Top Stories of Last Week

Regulatory

  • Seoul Metropolitan Police Agency reportedly seized Bithumb exchange for alleged fraud. Exchange reportedly accused of pre-selling native BXA tokens worth about 30 billion won (~$25 million) to investors and then not listing token, which allegedly led to losses to investors.
  • Brazil’s chief central banker Roberto Campos Neto said his country could be ready for CBDC by 2022, stating that Brazil will have an interoperable instant payments system and a “credible” and “convertible” international currency by that time. Banco Central is rolling out PIX instant payments system in November and launching Open Banking initiative later this year.
  • CFTC approved LedgerX’s amended registration order, allowing firm to go beyond offering digital currency-based products. LedgerX is now authorized to offer fully collateralized futures and options products, in addition to digital asset swaps it already offers.
  • Sygnum cryptocurrency bank announced it received regulatory approval from Financial Market Supervisory Authority, allowing company to expand services to a digital asset trading facility. Users now have access to instant settlement via Sygnum-issued stablecoin Digital Swiss franc.
  • Bank of Korea plans to unveil details for consulting partnership with local company as part of its second step toward central bank digital currency pilot system. Central bank did not share specifics over when it would make selection. Potential partner will help BOK establish CBDC system architecture.

Project Development

  • HSBCSingapore Exchange and Temasek announced pilot for DLT-based bond was successful. S$400 million (approx. $294m) worth of 5.5-year corporate bonds from Olam International were issued on SGX’s digital asset platform, showing DLT could streamline issuances and minimize settlement risk in bond market.
  • China Construction Bank reportedly launched central bank digital currency wallet feature inside bank’s mobile app, only to disable it shortly after it gained wide attention. Users of app could navigate to digital yuan wallet service and further activate it by registering with mobile phone number associated with their bank accounts, with some users managing to make small transactions.
  • Jump Trading announced backing for FTX’s decentralized exchange Serum, providing liquidity and also investing a “significant” sum in new dex.
  • SBI Holdings launching trading for contracts for difference derivative (CFDs) on SBI FX Trade, with contracts in bitcoin, ether and XRP. Traders can pair crypto assets with both U.S. dollar and yen.

Exchanges

  • BitMEX launched mobile trading app in 140 countries just weeks after identity verification requirement was announced in August. Mobile trading product is already up and running.
  • Binance launched mainnet of its smart contract-enabled blockchain and is introducing staking for BNB token in hopes to foster development of dApps and DeFi products by adding these features. New blockchain will use “Proof-of-Staked” Authority (PoSA) consensus mechanism, which allow validators to receive rewards for work on chain without sacrificing transaction speed.
  • Opium, a derivatives exchange, introduced credit default swaps for USDT, which insures buyer in event of default by Tether. It’s second time in a month that Opium launched CDS tied to digital asset. Opium also rolled out contract that insures buyer against defaults on “credit delegation” loans on Aave. 

Mining

  • Department of Industrial and Information Technology of Inner Mongolia Autonomous Region issued document showing agency required a local electricity trade company to disqualify 21 bitcoin mining farms from participating in energy trading. Notable entities include two subsidiaries of Bitmain in Inner Mongolia and another subsidiary of Ebang. Suspension means mining farms will no longer be able to garner electricity discounts from Inner Mongolia Power Group.
  • Petroleum multinational Equinor, a state-owned multinational based in Norway and ranked as 11th largest oil and gas firm globally, is moving on strategic partnership with Crusoe Energy Systems to use their digital flare mitigation technology to convert waste natural gas into electricity for mining cryptocurrency. Operation will harness Equinor’s operations on Bakken oilfield in North Dakota.

Fundraising

  • Zero Hash, formerly crypto derivatives exchange known as Seed CX, announced it closed Series C fundraising round to further build out settlement-as-a-service business. Investors include broker-dealer Tastyworks, Bain Capital, Trade Station, CMT Digital and Monday Capital. Filing with SEC shows round was raised via debt, bringing in at least $3.7 million.
  • iFinex invested $1 million into Dusk Network, a Dutch-based company looking to create regulated security token platform. Proposed exchange will list tokenized financial products such as equities, commodities, bonds and exchange-traded funds and adhere to second Markets in Financial Instruments Directive (MiFID II).

Things to Watch This Week

  • U.S. Labor Day Weekend
    • With U.S. traditional markets closed Monday for Labor Day, we’ll have to wait for Tuesday to see if the big selloff continues from last week or if it only amounts to a correction similar to mid-June. That outcome could determine whether Bitcoin is able to steer away from the $10k level that it managed to touch several times over this past weekend. Remaining in this territory, coupled with election fear possibly shaking traditional markets, could lead to even further downside. 
  • Defi Shakeout
    • The whipsaw in defi last week was noteworthy. First, we saw the entire defi ecosystem nearly breach $10 billion in Total Value Locked and token prices reach significant highs, such as in the case of YFI nearly breaking $40,000 per token. The sell-off towards the end of the week was equally remarkable, but a recovery began yesterday after FTX’s Sam Bankman-Fried offered to save SushiSwap from the “exit scam” it’s unknown founder committed. It will be important to keep an eye on further developments in Defi this week as we see if this selloff has finished or if market sentiment towards Defi has firmly shifted to the downside. 
    • Yassine Elmandjra@yassineARK
      1/ Bitcoin calls into question the very basis of economic organization. No other breakthrough in history will contribute more dramatically to the evolution of monetary systems. *Just published* w/ @coinmetrics Bitcoin: A Novel Economic Institution
      ark-invest.com/white-papers/b…

      2/ The promise of Bitcoin is best understood in relation to traditional financial systems, which rely on centrally controlled institutions that enforce the rules, record-keeping, and adjudication of the system.

      3/ These institutions were created to standardize the exchange of value, manage wealth, and facilitate economic activity. Ex: Central banks govern monetary policy, while commercial banks custody and manage assets, and centralized payment processors mediate consumer transactions

      4/ Under a “trust-based” model, the integrity of an institution is a function of those controlling the institution. Rules enforced from the top down are guaranteed if those in control are trustworthy

      5/ Financial systems founded on a trust-based model fail to provide predictable economic assurances. Specifically, under a financial system

      6/ Here is why the current financial system falls short: Assurance 1: Value should be exchanged globally and freely. Why the trust-based model fails to meet Assurance 1: Centralized parties determine the eligibility of participants and control the flow of capital.

      Bankless @BanklessHQ
      DeFi lending protocols are not actually lending protocols At least that’s the argument @jchervinsky makes Because there’s no credit risk, no credit, and no loan They’re interest rate protocols Still an amazing primitive…but it’s not lending
      Read: bankless.substack.com/p/defi-lending…
      vitalik.eth  @VitalikButerin
      We need to get past the myth that it’s *fatal* if one entity gets enough to 51% attack PoS. The reality is they could attack *once*, and then they either get slashed or (if censorship attack) soft-forked away and inactivity-leaked, and they lose their coins so can’t attack again.
      READ MORE
      Terence Tsao@terencechain
      While defi is taking the world by storm. Eth2 has been quietly chugging towards production readiness.
      Latest Medalla stats:
      * 40k active validators
      * 10k pending validators
      * 200k slots
      * nearly perfect non-skipping finality for the last 4 days
      beaconcha.in
      Frank Chaparro  @fintechfrank
      A lot of institutional crypto ppl have been reaching out to ask if I think DeFi is a joke. A surprisingly large % think it’s degen gambling/bad PR for the market/expecting a blow up. Sounds similar to what Wall Street has had to say about crypto overall.
      That these tokens are a lot different than the ones from 2017 – with working projects that are innovating liquidity provision and other elements of market structure. Highly speculative, incredibly risky, but a lot there finance can learn from.
      Molly @bigmagicdao
      DeFi is getting started in China now. only few WeChat groups were discuss ,farm and trade about it before. For the Past few days There are more people got into DeFi, there are even groups put money together made a “farming fund”, and many peopleare planning their own projects ..
      Roger Ver@rogerkver
      Bitcoin ABC and @deadalnix have announced that they are forking away from #BitcoinCash on Nov 15th. We wish them good luck with their new coin and thank them for the free airdrop to all BCH holders.
      PlanB@100trillionUSD
      $11880 (Sept actual) 
      $11655 (Aug close)
      $11356 (July close)
      $9132 (June close)
      #Bitcoin .. like clockwork
      CoinDesk@CoinDesk
      Over 95% of crypto futures volume comes from exchanges in Asia, according to a new report from @bvventures. The VC firm predicts Asian exchanges will be acquiring exchanges in the U.S. and Europe in the near future.
      trib.al/Wm74YNK
      Edward Morra@edwardmorra_btc
      September living up to its name as the worst month for crypto statistically