Top Stories of Last Week
- Christine Lagarde said European Central Bank should reach decision on releasing digital euro early next year, after viewing results of digital euro consultation the central bank launched in October that should be ready in January 2021. Although she stated that ECB was not “racing to be first” in efforts to release CBDC, she did say she believes region’s monetary authority will move to launch digital version of euro in next two to four years.
- Gary Gensler will lead financial policy transition team for U.S. President-elect Joe Biden. A former chairman of the CFTC, Gensler was tapped to lead agency review team for Federal Reserve, banking and securities regulators. As CFTC chairman, Gensler served as financial regulator for Barack Obama. More recently, he has also testified before Congress about cryptocurrency and blockchain, and called blockchain technology a “change catalyst” in 2019.
- Lebanon’s chief central banker said country is preparing a national digital currency for 2021 debut. Banque Du Liban Governor Riad Salameh said CBDC project is part of a “regulatory mechanism” to restore confidence in Lebanon’s troubled banking sector and will also help Lebanon move to a “cashless system” that enables more seamless cash movement locally and abroad.
- South Korea’s Financial Services Commission is seeking legal amendments that would make it mandatory for VASPs within country to report names of customers. Proposed update to Act on Reporting and Using Specified Financial Transaction Information is aimed to help guard against money laundering and changes will mean VASPs are required to use real-name accounts in financial transactions.
- Treasury Department of United Kingdom revealed it is drafting proposals to regulate private stablecoins. U.K. Treasury Chancellor Rishi Sunak noted forthcoming regulatory proposals alongside other goals for country’s financial services industry. Also revealed that both England’s central bank and treasury are currently researching a CBDC, with Chancellor welcoming work from two departments into “whether and how central banks can issue their own digital currencies as a complement to cash.”
- China Construction Bank partnered with Fusang to launch sale of US$3 billion worth of debt on blockchain, the first digital security issued by Chinese bank. China Construction Bank’s certificates of deposit will be issued through Labuan branch with tenor of three months. Issued at minimum of US$100 each, certificates will yield about 0.75 percent at maturity. Deal also allows investors to trade China Construction Bank’s digital certificates using bitcoin on Fusang Exchange, a digital exchange licensed by financial regulator in Labuan, Malaysia.
- PayPal’s crypto trading and payments went live for all eligible customers in United States. Trading features a limit of $20,000 per week, double originally announced $10,000. Global services are expected to launch at beginning of 2021, alongside crypto payments on Venmo.
- Ethereum blockchain network suffered issues after infrastructure provider Infura said it experienced service outage for its Ethereum mainnet API. Problems at Infura look to have stemmed from a bug in Go Ethereum (Geth) client, whose code underpins 80% of Ethereum’s applications, splitting Ethereum blockchain in two. Two conflicting transaction histories meant users were temporarily interacting with different versions of Ethereum blockchain. Infura has since fixed issue by updating their nodes.
- LiquidStake launched by crypto trading firm DARMA Capital, which will allow ether stakers to take out USDC stablecoin loan against staked assets while earning staking rewards from new network to tackle lockup issue, where first generation of participants staking crypto on Eth 2.0 blockchain must commit coins to restrictive multi-year contract. In addition, DARMA intends to allocate over $50 million worth of ETH to Ethereum’s new deposit contract.
- Crypto lender Cred Inc. filed for Chapter 11 bankruptcy protection in Delaware after publishing letter in October saying that it experienced “irregularities” in the handling of “specific” corporate funds by a “perpetrator of fraudulent activity.” Cred said Grant Lyon has been named to company’s board to oversee restructuring process and also hired MACCO Restructuring Group as financial advisor. Cred listed estimated assets of between $50 million and $100 million and liabilities between $100 million and $500 million.
- Bitfinex unveiled new lending service called Bitfinex Borrow, a crypto loan obtained via Bitfinex’s peer-to-peer lending platform. When customers put up crypto assets as collateral in exchange for loan, Bitfinex allocates assets to different customer as part of separate product called Bitfinex Funding. Service comes with annual interest rates ranging between 5.5% and 18.25%. Additionally, customers can only hold borrowed funds for 120 days.
- KuCoin allegedly has recovered majority of assets lost in $280 million hack in September, according to Johnny Lyu, KuCoin’s co-founder and CEO. 84% of affected assets have reportedly been recovered via “approaches like on-chain tracking, contract upgrade and judicial recovery.”
- Binance allegedly has begun blocking U.S. users from accessing exchange, more than a year after Binance first announced in July 2019 that it would stop serving U.S. residents. Binance reportedly sending emails to U.S. residents based on IP addresses in what appears to be step toward enforcing blockade.
- Hive Blockchain deployed largest batch of new ASIC miners, bringing 1,240 MicroBT WhatsMiner M30S machines online to double firm’s aggregate operating hashrate. Hive’s current hash power went from 116 PH/s to 229 PH/s, and total operating hash power of 1,000 PH/s is company’s goal within next 12 months.
- API3, which is developing network for decentralized APIs, raised $3 million in seed funding led by Placeholder Capital, with participation from Accomplice, CoinFund, Digital Currency Group, Hashed and Pantera Capital. API3 sold 10 million of its tokens to the funds, which will vest over a two-year period.
- Balancer Labs raised a seven-figure sum via sale of native governance token BAL to Pantera Capital and Alameda Research. Balancer plans to expand team ahead of protocol’s V2 launch that offers improvements to transaction costs and user experience.
- UNION, a DeFi protocol building risk management tools, raised $3.9 million in funding from Alameda Research, Solidity Ventures, 3Commas, and Black Edge Capital, among others. UNION looks to launch its protocol in coming months, offering risk management tools for DeFi that will mitigate issues around transaction finality, smart contract risk, Layer-1 risk, Impermanent loss, collateralization risk, flash loan exploits and portfolio correlation risk.
- DeFi platform Akropolis suffered $2 million loss following re-entrancy attack utilizing flash loan from dYdX. Attacker pulled out tranches of $50,000 in DAI from project’s yCurve and sUSD pools, collecting $2 million worth of stablecoin before exhausting pools.
- Bill Miller told CNBC in an interview that risks of bitcoin going to zero are “lower than they’ve ever been before” and predicted more institutional investment in the cryptocurrency. The chief investment officer of Miller Value Partners revealed in Dec 2017 that his MVP1 hedge fund had half of its investments in bitcoin.
- Stanley Druckenmiller stated in CNBC interview that Bitcoin has potential to store value for future generations. Druckenmiller said he had purchased some Bitcoin and that “bitcoin could be an asset class that has a lot of attraction as a store of value to both millennials and the new West Coast money.” Druckenmiller highlighted growing stabilization in market since launch 13 years ago, comparing act of investing in bitcoin to investing in gold.