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BRD team is spearheading a new initiative: Blockset, a business-to-business blockchain technology stack with a bent towards compliance, surveillance and security for cryptocurrency companies and government agencies.

After its 2014 launch, Bread was the first Bitcoin wallet to land on Apple’s app store. A couple of years later, the wallet launched a $32 million ICO and changed its name to BRD in a bid to “unify” its brand. Since then, BRD has expanded its coin support, launched new features like payment IDs, and expanded in-wallet crypto purchases to a motley of fiat currencies. 

Now, for its latest initiative, BRD has recently partnered with blockchain analysis/intelligence companies Chainalysis, CipherTrace and Elliptic, along with security firm Unbound Tech. The latter has been instrumental in securing Blockset’s key management features, while the former companies will provide Blockset with regulatory compliance and blockchain monitoring tools. 

Blockset: A suit-and-tie tech stack

Related: The Future for Unregulated Bitcoin Exchanges

“Layering these crucial applications on top of Blockset allows us to offer a comprehensive, broad-use offering to financial institutions from a single platform. This also enables our enterprise customers to address many use cases across all their crypto projects from a single vendor,” BRD CEO Adam Traidman told CoinDesk.

Per a Blockset press release, the new tech stack will provide anti-money laundering (AML), fraud detection, and other compliance tools, along with key management, security measures and data feeds for “financial institutions, government agencies, and cryptocurrency businesses.”

Read more:  All Global Crypto Exchanges Must Now Share Customer Data, FATF Rules

For AML and compliance, the software combines Chainalysis’ know-your transaction tools with CipherTrace’s travel rule compliance software. These features, along with risk-management software from Elliptic, will create real-time alerts to flag suspicious or fraudulent activity and “tainted” transactions for Blockset clients.

Related: Researchers Expose Flaw in Bitcoin Wallets That Could Be Exploited for Double-Spending

Traidman told CoinDesk that BRD is marketing its Blockset services primarily to financial institutions and banks that need sound compliance and key-management solutions. Regulators and government agencies are another logical fit given Blockset’s partnership with leading blockchain analysis firms.

According to BRD, SBI Holdings, PayPal, KPMG, and Ripple’s developer initiative Xpring have all participated in a private pre-release of Blockset’s technology, along with some 16 other firms.

BRD, which reportedly has over six million downloads and 550,000 monthly active users, “is powered by Blockset,” according to BRD documentation shared with CoinDesk. A BRD representative claimed that the wallet will not use Blockset’s AML and compliance features; instead, Blockset is just used to quickly sync BRD wallets with Bitcoin’s (and other coins’) transaction histories.

Compliance comes to crypto

BRD’s new initiative is another tech stack in the fast-growing landscape of crypto-compliance software.

Some time ago, the Financial Action Task Force recommended that crypto transactions should adhere to the travel rule – a banking mandate wherein transactions greater than $10,000 must include fund-sourcing disclosure and payer/payee identity information. Since then, crypto companies have chased solutions to streamline compliance tools for exchanges, brokers, service providers and other market participants.

Read more: Less Than 1% of FinCEN’s Suspicious Activity Reports Since 2013 Mentioned Crypto

“Compliance is of utmost importance for any financial institution. It’s important for banks and enterprises to have the foresight to stay ahead of the regulatory curve. They need the knowledge and resources to protect their clients and themselves,” Traidman told CoinDesk.

Still, critics of the travel rule have weighed whether or not it hampers cryptocurrency business with undue burdens and even whether or not such a rule is sustainable at scale.

Indeed, the recently leaked “FinCen files” illustrate the failure of financial surveillance in the legacy financial system as some $2 trillion worth of money-laundered funds were pushed, sans renovation or consequence, through accounts held by criminals, oligarchs and other powerful persons at JPMorgan, HSBC, Standard Chartered Bank, Deutsche Bank and Bank of New York Mellon.

As the same surveillance burden comes to the Bitcoin economy, perhaps the public nature of the blockchain’s digital ledger will make enforcing these mandates easier – if privacy preserving technology doesn’t keep up with the regulatory requirements, that is.

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The European Central Bank (ECB) has said the term “stablecoin” should be replaced with something less “confusing” or potentially “misleading”.

• The Eurozone’s primary financial institution said in a report Tuesday that a properly designed and well-regulated digital asset could live up to the name, but that existing examples fell short of the intrinsically stable money substitute that the term “stablecoin” implies.
• The ECB’s 30-page report says the growth of stablecoins in Europe could result in their increasing use as a new payment method or as an alternative store of value.
• The term stablecoins refers to digital assets that are designed to have minimal price fluctuations, generally by being backed by or pegged to assets such as fiat currency or gold.
• While the ECB says rock-bottom interest rates likely remove much incentive for users to hold value in stablecoins, at least for the foreseeable future, it suggests consumers are still in danger of being confused or misled by the name.
• “As regulatory principles are established and approaches are defined, the term ‘stablecoin’ should be replaced by a choice of terminology to shift the emphasis away from the issuer’s promise of stability,” the ECB said.
• Unambiguous phrasing would better distinguish stablecoins from fiat currencies and would serve to also differentiate various types of stablecoin – for example, collateralized stablecoins from algorithmic ones – the central bank said.
• It might also demarcate private initiatives from those of central banks – known in the industry’s lexicon as central bank digital currencies (CBDCs).
• Earlier today, ECB chief Christine Lagarde said a digital euro could become a viable alternative to existing cryptocurrencies and also prevent the Eurozone’s monetary sovereignty from falling into the hands of private companies.

See also: French Central Bank Chief Eyes Public-Private Partnership for Possible Digital Euro

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Bitcoin (BTC) is once again taking cues from the stock markets and prices may fall below $10,000 if equities see further sell-off, according to analysts.

• The top cryptocurrency fell by 4.5% on Monday to register its biggest single-day decline since Sept. 4.
• That came as global stock markets nursed sharp losses and the safe-haven U.S. dollar gained ground on renewed coronavirus fears and uncertainty over the 2020 U.S. election.
• Bitcoin is currently priced at around $10,460, down nearly 2% on the day, according to CoinDesk’s Bitcoin Price Index.
• “Sustained risk-off in broader equity markets will lead to heavy offers across major cryptocurrencies,” Matthew Dibb, Stack Funds’ co-founder and COO, told CoinDesk. “Bitcoin may revisit September lows [around $9,870].”
• European equities are reporting moderate gains at press time, however, futures tied to the S&P 500 index are down 0.3%, signaling scope for extension of Monday’s sell-off.
• Historically, September has been a weak month for the S&P 500 and the index performs poorly in October in the U.S. election years, according to crypto analyst Lark Davis.
• “As such, bitcoin could be in for some big bumps over the next six weeks,” Davis tweeted.
• A potential recovery in stocks may have a little positive impact on bitcoin, unless it is accompanied by an uptick in precious metals like gold, according to Dibb.
• “While Nasdaq recovered towards the end of Monday’s session, our concern in relation to bitcoin is its heavy correlation with gold and silver, which are trading further down [Tuesday],” he said.
• The 60-day positive correlation between gold and bitcoin strengthened to record highs earlier this month.
• Gold is currently trading near $1,900 per ounce, representing a 0.4% decline on the day, and fell nearly 2% on Monday. Meanwhile, silver dropped by 7.6% Monday.

• Bitcoin’s daily chart (above left) shows a “bear flag” breakdown – a sign the bounce from the recent low of $9,869 has ended and the pullback from August highs above $12,400 has resumed.
• “The cryptocurrency has breached the horizontal support of $10,500 (February high) and could slip to $10,000,” Patrick Heusser, senior cryptocurrency trader at Zurich-based Crypto Broker AG told CoinDesk.
• Gold’s descending triangle breakdown also suggests scope for deeper declines.
• Dibb is also keeping a close eye on the U.S. dollar index (DXY), which tracks the greenback’s value against major currencies.
• “A breakout of the USD from its two-month consolidation will likely lead to continued selling and pressure on Bitcoin,” Dibb said.

• The DXY has largely been restricted to a range of 92.00 to 94.00 since the end of July.
• A move above 94.00 would confirm a breakout and may weigh over bitcoin.
• Bitcoin’s big move from $9,000 to $12,000 seen in the second half of July was accompanied by a broad-based sell-off in the U.S. dollar.
• Federal Reserve Chair Jerome Powell will testify before the U.S. Congress on Tuesday and is expected to reiterate the central bank’s commitment to holding interest rates low for a prolonged period.
• Since the markets have already priced in low rates, stocks may not see a big relief rally.

Also read: Bitcoin Dips to $10.1K, Ether Drops to $330 on Sell-Off Session

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The service branch protecting U.S. interests outside the stratosphere may use blockchain to render its computer systems, on earth and in space, unhackable.

• Last week, Xage Security won a contract from the United States Space Force (USSF) to develop and roll out a blockchain-based data protection system across its networks.
• Called the Xage Security Fabric, the blockchain verifies data and protects the network from third party intervention, so confidential data sent from satellites to earth isn’t intercepted en-route.
• It also ensures security remains consistent across the entire USSF network, preventing hackers and other malicious entities from identifying and exploiting any weak spots.
• Per a release, Xage’s CEO Duncan Greatwood said blockchain allowed USSF to ensure effective domain resilience across all assets and data elements on its network.
• Xage inked a similar agreement with the United States Air Force last December, which wanted to evaluate the Security Fabric platform.

See also: US Air Force and Raytheon Are Studying How Distributed Ledgers Could Help Command the Skies

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The European Central Bank (ECB) is looking into the benefits and risks of a digital currency, according to its president, Christine Lagarde.

• Rather than as a replacement for cash, a digital euro would “complement” traditional money, she said in an introductory speech at the Franco-German Parliamentary Assembly on Monday.
• The central bank digital currency would further provide an alternative to “private digital currencies” for EU citizens, according to Lagarde.
• This, she said, would “ensure that sovereign money remains at the core of European payment systems.”
• The latter comment references fears from regulators and governments that a massively popular cryptocurrency could threaten the power of central banks to control monetary policy and even cause a shift away from the use of fiat money.
• Addressing this perceived threat from the as-yet-unlaunched Facebook-backed Libra payments project last October, France’s economic and finance minister Bruno Le Maire said Libra was usurping the sovereign right of states to issue their own currencies and could undermine the European project.
• “Do we really want to give private interests such power, given the consequences it would have on trade and financial stability?” Le Maire said at the time. “I cannot countenance one of a sovereign state’s most powerful tools, monetary policy, falling under the remit of entities not subject to democratic control.”
• Last month, in another speech, Lagarde said foreign providers had taken the lead on payments innovation due to the lack of integrated infrastructure in Europe, but a digital euro would allow the bloc to make up lost ground.
• She said then that a future digital euro might be used for retail payments and be “accessible to a wide audience.”

Also read: ‘Game-Changer’ Retail Digital Currency Now European Central Bank’s Focus, Board Member Says

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Chinese e-commerce giant JD.com is reportedly to help the nation’s central bank develop infrastructure for its cash-equivalent digital currency.

• Reported by local media on Monday, the People’s Bank of China has reached a strategic cooperation agreement with JD.com to co-develop mobile and blockchain technology platforms for the digital yuan initiative.
• The two entities will work together to develop on- and offline functionality for the products, which will include a digital wallet.
• JD.com will further use its group to promote the new services, per the article.
• The news comes as the latest instance of the People’s Bank working with commercial enterprises on the digital yuan project, more formally dubbed “digital currency electric payment” (DCEP).
• Six years in the making, DCEP is now reportedly being tested at state-owned banks, several companies backed by Tencent and “Chinese Uber” Didi.
• The digital currency is expected to act as cash in China, being used for retail payments via mobile apps.
• The central bank recently played down rumors of a property transaction settled with DCEP, saying that current testing has revolved around smaller transactions so far.
• The prime online retailer rival to Alibaba in China, JD.com is a NASDAQ-100 and a Fortune Global 500 company with revenue of close to $83 billion in 2019.

Also read: China Sees Advantages in Being First on New Digital Currency ‘Battlefield’

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A group of anonymous Uniswap users is trying to unite the many small holders of the UNI governance token to deal with potential problems in the automated market maker’s (AMM) governance. Yet that is what the launch of UNI last week was supposed to do.

The big initiative being promoted by this “union” is UNI Innamorare (or UNII), a token to be used by the Uniswap community. However, while Uniswap forks SushiSwap and SashimiSwap essentially took away Uniswap’s liquidity, this newly launched token promises to help Uniswap’s market to grow and potentially consolidate prices for UNI, which is held by more than 80,000 addresses at press time.

It is unclear who is behind the initiative. Its website said that the UNII is “backed by unii.finance.” A Silicon Valley-based investor familiar with the matter told CoinDesk that the group includes people from both UNI retail holders and some sub-communities of Uniswap. As press time, only around 20 people joined have joined its Telegram group.

Related: First Mover: Digital Gold Narrative Could Be Bitcoin’s Lone Ace as Ethereum Gains

The group is asking UNI holders to claim UNII tokens in order to form a party within the UNI community that can counter the power from the founding team and investors, according to a Medium post on Sept. 20.

The UNII token’s distribution will include two stages: after the initial airdrop of 15% of its total supply of 1 billion tokens, 30% of the UNII will be mined in the first staking pool, which requires UNI holders to stake their UNI and UNII at the ratio of 98:2. In a subsequent staking pool, UNI holders will only be required to stake their UNI and UNII at the ratio of 50:50 in order to mine 50% of the total UNII supply. The even split means that UNI holders are taking bigger mining risks compared with the first stage, which only requires a ratio of 2:98. As they stake more UNI tokens in this second pool, it could theoretically stabilize or even move up UNI’s price, said the same source who is close to the group.

The remaining 5% of the UNII will be reserved in what they are referring to as a “celebration pool” to reward UNII members if UNII becomes one or more of the token-pairs listed under UNI’s liquidity mining pool.

Prices for UNI were traded at $4.37 as the time of writing, down 48.4% from its all-time high at $8.40 on Sept. 18, according to CoinGecko.

When the hottest DeFi project has a decentralization problem

Related: DeFi Yield Farming Aggregator APY.Finance Raises $3.6M in Seed Funding

The launch of Uniswap’s governance token UNI on Sept. 16 was partly to tackle a long-existing issue for the venture capital-backed project: it is not 100% community-owned. After the decentralized exchange airdropped a share of its new governance token to everyone that had ever used it (up to Sept. 1), it received instant praise from both its users and the crypto community. However, as some took a deeper look at how UNI was distributed, they began to question just how much control the community will truly have.

Of the total supply of 1 billion UNI tokens, around 40% of them will eventually be allocated to team members, investors and advisors, according to a blog post on Uniswap’s website. That leaves 60% to the community.

While 60% may not sound too bad, the people behind UNII see a big hurdle in the fact that 1% and 4% of UNI total supply are required, respectively, to submit a governance proposal and to vote “yes” to reach quorum.

“We are all minions in terms of voting power,” according to a pre-launched page by the anonymous group, as they explained why a union within the Uniswap’s community is very much needed.

Uniswap is not the only decentralized finance (DeFi) project that uses such governance parameters. DeFi lending protocol Compound also requires 1% of its governance token COMP to submit a governance proposal.

UNII vs. SushiSwap, SashimiSwap and others

DeFi is still in its nascent stage, with many retail investors trading in this market. Returns for this unorganized group of people are impacted most by decisions made in DeFi communities on a decentralized basis. 

SushiSwap’s vampire attack on Uniswap became an immediate success as the popular fork touted its full decentralization since its birth. It was able to lure away more than $800 million of crypto assets from Uniswap.

As the so-called “Weird DeFi” projects continue to grow (for example, SashimiSwap) and take liquidity from their competitors, the group behind the UNII initiative is claiming an alternative approach to unite users while at the same time promising to keep the sustainability of the DeFi ecosystem.

“Form a governance community of UNI,” the initiative’s website wrote. “United, we stand, divided, we fall.”

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Silk Road programmer Michael R. Weigand pleaded guilty Monday to concealing his involvement in the once-sprawling darknet market’s backend operations.

• Prosecutors alleged that Weigand, 56, worked to shore up Silk Road’s vulnerabilities during its heyday and provided tech advice to site leadership. He also removed evidence from a London flat in 2013, prosecutors claimed.
• But with the infamous bazaar for illicit drugs and illegal services now nearly 7 years’ defunct, prosecutors in the hard-charging Southern District of New York chose to hit Weigand for the cover-up, instead of the crime.
• Weigand admitted that he lied to IRS and FBI special agents in January 2019 about his role on Silk Road, his pseudonym, his use of bitcoin on the site and his interactions with convicted Silk Road operator Ross Ulbricht’s online identity, Dread Pirate Roberts.
• The charge comes with a maximum statutory five-year prison term. Sentencing is scheduled for mid-December. No matter the outcome, it will fall well short of Ulbricht's life sentence.
• The charges may serve to illustrate how bitcoin’s enduring public ledger makes hiding one’s transaction history from law enforcement officials nearly impossible, even if they begin their search years after the transactions in question take place.

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Canadian cryptocurrency miner Bitfarms Ltd. will lease 2,000 WhatsMiner M31S rigs from market-maker BlockFills as the Bitcoin network’s ever-increasing difficulty rate turns up the heat on mining outfits.

• Bitfarms’ new equipment will add 360 petahashes of mining power by the end of October, according to a press release.
• The lease, set to last 24 months, comes with a 9.5% interest rate as well as a purchase option.
• BlockFills may furnish Bitfarms with even more miners by the the end of 2020, depending on equipment availability. The pair signed a non-binding letter of intent for up to 7,000 additional miners.
• Last quarter, Bitfarms mined 815 bitcoins – a high point among publicly traded miners. But it also lost $3.7 million as the entire mining market adjusted to COVID-19 challenges as well as the ramifications of the bitcoin halving.
• Bitcoin’s price recovery, repeated breaks above the $10,000 and $11,000 thresholds, and record-high network difficulty are forcing mining companies around the world to bulk up their computing power.

See also: Why Debt Financing May Be a Double-Edged Sword for Bitcoin Miner Bitfarms

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Bitcoin and ether both dropped Monday as global markets conducted a selling session.

• Bitcoin (BTC) trading around $10,492 as of 20:00 UTC (4 p.m. EDT). Slipping 3.6% over the previous 24 hours.
• Bitcoin’s 24-hour range: $10,179-$10,994.
• BTC below its 10-day and 50-day moving averages, a bearish signal for market technicians.

Bitcoin price fell sharply Monday, with a lengthy sell-off session starting around 07:00 UTC (12:00 a.m. EDT) and dropping to as low as $10,179 on spot exchanges such as Coinbase before gaining to $10,492 as of press time. 

“The market is still positioned short with persistent negative funding over the past month and under-allocation to BTC,” said Cindy Leow, portfolio manager for 256 Capital Partners, a market-neutral trading firm. ”At this stage, sellers are still in control of the market.”

Related: Bitcoin and Ether in Biggest Slump Since Sept. 3 as Stock Markets Sink

As bitcoin tumbled Monday, sell liquidations on derivatives exchange BitMEX picked up, putting pressure on price. In fact, over the past 24 hours, BitMEX liquidated over $34 million in long positions, the crypto equivalent of a margin call.

Darius Sit of crypto quant trading firm QCP Capital said the global equities markets are not faring well to start the week. “Stocks are getting hit,” Sit said. indeed, major indexes are all in the red Monday:

• In Asia the Nikkei 225 is closed for holiday Monday. Hong Kong’s Hang Seng slipped 2% as HSBC dropped 4.5% Tencent fell 1.7%.
• In Europe the FTSE 100 ended the day in the red 3.3% as potential fresh coronavirus restrictions in the UK led to major selling.
• In the United States the S&P 500 fell 1.8% as concerns about the coronavirus and uncertainty regarding fresh US government stimulus pushed the index lower.

Michael Rabkin, of crypto liquidity and market making firm DV Chain, said markets across the board are in “risk-off” mode, when asset holders unload for safer investments in the face of broader economic tumult. “Governments continue to print money and questions are left unanswered due to covid,” said Rabkin. “We’re seeing risk-off across all the markets right now which is having a direct effect on crypto.”

Read More: Bitcoin and Ether in Biggest Slump Since Sept. 3 as Stock Markets Sink

Related: Chamath Palihapitiya’s Social Capital Holds Bitcoin From 2013 Amid Talk of Public Listing

QCP Capital noted in its Monday investor letter that both bitcoin and ether were riding high just last week – ether hit $394 September 17, bitcoin topped $11,178 September 19.

Monday’s sell-off may prove to be an assessment of crypto’s resiliency, according to QCP. “We’ve had a retest of $11,000 in bitcoin and almost $400 in ether,” QCP’s note stated. “We think this week and next is where the rubber meets the road.”

Ether options shift on price drop

The second largest cryptocurrency by market capitalization, ether (ETH), was down Monday trading around $345 and slipping 7.2% in 24 hours as of 20:00 UTC (4:00 p.m. EDT). 

Read More: Did Ethereum Learn Anything From the $55M DAO Attack?

Implied volatility, the market’s expectation of ether’s future price movement, has dipped below realized volatility, ether’s current movement based on historical data. It’s a shift in the ether options market not seen since July.

William Purdy, an options trader and founder of analysis firm PurdyAlerts, said ether’s price descent, hitting as low as $330, Monday, is helping fuel the switch. “This recent discrepancy in implied volatility and realized volatility is due to the options market following the underlying asset price momentum in the short-term,” he said. 

Purdy said this means options premiums are likely undervalued and buyers can take advantage – at least for the time being. “Implied volatility will likely increase again when options buyers seek to close their positions,” Purdy added.

Other markets

Digital assets on the CoinDesk 20 are mostly in the red Monday. Two notable winners as of 20:00 UTC (4:00 p.m. EDT):

• orchid (OXT) + 28%
• ethereum classic (ETC) + 0.14%

Notable losers as of 20:00 UTC (4:00 p.m. EDT):

• chainlink (LINK) – 7.9%
• tezos (XTZ) – 7.9%
• zcash (ZEC) – 7%

Read More: Former HSBC, Citigroup, Merrill Lynch Execs Start $50M Crypto Fund

Commodities:

• Oil is down 3.1%. Price per barrel of West Texas Intermediate crude: $39.60.
• Gold was in the red 2% and at $1,910 as of press time.

Treasurys:

• U.S. Treasury bond yields slipped Monday. Yields, which move in the opposite direction as price, were down most on the 10-year, in the red 3.5%.

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In some circumstances, is yield farming with non-fungible tokens (NFTs) another term for wash trading?

Yield farming is the process of getting tokens in return for providing crypto assets to fledgling marketplaces. The activity surged this summer starting with decentralized finance (DeFi) money markets like Compound. But now the game has migrated to other markets as well. Just like players at arcades, yield farmers put in money and get tokens in return. Then they use those tokens to play video games, hoping to win a prize by beating the game.

In the NFT space, this dynamic is being pioneered by Rarible, where users are rewarded with rari tokens for buying and selling digital collectibles. Rari token rewards propelled the site to quickly overtake other NFT marketplaces. However, this dynamic also created a fresh set of problems related to wash trading. Traders often swap these reward tokens for money on platforms like Uniswap. 

Related: Bitcoin and Ether in Biggest Slump Since Sept. 3 as Stock Markets Sink

With more than 33,189 transactions tallying roughly $3.6 million in trading over the past month, according to NonFungible.com, there’s such a small market for crypto collectibles that wash trading can sometimes be difficult to identify. 

Michael Arnold, an engineer at crypto gaming startup My Crypto Heroes, said it’s important to distinguish between the different types of NFT wash trading. In short, wash trading traditionally means someone putting “buy” and “sell” orders at the same time, to create the illusion of demand. Sometimes people can wash trade while yield farming, but these aren’t usually the same thing. 

“Some developers have been spotted that did wash trading at the start. But I’d say it’s rare. Some users also did wash trading, which might be more common,” Arnold said. “But it really depends on the incentives. If you’re a whale in a game, you want to do wash trading to see your game high in the OpenSea ranks. If you’re trading on Rarible, you want to collect the governance tokens.”

Read more: Yield Farming Expands From Finance to Digital Collectibles

Related: First Mover: Digital Gold Narrative Could Be Bitcoin’s Lone Ace as Ethereum Gains

Coinfund co-founder Jake Brukhman, an investor in Rarible, said the reason rari token rewards are closer to yield farming than traditional rewards programs is that rari gives users voting rights. 

“This is a story about a marketplace that came in with a bunch of incumbents and introduced a crypto-native monetization, through a token,” Brukhman said. “When you get rari you become a partial owner of the platform. This gives you a right to vote in the governance process.”

The governance token has functioned as a growth driver, long before voting options were viable, with Messari Research showing sales on Rarible surging to well over $6 million by Sept. 16. 

“Who these protocols are democratizing for is individuals and retail users. It’s easier for my brother to 10x his NFT investment on Rarible than it is for me as Coinfund,” Brukhman added.

Out of 25 million rari tokens created, roughly 30% are reserved for the Rarible’s team, while the plan is to distribute 60% to various user groups. 

“Some people are incentivized to create volume,” Rarible co-founder Alexander Salnikov said.

As the primary holders, Rarible wants to make sure the governance tokens retain value beyond yield farming, a daunting aspiration. Salnikov said he estimated more than 40% of the $750,000 worth of NFT trades on his platform in August involved some type of wash trading. Salnikov said the platform is adding transaction fees to help curtail this issue. 

Incentive models

Stimulating demand to collect reward points, like rari tokens, is just one form of NFT wash trading. Another form of performative trading could be compared to bombastic marketing, or chasing clout for visibility. 

For example, a whale can simply ask a friend to buy his collectible while a token accumulator requires many accounts and transactions. Some marketplace users are still just experimenting with “mutually beneficial” deals between friends.

Read more: What Is Yield Farming? The Rocket Fuel of DeFi, Explained

Furthermore, platforms like Nifty Gateway that rank secondary marketplace sales might incentivize hops across platforms. There are also rare NFT galleries, like the Museum of Crypto Art which purchased the Picasso Bitcoin Bull NFT for $55,555 via Nifty Gateway, according to the artist Trevor Jones. 

For now, most of the value appears to come from the ability to transact with a geographically diverse community of crypto fans, including a few thousand artists and gamers. As with any crypto exchange, the platforms need to incentivize constructive user behavior rather than quick pump-and-dumps. 

It’s rare for authentic buyers to trade an asset many times within 24 hours, so this is one of the signs used to identify suspicious patterns. 

“We rely heavily on community signaling to identify those guys,” Rarible’s Salnikov said, adding they are denied token rewards. 

Governance challenges

From Brukhman’s perspective, if the platform can overcome these technical barriers to governance the profits could be extraordinary. 

“They have a bunch of challenges that are technical, but what’s most important for me as an investor is they’ve positioned themselves as a platform for all the different NFT types,” Brukhman said. “It’s also domain names, insurance, photography, 3D models, they’re going to become a Reddit for NFTs … that’s a much bigger market than art.”

Beyond liquidations on Uniswap, the rari token is primarily used to vote on governance options for the exchange. The Rarible platform does have an active community of digital artists, the Telegram group has 2,345 members and Discord has hundreds as well, where authentic trades and projects are discussed between fans. 

One such authentic fan, an artist who goes by Yeli, earns her primary income from selling artistic NFTs since her restaurant job shuttered in March. 

“The transition itself was pretty sharp, in the sense of going from a full-time job and making art every once in a while, to having all the time to create and brainstorm and collaborate with other artists,” Yeli said. “Luckily, though, I can say I’ve been blessed enough to have a small but steady stream of collectors lately who enjoy what I make enough to buy it and hopefully more people can take a look at it and feel the same way.” 

Read more: The NFT Game That Makes Cents for Filipinos During COVID

There are around 1,449 rari token holders, most of which weren’t blacklisted as part of identifying the problematic 40% of transactions. There does appear to be a consistent group of people who buy and sell NFTs. 

Plus, it’s unclear how accurate that wash trading estimate is. Some now-excluded Rarible users claim they weren’t involved with wash trading and the platform didn’t offer them any opportunity for explanation or recourse.  

“Some interesting projects related to NFTs were commissioned by a community member in the style of Japanese Waifus and community members were excited about it,” one such buyer who traded a flagged NFT, AaronTing8, said in a direct message. “Pretty much everyone I talk to who has bought the Yumiko NFT did not get the Rari airdrop. In fact, many did not receive Rari airdrops for other trading activities.”

The startup rectified this issue by issuing a special NFT, which jilted buyers could use to claim belated rewards from the previous Yumiko NFT purchases. Going forward, the startup aims to solve this issue with more direct community involvement, rather than routinely arbitrating themselves. 

“We have a plan to transition to a fully decentralized system,” Salnikov said in a phone interview, adding there will be a way for token holders to delegate their voting power to other parties. “There will be a DAO [decentralized autonomous organization] controlling all of this.”

Read more: Dapper Labs–USDC Integration Helps NBA Collectibles Game Clear $2M in Revenue Since June

At this stage, there’s no way to divorce speculation from future governance. Even artists like Yeli, who sell NFTs more often than she trades, find a curious appeal in the speculative aspects of the Rarible ecosystem. 

“The main attractive use of these cryptocurrencies lies in the ability to transact quickly and efficiently,” Yeli said, adding she uses bitcoin for savings and tokens for the operational needs of her NFT business. “But, also, I can’t say the speculative aspect isn’t a main draw. It’s fascinating to imagine earning a living in crypto, when the value can literally go anywhere.”

As for Arnold of My Crypto Heroes, he prefers to focus on collectibles that work as video game assets, not stores of value. This process is simpler because it usually doesn’t involve yield farming. At least, not yet. However, Arnold said, collectibles could someday become a part of the professional gaming industry. That might involve more complex token models. 

“You can compare it to cars: Unless it’s a very rare, old, valuable car, it’s meant to drive and will lose value over time,” Arnold said. “Once the infrastructure of lending and staking is in place, I can totally see NFT whales renting their NFTs to players for a revenue share on the rewards.”

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The U.S. Office of the Comptroller of the Currency (OCC) has published fresh guidance, officially clarifying national banks can provide services to stablecoin issuers in the U.S.

The Office of the Comptroller of the Currency (OCC) and the Securities and Exchange Commission (SEC) published stablecoin guidance Monday, providing the first detailed national guidance on how cryptocurrencies backed by fiat currencies should be treated under law. Prior to Monday’s notices, there was no federal clarity around stablecoins.

Stablecoin issuers have been using U.S.  banks for years, but in an unclear regulatory environment. Now, the OCC wants federally regulated banks to feel comfortable providing services to stablecoin issuers, it said in a press release. An accompanying interpretative letter, signed by Senior Deputy Comptroller Jonathan Gould, explained that while banks should conduct due diligence and ensure they assess the risks of banking any stablecoin issuers, stablecoins are becoming increasingly popular.

Related: What Is DeFi?

The letter specifies it refers to stablecoins backed on a one-to-one basis by fiat currencies.

“National banks and federal savings associations currently engage in stablecoin related activities involving billions of dollars each day. This opinion provides greater regulatory certainty for banks within the federal banking system to provide those client services in a safe and sound manner,” Acting Comptroller of the Currency Brian Brooks said in a statement.

Jeremy Allaire, CEO of CENTRE member Circle, told CoinDesk in March that at present, USDC issuers have to onboard with reserve banks, with each member holding an account at these banks. 

“I can’t speak on behalf of other stablecoins but at CENTRE we’ve seen really robust demand from significant banking institutions to get involved in reserve banking stablecoin clients,” he said at the time.

Banking stablecoins

Related: Checking In With Terra, the Korean Stablecoin Firm Bringing Online Shoppers to Crypto

The OCC detailed how banks should handle stablecoin reserves, specifically referring to stablecoins backed by currencies like the dollar. 

The OCC has taken a number of steps to integrate the crypto space with the existing financial system under Brooks, who is Coinbase’s former general counsel. In recent months, the OCC has told banks they can provide services to crypto startups and floated a national payment charter for exchanges and other fintech firms.

According to the letter, stablecoin issuers can point to the fact that regulated banks hold their reserves to convince the general public that they are safe.

The letter specifies that the OCC’s guidance only refers to stablecoins held in hosted wallets, meaning wallets controlled by a trusted third party. Unhosted wallets, which are controlled by the individual user who owns the cryptos being stored, are not included in Monday’s announcement. 

Read more: Following OCC Letter, Some US Banks Appear Open to Providing Crypto Services

“The due diligence process should facilitate an understanding of the risks of cryptocurrency and include a review for compliance with applicable laws and regulations, including those related to the Bank Secrecy Act (BSA) and anti-money laundering,” the OCC’s interpretative letter said. 

This due diligence includes Patriot Act compliance as well.

“Stablecoin reserve accounts could be structured as either deposits of the stablecoin issuer or as deposits of the individual stablecoin holder if the requirements for pass through insurance are met,” the letter explained.

SEC response

Further, the U.S. Securities and Exchange Commission (SEC) said certain stablecoins might not be securities under federal law, but advised issuers to work with the agency and legal counsel to ensure this is the case. According to the statement, the SEC is willing to publish a “no-action” letter, which would assure the recipient that the regulator would not bring an enforcement action against the company.

“Whether a particular digital asset, including a so-called “stablecoin,” is a security under the federal securities laws is inherently a facts and circumstances determination. This determination requires a careful analysis of the nature of the instrument, including the rights it purports to convey, and how it is offered and sold,” the SEC said.

Monday’s statements would appear to apply to fiat-backed stablecoins only, not algorithmic ones like MakerDAO’s DAI. Basis, another stablecoin startup which raised $133 million in 2018, shut down that December after its lawyers concluded that the specific mechanism for its token would be treated as securities under U.S. law.

The SEC’s crypto czar, Valerie Sczcepanik, said as much during last year’s SXSW.

“You might be getting into the land of security” with algorithmic stablecoins, she said in March 2019.

The SEC said Monday that it recommended issuers contact FinHub, its fintech wing, to ensure projects remain in compliance.

“The Staff stands ready to engage with market participants to assist them and to consider providing, if appropriate, a ‘no-action’ position regarding whether activities with respect to a specific digital asset may invoke the application of the federal securities laws,” the SEC said.

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CARACAS, Venezuela — At first blush, it looked like cryptocurrency adoption was poised to make a huge stride in Venezuela.

Late last month, Venezuelan opposition leader Juan Guaidó announced he would use the digital currency exchange Airtm to redistribute some $19 million to Venezuelan health care workers. The money would come from funds that the U.S. government seized from the incumbent Maduro government. The “health heroes” funds would be delivered via Airtm’s stablecoin, AirUSD.

But after speaking to various medical personnel here, I came away with the impression that the health heroes campaign has been somewhat chaotic. 

Related: How a Hacker Launched a Decentralized Network to Track Internet Censorship

One health care worker told me what happened when she tried to register:

“Most people I know, who work like me in the health sector and have discussed the matter, couldn’t register and didn’t even know what Airtm is. … The first registration page kept failing and it made you go back to the beginning. … I only know one person who was able to register but has not received the confirmation email.”

Venezuela has become a popular example of the power of crypto, which is sometimes more reliable than our hyperinflated national currency, the bolivar. But the Airtm campaign is another example of how well-intentioned crypto campaigns are easily obstructed by the daily challenges of Venezuelan life.  

Quarantine 

Bitcoin adoption is low nationwide, but during quarantine its use appears to have grown a little. Bitcoin peer-to-peer trade volume has held steady in 2020. [Note: Paxful recently left Venezuela, citing U.S. sanctions.] 

Related: Paxful, Citing Regulations and Its Own ‘Risk Tolerance,’ Exits Venezuela’s P2P Bitcoin Market

Venezuela currently has more than 60,000 cases of COVID-19 and the pandemic has only worsened Venezuela’s economic crisis. The vast majority of the population survives day to day and must decide between starvation or risking the virus to earn some money.

See also: Venezuelans Made Lightning-Savvy Hardware to Use Bitcoin During Blackouts

During quarantine, some people seemed to grow more interested in speculating in financial markets, including cryptocurrencies. That’s because Venezuela’s currency is so inflated that many consider it worthless. There are also many people with a desperate need to make money.

The bolivar remains volatile. The U.S. dollar is the more trusted currency, but some people think paper money can transmit COVID-19. There are a lot of digital payment options, but none are very popular. So accepting bitcoin and other cryptocurrencies has become more attractive.

Health heroes

COVID-19 has brought to light another big cryptocurrency story. Venezuela currently has a parallel government led by the opposition leader Juan Guaidó, who has also been declared president by the national assembly. In April, Guaidó promised to give bonuses to the health care workers who have been helping to manage the COVID-19 pandemic. The bonus would be around $100 a month for three months of work, which is not a small amount in Venezuela. 

The health heroes funding, which adds up to at least $19 million, would come from money seized from the Maduro government by the United States and held by the U.S. Treasury Department.

It’s worth noting that the Venezuelan state has a cryptocurrency of its own, the Petro. The AirUSD bonus will probably be much easier to use than the Petro bonus that the Venezuelan government gave out at the end of 2019. Up until today, there are still people who have not managed to move those Petros.

See also: The Battle to Get Dictator’s Seized Millions to 62,000 Venezuelan Health Heroes

According to Guaidó’s team, this campaign has four stages: application; verification and selection; registration in the digital platform (Airtm) intended for payment; and transfer of aid for three consecutive months. The last stage has already begun.  

The first stage was chaotic because the Maduro government quickly blocked the registration page. There were also phishing attempts intended to steal personal data. One public employee said he received threats from his supervisor for trying to receive the funds. Two of five health care workers I spoke to did not manage to pass the first stage because they could not open the page because of the government’s block. 

According to Guaidó’s team, more than 75,000 users were registered, and some 62,000 people were selected to receive the bonuses. It’s hard to know what percentage this is of total public health employees. Estimates range widely, and the only entity that would know the correct number is the Maduro government.

Airtm 

Airtm, registered in Mexico, took off in 2017 after a pre-ICO for selected investors. The exchange manages a P2P market for its clients with its own stablecoin, AirUSD. The Airtm platform is supposed to transfer the funds to the workers. The personnel who have been selected have to register and verify their identity to access the voucher.

A spokesperson for the campaign said one reason this platform was chosen was because it met the requirements of being able to avoid national bank accounts, to pay out in dollars and to create accounts from an email address. Importantly, Airtm is also based outside of Venezuela and is thus safer from government retaliation.

Airtm’s P2P market has its own exchange rate. If users wish to transfer AirUSD to bolivars, they can do it within the Airtm platform but they still might have to deal with a Venezuelan bank account. Recently, Airtm blocked the use of Banco de Venezuela, the largest public bank in the country, to reduce users’ risk from some government actions.

See also: Ukraine Leads Global Crypto Adoption, Chainalysis Says in New Report

Venezuela’s banking regulator has ordered the monitoring of banking transactions related to Airtm, in addition to blocking access to the web by telecommunications companies. In 2018 the platform was blocked by Internet servers because the government did not like that it gave an exchange rate for the dollar. Then, they stopped blocking it until Aug. 20, when they censored it again.

Now, authorities are even blocking the pages of virtual privacy networks (VPN) that could be used to access Airtm. The Guaidó and Airtm team are publishing educational content on how to use VPNs and how to change the DNS of their computers and avoid the censorship of VPNs by using mobile applications to access the web. They are even creating advisory groups called digital godfathers to help workers access the platform.

Jéronimo Bernot, who heads growth and client support at Airtm, told me that Airtm will consider any project that is aligned to their mission of financial freedom and inclusion. Would Airtm ever follow Paxful in ceasing to work with Venezuela? “AirTm is staying,” Bernot replied. 

According to recent statements by Guaidó, 70% of the selected health personnel are carrying out the identity verification process at Airtm. Also according to Guaidó, more than 39.000 health professionals have received their first bonus of $100.

Feedback

To get a better understanding of the campaign, I spoke to some workers from the public health sector. They all said they were unaware of Airtm until the media promotion of the “Health Heroes” campaign. 

Airtm’s Bernot told me that in anticipation of the campaign, the exchange grew their team by 20%. But there have still been bottlenecks in identity verification, for example. 

 “The biggest problem is that most of the doctors who receive this bonus are not very close to the world of technology, and many doctors are older. If you add to this the fact that peer-to-peer exchanges are not the most common option, things get even more complicated,” Bernot said.

But a rural doctor from the city of San Antonio de Los Altos acknowledged the campaign’s merits. Doctors continue to perform their medical duties, in spite of receiving a $3 salary every two weeks. As of Sept. 13, more than 126 health care workers reportedly died while working to fight COVID-19. 

See also: What Venezuelans Think About Bitcoin and American Media

“It’s not the solution, but it does address certain needs,” the doctor said of the campaign. “The lack of biosafety material puts us at greater risk … [O]ur work with patients does not allow us to deny them medical assistance, but the reality is that our safety also matters. “

Another rural doctor from the same city said the campaign was a step in the right direction, given the risks health care workers face. 

“Transportation has been affected and its availability reduced, leading to extreme and costly measures for health personnel who depend on these services. We have to acquire biosafety materials on our own[,] … exponentially increasing the exposure and risk of contagion of the entire medical team.”

To the doctor, the campaign is both fair and necessary:

 “Not just thinking about the economics of those who will benefit from this bonus, but as a form of valuation that distinguishes the hard work performed by each person who makes up a link in our country’s health care system.”

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The District Court for the Southern District of Florida has denied Craig Wright’s request for summary judgment in a case that involves claims over ownership of about 1.1 million bitcoin (worth over $11 billion). 

In an order signed on Monday, Judge Beth Bloom at the Florida court denied Wright’s motion seeking summary judgment that would have prevented the matter from proceeding to a full trial. 

• The case, first brought in 2018,  involves the plaintiff Ira Kleiman’s argument on behalf of the estate of his late brother David, that half of Wright’s bitcoin worth and intellectual property belongs to Kleiman. The plaintiff has argued that the bitcoin in question was also mined together by Wright and Kleiman.
  
• Wright’s request for summary judgment was comprised of six claims including statute of limitations, the plaintiff’s inability to prove the existence of an oral partnership and the court’s lack of subject matter jurisdiction. 
  
• In the past, Wright has claimed that he was the inventor of bitcoin under the pseudonym Satoshi Nakamoto, an assertion many in the crypto world have disputed due to a lack of corroborating evidence.
  
• According to an order issued by the Florida court on Sept. 4, the trial involving Wright’s bitcoin fortune has now been moved to Jan. 4, 2021. 
  

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The Central Intelligence Agency (CIA) launched a new research and develop laboratory on Monday that features blockchain technology among its focus areas.

• CIA Labs’ webpage said the labs will research “distributed ledger/blockchain-enabled technologies” alongside other tech stacks: wireless telecommunications, quantum computing, artificial intelligence and data analytics, to name a few.
• Officers who develop tech inventions in the lab will be permitted to patent, disclose and partially profit from their work, according to MIT Technology Review.
• MIT’s reporting notes the labs will give CIA a useful incentive to woo tech talent that might otherwise turn to Silicon Valley’s giants.
• That the CIA, one of the U.S. intelligence community’s two code-breaking hubs, would take an interest in researching a technology secured by cryptography should come as no surprise to observers.
• The Block first reported CIA Labs’ blockchain focus.

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The crypto industry is no stranger to hype and hyperbole

Kraken, a prominent U.S.-based cryptocurrency exchange, has received approval from the State of Wyoming for its proposal to form a new kind of financial institution: an exchange empowered to carry out some of the functions of a private bank.

Prices for both bitcoin and ether fell sharply in the past 24 hours, after a drop in global equities.

• The top cryptocurrency by market value was traded around $10,401.18 at press time, losing 4.64% over the previous 24 hours, while ether lost 8.15% over the same time period to about $341.01.
• The market correction in the top two cryptocurrencies came after the U.S. stock market fell to a two-month low amid new fears on the coronavirus pandemic.
• The German DAX and the U.K.’s FTSE indexes were also down by around 4% on the day. The Hang Seng Index began the week with a 2% decline.
• “Throughout 2020, we have consistently seen a strong correlation between crypto markets and traditional financial markets, and the crypto market’s response to the 2.2% drop in Dow Jones futures this morning has reaffirmed this correlation,” according to a note from Glassnode Monday.
• The crypto data site warned investors to keep an eye on the stock market for further impact.
• Meanwhile, Deribit, the world’s largest exchange for bitcoin options, was suffering from “partially degraded service,” as the exchange recorded high latency on the website as of press time.

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A Silicon Valley fund manager holds bitcoin purchased seven years ago as it mulls being publicly traded.

Palo Alto, Calif., investment firm Social Capital invested in bitcoin (BTC) in 2013, CEO Chamath Palihapitiya revealed Wednesday in an investment conference call. Bitcoin was trading between $13 and $1,200 in 2013 and today trades around $10,000, according to Coin Metrics data.

Palihapitiya made the disclosure on a Sept. 16 call about Social Capital’s plans to list Opendoor on the New York Stock Exchange through Social Capital Hedosophia II, one of six special purpose acquisition companies (SPACs) registered with former DST Global partner Ian Osborne’s Hedosophia investment group to take companies they acquire public.

Related: Bitcoin and Ether in Biggest Slump Since Sept. 3 as Stock Markets Sink

The first Social Capital Hedosophia SPAC merged with Richard Branson’s Virgin Galactic, now valued at more than $4 billion on the public market, in an offering that raised $720 million. The Opendoor SPAC, to be conducted through Social Capital Hedosophia II, is raising about $1.1 billion in a deal valuing the company at $4.8 billion as the other four registered Social Capital Hedosophia SPACs are headlining valuations between $350 million and $1 billion.

With potentially dozens more of these blank-check companies in the works, Social Capital itself may go public to rival Warren Buffett’s Berkshire Hathaway, Palihapitiya mused in a June Fortune interview. If that happens, Social Capital would be the first publicly traded venture capital and private equity fund manager with a significant market value to invest in cryptocurrency.

Bitcoin background

In 2018, an annual investor letter said at the time that Social Capital’s largest investments were bitcoin, Amazon and the San Francisco Golden State Warriors basketball team, in which Palihapitiya owns a minority stake. The three investments would be consolidated with the rest of Social Capital’s funds, the letter said. By then bitcoin had traded around its highest historical price, just under $20,000, in December 2017.

The exact amount of bitcoin Social Capital has bought and sold has not been publicly disclosed. Palihapitiya has talked about holding bitcoin before, but has not specified whether they were angel or fund investments. He told a bitcoin conference in 2011 that he held 100,000 bitcoin bought at less than $100 a pop, and he told TechCrunch in 2013 that he would purchase $10 million to $15 million in bitcoin in addition to the $5 million he already owned.

Related: The MicroStrategy Effect? This Firm Is Helping Businesses Save in Bitcoin

A senior vice president of Facebook from 2007 to 2011 when he founded Social Capital, Palihapitiya has fawned over bitcoin in interviews and media appearances, calling it “schmuck insurance” to “hedge against the traditional financial infrastructure.” Social Capital, with over $1.2 billion under management, has also invested in cryptocurrency trading platform SFOX, along with Box, Slack and SecondMarket, now the NASDAQ Private Market.

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The COVID-19 pandemic and its accompanying monetary policy have caused a surge in demand for bitcoin, and now companies are eying “digital gold” to protect their treasuries from cash depreciation.

Announced Monday, bitcoin financial services firm Unchained Capital has released an “advanced business account” specifically targeting firms that not only want to hold bitcoin but want to handle their own private keys rather than rely on some third-party crypto custodian (in keeping with the ethos of “not your keys, not your bitcoin”). 

The impetus to launch this service is straightforward and simple: It is no longer just folks in the crypto sphere who are worried about the printing of money, negative interest rates and the like. Just look at MicroStrategy’s recent moves. 

Related: Bitcoin and Ether in Biggest Slump Since Sept. 3 as Stock Markets Sink

Michael Saylor, founder of the business intelligence company, described bitcoin as “superior to cash” and announced that his publicly traded firm had purchased an additional $175 million of it last week, upping MicroStrategy’s total BTC holdings to around $425 million.

Read more: Bitcoin CEO: MicroStrategy’s Michael Saylor Explains His $425M Bet on BTC

MicroStrategy is blazing a trail that many others are now in line to follow, explained Parker Lewis, head of business development at Unchained Capital. 

As well as crypto-native businesses, family offices and investment firms, there is also an emergent crop of interested businesses that are not Bitcoin-centric, Lewis said. 

Related: Chamath Palihapitiya’s Social Capital Holds Bitcoin From 2013 Amid Talk of Public Listing

“We have companies that you wouldn’t expect, like your local bakery or your local liquor store that hold bitcoin in treasury,” Lewis told CoinDesk. “They are not Bitcoin-centric businesses, but they hold bitcoin and they hold their own keys; both small and large, like the MicroStrategies of this world.”

As for Saylor, he told CoinDesk the numbers tell the tale.

“This year, the real yield on treasury assets dived to something like -20%. We can expect these assets to yield -10% or less for the years to come,” he said via Twitter DMs. “Corporate treasurers need to keep a reasonably liquid, elastic asset on the balance sheet to ensure the company can meet its obligations to employees, customers, vendors, creditors, etc. Bitcoin is the only asset that meets those requirements that also has a positive real yield.”

Bitcoin B2B

In times past it would have been hard to imagine the CEO or chief financial officer of a company wanting to mess around with private keys.

“We make it really simple,” said Phil Geiger, Unchained’s head of marketing. “We hold one key, our clients hold two keys, which means that our clients are really in full control over their bitcoin. With these new business accounts, we have built out a combination of enterprise-level controls for different user types, accounting and so on. But at the base of everything, it’s the Bitcoin protocol.”

Read more: Pandemic Will Speed Bitcoin Adoption, Says DBS Bank Economist

This is all fine and dandy, but regulated financial firms see a gray area at best when it comes to crypto custody, and are likely to lean towards the closest thing to the traditional world, a regulated custodian such as BitGo Trust.

“At first blush, that’s entirely logical,” said Lewis. “But I think there will be this push and pull in terms of the way things were, and how they are shifting over to the way things will be. We have this new form of money; do we need to forfeit it to legacy regulation that has existed for 30 or 40 years? Maybe the reality is that the regulations need to change to deliver the best security.”

So if a CFO needs to quickly get their hands on fiat how does that typically work? 

“I think this can be tailored to the size of the organization,” said Lewis. “We have relationships with five or six OTC desks as well as being able to trade on exchange.”

Aleksandar Svetski, co-founder of bitcoin savings app Amber, has held 50% of the firm’s treasury in bitcoin for the past year. He pointed to abject conditions around cash and interest rates as a compelling incentive. 

“Look at things like negative interest rates,” said Svetski. “What the fuck kind of ‘Twilight Zone’ world do we live in where you now have to pay a bank to hold your money? Of course people are looking for a non-cash alternative. Anyone who isn’t thinking about holding bitcoin now is crazy.”

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