Top Stories of Last Week

Regulatory

  • Central Bank of the Bahamas announced Sand Dollar, the state-backed virtual currency, is now available nationwide to all 393,000 residents of The Bahamas, the first country in world to officially roll out a CBDC. Sand Dollar transfers are made by mobile phone and residents of The Bahamas can use digital currency at any merchant with a Central Bank approved e-Wallet on mobile device.
  • Larry Dean Harmon, the Helix and Coin Ninja founder who was arrested for allegedly mixing bitcoin for criminals, fined by prosecutors at FinCEN for $60 million in civil penalties. Harmon’s bitcoin mixing services allegedly laundered tens of millions of dollars in crypto for darknet markets including Abraxas, Agora, Hansa, Hydra, and Wall Street Market.
  • Spain’s central bank is fast-tracking research on digital currency‘s design and economic implications of CBDC as per four-year strategic plan, where researchers will consider design proposals and analyze digital currency’s financial and systemic risks for Spain. Research will carry through end of 2021.
  • Spanish National Police arrested operator of cryptocurrency arbitrage firm Arbistar 2.0 in crackdown on platform that investors allege to be massive bitcoin Ponzi scheme. Santiago Fuentes was taken into custody in Tenerife and charged with financial fraud and money laundering. Fuentes’ site serves around 120,000 users, which according to blockchain investigations firm Tulip Research have invested over $1 billion in total.
  • U.S. Travel Rule Working Group (USTRWG), a group of twenty-five U.S.-based virtual asset service providers, have come together to publish white paper on industry-wide solution to travel rule compliance that proposes hub through which they can identify customer information and use point-to-point communication channels to transmit data. Solution will be rolled out in phases, first admitting only U.S.-based VASPs to network to act as both governance and technology mechanism for compliance by controlling who may join. 
  • Consortium led by EY Hanyoung, along with Samsung SDS and Naver Corporation’s LINE, reportedly bid for country’s CBDC pilot project. If awarded, EY Hanyoung will be in charge of CBDC’s design processes, while Samsung SDS and LINE will provide system architecture support.

Project Development

  • PayPal and its social payments platform Venmo set to offer crypto buying and selling, with crypto to be solely offered on PayPal to start, with Venmo slated to follow in 2021. PayPal obtained conditional license from NYDFS by collaborating with Paxos Crypto Brokerage, which will handle regulatory, technological and liquidity aspects of crypto features. Paypal also reportedly exploring acquisitions of cryptocurrency companies including BitGo, with whom they have allegedly been holding talks with, and could even reach a deal within weeks. 
  • ConsenSys developer Ben Edgington published unofficial update that predicts ETH 2.0 beacon chain genesis will happen within six to eight weeks and that launch of V1.0.0 release candidate deposit contract address should be announced this week. Deposit contract allows ETH to be sent between Ethereum and ETH 2.0, and is one of few remaining updates needed to facilitate roll-out of ETH 2.0 phase 0.
  • LINE reportedly building platform for development of blockchain-based CBDCs, aiming to support development of customized CBDC and discussing application of platform with several central banks in major Asian countries. LINE executives did not disclose countries that are considering platform’s application.
  • Fintech investment fund managed by Lombard Odier Investment Managers reportedly seeking out companies focused on tokenization after launching strategy in May and amassing $250 million in assets. Jeroen van Oerle, global fintech equities portfolio manager for fund, said particular focus on companies involved in process of tokenization has already led group to investments in undisclosed consultancy and software company.

Exchanges

  • Binance Jersey announced closing of exchange, with all deposits to be disabled on Oct. 30, trading ceasing on Nov. 9, and shutdown expected on Nov. 30 where all accounts become inaccessible. Binance Jersey provided fiat-to-crypto exchange for users trading in euros and pounds. Growth of services on Binance.com extinguished rationale for Binance Jersey as distinct exchange.
  • Bitstamp introduced insurance policy that covers theft and other losses of user funds held on platform. Insurance policy will be provided by Paragon International Insurance Brokers in coordination with Woodruff-Sawyer. Policy applies to digital assets that are held at exchange both on and offline, and covers number of crime-related circumstances including employee theft, loss while assets are stored at any premise, loss in transit, loss caused by computer fraud or funds transfer fraud, and losses related to legal fees and expenses.
  • European crypto exchange LGO and brokerage Voyager are merging, enabling Voyager to expand into Europe. As part of merger, LGO will sunset institutional exchange business and transfer remainder of assets to Voyager. Additionally, the firm’s respective tokens will merge as well, with a new Voyager token to be minted which will allow VGX and LGO token holders to swap into new token.

Fundraising

  • Bixin Ventures allocating $100 million fund with all proprietary capital denominated in USDT for purpose of fostering infrastructure projects that aim to scale up DeFi.
  • Crypto security startup Curv announced Franklin Templeton and venture capital investor Illuminate Financial Management as new investors, bringing firm’s total amount raised to $30 million. Previous investors include Commerz Ventures, Coinbase Ventures, and Digital Currency Group. 
  • CasperLabs raised $14 million in private token sale led by Digital Strategies and participation from ZB Global, Gate.io, Consensus Capital and Cluster Capital. Platform aims to solve scalability trilemma of achieving scalability, decentralization and security, as well as build platform on which developers can build and operate decentralized applications.
  • O(1) Labs, the team behind development of Mina Protocol, raised $10.9 million in strategic investment round co-led by Three Arrows Capital and Bixin Ventures, with participation from HashKey Capital, NGC Ventures, and Fenbushi Capital, among others. O(1) Labs plans to build developer community for Mina blockchain in Asia.

Defi

  • DASH announced partnership with StakeHound, enabling Ethereum DeFi users to earn rewards with StakedDASH by building bridge that will allow DASH holders to generate additional yield through DeFi applications while at same time continue receiving staking rewards.
  • Rapper MF DOOM announced partnership with digital art platform Illust Space in creating and putting 11 augmented reality masks up for auction in form of NFTs. Masks are inspired by DOOM’s signature mask and Illust Space said purchasers will be able to wear them in AR via company’s web app.

Things to Watch This Week

  • Bitcoin Options Expiration
    • Open interest in bitcoin options has dropped from its October 22 peak of $2.6 billion, currently sitting at roughly $2.4 billion worth of options. But the market will witness 60k bitcoin options expire later this week on Oct 30, with a notional value of nearly $750 million. Although heightened volatility is being talked about as it usually is before large expirations, recent expirations have had little impact on Bitcoin price. Nevertheless, this expiration comes a few days before the November elections in the U.S. and at a time where the price of Bitcoin has rallied over 20% within the past weeks. Increased volatility should be expected and will need to be monitored throughout the week. 
    • Squawk Box@SquawkCNBC
      “I came to the conclusion that #btc was going to be the best of the inflation trades–the defensive trades,” says Paul Tudor Jones. “Bitcoin has a lot of characteristics of being an early investor in a tech company…it’s like investing with Steve Jobs and Apple.”
      WATCH
      Jack Purdy @jpurd17
      Q3 was mayhem for anyone keeping up with DeFi New projects were spun up and flooded with millions of $$ of mercenary capital On-chain activity surpassed the expectations of the biggest DeFi bull Producing a cascade of effects, vital for any crypto professional to be aware of

      For the first time ever DEXs are being taken seriously as legitimate competitors to centralized exchanges They reached an astounding 15% of total crypto trading volume Almost entirely driven by AMMs that account for >90% of total volume, up from ~20% at the start of the year

      While their long-term viability has been a topic of much debate recently… Its no doubt that AMMs are providing much-needed services around the early incentivization of liquidity in new markets and low-slippage trading around pegged-assets
      READ MORE

      f i l ₿ f i l ₿@filbfilb
      Bitcoin’s cyclical behaviour is difficult to escape from. Same week 4 years ago, Bitcoin was trying to finally break the 50% bear market fib retracement. It never looked back after that & tested ATH by January. This time it’s different?
      Image
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      Jake Chervinsky@jchervinsky
      “Cryptocurrency has a lingering reputation as a safe haven for criminals…. This is an artifact of its earliest days of development & does not reflect its growing scale & the range of investors, merchants, & others who now use it for legitimate purposes.”
      cnas.org/publications/r…
      River Financial@RiverFinancial
      Over twenty companies, most of which began accumulating within the last few months, collectively hold over 750,000 bitcoins as a reserve asset. The price of #Bitcoin is currently $11,965.
      Image
      https://bitcointreasuries.org

      Jacob Canfield@JacobCanfield
      A look at the two #bitcoin rallies from 2019 and 2020.

      2019 Rally: 350%
      -Massive short squeeze
      -Plus Token Ponzi in China created artificial buying

      2020 Rally: 250% (so far)
      -Corporate treasuries hedging against the US Dollar
      -Trillions of USD printing to prop the economy

      The massive downward sell pressure after the run up was the effect of Plus Token Ponzi selling their Bitcoin and Eth in the $13,000-$14,000 range. Currently, we just had the halving (reducing supply sell pressure) and on chain Bitcoin is at lows. Big contrast to 2019 Rally.

      Willy Woo@woonomic
      User base: PayPal 346m+ Bitcoin 187m+ This is a big deal. Estimating how many HODLers of BTC from on-chain forensics is from the incredible work of @glassnode.

      I love how this log chart starts off as total user count of 1; Satoshi Nakamoto

      glassnode@glassnode
      98% of all #Bitcoin UTXOs are currently in a state of profit. A level not seen since Dec 2017, and typical in previous $BTC bull markets. 

      Spencer Noon@spencernoon
      Despite a month that saw most tokens fall 50% or more, #DeFi is *still* at ATHs with its most important indicators: – TVL: $12.41B – ERC20 Stablecoins: $14B Don’t listen to the degens who burned out. Phase 2 of this #DeFi bull market will make this summer look like nothing.

      And yes, I believe burnout played a major factor in the recent DeFi drawdown. Farmers spent 3 months making serious gainz but with barely any sleep. When the market naturally corrected, anecdotally many of my farmer friends decided to hit the sidelines out of sheer exhaustion.

      The likely inflection point for DeFi Bull Phase 2 is the election, where there are multiple outcomes that would be favorable for risk assets. Until then, farmers will sit in #BTC b/c it’s low-maintenance and basically a stablecoin compared to what they were trading this summer.

      The most sophisticated crypto investors are still bullish #DeFi, it’s just a matter of timing. Which is to say: we’ve basically all just entered a high-stakes game of chicken…who is going to be the first to jump back in?

      Messari@MessariCrypto
      Ethereum is on pace to settle over $1 trillion in 2020
      bit.ly/31uay18

      Adam Cochran@AdamScochran
      1/7 I’ve confirmed, with sources with knowledge of the PayPal M&A discussions, that they’ve had exploratory discussions with multiple of crypto companies, I believe in excess of a dozen. These discussions ranged from early explorations all the way to late stage.

      2/7 While I can’t confirm specific companies without burning sources, I can confirm that the type of businesses they spoke with are *FAR* broader than just custodial services.

      3/7 This shows PayPal is very interested in custody, payments processing, payments (via card), and regional on ramps. The most interesting thing is that they spoke with companies that included ones with smart contracts and tokens

      4/7 While I couldn’t confirm the names of those specific smart contract based companies, I believe those were some of the earliest in terms of the exploratory process. There was also a VERY big focus on regional payments outside of the US.

      5/7 PayPal launching Bitcoin and thinking about companies like BitGo is big. But, I can safely say, we’ve all underestimated how seriously they are taking this space and how far along in their explorations they are.

      6/7 While they may not end up acquiring any of the companies they are talking to, it seems like we are about to enter an *AGGRESSIVE* golden age of crypto M&A that is going to take crypto to billions of users and institutions.

      7/7 This is huge. This space is just set to explode.

      Wilson Withiam@WilsonWithiam
      Q3 solidified Ethereum as the epicenter of crypto finance. Its potential to become the dominant settlement layer for crypto is clear, if not a foregone conclusion. But this activity came at a cost (high fees) that might give other blockchains a glimmer of hope. 1/

      The next 12 months could come to define the smart contract market as almost every high-profile Ethereum competitor will be live by year-end. And these networks are barrelling towards a head-to-head battle with Ethereum’s bevy Layer-2 scaling solutions.
      messari.io/article/q3-rec…

      READ MORE