Preparing to clarify legal and regulatory questions after the massive Terra and FTX crises, 2023 is already signaling what will be a critical year for the crypto industry.
If 2022 made one thing clear about crypto, it’s that there’s absolutely no point in predicting anything. The overnight collapse of billions of dollars of companies, historic technological successes, industry-wide collapses, exposures of corporate misconduct, billionaires on the run, surprise arrests, and much more happened in 2022.
Where does crypto go from here? Some of the volatile events of 2022 will certainly be reflected in the new year. Some new trends are also preparing to play an important role in shaping the year 2023.
Here are the key stories and events to consider in 2023:
FTX Crisis: The Sam Bankman-Fried Case
SBF, Founder of FTX, which filed for bankruptcy in November, was arrested in the Bahamas last month and subsequently extradited to the United States.
SBF was also released last month on $250 million bail and placed under house arrest at his family’s California home.
SBF, who came to trial in the USA on January 3 and faces 115 years in prison, stated that he was innocent. The hearing, which could not be concluded, was adjourned to October 2, 2023. Developments on the FTX exchange, which is linked to the assets of millions of investors, will be eagerly awaited this year.
Ripple and SEC’s 2-Year Legal Battle Continues
One of the most high-profile and still ongoing crypto lawsuits of 2022 is the long fight between Ripple and the SEC. The SEC alleges that the company’s XRP token was illegally sold as an unregistered security.
Some experts believe that the SEC used its lawsuit against Ripple not only to prevent unregistered sales of tokens like XRP, but also to lay the groundwork for the agency to go after centralized crypto exchanges like Coinbase, Kraken, and Binance.US. For the case where both sides are strong, Ripple CEO Brad Garlinghouse said that the case could be ended in 2023.
Will the case, which has been going on for nearly two years, finally be decided in 2023? And if it does, what will this decision mean for crypto as a whole? The answers to your questions are eagerly awaited.
Ethereum’s Way: Shanghai
The historic Ethereum Merge in September migrated to a proof-of-stake consensus mechanism that instantly reduces the network’s energy consumption by 99.99 percent. After this technical victory, what awaits Ethereum as it moves forward in 2023?
First up will be the Shanghai upgrade of the network, which is expected to launch in March.
Shanghai will, first of all, ensure the withdrawal of staked ETH. Since Merge went live in September, users have been able to deposit their existing ETH into the Ethereum network to help verify Ethereum transactions, creating new ETHs for themselves in the process. However, not all deposited ETHs and newly created ETHs are ready for withdrawal yet.
That will change in March, with around $20 billion worth of staked ETH finally available to Ethereum users after the network’s Shanghai upgrade.
Ethereum’s core developers are so committed to initiating staked ETH withdrawals that they’re trying to keep Shanghai as light as possible, leaving other much-anticipated network upgrades out of date for the sake of speed.
US Rate and Inflation Decisions
US inflation, which has had a significant impact on the Bitcoin price, started to show signs of cooling towards the end of 2022. The US Federal Reserve began raising interest rates in March 2022 to combat rising costs of goods and services.
CPI data for December is planned to be announced on January 12. Data for November showed that inflation was 7.1 percent, below the 7.3 percent forecasts. The Fed slowed the rate of increase in December, but there will be no Fed decision this month. In the following months, the rate decisions will be renewed according to the course of the US economy.
CBDC Studies Accelerate
International payments are heading in a very different direction in the coming years than in previous years. Countries that change their financial systems according to the rules of the digital world are paving the way for new regulations with international payments. Countries such as Australia, Russia, Sweden, Israel, Norway and Turkey are among the countries that have plans for 2023 on this issue.
The development and adoption of the cryptocurrency industry has also mobilized countries. At the same time, the emergence of crypto exchanges with problems (FTX liquidity crisis), on the other hand, caused countries to accelerate their digital transactions. Many countries have tightened their efforts for a central bank digital currency (CBDC). In the coming years, the use of digital currencies is aimed to be more prominent. In this context, Turkey also spends a lot of time.
Recently, the Central Bank of the Republic of Turkey (CBRT) successfully carried out the first payment transactions on the Digital Turkish Lira Network.
In the development of the crypto industry, the moves of countries play an important role. Although the cryptocurrency market has reached millions of investors, sustainability has become important. The recent FTX and Terra crises have led to a loss of confidence in cryptocurrencies. The bear market, especially in the last few years, has created a shocking market conditions. The need for regulation and oversight was also on the table, with billions of dollars in investments steaming up lately.
The United Kingdom and European Union countries have started to step up their work for crypto regulations. Due to the events of 2022, the future of stricter crypto rules is an indisputable fact. This is the signal for new steps to be taken in the crypto industry in 2023.