Coinbase Posts Sixth Consecutive Quarterly Loss (WSJ)
Digital asset prices are up, but Coinbase Global continues to face its own crypto winter. Coinbase reported a sixth consecutive quarter of losses as regulatory risks and lower trading volumes continue to weigh on the company. The biggest cryptocurrency exchange in the U.S. posted a loss of $97 million for the second quarter, or a loss of 42 cents a share, on revenue of $708 million. Coinbase stock swung between gains and losses in post-market trading. The stock has rocketed 156% this year, though it is trading well below its initial offering price of $381 a share.
Sam Bankman-Fried Faces Jail as DOJ Pushes for Incarceration (CoinDesk)
FTX founder Sam Bankman-Fried's defense isn't denying that he shared former Alameda Research CEO Caroline Ellison's diary with the New York Times, and therefore he should be "detained pending trial," the U.S. Department of Justice said again in a filing late Thursday. The filing, the second from the Justice Department and the third in the back-and-forth between Bankman-Fried's attorneys and the prosecutors accusing Bankman-Fried of massive financial fraud, presents the department's view that Bankman-Fried went far beyond making a "fair comment" in sharing the diary, which his team conceded both during a court hearing last Wednesday and in a filing earlier this week.
Cash App Bitcoin Sales Jumped 34% In Q2 to $2.4 Billion (The Block)
Payment company Block, Inc. said that bitcoin sales on its Cash App platform jumped 34% in the second quarter from the same period last year to a whopping $2.4 billion. Gross profit from the bitcoin sales came in at $44 million, up 7% year over year. The company said customers were buying more of the digital asset, even with declining prices.
Bitfinex Hacker, Rapper Wife Plead Guilty in Crypto Heist Money Laundering (Bloomberg)
One of the most enduring mysteries in the world of cryptocurrencies was resolved Thursday when Ilya Lichtenstein acknowledged that he was the hacker who executed the 2016 attack on the Bitfinex exchange. Lichtenstein, along with his social-media rapper wife, who dubbed herself the 'Crocodile of Wall Street,' pleaded guilty to a money-laundering conspiracy tied to the theft of billions of dollars of Bitcoin from the exchange. Who executed the exploit has been the biggest guessing games in crypto after the identity of Bitcoin’s pseudonymous creator, Satoshi Nakamoto.
Asia’s Crypto Regulatory Clarity Contrasts With Disarray in US (Bloomberg)
Asian regulators have stolen a march on the US by clarifying crypto rules, exemplified by Hong Kong’s first licenses for trading platforms under the city’s new digital-asset framework. Hong Kong opened up to mass-market trading following confirmation Thursday that HashKey Exchange and OSL had won permits that legalize the retail trading of tokens, part of the city’s push to become a global hub for virtual assets.
US Prosecutors Worry Binance Charges Could Cause Run on Exchange (CoinDesk)
Crypto exchange Binance could face U.S. Department of Justice fraud charges, though prosecutors are weighing alternatives given the risk of an FTX-style bank run, Semafor reported, citing people familiar with the matter. The price of bitcoin (BTC) and Binance's BNB token immediately fell following the report. U.S. officials are worried an indictment could imperil the broader cryptocurrency industry, according to Semafor. For that reason, they are weighing alternatives such as "fines and deferred or non-prosecution agreements," sources told the publication.
Hong Kong’s New Crypto Regime Awards First Exchange License to HashKey (Bloomberg)
The first license under Hong Kong’s new crypto regime went to HashKey Exchange, legalizing the retail trading of tokens in the city as officials seek to foster a global hub for the digital-asset sector. HashKey will be able to 'expand its business scope from serving professional investors to retail users' after receiving an upgrade of its existing licenses, the company said in a Thursday statement. The Securities and Futures Commission has yet to confirm the announcement.
Crypto Rules Delay Puts Billions in Tax Revenue at Risk (WSJ)
Implementation of a law to catch crypto tax cheats is delayed inside the Treasury Department, putting billions of dollars in federal revenue at risk and frustrating members of the president’s own party. The department missed its first deadline to implement a 2021 law in time for the current tax year. Now, following further delays, it might be close to too late for tax year 2024.
Binance Listing Fee-Free Bitcoin Trading Pair for First Digital USD (The Block)
Binance will launch bitcoin and ether trading pairs for the new stablecoin First Digital USD tomorrow — with the former set to temporarily have no trading fees. Trading for BTC/FDUSD — part of its zero-fee bitcoin trading program — and ETH/FDUSD will open on the leading crypto exchange on Aug. 4 at 8:00 a.m. UTC. Binance first listed First Digital USD on July 26, when it began offering maker-fee-free trading for FDUSD/BNB, FDUSD/USDT and FDUSD/BUSD sport trading pairs. Technical issues at that time caused the exchange to halt FDUSD trading, however briefly.
TradFi Giant Direxion Joins Crypto ETF Race by Filing for Combined Bitcoin and Ether Futures Fund (CoinDesk)
Exchange-traded fund (ETF) issuer Direxion filed for a Bitcoin and Ether futures product Wednesday, joining a whole raft of companies hoping to launch similar crypto-related trading products in the U.S. According to a filing with the U.S. Securities and Exchange Commission (SEC), the Direxion Bitcoin Ether Strategy ETF would invest in bitcoin and ether futures contracts, should regulators approve the product. The product may also invest in other ETFs with exposure to futures products.
Bitcoin ETF Approval Odds Just Got Better: Bloomberg Analysts (CoinDesk)
ETF analysts at Bloomberg Intelligence raised their estimates for the approval and launch of at least one spot bitcoin (BTC) exchange-traded fund (ETF) in the U.S. this year. “The odds of a spot Bitcoin ETF launching this year are up to 65%, in our eyes, after a flurry of developments,” analysts James Seyffart and Eric Balchunas wrote. They previously assigned a 50% probability.
Nomura’s Crypto Wing Set to Offer Trading and Asset Management Services With Dubai License (The Block)
Laser Digital Middle East FZE, Nomura's crypto subsidiary based in Dubai, has received operating license approval from the city's Virtual Asset Regulatory Authority (VARA). The full license allows Laser Digital to provide crypto broker-dealer and asset management services from its Dubai entity, the firm said Tuesday. Laser Digital is set to launch over-the-counter crypto trading services and investment products for institutional investors in the coming months, it added. In June, Laser Digital said it was acquiring the trading solutions firm Elysium Technology Group to provide post-trade services to institutional crypto investors.
IRS: Crypto Staking Rewards Taxable Once Investor Gets Hands on Tokens (CoinDesk)
A cryptocurrency investor given rewards for validation activity on a proof-of-stake network should count the rewards as income in the year the investor gets control of those tokens, according to a ruling issued Monday by the Internal Revenue Service (IRS). “The fair market value of the validation rewards received is included in the taxpayer's gross income in the taxable year in which the taxpayer gains dominion and control over the validation rewards,” according to the legal analysis, which says that value should be figured as of the moment the U.S. taxpayer gains control of the tokens.
Crypto Is Illegal in China. Binance Does $90 Billion of Business There Anyway (WSJ)
Binance, the world’s largest crypto exchange, was supposed to leave China behind when the country made cryptocurrency trading illegal in 2021. Almost two years later, users traded $90 billion of cryptocurrency-related assets in China in a single month, according to internal figures viewed by The Wall Street Journal and current and former employees. The transactions made China Binance’s biggest market by far, accounting for 20% of volume worldwide, excluding trades made by a subset of very large traders.
GameStop to Drop Crypto Wallets, Cites ‘Regulatory Uncertainty’ (Bloomberg)
GameStop Corp. said it’s ending its support for its cryptocurrency wallets, citing 'regulatory uncertainty.' The company will remove its iOS and Chrome Extension wallets from the market on Nov. 1, according to its website. The wallets have let users manage their crypto and nonfungible tokens — such as digital pictures of apes and penguins — and use decentralized apps on Ethereum. The removal of these wallets is a sign that GameStop is backing away from its crypto strategy, which was part of a broader push into digital services undertaken by Chairman Ryan Cohen in an effort to turn around the struggling video-game retailer.
Curve Founder Michael Egorov Sells More CRV to DCFGod and Others (The Block)
Curve founder Michael Egorov has sold more Curve (CRV) tokens in over-the-counter transactions with multiple crypto entities, according to blockchain data and a source familiar with the situation. Blockchain data shows that he sold 5 million CRV to Tron founder Justin Sun, as reported earlier, with a further 4.25 million CRV to crypto trader DCFGod, as noted by DeFi analysts Lookonchain. Plus, 3.75 million CRV to NFT owner Jeffrey Huang — known as Machi Big Brother — 2.5 million CRV to crypto investors DWF Labs, and 2.5 million CRV to DeFi project Cream Finance.
Tether Reports $3.3B in Excess Reserves in Q2, Up $850M for the Quarter (CoinDesk)
Tether, issuer of the USDT stablecoin, held $3.3 billion of reserve assets in excess to back the value of its stablecoins, the firm reported in its Q2 attestation on Monday. Signed by accounting firm BDO Italy, the attestation disclosed about $72.5 billion of exposure to U.S. Treasuries, including direct T-bill investments, repurchase agreements and deposits in money market funds. The company's bitcoin (BTC) holdings as of June 30 increased in dollar value to $1.67 billion from $1.5 billion three months earlier, according to the filing, though the number of tokens held was not disclosed.
Ripple Ruling on Crypto Rejected by Federal Judge in Terra Case (Bloomberg)
A federal judge in New York split with another judge who earlier this month ruled that a Ripple Labs token was not a security when sold to the public on secondary markets, adding to uncertainty over cryptocurrency regulation. US District Judge Jed Rakoff on Monday allowed the Securities and Exchange Commission to go forward with its case against Terraform Labs Pte and founder Do Kwon. In doing so, Rakoff said he rejected the distinction made in the Ripple case between public and institutional sales.
Curve Founder’s $168M Stash Is Under Stress, Creating a Risk for DeFi as a Whole (CoinDesk)
Chaos at Curve Finance has put a $168 million lending position held by founder Michael Egorov at greater risk of liquidation, an event that – if it happens – could have giant implications across decentralized finance (DeFi). Egorov has $168 million of CRV, Curve’s native token, securing loans from multiple DeFi protocols, data on blockchain analytics site DeBank shows. That equals almost 34% of the token’s total market capitalization.
SEC Sues Richard Heart of Hex and Pulsechain for Allegedly Selling Unregistered Securities (The Block)
The United States Securities and Exchange Commission has sued Richard Schueler — more widely known in the crypto industry as Richard Heart — for allegedly conducting a sale of unregistered securities. Heart is the founder of Pulsechain, PulseX and the project Hex, both of which have been marred in controversy during their existences. He raised more than $1 billion by selling tokens for these projects, according to the SEC, which is the focus of the lawsuit.
FTX Plans to Restart Crypto Exchange for International Customers (CoinDesk)
Defunct crypto exchange FTX has proposed to organize its creditors into different classes of claimants, and has provided a pathway for one class of claimants to restart the FTX exchange with third-party investors – should the group agree to it. The filing, posted Monday night U.S. time, delineates the claimants into various groups. The first group is claimants of FTX.com offshore exchange, which it calls “dotcom customers”, next is customers of the U.S. exchange (“U.S. customers”), after, customers of its NFT exchange, then general unsecured claims, secured claims, and subordinated claims. Included in general claims are those from Alameda’s lenders or trading partners, while subordinated claims are taxes and fines from penalties.
Binance Wins Operational License in Dubai (CoinDesk)
Binance, the world's largest cryptocurrency exchange, has won a license to operate in Dubai after meeting the pre-conditions since receiving a preparatory license in September 2022, the company announced on Monday. Last year Binance received a Minimal Viable Product (MVP) license from Dubai's Virtual Assets Regulatory Authority (VARA) allowing it to open a domestic bank account to hold clients' funds locally, operate a crypto exchange and offer payments and custody services.
Curve Finance Drained of $50M While CRV Token Sinks 12% in Latest DeFi Exploit (CoinDesk)
Curve, a stablecoin exchange at the heart of decentralized finance (DeFi) on Ethereum, has been the victim of an exploit according to a tweet from the project. Curve relies on smart contracts instead of middlemen to offer financial services such as stablecoin borrowing, trading and lending to users. Depositors on Curve earn annual yields of up to 4% from one of the many pools on the platform.
Crypto’s Asia Pivot Spurs Market Maker Wintermute to Boost Singapore Base (Bloomberg)
The co-founder of leading crypto market maker Wintermute Trading Ltd. plans to move to Singapore along with some of his staff as the digital-asset industry increasingly turns to Asia for growth opportunities. Yoann Turpin said in an interview he’ll move from London officially in a few months and that about 4% of the company’s roughly 85 staff are also due to relocate to the city-state, where Wintermute conducts derivatives business.
Meta’s Zuckerberg Remains Hopeful Despite $3.7 Billion Metaverse Loss in Q2 (The Block)
Meta’s metaverse-related division Reality Labs posted $3.7 billion in operating losses in the second quarter of this year, but the social media giant said it remains “fully committed” to metaverse development. The unit recorded $276 million in revenue in the second quarter of this year, down from $452 million in the same period last year, according to Meta’s latest earnings results released Wednesday.
Wall Street Banks Side With Nemesis Elizabeth Warren on Crypto Crackdown (Bloomberg)
Wall Street banks and Senator Elizabeth Warren have finally found something they can agree on: the need to crack down on crypto. The Bank Policy Institute, a trade group for lenders that Warren often blasts, threw its weight behind bipartisan legislation that the Massachusetts Democrat and three of her Senate colleagues reintroduced this week. The bill aims to force the crypto industry to comply with tougher rules for combating money laundering and terrorism financing.