Liquid Staking, Stable Coins, Singapore New Legislation, FTX Victory Lap

Check out our latest Thematic Research piece: From Sabotage to Mastery: Investing Beyond the Hype Cycle
Our latest blog post takes a deep dive into the evolution of institutional digital asset investment strategies. We challenge the short-term, extractive approaches that have dominated the landscape, arguing for fundamental strategies that enable long-term growth and sustainability.

Token Specific News

A Blur-y Token Incentive Model

Blur's Token Incentive Model revolves around utilizing tokens a means to attract and retain users. They have introduced a campaign airdrop system that links future airdrops and token distributions to loyalty programs, departing from the conventional approach of one-time lump sum airdrops. This innovative strategy has propelled Blur to a leadership position in the (NFT) industry, triggering a shift in user acquisition and retention approaches. Blur's model, which focuses on continuous incentives and sustained loyalty, holds promise for fostering ongoing customer engagement. However, it remains to be seen if this approach represents a progressive step forward or the definitive solution to ensuring lasting user retention.

Source: Messari

On The Ledger

Ledger, a well-known provider of cryptocurrency hardware storage devices, is targeting institutions with its new open, enterprise-grade trading platform called Ledger Enterprise Tradelink. The platform is designed to meet the risk management and regulatory requirements of institutional investors. Ledger has partnered with several crypto exchanges and brokers, including Crypto.com, Bitstamp, Huobi, Uphold, CEX.IO, and others, to offer custodial trading services. The goal is to provide transparency and alternatives to vertically integrated crypto exchanges, addressing concerns about asset security and regulatory compliance. Ledger's platform allows users to trade without having funds stored on the exchange, reducing exchange-related risks. The network is open to multiple custodial partners, ensuring flexibility for firms and mitigating lock-in risks. Ledger Enterprise also offers real-time tracking of collateral balances and operational status for participants, with no transaction fees. Ledger's expansion into the institutional trading space is a response to increased security and regulatory concerns within the crypto industry. See similar: Evolution of Web3 Communities

Like An 80's Rock Band, FTX Doesn't Know When To Quit

FTX CEO John J. Ray III is moving forward with plans to revive the bankrupt cryptocurrency exchange, FTX.com, according to sources. The company has started soliciting interested parties and engaging in preliminary talks with potential investors, potentially through a joint venture. Existing customers may be offered a stake in the relaunched entity as compensation for their claims. The relaunch may involve rebranding, but there is no indication of a restart for FTX's U.S. exchange. Among the interested parties is blockchain technology company Figure, while others have until the end of the week to express their interest. FTX and Figure have not yet responded to requests for comment.

Lido Wants To Put Its Money Where Its Mouth Is

In a daring move that would make even the bravest traders raise an eyebrow, the Lido community is currently engaged in a high-stakes voting frenzy to decide whether to go all-in and stake every last bit of their precious ETH from the treasury into their very own protocol, with hopes of generating some sweet yield to cover their operational expenses. With estimates suggesting a potential extra $2 million annually, it's no wonder the treasury management committee is feeling bullish. Of course, there are concerns about smart contract risks and the ever-fluctuating price of ETH, but some committee members see it as a bold testament to Lido's unwavering confidence in its own technological prowess.

Source: Dune

Live and Let DAI

MakerDAO's decentralized stablecoin DAI has significantly reduced its reliance on USDC collateral, decreasing it from 51% to 9.4% since the beginning of 2023. Instead, DAI now relies on real-world assets, primarily short-term U.S. Treasury bonds, as its largest source of collateral. Additionally, Ether and Lido's stETH token contribute significantly to DAI's backing. This diversification of collateral is a crucial step in mitigating risks and vulnerabilities associated with relying heavily on a single type of collateral, particularly centralized stablecoins. The move aims to enhance the stability and resilience of DAI and strengthen the overall DeFi ecosystem in which DAI plays a vital role. See similar: MakerDAO Boosts U.S. Treasury Holdings by $700M to Back DAI Stablecoin With Real-World Assets

Regulation

Escargot, Bucatini, and Crypto

The European Central Bank (ECB), under the leadership of President Christine Lagarde, is aiming to make a decision on the creation of a digital euro by the end of October. Lagarde clarified that while the central bank's approach to a central bank digital currency (CBDC) is "accelerated," widespread adoption of a digital euro is not imminent, and a final decision has not been reached. After the governing council meeting in October, there will be a phase of piloting, experimenting, and refining before any potential launch takes place. Lagarde emphasized the importance of ensuring the preservation of the euro's value and upholding the currency's sovereignty in the face of digital advancements.

Coinbase Is A Bit Sensitive

Cryptocurrency exchange Coinbase has filed a motion to dismiss the SEC's case against it, arguing that the SEC lacks authority and its position is legally unfounded. Coinbase asserts that the tokens in question don't meet the criteria of "investment contracts" and that the SEC should have formally changed its interpretation. The motion cites equitable estoppel and claims that the SEC was aware of Coinbase's processes without objections. Coinbase also argues that recent changes in the SEC's stance should prevent legal remedies, as the regulator initially deferred to Congress and later asserted its authority. The exchange maintains that no statute allows retroactive regulation and accuses the SEC of ignoring rulemaking requests and petitions.

Even The SEC's Poster Child Is In Trouble

Prometheum gained attention when its CEO testified in the U.S. House, claiming a viable compliance path for digital asset firms. However, there is debate over whether Prometheum, a licensed broker-dealer with no tradable assets, truly offers a compliant solution for digital asset exchanges. The CEO asserts that the platform follows SEC guidance for digital asset securities, but doubts have been raised by others. There are concerns that Prometheum might be used as a distraction from addressing the regulatory gap. The specific tokens available for trading remain undisclosed. Prometheum was previously critical of the SEC's lack of guidance but changed its stance after becoming a Special Purpose Broker-Dealer. The Blockchain Association has filed a FOIA request to uncover potential connections between the SEC and Prometheum. While some see Prometheum's registration as a positive step against crypto fraud, others believe it falls short in defining digital asset security consistently.

Singapore's MAS Orders Crypto Firms to Keep Customer Assets in a Trust by Year-End

The Monetary Authority of Singapore (MAS) has introduced new regulations for crypto service providers, mandating the deposit of customer assets under a statutory trust to enhance protection and enable asset recovery. Lending and staking services are now restricted for retail customers but permitted for institutional and accredited investors. The MAS is seeking public feedback on legislative amendments and remains open to adjusting its stance in response to market developments. Compared to Hong Kong, Singapore's requirements are relatively less strict. The MAS aims to support technological progress while cracking down on illicit activities in the crypto industry. See more: See more: Singapore Regulator Bans Crypto Exchanges from Lending, Staking for Retail Investors See more: Thailand Follows Singapore, Bans Crypto Exchanges From Offering Lending Services

SEC Wants Celsius To Go Cold

Celsius, a bankrupt crypto company, has received court approval to sell or convert some of its cryptocurrency holdings starting from July 1. The assets eligible for sale or conversion include non-Bitcoin and non-Ethereum tokens, excluding those associated with Withhold or Custody accounts. With over $600 million in crypto assets, Celsius primarily holds Bitcoin and Ethereum. The exact amount to be converted or sold is uncertain following the successful bid by Fahrenheit Consortium. Celsius is engaging in discussions with the SEC and state regulatory agencies. To comply with U.S. securities laws, the company will sell or convert tokens labeled as securities while considering applicable exemptions. Celsius aims to maximize the value of altcoins by converting them into Bitcoin or Ethereum. In the coming weeks, the company will prepare an amended Chapter 11 plan that involves distributing cryptocurrency to creditors. Celsius filed for bankruptcy in July 2022 following the collapse of the algorithmic stablecoin Terra.

Source: Arkham Intelligence

Everybody Hates Binance

BaFin, the German financial regulatory authority, has reportedly informed Binance that it will not grant the exchange a crypto custody license. The nature of the denial, whether it is a formal decision or an intention expressed during ongoing discussions, remains unclear. Binance has not confirmed or denied the report but stated that it continues to work to meet BaFin's requirements. This comes after Binance's European banking partner, Paysafe Payment Solutions, announced the withdrawal of support for the exchange. Binance is now seeking a new European banking partner. The denial of a license from BaFin would be a blow to Binance, which has recently faced challenges such as termination of operations in the Netherlands and legal actions from the SEC and French authorities.

Other Domestic Regulation Updates

• Coinbase’s Unusual Legal Strategy: A Raft of Amicus Briefs
• SEC ‘reserves its rights’ to challenge Celsius transactions ‘involving crypto assets'
• Nevada Places Prime Trust in Receivership After BitGo Withdraws Acquisition Offer
• Wall Street-Backed Bitcoin ETF Applications Pile Up After BlackRock’s Filing
• CME Group to add ether/bitcoin ratio futures in July pending regulatory approval

Other International Regulation Updates

• Crypto exchange KuCoin is implementing mandatory know-your-customer (KYC) procedures for all clients starting from July 15
• Hong Kong stacks Web3 task force with top finance regulators

• Central Banks Propose CBDC, Stablecoin Standards; Amazon, Grab, and Fazz Running Trials
• Credit Agricole and Santander’s CACEIS Registers as Crypto Custody Provider in France
• Hong Kong Is 'Embracing' Web3 With New Task Force

Pain & Gain

Pain

• If Binance isn’t compliant, then practically no other global trading platform is: Binance co-founder
• Crypto Exchange Gemini Tables 'Final' $1.5B Offer for Barry Silbert's DCG
• Attacker pockets $10 million from Poly Network security attack
• Vitalik Buterin voiced sympathy toward crypto projects like Solana
• Traders Short TUSD Stablecoin After Prime Trust Halts Withdrawals

Gain

• Metaverse Projects Attract 44% Of 2023 Web3 Investments
• Coinbase offering 4% yield on USDC held by customers, rivaling major banks
• Cross-border stablecoin payments testing underway at SAP
• Ether, the token of the Ethereum blockchain, jumped 61% in the first six months of the year. Traders are now betting the rally could extend in the second half
• Bitcoin Dominance Rises To Highest Level In Over Two Years
• Mastercard to continue crypto foray with beta launch of ‘blockchain app store’
• Ark, 21Shares look to ‘strengthen’ bitcoin ETF filing after BlackRock joins race
• Dmitri Cherniak NFT (“The Goose”) Fetches $6MM in Sotheby’s Auction
• Polygon Proposes Zero-Knowledge Overhaul For PoS Chain