op Stories of Last Week
- U.S. Justice Department published report titled “Cryptocurrency: An Enforcement Framework,” which details strategies DOJ plans to take related to digital assets. U.S. Attorney General William Barr said report would delineate priorities and strategies for DOJ’s crypto enforcements. Report also indicates interest in how enforcement will work in world of decentralized finance, plus makes note of where DOJ will exert authority over foreign actors, namely when “virtual asset transactions touch financial, data storage or other computer systems” with the U.S., if they use crypto to import illegal goods into country and if they provide illegal services” to defraud or steal from U.S. residents.
- Initial principles for how national digital currencies can help implement monetary policies was published in report titled “Central bank digital currencies: foundational principles and core features,” which was prepared by central banks of Canada, U.K., Japan, Sweden and Switzerland, as well as Federal Reserve, European Central Bank and Bank for International Settlements. It set out several core principals for CBDCs to work alongside cash and other payment types in flexible and innovative payment system, support wider policy objectives while doing no harm to monetary and financial stability, and promote innovation and efficiency.
- Bank of Korea to run trials of possible CBDC through next year following progress of research in technical phase over the summer and will see testing of distribution and circulation of the digital coin. BoK indicated they will test blockchain-based CBDC in virtual environment initially, simulating transactions on blockchain platform that would be similar to those for cash or traditional means of payment.
- Financial Conduct Authority published rules banning sale of derivatives and exchange-traded notes that reference certain types of crypto assets to retail consumers, saying it considers these products to be ill-suited due to harm they pose, inherent nature of underlying assets that have no reliable basis for valuation, prevalence of market abuse and financial crime in secondary markets, extreme volatility, and lack of legitimate investment need. Ban will affect sale, marketing and distribution to retail investors of derivatives contract or ETNs linked to unregulated transferable crypto assets issued by entities in or outside U.K. Ban will come into effect Jan. 6, 2021.
- China’s central bank unveiled usage statistics of DCEP trials conducted, as People’s Bank of China said bank opened 113,300 consumer digital wallets and 8,859 corporate digital wallets for residents of Shenzhen, Suzhou and Xiong’an to pilot digital yuan. Digital wallets processed RMB 1.1 billion ($162 mil) across 3.1 mil digital yuan transactions between Apr – Aug.
- Bank of Thailand launched blockchain-based government savings bond issuance platform using IBM’s blockchain technology and has reportedly sold more than $1.6 billion worth of savings bonds, as per IBM’s official announcement.
- Office of Foreign Assets Control warned that paying out to recover from ransomware attacks can be breach of its rules. OFAC, a wing of U.S. Department of Treasury, said in an advisory that there’s sanctions risk with complying with such demands, and specifically pointed to companies that facilitate negotiations with cyber attackers regarding ransomware payouts.
- Ethereum 2.0 second testnet, named Zinken, will launch Oct. 12 at 12:00 UTC after first testnet, Spadina, failed due to “critical peering issues” according to Ethereum Foundation researcher Danny Ryan. Testnet aims to give Ethereum stakers another practice run at moving ETH into Eth 2.0 deposit contract, and Ryan said he is “primarily looking for a clean client release process and minimal headaches for users” with Zinken.
- Revolut enlisted crypto security firm Fireblocks to lay foundation for new crypto products. Fireblocks said it will provide Revolut with infrastructure needed “for securing payment railways for digital asset transfers” and to introduce new product lines and retail-facing capabilities.
- DBS and Standard Chartered completed proof-of-concept of blockchain trade finance platform called Trade Finance Registry. Two entities developed PoC with 12 other banks and intend to launch platform for commercial use by central banks. Platform is expected to help banks fight fraud in lending and commodity trade using company’s blockchain-based TradeDoc Validation Registry, which reduces chance of duplicate financing from different lenders for same inventory.
- BitMEX announced leadership changes, stating Arthur Hayes is no longer BitMEX CEO and Samuel Reed is no longer exchange’s CTO. Additionally, Greg Dwyer will take leave of absence from role as head of business development. Vivien Khoo, chief operating officer of 100x Group, has become interim CEO. Ben Radclyffe, in his role as commercial director, will have additional responsibility for client relationship handling and oversight of financial products.
- SBI Holdings announced SBI’s foreign exchange and derivatives arm SBI Liquidity Market acquired all shares of TaoTao exchange, making it a wholly-owned subsidiary. With acquisition, SBI now has two crypto trading platforms as company is already offering crypto trading services through SBI VC Trade. SBI’s acquisition of TaoTao comes shortly after exchange officially ended negotiations with Binance.
- Galaxy Digital outlined ambitions to build one-stop financial services shop for bitcoin miners. Galaxy will offer services ranging from financing to capital markets advisory and liquidity services. Ian Taylor, a Galaxy executive, will play role in development of new unit and then will hand over reins to Amanda Fabiano, who joined Galaxy from Fidelity as head of mining.
- Riot Blockchain bought another 2,500 S19 Pro Antminer rigs from BitmainTech as firm aims to increase mining power by mid-2021, paying $6.1 million for rigs with delivery slated for December. New purchase will increase Riot’s hashrate from current levels around 500 PH/s to estimated 2.3 EH/s by June.
- Bitcoin derivatives marketplace Bitnomial raised $11.6 million from 13 different investors in Series B funding. In April, Bitnomial gained approval from CFTC to manage designated contracts market.
- Gauntlet Network raised $4.3 million in funding round led by Paradigm. First Round, IA and Polychain also took part in round. Firm developed system for modeling blockchain governance decisions in DeFi, allowing startups and project teams to game out and stress test protocol decisions in real world.
- Tim Draper backing a planned $5 million Series A funding round for Bangalore-based cryptocurrency exchange Unocoin. Exchange said Draper Associates is currently lead investor, with XBTO Ventures and 2020 Ventures also joining.
- Covalent, a data analytics startup, raised $3.1 million in new funding round co-led by Woodstock Fund, 1kx Capital, and Mechanism Capital. Other participating investors included CoinGecko and Alameda Research, among others. Covalent currently provides on-chain data and analytics for Ethereum network.
- Square purchased 4,709 bitcoin at aggregate purchase price of $50 million, or an average price of approx. $10,600 per bitcoin. Announcement from Square included statement that “cryptocurrency is an instrument of economic empowerment and provides a way to participate in a global monetary system, which aligns with the company’s purpose.” Investment represents approximately 1% of Square’s total assets as of Q2 2020.
- Christie’s auction house announced sale of digital portrait “Block 21,” comprised of physical piece of art and NFT representing Satoshi’s original Bitcoin code, by unknown buyer for $131,250, marking first time NFT was auctioned at major auction house.