[co-author: Lauren Bass]
NCUA Seeks Comment on DeFi, Crypto Firms Launch Products, Gain Licenses
By: Robert A. Musiala Jr.
The National Credit Union Administration (NCUA), a federal agency that charters and regulates federal credit unions, recently published a notice of request for information and comment on “the current and potential impact of activities connected to digital assets and related technologies on federally insured credit unions (FICUs), related entities, and the NCUA … including current and potential uses in the credit union system, and the risks associated with them.” According to the notice, the NCUA is seeking to learn how the credit union community is using emerging distributed ledger technology and decentralized finance (DeFi) applications. The NCUA is also seeking feedback on “the role the NCUA can play in safeguarding the financial system and consumers in the context of these emerging technologies.”
According to a press release this week, Ripple has completed its first “On-Demand Liquidity (ODL) service implementation in Japan, setting the stage to drive more adoption of crypto-enabled services in the region.” The service will reportedly leverage Ripple’s XRP cryptocurrency and be implemented through payments firms in Japan and the Philippines to “provide faster, more affordable remittance options for customers” in those countries.
In another recent announcement, cryptocurrency exchange Crypto.com has reportedly become “the first global cryptocurrency platform to receive an Electronic Money Institution (EMI) License from the Malta Financial Services Authority (MFSA).” The announcement notes that the license “allows Crypto.com to issue cards and offer bank transfers directly to consumers.”
A report published this week provided details on the expansion of cryptocurrency ATMs across the globe. Citing data from Coin ATM Radar, the report notes that “crypto ATM installations in 2021 have witnessed a spike of 71.73%, pulling up the numbers from 13,993 on Jan. 1 to 24,030 at the time of reporting.” According to the report, “Crypto ATMs can be accessed across 75 sovereign nations and are powered by 42 producers.”
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Reports Describe Developments in Decentralized Platforms and FinTech Funding
By: Kayley B. Sullivan and Robert A. Musiala Jr.
The MakerDAO Foundation recently announced that “MakerDAO is now completely decentralized.” MakerDAO is an Ethereum-based decentralized autonomous organization (DAO) that enables Dai, an ERC20 cryptocurrency designed to keep its value as close to one U.S. dollar as possible through an automated system of smart contracts. According to the announcement, “[t]he global Maker community is now responsible for every aspect of the Maker Protocol and the DAO.” The announcement states that “the DAO is now fully self-sufficient and the Maker Foundation will formally dissolve within the next few months.”
In another recent announcement, Uniswap Labs, “a software development studio that contributes to the Uniswap Protocol” and that provides the open source app.uniswap.org portal for interaction with the Uniswap Protocol, has “taken the decision to restrict access to certain tokens through app.uniswap.org.” The announcement includes a link to the full list of restricted tokens and notes that Uniswap Labs “monitor[s] the evolving regulatory landscape.” According to the announcement, the “action has no impact on the Uniswap Interface code, which remains open source, or the many other portals or locally run instances used to access the Uniswap Protocol.” The announcement distinguishes the app.uniswap.org portal from the Uniswap Protocol, which it describes as “a set of autonomous, decentralized, and immutable smart contracts” that “provides unrestricted access to anyone with an Internet connection.”
Late last week, CB Insights released its State of FinTech report for the second quarter of 2021. Among other things, the report notes that funding for Blockchain-related ventures has hit a record high, crossing $4 billion in the quarter. The largest reported deal was Circle, a cryptocurrency payment platform, which raised approximately $440 million. According to the report, Q2 was the largest funding quarter on record; mega-rounds drove the funding boom; South America led growth in both funding and deal count; and Fintech public exits reached new highs. The report discusses fintech financing trends in the payments, banking, digital lending, wealth management, insurance, capital markets, SMB and real estate sectors.
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Fashion, Sports, Art and Music: the NFT Market Continues to Boom
By: Lauren Bass
According to recent reports, a high-end Italian fashion house has partnered with a luxury digital marketplace to offer a haute couture collection of “fashion NFT (non-fungible token) wearables.” The one-of-a-kind digital pieces, inspired by the city of Venice, will be promoted during the house’s upcoming fashion shows in Italy in late August, and will reportedly be available to “wear” virtually through augmented reality.
In other NFT news, a multinational e-commerce platform has reportedly integrated an NFT marketplace, which will eliminate the need for third-party resellers and allow its merchants to issue and sell NFTs directly to consumers. The integration will support NFTs issued via Ethereum’s ERC-721 standard, Simple Ledger Protocol’s SLP token standard and Dapper Labs’ Flow blockchain. A major sports franchise team will reportedly be the first customer to take advantage of the new offering. The team will offer an exclusive digital collection, minted by Flow, featuring six unique pieces celebrating the legendary team’s iconic championship wins.
NFTs are also making their way into the not-for-profit arena. Earlier this month, a global nonprofit working to eradicate hunger reportedly commissioned three independent artists to create and release unique digital collectibles to help raise awareness for the organization’s sustainability programs. According to press releases, the NFTs will be auctioned on a community-owned digital marketplace, and the sale proceeds will help fund the nonprofit’s blockchain initiatives, including the creation of an agricultural network to introduce farmers to expanding markets.
Similarly, a major U.S. orchestra has reportedly released a series of classical music NFTs to raise funds to benefit musicians impacted by the COVID-19 pandemic. The series combines live orchestral performances captured on video, with behind-the-scenes concert footage, and various in-person VIP experiences. It also celebrates a historic musical event marking the first time many orchestral members had performed live since the coronavirus shutdown.
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OFAC Adds Bitcoin Address to SDN List, Anchorage Selected for USMS Services
By: Keith R. Murphy
This week the U.S. Department of the Treasury’s Office of Foreign Assets Control (OFAC) designated a Turkey-based financial facilitator for materially assisting al-Qa’ida, and separately designated a Syria-based fundraiser and recruiter for providing material support to Hay’et Tahrir Al-Sham, according to a press release. In related updates to OFAC’s Specially Designated Nationals (SDN) List, OFAC included a Bitcoin Network public key address associated with one of the individuals.
Anchorage Digital has been selected to provide digital asset custody and financial services to the United States Marshals Service (USMS), according to a press release by the company this week. To help the USMS handle its seized digital assets, Anchorage anticipates providing multiple cryptocurrency services to the USMS, including custody, wallet creation, management of blockchain forks and “transformation of token assets into coin assets.”
According to a recent report, Brazil’s civil police have seized $33 million in connection with an ongoing investigation into a purported cryptocurrency money laundering scheme. The allegations include that certain cryptocurrency exchanges acquired and sold bitcoin while knowingly operating on behalf of a criminal organization focused on laundering money through cryptocurrencies.
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