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| Hey Insider! Welcome back to the Inside Cryptocurrency newsletter! Cathie Wood-led ARK's application for the first U.S. spot Ether exchange-traded fund (ETF) hit the headlines today after the consecutive spot Bitcoin ETF applications from the asset management giants. Today's issue covers the details of this application as well as several of the other biggest stories from the crypto market, including Google's updated ad policy for NFT games, Tornado Cash co-founder pleading not guilty to criminal charges against him, the amendment in the crypto accounting rules for the companies, and more. Enjoy your reading, and if you find this newsletter useful, please do not forget to share it with your friends and colleagues! Doğa
p/dogayurduneri | |
| 1 | | Cathie Wood-led investment management firm ARK and billion-dollar investment manager 21Shares have submitted an application with the U.S. Securities and Exchange Commission (SEC) to launch a spot Ether (ETH) exchange-traded fund (ETF) in the U.S. If approved, the offering will mark the first U.S.-based ETF backed by Ether, the second-largest cryptocurrency by market cap. More: - The fund would trade under the ticker "ARKE."
- The move followed the consecutive applications by a number of investment management giants from traditional finance (TradFi), including WisdomTree, BlackRock, Invesco Galaxy, Valkyrie, Grayscale Investments, and Wise Origin, for a spot Bitcoin ETF over the last several months.
- However, the SEC has yet to approve any application, though it rejected some of them.
- The agency has conventionally denied many applications for crypto ETFs, citing concerns about fraud and price manipulation risks.
- Most recently, Grayscale won a legal fight against the SEC in its efforts to launch a Bitcoin ETF despite a rejection when the court voted in favor of the company in a three-judge appeals panel.
- Following the ruling, the securities regulator delayed its decisions on applications for spot Bitcoin ETFs until October.
- ARK and 21Shares also have another application with the SEC for a spot Bitcoin ETF, which was refiled in April and is pending approval.
Zoom Out: - On the other hand, ARK also previously hit the headlines in the crypto market many times with its loaded purchases of Coinbase shares (COIN).
Q: Do you believe the U.S. Securities and Exchange Commission (SEC) will approve the spot Bitcoin exchange-traded fund (ETF) applications in October? Join the conversation here. |     | |
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What the numbers say: First Digital USD (FDUSD) stablecoin's market cap increased by 51% over the past 30 days, experiencing a significant surge in supply. The figure grew to $394M, up from $260.2M in early August. The increase in the market cap made FDUSD the 11th-largest dollars-pegged stablecoin. The cryptocurrency was launched by the Hong Kong-based First Digital Group and listed on Binance, the largest crypto exchange by trading volume, in June. Relevance: The jump in FDUSD's market cap came shortly after Binance announced that it would gradually halt support for its own stablecoin, Binance USD (BUSD), by February 2024. At the time, the company asked users to convert their funds in BUSD into other available stablecoins on the platform, especially FDUSD. The exchange also started offering incentives for users seeking to shift their BUSD funds into the FDUSD stablecoin. As part of its push for adoption, Binance eliminated trading fees for BUSD-FDUSD conversions on a one-to-one basis. Besides, the platform replaced BUSD in some of its products with FDUSD and started offering an annualized yield on certain FDUSD deposits for a temporary promotional period. All the incentives caused a jump in FDUSD's market cap and trading volume, increasing its popularity. Brands that should care: Binance's decision to stop supporting BUSD followed the issuer Paxos' announcement that it halted minting the token as of Feb. 21, 2023. Paxos mainly had to stop the issuance after facing several legal challenges from the Securities and Exchange Commission (SEC), the New York Department of Financial Services (NYDFS), and the Commodity Futures Trading Commission (CFTC) in the U.S. The regulators ordered Paxos to mint new BUSD tokens, labeling the stablecoin as an unregistered derivative and securities product. | | | |
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| 3 | | The Financial Accounting Standards Board (FASB), a U.S.-based standard-setting body recognized by the U.S. Securities and Exchange Commission (SEC), has amended the accounting rules for cryptocurrencies with unanimous voting. The new rules will take effect in the fiscal year beginning after Dec. 15, 2024, for all public and private companies, though earlier adoption will also be permitted. More: - Under new rules, the FASB will require companies to disclose their digital asset holdings at fair market value at the end of each fiscal period.
- The amendment means that the companies will be responsible for reporting both their gains and losses from their crypto holdings in the income statements.
- The current rules, however, allow companies to report their digital assets with the original cost and the impairment loss if their value drops below the cost.
- The exclusion of the price rises has come under fire many times since it reflects just one side of the value changes.
- The new requirements will apply to all cryptocurrencies, including Bitcoin (BTC) and Ether (ETH), and stablecoins.
- However, the board excluded NFTs and wrapped tokens from the scope.
- The amended rules are expected to mainly affect the companies with large amounts of BTC holdings, such as Tesla and MicroStrategy, and to eliminate a significant impediment to corporate adoption of cryptocurrencies.
Zoom Out: - The FASB first proposed amendments to the crypto accounting rules in July 2022.
- The final vote took feedback from over 80 comment letters received during a public comment period into consideration.
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| 4 | | Google has announced that it would allow ads for NFT games across its platforms as of Sept. 15 as long as they do not promote gambling-related content. The update will cover ads for the NFT games that let players buy in-game items, including virtual apparel for avatars, weaponry, and armor, to enhance the user experience or help users advance in the game. More: - The updated policy will not allow for promoting NFT games with a gambling component.
- Games where players can wager or stake NFTs against other players or for rewards, like cryptocurrencies and other NFTs, will also not be able to be advertised on Google's platforms.
- Besides, NFT casino and betting games allowing users to wager or play for real-world prizes will similarly be kept out of Google's policy that approves ads.
- The change in the platform policies came nearly two months after Google updated its platform guidelines on Play Store, announcing that it would allow developers to integrate NFTs into games as part of the gaming experience as of Dec. 7.
- At the time, the tech giant similarly underlined that it would not allow the NFT transactions in the games to pave the way for gambling activities.
Zoom Out: - Google banned all crypto-related ads across its platforms in March 2018.
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| 5 | | Tornado Cash developer and co-founder Roman Storm has pleaded not guilty to the money laundering, U.S. sanctions violations, and unlicensed money-transmitting business operations charges during his latest appearance in the court. The move came two weeks after Storm was arrested by the Federal Bureau of Investigation (FBI) in the U.S. to wait for his trial. More: - Shortly after his arrest, the Tornado Cash co-founder was released on a $2M personal recognizance bond.
- U.S. Judge Katherine Polk Failla said the bond was secured by Roman's residence in Washington and co-signed by a financially responsible person.
- The developer, who has dual citizenship in the U.S. and Russia, will be under house arrest at his home in Washington and not be able to travel to locations other than California, New York, and New Jersey from his home.
- Storm will also receive regular drug testing and be banned from owning a firearm or contacting other defendants, witnesses, and alleged victims.
- Tornado Cash made it harder to track digital assets, claiming to provide untraceable financial transactions for the sake of anonymity and privacy.
- U.S. prosecutors alleged Storm, along with two other co-founders named Roman Semenov and Alexey Pertsev, of helping Tornado Cash clients, including the North Korean cybercrime organization Lazarus Group, launder more than $1B of crypto.
- Pertsev was also arrested by law enforcement agencies in the Netherlands last year, while Semenov is still a fugitive.
Zoom Out: - Last year, Tornado Cash came under scrutiny by the U.S. Treasury Department's Office of Foreign Assets Control (OFAC) with the accusations of laundering more than $7B of crypto assets since its launch in 2019.
- As part of its accusations, the agency sanctioned Tornado Cash and blocked crypto wallets associated with it to eliminate financial transactions benefiting foreign terrorists.
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| 6 | | The U.S.-based crypto exchange Kraken has added support for deposits through PayPal for users in the U.K. and Europe, except for those in Hungary and Croatia. The move will allow users in these regions to deposit euros (EUR) and pounds (GBP) in their Kraken accounts via the digital payments platform PayPal. More: - Users will be able to deposit funds in their Kraken accounts from the balances in their PayPal accounts, bank accounts, or payment cards connected to the PayPal account.
- The transfers through PayPal will be restricted to £1,000 (~$1,250) a day.
- The option to deposit funds via PayPal is currently only available on Kraken's mobile app.
- To utilize the new support, users will have to be verified by ensuring that their names on the PayPal account match up with the ones on the Kraken account and that they have a residency in a European country or the U.K.
- The deposited funds will reflect the Kraken account balance almost instantly and be able to be withdrawn after seven days.
- The seven-day period will apply to any assets in cash or crypto, though the funds will become available for trading immediately after being deposited.
- The fees will change depending on the region where Kraken users reside.
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- Bankrupt crypto exchange FTX's former executive, Ryan Salame, has reportedly decided to plead guilty to criminal charges against him over the collapse of the exchange.
- Bankrupt crypto lender Genesis Global has filed two lawsuits against its parent company, Digital Currency Group (DGC), demanding the repayment of more than $600M in unpaid loans.
- South Korean game publisher Neowiz has announced its plans to develop Web3 games on the Avalanche blockchain network through its Web3 arm, IntellaX.
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Term of the Day Cryptocurrency: A cryptocurrency is a decentralized virtual currency built using a blockchain. Cryptocurrency tokens can be traded or used to make purchases. Question of the Week Do you share details about your salary with your coworkers? Join the conversation |
INSIDE CRYPTOCURRENCY LEADERBOARD (ALL-TIME) |
 | 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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