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| Hey Insider! Whether Tesla added any new Bitcoin to its holdings or not has become an object of curiosity within the day as the carmaker revealed its earnings report for Q3. Today's Inside Cryptocurrency newsletter covers the final situation in Elon Musk-led company's digital assets as well as several other big stories in the crypto market, including Coinbase's new European hub, the New York Attorney General's lawsuit against Gemini and Digital Currency Group, Marathon Digital's partnership with Fidelity Digital Assets, 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 | | Crypto mining firm Marathon Digital has partnered with Fidelity Digital Assets, a subsidiary of investment management company Fidelity Investments, to store some of its crypto holdings. Through the move, Marathon Digital added a second custody partner to its partners in an attempt to diversify its third-party custodians. More: - The company said it historically custodied all its Bitcoin (BTC) assets with a single service provider, but recently added a new enterprise-grade custodian as its second custody partner as part of its broader treasury management strategy.
- The firm plans to open one or more custodial asset accounts with Fidelity Digital Assets.
- The miner also pointed out that it could expand its partners even further, adding more custodians.
- Marathon Digital had 13,726 Bitcoins as of Sept. 30, 2023.
Zoom Out: - Institutional investors have increasingly started entrusting their digital assets with more than one third-party custodian to ensure they will not lose all their assets if one of their partners runs into trouble.
- The trend has become even more common after several custody firms, including Fortress Trust, were targeted by hackers.
Q: Do you think investors with large amounts of crypto holdings should diversify their custodians to protect themselves from a potential security incident? Join the conversation here. |     | |
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What the numbers say: Elon Musk-led electric vehicle (EV) giant Tesla has recently released its earnings report for Q3, revealing the final situation in its Bitcoin (BTC) holdings. The report showed that the carmaker did not buy or sell any Bitcoin during the third three-month period of 2023. The latest figure also means that the company's digital asset portfolio remained the same for the last four consecutive quarters at $184M. Analysts underlined that the figure stayed flat despite the ups and downs in Bitcoin price since such gains cannot be recorded under the current accounting rules. Relevance: On the other hand, Tesla's Bitcoin journey started in February 2021 when it bought $1.5B in Bitcoin as part of its new investment strategy. In March 2021, the firm also began accepting Bitcoin as a payment method for the purchases of Tesla vehicles. The move helped the BTC price reach its all-time high, nearly $70,000, in November of the same year. However, two months after the investment, Musk said Tesla stopped accepting Bitcoin as payment due to its adverse environmental impacts amid the concerns around the use of fossil fuels for BTC mining and transactions. Then, the EV giant sold off 75% of its Bitcoin holdings for $936M in Q2 2022, citing concerns about its cash flow and the uncertainty related to the crypto market. Brands that should care: Meanwhile, Tesla is still the third-largest public company by Bitcoin holdings, with an estimated 9,720 Bitcoins, behind the business intelligence firm MicroStrategy and crypto mining company Marathon Digital. However, the top two companies continue their Bitcoin purchases and still hold a significant amount of the total Bitcoin supply. Most recently, MicroStrategy purchased another 5,445 Bitcoins for nearly $147.3M, taking its total Bitcoin reserves to 158,245. | | | |
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| 3 | | Coinbase, the largest U.S. crypto exchange, has recently announced that it selected Ireland as its European hub to consolidate its presence in Europe. The company cited the supportive political environment for financial technology (fintech) companies and a globally respected regulator in the country while explaining its decision. More: - The move came nearly ten months after Coinbase obtained an e-money institution license and was registered as a virtual asset service provider in Ireland.
- The company accelerated its global expansion efforts following its legal conflict with the Securities and Exchange Commission (SEC) in its home country, the U.S.
- In September, the exchange labeled some regions and countries, including the European Union (EU), as its priority due to clearer crypto regulations.
- European regulators have shown a strong effort to establish a legal framework for the digital asset industry within the last few years, which recently came to life with the approval of the EU's region-wide crypto regulations, Markets in Crypto Assets (MiCA).
- Under the new legislation, the crypto-related companies will have to obtain a license in at least one of the 27 member states by June 2024, registering with a national financial regulator.
- Coinbase currently has licenses in several other European countries, such as Spain, Italy, Germany, and the Netherlands.
Zoom Out: - Another U.S.-based crypto exchange, Gemini, also selected Ireland as its European base in May this year, citing the country's powerful regulatory system, wide talent pool, and well-established technology community.
- Several other crypto companies, including Kraken, MoonPay, and Binance, similarly have offices or authorization as virtual asset service providers in Ireland.
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| 4 | | New York Attorney General Letitia James, the U.S. state's top law enforcement officer, has filed a lawsuit against crypto exchange Gemini, crypto conglomerate Digital Currency Group (DCG), and the latter's bankrupt crypto lender Genesis Global, alleging the three firms of defrauding customers for $1.1B. In the filing, James also accused the defendants of failing to disclose the risks of their joint crypto lending service, Earn, to investors. More: - Earn, launched in 2021, allowed Gemini users to lend their crypto assets through Genesis to generate interest.
- Genesis' bankruptcy in January caused the Earn product to be halted, making some customer funds stuck.
- In the lawsuit, James claimed that Genesis and DCG tried to hide increasing losses and lied to customers about how risky the loans were in their joint venture.
- Besides, the case accused Genesis of failing to adequately audit one of its borrowers, Three Arrows Capital (3AC), and lying to Gemini by claiming that it regularly reviewed its borrowers' financial statements.
- James' report also found that no such audit had been performed for over two years.
- The lawsuit pointed out that the state wants to block Gemini, Genesis, and DCG from engaging in the financial investment industry in New York.
- In the filing, DCG CEO Barry Silbert and Genesis' former CEO, Michael Moro, were also named as defendants.
- The case further seeks restitution for investors and disgorgement of the allegedly ill-gotten gains.
Zoom Out: - Genesis Global filed for bankruptcy in January after freezing withdrawals in November 2022, mainly due to its exposure to the collapses of the crypto exchange FTX and crypto hedge fund 3AC.
- Gemini and Genesis also face a lawsuit by the U.S. Securities and Exchange Commission (SEC) over the allegation that the Earn product offered unregistered securities.
- In July, Gemini itself similarly sued DCG and Silbert, accusing the two of fraud and deception.
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| 5 | | The European Central Bank (ECB) has recently moved its central bank digital currency (CBDC) project, or the digital euro, to the preparation phase, taking a further step towards launching the digital version of the bloc's official currency. The new stage will start on Nov. 1 and last two years. More: - During the preparation phase, the ECB will finalize rules, select its private sector partners, and do some testing and experimentation.
- The ECB's Governing Council will decide whether to move the project to the next stage after two years, potentially paving the way for future issuance and distribution.
- If it comes to life, the digital euro will allow individuals residing in the European Union (EU) countries to use a single currency to make electronic payments securely.
- Based on the ECB's vision, the digital euro will serve as an online wallet or bank account rather than an investment product.
- The digital version of the euro will be free to use and guaranteed by the ECB itself instead of a private company.
- The ECB expects the digital euro to create competition in the market for payments, which is largely dominated by U.S. credit card issuers.
- The agency will not store any data about individual transactions, and the currency will be distributed only to residents and citizens of the euro area.
Zoom Out: - The data compiled by the European Commission, the governing body of the EU, showed that electronic payments in the bloc increased from $201.7T in 2017 to $253.6T in 2021.
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| 6 | | Austrian crypto exchange Bitpanda has obtained a new virtual asset service provider license in Norway as part of its European expansion plans. The move made Bitpanda one of the first foreign entities to obtain a crypto license in Norway. More: - Bitpanda CEO Lukas Enzersdorfer-Konrad said the registration in the country marks another step in their expansion across the European region.
- The license will allow the platform to offer its crypto services to Norwegian users in compliance with local regulations.
- Bitpanda also previously received licenses in several other European countries, including Austria, Germany, France, Czechia, and Sweden.
- The registration came nearly five months after Norges Bank, Norway's central bank, stated that Norwegian authorities should establish a national regulatory framework for the crypto industry without waiting for European regulations or potential global legislation.
- At the time, the bank also pointed out that the European Union's (EU) region-wide crypto regulations, Markets in Crypto Assets (MiCA), might not be adequate for all regulatory needs of the crypto market.
Zoom Out: - Bitpanda currently has 4 million users worldwide.
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| 7 | | Quick Hits: - Don't settle for the sidelines. Participate in Sandhill Markets' auctions and bid on shares of pre-IPO giants like Stripe, Databricks, Anduril, and OpenAI.*
- Hindustan Petroleum, one of India's largest oil and gas companies, has launched a new system to automatically verify purchase orders using blockchain.
- Aptos blockchain network has resumed all operations after experiencing a five-hour outage that caused many crypto exchanges to halt deposits and withdrawals of its native token, APT.
- BaFin, Germany's financial market regulator, has warned consumers that the crypto exchange MEXC offers financial services in the country without the required authorization.
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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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