Bitcoin price is showing signs of life after remaining range-bound for most of last month, amid a widening crisis in the cryptocurrency ecosystem. The premiere cryptocurrency had been trading in the $15,000 to $17,000 price range as the contagion from crypto exchange FTX’s collapse claimed more victims. Inexplicably, it broke past the $17,000 mark this morning. Some analysts attributed the slight jump price jump as … Continue reading Notes 11/30: Bitcoin Price, Regulation
In a now famous Rolling Stone description of Goldman Sachs after the 2008 financial crisis, journalist Matt Taibbi compared the Wall Street titan to a “giant vampire squid wrapped around the face of humanity.” FTX may not have the same footprint as Goldman Sachs but its high profile within crypto has ensured that tremors of its collapse are still being felt in the crypto ecosystem. … Continue reading Notes 11/15: FTX Tremors, GBTC Discount, and An Industry Fund
The barrage of news about FTX’s collapse means that it will take time to disentangle the many narratives emerging from it. But that hasn’t stopped many people from suggesting solutions to ride out the current crisis of confidence in crypto. One of those proposals comes from Binance chief Changpeng Zhao, an instigator of the current crisis in crypto. His suggestion is for cryptocurrency exchanges to … Continue reading Can Proof of Reserves Bring Transparency to Crypto?
Equities fell and crypto markets plummeted after Federal Reserve Chairman Jerome Powell reiterated his agency’s aggressive stance towards future interest rate hikes. The Dow Jones Industrial Average fell by 1.85% while the S&P 500 and Nasdaq Composite witnessed declines of 2.18% and 2.71% respectively immediately after the Fed’s speech. Bitcoin price fell by almost 5% following Powell’s speech before recovering. As of this writing, it … Continue reading Powell Reaffirms Aggressive Stance To Rate Hikes. What Does it Mean For Crypto?
Establishing an interface with banks has been one of the biggest problems for cryptocurrency businesses in the last ten years. Bitcoin’s dubious utility, an absence of regulatory guidance and volatility in crypto markets has made mainstream banks wary of processing transactions that involve cryptocurrencies. Crypto companies have, instead, turned towards smaller institutions. Three banks – Silvergate Bank, Signature Bank, and Customers’ Bank – have garnered … Continue reading Notes 8/16: Crypto Banks
Chandler Guo is what is known as an OG (Original Gangster, for the uninitiated) in crypto circles. A former beef salesman, Guo made his cryptocurrency millions by setting up a mining farm in Inner Mongolia and selling it for a massive payday during the asset class’s early days. He reportedly lives in a California mansion now and owns an estate, where he grows vegetables and … Continue reading Notes 8/12: Chandler Guo’s Crusade, the Tornado Cash Circus
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
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
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
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
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
The demarcating lines between traditional finance and cryptocurrencies are becoming increasingly blurry. Recent announcements by regulators and crypto companies point the way to a future in which the two ecosystems, different in their working and philosophically antagonistic until recently, are coalescing to become a single entity. FTX has become the first crypto exchange to offer trading of regular stocks to customers while SEC chief Gary … Continue reading Crypto and Mainstream Finance Move Towards Each Other
It’s yesterday once more in cryptoland. The dizzying rise and rapid fall of algorithmic stablecoin TerraUSD’s (UST) demise brings to mind the initial coin offering (ICO) frenzy of 2017. Back then, all you needed to raise funds from investors was a whitepaper and a generous marketing budget to hype the offering. With the media and crypto enthusiasts cheering on, investors poured money into the empty … Continue reading In The Aftermath of stablecoin UST’s Collapse
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
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
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?
The European Union may soon develop a regulatory framework for cryptocurrencies. At a confirmation hearing for his reappointment, Valdis Dombrovkis, the European Union’s financial commissioner, said that he intended to propose new legislation for cryptocurrencies. “Europe needs a common approach on crypto-assets such as Libra,” he said. Dombrovkis, who is the former Prime Minister of Latvia, made those remarks while discussing the use of financial … Continue reading EU Needs a Common Approach to Crypto-Assets: EU Financial Commissioner
The SEC has settled with another coin for an unregistered securities offering. Nebulous, a Boston-based company behind the Sia network – a decentralized cloud storage company, has agreed to pay $225,000 as penalty for conducting an offering worth $120,000 for SiaNotes, a token it intended to develop for purchase and sale of storage space on its network in 2014. The SEC’s order points out several … Continue reading SEC Settles with Nebulous over its 2014 Offering
In a Congressional testimony to the House Financial Services Committee yesterday, SEC chairman Jay Clayton indicated that Facebook’s cryptocurrency Libra might be a security token. “If what you are doing is raising capital for a project with the idea that you are going to give a return as a result of investing in that (token), then Libra sounds like a security,” he said. Clayton prefaced … Continue reading Libra Sounds Like a Security: SEC Chairman Jay Clayton
The contours of regulatory classification for Libra, Facebook’s cryptocurrency and blockchain, are becoming clear, at least, in Switzerland. In a guidance note for stablecoin regulation, the Swiss financial regulatory authority FINMA recommended an “indicative classification” of payment system license for Libra. The license is subject to the AML act and requires companies to account for additional risks, such as “bank-like risks.” The guidance also stated … Continue reading Facebook’s Libra Association Applies For Payment System License From Swiss Regulatory Authority FINMA