🔮 Genesis Strikes a Deal, Visa Meets Solana, SEC Enforces NFTs, Grayscale

Token Specific News

The Genesis of a Digital Deal

Digital Currency Group (DCG) has reached an in-principle agreement with Genesis creditors to address claims stemming from Genesis Global Holdco's bankruptcy. Genesis filed for Chapter 11 bankruptcy protection in January, revealing liabilities including $630 million in unsecured loans due in May 2023 and a $1.1 billion unsecured promissory note due in 2032. DCG's proposed resolution involves new debt facilities, including a $328.8 million first-lien facility with a 2-year maturity and an $830 million second-lien facility with a 7-year maturity. Additionally, DCG plans to make $275 million in four installment payments. If executed, this plan could result in estimated recoveries ranging from 70% to 90% for unsecured creditors in U.S. dollars and 65% to 90% on an in-kind basis, depending on the denomination of the digital asset.

Spot On

The 30-day moving average of Ethereum's (ETH) spot-to-futures volume ratio dropped from 0.21 in October to a low of 0.14 in July but has since rebounded, currently at 0.17, the highest since April. This trend, the longest upward movement this year, coincided with reduced volumes in both spot and futures markets for various assets, influenced by market cooldown, events like Terra's collapse and FTX's bankruptcy, and regulatory pressures. ETH futures volumes hit a low in August at $275 billion, the lowest since November 2020. ETH received less attention compared to Bitcoin and XRP this summer, but optimism remains for ETH futures and crypto ETFs, with expectations of SEC approval, similar to Bitcoin.

Source: The Block

"X"oxo - Twitter and Crypto

X, formerly known as Twitter and now associated with Elon Musk, has taken significant steps to dive into the world of cryptocurrencies by obtaining licenses in multiple U.S. states. These licenses allow X to function as a money or currency transmitter in seven U.S. states, including Rhode Island. With these licenses in hand, X has the capability to store, transfer, trade, and integrate cryptocurrency payments within its platform. This strategic move signals X's ambitious expansion into the cryptocurrency space, transforming from a traditional social media platform into a multifaceted ecosystem that includes cryptocurrency services. By acquiring these licenses, X aims to provide cryptocurrency payment and trading services to its users within the United States, reflecting its dedication to embracing the rapidly growing cryptocurrency industry. he platform previously rolled out support for BTC tipping in 2021 and followed up with NFT features for premium users last year.

MetaMask Introduces Bank and PayPal Cash-Out Options

MetaMask, a popular cryptocurrency wallet with over 30 million monthly active users, has introduced a new feature allowing users in the U.S., U.K., and parts of Europe to cash out their digital assets for fiat currency, including dollars, euros, and pounds. Users can send these funds directly to their bank accounts or PayPal balances. The move is aimed at providing a more seamless and self-sufficient Web3 experience by reducing intermediaries and enabling faster fiat conversions. MetaMask expressed its plans to expand this feature to more regions in the future, making it accessible to its global user community. The wallet, known for its compatibility with Ethereum and integration into various web browsers, continues to enhance its offerings to provide a user-friendly gateway to the world of cryptocurrencies and decentralized applications (dApps). MetaMask had recently introduced an Apple Pay option and a learning simulation platform, Metamask Learn, to educate users about Web3 concepts.

Visa Expands To Solana

Visa has expanded its stablecoin settlement capabilities to include the Solana blockchain, in addition to Ethereum, by partnering with merchant acquirers Worldpay and Nuvei for pilot programs. The company has already conducted live pilots, moving millions of USDC between its partners over the Solana and Ethereum blockchains to settle fiat-denominated payments authorized over VisaNet. This move aims to accelerate cross-border settlements and offer stablecoin payment options to clients, enhancing the speed and flexibility of funds transfers. Visa's inclusion of Solana as a supported blockchain for settlements makes it one of the first major payment companies to do so, signaling a growing interest in blockchain technology for traditional financial services. More Solana: Vitalik sells MakerDAO stake after co-founder Christensen suggests Solana-based blockchain

ETH Moderates Gas Prices Better Than The US

Top Ethereum developers, including Vitalik Buterin, have advocated for "layer-2" projects, secondary systems built on the Ethereum blockchain, to reduce congestion and transaction fees. This strategy appears to be working, possibly aided by Coinbase's layer-2 project called Base. Ethereum, which experienced high transaction fees (gas fees) during meme-coin mania in May, has recently seen a significant fee reduction. This decline is attributed to the growing availability and adoption of layer-2 solutions, which improve scalability. Even with the rapid success of Friend.tech, a web3 app that attracted over 100,000 users and generated $25 million in fees, Ethereum's gas fees have remained low. This is because projects like Friend.tech operate on the Base sub-network rather than the main Ethereum layer. Since Friend.tech's launch, Ethereum's daily gas fees have been 26% lower on average than before. Additionally, other well-established layer-2 networks like Arbitrum, Optimism, and zkSync are handling a substantial portion of Ethereum's transactions.

Source: FalconX Research

Regulation

NFT: Not That Free (from the SEC)

The U.S. Securities and Exchange Commission (SEC) has taken its first enforcement action related to NFTs, charging media company Impact Theory for selling unregistered securities through its $30 million NFT project called Founder's Keys. Impact Theory marketed itself as "the next Disney" and encouraged investors to see the NFTs as an investment in the business. As a result, Impact Theory has agreed to a cease-and-desist order, will pay over $6 million in fines, establish a fund to refund investors, and face regulatory consequences. This case highlights the SEC's increased scrutiny of the crypto industry, particularly NFT projects that make bold promises and raise substantial funds. NFT investors should closely monitor developments in this area as more regulatory actions may follow.

Source: Dune

MiCA Architect Takes Charge of EU's Digital Euro Push

Stefan Berger, the legislator based in Germany and the primary architect behind the EU's significant crypto regulation known as MiCA, has taken charge of legislative efforts aimed at passing a "digital euro." The European Central Bank has not yet made a decision regarding the issuance of a Central Bank Digital Currency (CBDC), which has become a contentious topic in both parliament and the general public. Berger is an advocate for CBDC, emphasizing that it enhances the European Union's monetary independence. However, he has also stressed that the success of the project hinges on the digital euro being as trustworthy as physical cash. See similar: Crypto bank SEBA obtains approval-in-principle in Hong Kong for crypto-related services

Tornado Crash

In recent developments, key members of the Tornado Cash team, including co-founder Roman Storm, who was arrested, co-founder Roman Semenov, who was indicted, and co-founder Alexey Pertsev, facing trial, have raised questions about whether this signifies a broader crackdown on privacy-focused cryptocurrency tools or primarily relates to allegations of facilitating money laundering for North Korea. The allegations center around their creation of a program and user interface enabling the laundering of cryptocurrency, potentially linked to North Korea's nuclear weapons programs. However, the charges are specific, involving conspiracy to operate an unlicensed money services business, conspiracy to commit money laundering, and conspiracy to violate economic sanctions, requiring the government to prove their knowing involvement. The case's complexity arises from Tornado Cash's developers' claim of losing control over the code and the focus on the user interface. Concerns within the crypto community persist, but some argue that the charges may be narrowly directed at these individuals rather than signaling a broader industry crackdown. The case's outcome remains uncertain, pending the presentation of evidence and legal arguments during the trial.

Gray Skies Ahead

Grayscale Investments secured a legal victory over the SEC in its quest for a spot bitcoin exchange-traded fund (ETF), with Bitcoin's price surging by 5.4% to $27,450 in response. The court opinion stated that the SEC must re-evaluate Grayscale's ETF proposal, emphasizing that the SEC's differential treatment of spot bitcoin ETFs and bitcoin futures ETFs lacked justification. The SEC has 45 days to request a rehearing, after which a final mandate will provide further details. This victory potentially opens the door for other firms, including BlackRock and Fidelity, that have sought spot bitcoin ETFs in recent months. Bloomberg analysts estimate a 75% chance of a spot bitcoin ETF by the end of 2023. See more: Grayscale Bitcoin Discount Hits 18-Month Low Amid SEC Court Win

Source: Yahoo Finance

London Stock Exchange Group Plans Blockchain-Powered Digital Markets Business

The London Stock Exchange Group (LSEG) is planning to establish a blockchain-powered digital markets business aimed at improving traditional financial asset trading. LSEG intends to create a comprehensive digital market ecosystem to streamline and cost-effectively facilitate capital raising and asset transfer across various classes. Following a year of feasibility assessment, LSEG is moving forward with plans, seeking regulatory approval to potentially launch a distinct legal entity for this digital markets initiative within the next year. The company is in discussions with regulators, the UK government, and the Treasury. The primary focus is on utilizing blockchain technology to enhance security, transparency, and accessibility in asset trading, with no incorporation of cryptocurrencies. This initiative aligns with the growing trend of real-world asset tokenization, which aims to increase liquidity and access to traditionally illiquid assets, gaining traction in the financial industry.

Chainlink, Swift Complete Tokenization Tests With Citi Bank, BNY Mellon, and Others

Swift has successfully conducted blockchain interoperability tests with over ten financial institutions, including Citi, BNP Paribas, and BNY Mellon. Partnering with Chainlink as the oracle provider, Swift established a connection with the Ethereum testnet Sepolia. In just over a month since launching its Cross-Chain Interoperability Protocol (CCIP), Swift and Chainlink demonstrated the transfer of tokenized assets between the testnet and other blockchains. These experiments focused on tokenizing traditional financial assets, a process gaining popularity. Swift's goal is to create a secure and fast connection between traditional finance and various public and private blockchains for tokenized asset transfers, highlighting the potential for multichain interoperability in the future.

Other Domestic Regulation Updates

• The SEC put off until October a decision on all spot bitcoin ETF applications
• DOJ Wants SBF's Proposed Expert Witnesses Barred From Testifying at FTX Trial
• Federal Prosecutors Take Aim at Bankman-Fried's 'Advice-of-Counsel' Defense

Other International Regulation Updates

• Half of the People in Turkey Now Own Crypto: Report
• Binance Mulls ‘Full Exit’ From Russia Amid Mounting Regulatory Pressure: Report
• US Judge Tosses Class Action Lawsuit Against Uniswap Labs
• New Pro-Crypto Thai PM Wants to Airdrop 10,000 Bhat to Every Citizen
• Binance Japan plans to triple number of listed tokens to 100

Pain & Gain

Pain

• Here Are The AI Celebrities You Can Date Right Now
• PayPal’s Stablecoin Sees Minimal Activity Three Weeks After Launch
• Bitcoin faces uncertain September despite Grayscale victory, say analysts
• Binance APAC head quits amid regulatory woes
• Binance will "gradually" end support for its BUSD stablecoin
• Espresso’s Gunter on tackling Ethereum’s MEV problem

Gain

• Future Ethereum Upgrades Could Allow Full Nodes to Run on Mobile Phones: Vitalik Buterin
• DYDX token approved to become native asset of upcoming dYdX Chain
• PancakeSwap Expands to Coinbase-Incubated Base Network
• Hashdex Submits Spot Bitcoin ETF Application with Novel Strategy
• Entrepreneurs Work to Help El Salvador Achieve its Bitcoin Goals
• OpenSea Decision to Quit Royalty Enforcement Roils NFT Market
• Raleon Raises $3.8MM Seed Round to Build “Embedded Quests” Marketing Too
• World Mobile Launches Token-Based Telecom Network on Cardano