This week in the crypto world we saw Binance take a massive hit, a $3 million Bitcoin transaction fee, and the UK accelerate its blockchain plans.
Big week, not gonna lie.
UK to Launch Digital Asset Sandbox
The UK is to get an official Digital Securities Sandbox (DSS) as part of its plans to scale up the digital asset sector in line with its plans to become a blockchain development hub. British Chancellor Jeremy Hunt revealed the new plan in the ‘mini-budget’ unveiled this week where he introduced 110 measures aimed at driving the nation’s economic growth.
One of these was the DSS which the government hopes to implement in the first quarter of 2024. The DSS will provide a controlled environment for experimentation and innovation, allowing firms to leverage digital asset technology to create and operate critical financial market infrastructure.
Mammoth Bitcoin Transaction Fee Stokes Debate
A $3.1 million Bitcoin transaction fee has stoked the fires of Bitcoin’s transaction fee model generally, with the issue of its unsuitability to everyday transactions rearing its head. The fee, seemingly sent by accident in accompaniment to a $2 million bitcoin send, is a six-fold increase on the previous record of $500,000 accidentally set by Paxos, which was repaid by the mining pool which processed it.
Bitcoin transaction fees are still at the $10 mark, thanks chiefly to the popularity of Ordinals, making reliance on Layer 2 solutions such as the Lightning Network all but essential. This has stirred the debate over Bitcoin’s high transaction fees, which have been a part of the Bitcoin landscape since time immemorial.
Binance and CZ Face the Music
It was always going to end this way. Six years of dodging regulations while building the biggest crypto empire in the world led this week to a record fine and possible jail time for its operator.
Binance, launched in 2017, was hit with a cumulative $4.3 billion fine for violating the Bank Secrecy Act and the International Emergency Economic Powers Act and also failing to register as a money transmitting business. Its CEO Changpeng Zhao, meanwhile, stepped down from his role and faces a prison spell for his part in allowing money laundering to flourish on the platform. He was also hit with a personal $50 million fine.
The result has been a massive outflow of funds from former Binance users who believe the platform will now be shuttered or face much heavier scrutiny, with Binance no longer allowed to have any presence in the US.