Biggest Crypto News Roundup – July
July 2024 has been quite a month for the crypto industry! We finally saw the launch of Ether spot ETFs, while India held firm on its tough crypto tax laws despite pushback from the industry. In a shocking event, $235 million was stolen from WazirX, India’s biggest crypto exchange. Plus, Gate.io decided to pull out of Japan due to regulatory issues.
Catch up on all the major crypto news and happenings from July 2024 right here.
U.S. Spot Ether ETFs Launch with $1.07 Billion Trading Volume on First Day
July 23, 2024, was a big day for crypto as U.S. spot ether ETFs finally made their debut.
These ETFs started trading on major platforms like Cboe, Nasdaq, and NYSE. On the first day, the total trading volume hit $1.07 billion. Grayscale’s Ethereum Trust led the pack with $450 million in trades, followed by iShares at $245 million and Fidelity’s ETF at $137 million. Other players like Franklin Templeton, VanEck, Bitwise, 21Shares, and Invesco also launched their ETFs.
While these numbers are impressive, they fall short of the $4.6 billion seen during the bitcoin ETFs launch in January 2024.
The fees for these ETFs vary, with Franklin Templeton’s at 0.19% and Grayscale’s trust going up to 2.5%. Interestingly, Grayscale also introduced a “mini” ETF with a 0.15% fee, although fewer fee waivers are available compared to bitcoin ETFs.
Market analysts are optimistic about ether ETFs, predicting they could attract $1 billion in monthly inflows. Despite the positive outlook, ether’s price remained steady on launch day, closing at $3,486.75.
The SEC’s stance played a critical role in the ether ETF launch. While they haven’t officially classified ether as a commodity, it allowed these ETFs as commodity-based trusts. However, the SEC’s decision to exclude the “staking” mechanism in these ETFs might sway some investors.
The introduction of ether ETFs is another huge win for the crypto industry. It not only reflects investor interest in digital assets beyond Bitcoin but also adds a layer of legitimacy to the market.
India Sticks to Strict Crypto Tax Laws Despite Industry Backlash
India’s crypto tax policy, introduced in July 2022, imposes a hefty 30% tax on crypto profits and a 1% tax deducted at source (TDS) on all transactions. This policy is one of the toughest worldwide, aimed at tracking transactions and reducing speculative trading. However, it hasn’t worked out as planned.
Recently, the Esya Centre, a New Delhi-based think tank, proposed lowering the TDS from 1% to 0.01%. Their study found that the high TDS pushed about 5 million crypto traders to move their activities offshore, causing a $420 million loss in potential government revenue. The report pointed out that the tax didn’t curb speculation or improve transparency as intended.
The 30% tax and 1% TDS led to a sharp drop in crypto trading in India. According to an article by Economic Times, trading volumes on Indian exchanges fell by 97%, and active users decreased by 81%. This has left local exchanges struggling to survive.
Despite multiple requests from the crypto community to reduce the TDS, Finance Minister Nirmala Sitharaman’s 2024 Union Budget speech on July 23 didn’t address cryptocurrencies. The government’s refusal to lower the TDS suggests it doesn’t see crypto as a serious business, equating it more with gambling.
Despite these tough tax rules, India remains a global leader in cryptocurrency adoption, topping Chainalysis’ 2023 Global Crypto Adoption Index.
$235 Million Stolen from India’s Largest Crypto Exchange, WazirX
On July 18, 2024, WazirX, a major Indian cryptocurrency exchange, got hacked, losing a whopping $235 million.
Web3 security firm Cyvers spotted the hack when they noticed some weird transactions from WazirX’s “Safe Multisig” wallet on Ethereum.
🚨ALERT🚨Hey @WazirXIndia, Our system has detected multiple suspicious transactions involving your Safe Multisig wallet on the #ETH network.
— 🚨 Cyvers Alerts 🚨 (@CyversAlerts) July 18, 2024
A total of $234.9M of your funds have been moved to a new address. Each transaction's caller is funded by @TornadoCash.
The suspicious… pic.twitter.com/4sajAwd4Hb
The hacker moved almost all the stolen funds to a new address and used Tornado Cash to hide their tracks. The stolen assets included Tether (USDT), Pepe (PEPE), Gala (GALA), Ethereum (ETH), Shiba Inu (SHIB), and Polygon (MATIC), which the hacker converted to Ether (ETH) to cover their trail even more.
WazirX quickly suspended all withdrawals of cryptocurrencies and Indian rupees. They’re actively investigating the breach and working with other exchanges to get the stolen funds back. They’ve also filed a police report and informed the Financial Intelligence Unit and the Indian Computer Emergency Response Team. Lastly, they also launched a bounty program offering up to $23 million for information leading to the recovery of the stolen funds.
Cyvers’ Meir Dolev explained that WazirX’s multisig wallet needed four signatures, with the last one provided by Liminal. The hacker managed to change the wallet’s setup, letting them move funds without WazirX or Liminal’s approval.
Analysts believe North Korean hackers, possibly the infamous Lazarus Group, are behind the attack. The Lazarus Group has been linked to other high-profile crypto hacks, like the $600 million Ronin Bridge hack.
The $235 million hack on WazirX is a major wake-up call for the crypto industry in India. This incident could lead to more scrutiny from the government on centralized exchanges in a country that’s already struggling with strict regulations.
Gate.io Withdraws from Japan Due to Regulatory Pressures
On July 22, 2024, Gate.io announced it was shutting down its services in Japan. They stopped opening new accounts for Japanese customers on the same day. The main reason? Compliance issues and regulatory pressures from Japan’s Financial Services Agency (FSA).
The Payment Services Act (PSA) requires crypto exchanges to register with the FSA and follow strict anti-money laundering (AML) regulations and identity checks.
Gate.io isn’t listed as a registered entity with the FSA, meaning they didn’t have the necessary approval to operate in Japan. The FSA had already warned that four other crypto exchanges were operating without proper registration.
Gate.io has promised to help its Japanese customers move to other compliant crypto exchanges within the country. They’ll also remove Japanese language info from their website but will keep providing updates to assist with the transition.
Japan has some of the toughest rules for cryptocurrency exchanges, including some strange tax laws, largely due to the infamous Mt. Gox hack in 2014. Despite the tough regulations, Japan remains a major player in the crypto world, attracting significant investments.