A Week in Crypto (23 October 2023)

Welcome to another edition of our weekly crypto news updates! This week we’ll discuss cryptocurrency ATM scams, crypto’s role in assisting Israel’s fight against terrorism, and the Grayscale spot Bitcoin approval update.

Bitcoin ATMs: A Scammer’s Paradise?

Source: Los Angeles Times

In a chilling incident earlier this year, a distressing incident involving Jim Meduri unfolded when he received a phone call from an individual posing as his son. This imposter, seemingly on the brink of tears, fabricated a story about a car accident, leading Meduri to believe that his son had been arrested for a severe offense related to drunk driving and an injured third party. What followed was a series of calls from individuals impersonating a defense attorney and a courthouse clerk, all conspiring to weave a fabricated narrative. Driven by panic and his desire to assist his son, Meduri succumbed to a scam that coerced him into sending bail money via cryptocurrency. The scammers went so far as to direct him to a Bitcoin ATM, where he deposited $15,000 in cash after scanning a code provided by the imposters, only to later discover that he had fallen victim to an intricate ruse.

Meduri's ordeal serves as just one example of scammers exploiting Bitcoin ATMs to purloin substantial sums of money. These ATMs, commonly found in convenience stores, gas stations, and other frequented public locations, offer an expedient means for individuals to acquire cryptocurrencies using cash. The relative anonymity of cash transactions makes them harder to trace in contrast to traditional payment methods. As cryptocurrency-related scams continue to proliferate, Bitcoin ATMs have come under the scrutiny of lawmakers, regulatory bodies, and consumer advocacy organizations, all of whom seek to safeguard individuals from fraud and the imposition of exorbitant fees.

To address these concerns, California is taking action by instituting limitations on cryptocurrency ATM transactions beginning in January. Senate Bill 401, which received the seal of approval from Governor Gavin Newsom, will restrict crypto ATM transactions to a daily cap of $1,000 per person. This represents a significant reduction from the lofty limits, some as high as $50,000, advertised by certain Bitcoin ATM operators. Furthermore, the legislation will enforce constraints on fees charged by these operators, capping them at $5 or 15% of the transaction, whichever is higher, effective from 2025. The intention behind this legal framework is to provide individuals with more time to recognize potential scams and thereby mitigate the risk of incurring substantial financial losses.

While these legislative measures are welcomed by victims of Bitcoin ATM scams, operators of these machines argue that the new laws may have adverse effects on their industry and the small businesses that host them. The state of California currently boasts more than 3,200 Bitcoin ATMs, making these regulatory changes a contentious subject. Critics argue that these measures may not effectively combat fraudulent activities and could potentially hinder the industry's growth.

Give me the WiiFM (what’s in it for me?): Crypto ATM scams pose a mounting threat, and California's response reflects an earnest attempt to protect consumers. Striking a balance between fostering innovation in the cryptocurrency realm and ensuring the welfare of individuals is a complex undertaking. California may be setting president as other U.S. states see increased use of crypto ATMs. As the landscape of cryptocurrency continues to evolve, it remains imperative to stay informed about potential risks and safeguards in this ever-changing environment.

Israel receives financial aid through Cryptocurrency Donations

Source: NewsDirect

Crypto Aid Israel, a collective of local leaders in the crypto space, has made significant progress in its mission to assist Israelis affected by the ongoing wave of Hamas terrorism. The initiative successfully raised over $185,000 USD, demonstrating the unity and collective strength of the Web3 and crypto community members.

Moreover, more than 30 companies have come together to support this cause, with notable participation from KPMG, a prominent accounting firm that's assisting with fundraising and distributions. Other major companies contributing to the campaign, either through awareness or financial support, include Zengo (a crypto wallet provider), Fuse, Wonderland, Psagot Equity, and many more.

Crypto Aid Israel has also taken the vital step of distributing aid to several organizations actively engaged in relief efforts. This initiative, totaling 200,000 NIS, aims to have a tangible impact on the lives of those affected. The organizations that have already received funding from Crypto Aid Israel include:

1. Foundation for Advancing Citizens of Eshkol Regional Council: This organization provides support to Israel's southern communities, particularly during times of conflict. It helps with essential services and products. The funding went toward supporting the transportation and shelter needs of citizens in areas near Gaza, who aren't officially recognized as such by the Israeli government. This assistance enables impacted individuals to seek safety and refuge.

2. Zaka: An Israeli volunteer-based NGO specializing in search and rescue, disaster response, and emergency medical services. They often work in the aftermath of major incidents and emergencies. The funding was used to secure critical medical equipment and ceramic vests for Zaka's volunteers operating on the front lines.

3. Lev Echad by Or Hanegev veHagalil: This NGO is dedicated to supporting at-risk youth and promoting social inclusion in Israel through various educational and empowerment programs. The funding went toward providing essential provisions, particularly food, hygiene products, and clothing to individuals who chose to remain in regions adjacent to Gaza to protect and support the municipalities and Kibbutzim.

4. Latet: An Israeli nonprofit organization dedicated to combating poverty and providing humanitarian aid to disadvantaged communities, with a focus on food security and social assistance. The funding supported Latet's large-scale operation in the south, providing food and hygiene boxes to citizens in urgent need with limited access to food and resources.

Crypto Aid Israel aims to continue its efforts in supporting those in need during these challenging times and expresses its gratitude to the global crypto community for its unwavering support.

New Year’s Resolution: Bitcoin ETF Approval

Source: CoinDesk

Approval for multiple spot Bitcoin exchange-traded funds (ETFs) is highly probable before January 10, 2024. This optimism stems from recent developments, with Bitcoin (BTC) experiencing gains during the week. The decision by the Securities and Exchange Commission (SEC) not to appeal a recent ruling related to the Grayscale case plays a pivotal role in bringing the approval of these ETF applications closer to realization.

For context, Grayscale manages the Grayscale Bitcoin Trust (GBTC), the world's largest cryptocurrency fund. While the exact timing of the approval remains uncertain, it is anticipated to occur within the coming months and possibly before the January 10 deadline for the Ark 21Shares applications. ETFs, unlike traditional cryptocurrencies, are traded on exchanges like stocks and mirror the performance of an underlying asset. Their appeal lies in providing investors with access to cryptocurrencies without the need to directly purchase digital assets, making them a cost-effective investment option.

The cryptocurrency market holds high hopes for the approval of a spot Bitcoin ETF, as this move is expected to usher in a wave of mainstream capital into the sector. JPMorgan's research report also emphasizes the likelihood that the SEC will approve multiple applications simultaneously rather than granting an exclusive "first mover advantage" to any single applicant. This approach is considered beneficial for investors as it encourages competition, particularly in terms of ETF fees.

Additionally, Grayscale may face increased pressure to reduce fees if its trust obtains approval for conversion into an ETF. This development would mark a significant shift in the dynamics of cryptocurrency investment and ETF offerings. It's important to note that Grayscale, a major player in the cryptocurrency space, is owned by Digital Currency Group, the parent company of CoinDesk, adding further complexity to the unfolding narrative.

WiiFM: While a Bitcoin spot ETF may not bring more users directly into the crypto space, it is likely to increase some crypto awareness, adoption, and also increase liquidity within the crypto space. Cha-Ching!

Crypto Fear and Greed Index

Weekly Token Watch: Top movers within the top 100

Bitcoin SV (BSV), Coin #46, 57.6%, $53.28

FraxShare (FRX), Coin #88, -7.6%, $5.43

Crypto Meme Corner

Source: Google Images

Thank you for being a part of the Token Mindset newsletter community this week! We remain focused on keeping you informed about the latest developments in the crypto space, making sure you're well-prepared for this exciting journey. Stay informed. Stay ahead.

-The Token Mindset Team

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