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| Hey Insider! A new regulatory approval granted to the crypto exchange Coinbase hit the headlines today, marking a milestone amid an uncertain regulatory environment. Today's Inside Cryptocurrency issue covers the details of this approval as well as some of other biggest stories in the crypto market, including Binance's decision to shut down its fiat-to-crypto payment platform, blockchain startup Nova Labs' new $5 mobile phone plan, crypto custodian BitGo's $100M funding, and more. Enjoy your reading, and if you find this newsletter useful, please share it with your friends and colleagues! Doğa
p/dogayurduneri | |
| 1 | | Coinbase, the largest U.S. crypto exchange, has received regulatory approval from the National Futures Association (NFA), a self-regulatory organization designated by the U.S. Commodity Futures Trading Commission (CFTC), to operate as a futures commission merchant (FCM). The approval will allow the company to offer crypto futures trading services to eligible retail customers in the U.S. More: - The move made the company the first crypto-native platform to directly offer traditional spot crypto trading services alongside regulated crypto futures to verified users.
- Coinbase's vice president (VP) of institutional product, Greg Tusar, defined the approval as a critical milestone, adding that the global crypto derivatives market accounts for roughly 75% of crypto trading volume worldwide.
- Tusar also said they would continue to work with regulators to obtain the necessary authorizations to offer certain products where regulations are clear and sensible.
- The approval came nearly two years after the company filed an application with the NFA to register as an FCM in September 2021.
- Coinbase will officially launch the new offering in the upcoming weeks.
Zoom Out: - The popular crypto exchange made its first major foray into the derivatives market by acquiring a registered futures exchange dubbed FairX in early 2022.
- The platform, rebranded as Coinbase Derivatives Exchange, started offering Bitcoin (BTC) and Ether (ETH) futures contracts to institutional clients in June.
- However, the latest approval from the NFA authorized Coinbase to provide the same derivatives to users directly through Coinbase's app without any third party.
- The company also launched a Bermuda-based international derivatives exchange dubbed Coinbase International Exchange for institutional crypto traders outside the U.S. in May, listing BTC and ETH perpetual futures.
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What the numbers say: The 19 tokens classified as unregistered securities by the U.S. Securities and Exchange Commission (SEC) in its legal proceedings have experienced a slight surge in trading volumes. The combined share of these tokens within the total crypto trading volume increased to 13.1%, up from 11.1% before the lawsuits. The share also reached as much as 14.5% within the two-month period. The rise means that the tokens in question are trading more, though their total market value has declined by 20% since the suits were filed two months ago. Relevance: In early June, the SEC filed two consecutive lawsuits against major crypto exchanges, Binance and Coinbase, over alleged U.S. securities law violations. In the complaints, the agency labeled 19 tokens listed on these exchanges as unregistered securities. These tokens reacted to the move with a sharp decline of 5.8% to 35% in price, with The Sandbox (SAND) taking the biggest hit. However, they experienced an increase of two percentage points in trading volumes as opposed to expectations. Brands that should care: Meanwhile, several trading platforms, including Revolut, eToro, Robinhood, and Bitstamp, have delisted some of the tokens mentioned in the lawsuits to prevent a potential legal action from the agency against themselves. The increase in trading came despite these consecutive delisting moves. Q: What will the SEC's lawsuits impact on the crypto industry in the long term? Share your thoughts with us in the comments box. | | | |
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| 3 | | Binance, the largest crypto exchange by trading volume, has shut down its fiat-to-crypto payment platform Binance Connect, previously known as Bifinity, citing its periodic reviews. The decision came more than a year after the platform launched in March 2022. More: - Binance Connect allowed merchants to accept payments in crypto, connecting crypto firms with the traditional finance (TradFi) system in order to help companies become crypto-ready.
- The service supported 50 cryptocurrencies and major fiat payment methods, including Visa and Mastercard.
- A Binance spokesperson said they periodically review the company's products and services to ensure that Binance's resources continue to focus on core efforts and long-term goals.
- The spokesperson also added that they consistently adapt and modify the business approach in response to changing market and user needs.
Zoom Out: - The move came at a time when Binance faced increased scrutiny by regulators worldwide, including the U.S., Australia, France, and Belgium.
- The platform also recently had to withdraw from several markets in the West, including Canada, Austria, the Netherlands, Cyprus, the U.K., and Germany, mainly due to compliance issues.
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| 4 | | The U.S.-based financial technology (FinTech) company PayPal has announced that it would temporarily halt crypto purchases for customers in the U.K. as of October. The firm said the move aims to help it better comply with the country's new rules on crypto ads. More: - As of Oct. 1, PayPal users in the U.K. will not be able to buy crypto through their accounts on the platform.
- However, U.K. customers will be able to continue to hold and sell their crypto funds on PayPal at any time.
- PayPal first launched the ability to buy and sell cryptocurrencies for customers in the U.K. in 2021.
- The move came nearly two months after the U.K.'s Financial Conduct Authority (FCA), the country's financial regulator, decided to tighten rules for crypto promotions.
- The new tougher rules will take effect on Oct. 8, shortly after PayPal halts the ability to buy crypto in the country.
- The company expects to relaunch the service in the U.K. in early 2024.
Zoom Out: - On the other hand, PayPal accelerated its efforts toward the crypto industry worldwide over the last several weeks.
- In early August, the company launched a new stablecoin pegged to the U.S. dollar (USD), PYUSD, becoming the first major financial services company to introduce its own stablecoin.
- The platform also recently hinted at its plans to launch a new feature dubbed Cryptocurrencies Hub that would allow users to hold, sell, purchase, send, and receive cryptocurrencies through their PayPal account.
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| 5 | | The U.S.-based crypto custody firm BitGo has raised $100M in funding from entirely new investors at a $1.75B valuation. CEO Mike Belshe said the new funding would be used for strategic acquisitions, with at least two deals being already under progress. More: - The participants of the fundraising round have yet to be disclosed.
- However, Belshe stated that the investors were based in the U.S. and Asia, while some of them were outside the crypto market.
- BitGo's current customers include the creditors of the bankrupt crypto exchange FTX, financial services firm Swan Bitcoin, blockchain startup Mysten Labs Inc., and sportswear brand Nike.
- Goldman Sachs Group Inc., DRW Holdings, and Galaxy Digital Ventures were among BitGo's previous investors.
- BitGo CEO underlined that their focus on being licensed and regulated helped them survive amid an uncertain regulatory environment for digital assets and the rough market conditions.
Zoom Out: - The latest funding came shortly after BitGo decided to terminate its acquisition deal with the troubled crypto custodian Prime Trust facing financial difficulties due to its exposure to the bankrupt crypto lender Celsius.
- Following the termination, Prime Trust filed for Chapter 11 bankruptcy protection.
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| 6 | | Nova Labs, a blockchain startup working on a decentralized wireless network, has announced that it would offer a mobile phone plan providing access to unlimited text, talk, and data for $5. The plan will initially only be available for Miami residents and people receiving an invite to the new offering. More: - Nova Labs' phone plan will be powered by more than 7,000 5G hotspots owned by individuals and businesses across the U.S.
- People signing up for the plan will be able to connect to the hotspots through their mobile devices using the Helium Network.
- When the phones are out of the coverage area of a hotspot, they will automatically start using the wireless network managed by T-Mobile, the second-largest U.S. carrier, as part of a partnership signed by two companies last year to launch a crypto-powered mobile service.
- Homeowners and businesses in the U.S. can buy the hotspots powered by the Helium Network for $1,500 to $7,000.
- In return, hotspot owners will receive 50 cents in crypto for each gigabyte of data provided to the customers.
Zoom Out: - Nova Labs, previously known as Helium Inc., was founded in 2013 and shifted its focus to crypto in 2018.
- The company has raised more than $250M in funding from venture capital (VC) firms so far.
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- Dubai's Virtual Assets Regulatory Authority (VARA) has issued a $2.7M fine against the crypto exchange OPNX, launched by the founders of the bankrupt crypto hedge fund Three Arrows Capital (3AC), for failing to comply with the local rules.
- Hardware crypto wallet manufacturer Ledger has partnered with PayPal to allow users to purchase cryptocurrencies in its mobile app through their PayPal accounts.
- Sportswear giant Adidas has unveiled a limited-edition sneaker that will be auctioned off and come with an NFT version in collaboration with BAPE.
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Term of the Day Rule of 40: Rule of 40 is a metric that analyzes the balance between the growth and profitability of a SaaS organization. Question of the Week Do you share details about your salary with your coworkers? Join the conversation |
INSIDE CRYPTOCURRENCY LEADERBOARD (30 DAYS) |
 | 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 Aaron Crutchfield | |
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