovers-some-of-the-money-paid-in-the-colonial-pipeline-ransom-officials-say.html">recover $2.3 million in bitcoin</a>&nbsp;paid to a criminal cybergroup involved in the ransomware attack on Colonial Pipeline in May.



The FBI said its agents were able to identify a virtual currency wallet that the hackers used to collect payment from Colonial Pipeline.



“The main idea of bitcoin… was to provide pseudonymity,” said Prasad. “But it turns out that if you use bitcoin a lot, and especially if you use Bitcoin to get any real goods and services, then it becomes possible eventually to link your address or your physical identity to your digital identity.”



What’s interesting, he said, is that there are other cryptocurrencies trying to fix this and offer more anonymity. He highlighted Monero and Zcash as some examples.



<figure class="wp-block-image size-large"><img loading="lazy" decoding="async" width="740" height="416" src="https://cms.cnbcafrica.com/wp-content/uploads/2021/06/106887563-1621887067804-gettyimages-843200050-UK_BITCOINS.jpeg" alt="" class="wp-image-407128" srcset="https://cms.cnbcafrica.com/wp-content/uploads/2021/06/106887563-1621887067804-gettyimages-843200050-UK_BITCOINS.jpeg 740w, https://cms.cnbcafrica.com/wp-content/uploads/2021/06/106887563-1621887067804-gettyimages-843200050-UK_BITCOINS-300x169.jpeg 300w, https://cms.cnbcafrica.com/wp-content/uploads/2021/06/106887563-1621887067804-gettyimages-843200050-UK_BITCOINS-140x80.jpeg 140w" sizes="auto, (max-width: 740px) 100vw, 740px" /><figcaption>Chris Ratcliffe/Bloomberg via Getty Images</figcaption></figure>



“So bitcoin really has set off something of a search for a better alternative and people seem to be on the lookout for a medium of exchange that does not require them to go through a trusted institution like the government or a commercial bank — but it’s not quite there yet,” Prasad said.



<h2 class="wp-block-heading">3. Doesn’t work well as a currency</h2>



In theory, bitcoin was supposed to provide an anonymous and efficient medium of exchange but “it hasn’t worked in that respect,” said the economics professor.



Rather, it’s “slow and cumbersome” to use bitcoin to pay for goods and services, and the market is very volatile, Prasad said.



<a href="https://www.cnbc.com/2021/05/19/why-is-bitcoin-so-volatile.html">Bitcoin is prone to wide swings in volatility</a>, as seen by its&nbsp;<a href="https://www.cnbc.com/2021/05/19/bitcoin-btc-price-plunges-but-bottom-could-be-near-.html">30% plunge in a single day last month.</a>



“So you could take a bitcoin to a store and one day, get a cup of coffee and another day, with the same bitcoin, be able to treat yourself to a lavish meal. So that doesn’t work well for the medium of exchange,” he said.



Bitcoin has become a speculative asset for people who hope it will appreciate in value, rather than because they want to use it as a payment mode, Prasad said.



— CNBC’s Sam Shead contributed to this report.

Bitcoin has 3 flaws — and that could set the stage for other alternatives, says Cornell economist

<figure class="wp-block-image size-large"><img loading="lazy" decoding="async" width="740" height="416" src="https://cms.cnbcafrica.com/wp-content/uploads/2021/06/106836976-1612792063735-gettyimages-1211441837-wm2_6852_2020030953941362.jpeg" alt="" class="wp-image-406748" srcset="https://cms.cnbcafrica.com/wp-content/uploads/2021/06/106836976-1612792063735-gettyimages-1211441837-wm2_6852_2020030953941362.jpeg 740w, https://cms.cnbcafrica.com/wp-content/uploads/2021/06/106836976-1612792063735-gettyimages-1211441837-wm2_6852_2020030953941362-300x169.jpeg 300w, https://cms.cnbcafrica.com/wp-content/uploads/2021/06/106836976-1612792063735-gettyimages-1211441837-wm2_6852_2020030953941362-140x80.jpeg 140w" sizes="auto, (max-width: 740px) 100vw, 740px" /><figcaption>Elon Musk, founder and chief engineer of SpaceX speaks at the 2020 Satellite Conference and Exhibition March 9, 2020 in Washington, DC. Win McNamee | Getty Images</figcaption></figure>



Bitcoin’s price surged Sunday evening stateside after Tesla CEO Elon Musk said the electric vehicle maker could accept bitcoin transactions again in future.



As of 1:52 a.m. ET Monday, Bitcoin surged 12.79% to $39,533.81, according to data from Coindesk. Since the start of the year, bitcoin has surged more than 30%, though its current price is way off the all-time high of $64,829.14 hit in April.



Those gains came after Musk said Sunday that Tesla will resume allowing bitcoin transactions “when there’s confirmation of reasonable (~50%) clean energy usage by miners with positive future trend.”



<a href="https://www.cnbc.com/2021/05/12/elon-musk-says-tesla-will-stop-accepting-bitcoin-for-car-purchases.html">Teslas halted car purchases with bitcoin in mid-May</a>, citing concerns over the climate impact of cryptocurrency mining.



<a href="https://www.cnbc.com/2021/02/05/bitcoin-btc-surge-renews-worries-about-its-massive-carbon-footprint.html">Crypto mining requires massive amounts of energy</a>&nbsp;to fuel powerful computers — bitcoin mining consumes more energy than entire countries such as Finland and Belgium, according to the&nbsp;<a href="https://cbeci.org/cbeci/comparisons" target="_blank" rel="noreferrer noopener">Cambridge Bitcoin Electricity Consumption Index</a>.



The latest development marks yet another example of large market moves following comments by the Tesla CEO and billionaire.



<a href="https://www.cnbc.com/2021/05/13/bitcoin-btc-price-falls-after-tesla-stops-car-purchases-with-crypto.html">Hundreds of billions of dollars were wiped off the cryptocurrency market</a>&nbsp;after Musk tweeted in May about Tesla’s suspension of car purchases using bitcoin. Musk’s past tweets have also been linked to moves in the stock market — ranging from&nbsp;<a href="https://www.cnbc.com/2021/01/29/elon-musks-tweets-are-moving-markets.html">so-called meme stocks</a>&nbsp;such as&nbsp;<a href="https://www.cnbc.com/quotes/GME" target="_blank" rel="noreferrer noopener">GameStop</a>, to the&nbsp;<a href="https://www.cnbc.com/2021/06/02/elon-musk-tweets-again-sending-shares-of-baby-shark-investor-soaring.html">investor of viral song “Baby Shark.”</a>



<h2 class="wp-block-heading" id="h-bitcoin-under-environmental-spotlight">Bitcoin under environmental spotlight</h2>



The environmental impact of bitcoin mining has come under intense scrutiny.



As part of its crackdown on bitcoin, China’s Inner Mongolia region — a major bitcoin mining hub —&nbsp;<a href="https://www.cnbc.com/2021/05/26/major-china-bitcoin-mining-hub-lays-out-harsher-crackdown-measures.html">in late-May proposed punishments</a>&nbsp;for companies and individuals involved in digital currency mining. It came after&nbsp;<a href="https://www.cnbc.com/2021/05/21/bitcoin-falls-after-china-calls-for-crackdown-on-bitcoin-mining-and-trading-behavior.html">Chinese Vice Premier Liu He said it is necessary to “crack down on Bitcoin mining</a>&nbsp;and trading behavior” to prevent the “transmission of individual risks to the social field.”



Elsewhere, Iran’s government in announced in May a&nbsp;<a href="https://www.cnbc.com/2021/05/26/iran-bans-bitcoin-mining-as-its-cities-suffer-blackouts.html">ban on the mining of bitcoin and other cryptocurrencies</a>&nbsp;until Sept. 22, after officials said blackouts in the country’s capital of Tehran and several other large cities were in part due to the energy-intensive activity.

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Bitcoin pops nearly 13% after Musk suggests Tesla could accept the cryptocurrency again

<figure class="wp-block-image size-large"><img loading="lazy" decoding="async" width="630" height="354" src="https://cms.cnbcafrica.com/wp-content/uploads/2021/05/bitcoin-1.jpeg" alt="" class="wp-image-404731" srcset="https://cms.cnbcafrica.com/wp-content/uploads/2021/05/bitcoin-1.jpeg 630w, https://cms.cnbcafrica.com/wp-content/uploads/2021/05/bitcoin-1-300x169.jpeg 300w" sizes="auto, (max-width: 630px) 100vw, 630px" /></figure>



Cryptocurrency is known for volatility and some experts say crashes tend to happen on weekends.



“This has been a phenomenon in crypto for several years,” said Stephen McKeon, associate professor of finance at the University of Oregon in Eugene, and partner at Collab+Currency, a cryptocurrency-focused investment fund.&nbsp;



These weekend dips may have significant effects as regulators weigh the future of digital currency, experts say. Here’s why these crashes may be happening.



<h2 class="wp-block-heading" id="h-less-trading-on-weekends">Less trading on weekends</h2>



One of the reasons for weekend cryptocurrency volatility is there are fewer trades, said Amin Shams, assistant professor of finance at Ohio State University in Columbus, Ohio.



“When the volume is low, the same trade size can move prices a lot more,” he said



With banks closed over the weekend, there is less trading because investors may not be able to add money to their accounts, McKeon said.



“You get moments of market panic where there’s a lot of selling pressure,” he said.&nbsp;



Typically, there’s a rebound on Sunday night as Asian banks open and into Monday as U.S. banks follow, McKeon said.&nbsp;



Plus, there are cryptocurrency influencers like&nbsp;<a href="https://www.cnbc.com/quotes/TSLA" target="_blank" rel="noreferrer noopener">Tesla</a>&nbsp;CEO&nbsp;<a href="https://www.cnbc.com/elon-musk/">Elon Musk</a>&nbsp;who “wave a heavy hand over the crypto space,” said Tyrone Ross, CEO of Onramp Invest in New York.



When Musk tweets something negative about bitcoin after-hours, it may spark a wave of activity.



<h2 class="wp-block-heading" id="h-trading-on-margin">Trading on margin&nbsp;</h2>



Another reason for weekend price swings may be investors trading&nbsp;<a href="https://www.cnbc.com/2021/05/25/bitcoin-crashes-driven-by-big-margin-bets-new-crypto-banking.html">cryptocurrency on margin</a>, which is borrowing money from the exchanges to buy more assets, Shams said.



When digital currency prices dip below a certain level, traders must repay the loan, known as a “margin call.”&nbsp;



But if investors don’t cover the loan, exchanges may sell the digital currency to ensure they receive the borrowed money back.



With banks closed over the weekend, some traders may struggle to pay off the borrowed funds because they can’t move money into their accounts, triggering sell-offs from exchanges, Shams said.&nbsp;



“That’s going to drop the price further,” he added.



<h2 class="wp-block-heading" id="h-market-manipulation">Market manipulation</h2>



It’s also possible those trying to artificially influence cryptocurrency prices may be a factor.&nbsp;



“There are a lot of studies that show there is [market] manipulation,” said Shams.



For example,&nbsp;<a href="https://papers.ssrn.com/sol3/papers.cfm?abstract_id=3195066" target="_blank" rel="noreferrer noopener">2019 research</a>&nbsp;shows how tether, a digital currency tied to the U.S. dollar, may have artificially inflated bitcoin and other cryptocurrency prices during the 2017 boom.



But researchers still don’t know the extent to which it happens, he said.&nbsp;I have not personally seen any conclusive evidence that suggests manipulation.Stephen McKeonASSOCIATE PROFESSOR OF FINANCE AT THE UNIVERSITY OF OREGON



One theory points to so-called spoofing, involving fake buy or sell orders to influence cryptocurrency prices by creating a false sense of supply and demand.&nbsp;



Some believe this happens more often during the week, causing digital currency prices to rise. But this theory may only be speculation, he said.



Other experts say there are “mixed views” on these practices.&nbsp;



“I have not personally seen any conclusive evidence that suggests manipulation,” McKeon said.



<h2 class="wp-block-heading" id="h-crypto-etfs">Crypto ETFs</h2>



Regardless of the reason for weekend volatility, it presents challenges for regulators weighing the approval of&nbsp;<a href="https://www.cnbc.com/2021/04/18/were-closer-to-a-bitcoin-etf-but-not-all-the-way-there-yet-cio.html">cryptocurrency-based exchange-traded funds</a>.



While ETFs trade during the work week, investors can buy or sell cryptocurrency 24 hours per day, seven days per week, and may create a mismatch for crypto ETFs, Shams said.



For example, if the digital currency market drops by 20% on a Sunday, those eager to sell may be stuck with their crypto ETFs until the markets open again on Monday.&nbsp;



Securities and Exchange Commission Chair Gary Gensler has called for&nbsp;<a href="https://www.cnbc.com/2021/05/07/sec-chairman-gary-gensler-says-more-investor-protections-are-needed-for-bitcoin-and-crypto-markets.html">greater investor protections for cryptocurrency</a>, signaling more regulation may be necessary before the agency approves crypto ETFs.&nbsp;



The SEC is currently reviewing bitcoin and ethereum ETF applications from several companies.

106888428-1622028919907-gettyimages-1232967074-omarques_18052021_crypto_3

Here’s why cryptocurrency crashes on weekends

<figure class="wp-block-image size-large"><img loading="lazy" decoding="async" width="740" height="416" src="https://cms.cnbcafrica.com/wp-content/uploads/2021/06/106826305-1611074293047-gettyimages-1295325607-_e6w9660_2021010863111059.jpeg" alt="" class="wp-image-406478" srcset="https://cms.cnbcafrica.com/wp-content/uploads/2021/06/106826305-1611074293047-gettyimages-1295325607-_e6w9660_2021010863111059.jpeg 740w, https://cms.cnbcafrica.com/wp-content/uploads/2021/06/106826305-1611074293047-gettyimages-1295325607-_e6w9660_2021010863111059-300x169.jpeg 300w, https://cms.cnbcafrica.com/wp-content/uploads/2021/06/106826305-1611074293047-gettyimages-1295325607-_e6w9660_2021010863111059-140x80.jpeg 140w" sizes="auto, (max-width: 740px) 100vw, 740px" /><figcaption>Chesnot | Getty Images</figcaption></figure>



<a href="https://www.cnbc.com/quotes/BTC.CM=">Bitcoin</a>&nbsp;surged on Wednesday after&nbsp;<a href="https://www.cnbc.com/2021/06/09/el-salvador-proposes-law-to-make-bitcoin-legal-tender.html">El Salvador passed a law to adopt bitcoin as legal tender</a>.



The cryptocurrency was trading at $37,176.44 at around 11:42 p.m. ET, up 13% from the previous 24 hours, according to CoinDesk data.



On Wednesday, lawmakers in the Central American country passed a law that made bitcoin legal tender. Among other things, it means prices can now be shown in bitcoin and tax contributions can be paid with the digital currency.



Bitcoin proponents, who have&nbsp;<a href="https://www.cnbc.com/2018/03/25/bitcoin-will-eventually-be-the-single-global-currency-twitters-jack-dorsey.html">long seen the digital coin as a viable alternative to fiat currencies</a>, welcomed El Salvador’s moves.



The country has<a href="https://www.cnbc.com/2021/06/05/el-salvador-becomes-the-first-country-to-adopt-bitcoin-as-legal-tender-.html"> struck a partnership with digital wallet company Strike,</a> to build the country’s modern financial infrastructure using bitcoin technology.



Other cryptocurrencies got a lift as well, and ether and XRP were both trading higher.



Bitcoin is still significantly off of its record high of $64,829.14 that was hit in April.



Bitcoin is known for&nbsp;<a href="https://www.cnbc.com/2021/05/24/bitcoins-trading-action-lately-is-wild-even-by-cryptos-standards-and-the-drama-is-not-over-yet.html">wild price swings</a>&nbsp;that have prompted critics to suggest it is&nbsp;<a href="https://www.cnbc.com/2021/04/23/bitcoin-a-gimmick-and-resembles-a-ponzi-scheme-black-swan-author-.html">not suitable to be an effective currency</a>. El Salvador’s case will be closely watched to see how bitcoin might work as a payments mechanism on a country-wide basis.

106826305-1611074293047-gettyimages-1295325607-_e6w9660_2021010863111059

Bitcoin rallies 13% jumping above $37,000 after El Salvador passes law to adopt it as legal tender

<figure class="wp-block-image size-large"><img loading="lazy" decoding="async" width="740" height="416" src="https://cms.cnbcafrica.com/wp-content/uploads/2021/06/104488063-RTX36ANY.jpg" alt="" class="wp-image-406385" srcset="https://cms.cnbcafrica.com/wp-content/uploads/2021/06/104488063-RTX36ANY.jpg 740w, https://cms.cnbcafrica.com/wp-content/uploads/2021/06/104488063-RTX36ANY-300x169.jpg 300w, https://cms.cnbcafrica.com/wp-content/uploads/2021/06/104488063-RTX36ANY-140x80.jpg 140w" sizes="auto, (max-width: 740px) 100vw, 740px" /><figcaption>Mark Mobius, executive chairman at Templeton Emerging Markets Group Richard Brian | Reuters</figcaption></figure>



Market volatility and the next moves by central banks have to be watched “very carefully,” veteran investor Mark Mobius has warned, describing “crazy moves” in assets such as bitcoin as being driven by “disorientation and confusion.”



Market speculation over when central banks, and particularly the U.S. Federal Reserve, could begin to taper asset purchases, has been rife for months given a nascent recovery from the coronavirus pandemic and the specter of rising inflation.



Mark Mobius, founder partner of Mobius Capital Partners, told CNBC that central bank moves have to be watched closely.



“Any pullback in the money supply as a result of central banks pulling back will be, I think, very bad for the markets. So I think we have to watch this very carefully,” Mobius told CNBC’s Squawk Box Europe.



“We’re in a very uncertain time, that’s for sure,” he added.



Even without concerns over central banks there have been instances of extreme market volatility since the start of the year, including the retail trading frenzy that hit U.S. stock markets in spring, driven largely by Reddit, to wild moves in the crypto market, particularly bitcoin.&nbsp;<a href="https://www.cnbc.com/2021/06/08/whats-really-behind-the-bitcoin-decline-and-why-it-could-take-the-cryptocurrency-as-low-as-20000.html">The price of the cryptocurrency fell&nbsp;about 10% Tuesday&nbsp;to around $32,000 and is down 50% from its April all-time high</a>.



Mobius believed that risk-taking behavior among investors and market volatility was down to confusion.



“A lot of people have cash in hand that they want to do something with, and secondly, a lot of people are confused. The fact that they’ve seen bitcoin, which they had so much faith in, go down the way it’s gone down confuses people,” he said.



“So you have a funny situation with a lot of money in their pocket and lots of confusion and disorientation, so I think that’s what driving a lot of these crazy moves in the market.”



Nonetheless, Mobius believed markets could still travel higher if central banks don’t pull the plug on asset purchase programs too soon.



“With lots of money sloshing about there’s no reason why the market can’t go higher, not only the U.S. market but the MSCI and EM (emerging market) market has gone up as well in fact more than the S&amp;P 500. You can see a continuation unless there’s a big pullback in money supply and that’s why we have to watch the behavior of central banks around the world, particularly the Fed.”



<h2 class="wp-block-heading" id="h-a-recipe-for-disaster">A recipe for disaster?</h2>



Mobius noted how some emerging markets had performed well thanks to the increased global money supply and pointed out how some currencies, such as the Chinese renminbi and Brazilian real, had performed particularly well over the last year but that the outlook was also unpredictable among currencies too.



“You’re going to see a lot of these unusual moves (continue)” he noted, with “some of them justifiable but a lot of it not justifiable and not logical really,” making for a very uncertain outlook.



“So at the end of the day we’re in a very, very uncertain situation &#8230; and of course that means a recipe for disaster for some people who are investing,” he noted.



The next pointer for global markets comes on Thursday with the latest reading of the U.S. inflation rate due which could lead the Federal Reserve to taper asset purchases sooner rather than later.



Read more:&nbsp;<a href="https://www.cnbc.com/2021/06/07/the-fed-is-in-the-early-stages-of-a-campaign-to-prepare-markets-for-tapering-its-asset-purchases.html">The Fed is in early stages of a campaign to prepare markets for tapering its asset purchases</a>



The consumer price index for May is set to be released Thursday. Economists are expecting the CPI to rise 4.7% from a year earlier, according to Dow Jones.&nbsp;<a href="https://www.cnbc.com/2021/05/12/consumer-price-index-april-2021.html#:~:text=Menu-,Inflation%20speeds%20up%20in%20April%20as,leap%204.2%25%2C%20fastest%20since%202008">In April, the CPI increased 4.2% on an annual basis, the fastest rise since 2008.</a>



The Fed has previously contended that higher price pressures are just temporary as the economy continues to rebound from the pandemic-induced recession.

104488063-RTX36ANY

‘Confusion and disorientation’ driving ‘crazy’ moves in the market, Mark Mobius says

<figure class="wp-block-image size-large"><img loading="lazy" decoding="async" width="740" height="416" src="https://cms.cnbcafrica.com/wp-content/uploads/2021/06/106892811-1622924631246-gettyimages-1233226528-EL_SALVADOR_BUKELE-1.jpeg" alt="" class="wp-image-406330" srcset="https://cms.cnbcafrica.com/wp-content/uploads/2021/06/106892811-1622924631246-gettyimages-1233226528-EL_SALVADOR_BUKELE-1.jpeg 740w, https://cms.cnbcafrica.com/wp-content/uploads/2021/06/106892811-1622924631246-gettyimages-1233226528-EL_SALVADOR_BUKELE-1-300x169.jpeg 300w, https://cms.cnbcafrica.com/wp-content/uploads/2021/06/106892811-1622924631246-gettyimages-1233226528-EL_SALVADOR_BUKELE-1-140x80.jpeg 140w" sizes="auto, (max-width: 740px) 100vw, 740px" /><figcaption>Nayib Bukele, El Salvador’s president, delivers a speech to Congress at the Legislative Assembly building in San Salvador, El Salvador, on Tuesday, June 1, 2021. Photographer: Camilo Freedman/Bloomberg via Getty Images Bloomberg | Bloomberg | Getty Images</figcaption></figure>



El Salvador has become the first country to adopt <a href="https://www.cnbc.com/quotes/BTC.CB=">bitcoin</a> as legal tender.



Lawmakers in the Central American country’s Congress voted by a “supermajority” in favor of the Bitcoin Law, receiving 62 out of 84 of the legislature’s vote.



The price of bitcoin was up 5% to $34,239.17 shortly after the vote.



Earlier on Wednesday, President Nayib Bukele sent the law to to the country’s Congress for a vote.



“The purpose of this law is to regulate bitcoin as unrestricted legal tender with liberating power, unlimited in any transaction, and to any title that public or private natural or legal persons require carrying out,” the law reads.



Prices can now be shown in bitcoin, tax contributions can be paid with the digital currency, and exchanges in bitcoin will not be subject to capital gains tax.



Bitcoin is known for&nbsp;<a href="https://www.cnbc.com/2021/05/24/bitcoins-trading-action-lately-is-wild-even-by-cryptos-standards-and-the-drama-is-not-over-yet.html">wild price swings</a>&nbsp;that have prompted critics to suggest it is&nbsp;<a href="https://www.cnbc.com/2021/04/23/bitcoin-a-gimmick-and-resembles-a-ponzi-scheme-black-swan-author-.html">not suitable to be an effective currency</a>. It’s still unclear how El Salvador will ultimately roll out bitcoin as legal tender.



The exchange rate with the <a href="https://www.cnbc.com/quotes/.DXY">U.S. dollar</a> “will be freely established by the market,” according to the proposed law. El Salvador’s current official currency is the U.S. dollar.



The law also says that the state will “promote the necessary training and mechanisms so that the population can access bitcoin transactions.”



Approximately 70% of El Salvador does not have access to traditional financial services, according to the Bitcoin Law. The cryptocurrency is seen as a way to increase financial inclusion.



The proposal will need to go through El Salvador’s legislative process before being passed as law.



Bukele’s move to submit the law to Congress comes after he announced last week that&nbsp;<a href="https://www.cnbc.com/2021/06/05/el-salvador-becomes-the-first-country-to-adopt-bitcoin-as-legal-tender-.html">El Salvador has struck a partnership with digital wallet company Strike,</a>&nbsp;to build the country’s modern financial infrastructure using bitcoin technology.



In April, <a href="https://www.cnbc.com/quotes/BTC.CM=">bitcoin</a> hit a record high of $64,829.14, but has since dropped by nearly half, according to CoinDesk data. It is still up over 230% over the last 12 months. That rise has been attributed to a number of factors including <a href="https://www.cnbc.com/2021/05/19/btig-keeps-50000-target-on-bitcoin-says-institutions-are-buying-during-rout.html">rising interest from institutional investors</a> and large companies such as <a href="https://www.cnbc.com/quotes/TSLA" target="_blank" rel="noreferrer noopener">Tesla</a> and <a href="https://www.cnbc.com/quotes/SQ" target="_blank" rel="noreferrer noopener">Square</a> buying bitcoin.

106892811-1622924631246-gettyimages-1233226528-EL_SALVADOR_BUKELE

El Salvador becomes first country to adopt bitcoin as legal tender after passing law

<figure class="wp-block-image size-large"><img loading="lazy" decoding="async" width="740" height="416" src="https://cms.cnbcafrica.com/wp-content/uploads/2021/06/106892639-1622836826337-bit.jpg" alt="" class="wp-image-406201" srcset="https://cms.cnbcafrica.com/wp-content/uploads/2021/06/106892639-1622836826337-bit.jpg 740w, https://cms.cnbcafrica.com/wp-content/uploads/2021/06/106892639-1622836826337-bit-300x169.jpg 300w, https://cms.cnbcafrica.com/wp-content/uploads/2021/06/106892639-1622836826337-bit-140x80.jpg 140w" sizes="auto, (max-width: 740px) 100vw, 740px" /><figcaption>A banner with the logo of bitcoin is seen during the crypto-currency conference Bitcoin 2021 Convention at the Mana Convention Center in Miami, Florida, on June 4, 2021. Marco Bello | AFP | Getty Images</figcaption></figure>



<a href="https://www.cnbc.com/quotes/BTC.CM=">Bitcoin’s</a>&nbsp;price slipped again Tuesday. The reason for the move was unclear, however it may be related to concerns over security of the cryptocurrency after U.S. officials managed to recover most of the ransom paid to hackers that targeted Colonial Pipeline.



Court documents said investigators were able to access the password for one of the hackers’ bitcoin wallets. The money was recovered by a&nbsp;<a href="https://www.npr.org/2021/06/08/1004223000/how-a-new-team-of-feds-hacked-the-hackers-and-got-colonial-pipelines-bitcoin-bac" target="_blank" rel="noreferrer noopener">recently launched task force</a>&nbsp;in Washington created as part of the government’s response to a rise in cyberattacks.



The world’s largest cryptocurrency slid over 7% at 5 a.m. ET to a price of $32,952, according to Coin Metrics data. Smaller digital coins also slumped, with ether falling 7% to $2,524 and XRP losing around 6%.



In April, 2021 was&nbsp;<a href="https://www.cnbc.com/2021/04/14/bitcoin-btc-and-ether-eth-prices-rally-ahead-of-coinbase-listing.html">looking to be a banner year</a>&nbsp;for digital assets, with bitcoin having topped $60,000 for the first time ever. But a recent plunge in crypto prices has shaken confidence in the market. Bitcoin sank to nearly $30,000 last month, and is currently down almost 50% from its all-time high.



The digital currency is now up only 14% since the start of the year, though it’s still more than tripled in price from a year ago.



<h2 class="wp-block-heading" id="h-u-s-recovers-most-of-colonial-ransom">U.S. recovers most of Colonial ransom</h2>



On Monday, U.S. law enforcement officials said they had&nbsp;<a href="https://www.cnbc.com/2021/06/07/us-recovers-some-of-the-money-paid-in-the-colonial-pipeline-ransom-officials-say.html">seized $2.3 million in bitcoin</a>&nbsp;paid to DarkSide, the cybercriminal gang behind a crippling cyberattack on Colonial Pipeline.



According to a court document, the Federal Bureau of Investigation was able to access the “private key,” or password, for one of the hackers’ bitcoin wallets. Bitcoin has often been the currency of choice for hackers demanding ransom payments to decrypt data locked by malware known as “ransomware.”



Crypto media outlet Decrypt&nbsp;<a href="https://decrypt.co/72992/bitcoin-tumbles-9-fears-that-us-law-enforcement-hacked-network" target="_blank" rel="noreferrer noopener">reported</a>&nbsp;there were unfounded rumors that the attackers’ bitcoin wallet had been “hacked,” an unlikely scenario.



DarkSide, which&nbsp;<a href="https://www.cnbc.com/2021/05/18/colonial-pipeline-hackers-darkside-received-90-million-in-bitcoin.html">reportedly received $90 million</a>&nbsp;in bitcoin ransom payments before shutting down, operated a so-called “ransomware as a service” business model, where hackers develop and market ransomware tools and sell them to affiliates who then carry out attacks.



According to blockchain analytics firm <a href="https://www.elliptic.co/blog/us-authorities-seize-darkside" target="_blank" rel="noreferrer noopener">Elliptic</a>, the seized funds represented the bulk of the DarkSide affiliate’s share of the ransom paid out by Colonial.



John Hultquist, vice president of analysis at Mandiant Threat Intelligence, called the move a “welcome development.”



“It has become clear that we need to use several tools to stem the tide of this serious problem, and even law enforcement agencies need to broaden their approach beyond building cases against criminals who may be beyond the grasp of the law,” said Hultquist.



“In addition to the immediate benefits of this approach, a stronger focus on disruption may disincentivize this behavior, which is growing in a vicious cycle,” he added.



<h2 class="wp-block-heading">Crypto crackdown</h2>



A number of issues are weighing on cryptocurrencies, including fears of a regulatory clampdown and tweets from&nbsp;<a href="https://www.cnbc.com/quotes/TSLA" target="_blank" rel="noreferrer noopener">Tesla</a>&nbsp;CEO&nbsp;<a href="https://www.cnbc.com/elon-musk/">Elon Musk</a>.



Chinese authorities last month&nbsp;<a href="https://www.cnbc.com/2021/05/21/bitcoin-falls-after-china-calls-for-crackdown-on-bitcoin-mining-and-trading-behavior.html">called for a crackdown</a>&nbsp;on crypto mining and trading. Once a major player in the market, China has since moved to stamp out speculative investment in cryptocurrencies,&nbsp;<a href="https://www.cnbc.com/2017/09/04/chinese-icos-china-bans-fundraising-through-initial-coin-offerings-report-says.html">banning a fundraising method known as initial coin offerings</a>&nbsp;and&nbsp;<a href="https://www.cnbc.com/2017/09/11/bitcoin-price-falls-on-reports-that-china-is-closing-local-exchanges.html">shuttering local exchanges</a>.



Meanwhile, Elon Musk has gone from a supporter of bitcoin to seemingly falling out of love with it in a matter of months. Musk’s electric car firm stopped accepting bitcoin as a payment method last month due to&nbsp;<a href="https://www.cnbc.com/2021/05/13/why-elon-musk-is-worried-about-bitcoin-environmental-impact.html">concerns over its environmental impact</a>.



Last week, thousands of bitcoin investors descended on Miami for an event billed as the&nbsp;<a href="https://www.cnbc.com/2021/06/07/bitcoin-2021-elon-musk-jack-dorsey-winklevoss-twins-key-highlights.html">biggest bitcoin event in history</a>.



The conference had a few bizarre highlights, including El Salvador President Nayib Bukele announcing plans for the country to&nbsp;<a href="https://www.cnbc.com/2021/06/05/el-salvador-becomes-the-first-country-to-adopt-bitcoin-as-legal-tender-.html">accept bitcoin as legal tender</a>.

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Bitcoin slides 7% after U.S. seizes most of Colonial Pipeline ransom

<figure class="wp-block-image size-large"><img loading="lazy" decoding="async" width="740" height="416" src="https://cms.cnbcafrica.com/wp-content/uploads/2021/06/106893007-1623065955092-GettyImages-1233274133.jpg" alt="" class="wp-image-406173" srcset="https://cms.cnbcafrica.com/wp-content/uploads/2021/06/106893007-1623065955092-GettyImages-1233274133.jpg 740w, https://cms.cnbcafrica.com/wp-content/uploads/2021/06/106893007-1623065955092-GettyImages-1233274133-300x169.jpg 300w, https://cms.cnbcafrica.com/wp-content/uploads/2021/06/106893007-1623065955092-GettyImages-1233274133-140x80.jpg 140w" sizes="auto, (max-width: 740px) 100vw, 740px" /></figure>



MIAMI – Crypto lingo and booze flowed freely as thousands of bitcoin enthusiasts descended on South Florida this weekend.



At Bitcoin 2021, billed as the biggest bitcoin event in history, legions of faithful fans braved 90-degree days to talk all things crypto. Many of the conference attendees were bitcoin maximalists, a phrase used to describe people who believe that bitcoin, and not necessarily other cryptocurrencies, is the future of finance. Most plan to BTD (buy the dip) and HODL (hold on for dear life).



The energy was electric. A maskless, sold-out crowd of 12,000 attendees spent two days glad-handing, hugging, sending crypto from wallet to wallet, and closing business deals in between panels and speeches. The novelty of taking part in a largely indoor event, free of Covid restrictions, contributed to the atmosphere.



A standard pass to the event cost $1,499. Some guests paid for a highly coveted orange bracelet, known as the “Whale Pass,” which takes its name from a term used to describe individuals who hold large sums of bitcoin. The pass granted access to an extra day of speakers, exclusive parties, and a private area in the convention hall, replete with a free bar. On the first day of the conference, it was retailing on Eventbrite for $21,000, plus a $529 transaction fee.



The crowd look was mixed. Picture conference merch like neon-colored fanny packs, Bitcoin 2021 branded sunglasses, and t-shirts with crypto puns and hashtags. Some appeared ready for a summer rave, wearing bikinis in the media room.



However, there was also a strong contingent clad in standard Wall Street business casual, in yet another sign of growing mainstream interest in the world’s most popular cryptocurrency. “Whether they were attendees, or just in Miami for the events, it is more institutional participation than I’ve ever seen at a bitcoin conference,” Nic Carter,&nbsp;founding partner at Castle Island Ventures, told CNBC.



<h2 class="wp-block-heading" id="h-miami-lights-up-for-crypto">Miami lights up for crypto</h2>



For the thousands who didn’t get an official ticket to the event, the parties and tangential gatherings were the real draw. There were yacht parties with a DeFi (decentralized finance) theme, sumo wrestling matches, NFT art gallery openings, and cocktail hours dedicated to talking about Bitclout, a social network built on the blockchain technology that underpins most cryptocurrencies.



The after-parties took over rooftops across the city, with at least one featuring fire dancers. The Oasis, one of the biggest nightclubs in Miami, was non-stop crypto.



“There isn’t a way to quantify the level that an event like this boosts business,” said Mati Greenspan, portfolio manager and founder of Quantum Economics, who flew in from Israel Wednesday night for the event. “What might take me an hour meeting at home can be done in five or ten minutes at a conference. So every hour is worth five or ten meetings.”



<figure class="wp-block-image size-large"><img loading="lazy" decoding="async" width="740" height="416" src="https://cms.cnbcafrica.com/wp-content/uploads/2021/06/106893561-1623112832656-Screen_Shot_2021-06-07_at_75634_PM.jpg" alt="" class="wp-image-406174" srcset="https://cms.cnbcafrica.com/wp-content/uploads/2021/06/106893561-1623112832656-Screen_Shot_2021-06-07_at_75634_PM.jpg 740w, https://cms.cnbcafrica.com/wp-content/uploads/2021/06/106893561-1623112832656-Screen_Shot_2021-06-07_at_75634_PM-300x169.jpg 300w, https://cms.cnbcafrica.com/wp-content/uploads/2021/06/106893561-1623112832656-Screen_Shot_2021-06-07_at_75634_PM-140x80.jpg 140w" sizes="auto, (max-width: 740px) 100vw, 740px" /><figcaption>Fire dancers entertain crypto enthusiasts at a rooftop party in Miami. Mati Greenspan</figcaption></figure>



A lot of talk centered around moving to Miami. Start-ups, venture firms, and crypto exchanges have been relocating to the city en masse – or at least opening additional offices.



Mayor Francis Suarez has portrayed himself as bitcoin-friendly – Suarez&nbsp;<a href="https://www.cnbc.com/video/2021/02/17/miami-mayor-francis-suarez-on-push-to-accept-bitcoin-attract-big-tech.html">announced in February</a>&nbsp;that Miami plans to accept tax payments in bitcoin and let employees draw their salary in the cryptocurrency, though the timing of the rollout is unclear. The city is also exploring holding bitcoin on its balance sheet.



Now, the entire city seems to be getting on board. “From waiters to Uber drivers, a bouncer at the nightclub and even a lady selling tchotchkes at the mall, most locals I met on the ground seemed to be somewhat familiar with cryptocurrencies, and many of them are HODLing,” said Greenspan, of the few days he spent in Miami.



Carter himself is considering the move. “Virtually everyone I’ve talked to is super bullish on Texas and Florida and pretty bearish on on New York, San Francisco, and Boston,” he said. “I left this thinking that I’m going to make that transition myself.”



<h2 class="wp-block-heading">‘Bitcoin fixes everything’</h2>



A common refrain from some of the biggest names on stage was that “bitcoin fixes everything,” which pretty much sums up the general sentiment at the conference.



“We say bitcoin is hope; bitcoin fixes everything,” said Saylor. “That certainly was the case with our stock.”



Dorsey also doubled down on his commitment to the cryptocurrency. “If I were not at Square or Twitter, I’d be working on bitcoin. If it needed more help than Square and Twitter, I would leave them for bitcoin,” said Dorsey.



The undertone of widespread support for bitcoin carried with it a spirit of rebellion against the existing financial system.



“We don’t need the banks anymore,” continued Dorsey. “We don’t need the financial institutions that we have today.”



Cameron Winklevoss wore a T-shirt with a picture of the Federal Reserve building with a caption reading, “Rage against the machine,” a reference to how bitcoin is not controlled by a central bank.&nbsp;



As one panel MC put it, “We are going to put the Fed out of business,” which speaks to how people at Bitcoin 2021 generally regarded the monetary system and fiat money, with bitcoin seen as the solution.



<figure class="wp-block-image size-large"><img loading="lazy" decoding="async" width="740" height="416" src="https://cms.cnbcafrica.com/wp-content/uploads/2021/06/106892636-1622836404102-wing.jpg" alt="" class="wp-image-406175" srcset="https://cms.cnbcafrica.com/wp-content/uploads/2021/06/106892636-1622836404102-wing.jpg 740w, https://cms.cnbcafrica.com/wp-content/uploads/2021/06/106892636-1622836404102-wing-300x169.jpg 300w, https://cms.cnbcafrica.com/wp-content/uploads/2021/06/106892636-1622836404102-wing-140x80.jpg 140w" sizes="auto, (max-width: 740px) 100vw, 740px" /><figcaption>Tyler Winklevoss and Cameron Winklevoss (L-R), creators of crypto exchange Gemini Trust Co. on stage at the Bitcoin 2021 Convention, a crypto-currency conference held at the Mana Convention Center in Wynwood on June 04, 2021 in Miami, Florida. Joe Raedle | Getty Images</figcaption></figure>



But a repudiation of the status quo doesn’t mean anarchy. In many of my conversations with attendees, the narrative was far from an advocation of societal collapse or dissolution.



“The whole point of bitcoin is that it’s a&#8230;peaceful protest against a monetary system that people want no part of,” said Carter. “I don’t think the Fed has a lot to fear from bitcoin. You don’t have to take to the streets to promote bitcoin.”



The conference drew participants from countries with high inflation or other currency troubles – places like Venezuela, Cuba, Turkey, Nigeria, Lebanon, and Iran – who perhaps best understand the use case for a cryptocurrency like bitcoin.



“There are hundreds of people in these places and you don’t have to explain bitcoin to them; they understand it intuitively,” explained Carter. “That was one of the best parts of the conference for me: meeting people who felt the real-world impact of currency collapse and seeing how they use bitcoin.”



One consistent theme of the conference was the maturity of the Lightning Network, a payments platform built on bitcoin, which enables instant transactions.



Virtually every booth at the conference was accepting Lightning transactions. Even Square and Twitter CEO Jack Dorsey completed one during his main stage talk with Alex Gladstein, of the Human Rights Foundation.



“That’s a real success story,” said Carter. “It’s taken four or five years for Lightning to be built on top of bitcoin, but it’s working now.”



<h2 class="wp-block-heading">The shadow of Elon</h2>



Elon Musk wasn’t physically in Miami but his presence was definitely felt. Right at the start of the conference, the price of bitcoin dropped following a tweet by the&nbsp;<a href="https://www.cnbc.com/quotes/TSLA" target="_blank" rel="noreferrer noopener">Tesla</a>&nbsp;CEO that implied he was breaking up with the currency.



Max Keiser, a high-profile bitcoin holder,&nbsp;began his fireside chat by cursing Musk’s name, shouting, “F&#8212; Elon!” several times.



On the main stage, Dorsey took what seemed to be a veiled shot at Musk’s critique of the environmental impact of bitcoin mining, saying that it actually “incentivizes more renewable energy.”



“You just look at the economics of it and ultimately miners have to make a profit and getting cheap renewable energy maximizes their potential for profit. It’s really that simple,” continued Dorsey. “I thought I had an agreement with some notable figures out there, and that seemed to change in a matter of weeks and now it’s in a weird kind of place.”



Michael Saylor, a high-profile crypto advocate and the CEO of MicroStrategy – a company that bought bitcoin for its balance sheet last year, before both Square and Tesla – took Dorsey’s comments one step further.



“It’s the highest value use of intermittent energy. It’s the highest value use of renewable energy. It’s the highest value use of wasted or stranded energy. And it’s just the highest value use of energy, period,” said Saylor.



NFL player and bitcoin fan Russell Okung launched a billboard campaign Friday with the tagline “Stick to space, Elon,” a reference to the fact that Musk should stay in his lane, and leave crypto opining to those in the industry.



Most conference attendees said they were ignoring his comments regardless. Many said they don’t think Musk, or anyone else – not even governments – can stop bitcoin.&nbsp;One person in the bathroom line called him a clown, referring to his promotion of a new, pornographically named cryptocurrency over the weekend.

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Thousands of bitcoin believers descended on Miami to party and preach the gospel of ‘HODL’

<figure class="wp-block-image size-large"><img loading="lazy" decoding="async" width="740" height="416" src="https://cms.cnbcafrica.com/wp-content/uploads/2021/06/106836977-1612792099253-gettyimages-1211442310-wm2_6890_2020030953941364.jpeg" alt="" class="wp-image-405868" srcset="https://cms.cnbcafrica.com/wp-content/uploads/2021/06/106836977-1612792099253-gettyimages-1211442310-wm2_6890_2020030953941364.jpeg 740w, https://cms.cnbcafrica.com/wp-content/uploads/2021/06/106836977-1612792099253-gettyimages-1211442310-wm2_6890_2020030953941364-300x169.jpeg 300w, https://cms.cnbcafrica.com/wp-content/uploads/2021/06/106836977-1612792099253-gettyimages-1211442310-wm2_6890_2020030953941364-140x80.jpeg 140w" sizes="auto, (max-width: 740px) 100vw, 740px" /><figcaption>Elon Musk, founder and chief engineer of SpaceX speaks at the 2020 Satellite Conference and Exhibition March 9, 2020 in Washington, DC. Musk answered a range of questions relating to SpaceX projects during his appearance at the conference. Win McNamee | Getty Images</figcaption></figure>



<a href="https://www.cnbc.com/quotes/BTC.CM=">Bitcoin’s</a>&nbsp;price fell Friday morning after&nbsp;<a href="https://www.cnbc.com/elon-musk/">Elon Musk</a>&nbsp;posted a tweet suggesting he’s fallen out of love with the world’s top cryptocurrency.



The billionaire Tesla CEO tweeted a meme about a couple breaking up over the male partner quoting Linkin Park lyrics, adding the hashtag #Bitcoin and a broken heart emoji.



Bitcoin fell nearly 6% to a price of $36,432 at around 3 a.m. ET Friday, according to data from Coin Metrics. Other digital coins followed suit, with No. 2 cryptocurrency ether dipping 7% to $2,600 and dogecoin — <a href="https://www.cnbc.com/2021/04/28/dogecoin-price-surges-after-tweets-from-elon-musk-and-mark-cuban.html">Musk’s favored crypto</a> — sinking almost 8% to around 36 cents.



Bitcoin has had a wild year, reaching a record high of more than $64,000 in April, only to then plummet to nearly $30,000 the following month. It’s now more than 40% off its all-time high, though still up almost 30% so far in 2021.



It’s not the first time Musk’s tweets about crypto have moved the market. In May, he said that Tesla would&nbsp;<a href="https://www.cnbc.com/2021/05/13/why-elon-musk-is-worried-about-bitcoin-environmental-impact.html">stop accepting bitcoin as a payment method</a>&nbsp;due to concerns over its energy usage, shaving hundreds of billions of dollars in value off the entire crypto market in a single day.



In a new note this week, <a href="https://www.cnbc.com/quotes/JPM" target="_blank" rel="noreferrer noopener">JPMorgan</a> said institutional investors were <a href="https://www.cnbc.com/2021/06/01/jpmorgan-says-big-investors-are-not-buying-the-bitcoin-dip-prices-could-fall-further.html">not buying the dip in bitcoin</a>, and suggested prices may have further to fall.



Bitcoin’s proponents view the digital currency as a store of value similar to gold, arguing it can act as a hedge against inflation as central banks around the world ramp up stimulus in response to the coronavirus crisis. But skeptics say bitcoin is a speculative bubble waiting to burst.



Thousands of bitcoin investors have descended on Miami this week for a conference dedicated to the cryptocurrency. Miami Mayor Francis Suarez is himself a believer in bitcoin, telling CNBC Thursday that the city is “actively looking at” paying employees in crypto.



“I think crypto is just fake money,” Andrey Kostin, chairman of Russia’s VTB Bank, told CNBC’s Hadley Gamble at the St. Petersburg International Economic Forum on Friday. “Somebody’s sitting somewhere mining and mining like in the Middle Ages and then using them.”



“No government will accept it because it’s not under any government regulations,” he added. “They can’t control it.”



Kostin alluded to several central bank initiatives to develop digital versions of existing money like the dollar, the euro, the Chinese yuan or, in Russia’s case, the ruble.



“It’s inevitable,” he said. “The whole world is moving to a digital world. And currency is not excluded from this process.”

106836977-1612792099253-gettyimages-1211442310-wm2_6890_2020030953941364

Bitcoin falls after Elon Musk tweets breakup meme

<figure class="wp-block-image size-large"><img loading="lazy" decoding="async" width="740" height="416" src="https://cms.cnbcafrica.com/wp-content/uploads/2021/06/106888428-1622028919907-gettyimages-1232967074-omarques_18052021_crypto_3-1.jpeg" alt="" class="wp-image-405806" srcset="https://cms.cnbcafrica.com/wp-content/uploads/2021/06/106888428-1622028919907-gettyimages-1232967074-omarques_18052021_crypto_3-1.jpeg 740w, https://cms.cnbcafrica.com/wp-content/uploads/2021/06/106888428-1622028919907-gettyimages-1232967074-omarques_18052021_crypto_3-1-300x169.jpeg 300w, https://cms.cnbcafrica.com/wp-content/uploads/2021/06/106888428-1622028919907-gettyimages-1232967074-omarques_18052021_crypto_3-1-140x80.jpeg 140w" sizes="auto, (max-width: 740px) 100vw, 740px" /><figcaption>Omar Marques | LightRocket | Getty Images</figcaption></figure>



LONDON — A “significantly high” number of&nbsp;<a href="https://www.cnbc.com/cryptocurrency/">cryptocurrency</a>&nbsp;firms are failing to meet U.K. requirements on preventing money laundering, the country’s financial services watchdog has warned.



Businesses offering crypto-related services are required to register with the Financial Conduct Authority. The regulator introduced a temporary licensing regime for firms whose applications haven’t yet been approved to allow them to continue trading.



The FCA said Thursday that it had pushed back the deadline for the so-called Temporary Registration Regime from July 9, 2021, to March 31, 2022.



“A significantly high number of businesses are not meeting the required standards under the Money Laundering Regulations resulting in an unprecedented number of businesses withdrawing their applications,” the FCA said in a statement.



“The extended date allows cryptoasset firms to continue to carry on business whilst the FCA continues with the robust assessment being undertaken.”



Just five crypto companies are currently registered with the FCA. Those include Tyler and Cameron Winklevoss’ Gemini and British start-up Ziglu. There are dozens of applicants sitting on the Temporary Registration Regime list.



Cryptocurrencies like&nbsp;<a href="https://www.cnbc.com/bitcoin/">bitcoin</a>&nbsp;have long been dogged by worries over their use in illegal activities like money laundering and cyberattacks. That’s because the people transacting them don’t reveal their identity. Officials have also warned about the speculative nature of crypto assets.



In January, the FCA issued a&nbsp;<a href="https://www.cnbc.com/2021/01/11/crypto-investors-risk-losing-all-their-money-uks-fca-warns.html">stark warning to cryptocurrency investors</a>.



“Investing in cryptoassets, or investments and lending linked to them, generally involves taking very high risks with investors’ money,” the regulator said.



“If consumers invest in these types of product, they should be prepared to lose all their money.”



The FCA reiterated its stance Thursday, warning that many cryptocurrencies are “highly speculative and can therefore lose value quickly.”



Bank of England Governor Andrew Bailey — who was previously chief executive of the FCA — last month gave a&nbsp;<a href="https://www.cnbc.com/2021/05/07/bank-of-englands-bailey-crypto-investors-risk-losing-all-their-money.html">similar statement</a>. Cryptocurrencies “have no intrinsic value,” he said, adding: “Buy them only if you’re prepared to lose all your money.”

106888428-1622028919907-gettyimages-1232967074-omarques_18052021_crypto_3-1

Many cryptocurrency firms are not meeting money laundering rules, UK watchdog warns

<figure class="wp-block-image size-large"><img loading="lazy" decoding="async" width="740" height="416" src="https://cms.cnbcafrica.com/wp-content/uploads/2021/06/106857628-1616445109133-gettyimages-1231864131-omarques_21032021_finance_2.jpeg" alt="" class="wp-image-405503" srcset="https://cms.cnbcafrica.com/wp-content/uploads/2021/06/106857628-1616445109133-gettyimages-1231864131-omarques_21032021_finance_2.jpeg 740w, https://cms.cnbcafrica.com/wp-content/uploads/2021/06/106857628-1616445109133-gettyimages-1231864131-omarques_21032021_finance_2-300x169.jpeg 300w, https://cms.cnbcafrica.com/wp-content/uploads/2021/06/106857628-1616445109133-gettyimages-1231864131-omarques_21032021_finance_2-140x80.jpeg 140w" sizes="auto, (max-width: 740px) 100vw, 740px" /><figcaption>In this photo illustration a Bitcoin logo seen displayed on a smartphone with stock market percentages in the background. Omar Marques | SOPA Images | LightRocket | Getty Images</figcaption></figure>



BEIJING — Two of China’s rivals to stock trading app Robinhood are looking to cryptocurrencies as a way to compete overseas.



The companies,&nbsp;<a href="https://www.cnbc.com/quotes/FUTU" target="_blank" rel="noreferrer noopener">Futu</a>&nbsp;and&nbsp;<a href="https://www.cnbc.com/quotes/TIGR" target="_blank" rel="noreferrer noopener">Tiger Brokers</a>, disclosed during earnings calls last month they are applying for licenses in Singapore and the U.S. that would allow local customers to trade digital currencies.



The move comes as cryptocurrencies such as&nbsp;<a href="https://www.cnbc.com/quotes/BTC.BS=-USS">bitcoin</a>&nbsp;have climbed back into the spotlight in recent months, while Chinese regulators have increased their efforts to limit speculation in the market. In the last few weeks, authorities issued&nbsp;<a href="https://www.cnbc.com/2021/05/19/bitcoin-btc-price-plunges-but-bottom-could-be-near-.html">new warnings against digital currency</a>&nbsp;trading and a&nbsp;<a href="https://www.cnbc.com/2021/05/26/major-china-bitcoin-mining-hub-lays-out-harsher-crackdown-measures.html">crackdown on bitcoin mining</a>&nbsp;— an energy-heavy computing process that allows participants to earn bitcoin.



But in the financial trading world, demand for cryptocurrencies is high as bitcoin’s price&nbsp;<a href="https://www.cnbc.com/2021/05/28/bitcoin-falls-below-36000-as-cryptocurrencies-slip-once-again.html">surged to record levels above $60,000, before dropping sharply to around $35,000</a>.



Robinhood, which&nbsp;<a href="https://www.cnbc.com/2018/01/25/stock-trading-app-robinhood-to-roll-out-bitcoin-ethereum-trading.html">launched</a>&nbsp;bitcoin and&nbsp;<a href="https://www.cnbc.com/quotes/ETH=">ethereum</a>&nbsp;trading in the U.S. in early 2018, has&nbsp;<a href="https://www.cnbc.com/2021/05/25/robinhood-nears-biggest-trade-of-all-an-ipo-after-wild-year.html">added 3 million customers a month</a>&nbsp;this year for its crypto business. In April, U.S.-based cryptocurrency trading site&nbsp;<a href="https://www.cnbc.com/quotes/COIN" target="_blank" rel="noreferrer noopener">Coinbase</a>&nbsp;debuted on the&nbsp;<a href="https://www.cnbc.com/2021/04/14/coinbase-to-debut-on-nasdaq-in-direct-listing.html">Nasdaq</a>.



“We do hear a lot of interest from our users across the world in terms of crypto. We have listened to that,” Arthur Chen, Futu’s chief financial officer, told CNBC last week. He said the company hopes to offer cryptocurrency-related products as soon as the end of this year.



Both Futu and Tiger Brokers got their start primarily from Chinese employees of major tech companies like Alibaba and Baidu. Since these companies are listed in the U.S., that&nbsp;<a href="https://www.cnbc.com/2019/03/20/chinas-tech-savvy-millennials-fueling-interest-in-trading-us-stocks.html">piqued their employees’ interest in trading stocks abroad</a>.



However, both companies are increasingly focused on markets outside mainland China. In addition to essentially banning yuan-bitcoin transactions, Beijing tightly controls capital flows out of the mainland.



Futu has gained 100,000 paying clients in Singapore less than three months since launching there in early March, Chen said. He said about one-fourth of new paying clients in the first quarter came from Singapore and the U.S.

106857628-1616445109133-gettyimages-1231864131-omarques_21032021_finance_2

China’s Robinhood rivals pile into the crypto craze as they look to compete overseas

<figure class="wp-block-image size-large is-resized"><img loading="lazy" decoding="async" src="https://cms.cnbcafrica.com/wp-content/uploads/2021/05/106863816-1617660366093-bit.jpg" alt="" class="wp-image-405264" width="843" height="474" srcset="https://cms.cnbcafrica.com/wp-content/uploads/2021/05/106863816-1617660366093-bit.jpg 740w, https://cms.cnbcafrica.com/wp-content/uploads/2021/05/106863816-1617660366093-bit-300x169.jpg 300w" sizes="auto, (max-width: 843px) 100vw, 843px" /><figcaption>Dado Ruvic | Reuters</figcaption></figure>



The price of bitcoin took another hit on Friday morning as other cryptocurrencies including ether and doge also saw their values fall.



Bitcoin was trading at $35,904 around 6 a.m. ET and has fallen over 7% in the last 24 hours, according to data from Coin Metrics.



The world’s most popular cryptocurrency has been trying to recover after a week of turmoil that saw its price tumble 30% to around $30,000 last week.



It briefly&nbsp;<a href="https://www.cnbc.com/2021/05/26/bitcoin-price-bounces-back-above-40000-after-a-wild-week-of-trading.html">climbed back above $40,000</a>&nbsp;on Wednesday before losing some of those gains.



Elsewhere, ethereum’s price has fallen around 10% in the last 24 hours to $2,473 a coin, while dogecoin’s price has fallen around 6% to 31 cents.



Cryptocurrencies continue to divide opinion. In a 41-page note last week,&nbsp;<a href="https://www.cnbc.com/2021/05/28/goldman-says-where-its-at-on-bitcoin-ether-and-doge.html">Goldman analysts shared their views</a>&nbsp;on whether the likes of bitcoin and ethereum should be considered an asset class or not.



The latest price falls comes a day after longtime bitcoin bull Cathie Wood, founder and CEO of Ark Investment Management, argued that bitcoin&nbsp;<a href="https://www.cnbc.com/2021/05/27/cathie-wood-sees-deflation-returning-innovation-stocks-and-bitcoin-to-rally.html">has a place in the world of deflation</a>.



Emerging markets — where currencies are often linked closely to commodity price cyclicality — could ultimately spur outperformance in bitcoin, she said.



“I think what will happen as their currencies come under pressure, the velocity of their money will increase as more and more of their populations shift into bitcoin, and other cryptocurrencies and assets,” Wood said at CoinDesk’s Consensus 2021 conference on Thursday.



Last week’s crypto sell-off came after authorities in China and the U.S. moved to tighten regulation and tax compliance on cryptocurrencies. Chinese authorities called for tighter regulation on crypto mining and trading,&nbsp;<a href="https://www.cnbc.com/2021/05/24/chinas-latest-move-on-crypto-regulation-nothing-new-says-hsbc-.html">reinforcing rules announced in 2017</a>, and the U.S. Treasury announced that it would require stricter crypto compliance with the IRS.



The price recovered after&nbsp;<a href="https://www.cnbc.com/2021/05/24/bitcoin-price-soars-after-elon-musk-tweet-on-sustainability-efforts.html">Tesla CEO Elon Musk said Mondaay</a>&nbsp;he spoke to bitcoin miners in North America about renewable energy solutions amid growing concerns about the&nbsp;<a href="https://www.cnbc.com/2021/02/05/bitcoin-btc-surge-renews-worries-about-its-massive-carbon-footprint.html">crypto’s carbon footprint</a>. Elsewhere, hedge fund billionaire&nbsp;<a href="https://www.cnbc.com/2021/05/24/billionaire-ray-dalio-i-have-some-bitcoin.html">Ray Dalio revealed</a>&nbsp;in an article published on Monday that he owns some bitcoin.

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Britain bans Binance’s UK ops in latest cryptocurrency crackdown

Mining bitcoin could be about to get a whole lot easier after China’s crypto crackdown

Bitcoin falls again, breaking below key $30,000 level that traders say could lead to more losses

China’s renewed crypto crackdown wipes nearly $300 billion off the market as bitcoin slides

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Bitcoin rallies 13% jumping above $37,000 after El Salvador passes law to adopt it as legal tender

‘Confusion and disorientation’ driving ‘crazy’ moves in the market, Mark Mobius says

El Salvador becomes first country to adopt bitcoin as legal tender after passing law

Bitcoin slides 7% after U.S. seizes most of Colonial Pipeline ransom

Thousands of bitcoin believers descended on Miami to party and preach the gospel of ‘HODL’

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Many cryptocurrency firms are not meeting money laundering rules, UK watchdog warns

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Bitcoin falls below $36,000 as cryptocurrencies slip once again

News Tips

Advertise With Us

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