Top Stories of Last Week
- French Finance Ministry set to implement stringent new measures for country’s cryptocurrency sector, including hardening KYC rules for crypto firms and regulating crypto-to-crypto transactions. Reason for proposed stricter measures attributed to recent terrorist attacks on France, after French police arrested 29 people suspected of funding Islamist extremists in Syria using cryptocurrency. First proposed measure decree will mandate full KYC for all crypto transactions, including crypto-to-crypto transactions. Other proposed rule change is mandatory registration for crypto-to-crypto exchanges.
- CFTC chairman Heath Tarbert intends to resign early next year. Tarbert’s term was set to expire in 2024, which also coincided with deadline for CFTC’s holistic framework for crypto assets. Tarbert firmed up cryto regulation during his tenure by asserting that ether is a commodity and falls under CFTC’s purview. SEC Enforcement Division director Stephanie Avakian will also leave post at end of year. Avakian led creation of SEC’s Cyber Unit, which addressed blockchain technology and digital asset violations. Deputy Director Marc P. Berger will fill vacancy left by Avakian as Acting Director.
- Paxos General Trust filed application for national trust bank charter from U.S. government, which would broaden range of services offered and geographic area to which it can offer services. If approved, application would mark first time a steward of digital assets was regulated at both state and federal levels within U.S. to hold cryptocurrencies and execute duties of regular trust bank.
- Crypto payments firm BitPay applied to Office of the Comptroller of the Currency to organize federally regulated bank called BitPay National Trust Bank. Total capitalization the national bank would receive for shares issued would fall just under $12 million, with 120 million shares to be issued.
- U.S. Representative Maxine Waters, who chairs House Financial Services Committee, issued letter requesting President-elect Biden to rescind or monitor all cryptocurrency-related guidance issued by Office of Comptroller of the Currency, including ruling that national banks may hold stablecoin reserves as service to bank customers and that federally chartered banks and federal savings associations may provide cryptocurrency custody services for customers.
- Monetary Authority of Singapore approved licenses for Ant Group Co, Grab Holding Inc., Sea Limited, and Greenland Consortium out of 14 applicants that had to meet list of requirements and licensing pre-conditions before MAS granted banking licenses. Approved digital banks will be able to start operating from Singapore in early 2022.
- MicroStrategy announced it raised $650 million via senior convertible note offering as part of push to buy more bitcoin. Final figure is $250 million more than when it first made announcement. Move follow’s MicroStrategy $50 million purchase of bitcoin last week, with its currently known holdings now above 40,000 BTC.
- DBS Bank of Singapore announced digital assets exchange trading to start this week. It will also provide tokenization of securities and other assets, and bank-grade custody for digital assets. SGD, USD, HKD, and JPY will be tradable against bitcoin, ether, bitcoin cash and XRP. Security token offering will comprise regulated platform for issuance and trading of digital tokens backed by financial assets, such as shares in unlisted companies, bonds and private equity funds.
- Massachusetts Mutual Life Insurance Co. announced $100 million investment in bitcoin and $5 million equity stake in NYDIG. NYDIG provided MassMutual with $100 million buy.
- JPMorgan announced it executed blockchain-based repo transaction using JPMCoin two months after unveiling rebrand of blockchain unit Onyx and its stablecoin-like product going into production. Bank plans to make product available to other counter-parties in future, with Goldman Sachs having already conducted successful trade simulations with BNY Mellon serving as tripartite agent.
- Fidelity Digital Assets will allow institutional customers to pledge Bitcoin as collateral against cash loans in partnership with BlockFi. Fidelity Investments will hold digital asset and not make loans itself, and BlockFi will risk-manage volatility of Bitcoin by offering cash worth 60% of loan backed by digital asset.
- BBVA poised to enter cryptocurrency trading and custody space, according to Coindesk sources, with launch of Europe-wide crypto initiative from Switzerland. Expectation is to be live Jan 2021, and BBVA is rumored to have integrated same custody solution for digital assets, called SILO, as Russia’s Gazprombank.
- Standard Chartered’s fintech investment unit, SC Ventures, and Northern Trust to launch U.K.-based cryptocurrency custodian for institutional clients called Zodia Custody, which is currently pending approval by U.K.’s FCA. Company will provide custody services for bitcoin and ethereum, initially, with litecoin, bitcoin cash and XRP to follow. Zodia expected to begin operating in London in 2021.
- Bitwise Asset Management announced shares of its crypto index fund will begin public quotation on OTC markets under BITW ticker, effectively making index fund tradeable using brokerage accounts. Bitwise reported crypto index fund contained $120 million in assets under management.
- Chinese city of Suzhou launching another trial of China’s digital yuan initiative. Suzhou government announced it will give away 20 million yuan, or about $3 million, in form of DC/EP via 100,000 red packets in a lottery before annual Double 12 online shopping festival. Lottery winners can spend free digital yuan from December 11 to December 27 at retail shops and selected online shops.
- Hong Kong Monetary Authority said it is working with People’s Bank of China to test digital yuan use cases and is currently discussing technical pilot testing of using e-CNY for making cross-border payments. No clear timeline yet for official launch of digital yuan in city.
- Latin American crypto exchange Bitso raised $62 million Series B funding round led by fintech VC firms QED Investors and Kaszek Ventures. Also involved in round were Coinbase Ventures and Pantera Capital. Nigel Morris, co-founder and managing partner of QED Investors, and Nicolas Szekasy, co-founder and managing partner at Kaszek Ventures, are also joining board of Bitso.
- S&P Global and State Street Corp. announced $15 million investment in Lukka, the blockchain data startup set to power upcoming cryptocurrency indices from S&P Dow Jones. CPA.com, the for-profit arm of American Institute of Certified Public Accountants, also participated in Series C.
- YIELD.app, a DeFi banking platform, raised $5 million in hybrid funding round led by Alphabit and Digital Strategies. Funding came from multiple sources including BnkToTheFuture, PALCapital, Yeoman’s Capital and Chronos VC. YIELD allows users to earn returns from investing in DeFi products and sets out to simplify learning process associated with new sector.
- Curv, a custody startup that specializes in multi-party computation, teaming up with MetaMask to allow institutions to be able to invest in DeFi protocols with institutional-grade custody options.