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No more crypto payments while visiting Bali, warns the island’s governor

Madiha Farrukh
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No more crypto payments while visiting Bali, warns the island’s governor

There is some bad news coming from Bali for the tourists who plan to pay in crypto for goods and services while visiting Indonesia’s beautiful island. The Governor of Bali, Wayan Koster said in a media statement that those tourists who do not comply with terms and conditions of their visa permit will be dealt firmly. He further stated that if tourists pay for goods and services using crypto, strict action will be taken against them as crypto as a form of payment is not allowed in the country. The tourists shall only be using Rupiah as a means of payment otherwise they may end up facing punishments which include one year jail term or deportation or a fine of 200 million Rupiah, which is approximately $13000.

This warning was issued after an investigation was conducted by a local news outlet Kompas, that many businesses were accepting crypto payments from tourists in restaurants, motorbike rental companies and meditation studios. According to the news reports, Russian tourists were facing issues while paying with cash as the country is bearing aftermath of Ukrainian war: facing economic sanctions from international community.

The Governor also warned that businesses who accept crypto payments instead of Rupiah will be dealt strictly with tougher bans which include closure of business activity, administrative sanctions, fines, criminal penalties or jail.

During the same press briefing, head of the Bank Indonesia’s Bali representative said that crypto is banned as a form of payment in the country and is only allowed for tradeable commodities on Futures Exchanges.

Bali has always attracted tourists who love beaches, specially in recent years, skilled professionals and digital nomads have relocated to the island to work remotely so that they can work while enjoying beautiful scenery. However, with latest development, many tourists have expressed their unhappiness with the Indonesian Government’s decision to ban crypto and said that they will revisit their decision to visit the island if government does not change its stance.

What is Staking?

Farrukh Pervez
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What is Staking?

Staking offers a way to generate passive income, without the need to sell one’s crypto when the prices are continuously dropping. It is by far the most popular way to earn passive income in crypto. Beside staking, crypto holders can earn passive income by providing liquidity to Liquidity Pools.

What is Staking?

In Staking, the user volunteers to lock their crypto assets to help support the operations on blockchain. In exchange for staking your coins, user is rewarded with a portion of cryptocurrency collected in form of fees from the blockchain. The APR can vary depending on the crypto asset selected for staking. Once assets are locked, no further action is required from the user, making it one of the best ways to earn passive income in crypto.

Can I Stake any Crypto Asset?

Short answer is No. Only crypto currencies that support Proof of Stake (PoS) mechanism, can be staked. Popular crypto currencies to stake are Ethereum (ETH), Pancakeswap (CAKE), Cosmos (ATOM), Cardano (ADA) and others.

What is Proof of Stake?

Proof of Stake (PoS) is a consensus protocol in blockchain. It is a way to decide which node in the network validates new blocks and earn reward on the blockchain. In PoS, validators are chosen based on the number of coins staked by them.

Types of Staking?

There are two types of staking available i.e., Fixed term & Flexible term staking.

In Fixed term staking, the crypto is locked for a fixed duration. The longer the locked duration, higher the APR. Fixed term staking is tailor made for crypto users who hold for long term and don’t worry about price fluctuation. In Fixed term staking, the crypto asset staked will not be available for withdrawal till the locked duration is expired.

In Flexible term staking, crypto is not locked and is readily available for withdrawal. As the crypto is not locked for any duration, the APR offered is quiet low as compared to Fixed staking. This type of staking favor users that are holding crypto for short duration and intend to sell when price fluctuates.

Risk of Staking Crypto?

Every investment has some sort of risk associated with it, especially in crypto. Cryptocurrencies are very volatile and any speculation can cause huge price fluctuations. If you bought crypto and put it in fixed term staking for a year, to gain maximum yield, sudden drop in price can easily outweigh the rewards you will earn via staking. It might take multiple years for the price to recover and till then you will be stuck as price will be too low to sell. Long term staking is only feasible when you are not concerned about the price in short term and believe that in long term it will reach new highs.

As crypto is staked with a validator, there is a risk that the validator might not do the job properly and, in the process, gets penalized and you might miss out on staking rewards. To mitigate this, it’s best to stake with reputable platforms only.

Staking pools can be compromised and funds can be hacked, resulting in total loss of staked funds. In crypto there is no insurance that will cover the loss. DYOR before trusting anyone with your crypto.

Where to Stake Crypto?

There are two popular ways to stake crypto. For non-tech savvy people one can stake on central exchanges like Binance, KuCoin, CEXIO & others.

Tech savvy people can stake on DeFi platforms using DeFi wallets. Popular DeFi platforms are Uniswap & Pancakeswap. In DeFi the user is responsible for managing the crypto wallet themselves.

How much can I earn with Staking?

Earnings depends on the crypto that is being staked and some times, the platform it is being staked on. At the time of writing this article, Ethereum (ETH) staking on Binance yields around 4% APR. Pancakeswap (CAKE) yields 18% APR for 1-year Fixed term staking on Pancakeswap platform. If you stake CAKE on Pancakeswap for 1-year Flexible term, staking yield drops to 0.86% APR.

Conclusion

Staking is a very good way to passively earn crypto. It can generate good yields for long term investors that are not bothered by short term price fluctuation. Always review terms of staking and invest in sound projects with high security standards.

There are some risks associated with it, as are with any other investment. Type of staking shall be considered based on the risk tolerance of your portfolio. Always diversify your portfolio to mitigate the loss of funds due to any reason. Don’t stake funds that you can’t afford to lose. Always DYOR.

SEC sues Coinbase: Second crackdown on crypto exchanges in 24 hours

Madiha Farrukh
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SEC sues Coinbase: Second crackdown on crypto exchanges in 24 hours

In a latest development, Securities and Exchange Commission (SEC) of United States has sued Coinbase. This came a day after SEC launched a lawsuit against Binance, one of the largest crypto exchanges in the world. Crackdown on crypto exchanges continue by SEC resulting in price drop of crypto assets. At the time of writing, the Coinbase’s share price has dropped approximately by 19%.

The US Commission said in a statement that lawsuit has been filed against Coinbase for illegally running the business in the country, without seeking registration from the regulator first.

“We allege that Coinbase, despite being subject to the securities laws, commingled and unlawfully offered exchange, broker-dealer, and clearinghouse functions,” SEC Gary Gensler, the Chair, said in a statement issued earlier today.

The SEC has classified 13 explicit crypto assets as Securities that are available on Coinbase. These include Cardano (ADA), Solana (SOL) Filecoin (FIL), Internet Computer (ICP), NEAR Protocol (NEAR), Polygon (MATIC) and others.

After SEC lawsuit against Binance yesterday, there was a sudden drop in top cryptocurrency prices. However today the crypto market has shown resilience and the prices have not been impacted much till now.

Link to SEC press release here.

Coinbase CEO & Co-founder Brian Armstrong has replied to the allegations via a tweet.

SEC Sues Binance – BNB Price drops

Farrukh Pervez
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SEC Sues Binance – BNB Price drops

Securities and Exchange Commission (SEC) has sued Binance, the world’s largest crypto exchange and its CEO CZ for allegedly breaching US securities rules. In the lawsuit it is alleged that Binance mishandled customer funds, didn’t stop manipulative trading practices, provided false statements to regulators and knowingly put investors and customer at risk. Binance US was launched in 2019 and headquartered in Florida.

In response to this news price of BNB, Binance’s Native token, has fallen by 10%. The price is expected to fall further as this lawsuit will dent Binance reputation in retail investor.

SEC Char Gary Gensler said in a press release, “Through thirteen charges, we allege that Zhao and Binance entities engaged in an extensive web of deception, conflicts of interest, lack of disclosure and calculated evasion of the law. [They] misled investors about their risk controls and corrupted trading volumes while actively concealing who was operating the platform”.

SEC has been targeting different crypto services from time to time. It was rumored for sometime now that SEC plans to launch an investigation against Binance.

Binance has responded to the lawsuit filed by SEC. Binance said that they have corporated with SEC investigation and are disappointed that SEC has proceded to file the lawsuit.

What is FOMO in Crypto?

Madiha Farrukh
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What is FOMO in Crypto?

FOMO term is being used in crypto extensively especially if you are a newbie in crypto then you may wonder what it means? FOMO stands for Fear Of Missing Out! FOMO in crypto occurs when trader makes irrational decision based on sudden market movements. FOMO leads user to buy cryptocurrencies like Bitcoin and altcoins when they are almost at the height of current cycle. Similarly, it leads people to sell at the bottom in anticipation of further drop.

When FOMO is generated?

FOMO is usually generated when everybody starts talking about digital currencies as they start moving up. This fear urges the investor to buy digital assets most of the time at their highest prices without understanding the market dynamics.

When bull market arrives, many influencers start talking about their favorite crypto assets specially on Twitter, TikTok and other social media channels. Sometimes new investors don’t understand that these influencers may have years of experience and they entered the market when many assets were at their lowest.

From my personal experience, during 2021 bull cycle, the more price of Bitcoin was moving up, the greater FOMO was increasing in people and they even started investing in Bitcoin at $60,000. When FOMO increases to a larger extent, volatility of an asset becomes inevitable which in last cycle resulted in Bitcoin to collapse to $15000 gradually. There is no denying that other factors do affect crypto market as it is still in its developing phase but FOMO does play a vital role.

FOMO is usually a result of unregulated emotions without prior trading experience. Traders even with years of experience get fomoed and start to feel that if they don’t invest at this certain point, they will miss out on quick big profits.

So, before trading in crypto or any other financial markets, you must be able to recognize and regulate your emotions to avoid losses.

Crypto ban in Pakistan: What does the future looks like?

Madiha Farrukh
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Crypto ban in Pakistan: What does the future looks like?

Pakistan’s government has decided to ban all online services dealing with crypto in the country last Wednesday, May 17, 2023. This comes as a shocking news for crypto investors as well as crypto industry in the country which was just starting to see some boom in a couple of years.

Since the last bull run, Pakistan based crypto wallets have seen exponential growth making Pakistan one of the top crypto traders in the world. This industry has grown from $18 billion to $25 billion industry in just a couple of years and that is an achievement in itself.

But Pakistan’s government stance has never been clearer in this regard. Aisha Ghaus Pasha, the Minister of State for Finance and Revenue stated in a Senate’s Standing Committee that government is banning cryptocurrency trading in the country saying that It will never be legalized. The country is currently fighting many battles on its political and economic landscape which is making it extremely hard to regularize crypto. Pasha further stated that cryptocurrencies pose a significant threat of being used for terrorist activities which is a serious concern for the country at this point. The crypto ban in Pakistan is reportedly to meet FATF’s conditions to avoid ‘Grey list’ which Pakistan has been a part of since 2018 and was removed from it in 2022. To keep complying with FATF’s conditions, crypto trading was banned as Pakistani government deems that allowing cryptocurrencies can help mushroom money laundering and financing of terrorist activities.

State Bank of Pakistan has also reportedly talked about the billion dollars invested in crypto already in the meeting. SBP said that FIA and FMU are working to enforce ban on crypto trading as it is highly risky. The authority said that all transactions are illegal to buy crypto using debit and credit card from now onwards.

Future for crypto traders does look gloomy in Pakistan as government has shown its strict stance on banning crypto for good in the country. In my personal opinion, despite all the political challenges country is facing right now, it should try to adapt to global financial technology as world is adapting to crypto at much faster rate.

Many youngsters believe in crypto and are investing in crypto believing that it can be a solution for their financial woes. The rupee value is constantly declining, inflation is rising and businesses are winding up for lack of exports. In these conditions many youngsters think that crypto investments can be a solution for the issues they are facing and can provide stability financially as the profit anticipation from crypto investment is always huge.

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