Issue #69

Binance pay $4.3B in fines and CZ (CEO) steps down, BTC ETF applicants continue meeting with the SEC & more...

Market Overview

As of the time of writing (Monday 5pm), the total market cap of the crypto asset market is $US1.48T, up (0.7%) from last week.

Below is the weekly performance of the top crypto assets. 

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News Headline Highlights

  • Binance CEO, Changpeng Zhao, fronted court in the US to announce his immediate vacation as CEO of Binance and plead guilty to violating U.S. anti-money laundering laws as part of a $4.3 billion settlement resolving a years-long probe into the world's largest crypto exchange.
    • Magnet Quick Take: We in no way condone intentional KYC/AML violations. And believe the unintended consequences of doing so can be disastrous for society. We are relieved however that this was not another FTX-like scenario and customer funds have been protected.
  • Circle and SBI Holdings announced a partnership to bring USDC distribution, banking and Web3 tech proliferation to Japan. Following the Japanese governments revised Payment Services Act (from June 3, 2023), Circle and SBI are hoping to stimulate the issuance and circulation of stablecoins in Japan under a regulatory framework that advances Japan’s transition towards a Web3 economy. 
  • Circle and SBI Holdings begin partnership combining USDC distribution, banking and Web3 tech proliferation for the Japan market.Santander Private Banking International, part of Spanish financial services giant Banco Santander, is offering BTC and ETH trading and investing services to high-net-worth clients with Swiss accounts.
  • Open interest for bitcoin options on Deribit hit an all-time high of over $15B, according to Deribit’s data. "Total open interest in bitcoin options surpassed that of BTC futures for the first time. This shift signifies the market's maturation and growing sophistication," noted Deribit Chief Commercial Officer Luuk Strijers.
  • Raiffeisen Bank, a 97 year old Austrian bank, will roll out cryptocurrency trading services to retail customers by the end of January 2024. The service will initially be offered to customers in Vienna, where the bank is headquartered.
  • Bittrex Global announced it is closing down, urging customers to withdraw funds as soon as possible. The company statement reads: "It is with great regret that we announce that Bittrex Global has decided to wind down its operations. This decision was not made lightly, and we understand the inconvenience it may have on our valued customers".

 Crypto Asset Project Updates

  • Blast, a new Ethereum Layer 2 scaling solution, went live in ‘early access mode’. Blast is aiming to become the first Ethereum Layer 2 to introduce a native yield model. The launch did not come without controversy, raising concerns from Dan Robinson, the Head of research at Paradigm, an investor in Blast’s seed round, who said the launch “crossed [ethos] lines in both messaging and execution.”
  • Tether, the issuer of the world’s largest stablecoin (USDT), froze $225m worth of USDT following an investigation by the U.S. Department of Justice (DOJ) into an international human trafficking syndicate in Southeast Asia. The investigation was ongoing for months and used blockchain analysis tools provided by Chainalysis.

Regulation Station

  • BlackRock and Grayscale met with the US Securities and Exchange Commission’s (SEC) division of trading and markets last week (the division in charge of approving or denying 19b-4’s). 
  • The US Securities and Exchange Commission (SEC) charged Kraken for operating as an unregistered securities exchange, broker, and dealer.
    • Kraken responded to the charges within 24 hours, sharing in a public statement: “The SEC has promulgated no rule describing how an order in a digital asset should be matched, no guidance on how a trade should be cleared, and articulated no standards for how to broker a digital asset transaction. The allegation is hollow; there is no such thing as an exchange, broker dealer, or clearing agency for investment contracts. The SEC is demanding compliance with a regime that doesn’t exist.”
  • Singapore is set to introduce tighter rules for cryptocurrency service providers, particularly those engaging with retail markets, following feedback on its proposed regulations. The Monetary Authority of Singapore released a statement last week saying: “The consulted proposals detail business conduct and consumer access measures to limit potential consumer harm”.
  • UK Chancellor of the Exchequer Jeremy Hunt outlined 110 measures for growing the nation's economy in his Autumn Statement. This included a governmental initiative to facilitate the expansion of the digital assets sector.  The UK government will pass legislation to implement the Digital Securities Sandbox (DSS), which aims to facilitate the adoption of digital assets across financial markets. 

The Weekly Deal Room

  • Blast, an L2 with native yield captured at the protocol level, raised $20m in a Private Round from Paradigm, Standard Crypto and others.
  • Privy, a web3 onboarding authentication and data control tool, raised $18m in a Series A led by Paradigm. 
  • Expanso, a decentralised open compute platform, raised $7.5m in a Seed Round led by General Catalyst. 
  • Pantopic, a decentralised protocol for perpetual options, raised $7m in a Seed Round led by Greenfield Capital.
  • Sleek, a web3 social platform, raised $5m at a $50m valuation in a Seed Round from Binance Labs, Shima Capital and others.
  • Saga, a web3 scalability protocol looking at optimising block space, raised $5m in a Seed Round led by Placeholder.
  • Bullish, a digital asset exchange led by ex-NYSE chief Tom Farley, has purchased CoinDesk from Barry Silbert’s Digital Currency Group.

Metric of the Week

The percentage of tokens that have moved on-chain in the past year has fallen to record lows for both BTC and ETH. 

At their peak of the 2021 bull market, over 46% of BTC's supply and 70% of ETH’s supply had not moved in over a year. As of November 2023, less than 30% of BTC’s supply and less than 39% of ETH’s supply has been active over the last 12 months.

Source: Coin Metrics

Chart-Mon Nov 27 2023

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