Notes 9/16: ETHW Crash, ETH As a Security

The effect of Ethereum’s transition from Proof of Work (PoW) to Proof of Stake (PoS) on the price of its native token ether has receded. Investors bid up ether’s price in the weeks leading up to the merge. It remained flat during the actual event. And now, it is in decline. After reaching a high of $2,007 slightly more than a month ago, ether prices … Continue reading Notes 9/16: ETHW Crash, ETH As a Security

SEC Chief Gensler Will Work With Congress to Ensure CFTC Regulates “Non-Security” Crypto Tokens

There were no surprises in the Securities and Exchange Commission (SEC) chief Gary Gensler’s conversation with Coindesk this morning. He hammered his main talking points – most crypto tokens are securities and crypto services should register with his agency – throughout the interview. In a later industry conference, however, he said that he was looking forward to working with Congress to pave the way for … Continue reading SEC Chief Gensler Will Work With Congress to Ensure CFTC Regulates “Non-Security” Crypto Tokens

Tornado Cash Sanctions Become Rallying Cry For Crypto Privacy Activists

The fallout from the Treasury Department’s sanctions on Tornado Cash continued this week. The department’s Office of Foreign Assets Control (OFAC) claims that the crypto-mixing service, which is a decentralized application (dApp) running off Ethereum’s blockchain, was used by hackers in North Korea to launder more than $7 billion worth of cryptocurrencies. Privacy activists in crypto are decrying the sanctions as an assault on “free … Continue reading Tornado Cash Sanctions Become Rallying Cry For Crypto Privacy Activists

What Does The Future Hold For GBTC?

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?

Four Takeaways From Celsius’ Bankruptcy Filing

Troubled cryptocurrency lending firm Celsius filed for bankruptcy yesterday in the Southern District of New York. The filing does not provide much information into the company’s operations because the company has many businesses. The opaque nature of cryptocurrency markets and its complex web of relationships between different players make it even more difficult to accurately determine its effect on the cryptocurrency ecosystem. Celsius stated that … Continue reading Four Takeaways From Celsius’ Bankruptcy Filing

Notes 7/13: NFT As Collateral, Bitcoin Price, And Celsius

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

Miner Extractable Value: A Source of Profits and Future Regulation

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

Notes: 7/6: Voyager Bankruptcy, Celsius Payback, and FTX’s Push For Retail Investors

Brokerage firm Voyager Digital has filed for bankruptcy, becoming the second crypto company – after hedge fund Three Arrows Capital (3AC) – to go under. In its filings, the firm stated that it had 100,000 creditors and between $1 billion to $10 billion in assets and liabilities. Its exposure to 3AC was worth $661 million, according to the filing.  Voyager had received critical cash infusion … Continue reading Notes: 7/6: Voyager Bankruptcy, Celsius Payback, and FTX’s Push For Retail Investors

Notes: 6/30: Grayscale’s SEC Rejection, Celsius Ponzi Scheme, and Genesis Losses

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

CBDCs Will Drive The Future Monetary System: BIS Report

There goes the dream of decentralization. Bitcoin enthusiasts have railed against central banks since the cryptocurrency was introduced to the world in the aftermath of a global financial crisis, widely blamed on central bank policymaking. But digital currencies issued by central banks, also known as Central Bank Digital Currencies (CBDCs), are at the center of a future monetary system in a report released by the … Continue reading CBDCs Will Drive The Future Monetary System: BIS Report

Bitcoin Price Continues Crumbling As Celsius Contagion Spreads

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

On Crypto Mining and NYDFS Guidance for Stablecoins

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

Can Crypto Handle A Recession?

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?

Bitcoin Mining in China; Crypto’s Play in Primaries; Meta Still Has Crypto Ambitions

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

The Otherdeed Sale Highlights Crypto’s Persistent Problems

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

IMF Calls For Capital Controls and Regulation In Crypto

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

Does DeFi Need Regulation?

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?

Crypto Makes Moves in Washington

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

Bitcoin Ownership is Still Concentrated and 90% of Transactions On Its Blockchain Do Not Have Economic Value: Study

About 90% of transaction volume on Bitcoin’s blockchain does not have much economic value and the cryptocurrency’s ownership is concentrated among relatively few investors. These are the results of a new study published by researchers from the Massachusetts Institute of Technology (MIT) and the London School of Economics (LSE). According to the authors, 90% of transaction volume on the Bitcoin blockchain is not tied to … Continue reading Bitcoin Ownership is Still Concentrated and 90% of Transactions On Its Blockchain Do Not Have Economic Value: Study

Can SEC Commissioner Hester Peirce’s Proposal Revive the ICO Market?

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?

fsb stablecoins randal quarles

Randal Quarles, FSB Chair, Says Stablecoins May Pose Regulatory Challenges

Randal Quarles, Chairperson of the Financial Stability Board (FSB) has warned that stablecoins “may pose regulatory challenges” to the financial ecosystem in the future. The FSB is tasked with monitoring and assessing vulnerabilities in the global financial system. “The introduction of stablecoins … brings a potentially new scale and scope that the financial regulatory community must carefully consider,” Quarles said in an address at the … Continue reading Randal Quarles, FSB Chair, Says Stablecoins May Pose Regulatory Challenges