Top Stories of Last Week

Regulatory

  • House lawmakers will vote on $1 trillion infrastructure bill on Sept. 27, including crypto tax provision that does not appear to include any amendments. Despite representatives who have announced intentions to add amendments to bill, it does not appear Speaker of the House Nancy Pelosi will allow bill to be amended. Goal is to enact both infrastructure bill and $3.5 trillion budget reconciliation by Oct. 1.
  • Japan’s Financial Services Agency started discussions around imposing stricter regulations for cryptocurrencies in effort to provide better protection to Japanese investors. Financial regulator intends to replace and impose new crypto regulations by mid-2022. 
  • Thailand’s SEC drafted new rules for custody of digital assets, which prohibit crypto custodians from extracting benefits from clients’ assets. Digital asset custodians can’t use client’s assets for benefit of someone else, nor can they use for own benefit, such as lending for interest.
  • Regulators in Philippines expressed intention to tax players and publisher Axie Infinity, according to Undersecretary of Finance Antonette C. Tionko. Whether Axie tokens are assets or securities is being discussed by country’s SEC and central bank. Game creator Sky Mavis also must pay taxes in country for revenue created through local sources.
  • Securities and Exchange Board of India announced intentions to roll out system for security and covenant monitoring for non-convertible debentures by April 1, 2022, which will lean heavily on distributed ledger technology for monitoring and recording of financial instruments. System will also keep tabs on covenants and will monitor credit ratings of NCDs.
  • Cuba’s Central Bank issued resolution establishing rules to regulate use of virtual assets in commercial transactions and licensing of service providers.

Project Development

  • PayPal extending crypto service to U.K., allowing customers to buy, sell and hold cryptocurrencies on platform. Users will be able transact in Bitcoin, Eth, LTC, and BCH. Rollout will begin this week and should be available to all eligible customers within next few weeks.
  • Paxos renaming stablecoin as Pax dollar with ticker USDP, which identifies stablecoin as U.S. dollar-backed token. Paxos asked ecosystem partners to reflect stablecoin’s new branding ahead of updated smart contract going live on Aug. 31.
  • Substack’s over 500,000 paying subscribers now able to pay using Bitcoin through Lightning Network after announcement made by OpenNode, a bitcoin payment processor, that integrated API to allow both on-chain and Lightning payments on Substack online publishing platform.

Institutional

  • Citigroup reportedly awaiting regulatory approval to begin trading Bitcoin futures contracts on Chicago Mercantile Exchange. Citi laos allegedly recruiting people to join crypto-focused team in London.
  • Wells Fargo registered new pooled investment fund that offers clients indirect exposure to Bitcoin. Wells Fargo’s Form D filing revealed FS NYDIG BITCOIN FUND I, incorporated as limited partnership with NYDIG and FS Investments.
  • MicroStrategy added another 3,907 Bitcoins, according to filing with SEC that stated company spent about $177 million on latest BTC purchase, at an average price of approximately $45,294 per coin. Firm now holds 108,992 BTC.
  • Regulatory filing by Nasdaq to list and trade shares of Valkyrie XBTO Bitcoin Futures Fund revealed existence of previously undisclosed ETF proposal. Reveal of partner exchange means SEC can begin consideration of product, moving Valkyrie closer to judgment on Bitcoin futures ETF than other hopeful issuers.
  • VanEck and ProShares have both withdrawn applications with SEC for approval of Ether futures ETFs just two days after filing them.
  • Neuberger Berman’s $164 million Commodity Strategy Fund can invest up to 5% of assets in Bitcoin futures and funds. Fund got initial go-ahead for Bitcoin and Ether exposure through derivative products, but Ether now appears to be off table.
  • Customers Bank joining list of FDIC-insured institutions in U.S. that are willing to work with cryptocurrency businesses. Bank will compete against Silvergate and Signature in offering crypto firms basic accounts as well as blockchain-based platform for clients.

Exchanges

  • FTX will lend $120 million to Liquid Global, the Japanese crypto exchange that was hacked for more than $90 million last week. Debt financing will be used for Liquid Global’s capital position and to speed up capital generation projects. FTX.US also signed $17.5 million, 10-year agreement with Cal Athletics, the athletic department of University of California, Berkeley, for naming rights to field at California Memorial Stadium. 
  • 10T Holdings and Akuna Capital invested $100 million in Bitcoin futures exchange Deribit. Deribit said 10T and Akuna purchased equity on secondary market.
  • Coinbase President and COO Emilie Choi said USDC reserves to be held in cash, short-term treasuries from September. Choi also wrote “USDC has always been fully backed by reserves equal to or greater than USDC in circulation, giving users the ability to always redeem 1 USD Coin for US$1.00.”
  • Binance hired Richard Teng, former CEO of Abu Dhabi’s financial watchdog, to head exchange’s operations in Singapore. Teng spent six years at Financial Services Regulatory Authority at Abu Dhabi Global Market as its head. He also spent seven years as chief regulatory officer of Singapore exchange and 13 years with Money Authority of Singapore.
  • Upbit first exchange to register with South Korea’s Financial Intelligence Unit before September deadline. Authorities have threatened to block websites of unregistered exchanges that fail to meet Sept. 24 deadline.

Fundraising

  • Blockstream raised $210 million in Series B funding round that values firm at $3.2 billion and will fund expansion into manufacturing mining chips. Baillie Gifford and iFinex, the parent company of Bitfinex and Tether, were only firms announced to have participated in round.
  • 1inch Network reportedly looking to raise $70M in series B at $2.2 bil valuation, and is in early stages of latest venture round looking to close by end of 2021.
  • Software developer Alethea AI, which created world’s first intelligent NFT, secured $16 million in funding via private token sale to create metaverse populated by bots. Lead investors Metapurse and Crypto.com Capital, as well as Mark Cuban, Dapper Labs, BITKRAFT, Galaxy Interactive, Sfermion, and LD Capital.
  • XREX Inc., a Taiwanese blockchain TradeTech firm, closed $17 million pre-Series A round led by CDIB Capital Group. Other investors included SBI Investment, Global Founders Capital, ThreeD Capital, E.Sun Venture Capital Systex Corp, Metaplanet Holdings, AppWorks, Black Marble, New Economy Ventures and Seraph Group.

Defi / NFT

  • Fox Corporation made strategic investment in digital content management firm Eluvio’s Series A funding round at valuation of $100 million to help develop Fox’s nonfungible token business. 
  • Budweiser changed Twitter profile picture to that of rocket ship NFT and also purchased Beer.eth domain name for 30 ether, or roughly $95,000. Link to DNS address shows rocket displayed in Budweiser’s Twitter profile was bought for $25,000.

Things to Watch This Week

  • Bitcoin Legal Tender in El Salvador
    • El Salvador’s official Bitcoin wallet will go live on September 7th and the build-up to this event will be worth watching over the next week. Although some small protests are being held in opposition to the country’s new legislature, many other parties, including neighboring countries in South America and institutions such as the World Bank, will be eager to see the impact that is realized on the first nation to adopt Bitcoin as legal tender. Upon passing the bill in June, several representatives in other countries such as Paraguay and Panama voiced support in El Salvador’s decision. If early signals of success surround the launch, such as cost of remittances dropping substantially or an overwhelmingly positive reception among the population, it could push other countries to seek adoption quickly since country-wide implementation will no longer be simply a theoretical experiment, but rather an actualized working product. However, a pillar of the opposition’s argument against adoption revolves around the volatility of Bitcoin, and thus, this week will be a critical period for crypto markets to show maturity and hopefully some level of stability as Bitcoin takes center stage in its new role as legal tender.      
  • Bitcoin Lightning Network
    • The Lightning Network has been on the rise lately, as it reached new heights today, crossing 25,000 nodes and possessing a network capacity of over 2300 Bitcoin inside its channels, worth nearly $115 million as of time of writing. Along with being a focal point of the roll out in El Salvador, it has recently been adopted by Substack as a method of payment and been given a boost by news that Jack Dorsey plans to launch a decentralized exchange for Bitcoin, which will tap into further growth of the Lightning Network. The Lightning Network has come very far in a few short months, and seems poised to strengthen Bitcoin’s infrastructure if it can show that it is capable of handling the stress test that it should receive by onboarding a country next week. Depending on the outcome, it could potentially prove to be a network capable of handling payments on a grand scale, strengthening its argument for businesses and people to begin using the Bitcoin ecosystem.
    • Wu Blockchain@WuBlockchain
      Exclusive: Multiple sources told that Binance is considering obtaining investment and protection from government funds at a valuation of $200 billion. Singapore is one of the most likely options.

      The source stated that Binance’s equity belongs to founder CZ and co-founder HeYi, with a ratio of 92:8.

      On August 23, Binance Singapore announced the appointment of Richard Teng as CEO. Teng has been the Director of Corporate Finance at the Monetary Authority of Singapore (MAS) for 13 years.

      After rejecting Sequoia Capital’s investment, CZ made it clear that Binance does not need external funds, and he is only interested in working with venture capital companies that can help exchanges cooperate with regulators and obtain operating licenses.

      Vertex Ventures, a subsidiary of Singapore’s sovereign fund Temasek, has invested in Binance Singapore. It seems logical to invest in Binance Global now. The premise is that the government is willing to take risks.

      Coinbase’s profit in the first quarter was about 800 million, and its current market value was 54.2 billion. Binance’s profit is about 4x that of Coinbase, so the valuation is $200 billion.

      Chris Dixon@cdixon
      1/ Topic: Turning networks into economies 

      2/ We spent the last 20 years building networks on the internet. Social media platforms like Instagram, Twitter, YouTube, and Discord are networks, which can be divided into billions of smaller networks, consisting of followers, friends, subscribers, backers, etc.

      3/ These platforms gave many people an audience who didn’t previously have one. But due to fundamental structural misalignments between the networks and the companies that own them, we’ve seen increasing tension around these networks’ rules and economics.

      4/ For example, social media companies that control large networks routinely kill off promising 3rd-party developers, fight cross-network interoperability, charge excessively high take rates, and adopt intrusive advertising models.
      READ MORE

      VisaNews@VisaNews
      Over the last 60 years, Visa has built a collection of historic commerce artifacts – from early paper credit cards to the zip-zap machine. Today, as we enter a new era of NFT-commerce, Visa welcomes CryptoPunk #7610 to our collection.
      vi.sa/3gk2GXh

      We support the creators, collectors, and artists driving the future of NFT-commerce. Learn more about our perspective on NFTs:
      vi.sa/2WfDrhT

      Curious about NFTs and how to integrate them in your brand strategy? Check out the latest from Visa on evaluating and scaling crypto art:
      vi.sa/3mkB0W8

      Hasu @hasufl
      1) EGL aggressively bribes core devs and other influencers 2) Erigon client dev says will “veto hard-coding the gas limit” which would make EGL obsolete I’m not saying 1 necessarily causes 2, but a response to this would be nice. twitter.com/hasufl/status/…

      Second hypothesis: 1) Erigon dev wanted to raise the gas limit, but couldn’t convince governance 2) Erigon dev supports the extra-procedural EGL (to put it nicely) to get it anyway Also not great. EIP process exists for a reason

      Note as always, 1-2 devs do not speak for the entire Erigon team

      The participants listed here received $78k at current prices with a one-year lockup. Of course, they can only realize that value if the hard-coded gas limit does not get merged until then. There is no other word for this than bribe
      docs.egl.vote/protocol-overv…

      (1/4) Here’s a hypothesis why EGL exists in the first place: 1) Bloxroute’s 1st product is the Blockchain Distribution Network. BDN is a private p2p network for miners optimized for blockchain-specific data. They promise miners better propagation time on their blocks.
      READ MORE

      Lyn Alden@LynAldenContact
      My bitcoin energy consumption article is now on my site as well. I added a few tables on transaction volumes.
      lynalden.com/bitcoin-energy/

      DCinvΞstor @iamDCinvestor
      the wealth-base that was already in crypto prior to NFTs dramatically accelerated price discovery price discovery that may have taken years or decades seems to be happening in weeks and months yes, there is some heavy speculation, but newcomers are buying at these prices 

      ThΞ Daoist Punk | thedaoistpunk.eth@thedaoistpunk
      Global wealth ~ $500 trillion
      Crypto wealth base ~ $2 Trillion (.5% of global wealth)
      Ethereum wealth base ~$400 billion (.1% of global wealth)
      Punks market cap ~ $4 billion (1% of ETH wealth)
      Art Blocks market cap ~ $1 billion

      Alex Thorn@intangiblecoins
      #bitcoin’s lightning network has gone parabolic w/ more DIY node options, growing mobile wallet usage, and expanding exchange support. and:
      • @SubstackInc adds BTC & LN
      • el salvador btc legal tender starts sept 7
      • BOLTs 877 removes payment limits
      what next? 

      Robert Miller@bertcmiller
      Alright, let’s go A thread on leveraged (!) sandwiching using flashswaps

      Let’s review what a normal looks like. A victim attempts to trade on a DEX, buying asset X with ETH
      1. A bot gets in front of them, buying X & raising the price of X
      2. The victim’s tx lands, further raising the price of X.
      3. The bot sells X at this higher price for profit
      READ MORE

      nic carter@nic__carter
      The @chainalysis 2021 Crypto & DeFi adoption indexes measure penetration on a PPP per-capita basis. Making the top 20 in both: Vietnam, India, USA, Ukraine, Thailand, Togo (!), China, Argentina, Brazil, Russia
      blog.chainalysis.com/reports/2021-g…

      James Seyffart@JSeyff
      Gonna add some additional color from our piece: We’ve seen a slew of 1940 Act Bitcoin Futures ETF products and if they follow the relatively standard 75-day launch window we will could see a launch in October. but we think SEC should hold back and launch a handful at once.
      twitter.com/EricBalchunas/…

      BTC futures dwarf ETH futures open interest in $$ terms currently. But we think that as open interest and volume climb and if Bitcoin futures ETF operate without issues it probably wont be long before we see ETH ETFs. Likely 1H 2022 if our 4Q 2021 BTC ETF prediction is correct.

      Bitcoin Archive  @BTC_Archive
      #Bitcoin Futures ETF could be approved as soon as October according to Bloomberg’s Senior ETF analyst @EricBalchunas

      Eric Balchunas@EricBalchunas
      We have been humbled too many times by the SEC to be overly-confident but yeah there’s pretty solid evidence for an Oct or perhaps Nov launch.

      Some of the aforementioned evidence (not to mention Gensler’s own words):
      READ MORE

      mitz@0xMitzy
      DAOs are evolving rapidly, shifting our understanding of organisations upside down. Check out some of my key takeaway points from the panelists on @BanklessHQ @Cooopahtroopa @kaiynne @tracheopteryx 

      Some follow up questions: DAOs are defined to be a fluid system where contributors can enter and exit at anytime. But what does this mean for new crypto users who do not have the ‘right’ skills at this moment in time?

      Do you see DAOs moving towards potentially focusing on educating and upskilling new users into crypto?

      Aside from helping people achieve financial freedom and building communities, what are some social issues that DAOs are helping to solve?
      READ MORE

      Spencer Noon @spencernoon
      Using on-chain data we found 5 of the best #NFT collectors ever
      #1: 0x6611fE71c233e4e7510b2795C242C9A57790b376
      Started: 1531 days ago
      1st Trade: Claimed 200+ Punks  
      Total Spent: 1338 ETH
      Total Profit From Sales: 9627 ETH
      Zapper Est. Current Collection: $45.5M
      https://dune.xyz/queries/115847/235018