Crypto Offerings Launch by Major Investment Bank, Asset Manager and Insurer
By Keith R. Murphy
According to a recent report, a major multinational investment bank and financial services firm is now allowing its investment advisors to pitch bitcoin exchange traded funds (ETFs) to some clients. Specifically, the investment advisors are allowed to pitch two identified bitcoin ETFs to qualified clients, and the firm reportedly will monitor its clients’ portfolios to help ensure that they do not end up with excessive exposure to the asset class, which can be volatile. As noted in the report, the firm is the first major Wall Street bank to offer this opportunity.
In related news, a major U.S. crypto asset manager announced that it has launched two new investment trusts, the Bittensor Trust and the Sui Trust, according to a recent press release. Regarding the launch, the company’s Head of Product Research stated in the release that “[w]e are excited to add Bittensor and Sui to our product suite, and believe Bittensor is at the center of the growth of decentralized AI, while Sui is redefining the smart contract blockchain.” The two trusts reportedly are available for daily subscription by qualified individual and institutional accredited investors.
In a final development, a well-known U.K.-based insurance and reinsurance marketplace is now backing protection policies for digital assets arranged on the Ethereum blockchain, according to a recent report. The policies reportedly can be paid for on-chain using cryptocurrency, and can benefit by utilizing a blockchain to streamline intermediary-heavy paperwork. The CEO for one of the marketplace’s coverholders is quoted in the report as stating, “Whether it’s to pay in USDC or native crypto, or to place policies completely on-chain with the blockchain helping coordinate between a broker, the insured, and the insurers, we think this is a seminal piece of infrastructure.”
For more information, please refer to the following links:
Foreign Crypto Companies Launch Products; $1B in Tokens Set to Unlock
By Robert A. Musiala Jr.
According to recent reports, Gibraltar-based Xapo Bank recently launched banking services in the U.K. that offer customers the ability to earn interest on accounts holding bitcoin (BTC). The accounts also reportedly allow customers to send transactions valued up to 1 million British pounds and make payments to U.K.-based crypto wallets and bank accounts. The new offering was launched after Xapo completed a regulatory process of “passporting” its Gibraltar banking license to the U.K.
In more foreign-based news, according to a recent press release, cryptocurrency exchange Bitstamp has announced a partnership with a major U.S. fintech company to enable the company’s “fiat-to-crypto onramp” across the EU. The press release notes that the collaboration “brings together two of the most trusted and reliable fintech brands in the world, allowing consumers across the EU to easily purchase cryptocurrencies directly.” According to the press release, developers can integrate the U.S. company’s “crypto onramp directly into their products with just a few lines of code, while [the company] and Bitstamp handle the underlying complexity.”
A recent report highlights that nearly $1 billion in token project unlocks are expected to occur in the month of August. Some of the more notable expected unlocks include:
- Optimism (unlocked 31.3M OP tokens on July 31 valued at approx. $55M)
- dYdX (unlocked 8.33M DYDX tokens on Aug. 1 valued at approx. $11M)
- Sui (unlocked 64M SUI tokens on Aug. 1 valued at approx. $50M)
- ZetaChain (unlocked 54M tokens on Aug. 1 valued at approx. $35M)
- Wormhole (unlocked 600M W tokens on Aug. 3 valued at approx. $180M)
- ImmutableX (unlocked 32.5M IMX tokens on Aug. 9 valued at approx. $49M)
- Aptos (unlocking 11.31M tokens on Aug. 12 valued at approx. $80M)
- Sandbox (unlocking 205M SAND tokens on Aug. 14 valued at approx. $69M)
- StarkNet (unlocking 64M STRK tokens on Aug. 15 valued at approx. $35M)
- Arbitrum (unlocking 92.6M ARB tokens on Aug. 16 valued at approx. $67M)
- Avalanche (unlocking 9.5M AVAX tokens on Aug. 20 valued at approx. $268M)
For more information, please refer to the following links:
Reports Provide New Data on Growth of Stablecoin Market
By Robert A. Musiala Jr.
A major U.S. cryptocurrency exchange recently published a report analyzing the current role of stablecoins in the global payments system. The report’s findings include the following: (1) the stablecoin market settled more than $10.8M worth of transactions in 2023, or $2.3T excluding “inorganic” activity, like bots or automated transactions; (2) stablecoin volumes are growing by 17 percent year over year; (3) stablecoins are increasingly being used to construct robust payment systems on crypto rails, facilitating remittance payments and streamlining cross-border transactions; (4) the average cost of sending $200 is still 6.35 percent of the transfer amount globally, while comparatively, the average transaction cost of sending remittances using stablecoins is 0.5 percent to 3.0 percent of the transfer amount; and (5) today stablecoins are primarily used to allow crypto investors to trade in and out of digital assets on both centralized and decentralized exchanges.
Tether, the issuer of the USDT stablecoin, recently published a blog post releasing the company’s Q2 2024 attestation and Consolidated Financials Figures and Reserves Report. Among other things, the blog post states that the company reported $5.2 billion in profit in the first half of 2024. The blog post also states that Tether holds over $97.6 billion in direct and indirect ownership of U.S. Treasuries. According to the blog post, that figure would rank Tether as 18th among countries holding U.S. Treasuries.
For more information, please refer to the following links:
NY DA and FBI Address Crypto Scams, Report Analyzes Tornado Cash Sanctions
By Christopher Lamb
According to a recent press release, the Manhattan District Attorney’s (DA) Office has announced charges against an individual for stealing from customers of Coin Dispute Network, a sham cryptocurrency asset recovery business. According to the release, after collecting a fee to trace and recover cryptocurrency, the company kept the fee and “extracted additional Ethereum from at least 3 customers by making false promises of asset recovery and creating false blockchain reports.”
The FBI recently released a Public Service Announcement (PSA) alerting consumers of a growing trend of scammers impersonating cryptocurrency exchange employees to steal funds from customers. According to the PSA, the scammers, contact victims pretending to be an exchange employee, tell the victim there is a compromise or problem with the victim’s account, and then tell the victim they must safeguard the account by providing log-in information, clicking a link or providing identification information. The scammers use this information to access the account and steal the victim’s funds. The PSA gives tips for consumers to protect themselves, including, among other things, not responding to any kind of unsolicited attempt to address account problems or compromises – and reporting the attempt to the FBI.
The Federal Reserve Bank of New York recently released Staff Report no. 1112 “Regulating Decentralized Systems: Evidence from Sanctions on Tornado Cash.” The Report analyzes the sanctions that were imposed on Tornado Cash (TC) – an Ethereum smart contract protocol “tumbler” that obscures the transaction trail and source of crypto funds – and the effect that the sanctions have had on TC transaction volume and diversity of users. According to the report, the sanctions had an “immediate and lasting impact,” but “net flows into TC contracts recover to and surpass pre-announcement levels for most pools.” Further, the Report indicates that the number of actors that process TC transactions is shrinking, “indicating a fragility to sustainability of censorship-resistance.”
For more information, please refer to the following links:
DeFi Hacks Continue
By Robert A. Musiala Jr.
DeFi hacks continue to plague the crypto industry. Ronin Bridge, a major cross-chain bridge, recently suffered a $12 million hack; however, reports indicate the attack was conducted by white-hat hackers who intend to return the stolen funds. The white-hat hackers reportedly stole 4,000 ETH and $2 million USDC. In another recent hack, the Nexera protocol reportedly lost $1.5 million in a smart contract exploit. And in a third incident, the Convergence protocol lost approximately $210,000 in a hack that also plunged the market price of its CVG token.
For more information, please refer to the following links:
Ripple Case Reaches Final Judgment as Digital Assets Law Continues to Evolve
By Robert A. Musiala Jr.; Joanna F. Wasick; Isabelle Corbett Sterling; Teresa Goody Guillén; Jonathan A. Forman
On Aug. 7, the U.S. District Court for the Southern District of New York issued its judgment in U.S. Securities and Exchange Commission v. Ripple Labs, Inc., marking the end of district court- level proceedings in the highly watched litigation. While the decision will likely be appealed, the judgment marks a milestone in the case and solidifies key holdings from the Court’s July 13, 2023 summary judgment decision.
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