Top Stories of Last Week

Regulatory

  • Hong Kong’s government seeking to change rules for cryptocurrency trading firms operating or offering services within city jurisdiction. Consultation paper detailed by Clara Chiu, director of licensing at SFC, proposes that SFC be given expanded regulatory oversight over all centralized virtual asset trading platforms in Hong Kong, regardless of whether they provide access to tokens considered to be securities or solely cryptocurrencies.
  • South Korea’s Financial Services Commission announced virtual asset service providers within country will no longer be able to handle digital assets that present high money laundering risk. Updates were made as part of guidelines under Special Payment Act and FIU specifically called out privacy-oriented cryptocurrencies such as Zcash, Monero, and Dash. Amendments to Special Payment Act expected to be enforced starting in March 2021.
  • Reserve Bank of Australia announced partnership with Commonwealth Bank, National Australia Bank, Perpetual and ConsenSys Software to explore possible use and implications of CBDC. Project will involve development of proof-of-concept for issuance of a tokenized form of CBDC for use by wholesale market participants for funding, settlement and repayment of tokenized syndicated loan.
  • Court documents reveal Department of Justice seized over 69,370 bitcoin, totaling more than $1 billion, in funds tied to darknet market Silk Road that also include equivalent amounts of bitcoin cash, bitcoin gold and bitcoin SV. Prosecutors say unnamed hacker stole trove from Silk Road and moved them to wallet where they sat from April 2013 until recent seizure that individual consented to.
  • Lawsuit alleges top officers of HDR, the parent company of BitMEX, looted $440,308,400 from HDR accounts to reduce amount of assets that could be seized by authorities after becoming aware of investigations and possible charges in 2019 by CFTC and DOJ.

Project Development

  • Ethereum Foundation announced launch of Eth2 deposit address, which lets staking participants ready funds for eventual launch of beacon chain constituting Phase 0 launch of Eth. Eth2’s genesis time is December 1 at 12:00 UTC, under requirement that there be some 524,288 ETH provided by 16,284 staking participants deposited ahead of date.
  • Cash App, the mobile payments app from Square, reported Bitcoin has overtaken all other revenue sources, making up almost 80% of entire revenue in third quarter. Cash App’s Bitcoin-derived revenue of $1.63 billion in Bitcoin marked increase of more than 1,100% when compared to same period in 2019. Bitcoin revenue was largest component of Cash App’s overall revenue generation of $2 billion, with all other revenue streams totaling $453 million, or 22% of total.
  • PayPal revealed details about plans to aggressively push into crypto sector next year, including plans to support central bank digital currencies. PayPal’s chief executive said that through its scale and prominence the company would “help shape utility of CBDCs,” including facilitating interoperability with existing payment rails and fostering acceptance among merchants. PayPal also emphasized strength of demand for crypto services from customers and announced they will increase weekly crypto purchase limit to $15,000.
  • Verizon unveiled proof-of-concept blockchain-based transparency tool for news releases called Full Transparency. Proof-of-concept is described as a blockchain-verified record of changes to its news releases and seeks to transform how Verizon Corporate Newsroom publishes news releases by providing authoritative record of changes to public communications.
  • Crypto exchange INX applied to list its digital security on Canadian Securities Exchange. INX said listing application is subject to CSE’s approval. Once green-lighted, INX token would get listed on traditional stock exchange.
  • China UnionPay partnered with South Korean payment provider Danal to launch cryptocurrency-supporting digital card, with Danal’s crypto wallet Paycoin and its crypto token of same name becoming interface for new, prepaid mobile card. Paycoin has indicated that users will be able to use both card and Paycoin to pay for goods and services at over 30 million UnionPay merchants across 179 countries and regions.

Exchanges

  • Eris Clearing LLC, the clearing arm of Eris Exchange, received Commodity Futures Trading Commission’s permission to provide clearing services for fully collateralized swaps in addition to existing business of clearing digital currency products.

Mining

  • En+, one of largest aluminum and power producers in world, is venturing into crypto mining via partnership with BitRiver, which owns largest mining venue in Russia. En+ owns four major hydropower plants in Russia’s Siberia, and is producing about 7% of country’s electricity. New farm will be joint venture, with En+ holding 80% stake and BitRiver 20%, and will initially offer 10 megawatts of power for miners, with the potential to expand to 40 megawatts.
  • Bitfury formed partnership with private equity firm LIAN Group to launch crypto mining as a service, and as part of arrangement, LIAN Group will contribute to full upgrade of Bitfury’s existing blockchain infrastructure, consisting of a large data center in Norway.

Fundraising

  • Crypto derivatives exchange Opium closed $3.25 million funding round involving QCP Soteria, Kenetic Capital and Alameda Research. Startup allows for users to launch custom decentralized derivatives that anyone can access. 
  • Alameda Research invested $3 million in trading platform 3Commas, a crypto investing experience for retail users. Upcoming initiatives include 3Commas Academy, an online education program for new users to learn trading and risk management, and expanding localized services in Asia and South America.
  • NIFTEX, a platform that allows for fractional trading of NFTs, announced $500,000 funding round led by 1kx and joined by CoinFund, MetaCartel Ventures, Sparq and Digital Currency Group. Company launched alpha version five months ago and generated more than $2 million in total volume.

Other

  • Sam Bankman-Fried, CEO of FTX, made $5.2 million donation to Joe Biden’s presidential campaign. Biden’s campaign received total of $79.5 mil from top 100 donors describing themselves as CEOs. Bankman-Fried reportedly second-largest CEO-contributor after Michael Bloomberg, who donated $56 mil.

Things to Watch This Week

  • Bitcoin Cash Fork
    • The Bitcoin Cash network will upgrade on November 15, 2020 and Bitcoin ABC, the historically dominant implementation of Bitcoin Cash, appears on the brink of giving way to Bitcoin Cash Node (BCHN).
      • Amaury Séchet, a BCH developer and lead of the ABC node, introduced an infrastructure funding proposal that added a Coinbase Rule that dictates that all newly mined blocks must contain an output assigning 8% of the newly mined coins to an address that some worry will be controlled by Séchet. Thus, miners would receive only 92% of the block reward on the ABC implementation.
      • Thus far, more than 80% of nodes have signaled in favor of BCHN over the past week.
    • In addition to exchanges and service providers pausing withdrawals and deposits in BCH in the days leading up to November 15, most of the market’s entities have been putting out statements revealing their action plan after the fork, with the BCHN camp gathering most support from miners, exchanges and the community.
      • Binance, Huobi, Okex, BTC.Top, P2Pool, F2Pool, Easy2Mine, and Bitcoin.com are adding “powered by BCHN” in the Coinbase parameters of the blocks mined on their platforms. Additionally, Kraken, Coinbase, and several other exchanges have announced full support for BCHN, which will most likely end up keeping the BCH ticker after events unfold.
      • PlanB@100trillionUSD
        #Bitcoin is the best performing asset, this year, last 5 years and last 10 years. Even risk-adjusted bitcoin outperforms all other assets, year after year. What’s your reason for not having bitcoin in your investment portfolio? 
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        SpartanBlack@SpartanBlack_1
        The timing of the Chinese OTC and exchange crackdowns is no coincidence. The PRC government is sending a strong message about its stance on cryptocurrencies other than the DCEP.

        China’s stance is not new. It just rears its head every now and then. $BTC was getting over-extended from a short term technical standpoint anyway so this event likely triggers some profit taking.

        The Block @TheBlock__
        ICYMI: PBoC governor says digital yuan’s pilot has done 4M transactions so far with $300M
        theblockcrypto.com/linked/83187/p…
        Dan Morehead@dan_pantera
        Pre-halving, @CashApp was buying 20% of all newly-issued BTC. Now it’s ~40% You can go round and round with pundits on valuing #Bitcoin. One thing that is certain – when net supply goes way down – and demand is constant or growing – the price goes up. bit.ly/2TArvCt

        Willy Woo@woonomic
        The rate of Bitcoin user adoption took a step change UP last month. This latest round of bullish price action has been supported by organic buyers. Interestingly it happened BEFORE the PayPal announcement.

        Square announcement of treasury deployment pumped the price $750 upwards over 3 days. The influx happened after the price pump. Then the PayPal announcement happened afterwards.

        Adam Cochran@AdamScochran
        1/15 So as announced last night Hong Kong will be requiring cryptocurrency exchanges to pursue an SFC/SFO license. Hong Kong is home to operations for the largest crypto exchanges (Huobi OKEx, FTX, BitMex and Binance) So here is some unpacking on what the SFC license means.

        2/15 First Licensing is divided into 10 categories including, securities, futures, forex, automated trading, and margin. None of which were previously applied to ‘virtual assets’ as long as they were not considered to also be a security.

        3/15 In 2019 HK SFC put out a position paper on virtual asset trading which was an opt-in framework. It is however unclear if this position/framework is what is expected to now be mandatory after yesterdays announcement.
        READ MORE

        skew@skewdotcom
        This time it’s different? Google trends for “#bitcoin” a fraction of what they were when it first touched $14k in 2020

        Qiao Wang @QwQiao
        A non-exhaustive list of DeFi products I’m excited about for the next couple years: 1) Synthetic traditional assets: provide access to high quality assets. Main challenge: regulatory

        2) Decentralized derivatives: on-chain perpetual swaps, futures, options, structured products, etc. Main challenge: will they be able reel in institutional liquidity?

        3) Order book-based exchanges: with L2s and ETH competitors coming online, order book-based exchanges can finally scale. Main challenge: same as above, will institutional liquidity come?

        4) Fixed rate borrowing and lending: currently the main loan instruments are floating rates.

        5) Under-collateralized borrowing and lending: give people the ability to borrow money without massive collateral. Main challenge: how to build trust between counterparties?

        6) Staking pools: similar to PoW mining pools but for staking tokens.

        7) Front-end aggregators: as DeFi assets and platforms become more complex, need front-end aggregators for users to seamlessly manage their finances.

        8) Cross exchange liquidity bridges: Ability to execute financial transactions on assets from different chains. Main challenge: technical.

        What did I miss? In the long-run I’d like to see more products that serve non-speculative activities. But for now we are still in the speculative phase of DeFi. And that’s fine. Speculation attracts ideas, talent, and capital.

        whalemap@whale_map
        Fresh hourly bubble chart. Fairly strong supports at $13,740 and $13,607. Would be a good buy zone if price ever gets there. Clear invalidation below $12,987.
        intotheblock@intotheblock
        We are above $15,000 again  Our IOMAP indicator shows that #Bitcoin has little resistance to continue climbing towards $17,000. The biggest level of support is located between $13,556.17 and $14,000, where 1.06m addresses previously bought 763 thousand $BTC
        Yassine Elmandjra@yassineARK
        UPDATE: Day 692 The price of bitcoin is now 80% of its all time high, the closest it has ever been to full recovery. Historically, it has taken 12 days on average to go from 80% recovery to full recovery.