CoinDesk Crypto

Banks across Italy are using R3’s Corda blockchain to vastly speed up the process of double-checking transaction logs.

Silvia Attanasio, head of innovation at the Italian Banking Association (Associazione Bancaria Italiana or ABI), said both the process of interbank reconciliation and the technology underlying the exchange of data had to change.

In the old system, reconciliation took a long time and was unpredictable. The average time for reconciliation was between 30 and 50 days, Attanasio said. On Corda, reconciliation is completed within a day.

Related: Wyoming-Based Avanti to Open in October With a New Bank-Issued Digital Asset

The Interbank Agreement, a part of Italian law that governs interbank transfers, was passed in 1978 and describes a process of banks sending physical tapes. Once the interbank agreement was updated in May 2019 to include data standardization, Italy set a window between March 1 and Oct. 1, 2020 for integration to that standard and a blockchain that banks could use to follow the new rules.

Read more: Italian Bank Consortium Trials Interbank Transfers on R3’s Corda

Information technology company NTT Data designed the network and bank technology company SIA operates it.

The project is in phase two with around 85% of Italian banks, or 55 banks total, using the platform to share interbank transfer data. In the third and final phase slated for October, the association expects to have 70 to 100 banks on the platform. 

Related: Cryptocurrency Exchange Kraken Adds New Banking Option for US Users

“The benefit is related to the new standardization more than the technology itself,” Attanasio said. “It’s like the rhythm you set on your metronome that sets a [faster] timeline.”

Blockchain benefits

Before Spunta, each bank had its own software for exchanging data related to interbank transfers, said Demetrio Migliorati, head of blockchain at Banca Mediolanum.

Using Corda for data exchanges between banks was also lower-stakes than moving fiat  between banks on a blockchain.

“If we failed in this process, the worst thing that could happen was to have a problem in the information exchange between banks,” she said. “Clients are not affected, the companies are not affected. It was a natural sandbox.”

Read more: Italian Banks Are Ready to Trial a Digital Euro

The association did consider a centralized database as opposed to Corda but wasn’t open to having banks keep data on separate ledgers at each bank.

Experimenting with something small like data exchange between banks also allows Italian banks to experiment with other use cases. Some banks have begun experimenting with sharing know-your-customer (KYC) information and guarantees of credit on Spunta.

“If we want to do something new for Spunta, we change it immediately and it is changed for all banks,” said Migliorati. 

Related Stories

• Swiss Bank InCore Enables Euro On-Ramp for Crypto Exchange Kraken
• Sri Lanka’s Blockchain Bank KYC Platform to Enter Development ‘Shortly’: Central Bank

The lights were dimmed during the last day of Devcon in October 2019. A hush fell over the auditorium in Osaka, Japan. A haunting melody rippled through the crowd of roughly 1,000 people. Everyone knew the dance was about to begin. 

Ethereum leaders, including inventor Vitalik Buterin, plus Hudson Jameson and Aya Miyaguchi of the Ethereum Foundation, would lead a goofy dance to close out the annual tech conference. 

Cheers erupted when the Ethereum influencers took the stage, nodding respectfully to conference organizers and thanking the crowd. Soon the whole crowd was following along, jumping up and down, turning in circles. Critics might say they were simply mimicking the technologists on stage, but on the ground, people were adding their own moves or simply nodding along. Every Etherean dances his or her own way, or smiles and sways timidly. (Ethereum Foundation developer Vlad Zamfir, for example, dislikes the dance and said he prefers not to partake.) 

Related: Bitcoin Price Logs Two-Month High Above $10,000

The tongue-in-cheek ritual offers a microcosm of the carefree Ethereum lifestyle brand, inspired by the cryptocurrency founded in 2015. Over the past five years, Ethereum, the blockchain platform that birthed so many ill-fated ideas, also launched a crop of products and services that are currently multibillion-dollar endeavors. 

The dance is a promise “until next year,” the leaders say on stage. It’s a celebration of what the community has achieved so far and what it will achieve. The dance is a way to communicate with Ethereans from all around the world, even if they don’t speak English. 

There is roughly $3.7 billion worth of cryptocurrency locked up in Ethereum-based decentralized finance (DeFi) platforms used by people around the world like Gerald Nash, a computer science student who interned at Coinbase and leads programs at the Howard University Blockchain Lab.

“I wouldn’t consider it a hard money because of the economic decisions the core team makes,” Nash said, describing the difference between bitcoin and ether. Bitcoin is digital money, he said, unlike ether. 

Related: Everything You Need to Know About Ethereum 2.0

“But I am fascinated by the other technological aspects [beyond money], like Turing-complete smart contracts,” he added.

As a young Black man without a wealthy background, Nash said he uses DeFi to access “more complex or sophisticated finance [tools],” than he previously could through banks. He acknowledges these are risky software projects and uses them with deliberate caution. That hasn’t dampened the allure.

Scaling diversity

Ethereum was able to outgrow the pop culture affiliations of its predecessor, Bitcoin, and develop a distinct culture where more people feel welcome to participate. 

Law professor and Maker Foundation board member Tonya Evans offers another example of a DeFi fan. 

“I’m a Black, queer woman in crypto … focused on education and financial inclusion,” she said. “You don’t have to come from a technical background to have a lot to add.” 

From her perspective, cryptocurrency projects should “start off with some level of control then work toward decentralization.” She added this may not be the Bitcoin approach, often referred to cheekily as “Satoshi’s Vision.” Although different, she said, Ethereum represents a “good-faith march” toward a similar goal.  

“These platforms and protocols aren’t developed in a vacuum, especially those developed for heavily regulated industries like finance and healthcare,” she said, describing Ethereum experiments. “It’s not about a foundation or any one person.”

Indeed, the DeFi industry attracted some of the shrewdest women in the blockchain industry, from Evans to Volt Capital co-founder Soona Amhaz and Optimism co-founder Jinglan Wang. None of these women danced with developers in Japan in 2019. But they may engage with the Ethereum lifestyle brand in other ways, like wearing unicorn swag. 

Ethereum chic

It’s impossible to mistake an Ethereum event, which may include dancing or goofy rap performances (like the one at EDCON 2019 in Australia), in addition to unicorn graphics and rainbow or pastel-colored decor. 

Attendees often dress with more pizazz than other tech conferences and may be openly inclined to use recreational drugs. 

“Like many digital countercultural movements, who have always been anchored in a bohemian and hippie-like ethos, Ethereum is no exception,” said anthropologist Ann Brody, a crypto fan in attendance in Japan during the fifth Devcon. 

She compared Ethereum to thought leader Stewart Brand and his Bay Area circles of influence in the 1960s and 1970s. However, the contemporary band of Ethereum thought leaders isn’t yet a “social movement,” Brody said.  

“There are also those in the community that treat Ethereum simply as an experiment and that’s why I hesitate to call them a social movement at this time,” Brody said. “I think the dancing in itself speaks so much about Ethereum’s cultural values related to freedom, creative expression, fun, unconventionality, and even the desire for collective unity to some extent.”

TikTok commonalities

After all, the younger generation has a different relationship with brands than those who grew up before social media was omnipresent. 

As the New York Times reported, it’s a popular pastime for teenagers to impersonate brands on platforms like TikTok and act out fictional storylines that often include dance moves. Likewise, Ethereans identify themselves with the Ethereum lifestyle brand, acting out the meme of a socially awkward nerd in the form of interpretive dance.

TikTok and Ethereum influencers can motivate thousands of people to download an app, sometimes garnering thousands of dollars in the process. 

Ethereum has spawned many subcultures, comparable to how Twitter became a jungle of amorphous social groups like Weird Twitter and Bitcoin Twitter. Yet even Ethereans who never attended a conference use the same iconography, the ether symbol or pink-haired unicorn, often illustrated with rainbows. This visual aesthetic sets it apart from the (generally older or more academic) Bitcoin community. 

On the other hand, one tendency crypto fans, Bitcoiners and Ethereans alike, share with teens on TikTok is the preoccupation with identifying “posers” who don’t belong to Elite TikTok or to a chosen crypto “revolution.” 

At their core, TikTok, Twitter and Bitcoin are platforms. Ethereum’s tech platform cannot handle comparable volumes yet, but the Ethereum community is motivated to achieve that goal and maybe even become tech unicorns. 

“There is something naïve and childlike to these symbols,” Brody said of the “uncorrupted youth” aesthetics in Ethereum. She added that, to some people, the rainbow “world computer” is subconsciously a metaphor for global unification. 

Unicorns

Many people believe they can use the wizardry (Ethereans love magical metaphors) of software to fix the failures of previous generations.

“Ethereum is a wonderland, a confusing wonderland for abstractions,” said the Ethereum Foundation’s Zamfir. “It represented a super ambitious decentralization agenda that was very general and took Bitcoin’s ethos to the next level. It was never just about finance.”

Ethereum advocate and journalist Camila Russo said token creator Fabian Vogelsteller used cartoon unicorns in his videos, similar to the small unicorn and rainbow featured on early Devcon conference shirts and decorations, long before the token boom in 2017. Plus, “unicorn” has long been slang for a tech company evaluated at $1 billion. The aspirational unicorn metaphor was already common among young developers. Then, when Buterin was photographed in 2017 wearing unicorn shirts at tech events, Russo said the trend “blew up.” 

“This is all in the context of the ETH community being young, millennial developers, where all these internet memes and unicorn images are already popular,” she added. 

Years later, the Ethereum Foundation and the Brooklyn-based conglomerate ConsenSys, headed by Ethereum co-founder Joe Lubin, are still busy evangelizing their blockchain. While Lubin’s companies run a considerable chunk of the hardware supporting the DeFi ecosystem, Buterin’s nonprofit donates ether to organizations like the United Nations Children’s Fund. Both companies sponsor a variety of grants and scholarships, and they are rarely short on unicorn swag. 

Most of the dozen or so Ethereum co-founders pivoted to their own projects long ago. Those that remain, like Buterin and Lubin, remain consistent.

Vision

One common gripe among Ethereum critics, that the project keeps changing focus, doesn’t hold up if we consider the community’s goal rather than its tools.

Longtime Bitcoin advocate Bruce Fenton said he met Buterin at a conference in Miami back when Ethereum co-founders were just starting to crystalize their idea. In the years to come, Fenton said Lubin’s ConsenSys sponsored many “fun and relaxed” events with unicorn art and hip vendors. He said “hacker commune-style spaces” popped up from Zug to San Francisco, all revolving around similar aesthetics and values.  

“I’ve always loved the energy at Ethereum events – lots of excited builders,” Fenton said. “What this ultimately means is democratizing finance. … They don’t need to go beg the establishment for money, they can go directly to the people.”

Token Summit co-founder William Mougayar, author of the “Business of Blockchain,” said the project’s 2020 “brand strategy” is still similar to conversations he had with Ethereum co-founders in 2014.

According to Mougayar’s consultation documents from 2014, the project aimed to be “inclusive,” “empowering” and “visionary” in order to “bring people together from all disciplines for the common goal of something bigger than themselves.” 

The Ethereum community has generally followed these principles across a variety of software experiments over the past five years.

Roots

Millennials didn’t invent this moralistic and social approach to technology, as historian Benjamin Peters showed in his writings about Soviet tech culture. The Russian-Canadian Buterin said in public interviews he was interested in both socialism and libertarianism, offering a unique cultural mix. Ethereans, including fans of all backgrounds, are now putting their own spins on blockchain technology. 

MyEtherWallet co-founder Kosala Hemachandra, who has been involved with the token economy since 2015, now spearheads a team of 18 employees serving at least 300,000 monthly active users, he said. 

“Volumes went up nine times since the start of the COVID-19 crisis, starting in February, compared to previous months,” Hemachandra said. “We have way more help requests now than before [2017], which means new users are coming in.” 

Bitcoin purists who claim Ethereum is failing aren’t measuring success the same way as Ethereans. Hemachandra said he is confident Eth 2.0, the blockchain’s latest technical overhaul, will launch a usable beacon chain in 2020. Regardless of the current state of the software, Ethereum fans see the experiment as a success. It inspired research and community-building efforts that changed thousands of lives, for better or worse. 

ConsenSys alum Andrew Keys said he met Lubin in 2014 and was instrumental in helping create Ethereum’s first cooperation with Microsoft in 2015. In May 2020, he described Ethereum as a “huge success” in its “opening act.” 

“It has proven the ability to digitize all assets, automate agreements and empower self-sovereign identity,” Keys said. “We’re still in the first inning, though, and bleeding-edge technology that already garners billions in value takes time to upgrade properly.”

Global reach

Even Ethereum’s critics can’t deny the lifestyle brand went global in 2017. 

In addition to dozens of central bank experiments, Ethereum also inspired grassroots education initiatives that draw more emotional nourishment from the founders than financial incentives. 

Awosika Israel Ayodeji, an Ethereum advocate in Nigeria since the token boom of 2017, said he’s helped train 150 local developers on how to write Ethereum smart contracts since October 2019. After having an “amazing experience” at the EthCC 3 conference in Europe in March 2020, he returned home feeling confident in his work and supported by the global community. 

While Bitcoiners are often individualistic, Ethereans tend to be more collectivist. For Ayodeji, Ethereum is more than a software or even a project. It is a way of thinking. 

“The fact that Ethereum allows everyone an [opportunity for] expression is why I personally like Ethereum,” he said. “The image I see of Ethereum is an innovation giving power to groups of people to express and govern themselves.” 

Like Evans and Nash, Ayodeji is a token user, including the dai stablecoins minted on MakerDAO.

“I earn in ETH and convert to fiat when I need to spend,” he said. “Ethereum culture for me is decentralization. Although we might still be far from decentralization, as it might still be early, it’s gradually coming along.”

At least in terms of geographic decentralization, the Ethereum community has achieved some degree of diversity. Over in Taiwan, marketing associate Yahsin Huang has been involved with a local Ethereum meetup group since 2016. 

“I’m interested in building the next generation of the internet,” she said. For her, getting involved in blockchain projects is “less about investment or career development” and closer to activism. 

“I’m more of an idealist, very purpose-driven, believe in the core values, and also strongly believe in the future of the web,” she said. 

Likeminded Ethereum Foundation developer Danny Ryan said, from his perspective, “Ethereum is about freedom of choice on the internet.” He added Hemachandra is correct to believe the Eth 2.0 beacon chain will go live this year.

“I’m deeply concerned about the trajectory of technology. … Ethereum might help us disrupt that and push it in the right direction,” Ryan said. “The beacon chain is the core of this new consensus mechanism.” 

His coworker Zamfir said Ethereum is also “associated with” a type of discipline or practice beyond coding. Zamfir doesn’t dance, like some of his fellow Ethereans, but even he can’t deny the narrative-shaping power of the moment at Devcon when the lights turned low.

“I still believe that Ethereum, Bitcoin and the blockchain space create an incredible opportunity to do interesting research,” Zamfir said. “I’m more optimistic than ever about what it could be, despite not being optimistic about what it is now.”

Related Stories

• Ether Leaves Bitcoin Behind With 2020 Gain of Over 100%
• Climbing off Twitter on Scaffolds of Truth: Where Srinivasan and Benet Diverge

Bitcoin‘s price crossed into five figures on Sunday to hit its highest level in nearly two months. However, it still lags Ethereum’s ether token, which recently traded at 13-month highs.

• Bitcoin rose to $10,135 at 10:05 UTC – a level last seen on June 2.
• The biggest cryptocurrency by market value is trading near $9,970 at press time, representing a 4% gain on a 24-hour basis and 8% gains on a week-to-date basis.
• “The DeFi-led surge in Ethereum’s ether token, the second-largest cryptocurrency, seems to have spilled over into the bitcoin market,” said John Ng Pangilinan, managing partner at Singapore-based Signum Capital.
• Ether’s price rose to a 13-month high of $319 early Friday and is currently trading at $310 – up over 9% on a 24-hour basis and 30% this week alone.
• The token, which powers Ethereum’s blockchain, has gained 140% this year, leaving bitcoin, up 40% on a year-to-date basis, far behind.
• Bitcoin is outshining gold, which has appreciated by 25% this year.
• However, gold is trading close to its record high of $1,920 reached in 2011, while bitcoin is still down 50% from its lifetime high of $20,000 hit in December 2017.
• The U.S. Federal Reserve’s massive liquidity injections and the negative yield on the inflation-adjusted US bonds look to have powered gains in gold, an inflation-hedge.
• Bitcoin, however, struggled to draw hedging bids over the past two months and was locked in the narrow range of $9,000 to $10,000.
• Some investors expect bitcoin to chart stronger gains in the near future as the cryptocurrency has breached a bearish trendline falling from December 2017 and June 2019 highs.

Related Stories

• Market Wrap: Bitcoin Near $9,600 as Gold Hits High, Uniswap Liquidity Over $100m
• Bitcoin Is a Form of Money in DC, Federal Court Rules
• Everything You Need to Know About Ethereum 2.0
• Ether Leaves Bitcoin Behind With 2020 Gain of Over 100%

As bitcoin closes in on $9,600, gold surpasses $1,900 and DeFi liquidity steadily grows.

• Bitcoin (BTC) trading around $9,592 as of 20:00 UTC (4 p.m. ET). Slipping 0.03% over the previous 24 hours.
• Bitcoin’s 24-hour range: $9,475-$9,601
• BTC above 10-day and 50-day moving averages, a bullish signal for market technicians.

Gold is on the brink of an all-time high, up 0.80% Friday, at $1,901 per ounce. Sweden-based over-the-counter bitcoin trader Henrik Kugelberg sees gold nearing its all-time high as a positive for the world’s oldest cryptocurrency. “Bitcoin will pass $20,000 in a surge. I suspect a new normal discounted bitcoin price will be around $15,000 in 2021, like it has been around $9,000 in 2020.”

Bullish bitcoin traders love to talk about gold, since they see similarities between the yellow metal and the cryptocurrency. “I think we are just a couple weeks or months out from a strong continuation on bitcoin as gold reaches $1,900 today,” said William Purdy, a New York-based equity options and crypto trader. 

Related: Silvergate’s Bitcoin-Backed Lending Product Grew 80% in the Last Quarter

Indeed, gold’s jump this week occurred as bitcoin eked gains and the S&P 500 U.S. stock index performance was back to being flat for 2020. 

Kugelberg is pessimistic on stocks for the balance of 2020. “I believe there will be at least a 30% drop in stocks on average at the latest in Q4. So where to go? To real assets with lasting value,” said Kugelberg. He mentioned gold, bitcoin and property as “real assets”. 

“Bitcoin bulls have momentum on their side for now,” said Alessandro Andreotti, an Italy-based over-the-counter bitcoin trader. “The crypto market is likely to be heading towards a bullish continuation from here.” 

Within crypto, ether is doing even better than bitcoin this week. ETH/BTC, that is, ether priced in bitcoin, has seen a jump in the past few days. 

Related: Odds of Bitcoin Hitting Record High in 2020 Are (Slightly) Up, Options Data Suggests

Ether prices have increased almost 12% against bitcoin, said Aaron Suduiko, head of research for cryptocurrency liquidity provider SFOX. “It will be interesting to see whether any trends develop in the event that more DeFi projects continue to grow.”

Uniswap crosses $100 million in liquidity

The second-largest cryptocurrency by market capitalization, ether (ETH), was up Friday trading around $283 and climbing 3.6% in 24 hours as of 20:00 UTC (4:00 p.m. ET). 

Read More: Ether Leaves Bitcoin Behind With 2020 Gain of Over 100%

“The recent gains in ether are due to the on-going thematic chatter on social media around new DeFi projects that have been showing considerable strength,” said Purdy, the equity options and crypto trader. Indeed, Uniswap, a decentralized exchange (DEX), for trading various DeFi project tokens, surpassed $100 million in liquidity Friday.

Instead of order books, Uniswap uses liquidity pools that investors can “stake” cryptocurrency into and profit or “yield” from trading fees on the DEX. This liquidity is what enables Uniswap traders to quickly exchange between ether and various Ethereum-based ERC-20 tokens, with total daily volume reaching $71 million per day, according to data aggregator Dune Analytics. 

Other markets

Digital assets on the CoinDesk 20 are mostly red Friday. Notable winners as of 20:00 UTC (4:00 p.m. EDT): 

• nem (NEM) + 1.6%
• tron (TRX) + 1.2%
• zcash (ZEC) + 0.44%

Read More: Arca’s Flagship Crypto Hedge Fund is Up 77% in 2020

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

• chainlink (LINK) – 3.6%
• cardano (ADA) – 2%
• monero (XMR) – 2%

Read More: Carlos Ghosn’s $600K Bitcoin Escape Fee Paid via Coinbase

Equities:

• In Asia the Tokyo Stock Exchange is on holiday. Hong Kong’s Hang Seng slipped 1.8% on news China demanded the closing of a US consulate in Chengdu. 
• In Europe the FTSE 100 ended the day in the red 1.6% as the U.K. and the E.U. are still at an impasse on a Brexit trade deal. 
• The U.S. S&P 500 index lost 0.80% as tensions with China dragged stocks lower, including Intel in the red 16%.

Read More: Crypto’s $35T Moment Could Come From Analog-World Stock Listings

Commodities:

• Oil is up 0.40%. Price per barrel of West Texas Intermediate crude: $41.21

Read More: No One Has Traded Bitcoin Options on Bakkt for Over a Month

Treasurys:

• U.S. Treasury bonds were mixed Friday. Yields, which move in the opposite direction as price, were down most on the 2-year, in the red 4.3%.

Read More: Banks Won’t Rush to Hold Crypto

Related Stories

• First Mover: Bitcoin at Last Passes $10K, but Why Has It Struggled While Gold Shone?
• Bitcoin Price Logs Two-Month High Above $10,000

As bitcoin closes in on $9,600, gold surpasses $1,900 and DeFi liquidity steadily grows.

• Bitcoin (BTC) trading around $9,592 as of 20:00 UTC (4 p.m. EDT). Slipping 0.03% over the previous 24 hours.
• Bitcoin’s 24-hour range: $9,475-$9,601
• BTC above 10-day and 50-day moving averages, a bullish signal for market technicians.

Gold is on the brink of an all-time high, up 0.80% Friday, at $1,901 per ounce. Sweden-based over-the-counter bitcoin trader Henrik Kugelberg sees gold nearing its all-time high as a positive for the world’s oldest cryptocurrency. “Bitcoin will pass $20,000 in a surge. I suspect a new normal discounted bitcoin price will be around $15,000 in 2021, like it has been around $9,000 in 2020.”

Bullish bitcoin traders love to talk about gold, since they see similarities between the yellow metal and the cryptocurrency. “I think we are just a couple weeks or months out from a strong continuation on bitcoin as gold reaches $1,900 today,” said William Purdy, a New York-based equity options and crypto trader. 

Related: Bitcoin Is a Form of Money in DC, Federal Court Rules

Indeed, gold’s jump this week occurred as bitcoin eked gains and the S&P 500 U.S. stock index performance was back to being flat for 2020. 

Kugelberg is pessimistic on stocks for the balance of 2020. “I believe there will be at least a 30% drop in stocks on average at the latest in Q4. So where to go? To real assets with lasting value,” said Kugelberg. He mentioned gold, bitcoin and property as “real assets”. 

“Bitcoin bulls have momentum on their side for now,” said Alessandro Andreotti, an Italy-based over-the-counter bitcoin trader. “The crypto market is likely to be heading towards a bullish continuation from here.” 

Within crypto, ether is doing even better than bitcoin this week. ETH/BTC, that is, ether priced in bitcoin, has seen a jump in the past few days. 

Related: Ether Leaves Bitcoin Behind With 2020 Gain of Over 100%

Ether prices have increased almost 12% against bitcoin, said Aaron Suduiko, a research analyst for cryptocurrency exchange OKCoin. “It will be interesting to see whether any trends develop in the event that more DeFi projects continue to grow.”

Uniswap crosses $100 million in liquidity

The second-largest cryptocurrency by market capitalization, ether (ETH), was up Friday trading around $283 and climbing 3.6% in 24 hours as of 20:00 UTC (4:00 p.m. EDT). 

Read More: Ether Leaves Bitcoin Behind With 2020 Gain of Over 100%

“The recent gains in ether are due to the on-going thematic chatter on social media around new DeFi projects that have been showing considerable strength,” said Purdy, the equity options and crypto trader. Indeed, Uniswap, a decentralized exchange (DEX), for trading various DeFi project tokens, surpassed $100 million in liquidity Friday.

Instead of order books, Uniswap uses liquidity pools that investors can “stake” cryptocurrency into and profit or “yield” from trading fees on the DEX. This liquidity is what enables Uniswap traders to quickly exchange between ether and various Ethereum-based ERC-20 tokens, with total daily volume reaching $71 million per day, according to data aggregator Dune Analytics. 

Other markets

Digital assets on the CoinDesk 20 are mostly red Friday. Notable winners as of 20:00 UTC (4:00 p.m. EDT): 

• nem (NEM) + 1.6%
• tron (TRX) + 1.2%
• zcash (ZEC) + 0.44%

Read More: Arca’s Flagship Crypto Hedge Fund is Up 77% in 2020

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

• chainlink (LINK) – 3.6%
• cardano (ADA) – 2%
• monero (XMR) – 2%

Read More: Carlos Ghosn’s $600K Bitcoin Escape Fee Paid via Coinbase

Equities:

• In Asia the Tokyo Stock Exchange is on holiday. Hong Kong’s Hang Seng slipped 1.8% on news China demanded the closing of a US consulate in Chengdu. 
• In Europe the FTSE 100 ended the day in the red 1.6% as the U.K. and the E.U. are still at an impasse on a Brexit trade deal. 
• The U.S. S&P 500 index lost 0.80% as tensions with China dragged stocks lower, including Intel in the red 16%.

Read More: Crypto’s $35T Moment Could Come From Analog-World Stock Listings

Commodities:

• Oil is up 0.40%. Price per barrel of West Texas Intermediate crude: $41.21

Read More: No One Has Traded Bitcoin Options on Bakkt for Over a Month

Treasurys:

• U.S. Treasury bonds were mixed Friday. Yields, which move in the opposite direction as price, were down most on the 2-year, in the red 4.3%.

Read More: Banks Won’t Rush to Hold Crypto

Related Stories

• Market Wrap: Bitcoin Hits 1-Month High; DeFi Value Locked Hits $3.3B
• No One Has Traded Bitcoin Options on Bakkt for Over a Month: Deribit Continues to Dominate

Bitcoin is a form of “money” covered under the Washington, D.C., Money Transmitters Act, a federal court said Friday.

• In the case of United States v. Harmon, Chief Judge Beryl A. Howell wrote that money is “commonly means a medium of exchange, method of payment, or store of value.”
• “Bitcoin is these things,” Judge Howell added.
• Defining bitcoin as money was integral to the court’s decision to not dismiss criminal charges against Larry Harmon, the operator of an unlicensed bitcoin trading platform, for laundering money under federal law.
• The court’s comments mean that bitcoin “is treated as money in the context of money transmission licensing in D.C., nothing more,” said Neeraj Agrawal, director of communications at Coin Center, a cryptocurrency public policy think tank.

Update (July 24, 17:13 UTC): This article has been updated with a comment from Coin Center.
Update (July 24, 17:29 UTC): This article has been updated with background information on U.S. v. Harmon.
Update (July 24, 19:41 UTC): This article’s headline has been updated to further clarify the decision applies to money transmission in D.C.

Related Stories

• Market Wrap: Bitcoin Near $9,600 as Gold Hits High, Uniswap Liquidity Over $100m
• Ether Leaves Bitcoin Behind With 2020 Gain of Over 100%
• Market Wrap: Bitcoin Hits 1-Month High; DeFi Value Locked Hits $3.3B
• No One Has Traded Bitcoin Options on Bakkt for Over a Month: Deribit Continues to Dominate

Bitcoin is a form of “money” covered under the Washington, D.C., Money Transmitters Act, a federal court said Friday.

• In the case of United States v. Harmon, Chief Judge Beryl A. Howell wrote that money is “commonly means a medium of exchange, method of payment, or store of value.”
• “Bitcoin is these things,” Judge Howell added.
• Defining bitcoin as money was integral to the court’s decision to not dismiss criminal charges against Larry Harmon, the operator of an unlicensed bitcoin trading platform, for laundering money under federal law.
• The court’s comments mean that bitcoin “is treated as money in the context of money transmission licensing in D.C., nothing more,” said Neeraj Agrawal, director of communications at Coin Center, a cryptocurrency public policy think tank.

Update (July 24, 17:13 UTC): This article has been updated with a comment from Coin Center.
Update (July 24, 17:29 UTC): This article has been updated with background information on U.S. v. Harmon.

Related Stories

• Ether Leaves Bitcoin Behind With 2020 Gain of Over 100%
• Market Wrap: Bitcoin Hits 1-Month High; DeFi Value Locked Hits $3.3B
• No One Has Traded Bitcoin Options on Bakkt for Over a Month: Deribit Continues to Dominate
• 3 Reasons Bitcoin’s Price Could Soon Rise to $10K

Related: Market Wrap: Bitcoin Hits 1-Month High; DeFi Value Locked Hits $3.3B

Read CoinDesk Research’s full report on Eth 2.0

Related Stories

• Ether Stalls After 8% Rally as Exchange Inflows Spike
• First Mover: Ethereum a Victim of Its Own Success as Fees Soar, Vitalik Complains

Ukraine’s Ministry of Digital Transformation signed a deal last week with BitFury’s crypto-tracing spin-off Crystal Blockchain B.V. to kick-start the government’s virtual asset monitoring initiative, a company executive told CoinDesk.

• Crystal Chief Executive Marina Khaustova said ministry officials, who oversee Ukraine’s digital pivot and maintain links with the Ministry of Finance, will use the company’s software to trace the origins of suspicious crypto transactions. 
• Finance ministry officials have previously said they will trace all crypto transactions over $1,200 in accordance with international anti-money laundering (AML) guidelines and a 2019 Ukrainian law. 
• Khaustova said that the deal “is not limited to compliance tools access,” however. Digital Transformation officials were just as “eager to consult” on developing legislation and regulations for Ukraine’s burgeoning virtual asset sector as they were in enforcing crypto AML restrictions, she said.
• “The main goal of our cooperation is the rapid formation and legalization of the virtual asset market in Ukraine,” the ministry said in a press statement. The ministry did not immediately return a CoinDesk request for comment.

Related Stories

• Malaysian Watchdog Plans to Extend Crypto Regulations to Wallet Providers
• French Officials Move to Start Trial of Alleged BTC-e Operator Alexander Vinnik
• Carlos Ghosn’s $600K Bitcoin Escape Fee Paid via Coinbase
• Binance’s Fiat-Gateway Partner Banxa Expanding to US

Malaysia’s Securities Commission (SC) is planning a regulatory framework for wallet providers that will be built into its existing cryptocurrency legislation.

• In an announcement Thursday, the SC said it was looking to “compliment” its existing frameworks for digital asset exchanges and initial exchange offerings with the inclusion of wallet providers.
• While the commission offered no details of how the new framework might look, such entities play an important role in safeguarding of digital assets on behalf of clients, it said.
• Digital asset wallet providers or anyone with an interest are encouraged to contact the commission to discuss their current business operations or to provide feedback on the framework.
• The SC said such parties should arrange for a meeting before Aug. 14, 2020.
• After the cut-off date, the regulatory framework governing wallet providers will be added to the country’s Guidelines on Digital Assets.
• The regulator recently added Binance and eToro to a list of companies not authorized to operate within the country, saying the two firms did not comply with its securities laws.

See also: Singapore Begins Crackdown on Unlicensed Bitcoin Sellers

Related Stories

• French Officials Move to Start Trial of Alleged BTC-e Operator Alexander Vinnik
• Carlos Ghosn’s $600K Bitcoin Escape Fee Paid via Coinbase
• Binance’s Fiat-Gateway Partner Banxa Expanding to US
• Crypto Bank Hopeful Bitcoin Suisse Raises $48M in First-Ever Round

Cryptographers call out Craig Wright’s latest claims, blockchain business deposits are growing at Signature and Carlos Ghosn’s smugglers were paid in crypto.

You’re reading Blockchain Bites, the daily roundup of the most pivotal stories in blockchain and crypto news, and why they’re significant. You can subscribe to this and all of CoinDesk’s newsletters here. 

Top shelf

Cryptic Payments
The son of former Renault and Nissan head and fugitive Carlos Ghosn used Coinbase to pay two men $500,000 in bitcoin to get his father out of Japan last December. U.S. prosecutors said Wednesday that Anthony Ghosn sent 63 bitcoin to Michael and Peter Taylor, a father and son team who smuggled Carlos Ghosn out. Coinbase gave evidence to Japanese investigators this week, showing a series of transactions between January and May 2020 from Ghosn’s Coinbase account to one belonging to Peter Taylor. Wednesday’s filing shows a bank account managed by Peter Taylor also received two wire transfers, totaling over $870,000, from Carlos Ghosn’s account in October 2019.

Related: First Mover: Crypto’s $35T Moment Could Come From Analog-World Stock Listings

Work to Do
The Office of the Comptroller of the Currency (OCC) said banks can provide custody services for cryptocurrencies. The move is widely praised as a step towards mainstreaming crypto. However, it’s unclear whether banks will immediately act on the regulatory clarification. Congressman Darren Soto (D-Fla.), said the letter was “an important step” to better integrate cryptocurrencies into the U.S. financial system, but cautioned “the federal government is still behind in incorporating” cryptocurrency. “I don’t expect you will see much change in the next three to four months, but then we might see some acceleration thereafter,” Trustology CEO Alex Batlin said. “This will come up as banks will be holding investment committees for funding approvals for the next year.”

Assessment of the Facts 
Four experts agree that Craig S. Wright’s latest claims about Bitcoin message-signing are wrong on the facts. Wright, who claims he’s Bitcoin’s pseudonymous creator, is embroiled in a legal battle that hinges on his purported ownership of a number of the earliest Bitcoin addresses. Recently, an anonymous user signed a public message using 145 of those keys, calling him a “liar and a fraud,” an accusation Wright countered by saying, “You cannot have a digital signature that is anonymous, by definition.” Four cryptography experts now dispute these claims, with Johns Hopkins associate professor Matthew Green saying, it “makes zero sense to me as a cryptographer… If Craig Wright is saying something meaningful here then he needs to slow down and explain it more clearly. Because the words he’s using sound like nonsense to me.”

Red Wall
Russia’s Federal Security Service, or FSB, the successor to the KGB, supervises all industries related to cryptography and may be holding back the local blockchain sector. The FSB’s rigid certification process for crypto companies could cost more than $100,000 and take at least a year, according to experts on the Russian enterprise blockchain market. Further, this borderless technology is sometimes stonewalled by the watchdog, which is distrustful of foreign-developed blockchains. It works in reverse too. Russian-made systems might end up isolated from the global market due to distrust of Russian government cryptography standards.

Future of the Internet
A debate hosted Wednesday night featuring Protocol Lab’s Juan Benet, Ethereum creator Vitalik Buterin and former Coinbase executive Balaji Srinivasan detailed competing visions for the future of the internet. While all parties agreed the world needs to move towards decentralized models – especially in social media – there were differing opinions about how and when data should be verified in distributed systems. “My impression is we are headed to a much better future where the data structures are going to be decoupled from the [user interfaces],” Benet said. “There will be many different systems built atop the same information graph.”

Quick bites

• Arca’s flagship crypto hedge fund is up 77% in 2020
• Crypto bank hopeful Bitcoin Suisse raised a $48 million Series A
• Central bank board member says CBDCs raise more questions than answers – calling it “helicopter money”
• Opera’s built-in crypto wallets have 170,000 monthly active users
• SEC registered broker-dealer is launching a security token platform called Gladius

The big idea

Related: Blockchain Bites: OCC’s Crypto Letter, Eth 2.0’s ‘Official’ Testnet and Dinwiddie’s Tokenized Airball

Signature Bank saw $1 billion in deposit growth in the second quarter of 2020 from the firm’s digital assets team, according to its latest filing. 

The New York-based bank is one of a handful – including Silvergate Bank and Metropolitan Commercial Bank – willing to take deposits from blockchain firms. And it’s a risk that seems to be paying off.  

Signature’s blockchain-related business lines represented one-eighth of the firm’s total $8 billion deposit growth this quarter. 

“The crypto industry is often a rich source of low-cost, non-interest bearing deposits for crypto-friendly banks like Signature,” CoinDesk’s Nathan DiCamillo reports. According to Signature CEO Joseph DePaolo on the firm’s earnings call, the cost of those deposits decreased to 56 basis points from 98 basis points because of the low interest rate environment.

“This is now the fourth consecutive quarter exceeding $1 billion in both total and average deposit growth, non-interest bearing deposits of $16.1 billion still represent a high 32% of total deposits since the second quarter of last year,” DePaolo said. 

For years, crypto and banking was like oil and water. Most of the Wall Street banking powerhouses – like Chase, Citigroup and Wells Fargo – were reluctant to enter into this poorly understood and underregulated market. 

In 2017, for instance, J.P. Morgan Chase CEO Jamie Dimon called Bitcoin a fraud. It now looks like he’s singing a different tune – with his bank taking on Coinbase as a client last May.

Brian Brooks, Coinbase’s former chief legal officer and now senior deputy at the Office of the Comptroller of the Currency, which recently issued a letter allowing crypto custody among chartered banks, said at the time the trend will likely continue. 

This doesn’t necessarily mean the original lot of crypto-friendly banks will be pushed out of the market. Silvergate, which once banked Coinbase, has plans to continue expanding its crypto services. 

In an industry of constant evolution, there will always be new paths to profits.

Market intel

Flatlining Interest
Volume and open interest on Bakkt has flatlined at $0 since June 15, according to Skew. The Intercontinental Exchange’s subsidiary launched its bitcoin options market in December 2019. Open interest for the exchange’s options market has suffered complete inactivity before, but the current 38-day streak dwarfs other periods. Bakkt’s options volume has also dropped to $0 since April 23, Skew said.

Going Public?
Digital-asset industry insiders say a move toward more public ownership of crypto firms could accelerate mainstream adoption. “By becoming publicly traded, cryptocurrency-focused companies could appeal to investors in the $35 trillion U.S. stock market. Back-of-the-envelope math shows that just a 1% allocation into crypto stocks could mean $350 billion of new investments for companies in the space,” CoinDesk’s First Mover reports. The total market value of all digital asset markets currently sits at $287 billion. According to CoinDesk Research, there’s more than two dozen publicly-traded firms, with many more like Coinbase and Ant Group rumored to be in the process of listing.

Opinion

Banks Won’t Bite
Alex Mascioli, head of institutional services for Bequant, thinks banks aren’t likely to jump at the opportunity to custody crypto assets. Last Wednesday, the Office of the Comptroller of the Currency (OCC) announced banks can offer crypto and digital asset custody to their clients, which could be a profitable new business line. However, there’s inertia standing in the way. “The bulk of banks and other sophisticated players in the old school markets don’t know much about our industry. Most of them don’t appear to have even done anything as basic as buying a fractional Bitcoin on Robinhood,” he writes. 

Podcast

Big Tech’s Effect on Small Biz
Sahil Bloom, an investor with Altamont Capital Partners, joins as a guest on the latest episode of The Breakdown to discuss the recent increase in joblessness claims, remote work and Robinhood traders. 

Who won #CryptoTwitter? Related Stories

• First Mover: Ethereum a Victim of Its Own Success as Fees Soar, Vitalik Complains
• Blockchain Bites: Coinsquare Conclusion, Ethereum Fees and a GPT-3 Poet

The Office of the Comptroller of the Currency (OCC), a federal banking regulator in the U.S., is rapidly expanding crypto awareness on Capitol Hill.

The OCC published an interpretive letter Wednesday announcing that in its view, nationally chartered banks are able to provide custody services for cryptocurrencies, a move that the industry widely praised as one that could help mainstream adoption of crypto, even though it’s unclear as to whether banks will immediately act  on the regulatory clarification. 

This development is likely to be very positive for the digital assets space, but major U.S. banks probably won’t be holding Bitcoin any time soon.

Related: Crypto Bank Hopeful Bitcoin Suisse Raises $48M in First-Ever Round

Congressman Darren Soto (D-Fla.), told CoinDesk in a phone call that the letter was “an important step” to better integrate cryptocurrencies into the U.S. financial system, though he cautioned that “the federal government is still behind in incorporating” cryptocurrency.

“We support further integration of cryptocurrency into the financial system, including allowing the major financial institutions to hold this currency. It’ll lead to further legitimization of crypto,” he said.

Across the aisle, Representative Tom Emmer (R-Minn.) agreed, telling CoinDesk in an emailed statement that providing custody is “a big step forward” for financial innovation. 

Both representatives are members of the Congressional Blockchain Caucus.

Related: Wyoming-Based Avanti to Open in October With a New Bank-Issued Digital Asset

“[Acting Comptroller] Brian Brook’s work should serve as a guiding light forward for the rest of our patchwork of financial regulators,” Emmer said.

A number of aspects of the letter make it interesting, said a Congressional staffer, who advises a lawmaker on fintech issues and asked for their name to be withheld. The first was its rapid release, given Brooks just took the job in May. The staffer said a number of lawmakers will claim that insufficient research was put into the benefits or detriments of the move.

Even the bullish Soto noted that the OCC’s announcement seemed hurried.

“We’ve seen some things rushed throughout the Trump administration so this isn’t particularly surprising,” Soto said, though he added, “it’s been a long time coming. This should have happened months or years ago.”

The Congressional staffer added that the form of the letter is interesting, in that it’s not an announcement or a rule. “It looks like it’s an interpretive letter, which maybe a specific bank asked for … and that’s fairly normal practice if regulations are a little ambiguous but usually … you don’t issue it writ large.” 

Starting a conversation

Up until now, the lack of regulatory clarity has meant mainstream financial firms like Fidelity have managed to get into crypto, but only by going the long way around and creating a separate legal entity, such as Fidelity Digital Assets. The OCC letter provides clarity so that banks can get closer to crypto without worrying about regulatory uncertainty. 

“People who are supportive of crypto and blockchain technology will see this as a very positive step, and the more skeptical crowd, this’ll further entrench their viewpoint,” the Congressional staffer said. “I think there’s a very large group of politicians who have never thought about this, so that’s the real benefit is it’ll start that discussion.”

Ron Hammond, a former aide to Rep. Warren Davidson (R-Ohio), agreed that the move might force a conversation around crypto, but noted that neither major party – Democrats or Republicans – currently have a platform around financial technology or digital assets. 

He expects Democrats as a party to come out against the move, he told CoinDesk in a phone call.

“Democrats already are skeptical of banks [and] they’re even more skeptical of digital assets, so you put those two together and you have a pretty big policy storm of mistrust in the system,” he said. 

Anti-money laundering and know-your-customer concerns may be brought up, along with the fact that Brian Brooks, the current Acting Comptroller of the Currency, has been neither formally nominated nor confirmed to his role. 

The conversation about crypto will not be limited to Capitol Hill. 

Alex Batlin, CEO of digital asset custody provider Trustology, and a former blockchain lead at BNY Mellon and UBS, told CoinDesk he expects there to be “a lot more conversations” about crypto in various company boardrooms this coming fall.

Open door

A number of barriers still remain before any nationally chartered banks are able to actually offer crypto custody services.

Hammond said that while the letter might provide cover for smaller banks, major ones would need more reassurance before they’d be willing to enter the space.

“I don’t expect you will see much change in the next three to four months, but then we might see some acceleration thereafter,” Batlin said. “I expect that after the summer, this will come up as banks will be holding investment committees for funding approvals for the next year.”

There are also concerns around whether the letter can provide binding guidance. The Congressional staffer noted that the relevant statutes could be interpreted differently by another administration, meaning a future letter or rulemaking process could tell banks the opposite of Wednesday’s missive. 

Still, the OCC’s overtures open the door for much less risky and cheaper routes into crypto for big banks, said Batlin. The way banks are likely to dip their toes in is by going the sub-custody route, he said, by partnering with small specialist organizations.

“That’s exactly what a global custodian like BNY Mellon does anyway,” Batlin said. “Now that this activity is going to be regulated, I expect the cheapest solution for bigger banks is to have some kind of semi-derisked trial of this is to use someone as a sub-custodian.”

Following Europe

The OCC letter brings the U.S. closer to the situation in Germany, where lawmakers provided clarity that essentially eased restrictions on banks providing custody of crypto assets.

Germany’s Financial Supervisory Authority (BaFin) released guidance earlier this year clarifying how firms based outside the nation could still provide custody services within Germany’s borders and remain in compliance with international law, such as the European Union’s Fifth Anti-Money Laundering Directive.

“The U.S. is following Europe, and the use cases are unlikely to be crypto coins,” said Phil Mochan, co-founder of Koine, a London-based custody and post-trade settlement solution for digital assets. “The banks in Germany are all saying they are not going to touch crypto coins, but are interested in primary issuance of securities on behalf of their clients.”

Mochan pointed out that simply providing cold storage of crypto keys does not resolve any of the post-trade activities needed for standard market infrastructure, which involves the emergence of blockchain-enabled central securities depositories (CSDs). 

Election approaching

Back in the U.S., the upcoming presidential election is one wild card that might determine whether the next Comptroller reverses the decision or not.

“I don’t see a situation where a [Republican President Donald] Trump nominee, whether he be Brooks or someone else, would overturn this but I can see a situation in a [Democratic Presidential nominee Joe] Biden administration where this gets overturned,” he said. 

That’s not to say a potential Biden administration would for sure overturn the move, and it’s unlikely to be a key priority, but the uncertainty remains. 

“There’s no notice or comments, [no] input [from] the industry,” Hammond said. “I can see a Biden administration being more concerned about that and probably striking down the [letter].”

Soto said Congress needed to take action to bring further clarity, starting with passing the Token Taxonomy Act (which Hammond wrote while working for Davidson) and the Digital Taxonomy Act (which Soto sponsored).

“We need to pass both those bills to establish basic definitions and jurisdiction so there’s no overreach by agencies and there’s more certainty,” he said. “I continue to be troubled by the fact that many new cryptocurrency firms have to spend [millions] due to the complex rules in the United States and that’s because we’ve left it solely to the agencies.”

Related Stories

• Blockchain Bites: OCC’s Crypto Letter, Eth 2.0’s ‘Official’ Testnet and Dinwiddie’s Tokenized Airball
• Binance Enters German Market via Partnership With Crypto Investment Firm

French officials have officially started the ball rolling for the trial of Alexander Vinnik, the alleged operator of an exchange said to have laundered millions of dollars for criminals.

• French prosecutors filed a petition to start the lawsuit against Vinnik on Wednesday, according to a news report from L’Express.
• Vinnik was charged on the day he arrived in France in late January after been extradited from Greece.
• He stands accused of extortion, aggravated money laundering, conspiracy, and harming automatic data-processing systems as the chief of the exchange BTC-e, closed by law enforcement agencies in 2017.
• A hot wallet address for BTC-e can be seen on blockchain explorers.
• The platform from Netherlands-based Crystal Blockchain shows that, while now empty, more than 733,000 bitcoin (around $7 billion) has passed through the wallet.
• It has remained inactive since September 2017 – a few months after Vinnik was detained by the Greek authorities.

• Once the French trial has concluded, Vinnik will be extradited to the U.S. and then Russia to face similar charges there.
• Vinnik has maintained he is innocent of all charges.

See also: New Zealand Police Seize $90M Linked to Alleged BTC-e Exchange Operator

Related Stories

• Malaysian Watchdog Plans to Extend Crypto Regulations to Wallet Providers
• Carlos Ghosn’s $600K Bitcoin Escape Fee Paid via Coinbase
• Binance’s Fiat-Gateway Partner Banxa Expanding to US
• Crypto Bank Hopeful Bitcoin Suisse Raises $48M in First-Ever Round

Ether, the second-largest cryptocurrency by market value, has more than doubled in value this year, leaving bitcoin, the crypto market leader, far behind. 

• Ether is trading near $275 at press time, representing a nearly 114% gain on a year-to-date (YTD) basis, according to CoinDesk’s Ether Price Index. 
• The cryptocurrency clocked a five-month high of $289 on Thursday despite increased exchange inflows.
• Ether’s YTD rise is over three times bigger than bitcoin’s 34% 2020 rally.
• bitcoin, the top cryptocurrency by market value, is currently trading around $9,550.

• Jehan Chu, co-founder and managing partner at Hong Kong-based trading firm Kenetic told CoinDesk that ether’s price is surging on increased general interest and the network’s popularity in the decentralized finance space. 
• Ethereum’s median transaction fee recently rose to its highest level since August 2018 due to a surge in transaction activity.
• Additional buying pressure for ether looks to be stemming from the excitement surrounding the impending transition from the proof-of-work mechanism (aka mining) to proof-of-stake in the network’s next big upgrade, dubbed Ethereum 2.0.
• Staking would allow investors to earn additional yield simply by holding ether to support the operations on the blockchain. 
• Glassnode data shows the number of addresses holding 32 ETH – the minimum balance needed to become a validator on Ethereum 2.0 – has increased by more than 12% this year, suggesting increased investor interest in the novel form of income.
• While bitcoin was expected to print solid gains following the May 12 miner reward halving event, the cryptocurrency has remained largely stuck in a range between $9,000 and $10,000.

Disclosure: The author holds no cryptocurrency at the time of writing.

Related Stories

• First Mover: Crypto’s $35T Moment Could Come From Analog-World Stock Listings
• Market Wrap: Bitcoin Hits 1-Month High; DeFi Value Locked Hits $3.3B
• No One Has Traded Bitcoin Options on Bakkt for Over a Month: Deribit Continues to Dominate
• Ether Stalls After 8% Rally as Exchange Inflows Spike

The son of former Renault and Nissan head and fugitive Carlos Ghosn used Coinbase to pay two men $600,000 in bitcoin to get his father out of Japan last December.

• U.S. prosecutors said Wednesday that Anthony Ghosn sent 63 bitcoin to Michael and Peter Taylor, a father and son team who smuggled Carlos Ghosn out of Japan on December 30, 2019.
• Coinbase gave evidence to Japanese investigators this week (see below), showing a series of transactions between January and May 2020 from Ghosn’s Coinbase account to one belonging to Peter Taylor.
• Ghosn transferred what was then worth $500,000 of bitcoin to Taylor in seven transactions – the 63 bitcoin would now be worth $608,000.
• Michael Taylor, a former green beret, and Peter Taylor are currently being held by U.S. authorities on the request of Japan, which is trying to extradite them.
• U.S. prosecutors filed the evidence in opposition to the Taylors’ bid to be released on bail.
• Wednesday’s filing shows a bank account managed by Peter Taylor also received two wire transfers, totaling over $870,000, from Carlos Ghosn’s account in October 2019.
• Ghosn was arrested in November 2018 on allegations of false accounting and then of shifting a personal loss of $16.6 million onto Nissan’s books.
• Pleading innocent, Ghosn was held under house arrest for more than a year until his escape.
• In December, he was smuggled out of the country in a double-bass case by the Taylors, who pretended to be a band playing at a dinner party.
• Ghosn is now hiding out in his childhood home of Lebanon, having accused the “rigged” Japanese justice system of denying his basic human rights.

See also: Wanted Wirecard Exec Said to Be Sheltered by Secret Service in Russia

See the Coinbase evidence below:

Related: Binance’s Fiat-Gateway Partner Banxa Expanding to US

Related Stories

• Crypto Bank Hopeful Bitcoin Suisse Raises $48M in First-Ever Round
• Central Bank Board Member Says CBDCs Raise More Questions Than Answers
• Opera’s Built-In Crypto Wallets Have 170K Monthly Active Users

The stock market isn’t usually considered an ally of cryptocurrencies, but with the big U.S. exchange Coinbase now rumored to be considering a share listing, some digital-asset industry insiders say a move toward more public ownership could accelerate mainstream adoption. 

By becoming publicly traded, cryptocurrency-focused companies could appeal to investors in the $35 trillion U.S. stock market. Back-of-the-envelope math shows that just a 1% allocation into crypto stocks could mean $350 billion of new investments for companies in the space. Compare that with the $287 billion total market value of digital-asset markets, and suddenly there’s a lot more capital going into the industry, even if it’s not directly into cryptocurrencies. 

You’re reading First Mover, CoinDesk’s daily markets newsletter. Assembled by the CoinDesk Markets Team, First Mover starts your day with the most up-to-date sentiment around crypto markets, which of course never close, putting in context every wild swing in bitcoin and more. We follow the money so you don’t have to. You can subscribe here.

Related: Ether Leaves Bitcoin Behind With 2020 Gain of Over 100%

New listings and initial public offerings would also be sure to generate a raft of coverage on analog-world TV channels like CNBC, while the Wall Street Journal and Bloomberg News publish ostensibly breathless headlines on first-day trading action. No publicity is bad publicity, and all this just gives digital-asset companies generous exposure to a broader swath of potential investors who typically only deal in stocks. 

Steve Ehrlich, CEO of the crypto brokerage platform Voyager Digital, which has been publicly traded on the Toronto Stock Exchange since February 2019, told First Mover in a phone interview that stock-market listings promise a whole new vista for the cryptocurrency industry. 

“We always felt that being a public company was something that was necessary in the crypto space,” Ehrlich said, over the phone. “It’s great for the industry.”

A handful of crypto companies have already gone down the route of listing shares.

Related: Blockchain Bites: OCC’s Crypto Letter, Eth 2.0’s ‘Official’ Testnet and Dinwiddie’s Tokenized Airball

According to CoinDesk Research, there’s more than two dozen publicly-traded firms, from the the bitcoin-mining firm Argo, which listed on the London Stock Exchange in 2018, to the bitcoin-mining computer maker Canaan, which listed depositary receipts on the Nasdaq late last year. Bitmain, another mining-computer manufacturer, previously considered an initial public offering (IPO) in Hong Kong in 2018 and is rumored to be exploring a listing in the U.S. 

Earlier this month, industry sources told Reuters that the San Francisco-based exchange Coinbase, worth approximately $8 billion at its last valuation, was seriously considering a direct listing in 2021.

Just this week, the Alibaba affiliate company Ant Group announced it was planning an IPO in both Shanghai and Hong Kong at a reported $200 billion valuation. Although the company is best known for its payment app Alipay, the Hangzhou-based company also runs its own highly scalable blockchain network and is believed to be one of the planned primary issuers for China’s digital yuan.

Should it go through, the dual IPO would arguably make Ant Group the largest company operating in the blockchain space. 

Ehrlich, a long-time entrepreneur who previously served as a top executive at the online stock-trading firm E*Trade, said he welcomed the news that companies like Coinbase were now considering share listings. 

According to Ehrlich, not only can auditors scrutinize Voyager’s financial statements, they can also help to make sure company operates in an ethical and regulatory compliant manner. That could provide the accountability, transparency and comfort demanded by investors, especially for a still-maturing industry that has been pocked by controversies, scams, hacks and fraud. 

Binance, the largest exchange in the world, has resisted calls to divulge the location of its headquarters. Tether, the $10 billion stablecoin, is dogged by allegations that the token is not properly backed by dollar reserves. Just this week, the CEO of Canadian exchange Coinsquare was forced to resign after the local regulator found the exchange regularly made fake trades on the platform.

“Our customers love it, the transparency that comes with it,” Ehrlich said.

Yet another benefit: More listings might allow stock investors to bet on individual or multiple executive teams and strategies within the cryptocurrency industry. That way they’re not limited to putting all eggs into the bitcoin basket, as envisioned by proposed issuers of a bitcoin exchange-traded fund, which has yet to win approval from the U.S. Securities and Exchange Commission. 

It goes without saying that a bet on Coinbase would represent a bet on broad growth in digital-asset markets, including “altcoins” like ether and litecoin.  

Grayscale, which offers cryptocurrency funds known as “trusts” that trade like stocks, reported last week that total capital inflows into non-bitcoin products had climbed seven-fold in the past 12 months. (Grayscale is a unit of the investment firm Digital Currency Group, which also owns CoinDesk.)  

More stock listings could satiate growing investor appetite for exposure to a broad range of cryptocurrencies, similar to the way a mutual fund might buy a big, vertically integrated energy producer like Exxon for exposure to oil, natural gas, refining and retail distribution — without ever having to venture directly into commodities markets. 

In an industry where market-leading companies can get away with not disclosing their headquarters, the trend could help bring a much-needed dose of transparency and trust to the digital-asset space. 

Tweet of the day Bitcoin watch

BTC: Price: $9,561 (BPI) | 24-Hr High: $9,682 | 24-Hr Low: $9,454

Trend: Bitcoin is trading flat so far on Friday, after three consecutive daily gains. 

The leading cryptocurrency by market value is changing hands around $9,560, representing a very slight decline on the day. Bitcoin was rejected near $9,700 during Thursday’s U.S. trading hours. Prices are still up over 3% on a week-to-date basis. 

The weak tone seen at press time could be associated with the renewed risk aversion in traditional markets. The major European stock markets are down over 1% at press time seemingly due to China-U.S. tensions. China has announced the closure of the U.S. consulate in the southwestern city of Chengdu in retaliation to the U.S.’s recent decision to shut down Beijing’s diplomatic mission in Houston.

While bitcoin may face selling pressure, the immediate bullish bias confirmed by Tuesday’s 1.5% gain would be invalidated only if prices find acceptance below $9,480.

A strong bounce from that level would reinforce the immediate bullish bias and shift the focus to $9,800 – the resistance of the trendline falling from the December 2017 to June 2019 highs.

If prices establish a foothold below $9,480, we may see a deeper decline toward $9,150 (July 21 low). 

Related Stories

• First Mover: Ethereum a Victim of Its Own Success as Fees Soar, Vitalik Complains
• 3 Reasons Bitcoin’s Price Could Soon Rise to $10K

Digital banking infrastructure provider Banxa is making a move into North American markets.

• In a strategic partnership announced Thursday, Australia-based Banxa plans to leverage custody and settlement infrastructure from exchange platform Zero Hash to provide the regulatory and technology means for its expansion.
• The partnership will see Banxa expand its fiat gateway API solutions for exchanges, wallets and other crypto-related businesses across North America.
• Banxa’s CEO, Holger Arians, said the startup was in the final stages of a Toronto Stock Exchange listing that would position the company as the “first crypto payment service provider to be publicly listed.”
• Zero Hash is a registered Money Service Business under the oversight of FinCEN, and is also a registered Money Transmitter in over 40 U.S. states.
• It was awarded a “BitLicense” allowing it to operate in New York State in 2019.
• Banxa already provides a fiat onramp for users of Binance and Edge Wallet, among others.
• It recently raised $2 million in a Series A funding round back in January of this year.

See also: Seed CX to Close Exchange, Focus on Settlements in Company Shift

Related Stories

• Carlos Ghosn’s $600K Bitcoin Escape Fee Paid via Coinbase
• Crypto Bank Hopeful Bitcoin Suisse Raises $48M in First-Ever Round
• Central Bank Board Member Says CBDCs Raise More Questions Than Answers
• Opera’s Built-In Crypto Wallets Have 170K Monthly Active Users

Bitcoin Suisse has raised more than CHF 45 million (~$48 million) in its first-ever funding round.

• The Series A was for 16.4% of total equity – 10% newly-created – and completed in four months.
• It was led by Roger Studer, the former investment head of Vontobel, a private bank that held approximately $215 billion in assets under management at the end of 2019.
• A Zug-based financial services provider for the digital asset industry, Bitcoin Suisse said the funding round pushed its valuation to CHF 302.5 million (~$327 million).
• Some of the funding will expand the company’s lending business and staking services, as well as the custodial solution.
• Bitcoin Suisse is applying for a Swiss banking and securities dealer license, as well as a banking license in neighboring Liechtenstein.
• A spokesperson told CoinDesk it had set aside funding for new product offerings, should the license applications be successful.
• In a statement, Bitcoin Suisse said H1 2020 performance had been strong, with strong growth across its product and service range – the Series A satisfied capital needs for the foreseeable future.
• The spokesperson previously told CoinDesk that Bitcoin Suisse had started initial preparations for a public listing – either an IPO or direct listing – for some time in the next few years.
• A security token offering (STO) might also be in the works, but this will depend on market demand and Bitcoin Suisse’s capital requirements.
• The spokesperson told CoinDesk Friday that the Series A put the bank hopeful in a “good position” to move ahead with its listing plans.

See also: Swiss Banks Enter the Age of Bitcoin

Related Stories

• Carlos Ghosn’s $600K Bitcoin Escape Fee Paid via Coinbase
• Binance’s Fiat-Gateway Partner Banxa Expanding to US
• Central Bank Board Member Says CBDCs Raise More Questions Than Answers
• Opera’s Built-In Crypto Wallets Have 170K Monthly Active Users

A board member of the Czech National Bank has provided a less than glowing opinion on the current viability of central bank digital currencies (CBDCs).

• Tomas Holub told 4H Production journalist Martina Sobkova in a wide-ranging interview on Tuesday that the role CBDCs had in providing direct liquidity to clients’ accounts was technically an “attractive concept.”
• However, Holub stopped short of praising CBDCs, which he dubbed “helicopter money,” because he hasn’t seen a solution that answers outstanding questions surrounding the nature of CBDCs.
• Helicopter money is a term used to describe newly printed money that distributed publicly to stimulate an economy in a recession or or at times of zero interest rates.
• Those questions included whether digital currency would be anonymous or not, whether anti-money laundering (AML) standards would be applied to the anonymous variant, and if the currencies would be interest-bearing.
• When asking these questions, Holub said, many more arise and he is yet to see any CBDC project that provided full, detailed answers.
• Holub also took aim at Czech law, which he said lacked the power to give the central bank the authority to issue citizens credit in the form of digital currency due to European legislation standards.
• When asked if the Czech Republic would be a pioneer in CBDCs, he said the country’s share of currency in circulation is still fairly high and is growing long-term, countering the idea of a liquidity crisis that might prompt such a launch.
• Still, a digital currency from the central bank is a future possibility, Holub said.

See also: Fed Paper: Central Bank Digital Currencies Could Replace Commercial Banks – But at a Cost

Related Stories

• Carlos Ghosn’s $600K Bitcoin Escape Fee Paid via Coinbase
• Binance’s Fiat-Gateway Partner Banxa Expanding to US
• Crypto Bank Hopeful Bitcoin Suisse Raises $48M in First-Ever Round
• Opera’s Built-In Crypto Wallets Have 170K Monthly Active Users

Opera’s web browser is slowly amassing a following among those advocating for a decentralized internet, with 170,000 users now engaging with its built-in Ethereum, Tron and Bitcoin wallets every month.

• Announcing crypto wallet usage numbers for the first time Friday, the longstanding Norwegian browser company gave some context to its two years-long courting of the Web 3, decentralized application (dapp) and distributed computing communities.  
• While the firm would not provide a breakdown of the numbers by blockchain network, Charles Hamel, head of crypto at Opera, said Ethereum is “by far the most popular.”
• While the wallet engagement figures pale in comparison to Opera’s total monthly active user-base (about 360 million) they’re not quite as far off from similar web-wallet products. MetaMask, a wallet browser extension provider, measured 192,000 monthly active users in May 2019.
• Opera worked on Friday to woo yet more wallet users by announcing that decentralized application clearinghouse Dapp.com will now power its Web 3 app store.
• U.K. users will now also be able to access the crypto top-up feature that Opera had previously rolled out in the U.S. and European markets. Fiat-to-crypto bridge company Ramp Instant will provide the U.K. service, Opera said.

Related Stories

• Carlos Ghosn’s $600K Bitcoin Escape Fee Paid via Coinbase
• Binance’s Fiat-Gateway Partner Banxa Expanding to US
• Crypto Bank Hopeful Bitcoin Suisse Raises $48M in First-Ever Round
• Central Bank Board Member Says CBDCs Raise More Questions Than Answers