CoinDesk Crypto

The liquidator of the defunct cryptocurrency exchange Cryptopia has told former customers they can now begin making claims for the return of their funds.

In a blog post Wednesday, the New Zealand branch of accountancy firm Grant Thornton said it has opened a claims portal allowing affected users to register for the repatriation of property still held by the exchange. All accounts were frozen after over US$17 million in in ether and ERC-20 tokens was stolen during a hack in early 2019.

Grant Thornton said the “sheer volume” of emails means it is informing users about the portal in batches throughout the week.

Related: New Zealand Man Charged With Money Laundering via Crypto and Luxury Cars

Around 960,000 former Cryptopia users are being informed, and those registering are being asked to confirm some account details to ensure only verified users of the exchange make claims. As previously reported, Grant Thornton said the steps are necessary to ensure the repatriation of assets complies with New Zealand law.

In April 2020, a ruling by the High Court in Christchurch said customers were entitled to the assets they held in Cryptopia accounts, determining those assets are classed as “property.”

In turn, that ruling paved the way for Grant Thornton to initiative the claims. “This marks the launch of the Cryptopia claims portal to start the process of returning account holders’ property,” the liquidator’s post reads.

At the time of liquidation, Cryptopia had US$100 million in cryptocurrencies. It’s not clear what percentage of their original holdings users are likely to receive via their claims. As well as the large number of account holders, 37 creditors, 90 shareholders and New Zealand’s tax agency are also seeking a good portion of the company’s remaining assets.

Related: Cryptopia Users Can Claim Assets From End of 2020, Says Hacked Exchange’s Liquidator

See also: Cryptopia Creditor Issues Legal Notice to Liquidator Over Alleged Failures, Fees

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Banks in India are again doing business with select cryptocurrency exchanges and their customers.

Top institutions such as State Bank of India, ICICI Bank, HDFC Bank and Yes Bank are allowing customers to use their bank accounts to fund cryptocurrency trading. They are further offering various facilities to cryptocurrency exchanges, sources familiar with the matter told The Economic Times.

Accounts of major exchanges had been suspended after the Reserve Bank of India issued an order barring banks from using their systems for cryptocurrency-related transactions in April 2018. The ban was quashed by the Supreme Court earlier this year.

Related: Putin Orders Russia’s Public Officials to Report Crypto Holdings

“Banks earlier took a cautious approach even after the supreme court overruled the central bank’s crypto ban in March.” Gaurav Dahake, founder and CEO of Bangalore-based exchange Bitbns, told CoinDesk in an email. “But with time and price momentum around bitcoin, a lot more clients started demanding them to open up an account specific to crypto trading and banks have started opening them up now.”

Bitcoin recently rose to a new record high of $19,920, topping the previous peak price of $19,783 reached in December 2017.

Sumit Gupta, CEO of Mumbai-based cryptocurrency exchange CoinDCX, confirmed via WhatsApp that his exchange has been collaborating with multiple banking partners to build and develop business services ever since the Supreme Court order was overturned.

Meanwhile, Nischal Shetty, CEO of Binance-backed cryptocurrency exchange WazirX, told CoinDesk that banks have reached out to the company to offer working capital or other loans and financial services.

Related: SEC Enforcement Director to Step Down by End of Year

A banker, however, told The Economic Times that his bank is still cautious while dealing with cryptocurrency exchanges and serves only a select few so far. CoinDesk reached out to HDFC Bank and State Bank of India for comment on the matter, but did not receive response by press time.

Also read: India Plans to Tax Income From Bitcoin Investments: Report

While banks have begin serving crypto exchanges and traders, the Indian government’s stance on cryptocurrency trading remains unclear. As of September, the government was said to be mulling a ban on cryptocurrency trading but exploring blockchain’s utility in managing land records, the pharma supply chain and educational certificate records.

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Russian President Vladimir Putin has signed an order obliging public officials to report any cryptocurrency holdings.

According to the document, signed on Thursday, both current civil servants and people about to assume a government position must disclose which digital assets they own, as well as in what quantity and where they were purchased from. The first reports must be provided from Jan. 1 through June 30, 2021.

The reports must include all types of digital assets – including cryptocurrencies, digital securities and utility tokens – owned by a current or prospective civil servant, as well as their spouses and children. People seeking government roles will also have to make a crypto disclosure during the application process.

Related: India’s Banks Are Once More Serving Crypto Traders and Exchanges

The disclosures will come as a complement to the usual mandatory reports of candidates’ property, a standard anti-corruption procedure.

Cryptocurrencies are recognized as a type of property by a Russian law signed by President Putin this summer and coming into force in January 2021.

See also: Russian Prime Minister Pledges to ‘Civilize’ Crypto Market and Prevent Scams

The country’s Ministry of Finance recently proposed a package of draft bills detailing the rules for reporting crypto for tax purposes. According to the drafts, individuals and companies must report their holdings if annual transactions exceed 600,000 Russian rubles (about $7,800). Failure to do so would lead to fines or up to three years in jail, depending on the amount of crypto concealed from the tax agency.

Related: SEC Enforcement Director to Step Down by End of Year

However, the government ended up softening these rules. On Nov. 30, it introduced a lighter version of the draft bill into Russia’s parliament, the State Duma. Under this bill, a failure to report crypto holdings in a timely manner should lead to a fine of 50,000 rubles (around $682), and not reporting them at all means a fine of 10% of the sum of all incoming or outgoing transactions, depending on which amount is the larger.

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• G7 Officials Stress Need to Regulate Digital Currencies: US Treasury

Three major Chinese companies, Didi, Meituan and Bilibili, are taking part in the latest test of the central bank’s digital currency (CBDC) initiative, according to local news source CLS.

• The report, which cites Financial Associated Press, says successful applicants in a lottery-based trial in the city of Suzhou can spend their digital yuan winnings online via Meituan’s bike-sharing platform, Didi’s taxi service and Bilibili’s video-sharing site.
• China is accelerating its push toward the adoption of a digital currency as the People’s Bank of China works with banks and commercial entities on public pilots to gauge user experience. The Suzhou lottery follows one in Shenzhen in October. 
• As reported by CoinDesk, e-commerce firm JD.com is also taking part in the Suzhou test, allowing winners to spend digital yuan at an online mall.
• The latest giveaway on Dec. 12 reportedly sees 10,000 residents of the city apply for 200 digital yuan prizes. They can spend the CBDC at physical stores equipped with the appropriate point-of-sale technology, and now online via major Chinese companies. Shenzhen’s trial was focused on bricks-and-mortar stores.
• According to CLS’ report, six banks are also taking part in the Suzhou effort.

See also: JD.Com Says It’s Accepting China’s Digital Yuan for Latest Lottery

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The New York Attorney General (NYAG) anticipates the handover of loan documents relating to an alleged $850 million cover-up will be completed in “the coming weeks.”

In a letter filed with the New York Supreme Court on Wednesday, the NYAG said stablecoin issuer Tether and cryptocurrency exchange Bitfinex had been cooperating with its inquiry.

The NYAG also noted the timeline for documents to be handed over would come after a deadline, previously mediated by the court, that once again ordered the crypto companies to hand over documents outlining their financial relationship.

Related: OKEx’s Trading Volumes and Tether Reserve Plunge on Possible User Exodus

As such, the NYAG seeks in the letter to extend an injunction, which bars Tether from loaning Bitfinex any further funds, to Jan. 15, 2021. The date has previously been extended on multiple occasions and is again expected to expire this week before the documents are provided.

The NYAG has alleged that Bitfinex attempted to cover up the loss of $850 million in funds held on behalf of customers via payment processor Crypto Capital, and that it secretly borrowed the shortfall from sister firm Tether’s reserves. Tether issues the USDT stablecoin, which now has a market capitalization of close to $20 billion, according to markets data site CoinGecko.

Counsel for the crypto companies previously argued the document production order was too broad. The NYAG’s office argued otherwise claiming Bitfinex’s attempts to delay the then 17-month-old order “must stop.”

The operators of Crypto Capital were indicted in 2019, including ex-Minnesota Vikings owner Reginald Fowler, accused of stashing funds over a global network of accounts at 56 different banks.

Related: Aquaculture Firm Completes Australia’s First IPO Raise Using Cryptocurrency

Bitfinex has filed for multiple subpoenas in an attempt to recover the nearly $1 billion it lost.

See also: New York Supreme Court Denies Bitfinex’s Lack-of-Jurisdiction Claim

Related Stories

• Market Wrap: Bitcoin Ascends to $16.8K; Uniswap and Tether 35% of Ethereum Transactions
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An Ethereum-based fund has completed its initial public offering (IPO) on the Toronto Stock Exchange (TSX).

According to a press release on Thursday, Canadian investment fund manager 3iQ announced the sale of more than 7.2 million Class A and F units totaling gross proceeds of around $76.5 million. The Ether Fund Class A Units, aimed at all investor types, have opened for trading under the symbol QETH.U. Investors in the U.S. are specifically excluded, however.

3iQ successfully launched a similar bitcoin fund earlier this year. The ether product’s exchange listing marks a “world first,” according to a tweet by the fund manager on Thursday.

Related: Ethereum Far Outpaces Bitcoin in Developer Activity in 2020: Electric Capital Report

The fund is aimed to provide investors with the ability to purchase shares in the fund and receive exposure to changes in ether’s price over time, providing investors with “the opportunity for long-term capital appreciation,” per the statement. Ether is the native cryptocurrency of the Ethereum blockchain network.

U.S.-based cryptocurrency exchange Gemini said it will provide exclusive custody of the fund’s assets. The exchange’s co-founder, Tyler Winklevoss, declared it was “huge news for Ethereans,” in a Thursday tweet.

See also: $14M Bitcoin Fund Gets Listed on Toronto Stock Exchange

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Weak volumes and rotations into other cryptocurrencies are likely impeding bitcoin’s price movement from going higher. Meanwhile, ether has been more volatile than bitcoin in 2020 and could remain that way.

• Bitcoin (BTC) trading around $18,349 as of 21:00 UTC (4 p.m. ET). Gaining 0.14% over the previous 24 hours.
• Bitcoin’s 24-hour range: $17,904-$18,652 (CoinDesk 20)
• BTC slightly above its 10-day and 50-day moving averages, a bullish trending signal for market technicians.

The price of bitcoin once again fell below $18,000 Thursday, going as low as $17,904 according to the CoinDesk 20. The price was able to reverse course, with higher volume pushing it back up to $18,349 as of press time. 

Read More: Bitcoin Stuck as ECB’s Lagarde Primes Extra €500B Stimulus

Related: MassMutual Buys $100M in Bitcoin, Bets on Institutional Adoption With $5M NYDIG Stake

Constantin Kogan, partner at crypto investment firm Wave Financial, pegs $17,900 as a “support” level whereby if traders don’t start scooping up bitcoin to push price back up, there may be a larger fall. “The trend is weakening,” Kogan told CoinDesk. “If we dip further then I will consider that as a start of a downtrend.”

Chris Thomas, head of digital assets for Swissquote Bank, has noticed a lull in the market this week but sees it as a buying opportunity for those who have a longer time frame. “I’m not scared by this. It’s just providing a better entry point for those who want to invest mid-long term,” said Thomas to CoinDesk. “I haven’t seen much [over-the-counter] or larger activity this week, though.”

At a combined $1.1 billion as of Wednesday’s close, average weekday spot volume on major CoinDesk 20 exchanges is lighter this week than last week’s $1.7 billion. As of press time, combined volumes were at $873 million Thursday. 

Henrik Kugelberg, an over-the-counter (OTC) crypto trader, is not dismayed by the doldrums in the crypto market this week. “It’s a moderate dip on the way up,” Kugelberg told CoinDesk.  “Nothing to see here.”

Related: Ethereum Far Outpaces Bitcoin in Developer Activity in 2020: Electric Capital Report

Rotation into alternative cryptocurrencies has been a popular theme in the crypto market as of late, and Swissquote’s Thomas pointed to XRP as one example of this dynamic. “Our data shows that in the last four weeks the volume of XRP has increased substantially at the detriment to ether and a little bit bitcoin,” Thomas said. 

Read More: Coinbase to Support Spark Token Airdrop to XRP Holders

Indeed, XRP, the third-largest cryptocurrency by market capitalization, has seen a bump in volume over the past month, according to data from aggregator CoinGecko.

An airdrop in collaboration with Coinbase is likely accelerating a hype cycle on XRP, leading to volume jumping along with price, noted Thomas.“I think XRP volumes continue to outperform BTC and ETH ahead of tomorrow night’s flare token snapshot,“ said Thomas.

Ether more volatile than bitcoin this year

Ether, the second-largest cryptocurrency by market capitalization, was down Thursday, trading around $566 and slipping 1.1% in 24 hours as of 21:00 UTC (4:00 p.m. ET).

Read More: Ethereum Far Outpaces Bitcoin in Developer Activity in 2020

The 30-day volatility for ether for the most part has been higher than for bitcoin in 2020, according to data collected by CoinDesk Research.

Vishal Shah, a crypto options trader and founder of derivatives venue Alpha5, says Ethereum’s ambitious “2.0” upgrade provides totally different fundamentals for ETH compared to BTC, giving it wilder gyrations.

“ETH should have a higher volatility given that it’s a less established protocol than bitcoin; it is materially smaller in market cap and has more uncertainties on the immediate horizon,” Shah told CoinDesk. “The largest uncertainty would be the settling of [the Beacon Chain] and the transition to 2.0, it’s all a bit uncharted.“

Other markets

Digital assets on the CoinDesk 20 are mixed Thursday, mostly red. One winner as of 21:00 UTC (4:00 p.m. ET):

• bitcoin cash (BCH) + 0.10%

Notable losers:

• orchid (OXT) – 8.5%
• ethereum classic (ETC) – 4%
• stellar (XLM) 3.8%

Read More: Paxos Becomes Latest Crypto Firm to File for Federal Bank Charter

Equities:

• Asia’s Nikkei 225 ended the day in the red 0.23% as investors signaled uncertainty amid Brexit and U.S. stimulus negotiations.
• The FTSE 100 in Europe closed down 0.53% as investors weighed Brexit talks against European Central Bank stimulus.
• The S&P in the United States was down 0.30% as investor concerns over stimulus negotiations mixed with bad unemployment data led the index lower.

Commodities:

• Oil was up 2.5%. Price per barrel of West Texas Intermediate crude: $46.86.
• Gold was in the red 0.14% and at $1,836 as of press time.

Treasurys:

• The 10-year U.S. Treasury bond yield fell Thursday dipping to 0.915 and in the red 2.1%.

Related Stories

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The World Economic Forum (WEF) is designing a global governance framework for the ethical collection and sharing of data, the organization announced Tuesday. 

WEF’s Data for Common Purpose Initiative (DCPI) is the first of its kind and aims to “responsibly enhance the societal benefit from data” by creating guidelines to ensure governments and researchers can more readily rely on data for making decisions that benefit the public, especially in crises like the COVID-19 pandemic, according to the announcement.    

Sheila Warren, head of Data, Blockchain and Digital Assets at WEF, told CoinDesk that having siloed, or isolated, data led to a delay in humanity’s ability to respond to the pandemic with the necessary speed and agility. 

Related: How FinCEN Became a Honeypot for Sensitive Personal Data

“While [siloing data] often comes from either good intentions or, more realistically speaking, business imperatives, it has really meaningful consequences,” said Warren, who also co-hosts CoinDesk’s Money Reimagined podcast, referring to the problems surrounding personal protective equipment (PPE) provisions and supply chains during the pandemic. 

The DCPI hopes to refocus data policy and models towards a range of “common purposes” like public health, environmental protection and disaster management, while ensuring people’s personal data cannot be used for non-permissioned purposes. 

The project already has the support of 10 governments and over 50 global partners, the announcement said, including consulting firm PricewaterhouseCoopers (PwC) and blockchain platforms such as Elastos. 

A number of pilot projects have launched in Japan, Colombia and India, Warren said, though it’s important to note that WEF focuses on policy pilots as opposed to traditional tech proof-of-concept.

‘Differentiated Permissioning’

Related: First CoinSwap Test Could Herald an Era of Stronger Bitcoin Privacy

One goal of the initiative is to enable differentiated permissioning of the same data for varied purposes. This means people would be able to set permissions around how their data can be used. 

For instance, the initiative asks you to imagine a world where devices collect your vitals and medical information but you could set permissions for how that data is used in research or testing related to COVID-19, cancer, dementia and more, or get paid if someone wants to use your data for market research.  

Read more: The Web Wasn’t Built for Privacy, but It Could Be

According to the initiative, user data will “automatically be encrypted, anonymized and transmitted along with digital rights management rules to ensure that the data cannot be used for other purposes,” likening personal data sharing to the controlled sharing of music.

Warren said people should be able to make a choice about what happens with their data beyond the yes-or-no choice that is available now.

“I don’t think the general tenor is that all data should be approved by each individual. I think the idea is that we should create a system in which that is possible,” Warren said. 

The role of blockchain

According to the WEF announcement, the prioritization of data protection and privacy by institutions over constructive data sharing has led to the failure of harnessing the full value of data as well as the “rapid fragmentation of data governance policies.”

“I think that there are a lot of ways to protect privacy and also share data,” Warren said, adding that whether it is a question of data sharing, access or encryption, blockchain can help.

DCPI partner, the Elastos Foundation, is developing a collection of open-source software to build a free and decentralized internet.

Donald Bullers, Global Technical lead at Elastos, told CoinDesk blockchain firms can incorporate policies and visions resulting from initiatives like the DCPI into client-facing products. 

Read more: How FinCEN Became a Honeypot for Sensitive Personal Data

“We can take some of these discussions on data marketplaces, data exchange, global accessibility … and we can implement that into the software that we’re developing,” Bullers said.

Blockchain also has a role to play in data protection by providing a new way to think about permissioning, Warren added. According to Bullers, Elastos is building a specific profile for each individual where they can house data privately and control the “inbound-outbound” of their data. 

“You’re already giving up a lot of your information to these large corporations, or these siloed enterprises where they’re storing it on their own servers, and they have complete control and you’re okay with that. But what we’re really trying to do is to flip that and make it so that the individual or those who want to control their own data can do that,” Bullers said.  

But Bullers added that blockchain can only address small parts of the larger problem around data governance. 

“Blockchains do not solve all the problems of the internet,” Zach Warsavage, public relations director at Elastos told CoinDesk. 

Blockchains are public and are “terribly inefficient” at storing large amounts of data, he said, so other technologies would be needed to assist any blockchain base.

Pilot projects  

According to Warren, the DCPI will leverage the global network and prestige of the WEF to create momentum for the multi-year program, and there are two pilot programs already in motion. 

The Centre for the Fourth Industrial Revolution Colombia is working with the city of Medellin to develop a government-led data marketplace to connect data contributors and consumers, the WEF announcement said.

In Norway, WEF’s Centre for the Fourth Industrial Revolution Ocean is working with partners in conservation and government to improve the environmental footprint of ocean industries by combating emissions, plastic waste and overfishing.

“The Data for Common Purpose Initiative gives us a solid platform to work from, both in developing content but not the least to engage with ambitious partners from all sectors,” Bjørn Tore Markussen, chief executive at Centre for the Fourth Industrial Revolution in Norway, said in the WEF announcement.

Two more pilots are in the works in Japan and India, Warren said. The WEF is working with the government of Japan and the private sector to explore data exchanges to address problems ranging from public health to disaster prevention and traffic safety. In India, the initiative is looking to address data sharing around agriculture. 

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Massachusetts Mutual Life Insurance Co. is jumping into the institutional bitcoin game with a $100 million investment in bitcoin and a $5 million equity stake in NYDIG.

The twin plays – both revealed in a Thursday press release – give MassMutual direct exposure to the cryptocurrency’s price swings and signal it’s betting that other big fish will follow suit. NYDIG is one of the fastest-growing institutional crypto shops with $2.3 billion under management. It provided MassMutual with the $100 million buy.

Without specifically explaining why it saw bitcoin as a reasonable investment, MassMutual told WSJ it was seeking “measured yet meaningful” exposure to an increasingly digital world.

Related: Ethereum Far Outpaces Bitcoin in Developer Activity in 2020: Electric Capital Report

MassMutual’s $100 million BTC bet is barely a drop in its general investment account’s hulking $235 billion money bucket. Coming from a 169-year-old insurance institution in the business of measuring risk it could wield outsize influence on bitcoin’s perception among mainstream investors.

That storyline has already been playing out all year.

The life insurance company is the latest institutional stalwart to join bitcoin’s march into the financial mainstream this year. Since the pandemic took hold, publicly traded corporations and storied fund managers have been embracing the cryptocurrency at a pace not seen at any other point in its history.

But with its dual investment in NYDIG, the firm that facilitated this buy, MassMutual is moving to embrace the infrastructure powering institutional adoption.

Related: First Mover: Bitcoin Stuck as ECB’s Lagarde Primes Extra €500B Stimulus

NYDIG has been forthright in its courting of the institutional class. Wednesday, the firm hired crypto banker Patrick Sells to lead its crypto-services outreach efforts. It regularly raises tens of millions of dollars for crypto funds, including a $100 million bitcoin fund filed over Thanksgiving. That mammoth vehicle, which CoinDesk reported at the time, only had a single investor.

NYIDG declined to comment on the investor of that Fund.

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Stephanie Avakian, the U.S. Securities and Exchange Commission (SEC) enforcement director who led investigations since 2017, including during the entirety of SEC’s initial coin offering (ICO) crackdown, plans to leave the agency this year.

• SEC said Thursday that Avakian created the Cyber Unit responsible for managing crypto-related securities violations, especially the ICO projects that attempt to raise capital without filing.
• A CoinDesk review of SEC enforcement filings shows the regulator initiated at least 46 actions against ICOs during Avakian’s tenure as director.
• Avakian took over the Enforcement Division in June 2017. She had previously served as deputy enforcement director from June 2014.

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Twenty-one minutes and 41 seconds is how long it took for American rapper Lil Yachty’s new social token, $YACHTY, to sell out on Thursday. The token was listed on social money platform Fyooz, where buyers, most likely fans of the rapper, bought $YACHTY for $15 each. 

“I’m still new and learning about the crypto world, but I can tell you I’m partnering up with some very smart people to give my fans some dope experiences,” Lil Yachty said in a statement. 

The sale is the latest in a recent string of experiments involving social tokens, a way for artists and other personalities to potentially monetize fan engagement as the events industry reels from COVID-related shutdowns. Yachty’s offering, which was only open to non-U.S. investors, captured mainstream media attention earlier this month.

Related: Spotify Looking for Associate Director to Lead Activity on Libra Project, Other Crypto Efforts

According to the Fyooz app, the sale brought in $276,006. Owning $YACHTY gives fans exclusive access to the Grammy-nominated artist, including surprise boxes prepared by his mom, Venita McCollum, author of the book “Raising a Rapper.”

Token owners can also receive personal items from the rapper’s career and participate in online parties with him, according to Fyooz. 

The $YACHTY sale comes as other social token platforms have toyed with high-profile collaborations. Rally drew chart-topping Christian vocal trio Selah into the fold with a similarly structured fan engagement token earlier this month. Earlier this year, Roll inked a deal with rapper Ja Rule.

Remo Prinz, co-founder of the Zurich-based Fyooz (pronounced “fuse”), said Thursday’s sale was a sign of “growing demand for social money.”

Related: Audius Has Big Numbers by Crypto Standards but Can It Take On SoundCloud?

“We are at the forefront of a new type of economic relationship between artists, actors, athletes, gamers and influencers to engage their fans,” Prinz said in a statement.

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• Audius, the ‘Decentralized Spotify,’ Is Moving Part of Its Service to Solana Blockchain
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U.S. lawmakers are asking the nation’s financial guardians to clarify custodianship questions. France is looking to eliminate anonymity in the crypto sector. And an exposé into how FinCEN became a honeypot for personal information. 

Top shelf

Banking play
Paxos is making moves to become a federally regulated bank in the U.S., according to a filing with the Office of the Comptroller of the Currency (OCC). The stablecoin issuer and crypto services firm is seeking to create the Paxos National Trust, which would operate out of New York and incorporate as one of the first crypto-native banks in the U.S. There are two paths to achieving bank status, the state-chartered route through Wyoming (that Kraken and Avanti used) or the federal route, which is also being pursued by BitPay and Anchorage.

La Terreur?
The French Ministry of Finance unveiled sweeping know-your-customer (KYC) requirements Wednesday on all cryptocurrency companies operating in and servicing the country, a move that could ultimately strip the French crypto space of any semblance of anonymity. All virtual asset service providers must immediately begin checking their customers’ identities, verifying “beneficial owners” and prohibit anonymous crypto accounts, according to the press release. The government said the action was taken to prevent terrorist financing, a broadside that has justified the encroachment of centralized powers over many civil liberties.

Related: First Mover: Bitcoin Stuck as ECB’s Lagarde Primes Extra €500B Stimulus

Data honeypot
In an explosive exposé, CoinDesk privacy report Ben Powers outlines how FinCEN, the U.S. Financial Crimes Enforcement Network meant to track and eliminate criminal activity from the financial system, became a honeypot of personal information. There is little sense of the amount of personal data, what types of data and how long the agency holds on to data or shields it from malicious actors – and the agency wouldn’t answer questions. “You’ve got personal, private information in a database and allegations of conduct,” said Melissa G.R. Goldstein, a former attorney-advisor at FinCEN and now Special Counsel at financial law firm Schulte Roth & Zabel. “Just because someone is named in a SAR doesn’t necessarily mean that they are guilty of something criminal.”

Deposit drag?
Bank of America is warning a digital euro with mass appeal could “reduce costs and complexity for individuals” but negatively affect the region’s banking industry. In a Tuesday report, BofA analysts said a digital euro, a central bank digital currency with accounts and reserves held by the supranational European Central Bank, would cut into commercial bank deposits and reduce the need for third parties. Analysts criticized the ECB’s steadfast attention on China’s digital yuan and Diem’s (formerly Libra’s) multinational stablecoin, as a cause for developing a CBDC. “Money, like internet data, has a strong tendency to monopoly,” they wrote.

Dollar vs. BTC
Morgan Stanley Investment Management Chief Global Strategist Ruchir Sharma said bitcoin is already cutting into the U.S. dollar. “Today, most bitcoins are held as an investment, not used to pay bills, but that is changing,” Sharma wrote in a Financial Times op-ed. He further argued that “bitcoin will gain” as its traditional competitors falter – even if the market bubble were to burst.

Satellite of logs
SpaceChain has secured a £440,000 (US$585,800) grant to co-develop decentralized satellite infrastructure, from EUREKA’s Globalstars, an initiative active in 45 countries. The funding will pay for development of a “decentralized satellite infrastructure with blockchain payload,” or, in English, a mesh network of low-earth orbit satellites. Blockchain helps “democratize access to the nascent space sector with lower barriers to entry by individual companies,” according to the firm.

Quick bites

• SINGAPORE’S STAKE: DBS Bank’s digital exchange, partly owned by the nation’s stock exchange, to begin trading crypto next week. (CoinDesk)
• DESTABILIZING ACT? Would the STABLE Act make running an Ethereum node illegal? Preston Byrne digs in. (CoinDesk)
• PRIVATE DEALINGS: Ukrainian politician discloses $24 million worth of monero. (CoinDesk)
• REPO TEST: JPMorgan just conducted a blockchain-based repo transaction using jpm coin. (The Block)
• HOOVERING CRYPTO: Grayscale, sister company of CoinDesk, has added more than $325 million worth of bitcoin and ether to its trusts in just over a week. (Decrypt)
• CRYPTO CRIME: Human trafficker caught after using bitcoin to launder blood money. (Modern Consensus)

At stake

Related: Blockchain Bites: Bitcoin Shorts In, MicroStrategy Stock Downgraded, Bitwise Index Trades

Custody questions?
In the latest legal gambit seeking to determine how crypto can and will square with existing regulation, nine lawmakers are seeking clarification for how crypto firms can become registered broker-dealers.

CoinDesk’s Nikhilesh De reports nine U.S. lawmakers of both major political parties have written an open letter to Securities and Exchange Commission (SEC) Chairman Jay Clayton Wednesday and the Financial Industry Regulatory Authority (FINRA) seeking clarification. What is crypto custodianship, anyway?

To date, only a few companies in the crypto space have become registered broker-dealers, including Watchdog Capital, Harbor (which was acquired by BitGo) and Prometheum. Though there is reportedly a backlog of applications sitting with FINRA.

“CoinDesk reported in June 2019 FINRA had been sitting on a number of broker-dealer applications from firms that touch crypto, some for over a year. FINRA had taken no actions to approve or disapprove these applications, letting them sit in a sort of limbo,” De wrote.

The most recent letter asks the SEC and FINRA to confirm whether banks can provide custody services for digital securities; asks for a clearer pathway for crypto custodians to register with FINRA; and for FINRA to move on outstanding applications.

Though there are a number of issues that complicate the question. First is the issue of private keys – a special bit of code that confers complete access, control and ownership over a crypto asset – and which party controls them. Second is the ambiguous classification of cryptocurrencies, which depending on intended use, level of decentralization and other considerations could fall along the commodity to security spectrum.

(All securities are commodities, but not all commodities – like gift cards, for instance – are securities.)

This is important, because, as De notes, broker-dealers in the crypto space may also lose Securities Investor Protection Act protections if the crypto assets are deemed not tobe securities, the agencies said.

Three of the lawmakers involved in this bill, plus Rep. Scott Perry, have also sent a letter to Treasury Secretary Steven Mnuchin, “expressing our concern” about rumored self-hosted wallet regulations.

Coinbase CEO Brian Armstrong tweeted last month that Mnuchin was “planning to rush out” these new regulations, which would apparently require crypto exchanges to verify know-your-customer data for self-hosted wallets before they could send cryptocurrencies off of their platforms and into the wallets.

According to Wednesday’s letter, this potential regulation would “hinder American leadership,” preclude U.S. actors from participating in the space and “undermine the Treasury Department from stopping illicit actors from exploiting the financial system.”

Most influential

Art auction
Looking to make someone (or just yourself) happy this yuletide holiday? Give the gift of crypto art. As part of the launch of Most Influential 2020 list, CoinDesk is auctioning off 12 original artworks that accompany this year’s list of honorees. The NFTs were created by leading digital artists including Alotta Money, XCopy, Osinachi, Matt Kane, Sarah Zucker, Yonat Vaks and Olive Allen. They are available at Nifty Gateway and Super Rare (Matt Kane). The artists will donate 50% of the proceeds to charities of their choice, under an arrangement with cryptocurrency donations company The Giving Block. Learn more about the Most Influential 2020 NFT art auction, running to Dec. 31.

The list
Who moved the needle on crypto this year? What were the projects that mattered? Who shattered the glass ceiling and broke the mold? From DeFi to bitcoin’s late year surge, 2020 was full of big stories, trends and personalities. We’ve unveiled CoinDesk’s 2020 Most Influential list, a selection of 12 people who helped push the industry forward this year. See who made the list.

Who won #CryptoTwitter? Related Stories

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Bitcoin traders stared at price charts over 3.4 million times in November, watching the leading cryptocurrency pass its record-high price from 2017 late in the month, according to leading charting service TradingView.

In November, bitcoin chart views on TradingView soared 82% from the previous month with similar growth seen in charting of other cryptocurrencies, per user data shared exclusively with CoinDesk. 

Bitcoin’s price rallied 42% over the same period.

Related: Secondary Mining Markets Surge Amid ASIC Manufacturing Delays

“BTCUSD has consistently been the most popularly viewed symbol this year,” said David Belle, the company’s U.K. growth director, in an email to CoinDesk, referring to bitcoin and the U.S. dollar. TradingView supports price charting tools across stocks, futures, foreign exchange, cryptocurrency and other markets.

“What we’re seeing is that currently there’s simply a massive amount of interest in bitcoin,” Belle said.

Beyond charting, rapid growth in attention paid to bitcoin is seen in the use of other products and services including record buying volume on the retail-focused product CashApp by Square along with strong demand for new services like PayPal’s cryptocurrency features. 

Institutional trading activity is also increasing, as evidenced by CME Group’s bitcoin futures market hitting record-high open interest shortly before bitcoin’s all-time high in November. 

Related: Bitcoin Miners Saw 48% Revenue Increase in November

Bitcoin chart views on TradingView are still down roughly 50% from the record highs set in late 2017. But since launching support for bitcoin and other cryptocurrencies in 2016, TradingView’s charting tools have been widely integrated across almost every leading cryptocurrency exchange. 

Bitcoin’s price has cooled off a bit in December, dipping about 10% from its monthly open of above $19,700 on Coinbase. “The current price does seem a little different to 2017,” Belle said. “I’d argue it’s because it’s less of a price discovery phase and the market is less infant than in 2017.”

In 2020, the bellwether cryptocurrency has gained 152%. 

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The number of developers in crypto is ticking up again, according to the annual developer report from venture firm Electric Capital.

And one network remains a clear winner in terms of attractiveness to coders. “More than 300 new developers per month are joining Ethereum,” Maria Shen, a partner at Electric and the report’s author, told CoinDesk. “Ethereum has continuously grown through Crypto Winter.”

The report tracks ecosystems by blockchain. In other words, a Bitcoin developer is counted toward Bitcoin even if the person is working on its Lightning Network or any of its wallets. Similarly, Ethereum’s numbers are driven by developers working on tokens that rely, fundamentally, on Vitalik’s world computer.

Related: First Mover: Bitcoin Stuck as ECB’s Lagarde Primes Extra €500B Stimulus

Of the ecosystem, Electric’s report shows Ethereum so far out in front that second place is almost misleading. Almost 2,300 average monthly developers worked on Ethereum across the third quarter of 2020, with Bitcoin in second at a bit under 400.

Still, the good news for the industry is broader: Developer numbers are going up across crypto’s stronger projects.

Electric’s data is based on ongoing scraping of all the publicly available code documentation (89 million code commits across just under 300,000 repositories on sites such as GitHub and GitLab from January to October). No one can know who is a paid staffer, who is a volunteer and who is trying to earn street cred that will get him or her a spot as a paid staffer. For that reason, the report also takes pains to segment contributors out by their rate of contribution.

All that said, when viewed across the board most people believe looking at developer activity in aggregate can be a good sign of health for any open-source technology project, crypto or otherwise.

Related: S&P, State Street Back $15M Investment in Crypto Data Startup Lukka

“New monthly crypto developers grew 15% in 2020,” Shen writes in the report’s summary, noting also that the “Bitcoin ecosystem has 70% more developers than it did three years ago.”

Electric takes pains to track contributions, developers and to remove double counts as much as possible. For more detail on their methods, check out the report. 

Also-rans

The report drew a line between the top 200 crypto projects by value and the rest, noting that much of the loss in developer activity occurred in the smaller projects, offsetting much of the gains elsewhere. Electric called this a flight to quality.

Ethereum, Bitcoin, Polkadot, Tezos, Cardano and EOS are the largest networks, each averaging more than 100 monthly developers. Of those, only EOS lost developers when the third quarter of 2020 is compared to 2019.

Read more: Crypto Code Commits Remain Near All-Time Highs, Despite Price Declines

While many might think that making a distinction between the top 200 and the rest is still a too-generous threshold, Shen said there are likely some very small networks now that will rise up soon. Longtime denizens of the lower echelons of the top 200 are less likely to ascend but there could be some new arrivals that surprise everyone, and that’s why Electric drew the distinction so generously.

DeFi

The most striking area of growth has been in decentralized finance (DeFi), which has been a major topic in 2020.

No one can know for sure why new people are coming in, but Electric’s team had some guesses. Shen noted the tooling is better than it has ever been and there’s so much proven code to fork and build upon. That makes it easier to get started.

Electric co-founder Curtis Spencer noted that we’re now in an era where a developer can deploy a smart contract and very rapidly see an enormous amount of assets move into it. Even if they give control of that application away through a fair launch, as has become popular this year, that can still just be tremendously gratifying to someone who just wants to build.

Shen concurred that the engagement alone can be rewarding. “Once you launch a protocol, suddenly tens of millions of dollars are wrapped in your protocol,” she said.

For users of DeFi, though, sometimes this eagerness to see people use projects has come at a cost. Depositor beware.

Getting started

But some of the new activity also, no doubt, comes down to the fact that crypto is a space so well resourced that it’s fairly easy, for technical adepts, to get a new company started. 

“We’ve seen a professionalization of grant funds,” Spencer added. This means that well-resourced layer one projects are eager to support promising devs with ideas for applications that might entice users. That makes it easier to get a company off the ground.

It should be noted that a grant kicked off Uniswap, now one of the biggest projects out there, in terms of funds entrusted to it.

Read more: Hayden Adams: King of the DeFi Degens

Ken Deeter, another Electric Capital partner, said the growth in DeFi might also be partially attributed to developers from fintech frustrated by what they can’t do there.

“DeFi is a really interesting area … where there’s an ability for developers to really experiment in a way that in the traditional financial system is difficult to do,” Deeter said.

In last year’s report, Electric explained that testnets were always moments that saw strong growth in developer activity, led by developments on the Cosmos network. Shen said that has continued to hold true, noting that NEAR had a strong showing this year.

Though the spikes fall after the incentives run out, she said they still see gains in ongoing participation following these booms.

The prior report also heavily emphasized the total number of commits in 2019 hadn’t fallen, though the number of developers had. There’s no update on commit volume this time around, however.

“We chose not to include it in this report,” Shen said, because some commits are so much less significant than others.

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Commodity Futures Trading Commission (CFTC) Chairman Heath Tarbert announced Thursday he would resign early in 2021.

The crypto-friendly regulator took office last year, and has overseen an expansion of regulated crypto products in the derivatives space, including ether futures contracts and bitcoin options products. In a public statement, he noted that ether was declared a commodity under his tenure.

Tarbert has said in various public statements that he sees the potential for much of the financial system to build on top of blockchain platforms, like Ethereum.

Related: Coinbase Will Suspend All Margin Trading Tomorrow, Citing CFTC Guidance

“With the agenda I laid out last year now complete, the Commission can fully turn its focus to the unwritten future,” he said in Thursday’s announcement.

“A majority of our work has taken place in the midst of COVID-19, a global pandemic that is testing the strength of our markets and our ability to adapt. Amid historic volatility, the CFTC has provided a steady hand and watchful eye while our markets act as shock absorbers. There is no doubt in my mind this has been the CFTC’s ‘finest hour’ during our celebrated 45-year history,” he said.

Tarbert did not provide a specific timeline for his departure, but he will leave as President-elect Joe Biden takes office after unseating incumbent President Donald Trump. Biden is already set to name a new Securities and Exchange Commission (SEC) chairperson after current one, Jay Clayton, announced he would depart at the end of 2020.

Biden may also name a new head for the Office of the Comptroller of the Currency. Currently, the seat is filled by Acting Comptroller Brian Brooks, who has been nominated to serve a full five-year term with the agency.

Related: BitMEX Founder’s Charges Highlight Risks for DeFi

UPDATE (Dec. 10, 2020, 16:04 UTC): Updated with additional information.

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Bitcoin (BTC) was lower while staying mostly within this month’s range of roughly $18,200 to $19,700.

“Upward price action seems to stall, and our analysts believe more inertia is required to push bitcoin beyond the $20,000 psychology barrier,” Lennard Neo, head of research for the cryptocurrency investment firm Stack Funds, wrote Thursday in a report. 

In traditional markets, European shares were lower even after the European Central Bank boosted the size of an emergency bond-buying program to combat the economic toll of a resurgent coronavirus. U.S. stock futures pointed to a lower open. Gold rose 0.3% to $1,843 an ounce.  

Market moves

Related: Ethereum Far Outpaces Bitcoin in Developer Activity in 2020: Electric Capital Report

It’s becoming tougher to get through a rundown of each day’s news without finding a story or several about economic stimulus.

U.S. headlines are filled with incremental developments on lawmakers’ push to hammer out a new government stimulus package by the end of the year. Only the details change from article to article. Is it $908 billion or $916 billion? Will there or won’t there be a new round of $1,200 stimulus checks? A CNBC article on Wednesday mentioned the possibility of $25 billion in rental assistance. Liability protections for businesses? Unresolved. 

What’s clear is just how dependent the stock market has become on further stimulus for further gains. “Wall Street falls on stimulus stall,” read the headline on Reuters’ stock-market wrap Wednesday. And because the stock market’s performance is in some way connected to hundreds of powerful billionaires’ fortunes, millions of Americans’ retirement savings and scads of politicians’ futures, it seems unlikely that more stimulus wouldn’t be forthcoming – not to mention the pressing need to actually provide stimulus to an ailing economy and millions of jobless people.   

All this matters to bitcoin traders, or course, because the cryptocurrency has suddenly become in vogue among big investors from traditional finance as a way of hedging against trillions of dollars of fiscal and monetary stimulus that could theoretically debase the U.S. currency, boosting the value of dollar-denominated assets.

Related: ECB Boosts Emergency Bond-Buying Program by 37% to €1.85T Amid Pandemic Resurgence

“As recently as 2017 bitcoin could be viewed largely as a speculative instrument but this is no longer the case,” Gavin Smith, CEO of the cryptocurrency financial firm Panxora, said in an email. “The bitcoin of today has become a store of value that is used in times when people fear currency devaluation.”  

Even Wall Street’s starting to agree, with pronouncements on bitcoin’s growing stature emerging Wednesday from the likes of JPMorgan and Morgan Stanley. 

On Thursday, the stimulus watch shifted to Europe, where monetary policy makers have just announced their latest plans to revive the coronavirus-stricken economy. 

The European Central Bank, led by President Christine Lagarde, said Thursday that it would increase the size of the pandemic emergency purchasing program, or PEPP, by €500 billion ($604 billion) to about €1.85 trillion. 

“This is a solid package, both in its own right, not to mention that it delivers what markets expected, which is a key signal as well,” Claus Vistesen, chief eurozone economist for the forecasting firm Pantheon, told clients Thursday in an email. 

“Assuming a smoothed implementation of the PEPP, this would allow the ECB to buy just under €100B per month between now and the end of the program in March 2022,” Vistesen wrote. “The reality, however, is that purchases will be flexible and front-loaded.”

Such flexibility recalls Federal Reserve Chair Jerome Powell’s pledge as recently as last month to keep pumping fresh money into global markets at the current pace of about $120 billion a month or as needed to “sustain smooth market functioning.” 

“In short, the printer keeps going brrrrrrrrrrrr in all the wrong places, to the great delight of investors everywhere,” Mati Greenspan, founder of the foreign-exchange and cryptocurrency analysis firm Quantum Economics, told newsletter subscribers Wednesday. 

Investors in bitcoin, whose price is up 160% this year, may be the most delighted. And if Pantheon’s right, the stimulus headlines could continue for at least couple more years.   

– Bradley Keoun

Bitcoin watch

Bitcoin has steadied over the past couple of days. But based on technical analysis, a sell-off earlier this week to as low as $17,640 during Asian trading hours appears to have resulted from a price-chart pattern known as a descending triangle breakdown. 

The pattern, typically defined by a series of lower highs and a zone of support forming a baseline, can be seen on the four-hour chart (above). The chart indicates weakened buying pressure above $18,600 after being rejected from the triangle baseline of support near $18,650 during a price bounce on Wednesday. 

The cryptocurrency may move to test this zone of support-turned-resistance in a bid to reestablish bullish dominance. A close above $18,650 would likely invalidate bearish confidence in the short term as it makes bitcoin makes its final moves for what has been a tumultuous year.

Yet, Oliver von Landsberg-Sadie, CEO at BCB Group, told CoinDesk via Telegram that while strong support exists at $18,000, any further breakouts heading into year’s end will likely be “tempered.”  

Current price levels are likely buoyed by large holders continuing to buy bitcoin. “It is almost certain that companies, banks and other institutions are accumulating BTC in private as well,” Gunnar Jaerv, COO of First Digital Trust, said in an interview via Telegram. 

– Sebastian Sinclair

What’s hot

Singapore’s DBS Bank says new digital-asset exchange, 10% owned by Singapore’s SGX stock exchange, will start trading next week (CoinDesk) 

Stablecoin issuer Paxos becomes latest crypto firm to file for federal bank charter, joining fellow applicants BitPay and Anchorage (CoinDesk)   

Fidelity Digital to hold bitcoin as collateral for cash loans, in partnership with crypto lender BlockFi, under plan to provide liquidity to hedge funds, cryptocurrency miners and over-the-counter trading desks (Bloomberg)

Nine U.S. lawmakers ask securities regulators to clarify how crypto firms can become registered broker-dealers and provide custody services for crypto assets (CoinDesk)

FTX exchange lists Airbnb pre-IPO derivatives ahead of planned IPO (CoinDesk) 

266-year-old German bank issues euro-linked stablecoin on Stellar blockchain network (CoinDesk)  

U.S. cryptocurrency exchange OKCoin agrees to list Blockstack’s STX token following new network launch (CoinDesk) 

Bitwise’s crypto-index fund becomes available to U.S. investors (CoinDesk)  

MicroStrategy boosts size of bitcoin-focused convertible-notes sale to $550M from originally announced $400M (CoinDesk)   

Ukrainian politician discloses owning $24M in privacy coin monero (CoinDesk) 

Miners creep back to OKEx exchange after mass defection (CoinDesk) 

Mexico City-based crypto exchange Bitso raises $62M in funding round, with participation from existing shareholders Coinbase and Pantera Capital (CoinDesk)  

Analogs The latest on the economy and traditional finance

More than 37 million U.S. student-loan borrowers haven’t made a payment in months (CNBC)

Euro rally weighs on inflation, sapping appetite for stocks (WSJ) 

Gold’s volatile run continues in December (WSJ) 

Tweet of the day Related Stories

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Curv is teaming up with MetaMask to allow institutions to be able to invest in decentralized finance (DeFi) protocols with institutional-grade custody options.

Curv is a custody startup that specializes in multi-party computation, and the company chose to integrate with MetaMask after building an integration with lending protocol Compound in July of this year. MetaMask is a wholly owned product of Ethereum software company ConsenSys. 

“You get all of the enterprise controls, security level and audit trail that you would get from Curv, but with MetaMask in one click you get integration with all of the DeFi protocols,” Curv CEO Itay Malinger said, adding:

Related: YIELD Raises $4.9M in Bid to Simplify DeFi

“A DeFi protocol can become valuable in a matter of seconds or minutes from when it emerges, so you want to have the ability to access new protocols as soon as possible and not wait for your custody provider to integrate with that specific protocol.” 

Curv’s customers are professional traders who want to use protocols to lend, stake and trade; and exchanges and wallet providers who want to offer retail customers integrated access to DeFi protocols, Malinger said. 

Creating products for institutional customers to have access to DeFi protocols is a burgeoning market. In September, crypto custody firm Trustology announced it was offering a “DeFi Firewall” that would allow customers to set rules or filters specifying which protocols they think are kosher. In the same month, the Chicago DeFi Alliance launched a Liquidity Launchpad program to get “professional players” into DeFi.

Read more: This Ethereum Startup Is Building a ‘DeFi Firewall’ for Institutional Investors

Related: Market Wrap: Bitcoin Recovers to $18.2K While Market Dynamics Juice DeFi Total Locked

The program is only open to a limited number of early adopters so that institutions do not overwhelm the new program, but MetaMask aims to release the program widely by the end of next year, said ConsenSys global fintech co-head Patrick Berarducci.

Curv’s MPC technology allows multiple people within an organization can approve financial decisions on DeFi protocols such as lending assets through a smart contract.

“When it comes to DeFi, there are an infinite number of interactions that you can have with a very large number of smart contracts,” Malinger said. “So an institutional investor wants to keep the operational policy that they have for their digital assets, and the flexibility to define those policies.”

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Investment bank JPMorgan says it has completed a live intraday repo transaction using a blockchain solution that will soon see a commercial launch.

• The repo trade was carried out between JPMorgan’s broker-dealer and banking entity, the bank announced Thursday.
• The blockchain application used was developed in-house by the bank’s blockchain business arm, Onyx, and is said to support the settlement and maturity of such transactions in hours rather than days.
• The trade also used the bank’s stablecoin jpm coin for the cash leg. Blockchain was used for both collateral and cash legs.
• For context, the repo market allows financial firms such as JPMorgan to trade large quantities of securities and to borrow cheaply – allowing parties with cash to earn a small return.
• Repo trades are like a short-term loan, involving a trader selling an asset to another trader at a set price and committing to repurchase the same asset, or part of the asset, at a different price at a future date.
• The blockchain app will see production use, being offered to external counterparties in the U.S., according to the announcement.
• Goldman Sachs and BNY Mellon have both been involved in trial trades on the platform and will be involved going forward.
• Mathew McDermott, global head of digital assets at Goldman Sachs, said his institution is “looking forward to going live in early 2021.”
• Brian Ruane, CEO of BNY Mellon Clearance & Collateral Management, said his bank would be a “critical partner for JPMorgan to provide much-needed collateral services to market participants looking to execute intraday repo transactions.”

See also: JPMorgan Launches JPM Coin: Welcome to the Private Currency Era

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YIELD.app, a project that describes itself as a “simpler” decentralized finance (DeFi) banking platform, has raised close to $5 million in a hybrid funding round led by Alphabit and Digital Strategies.

The funding will be used to continue supporting working capital, further development of the portfolio management system, marketing, growth and additional licenses, a spokesperson told CoinDesk via email.

According to a statement on Thursday, the funding came from multiple sources including $297,000 from online investment platform BnkToTheFuture. A further $3.4 million in private funding was secured from Alphabit Fund, Digital Strategies, PALCapital, Yeoman’s Capital and Chronos VC.

Related: Curv Partners With MetaMask to Help Institutions Custody DeFi Assets

On Dec. 7, another $1.2 million was raised in partnership with TrustSwap from a presale of the platform’s utility token ($YLD), bringing the total funding from the hybrid round to just under $4.9 million.

YIELD allows users to earn returns from investing in DeFi products and sets out to simplify the “costly learning process” associated with the relatively new sector. The project will soon launch an app on both Android and iOS.

Simon Dixon, CEO of BnkToTheFuture said YIELD was selected for investment because it has a “well-structured company” behind it. YIELD and its supporting companies are owned by UNIFI Group Ltd., a British Virgin Islands holding company.

See also: Algorand-Linked Axelar Raises $3.75M in Seed Funding to Help Blockchains Communicate

Related: Market Wrap: Bitcoin Recovers to $18.2K While Market Dynamics Juice DeFi Total Locked

The firm’s website says it is regulated and licensed. When asked by CoinDesk, a representative said: “Yield.App is operated by … Mwali international business corporations holding a restricted banking license and trust management license issued by the Mwali International Services Authority.”

Mwali is the smallest island of the Comoros archipelago.

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Financial data giant S&P Global and institutional asset manager State Street Corp. are headlining a $15 million investment in Lukka, the blockchain data startup set to power the upcoming cryptocurrency indices from S&P Dow Jones.

CPA.com, the for-profit arm of the American Institute of Certified Public Accountants (AICPA), also participated in the Series C, Lukka CEO Robert Materazzi told CoinDesk. It’s S&P’s first equity play in the crypto industry and the latest of many blockchain efforts by State Street, which led the round.

The investment adds institutional clout to a crypto startup already careening toward the financial mainstream. Last week, S&P Dow Jones Indices, one of the world’s biggest index providers, launched a partnership with Lukka that will ultimately deliver price points on 550 cryptocurrencies to Wall Street.

Related: Ethereum Far Outpaces Bitcoin in Developer Activity in 2020: Electric Capital Report

Read more: S&P Dow Jones Indices to Launch Crypto Indexes in 2021

Such data could be a boon to desks eager for signals on an asset class many investors still struggle to understand, let alone know how to quote. Even in the cryptocurrency industry, coin traders treat exchange-reported numbers with a skepticism that speaks to a still-maturing industry.

State Street and others are betting on Lukka’s ability to capitalize on this maturation. They are also buying into a business that goes far deeper than price sourcing. Lukka builds data-management software for exchanges and data-standardization tools for businesses spanning the cryptosphere. 

But Lukka is perhaps best known in the crypto industry as a tax software developer. In the past year Lukka has raised awareness of crypto tax reporting (and its own products to help calculate them) just as the U.S. Internal Revenue Service turned up the heat on non-filers.

Related: Crypto Funds Have Seen Record Investment Inflow in Recent Weeks

Regardless of the product, Lukka’s focus remains the parsing of complex datasets into things businesses and people can use, said Materazzi. 

“It all comes down to organizing and managing this very messy crypto data,” he said. “We are experts in managing incredibly high-volume crypto datasets, across tons of liquidity providers and tons of assets.”

S&P Global declined to comment on the round. State Street and CPA.com did not answer CoinDesk’s questions by press time.

Next steps

The Series C is Lukka’s first equity sale since founder Jake Benson left the company in June. 

Founded in 2014, Lukka had raised $25 million in two previous equity rounds, both back when the firm operated as “Libra.” It announced a rebrand to Lukka in late March 2019 with U.S. Patent and Trademark Office records showing a transfer of the trademark to Facebook in April 2019, months before the stablecoin project – now called Diem – was announced in June 2019.

See also: Libra Eyes Institutional Investors with Crypto Tax and Accounting App

Materazzi said Lukka’s successes have largely stemmed from its ability to create institutional-grade software for crypto that financial traditionalists feel comfortable using. Basically, that means Lukka’s platforms follow the methodologies, accounting standards and audit guidelines that any normie platform must use to be taken seriously on the Street. 

Such stringency is a no-brainer in traditional finance. But in crypto, where seemingly every attestation notched by this exchange or that tax software firm is a cause for celebration, incremental progress carries weight. It’s a sign of an industry trying to bootstrap its way into big-money finance.

Lukka already provides crypto datasets to over 160 active crypto funds. It also previously forged commercial partnerships with the three investors headlining this round. 

Even before last week’s indices tie-up, Lukka signed a separate data deal with IHS Markit, the financial research provider that S&P recently agreed to acquire for $44 billion in stock. With CPA.com, Lukka developed and promoted a crypto gains tax calculator last tax season. And Materazzi said State Street’s equity investment emerged from commercial conversations.

Materazzi said getting the trio on board as investors was a “deliberate strategy” in Lukka’s Series C.

“Hopefully, what this will do is introduce us to more of the traditional financial services industry, because we’re pretty well known in the crypto-native one,” he said.

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