The ‘Fidelity Mafia’ Behind Big Crypto (WSJ)
Some of the most prominent players in the digital-assets industry cut their teeth at the same place: Fidelity Investments. A storied mutual-fund powerhouse, Fidelity is a cornerstone of the traditional financial system that the founders of bitcoin and other cryptocurrencies intended to disrupt. Yet the 77-year-old company became a bitcoin pioneer in 2014, mining the token when it was trading around $400. It encouraged employees to experiment with blockchain technology and develop new products that led to the launch of its crypto business unit four years later.
SEC Delays Spot Bitcoin ETF Decision for All Applicants Including BlackRock, Fidelity (CoinDesk)
The U.S. Securities and Exchange Commission (SEC) has delayed until October making a decision on all of the spot bitcoin exchange-traded fund (ETF) applications filed by applicants including BlackRock, WisdomTree, Invesco Galaxy, Wise Origin, VanEck, Bitwise and Valkyrie Digital Assets earlier this year, according to agency filings on Thursday. Already down sharply on the day, bitcoin (BTC) fell further on the news, now off 4.1% over the past 24 hours to $26,100.
Binance Asia-Pacific Head Foong Leaving Biggest Crypto Exchange (Bloomberg)
Binance Asia-Pacific’s head Leon Foong is leaving the world’s largest crypto exchange, according to people familiar with the matter. Foong, who led Binance’s expansion into markets like South Korea, Thailand and Japan, has resigned, one of the people said, asking not to be named because the move hasn’t been publicly announced.
U.S. Tackles Crypto Tax Mess (WSJ)
The federal government is escalating efforts to make cryptocurrency investors comply with tax law, nearly 15 years after people started trading bitcoin. The Treasury Department proposed new rules Friday with twin goals: making it harder for crypto investors to dodge income taxes when they sell digital assets, and simplifying complicated tax messes for people who are trying to follow the law. When they are fully implemented, the rules will require crypto exchanges such as Coinbase to deal with the Internal Revenue Service in a manner similar to brokers who handle investors’ stock and mutual-fund portfolios.
Swift, Chainlink Tokenization Experiment Successfully Transfers Value Across Multiple Blockchains (CoinDesk)
Interbank messaging system Swift and Web3 services platform Chainlink have successfully transferred tokenized value across multiple private and public blockchains in recent experiments, a Thursday press release said. "The findings have potential to remove significant friction slowing the growth of tokenized asset markets and enable them to scale globally as they mature," the press release said. In June Chainlink and Swift announced that they would be collaborating with dozens of financial institutions to test how they can connect with multiple blockchain networks. BNP Paribas, BNY Mellon, The Depository Trust & Clearing Corporation and Lloyds Banking Group and others collaborated with Swift on the experiments.
Web3 Losses Exceed $1 Billion in 2023 (The Block)
Web3 has witnessed losses of $1.25 billion over 211 incidents in 2023, with August accounting for $23.4 million alone as projects on the newly launched Ethereum Layer 2 Base added to major exploits. The Coinbase-incubated Base network suffered losses across four separate projects since launching on Aug. 9, placing it alongside Ethereum and BNB Chain as one of the most targeted chains, according to the latest report from web3 bug bounty platform Immunefi.
Elon Musk's X Has Licenses in Multiple U.S. States to Process Payments, Including Crypto (CoinDesk)
X, the Elon Musk-owned social media platform formerly called Twitter, has obtained payments licenses from several U.S. states in recent months – including a currency transmitter license in Rhode Island earlier this week. While Musk has hinted at supporting crypto on the platform – even briefly switching out Twitter's bird logo to dogecoin's dog before its rebranding to X last month – the licenses allow for broader payments services to be offered.
Bloomberg Analysts Estimate 75% Chance of a Spot Bitcoin ETF in 2023 (The Block)
Following Grayscale's legal victory against the Securities and Exchange Commission (SEC) yesterday, Bloomberg ETF analysts James Seyffart and Eric Balchunas have updated their estimate regarding the launch of a spot bitcoin ETF product. The analysts now estimate a 75% probability of a spot bitcoin ETF launching in 2023, with it being almost a "done deal" by the end of 2024.
Gemini Opposes Genesis Bankruptcy Plan: 'Woefully Light on Specifics' (CoinDesk)
Attorneys for crypto exchange Gemini argued that a proposed resolution for Genesis' bankruptcy doesn't have enough detail or provide any assurances for some of its largest debtors in a new filing Wednesday. A set of ad hoc creditors, the Fair Deal Group, also filed an objection to the proposed plan on similar grounds, saying the proposed agreement would fail to secure all of the debts Genesis is owed and that Genesis has not demonstrated it would be able to "confirm a viable plan."
Controversial Digital Euro Plan to Be Led by Architect of Landmark MiCA Crypto Law (CoinDesk)
German lawmaker Stefan Berger will take the lead in new legislation to underpin a digital euro, the member of the European Parliament (MEP) said Wednesday. The center-right Berger already shepherded the EU’s landmark Markets in Crypto Assets regulation through the Parliament, and will now take a similar role on the central bank digital currency (CBDC) on which many of his colleagues have proved skeptical.
Binance Japan plans to triple number of listed tokens to 100: Bloomberg (The Block)
Binance Japan, which launched full services earlier this month, said today that it aims to offer at least 100 tokens on its platform in the short term — about three times the current offering — according to a Bloomberg report. Binance Japan’s representative said today in an online briefing that it plans to work with other local crypto exchanges in the country to ensure better liquidity in the market, Japanese crypto media outlet Coinpost reported. Changpeng Zhao, founder and CEO of Binance, retweeted the Coinpost article.
StarkWare Re-Enables Access to Funds Locked After Upgrade (The Block)
A number of users were locked out of accounts with StarkWare after an upgrade siloed some funds. The Ethereum scaling protocol explained that the blockage was due to the 0.12.1 version upgrade last week. Users were advised to perform an "essential" account upgrade months ago, and those who had not upgraded could not access their accounts. Affected accounts contained a total of $550,000.
SEC's Secret Binance Court Filing Has Observers Bracing for Bad News (CoinDesk)
A new secret court filing related to Binance, the crypto exchange that already faces U.S. accusations of wrongdoing, has some wondering whether more bad news is about to hit the industry giant. On Monday, in the court docket for its case against Binance, the Securities and Exchange Commission submitted a sealed motion, which lets it file sensitive or confidential information without revealing the contents publicly.
Tether Leaning on Bahamas-Based Britannia as US Banks Cut Crypto Ties (Bloomberg)
Stablecoin issuer Tether has added Britannia Bank & Trust, a privately-held bank operating in the Bahamas, to process dollar transfers, according to people familiar with the matter. While it’s unclear when the banking relationship started, Tether has instructed clients to send money to Britannia’s bank account in recent months, the people said, asking not to be identified discussing private information.
Robinhood and Jump Trading No Longer Have Crypto Partnership (CoinDesk)
Robinhood Markets Inc., the retail broker whose entry into crypto several years ago was powered by Chicago-based juggernaut Jump Trading, is no longer doing business with the firm, a person familiar with the matter told CoinDesk. Robinhood’s no-fee crypto business depends on market-making firms to keep its billions of dollars in volume trading smoothly. But Jump has been reportedly backing away from the U.S. market amid heightened regulatory scrutiny.
Binance Launches Send Cash in Latin America (The Block)
Binance has launched a new platform that will allow for the transfer of crypto from Binance Pay in nine Latin American countries. Called Send Cash, users can transfer digital funds at a reduced costs more quickly through licensed providers, Binance wrote in a Tuesday statement. The platform will first be available in Colombia, Honduras, Guatemala, Argentina, Costa Rica, Paraguay, Dominican Republic, Panama and Mexico. Users in the nine countries can send funds to bank accounts in Colombia and Argentina in the first stage of launch.
Grayscale’s Court Win Over SEC Lifts Hopes for Bitcoin ETF Approval (WSJ)
A federal appeals court ruled Tuesday that the Securities and Exchange Commission must reconsider the crypto asset manager Grayscale Investments’ application to launch the first bitcoin exchange-traded fund, the latest setback for SEC Chair Gary Gensler’s efforts to regulate the upstart industry. Bitcoin-related assets surged on the news, with traders betting the decision would pave the way for broad investor access to the cryptocurrency. Coinbase Global, the largest publicly traded crypto exchange, rose 15%, and bitcoin futures climbed more than 7%.
DCG Reaches in Principle Deal With Genesis Creditors, Estimates Recoveries of 70%-90% (CoinDesk)
Digital Currency Group (DCG) has reached an in-principle deal with Genesis creditors to resolve the claims brought up in Genesis' bankruptcy, according to a court filing on Tuesday. The plan could result in the recoveries of 70%-90% in USD equivalent for unsecured creditors and 65%-90% recovery on an in-kind basis depending on the denomination of the digital asset. All the estimated recoveries are subject to market pricing and definitive documentation.
Crypto Giant Binance Considers Russia Exit (WSJ)
Binance, the world’s largest cryptocurrency exchange, is reevaluating its Russian business, including the possibility of a full withdrawal from a once-important market that has turned into a headache. "All options are on the table, including a full exit," a spokesperson told The Wall Street Journal.
SEC’s Crypto Dragnet Widens to NFTs in Case With Media Firm (Bloomberg)
Wall Street’s main regulator expanded its crackdown on crypto products Monday by accusing a Los Angeles-based media and entertainment company of offering nonfungible tokens that were really unregistered securities. The US Securities and Exchange Commission alleged that Impact Theory LLC raised approximately $30 million from hundreds of investors through its NFT offerings. The SEC said the offerings should have been registered with the agency, and that Impact Theory had agreed to pay more than $6 million to settle the allegations.
Crypto ETF Drags ESG Label Into Wildly Volatile World of Bitcoin (Bloomberg)
A London-based money manager has just attached an ESG label to a Bitcoin exchange-traded fund, in a move that has environmental experts doing a double take. Jacobi Asset Management says its Jacobi FT Wilshire Bitcoin ETF (Ticker: BCOIN NA) is an Article 8 fund, which under EU regulations means it has to “promote” ESG. It’s the latest addition to the Article 8 fund category, which Bloomberg Intelligence estimates now covers about $6 trillion of assets across an ever wider array of financial products.
House Republicans ‘Express Concern’ Over the Fed’s New Crypto Oversight Program (Blockworks)
A group of Republican members of the House Financial Services Committee has accused the US Federal Reserve of undermining efforts to develop federal rules for stablecoins. Chair Patrick McHenry, R-N.C., penned a letter to Federal Reserve Chair Jerome Powell that argued the Fed’s recent oversight expansion into crypto-related activities at banks could impede regulatory progress. The letter comes after the Fed announced new programs on Aug. 8 with the goal of enhancing oversight into crypto-related activities at American banks, including state member banks.
Binance Drops Sanctioned Russian Banks From Peer-to-Peer Service (WSJ)
Binance has stopped offering clients the option to pay one another through sanctioned Russian banks, days after a Wall Street Journal article detailed how the crypto giant was helping Russians move money abroad. The cryptocurrency company’s peer-to-peer service no longer lists five sanctioned Russian lenders on its website as a method for users to transfer rubles to each other. Asked about the banks’ removal, a Binance spokesperson said: “We regularly update our systems to ensure compliance with local and global regulatory standards. When gaps are pointed out to us, we seek to address and remediate them as soon as possible.”
Base Set to Receive 118M OP Tokens Over Six Years in Governance Agreement (The Block)
Coinbase-backed Layer 2 Base and the Optimism network’s governance body, The Optimism Collection, are set to collaborate on a revenue and governance sharing agreement. An Optimism Collective proposal states Base will contribute either 2.5% of its total sequencer revenue or 15% of its net profits, whichever is greater, to the Optimism Collective, and in return, will receive up to 118 million OP tokens ($175 million) over six years, The Optimism Collective said.
Treasury, IRS Release Proposed Crypto Tax Reporting Rules (The Block)
The U.S. Treasury Department released proposed rules that would require brokers and exchanges to report certain sales on crypto from bitcoin to NFTs to close the tax gap and “ensure that everyone plays by the same set of rules.” The Treasury, alongside the Internal Revenue Service, released a set of proposed regulations on Friday as part of the Infrastructure Investment and Jobs Act passed in 2021 that included crypto language to increase reporting made by brokers on customers’ crypto activity.
JPMorgan Sees Limited Downside for Crypto Markets in the Near Term (CoinDesk)
Analysis of open interest in Chicago Mercantile Exchange’s (CME) bitcoin (BTC) futures shows that the unwinding of long positions appears to be in its end phase rather than its beginning, JPMorgan (JPM) said in a research report on Thursday. Open interest refers to the total number of outstanding derivative contracts, such as options or futures, that have not been settled. “As a result we see limited downside for crypto markets over the near term,” analysts led by Nikolaos Panigirtzoglou wrote.
FTX, BlockFi Claimant Data Compromised in Kroll ‘Cybersecurity Incident’ (The Block)
Kroll, the bankruptcy claims agent of collapsed cryptocurrency exchange FTX, suffered a “cybersecurity incident” that compromised certain non-sensitive user data. FTX tweeted today that Kroll is informing affected individuals about measures they can take to protect themselves. “FTX account passwords were not maintained by Kroll, and FTX’s own systems were not affected,” FTX said.