It is mostly difficult to find a defining pattern for news developments in cryptocurrencies and blockchain. Some weeks, it is crime. During other times, it is startup fundings or regulation. This past week brought both crime and regulation into sharp focus.
Here’s a brief recap of important news developments in cryptoassets and blockchain.
CME Bitcoin Options
CME Group, which launched bitcoin futures in December 2017, may become the first major trading venue to list bitcoin options. The exchange announced its intention to list bitcoin options in early 2020. The news came approximately a week after the group increased position limits of Bitcoin futures for traders on its exchange. CME’s announcement is significant because it is indicative of growing embrace of cryptocurrencies as an asset class by regulators and institutional investors. Bitcoin’s price volatility has been cause of concern for traders. Options trading will broaden the number of venues available for shorting bitcoin and increase liquidity, thereby making irrational price swings less frequent.
Binance Makes News
Cryptocurrency exchange Binance may be based in Malta but it provides a steady drip of news here in the United States.
The exchange commenced user registration for its U.S. operations last week. It intends to follow regulations and has asked users for government-issued user IDs to comply with KYC and AML laws. The fragmented nature of existing cryptocurrency exchanges has proved to be a stumbling block for Binance and users in 13 states, including New York and Texas, will not be able to trade on the exchange for now.
Binance also made a head-scratching investment in a news site for cryptocurrencies and blockchain. The site hasn’t updated its content since January this year. Binance CEO Changpeng Zhao (CZ) was quoted extensively in mainstream and crypto media, praising the site and offering elaborate rationales for the investment. Other notable crypto exchanges, such as OkEx, have also invested in the site and valued it at $200 million in the latest fundraising round.
All of it seemed mysterious until you looked past the headline, at a little detail tucked away towards the end of news items. Mars Finance, the company which received the funding, has a venture fund that has invested in several blockchain and crypto startups in the region. An investment in the site will help Binance access deal flow for those startups as it looks to expand its business and provide new services to customers.
Ripple Seeks Dismissal of Lawsuit Against XRP
Ripple’s XRP, the world’s third-most valuable cryptocurrency, was the subject of a class-action lawsuit last month after disgruntled investors charged the company with conducting “an unregistered sale of securities” and violating California’s advertising laws.
This past week, Ripple fired back and filed a motion seeking dismissal of those charges. According to the motion, XRP has been classified as a “virtual convertible currency” by the Department of Treasury. With regards to violating advertising laws, the company stated that those laws do not apply to securities.
Germany Unveils Blockchain Strategy
Germany joined a select club of countries with a strategy, specifically for blockchain and cryptocurrencies. The country’s finance minister Olaf Scholz also fired a warning shot against Facebook’s Libra, which has become a touchstone for crypto criticism in recent times, while announcing the regulation. Of note in the regulation are Germany’s ambitious plans to use blockchain in the finance and energy sector and provide legal clarity for utility tokens within the next five years.
Other News Developments Last Week
EOS Faces Developer Revolt
An Early Advisor to Ethereum Arrested by Federal Authorities
Steven Nerayoff is a licensed U.S. attorney in New York and was an early advisor to Ethereum, the world’s second-most valuable blockchain. He was arrested last week by Federal authorities and charged with running an extortion ring using his blockchain consulting firm that advised startups on ICOs.
According to the filing, he threatened a Seattle company with ruin, unless they gave him additional tokens from their offering. Along with his accomplice Michael Hlady, a self-described “operations guy”, he threatened to “destroy” their community and drive down the price of the company’s token. The hearing is scheduled for September 24th.
Another One Bites the Bitcoin ETF Dust
VanEck, which had filed for a bitcoin ETF earlier this year, withdrew its application last week. That leaves Bitwise, which made a presentation to the SEC officials last week, as the strongest contender for America’s first Bitcoin ETF.