Crypto Biz: Crypto outflows surge, a16z’s UK office, and the silent altcoins ban

The crypto industry has experienced a $417 million outflow over the past eight weeks due to a combination of increasing interest rates and stringent regulation in the United States, resulting in pauses in trading for numerous altcoins, further exacerbating the current crypto winter.

This setting is causing crypto firms to reconsider and modify their corporate plans.

Binance, a crypto exchange, is taking steps to broaden its income streams despite contending with legal issues with authorities. As part of this, it is introducing a subscription-based cloud mining facility for Bitcoin (BTC) that will let people who don’t own any hardware to buy Bitcoin hash rates from Binance’s cloud mining platform.

Venture capital firm Andreessen Horowitz (a16z) is taking a new direction by establishing their first office outside the United States in London, United Kingdom. Chris Dixon, a16z’s managing partner, has attributed the decision to the presence of a “predictable business environment”. U.K. Prime Minister Rishi Sunak has noted that the expansion is due to the “right regulation and guardrails” that are in place to both “foster innovation” and protect consumers.

The Sovereign Wealth Fund Institute reports that a16z is the most sizable venture capital firm globally, with $35.8 billion in assets under its administration. This action places the firm among other crypto companies that have established operations in jurisdictions with a more accommodating regulatory framework outside of the United States.

This week’s Crypto Biz examines the exodus of crypto markets, the inaugural overseas branch of a16z, the ongoing prohibition of altcoins, and the AI systems that will be rolled out first in the United Kingdom.

​​Crypto fund outflows reach $417 million over eight weeks as investor caution persists

CoinShares’ most recent weekly report showed that cryptocurrency investment products experienced a drawdown of $88 million in the past week. This marks the eighth consecutive week of outflows, amounting to $417 million. According to CoinShares analysts, these continuous outflows are likely due to monetary policy considerations, leading investors to be more careful with digital assets. Of the total outflows, Ether products experienced the most, with $36 million being taken out, the most since the Ethereum Merge in September 2022. Bitcoin investment products, on the other hand, saw outflows of $52 million.

A16z opening London crypto office, citing ‘predictable’ environment

Venture capital firm a16z has concluded their deliberations and will be establishing their first office outside of the United States this year. This decision is a result of “productive dialogue” with the U.K. prime minister and “months of constructive conversations” with His Majesty’s Treasury, policymakers, and the Financial Conduct Authority. In addition, a16z has declared that they will be launching a Crypto Startup School (CSS) program in London in the spring of 2024. The most recent CSS program had 8,000 applicants, with 26 of them getting investments from a16z.

EToro halts ALGO, MANA, MATIC and DASH purchases for U.S. customers

eToro, a trading platform, has decided to suspend the buying of Algorand (ALGO), Decentraland (MANA), Polygon (MATIC) and Dash (DASH) by US customers due to them being categorized as securities in recent lawsuits from the Securities and Exchange Commission. This step follows the suspension of MATIC, Cardano (ADA) and Solana (SOL) by competitor Robinhood. Although the assets have been officially removed, US users of eToro can still keep and sell these tokens. The company proclaimed that it is still a “supporter” of the crypto industry, and that this move is merely to avoid any potential regulatory noncompliance.

UK to get “early or priority access” to AI models from Google and OpenAI

British Prime Minister Rishi Sunak recently declared that Google DeepMind, OpenAI and Anthropic – three tech organizations considered to be the world’s leading providers of generative artificial intelligence (AI) technologies – have consented to give the U.K. early access to their AI models. Sunak made the announcement while commencing London Tech Week, revealing a three-part plan for AI systems deployment. The prime minister did not make clear if the U.K. would receive earlier access to production models than the general public or contractors, or if the commitment was just to provide access to the government and other priority researchers.

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