Latam Insights: Brazil Launches Nationwide Blockchain ID Program, Venezuelan Crypto Watchdog Extends Restructuring Period

Welcome to Latam Insights, a compendium of Latin America’s most relevant crypto and economic news during the last week. In this issue: Brazil launches a blockchain-based ID card, the Venezuelan cryptocurrency watchdog Sunacrip extends its restructuring period, and Buenos Aires launches a “self-sovereign” blockchain ID program.

Brazil Launches Nationwide Blockchain-Based ID

The government of Brazil announced the implementation of a nationwide blockchain-based ID card that will centralize the identity function of all states. Selected states, including Goias, Parana, and Rio de Janeiro, will begin issuing the National Identity Card immediately, with all states having to adopt it by November 6.

The digital document will serve as a weapon to fight identity theft in Brazil, as the card includes a QR code that will be used to verify the authenticity of the ID and other documents linked with it.

Alexandre Amorim, president of Serpro, the federal company that developed the ID system, commented on the significance of blockchain for this use case. He stated:

Blockchain technology plays a fundamental role in protecting personal data and preventing fraud, providing a safer digital experience for Brazilian citizens. The use of the b-Cadastros blockchain platform is a major differentiator for the security and reliability of the National Identity Card project.

The document will also offer other advantages, including bringing “consistency in the service provided, traceability, security, and independence of the states,” according to the secretary of digital government of the Ministry of Management and Innovation in Public Services (MGI), Rogério Mascarenhas.

Venezuelan Crypto Watchdog Sunacrip Extends Restructuring Period

Sunacrip, the Venezuelan cryptocurrency enforcer, will have more time to complete its restructuring process. According to an executive order, the government approved the extension of its restructuring period for six more months, with the same restructuring board at the helm.

The intervention, ordered by President Nicolas Maduro in March after the arrest of former Sunacrip head Joselit Ramirez, was initially scheduled for six months. Ramirez and Sunacrip were linked to an alleged corruption scheme still under investigation by the Venezuelan authorities.

This extension also aggravates the woes of registered Bitcoin miners in the country, who were disconnected from the power grid by the national power company Corpoelec and are still waiting for permission from the institution to restart operations.

Buenos Aires Launches Blockchain ID Program

The city of Buenos Aires announced the implementation of the Quarkid project, a digital blockchain-based, “self-sovereign” wallet that will allow users to hold ID documents. The project, known before as Tangoid, has been in development since last year and will use Ethereum’s Layer 2 Zksync Era for privacy and confidentiality purposes.

The wallet will initially allow users to associate documents like birth and marriage certificates, and other documents like proof-of-income and academic verifications will be available by November. Furthermore, more documents might be available for next year, depending on a yet to be constructed roadmap.

Quarkid creators expect this project to extend to all of Argentina and then to collaborate with other countries seeking to adopt similar standards.

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What do you think about this week’s Latam Insights report? Tell us in the comment section below.

via Sergio Goschenko

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SEC Charges FTX Auditor for Helping Clients Violate Securities Laws

The U.S. Securities and Exchange Commission (SEC) announced charges against an accounting firm that worked for failed cryptocurrency exchange FTX. The company, Prager Metis, has been accused of facilitating clients in breaking federal securities laws and also auditor independence violations.

FTX Accountant Prager Metis Charged With Auditor Rules Violations

The U.S. securities regulator has charged accounting firm Prager Metis CPAs, LLC and its California professional services firm, Prager Metis CPAs, LLP with violating auditor independence rules while also aiding and abetting clients’ violations of America’s securities laws.

In its complaint, filed in the U.S. District Court for the Southern District of Florida, the SEC claims that between December 2017 and October 2020 Prager included indemnification provisions in engagement letters for more than 200 audits, reviews, and exams. It alleges:

Prager was not independent from its clients for those engagements, as required under the federal securities laws.

According to the Commission, Prager Metis continued to sign engagement letters with indemnification provisions and issued “accountant’s reports” in which it purported to be independent, despite regulators repeatedly notifying its senior partners that this practice rendered the firm not independent.

“Many of Prager’s clients included those ‘accountant’s reports’ in their filings with the SEC. Prager allegedly also failed to advise its clients of its violations, even after the Public Company Accounting Oversight Board informed Prager that the indemnification provisions violated the independence requirements of the federal securities laws,” the SEC elaborated.

According to a press release published Friday, the complaint seeks a permanent injunction, disgorgement plus prejudgment interest, and a civil monetary penalty against Prager. The SEC also quoted the Director of its Miami Regional Office as stating:

Auditor independence is critical to both protecting the integrity of financial reporting and promoting public trust … Our complaint is an important reminder that auditor independence is crucial to investor protection.

While the announcement does not mention FTX or other customers of the accounting firm, the bankrupt crypto exchange claimed before its November 2022 collapse that its 2021 financial results had been audited by Prager Metis and another company claiming crypto expertise, Armanino. Earlier this year, FTX’s new management expressed concerns regarding the company’s audited financial statements.

What are your thoughts on the SEC charges filed against FTX’s auditor? Let us know in the comments section below.

via Lubomir Tassev

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The Leading 5 Defi Categories Overseeing Billions: An October 2023 Snapshot

As of October 1, 2023, $39.50 billion is nestled within decentralized finance (defi) platforms. Let’s dive into the top five categories, spotlighting the diverse array of defi protocols, the count of these applications, and the wealth they encompass.

A Look at 5 Defi Categories Commanding Billions in Crypto Assets

Defillama.com, a decentralized finance (defi) industry aggregator, showcases an array of defi protocols, their underlying blockchains, and their held values. It features around 35 unique categories of applications. Dominating the scene are liquid staking derivatives applications, with 119 of them controlling $23.05 billion.

Liquid staking derivatives represent tokens that are backed by staked assets in blockchain networks, allowing users to remain liquid while their assets are staked. In essence, they let you earn staking rewards without locking up your assets, by converting them into tradable tokens.

Lending, the runner-up in the defi realm, encompasses protocols enabling users to lend or borrow assets. Approximately 302 protocols fall under this lending umbrella, collectively holding $15.14 billion in crypto assets as of October 1, 2023. Following closely, the decentralized exchange (dex) category claims the third position with a total value locked (TVL) of $11.82 billion across 1,026 protocols.

Dex protocols are platforms that allow users to trade crypto assets directly with one another, without the need for an intermediary or central authority. Essentially, dexs offer peer-to-peer trading, ensuring transactions are transparent and secure on the blockchain.

Occupying the fourth rank in the defi landscape is the bridge category, protocols designed to shuttle tokens between networks. Acting as vital links between diverse blockchain networks, these bridges currently oversee $9.17 billion, spread across 46 distinct platforms. Securing the fifth position in the defi hierarchy is the CDP, or collateralized debt position category.

CDP defi protocols give users the ability to pledge assets as collateral, granting them the ability to borrow different assets or tokens. At their core, they extend loans anchored to the value of the pledged collateral, letting users tap into funds while their primary assets stay safeguarded. A notable 105 CDP protocols exist, amassing a combined value of $8.23 billion.

Following the ranks of liquid staking, lending, dex platforms, bridges, and CDPs are protocols zeroing in on yield, real-world assets (RWAs), and derivatives. Leading the parade, Lido Finance is the top dog in liquid staking, Aave reigns supreme in lending, Uniswap dominates the dex space, WBTC stands tall as the chief bridge, and Makerdao is the titan of the CDP realm.

What do you think about the top five defi categories in terms of total value held by these distinct types of protocols? Share your thoughts and opinions about this subject in the comments section below.

via Jamie Redman

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Vaneck Pledges 10% of Ethereum ETF Profits to Fuel ETH Core Development

On September 29, 2023, the asset management firm Vaneck unveiled an initiative to earmark 10% of its profits from its ethereum (ETH) exchange-traded fund (ETF) towards protocol development for at least ten years. This financial infusion will be given to the Protocol Guild, a consortium of over 150 core Ethereum developers, fueling their quest to further refine and grow the Ethereum protocol.

A Decade-Long Commitment to Ethereum Development

Vaneck is set to contribute 10% of its ethereum futures ETF profits to the advancement of Ethereum, as revealed in a statement released on the social media platform X this past Friday. “We intend to donate 10% of our EFUT ETF profits to Protocol Guild for at least 10 years,” the firm said. “Thank you, Ethereum contributors, for nearly a decade of relentless building & ongoing stewardship of this common infrastructure.”

The Protocol Guild encompasses over 150 Ethereum core developers, with an onchain registry bearing testimony to its membership. This guild is steered by the vision to “boost the incentives around stewarding the core protocol.” Vaneck accentuates that core developers have played pivotal roles in propelling crucial updates such as The Merge and Shanghai.

The firm underscored that should traditional finance (tradfi) reap benefits from the endeavors of Ethereum development, it’s only fitting that Tradefi reciprocates by giving back. “If tradfi stands to gain from the efforts of Ethereum’s core contributors, it makes sense that we also give back to their work,” Vaneck stated on X.

The digital asset fund manager added:

We urge other asset managers/ETF issuers to consider also giving back in the same way.

Vaneck’s Ethereum-centric ETF, brandishing the ticker “EFUT,” operates as a cash-settled futures fund, capitalizing on futures traded over the Chicago Mercantile Exchange (CME). Yet, it has lodged a filing for a physically-settled ether ETF, in tandem with its spot bitcoin ETF submission. Not to be outdone, Ark Invest and 21shares have also cast their bid into the ring, aiming to launch a physically settled ETH exchange-traded fund with regulatory approval.

What do you think about Vaneck pledging 10% of its EFUT profits to the Protocol Guild? Share your thoughts and opinions about this subject in the comments section below.

via Jamie Redman

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Vitalik Buterin Discusses Ethereum Protocol ‘Enshrining’: ‘Blockchains Are Social Systems’

Vitalik Buterin, the co-creator of Ethereum, has discussed the next steps that the protocol is about to take and how the upcoming decisions should be the result of balancing complexity and functionality. Buterin noted that Ethereum started with a philosophy of striving for simplicity but that blockchains were “social systems” and that there are rationales for adding functionalities directly to the protocol.

Vitalik Buterin Discusses Ethereum’s ‘Enshrining’ Philosophy

Vitalik Buterin, co-creator of Ethereum, has discussed the future actions in the evolution of Ethereum and how the community is debating between adding functionality directly to the protocol (what he called “enshrining”) and extending it through Layer 2 structures, like rollups. Buterin explained that this discussion not only included the topic of scaling but also touched on other functionalities like digital asset exchange, privacy, usernames, advanced cryptography, account safety, censorship resistance, and frontrunning protection, among others.

Ethereum started with a minimalistic philosophy, Buterin stressed, with the idea of only providing a “clean, simple and beautiful protocol that tried to do as little as possible itself,” leaving to the users “almost everything” to build on top. However, this philosophy has been changing, and Buterin presents different implementations that could bring benefits to the protocol if included, but with caveats, like account abstraction, zero-knowledge Ethereum Virtual Machines (EVMs), private mempools, and liquid staking, among others.

Blockchains Are ‘Social Systems’

Buterin concluded that while the desire to “enshrine” as little as possible is understandable and avoids the curses of software bloat, this approach is not absolute when applied to blockchains due to their specific characteristics.

Buterin stated:

Blockchains are not personal-computing operating systems; they are social systems. This means that there are rationales for enshrining certain features in the protocol that go beyond the rationales that exist in a purely personal-computing context.

Nonetheless, enshrining too much can also bring problems to the protocol in the long run, overcomplicating it and including features that can be deemed not useful or popular in the short term.

Buterin had referred to not overloading the Ethereum protocol in a blog post published last May. In the post, he warned about “application-layer projects taking actions that risk increasing the ‘scope’ of blockchain consensus to anything other than verifying the core Ethereum protocol rules,” instead calling to preserve the chain’s minimalism.

What do you think about Vitalik Buterin’s thoughts on including more functionality in Ethereum’s core? Tell us in the comments section below.

via Sergio Goschenko

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Stablecoin Economy Sheds $1.52 Billion in September, Revisiting a 2-Year Low

Drawing from the latest figures, the stablecoin economy saw a notable $1.52 billion in redemptions unfold from September 1 through September 30, 2023. Within the top ten standings, two stablecoins notably bore the brunt of these redemptions: FRAX and BUSD. The two assets saw their supplies erode by 16.9% and 26.4% respectively, over the span of 30 days.

$1.52 Billion Evaporates from Stablecoin Realm in 30 Days

The realm of fiat-pegged cryptocurrencies, predominantly comprised of USD-backed stablecoins, has persevered in its trajectory of contraction, hovering just above the $123 billion benchmark as of September 30, 2023.

A glimpse at archived figures unveils that a mere 30 days earlier, on the first day of September, the stablecoin economy boasted a much larger valuation of $124.57 billion. This underscores that across the stretch of September, a cumulative value of $1.52 billion was wiped off the slate.

Tether’s supply nudged 0.5% upward in September, rounding off the month with an appraisal of $83.22 billion. As the largest stablecoin by market capitalization, tether (USDT) encapsulates 67.65% of the $123 billion stablecoin market.

The runner-up in the stablecoin arena, usd coin (USDC), documented a 4% reduction over the preceding 30 days, now boasting a market cap of $25.10 billion. Makerdao’s DAI experienced a 2% contraction, bringing the coin’s valuation to $3.81 billion.

Trueusd’s (TUSD) supply grew by 18.6% over the previous month, hitting the $3.44 billion mark, and among the five leading stablecoins, TUSD clinched the title of the largest riser.

Trailing next on the list, BUSD found itself on the flip side as a substantial 26.4% of its supply vanished, leaving it precariously perched just above the $2 billion threshold with a valuation of $2.25 billion.

In September, Tron’s USDD inched up by 0.6%, with its market cap nestling just shy of the billion-dollar milestone at $726.87 million. Over the same span, Frax Dollar’s (FRAX) supply took a 16.9% tumble, dwindling to $669.65 million.

Pax Dollar (USDP) too felt the squeeze, shedding 3.8% of its supply. As the stablecoin economy cruises at $123 billion, the market finds itself at a low not seen since September 2021, rewinding the clock by two years.

What do you think about the stablecoin economy losing $1.52 billion in September? Share your thoughts and opinions about this subject in the comments section below.

via Jamie Redman

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NFT Sales Slide 9.91% Continuing a 6-Week Downtrend Despite Rising Crypto Prices

Sales of non-fungible tokens (NFTs) have slid once more this week, dipping to 9.91% below the preceding week’s figures. Data reveals that in the span from September 24 to October 1, 2023, around $72,767,450 worth of NFT sales have been logged, marking the latest seven-day stretch.

NFT Sales Continue to Slide

While the crypto economy has risen over the past seven days, NFT sales have dropped once again for the sixth week in a row. With $72.76 million in NFT sales, the week’s aggregate is 9.91% lower than the week prior. The number of NFT buyers, however, has risen 17.77% to 569,407 buyers. The number of NFT sellers is also up 15.82% to 714,889 of them over the past week.

In the realm of NFT sales across blockchains, Ethereum emerged as the frontrunner among 22 networks, boasting $37.27 million in sales. This signifies that a substantial 51.22% of the week’s NFT commerce originated from the Ethereum blockchain. Albeit leading, ETH-centered NFT sales experienced a slight descent, registering a modest 1.16% dip compared to the previous week.

Following in stride, Mythos NFT sales secured the second spot by garnering $7.83 million in sales, an uplifting surge of 13.12% since last week. Polygon clinched the third position in NFT sales this week, amassing $7.12 million, while Solana secured the fourth spot with a solid $5.86 million. From September 24 to October 1, Immutable X nestled into the fifth position, accruing $5.47 million in sales.

This week, the crown for the top NFT collection was claimed by the Mythos-based Dmarket, with its $7.76 million in sales. Hot on its heels, the second spot was nabbed by the Immutable X-housed compilation, Gods Unchained, generating a cool $5.22 million. Following the lead of the top two contenders in the seven-day sales race were Draftkings, Bored Ape Yacht Club (BAYC), and Sorare.

The spotlight of this week’s most lavish NFT purchase shone on BAYC #591, which fetched $177,710 just five days ago on Opensea’s marketplace. Over on the Bitcoin blockchain, an NFT dubbed Ordinal Maxi Biz commanded $44,217 on Magic Eden’s NFT market. Hot on their trails was Solana’s Boogle #066, fetching $40,503, followed by BNB’s Starcraft Planets which garnered $32,544, and Cardano’s Earth Node #268 closing the high-value sale race at $32,100.

What do you think about the last seven days of NFT sales? Share your thoughts and opinions about this subject in the comments section below.

via Jamie Redman

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