This week in Web3: ETFs, scams and other pressures for acceptance

Can the world of payments and financial services embrace crypto and scale on-chain?

Maybe in part, and maybe one day. Ultimately, it all comes down to usability, regulation, and of course, investment in the space.

Crypto regulation, for its part, is awaiting a potential boost in the United States as lawmakers debated the Financial Innovation and Technology for the 21st Century (FIT21) Act for more than two hours, on Wednesday, May 22, legislation that would detail which regulatory agencies have jurisdiction over certain digital assets, as well as how crypto companies could operate in a compliant manner.

“Whether you love crypto or hate it, you should support regulation because the status quo simply doesn’t work” said Rep. Wiley Nickel, D-N.C., during the hearing.

For his part, the chairman of the Securities and Exchange Commission (SEC), Gary Gensler. issued a statement decrying the act, which has bipartisan support. At the time of the report, policymakers had not yet put FIT21 to a final vote as it was still under debate.

And regarding this last point regarding investment, a new report shows that investor interest is on the rise after nearly two years of weakness, with venture capital firms deploying $2.4 billion into Web3 startups in the first three months of 2024.

As for the first, and arguably most important, point, usability, well, that’s why every week PYMNTS stays tuned to the Web3 landscape, listening for trends and themes that could shape its future – and that of the financial market in the broad sense.

So, from legal showdowns to Web3 incubators and Ethereum exchange-traded funds (ETFs), to broader mainstream acceptance of crypto and beyond, these are the top stories from the Web3 landscape that PYMNTS has been tracking over the past week.

Institutional adoption of crypto

Thursday (May 23) is the deadline for the SEC to approve or deny an Ethereum ETF application starting VanEckone of the issuers that filed an application with the regulator, and the broader crypto market – as well as Ethereum – is rising on speculation that the agency might approve the request.

Bitcoin exceeded $70,000 for a while on Monday, and was back on report date Wednesday (May 22).

And crypto custody company Bakkt said last week that the SEC’s approval of Bitcoin ETFs would lead institutional investors play a bigger role in the cryptocurrency trading market.

“As our first quarter trading volumes show, we have started to see positive signs in the market and the overall demand environment is improving, with increased industrial activity, higher part prices and volume higher overall retail transactions.” Andy Mainpresident and CEO of Bakktsaid during the company’s earnings call.

As more institutions adopt bitcoin and other cryptocurrencies, this could lead to increased mainstream acceptance and further development of the Web3 ecosystem.

Yet cryptocurrency spot trading cooled last month (April) for the first time in seven months, by 32.6% to $2.01 trillion in April, while monthly derivatives trading volume declined 24.1% to $4.57 trillion , its first decline in three months, according to figures from CCData. Observers believe this is a trend driven by the decreasing likelihood of interest rate cuts and slowing inflows into US-listed spot Bitcoin ETFs.

Crypto and the courts

Despite the growing adoption of crypto ETFs, the digital asset space still has vestiges of its Wild West days.

Last Thursday (May 16), two Chinese nationals were accused with leading a scheme to launder the proceeds of cryptocurrency investment scams. According to court documents, the two criminals and their co-conspirators operated an international fraudulent cryptocurrency laundering syndicate. These scams, commonly known as “pig butchery,” fraudulently enticed victims to transfer millions of dollars to U.S. bank accounts opened in the name of shell companies. The sole objective of these companies was to facilitate the laundering of the proceeds of fraud, according to the press release.

Elsewhere, the United States Department of Justice (DOJ) announced the unsealing of a charge On Wednesday, May 15, they charged two brothers with crimes stemming from an alleged “spike scheme” in which they stole $25 million in cryptocurrency from the Ethereum blockchain.

And a cryptocurrency company Genesis has been prohibited from exploitation in New York and will pay a regulation worth $2 billion, the Office of the Attorney General of the State of New York said on a Monday (May 20) Press release. The settlement includes bankrupt companies Genesis Global Capital, Genesis Asia Pacific and Genesis Global Holdco.

In other national news, Bitcoin payment processor Pay the ibex will suspend all its services in the United States, effective on May 31, a move that comes at a time when some tech figures have said that encrypted payments will unlock scalable, real-world use.

Dolce & Gabbana would have been sued by a customer who said he spent $6,000 on non-fungible tokens (NFTs) offered by the company, only to have them arrive late and without the promised benefits. The NFTs lost 97% of their value, meaning the plaintiff lost $5,800, according to the suit.

And a judge at the High Court in London governed On Monday May 20, Australian computer scientist Craig Wright lied and falsified documents to support his false claim that he was the inventor of bitcoin, the pseudonym “Satoshi Nakamoto”.

Unlocking the Usability of Crypto

But the crypto space continues to push for broader acceptance by highlighting the usability of Web3 technologies, and it continues to make inroads.

For example, Wednesday (May 15), MasterCard selected five startups from around the world to participate in its Blockchain and Digital Assets Startup Path program. The program is designed to connect Mastercard with industry and FinTech experts so they can work together to explore differentiated use cases where blockchain and digital assets can help solve real-world problems.

While Friday, PYMNTS unpacked how integrating decentralized finance (DeFi) protocols and services directly into traditional and non-traditional financial applications, platforms and services could potentially streamline processes such as lending, borrowing and trading, making them more efficient and more efficient. profitable.

As Sheraz Shereresponsible for payments at Solana Foundationtold PYMNTS in a previous discussion: “It’s important to know that crypto is not just bitcoin and Doge and NFT. …Blockchains are truly alternative pathways for payments and financial assets.

See more in: Bakkt, Bitcoin ETF, Blockchain, cryptocurrency, Ethereum ETF, Financial Innovation and Technology for the 21st Century Act, FIT21, Genesis, MasterCard, News, PYMNTS News, Blockchain and Digital Assets Startup Path, Web3

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