BitDigest - Friday November 1, 2019
Bitcoin is flat following an All Hallows’ Eve flash crash when bitcoin slid to $7,720 before recovering minutes later
Global regulators looking at capital requirements for crypto lenders
European governments issue new fraud warnings to market
The Headlines
Global Regulators Discussing Capital Requirements for Crypto Lending
The Basel Committee on Banking Supervision, a committee of banking supervisory authorities from the leading financial markets, said they plan to consider how much capital lenders should be setting aside to cover risks associated to digital asset holdings. “The Committee reiterated its view that the prudential treatment of banks’ crypto asset exposures should appropriately reflect the high degree of risk of crypto assets,” the committee said, adding “Committee will seek the views of stakeholders on a wide range of issues related to the prudential treatment of crypto assets,…[and] will consider whether any further regulatory or supervisory measures are warranted to help achieve this outcome.”
Bahamian Government Considers Expanding Release of Digital Sand Dollar
The Central Bank of the Bahamas is exploring the release of its digital currency project into the Abaco islands along with the scheduled release into Exuma district. Central Bank Governor John Rolle made this announcement saying the technology driving digital currency has the power to make economies more resilient after a natural disaster. While the central bank has been planning to introduce their digital currency to Exuma by the end of the year, Rolle explained that releasing the “Sand Dollar” to Abaco sooner rather than later could allow for a quicker turn-around of the island’s economy. “It will allow the Bank to test aspects of the emergency wireless communications features that would enable rapid financial services recovery and to connect with many retail businesses early in their recovery process,” he said.
MFSA Issues Warning Highlighting Unregistered Crypto Businesses
Malta’s Financial Service Authority (FSA) has issued another warning to investors to highlight the ongoing practice of false and deceitful statements in the crypto world. The FSA has identified a new companies, Bitcoin Future, that is promoting itself by using fake news and claiming it is a registered Maltese companies authorized to provide financial services in the country.
Belgium Adds its Own Warning Against New Crypto Exchanges
Belgium’s financial regulator, the Financial Services and Markets Authority (FSMA), has updated its list of companies offering fraudulent investment in digital currencies. The FSMA added 9 new websites to a list of trading platforms it has identified for showing signs of fraud. The exchanges “claim to have specialists who will manage your investments for you. You are told that your funds can be withdrawn at any time or that they are guaranteed. In the end, the result is always the same: the victims find themselves unable to recover their money!” the FSMA explained.
Mt. Gox Trustee Delay Issuance of Rehabilitation Plan to Q1'20
Nobuaki Kobayashi, the Japanese Rehabilitation Trustee in the Mt. Gox settlement case, says it is no longer “practically possible” to have the necessary discussions with all creditors within the previously allowed time period and has, therefore, filed a motion in the Tokyo District Court to extend his deadline to submit a Rehabilitation Plan to the end of Q1’20.
Market Data
Futures Have Soothed Bitcoin Marketplace
According to data from 13 top crypto exchanges, bitcoin futures trading has group to almost 50% of spot bitcoin markets. This evolution of the leading digital currency by market cap has reduced volatility, increased liquidity, broadened the investor base, improved portfolio management and soothed regulatory concerns.
Exchange and Product News
New Liquidity Pool Coming to European Marketplace
Mercury Digital Assets and UniCrypt Group have teamed up to create one of the largest compliant liquidity venues in Europe providing an end to end solution for retail and institutional customers alike. The liquidity pool will focus primarily on cryptocurrencies and fiat, but will explore adding other asset backed tokens and security tokens as the market develops. The centralized liquidity will not only benefit users to get filled at the best execution, but should also minimize settlement times regardless of the blockchain or trading pairs.
BitMex Mistakenly Releases Email Addresses of All Users
Expect an increase in crypto spam and phishing attacks. BitMex mistakenly sent out a mass email showing the email addresses of all account holders. The company sent an email and did not use the blind copy feature on the message.
Harbor Receives SEC's Transfer Agent License
The Harbor digital asset platform has received a transfer agent license from the US States Securities and Exchange Commission. Harbor will now be able to offer token ownership using the SEC’s Reg A+ offering structure. Harbor can now facilitate the full life cycle of security token issuance as well as regulated trading, strengthening its appeal to companies seeking to do security token offerings.
Binance has quietly launched fiat trading with the Russian ruble. CEO Changpeng Zhao (“CZ”) posted a tweet saying, “$RUB support on @Binance was silently release[d] yesterday…Enjoy!”
Thoughts on the Ecosystem
Digital Gold Needs to Have Consumer Use to Drive Value
Intercontinental Exchange’s (ICE) Jeffrey Sprecher, says bitcoin needs to become a medium of exchange before it becomes a long-term store of value. The ICE CEO made this statement about digital gold while describing the evolution of traditional gold. “Gold became a store of value because at one point it was a currency,” he said. “We had gold coins, it was in circulation, and over time because of the nature of its ability to spend, … it became a store of value and today, you know, in a crisis we all accept gold as a form of payment,” he said.
Libra is About Economic Integration and Digital Identity
Blythe Masters, the former Chief Financial Officer at JP Morgan’s investment Bank and subsequent CEO of Digital Asset Holdings, thinks Libra’s offer of “economic integration” and digital identify is “worthy of being solved” and Facebook’s immediate access to 2.7 billion active users offers “great promise.” Masters believes that Libra is “technologically viable” and stressing that although it is currently being met with political , she wants to highlight the difference between Facebook, the company, and Libra, the members run association.
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BitDigest is a weekday news update on digital currencies and blockchain technology for friends and partners of Parsons & Whittemore, a single family office based in Rye Brook, New York. Receipt of BitDigest is by approval of the Author. The commentary, analysis, opinions and recommendations in this newsletter represent the personal and subjective views of the Author, and are subject to change at any time without notice. The information provided in this newsletter is obtained from sources which the Author believes to be reliable. However, the Author has not independently verified or otherwise investigated all such information. Neither the Author nor any of the Author's affiliates make any guarantee or other promise as to any results that may be obtained from reading this newsletter. While past performance may be analyzed in this newsletter, past performance should not be considered indicative of future performance. No reader should make any investment decision without first consulting his or her own financial advisor and conducting his or her own research and due diligence. The Author is not making a solicitation or offer to buy or sell any securities of any kind.