The Securities and Exchange Commission (SEC) and Commodities Futures Trading Commission (CFTC) want to know more about trading strategies employed by hedge funds and their digital asset holdings, according to multiple reports this morning. The two agencies have approved a proposal that will change Form PF – filed by private funds – to require more disclosures about these holdings. Currently, digital asset holdings are reported … Continue reading SEC Wants More Information About Digital Assets Holdings From Hedge Funds
Among the limited number of bitcoin-related investments available to investors, the Grayscale Bitcoin Trust (GBTC) is the most well-known. It was the first publicly traded investment vehicle in public markets and has the biggest number of assets under management. In the last year, however, GBTC’s popularity has waned. Its shares, which traded at significant premiums to its net asset value, are trading at a discount. … Continue reading What Does The Future Hold For GBTC?
Because TradFi isn’t enough. Because DeFi isn’t enough. We now have the imaginatively titled NFTfi. The South Africa-based firm makes cryptocurrency loans using NFTs as collateral. NFTs or non-fungible tokens are digital artifacts for artworks currently but are expected to represent many other assets, such as real estate, in the future. They exploded in popularity during the pandemic, with some NFTs becoming worth as much … Continue reading Notes 7/13: NFT As Collateral, Bitcoin Price, And Celsius
Last month, as the crypto contagion was beginning to spread, FTX CEO Sam Bankman-Fried, who believes in “effective altruism”, talked about his “responsibility” to crypto with National Public Radio (NPR). “I do feel like we have a responsibility to seriously consider stepping in, even if it is at a loss to ourselves, to stem contagion,” he said. He has rescued many companies that have fallen … Continue reading Notes: 7/8: Voyager and Alameda, Celsius, and Grayscale ETF
I have written about Ethereum’s expensive gas fees earlier. The fees are an important source of revenue for miners in a volatile crypto market where double-digit price swings are not uncommon. But they are not the only source of profits. The Bank of International Settlements (BIS) released a bulletin last month highlighting the need to design regulations pertaining to Miner Extractable Value (MEV) – another … Continue reading Miner Extractable Value: A Source of Profits and Future Regulation
According to reports, lending firm BlockFi is being sold in a fire sale to FTX. The firm, which was seeking a valuation of $5 billion in its previous funding round has a price tag of $25 million now. The reasons for a crash in its valuation are not clear. BlockFi CEO Zac Prince yesterday linked to a podcast he did with Castle Island Ventures last … Continue reading Notes: 1/7: BlockFi Valuation, EU Crypto Regulation, and More CoinFlex Drama
Pop quiz: What is common between a lawsuit, a Ponzi scheme, and “hundreds of millions” dollars’ in losses? If you guessed cryptocurrencies, then you are on the right track. Bitcoin price fell below $20,000 this morning after news came out that the SEC had rejected Grayscale’s Bitcoin ETF application. For crypto enthusiasts, approval would have been a vote of confidence for the ecosystem. It would … Continue reading Notes: 6/30: Grayscale’s SEC Rejection, Celsius Ponzi Scheme, and Genesis Losses
Bring out the popcorn. The dramas [and pyramid schemes] in crypto seem to go on forever. Just as the controversies about Three Arrows Capital and Celsius Lending were on the wane, we are being treated to another soap opera of sorts at CoinFLEX. The derivatives exchange stopped customer withdrawals due to “extreme market conditions” last week and was back in the news yesterday. It is … Continue reading Notes: 6/28: CoinFLEX Drama, Bitcoin As Commodity, Grayscale’s ETF Bid, and Crypto’s Robber Barons
The dreaded W word is re-entering the crypto lexicon. Chatter about a crypto winter is on the cards once again after the asset class’s spectacular pandemic run. The irony of crypto becoming one of the first casualties of an impending recession is rich because its enthusiasts have spent years positioning it as a hedge against central bank policies and distinguishing the asset class from mainstream … Continue reading Bitcoin Price Continues Crumbling As Celsius Contagion Spreads
Yesterday I wrote about a crypto mining bill that is sitting on Gov. Kathy Hochul’s desk. While New York’s net zero goals are ostensibly the driving factor behind the legislation, an element of political calculus could trump climate change concerns. According to the New York Times, Gov. Kathy Hochul’s re-election campaign has already received $40,000 from the owner of a crypto-mining plant in Massena, N.Y. … Continue reading On Crypto Mining and NYDFS Guidance for Stablecoins
Regulation of cryptocurrencies by the Commodities and Futures Trading Commission (CFTC), tax exemptions for crypto transactions, and strict reserve requirements for stablecoin issuers are some of the proposals in a new bipartisan bill for cryptocurrency regulation from Senator Cynthia Lummis (R-Wy) and Sen. Kirsten Gillibrand (R-NY). The bill, titled the Responsible Financial Innovation Act, is the first such attempt to regulate an industry with aspirations … Continue reading Bipartisan Senate Bill Aims to Bring Order to Crypto But Could Set Up Dangerous Dynamic, Says a Critic
After climbing to dizzy heights last year, markets are hemorrhaging value as prices plummet since the beginning of this year. Expensive assets that were worth millions of dollars as recently as last year have crashed from their earlier valuations. One of the world’s biggest financial instruments careened to a sudden and spectacular crash in less than a month, further deepening distrust of a financial system … Continue reading Can Crypto Handle A Recession?
The United States remains the world’s biggest center for bitcoin mining, according to a new report from the Cambridge Center for Alternative Finance (CCAF). The country accounted for 37.84% of global hashrate – the amount of computing power deployed to mine bitcoin – in the period between September 2021 to January 2022. China, which banned bitcoin mining last May, was responsible for 21.11% of the … Continue reading Bitcoin Mining in China; Crypto’s Play in Primaries; Meta Still Has Crypto Ambitions
There is never a dull moment in crypto. On any given day, there is a scam or a hack. On others, there is a controversy. The latest kerfuffle in cryptoland involves an NFT sale (what else?) and highlights two persistent problems: high transaction fees and regulatory uncertainty. The Otherdeed Mint: A Troubled Sale It started when Yuga Labs – the company behind the Bored Ape … Continue reading The Otherdeed Sale Highlights Crypto’s Persistent Problems
In his appearances between lawmakers after becoming the chief of Securities and Exchange Commission (SEC), Chairman Gary Gensler referred to the cryptocurrency ecosystem as a “Wild West” and requested greater authority and funding to police it. In a press release yesterday, the agency said it was adding 20 new positions to its Crypto Assets and Cyber Unit. The new additions bring the total number of … Continue reading SEC Adds Staff To Its Crypto Division; Could Signal Clarity In Regulation
With an acceleration in “cryptoization” of emerging market currencies, the International Monetary Fund (IMF) is calling for capital controls for cryptocurrency businesses. The agency issued a report Tuesday that outlined measures for instituting regulation on the emerging asset class. Crypto: A Threat to Global Financial Stability As a result of the “cryptoization,” trading volumes for cryptocurrencies against those for emerging markets spiked following Russia’s invasion … Continue reading IMF Calls For Capital Controls and Regulation In Crypto
The UK’s temporary registration regime, introduced in Dec. 2020, was supposed to enable crypto firms to continue their trading operations until they received final approval from the Financial Conduct Authority (FCA). But successive extensions to the regime and delays to the final approval deadline have forced them to seek regulatory approval outside the UK. The current deadline for approval is March 31, 2022. According to … Continue reading Crypto Firms Exit UK Before FCA Deadline for Registration
Is decentralized finance (DeFi) a revolutionary reinvention of modern finance that should remain outside the bounds of regulation? Or is it jargon – algorithmic authority window-dressed as liberty and accompanied by the same problems as traditional finance – that should be hemmed in by rules? A new paper by Hilary J. Allen, Professor at the American University Washington College of Law, argues for the latter … Continue reading Does DeFi Need Regulation?
The cryptocurrency industry is going to Washington. According to an article in the Wall Street Journal, crypto companies are spending big bucks to hire former regulators and government officials to increase their influence on policymaking. The revolving door between government agencies and private enterprise, at least in the case of cryptocurrencies, has gathered speed in recent times after a bull market in prices and new … Continue reading Crypto Makes Moves in Washington
President Joe Biden today signed an executive order to develop a framework and formulate a ‘whole-of-government approach’ to cryptocurrencies. The order tasks government agencies with coordinating amongst themselves to focus on six key areas of research: consumer and investor protection; financial stability; illicit finance; U.S. leadership in the global financial system and economic competitiveness; financial inclusion; and responsible innovation. While individual agencies within the U.S … Continue reading Does Biden’s Executive Order On Cryptoassets Make A Difference?
In the annals of crypto history, initial coin offerings (ICOs) were the latest innovation until they weren’t. After briefly eclipsing traditional forms of venture financing, ICOs have largely been relegated to the sidelines of the fundraising ecosystem after an SEC crackdown. A glance at the moribund market for coin offerings during the first quarter of 2019 revealed distressing news. Coin offerings, which had raised $6.9 … Continue reading Can SEC Commissioner Hester Peirce’s Proposal Revive the ICO Market?