Top Stories of Last Week

Regulatory

  • Federal court said Bitcoin is form of “money” covered under Washington, D.C. Money Transmitters Act, as part of ruling to decline dismissal of criminal charges against Larry Dean Harmon, operator of underground Bitcoin trading platform. Ruling establishes parameters on how District of Columbia regulates cryptocurrency in money transmission and also brings D.C. rule in line with how federal and state authorities treat Bitcoin for purposes of AML purposes.
  • Iran announced it will allow industrial-scale power plants in country to operate as Bitcoin miners if they comply with approved tariffs, have necessary licenses, and do not use subsidized fuel for mining.
  • Bank of England’s upcoming settlement service being designed to support possible CBDC, with its redesigned real-time gross settlement service used by U.K. financial institutions geared to be forwards compatible with CBDCs. Modules for other future capabilities, as well as digital pound, are also being considered for upcoming settlement system. RTGS system expected to go live in 2022.
  • Chinese police arrested all 27 primary suspects thought to be responsible for running Plus Token Ponzi scheme. Investigators also arrested another 82 core members of scheme. Total amount of crypto assets swindled from investors is approximately 40 billion yuan, or $5.7 billion.
  • Philippines central bank, or Bangko Sentral ng Pilipinas, formed committee to consider implication of releasing CBDC, looking at feasibility and potential policy implications of issuing digital currency. First results of committee’s investigation are expected in August.

Project Development

  • Ethereum 2.0 developers released “validator launchpad” on Medalla testnet to enable validators to track and deposit test stakes on Medalla multi-client testnet.
  • Circle teaming with Genesis Trading in $25 million deal aimed at pushing USDC stablecoin to fintech masses. Funding will come from Genesis parent company Digital Currency Group, and new partnership will enhance Circle’s suite of products with new launches in store.
  • Derivatives platform EQUOS.io set to become U.S.’ first publicly-traded crypto exchange later this year through backdoor listing on Nasdaq. Its operator, Diginex, announced it is combining EQUOS.io with Singapore’s 8i Enterprises Acquisition Corp, a SPAC listed on Nasdaq. Acquisition is to be completed in September
  • BCB Group launching instant settlement network for cash and crypto called BCB Liquidity Interchange Network Consortium, a real-time gross settlement system that aims to replicate Silvergate Exchange Network. BLINC is emerging from pilot stage, going live with Bitstamp as founding partner alongside 15 other BCB clients. 
  • Digital banking infrastructure provider Banxa announced strategic partnership with exchange platform Zero Hash for expansion plans into North America. 
  • Digital asset research and consulting firm Delphi Digital launched venture capital fund focused on emerging crypto asset projects. VC wing funded primarily using internal capital and will focus on early-stage projects with token element. 

Exchanges

  • Tel Aviv Stock Exchange launching blockchain platform called Central Blockchain Securities Lending Platform, which will provide single national market where Israeli institutions can lend securities directly to one another. Platform set to go live Nov. 2.
  • Malaysian national stock exchange will explore digitization of country’s bond market through proof-of-concept blockchain called Project Harbour. Initiative will use DLT as register for Labuan Financial Exchange’s bond marketplace.

Mining

  • Marathon Patent Group planning to receive 1,360 additional bitcoin mining rigs in rollout that will increase facility’s hashpower up 320% to 184 peta hashes. Company said it expects 700 newly bought M31S+ ASIC Miners from MicroBT and 660 previously ordered Bitmain S-19 Pro Miners to arrive in mid-August.

Fundraising

  • Bitcoin Suisse raised CHF 45 million (~$48 mil) in Series A funding round for 16.4% of total equity. Round was led by Roger Studer, former investment head of Vontobel. Funding round pushed valuation to CHF 302.5 million (~$327 mil).
  • Polkadot token’s second private sale netted Web3 Foundation and Parity Technologies nearly 4000 bitcoin. Token offering was not available in certain jurisdictions such as U.S., and DOTs were listed for $125 per token. Polkadot raised $145 million in 2017, selling 50% of network.
  • Decentralized derivatives exchange Injective Protocol raised $2.6 million in seed round led by Pantera Capital. Team has previously said it expects to launch on mainnet in third or fourth quarter of 2020.

Defi

  • Team behind Synthetix said project is now officially being governed by three decentralized autonomous organizations, or DAOs, after wind-down of foundation dedicated to oversight of protocol. Protocol is now under control of protocolDAO, which controls protocol upgrades and variable configuration; grantsDAO which funds public goods in Synthetix ecosystem; and synthetixDAO, which manages and deploys funds to contributors and other project needs.
  • Crypto lender Dharma announced it is enabling support for every token listed on Uniswap v2. New features built atop Uniswap meant to attract newcomers to DeFi and create more seamless user interface for DeFi natives, in addition to enabling swap of over 2000 tokens.

Things to Watch This Week

  • Ethereum Medalla Testnet
    • Eth2 researchers unveiled a validator launchpad last week, ahead of this week’s Medalla testnet launch. As Ethereum’s overhaul inches closer to its formal launch, we’ll be monitoring the progress of this important first step as any significant issue arising could turn into delays to the timeline of Eth2 Phase Zero launch, currently slated for sometime this winter.  
  • Enforcement updates
    • Last week, two of the more notable criminal investigations in crypto, PlusToken and the Twitter hack, seemed to have come to resolutions. PlusToken’s leadership, totaling roughly 100 high-ranking members, were all arrested and the Twitter hacker, a teen from Florida, was identified and charged for masterminding the attack. Both cases highlight the significant progress that has been made in crypto investigative capabilities thus far. However, the funds that were associated in both schemes still have yet to be accounted for, so we’ll be keeping an eye out for more updates on the recovery or movement of those funds.    
    • 2/ I’m SO GLAD native #crypto cos r close to receiving #bank licenses, so the big national banks won’t entirely co-opt native crypto cos in US market. Bank licenses are far superior to existing regulatory structures used in US crypto (
      @APompliano about to release podcast on this)
       
      3/ The @finopsreport article details why a #bank license is superior to trust charter or #BitLicense–banks have much higher capital & reg rqmts, r directly plumbed into Fed, much better bankruptcy treatment for customers, only banks have safe harbor as “qualified custodian”+more
       
      4/ Since @USOCC news came out, had many convos w/ fund managers, RIAs. Those acting in a fiduciary capacity said same thing–as fiduciaries they’d need to switch to the bank. Amazing how much the landscape changed in US since @ChrisKentouris interviewed me 4 this earlier this wk!
      SBF@SBF_Alameda

      1) This is my fifth and final post about The State of DeFi: PROJECT SERUM

      2) As before: a) Some others know DeFi better than I b) I don’t know the future, I’m just guessing c) Not investment advice d) In the end value is in the eye of the beholder. It doesn’t matter what I think, it matters what you all think.

      3) DeFi is hot, and exciting, and messy. And it’s filled with potential: the potential to build an entire financial ecosystem without relying on trust or censorship. And it’s made a lot of headlines this month. But the actual products have a long way to go.

      4) Decentralized products have centralized oracles sprouting up at the crucial step. Stablecoins either rely on a single bank account or aren’t really fungible with a dollar. The space has dozens of viable blockchains each reinventing the wheel and isolated.

      5) And above all, it’s slow and expensive. The core network has 7 transactions per second to share between every single project; it takes dollars and minutes to take even simple actions. So there are no orderbooks, or risk engines, or complex, computationally intensive products.

      6) Anyone who’s used existing protocols has felt this: the frustration of waiting 5 minutes for a transaction before learning it failed because of something that happened after you sent it; seeing a estimated gas cost of $100 during peak times. It’s really holding back the space.
      READ MORE

      Silver Watchdog@Silver_Watchdog

      BTC pump is coming from Binance (USDT). They’re trading more volume than the top five exchanges. Remember what Mark Karpelès did with his Willy Bot. All he needed to move the market was computing power. #fraud

      24hr btc/usd volume
      12.5k Coinbase
      9.3k Bitstamp
      9.2k Bitfinex
      5.8k Kraken
      2.4k Gemini

      btc/usdt
      69k Binance <<<
      1.6k Poloniex
      1.3k Bitfinex 

      Can’t wait until @bitfinex explains to the NY judge how @binance was issuing USDT for US customers.

      And why are Asian traders staying in USDT with the dollar declining? There should be moving to CNHT.

      Grayscale@GrayscaleInvest
      07/28/20 UPDATE: Net Assets Under Management, Holdings per Share, and Market Price per Share for our Investment Products.
      Total AUM: $5.1 billion
      Image

      Anil@anilsaidso

      I took 500 yrs of global reserve currency data and overlaid @RayDalio‘s ‘Relative Standing of Great Empires’ chart… 

      Byzantine Bull@ByzGeneral

      Even big American banks are beginning to have doubts about the US dollar’s status as world reserve currency. If Satoshi was still around, he would have a grin on his face. The landscape literally couldn’t be better for #bitcoin

      CoinMetrics.io@coinmetrics

      Crypto trading volume numbers are often exaggerated or faked. Which exchanges have trustworthy trading volume? We created a framework to help solve the problem.
      Read more here: coinmetrics.substack.com/p/coin-metrics…

      Gabor Gurbacs@gaborgurbacs

      I just published “#Bitcoin: Less Volatile Than Many #SP500 Stocks?” We found that Bitcoin has exhibited lower volatility than 172 stocks of the S&P 500 in a 90 day period and 155 stocks YTD. 
      Blog: vaneck.com/blogs/investme…

      Ryan Sean Adams – rsa.eth @RyanSAdams

      What will DeFi look like in Ethereum 2.0? There’s one plot of real-estate for DeFi protocols on Ethereum today. In Eth2 there’ll be 64. @hosseeb gives us the model to understand how this new world might evolve. DeFi in Eth2: Cities, suburbs, farms
      bankless.substack.com/p/defi-in-eth2…

      Fidelity Digital Assets@DigitalAssets

      Introducing the first report in our Bitcoin Investment Thesis series by @riasearch, highlighting #bitcoin as an aspirational store of value. 
      Download here: bit.ly/3i0eY5J

      Ryan Watkins@RyanWatkins_

      The entirety of what we call DeFi is worth less than both XRP and Bitcoin Cash alone. Despite its rerating over the past couple months, DeFi is still extremely small in perspective. 1/

       

      DeFi’s relative stature becomes even more stark when comparing it to all publicly traded layer 1s outside Bitcoin and Ethereum. DeFi is worth an order of magnitude less than these projects, which are collectively worth $45.7 billion.

      The top 30 cryptoassets outside BTC and ETH is full of useless first-gen cryptocurrencies, ghost town “ETH killers”, and dead projects. This doesn’t even include the vaporware yet to launch projects that raised large sums of money at ridiculous valuations in 2017.
      READ MORE