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| Hey Insider! Welcome back to the Inside Cryptocurrency newsletter! Today’s issue covers Hong Kong’s first crypto licenses under the new licensing regime, the drop in Robinhood’s crypto trading revenue, Binance’s newly-appointed chief compliance officer, and several other most exciting stories from the crypto industry as the week nears to close. I hope you enjoy your reading! Doğa
p/dogayurduneri | |
| 1 | | Binance, the largest crypto exchange by trading volume, has appointed Kristen Hecht as its new Deputy Chief Compliance Officer (CCO) and Global Money Laundering Reporting Officer. The move comes nearly six months after Hecht joined Binance as the global head of corporate compliance in January. More: - Hecht will bring her 17 years of experience in financial crime compliance to the crypto exchange.
- The new CCO has work experience in several renowned companies and federal institutions, including Meta, HSBC China, and the U.S. Department of the Treasury.
- The appointment will see Hecht enhancing Binance's compliance program and overseeing money laundering teams by supporting them to identify and reduce financial crime.
- Hecht said she plans to proactively interact with regulators, intergovernmental organizations, and industry bodies to help develop compliance programs.
- Besides, the new compliance officer aims to collaborate with regulators, industry bodies, and business partners to eliminate financial crime risks in the long term.
- Binance also had to increase its workforce for compliance and investigations by 500% in 2022 after it came under fire from local regulators in several countries.
Zoom Out: - Hecht's appointment came amid a time Binance faced increased scrutiny by regulators in various parts of the world, including the U.S., Australia, France, and Belgium.
- The company also recently withdrew from several markets in the West, including Canada, the Netherlands, Cyprus, the U.K., and Germany, mainly due to compliance issues.
- Following the regulatory crackdown, Binance's several senior executives, such as chief strategy officer Patrick Hillmann, senior vice president for compliance Steven Christie, and general counsel Hon Ng, parted ways with the company.
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| 2 | |  What the numbers say: Crypto and stock trading platform Robinhood's new earnings report for Q2 2023 shows that the firm's crypto trading revenue declined to $31M. The figure represents an 18% drop from the $38M revenue reported in Q1. The new figure also means that Robinhood experienced a decline in its crypto trading revenue for a fourth consecutive quarter. Besides, the app's crypto revenue accounted for 16% of the $193M revenue across all categories in Q2. On the other hand, the value of the platform's crypto assets under custody remained the same as the end of Q1 at $11.5M.
Relevance: During Q2, Robinhood had to delist Solana (SOL), Polygon (MATIC), and Cardano (ADA) after the popular tokens were labeled as unregistered securities in the U.S. Securities and Exchange Commission's (SEC) complaints against the two major crypto exchanges, Binance and Coinbase. The move was predicted to accelerate the decline in the platform's crypto trading revenue within Q2. Following the decision, the number of cryptocurrencies listed on Robinhood dropped to 15. Brands that should care: The increased crackdown by the SEC and other regulators in the U.S. on the crypto industry caused several other crypto-related platforms, including eToro and Revolut, to delist some tokens classified as unregistered securities in consecutive lawsuits. NOTE: Inside.com founder and CEO Jason Calacanis is an investor in Robinhood. | | | |
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| 3 | | Bankrupt crypto exchange FTX has filed a new legal motion, asking the court to exclude its Dubai unit, FTX Dubai, from its ongoing bankruptcy proceedings. The firm said the unit did not conduct any business activity before the bankruptcy and cannot reconstruct its operations. More: - The company also stated that a voluntary liquidation process by the laws of the United Arab Emirates (UAE) would allow a timely distribution of the positive cash balance.
- The court hearing on the request will happen on Aug. 23.
- FTX Dubai is mainly a subsidiary of FTX's European arm.
- The unit obtained a virtual asset service provider license from Dubai's Virtual Assets Regulatory Authority (VARA), the region's market regulator.
- The subsidiary currently has $4.5M of holdings in various accounts, with $4M restricted by VARA as security for the license.
- VARA confirmed it would release the restricted cash in case of a potential liquidation process.
Zoom Out: - FTX, previously the third-largest crypto exchange, filed for Chapter 11 bankruptcy in November 2022, with all the 130 entities under the roof of FTX Group.
- The downfall followed the claims that the former CEO, Sam Bankman-Fried (SBF), used customer funds in FTX to compensate for losses at the sister company Alameda Research.
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| 4 | | Coinbase, the largest U.S. crypto exchange, has announced that it would open Base, its Ethereum-powered Layer-2 blockchain network, to the public on Aug. 9. Following the public launch, users can bridge their Ether (ETH) to Base. More: - Base already went live for developers in July, allowing them to test their applications on the new network.
- The company also recently launched a series of events, Onchain Summer, to let creators and developers make art or build applications on Base.
- Participants of Onchain Summer include some major brands such as beverage giant Coca-Cola, video game company Atari, and NFT marketplace OpenSea.
- The popular crypto exchange built Base using Optimism's open-source developer toolkit OP Stack and first introduced it in February without any plan to release a native token for the network.
- At the time, the firm defined Base as a bridge between its users and other blockchain-based projects, promising a secure and low-cost area for developers to build decentralized apps (dApps) on blockchains and Layer-2 networks.
Zoom Out: - Rival Binance, the world's largest crypto exchange by trading volume, also has its own blockchain network called BNB Smart Chain with its native token, BNB.
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| 5 | | Hong Kong has granted its first crypto license under the new licensing regime to HashKey. The license has expanded the scope of the firm's business from catering only to institutional investors to retail customers. More: - HashKey's license approval was followed by the announcement of OSL, which also obtained a crypto license in Hong Kong under the new regime.
- Before obtaining the licenses under the new regulations, HashKey and OSL were the only two licensed crypto exchanges in Hong Kong.
- However, the former voluntary licensing program only allowed the companies to serve professional clients.
- Hong Kong officially approved its long-awaited licensing regime for crypto exchanges in May to turn the region into a crypto hub, allowing retail investors to trade major tokens such as Bitcoin (BTC) and Ether (ETH) on licensed platforms.
- As part of the new regime, the region's Securities and Futures Commission (SFC) started accepting applications for digital asset trading platform licenses on June 1.
- Through the new regulations, Hong Kong aims to prevent risky practices seen in last year's prolonged crypto winter, mainly triggered by the collapses of high-profile crypto projects, including the previously third-largest crypto exchange FTX and multi-billion dollar Terra ecosystem.
Zoom Out: - Earlier this year, several leading crypto firms, such as OKX, Huobi, Bitget, and Amber Group, also revealed their plans to apply for a license under Hong Kong's new licensing regime.
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| 6 | | The Tel Aviv Stock Exchange (TASE), Israel's only public stock exchange, has announced that it will offer a range of new crypto products and services in collaboration with the digital asset platform Fireblocks. The partnership between the two platforms will allow TASE to provide regulated institutional clients with digital asset solutions. More: - TASE's clearing executive, Orly Grinfeld, defined the collaboration as a milestone for the global digital assets landscape.
- Fireblocks co-founder and CEO Michael Shaulov also said the digital asset products and services explored by TASE would play foundational roles in the future of Israel's economy.
- The Israeli stock exchange first hinted at its plans towards the crypto market in October 2022, announcing its intention to create a blockchain-based digital asset platform.
Zoom Out: - Several other leading stock exchanges, including the London Stock Exchange Group (LSEG) and Nasdaq, also previously explored the potential of crypto services. However, some abandoned their plans amid an increased regulatory crackdown on the industry.
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- Binance has denied the reports that China is its largest market, with more than $90B in trading volumes, despite the country's crypto ban, saying its website is blocked in China.
- Hong Kong-based crypto custodian Hex Trust has registered with the regulatory authorities in France, clearing the way to offer digital asset custody and trading services to French users.
- The Australian Securities and Investments Commission (ASIC) has filed a lawsuit against Israeli social investing and trading platform eToro, alleging the firm violated regulations related to the crypto derivative products.
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 | Staff Writer | | Doga is a tech and science editor who has been writing news for nearly 10 years. She worked for leading tech platforms and mainstrem media channels as an editor and presenter throughout his career. Then, she carried her know-how to more than one platform. She is a part-time cat lover and binge-watcher, and also fond of science, space, and emerging tech. She always has a story to tell. She is a bit addict to the laughter and -unfortunately- the '90s culture. | | This newsletter was edited by Christopher Hachey | |
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