India’s largest crypto exchange crossed $2 billion in trading volumes in Feb

India’s largest crypto exchange crossed $2 billion in trading volumes in Feb

NEW DELHI: India’s top cryptocurrency exchange nearly doubled its trading volumes month-on-month in February, despite fears of a government-imposed ban on crypto assets. According to a tweet by Nischal Shetty, founder of WazirX, the largest crypto exchange in India, the company hit $2.3 billion in trading volumes on 21 February. Volumes were at $1.4 billion on 21 January, and at $500 million as on 20 December.

WazirX has been growing fast 🚀

A major reason for our growth is YOU.

Volume growth:

Dec 20 - $500M

Jan 21 - $1.4B

Feb 21 - $2.3B

Thank you for placing your trust on us.

We’ll continue to work hard & serve all our customers.

We’re growing & learning#IndiaWantsCrypto — Nischal (WazirX) ⚡️ (@NischalShetty) March 3, 2021

Also Read | How citizen data led India’s covid battle

The future of crypto trading in India has been in question since the Budget session began in February. The Indian government was expected to bring a bill that bans “private cryptocurrencies" in the country, and lay framework for the creation of a digital rupee. While the definition of private cryptocurrencies wasn’t clear at the time, experts believed that the bill will make it illegal to buy, sell or deal in Bitcoin, Ethereum, and other cryptocurrencies in the country.

At the same time though, interest in crypto trading grew, thanks to big moves made by global companies. Billionaire Elon Musk’s Tesla announced that it has invested $1.5 billion in Bitcoin, while payments provider Mastercard said it would start accepting cryptocurrencies on its network from this year.

WazirX had earlier told Mint that it took the company 11 days to hit the billion-dollar mark in February, while its total for January was $1.84 billion.

“Crypto is a global phenomenon. The moment a Tesla spends $1.5 billion, your wealth in India has increased. Most of your investments are very local, but in crypto, anyone anywhere in the world can affect your wealth. People in India have been joining based on all of this positive news that’s been coming," Shetty had told Mint.

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People are paying millions for clips that can be viewed for free. Welcome to the world of ‘NFTs’

From art to sports trading cards, people are spending millions of dollars on digital collector’s items. These crypto collectibles, known as NFTs, have exploded in popularity lately. A video clip created by digital artist Beeple, whose real name is Mike Winkelmann, was flipped for a record $6.6 million last week. It had originally been bought for around $67,000. Meanwhile, one of thousands of computer-generated avatars called CryptoPunks recently sold for $2 million. And a crypto art rendition of the Nyan Cat meme from 2011 sold for about $590,000 in an online auction. Proponents of NFTs say they fix a big problem with the internet: artists not getting paid for the distribution of their content online. At the same time, critics see the NFT craze as another potential speculative frenzy in crypto that’s sure to fizzle out eventually. So what exactly are NFTs? And why are they suddenly being sold for millions? CNBC runs through everything you need to know.

What are NFTs?

NFTs, or non-fungible tokens, are a new type of digital asset. Ownership of these assets are recorded on a blockchain — a digital ledger similar to the networks that underpin bitcoin and other cryptocurrencies.

But unlike most virtual currencies, you couldn’t exchange one NFT for another in the same way that you would with dollars or gold bars. Each NFT is unique and acts as a collector’s item that can’t be duplicated, making them rare by design. You can think of them like the crypto alternative to rare Pokémon or baseball cards. The rise of the internet meant that anyone could view images, videos and songs online for free. People are buying NFTs out of the belief that they’ll be able to prove ownership of a virtual item thanks to blockchain. NBA Top Shot, an NFT platform based on the U.S. basketball league, lets users buy and sell short clips showing match highlights from star players. The NBA licenses the reels to Dapper Labs, a start-up which digitizes the footage, making a limited amount to create scarcity. NBA Top Shot has facilitated over $280 million in sales to date, according to the website CryptoSlam. Dapper Labs earns a cut on each transaction while the NBA gets royalty payments.

Source: NBA Top Shot

Basketball isn’t the only sport getting into crypto. French start-up Sorare lets users collect and play officially licensed soccer cards in fantasy games. According to NFT data tracker NonFungible, Sorare’s marketplace has generated over $22 million worth of sales to date. Sorare last week announced it had raised $50 million from investors including Benchmark, Accel and Reddit co-founder Alexis Ohanian. “It is an obvious industry use case for NFTs,” said Lars Rensing, CEO of blockchain firm Protokol. “Trading cards and collectibles have always been a profitable revenue stream for clubs.” Meanwhile, art dealers are also getting in on the action, with auction house Christie’s running an auction for a virtual art piece from Beeple. The auction is yet to close but the work has already been bid up to $3 million.

NFTs aren’t a new phenomenon. CryptoKitties, one of the earliest examples, were once so popular they clogged up the network of digital currency ether. To date, these colorful online cats have generated sales of over $40 million, according to NonFungible.

Why are they so popular?

The coronavirus pandemic played a big role in the NFT boom. Last year, the total value of NFT transactions quadrupled to $250 million, according to a study from NonFungible and BNP Paribas-affiliated research firm L’Atelier. That’s in no small part because of stay-at-home restrictions that resulted in people spending a lot more of their time on the internet and saving cash from a lack of commuting. It’s similar to the rise of retail traders betting on GameStop and other historically unloved stocks promoted on the Reddit board WallStreetBets. Meanwhile, it also arrives at a time when bitcoin, ether and other digital coins have surged in value, with bitcoin briefly topping $1 trillion in market value last month. “Right now we’re living in a point in the world whereby the majority of the population is spending 50% of their time online and a significant amount of their time on a PC,” Whale Shark, a pseudonymous NFT collector who claims to have amassed a collection worth over $2.7 million, told CNBC.

Skepticism

Many investors buy NFTs as a speculative investment in the hope that they’ll be able to flip them at a much higher price than what they originally paid. But a growing number of people are also holding them long term as collectibles.

“Like any technological hype cycle, we’re starting with speculative activity and usually that gives way to more fundamental value,” Nadya Ivanova, chief operating officer of L’Atelier, told CNBC. “NFTs started in 2017. A lot of it was about speculation. What we saw in 2020 is the market is actually maturing.” NFTs have lured in celebrities like Mark Cuban, Lindsay Lohan and Gary Vaynerchuk, while major brands are also getting involved. And people are finding other use cases for NFTs, such as virtual real estate and gaming. Nevertheless, the NFT space has been met with skepticism from some artists and investors. Critics view it as another crypto fad akin to the initial coin offerings of 2017 that will eventually drift into irrelevance. Unsurprisingly, the firms behind such tokens disagree. “I think that 99% of the projects that are in the space today might not exist two or three years later, very similar to the ICO boom,” WhaleShark said. Many NFTs are priced in ether, the digital token of the Ethereum blockchain. The digital asset briefly touched a record price of more than $2,000 last month before slumping about $600 in a matter of days, reminding investors of cryptocurrencies' wild volatility.

Blockchain Sleuthing Firm Calls Nigeria ‘Focal Point’ for Africa’s Crypto Scams

Israel-based blockchain analysis firm Whitestream has released a report uncovering four recent crypto scams originating in Lagos, Nigeria, going on to claim that “it seems that Lagos is a central focal point in Africa for investor scams of this kind.”

Bitcoin and crypto use has been booming in Nigeria, but the dark side is the rise of scams. Whitestream’s report speculates that Nigeria’s Central Bank recently doubled down on cryptocurrency restrictions partly due to the rise of such scams.

Whitestream, which serves large institutions such as Israeli Ministry of Defense and global cybersecurity firm VERINT, discovered the scams on the social media platform Instagram. The Instagram accounts are designed to look like they’re from America or Europe, but Whitestream was able to track down that they actually originated from Nigeria.

Related: Banksy Work Physically Burned and Digitized as NFT in Art-World First

The scams, which target new crypto users, look very close to other widespread cryptocurrency scams. The scammers ask users to send bitcoin directly to them, promising profits, but instead run away with the money.

Facebook did not return a request for comment by press time.

‘Fake reality’

The Whitestream report highlights Instagram photos featuring a fake broker living a luxurious lifestyle from her lavish crypto earnings.

The scammers draw in victims over chat, convincing them to send bitcoin, which the scammers will supposedly invest, promising high returns. But instead of investing the bitcoin as promised, they cash out.

Related: Controversial Dapps Test Binance Smart Chain’s Decentralization

They then typically transfer the bitcoin to the Binance exchange to convert it into fiat currency, Whitestream’s analysis determined.

The scammer used a virtual private network (VPN), which allows people to pick an IP address, to make it look like they were from the U.S. But through deeper investigation, including analyzing the Bitcoin blockchain for transactions and detecting the mobile device that was used, Whitestream found the scam originated in Nigeria.

Whitestream tracked down four similar Instagram scams in the fourth quarter of 2020. “It may be the same entity that is running all of these scams at the same time,” the report adds.

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Instagram’s role

Altogether these scams are raking in tens of thousands of dollars’ worth of crypto a month, Whitestream determined.

“The Instagram platform creates fake reality for young investors who are bored during the COVID-19 situation, and they are losing their savings because of these fake, imaginary accounts,” Levy told CoinDesk.

Whitestream CEO Itsik Levy argues that Instagram and its parent company, Facebook, have a duty to stop these scams. The accounts have already been flagged as scams – but there’s nowhere to turn to get them taken down.

“The accounts are still active, and the scam is still attracting new people. It makes no sense,” Levy said.

Scams can’t easily be controlled, but nor can crypto. Cryptocurrency will stick around, the report argues, despite efforts, such as by the Nigeria Central Bank, to stamp it out: “It is not possible to block people or financial institutions from using digital currencies, as this is a natural global economical evolution.”

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