Crypto Offers Its Hand To Ukrainians

The stablecoin Tether is trading above its peg on the Ukrainian exchange Kuna as Russia begins its invasion of the Eastern European country. Ukraine suspended digital money transfers in the country as part of its emergency plan, which has stressed many citizens.

The premium speaks to economic desperation among Ukrainians, who are trying to ensure the security of their funds – and that goes especially for those fleeing the country and withdrawing their wealth en masse.  

On the popular Ukrainian cryptocurrency exchange Kuna, the price of USDT jumped by almost 5% in the past 24 hours to ₴32 Ukrainian hryvnias (UAH), or the equivalent of $1.10 USD. Yesterday, Tether trading volumes exceeded ₴8.5 million, equivalent to about $290,000, per Coingecko. 

Tether has not been alone in soaring in popularity. Overall, there has been a surge in interest in cryptocurrencies in the country. Since the Ukrainian government has suspended digital money transfers as part of its emergency measures, the citizens have turned to cryptocurrency. According to CoinGecko, the volume of Bitcoin and other cryptocurrencies traded on popular Ukrainian exchange Kuna surged by more than 200% earlier today. Trading volumes on Kuna hit a record high today of $4.8 million, the highest since May 2021.

The Eastern European country has been supportive of crypto trading and mining, aiming to become the crypto capital of the world. As tensions with Russia escalated over the past few years, Ukraine kept a strategic eye on crypto regulation. Just last week, the Ukrainian parliament legalized Bitcoin and other cryptocurrencies. However, the country has not made Bitcoin a legal tender. The country was also reportedly on the brink of launching its own digital currency. The Eastern European country wants to use crypto to combat Russian influence and to be viewed as a crypto hub by the global community.

In addition to this, reports have come out saying that after Russia declared war on Thursday, $400,000 worth of Bitcoin donations were made to  Ukrainian military groups in one day. According to new data from blockchain analytics firm Elliptic, the amount was donated to Come Back Alive, a Ukrainian non-governmental organization supporting the armed forces.

Considering the current geopolitical climate in Eastern Europe,  crypto markets and cryptocurrency applications will now play an indirect role in the conflict – which will be fought on many fronts, including economic ones. Digital currency is being used not just for investments, but also for political interests, emergency money, crowdfunding war efforts, and much more.

OnJuno Co-Founder Varun Deshpande has a unique brand of foresight as it pertains to the crypto space. In October 2017, Deshpande helped co-found Nuo Network, one of crypto’s first decentralized finance apps. It’s a lesser-known name that helped people lend and borrow crypto – but it shares company with other DeFi titans which established the foundations of DeFi, such as Compound and Maker.

Some five years on from Nuo, Deshpande says very little has changed about how people get their money into crypto. Sure, we’re using exchanges as we always have – but in the world of sky-high Ethereum gas fees, layer-2 blockchains, and Ethereum killers, the game has changed. 

“Right now, to get money in crypto, you have to go from Bank of America to Coinbase to Metamask to a bridge,” Deshpande said. “Then money gets locked, it’s a crazy process to get money in and out, and that’s not an experience we want.”

That’s why Deshpande – and a crack team of crypto fanatics – have been hard at work building a neobank called OnJuno, which is solving the “onramp problem” that crypto maximalists need to go truly “bankless.”

“We have been able to build an entire banking stack, but we think of ourselves as employers of the DeFi world and enablers of self-custody money,” Deshpande said. “We envision a world wherein users will not just have a primary bank account, but also a digital wallet that they choose … and we want to become a very simple banking interface for them to interact with that wallet.” 

What does that look like? Well, Deshpande says that it “means that money within that ecosystem can move from cash to crypto, and crypto to chain, instantly.” And for OnJuno, that means that the company can do a lot of what other banks do. But on top of that, it can then either allocate that money into cash (which is secured in an FDIC-insured bank account) or put it into crypto. 

The bolder, more interesting option is when you opt for a crypto paycheck – right now, users can allocate their funds into ETH, BTC, or yield-bearing USDC. The former option is pretty boring, comparatively, but savers in OnJuno’s insured account will be welcome to a surprisingly bold 1.2% APY on their funds.

Those who take their paychecks in crypto – or buy crypto on OnJuno’s portal – will fetch a few benefits, though. Namely, there are no fees. And maybe even more impressively, those who want to have a ‘strictly crypto account’ can keep their funds in USDC to pay for purchases – and make 4% APY on their USDC held at the neobank. Users can also set up their paychecks to skip OnJuno and go directly to an on-chain address. 

Deshpande also says that they’ll be “expanding the offering … to offer stablecoins [such as] USDC on Polygon” and to “offer new layer-1s like Avalanche and Fantom.” In the long run, he hopes that OnJuno will offer onramp support for all major blockchains and asset types.

In its current state, though, OnJuno has the makings of something that crypto maximalists will truly love. The traditional banking infrastructure – much of which is compulsory, namely for paying bills and honoring other obligations – is a sunk cost, but one that most will lean on. However, OnJuno’s product offers a way out – a way to stay purely in crypto, spend your money in it, or send your money on-chain to stretch your earnings even further.

Check out OnJuno’s website and Twitter to find out more.

Even though Ethereum 2.0 is expected to launch this year, many developers are positioning to help Ethereum scale now and into the future. Among the leading layer-2 scaling solutions are Polygon, Arbitrum, and Optimism. One more – zkSync – is now hoping to join the club and pave the path to smoother (and less expensive) Ethereum transactions.

zkSync is the latest protocol implementing its own Ethereum scaling solution in a layer-2 enhance, and test, technology that could improve the performance of the network. As its name implies, it is powered by zero-knowledge rollups (hence, “zk”), an in-development scaling technology that rolls up hundreds of transfers or transactions into a single transaction to increase throughput.  

There are lots of companies playing around with zero-knowledge rollups, but yesterday was the first time that it was put into a production blockchain – and that’s what zkSync is.  It’s a test network built on the Ethereum Virtual Machine, the same tech that forms the basis of Ethereum itself. However, its implementation is novel in that zkSync will serve as a test network for testing zero-knowledge tech and scaling.

Ethereum is becoming more congested as more people use its smart contract-powered DApps and buy, sell and borrow at NFT marketplaces. As checkpoints for the Ethereum blockchain, the layer-2 scaling solutions handle the traffic. But we’ve seen over the past years that the Ethereum blockchain network still faces congestion issues due to high demand. 

In this scenario, solutions like zkSync emerge as another possible solution to the largest blockchain network. Moreover, Ethereum also needs assistance with customer retention as it transforms into ETH 2.0. Some experts say that the “zkEVM” could change the landscape of Ethereum scaling soon.

After years of playing hide and seek with the authorities, cryptocurrency derivatives exchange BitMEX founders pleaded guilty to violating U.S. anti-money laundering laws. During a hearing in federal court in New York, Arthur Hayes and Benjamin Delo admitted that they failed to establish an anti-money laundering program at the cryptocurrency exchange. Both were found guilty of violating the anti-money laundering provision of the Bank Secrecy Act. The two agreed to each pay a $10 million fine. 

“Arthur Hayes and Benjamin Delo built a company designed to flout those obligations,” said the U.S. Attorney for Manhattan, Damian Williams. 

“They willfully failed to implement and maintain even basic anti-money laundering policies. They allowed BitMEX to operate as a platform in the shadows of the financial markets.”

Hayes and Delo founded BitMEX in 2014 with the help of Samuel Reed, a programmer specializing in web applications. In October 2020, they were charged with failing to implement programs that prevented money laundering or verified the identities of their customers. Prosecutors claimed BitMEX was set up in Seychelles to escape regulatory scrutiny. Later in the year, the crypto exchange and its three founders were sued by the U.S. Commodity Futures Trading Commission (CFTC) for operating an unregistered trading platform and violating multiple CFTC regulations. 

Two years later, the founders have acknowledged their mistakes and are willing to accept responsibility for their actions. Hayes’s spokesperson mentioned in the statement that he [Hayes] “looks forward to the time when he can put this matter behind him.” 

 It’s noteworthy that despite the crisis at BitMEX, the crypto exchange was able to launch new products without many hurdles. For instance, one of the oldest crypto derivatives exchanges is now promoting its own crypto token while keeping a close eye on other crypto products. In an attempt to bridge the financial and crypto sectors, the exchange announced earlier this year that it would purchase Bankhaus von der Heydt, a 268-year-old German bank.

Currently, the exchange’s trading 24-hour trading volume stands at $1.48 billion. Even though Coinbase’s volume is much higher at $3.77 billion, this is still a massive figure nonetheless.