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Kalam Crypto #53: MetaMask x Paypal, Trump NFTs, and SBF charged with fraud

This week, MetaMask partners with PayPal, SBF was charged with criminal and civil fraud, and Trump issues his NFT collection.

CoinMENA Team

“I dreamed it so many times” - Lionel Messi after winning the World Cup

Ahlan wa sahlan, and welcome to the 53rd edition of CoinMENA's weekly newsletter, Kalam Crypto. This week, MetaMask partners with PayPal, SBF was charged with criminal and civil fraud, and Trump issues his NFT collection. All that and more, so let's dive into this week's letter, and talk crypto:

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Global News 🌍

This week’s headlines are brought to you in partnership with CoinTelegraph MENA.

Metamask Partners With Paypal: Select MetaMask users in the U.S. will be able to buy ETH via PayPal for a 1% fee. ConsenSys announced the new feature is rolled out to MetaMask Mobile users only at first, with a browser integration to follow in the first quarter of 2023. This is yet another important partnership between a Web 2 fintech company and a Web 3 crypto company, that aims to onboard more people onto crypto.

FTX’s SBF charged with Fraud: US authorities are charging SBF with both criminal and civil fraud. Last week, A U.S. grand jury charged SBF with committing or conspiring to commit fraud on FTX’s customers and lenders plus counts of money laundering, and the Securities and Exchange Commission (SEC) is charging him with defrauding investors. The SEC also alleges Bankman-Fried used customer funds for political donations and to fund an extravagant lifestyle. It appears everything we knew about SBF's “modest” lifestyle was a carefully orchestrated public relations move. If indicted, SBF could face up to 115 years in jail. 

Donald Trump NFTs: Just when you think we’ve seen it all, the world of crypto shows us otherwise. This week, former US President Donald Trump released a series of digital collectibles (NFTs), called. Trump Digital Trading Cards. The cards feature images of Trump in a style similar to collectible baseball cards. The tokens, minted on Polygon, cost $99 and can be purchased with ether (ETH) or in fiat currency. Buyers of multiple NFTs could earn other perks such as face-to-face meetings with trump, or access to his golf course. Is this the sign of the market bottom?

Deep Dive 🔬

Proof of Reserves: After the collapse of FTX, many investors are demanding more transparency from cryptocurrency exchanges. In the past 30 days, nine crypto exchanges issued proof of reserve statements, which include liabilities: Kraken, BitMEX, Deribit, OKX, Kucoin, Gate, Binance, Crypto dot com, and Bybit. While these proof of reserve statements are not perfect, they are definitely a step in the right direction. Binance’s proof of reserve statement in particular drew strong criticism for its failure to include details on its corporate structure or information related to the quality of internal controls and how Binance's systems liquidate assets to cover margin loans. 

While the criticism the crypto industry is receiving these days is valid, it is relevant to point out that traditional financial institutions cannot show proof of reserves even if they wanted to. Fractional reserve banking means that banks are only required to hold a fraction of customer deposits, around ~14%, and the rest is loaned out. Even for the fraction of assets that banks hold, they cannot show cryptographic proof that they actually own these assets, instead, they rely on institutional “trust”. This is where crypto can stand out as a more transparent system than the legacy financial system. Proof of ownership can be cryptographically proven, without the requirement of trusting a third party or an auditor.

Exchanges issuing proof of reserves is an excellent first step to increasing transparency and restoring investor confidence in crypto. They’re not perfect, but let’s not let perfect be the enemy of progress.  

CoinMENA News 🗞

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Tweet of the week 🐥

Quiz Corner ✅ 

Last week’s question: What is the term used for when a blockchain splits?

Answer: Fork

This week’s question:  What's the percentage of people owning crypto in Argentina?

  1. 2%

  2. 4%

  3. 10%

  4. 5.18%

See the answer in next week’s newsletter.

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