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| Take a look at the hits from today's Inside Cryptocurrency briefing: - Swiss crypto bank Sygnum's $41M funding,
- Bitwise's decision to release digital wallet addresses of the holdings in its spot Bitcoin ETF,
- CZ's attempt to pledge his entire stake in Binance.US as security to leave the U.S. until his sentencing, and more.
Enjoy your reading! Doğa
p/dogayurduneri | |
| 1 | | Crypto-focused investment management firm Bitwise has published the digital wallet addresses of the holdings in its spot Bitcoin exchange-traded fund (ETF), becoming the first issuer in the U.S. to make the addresses of its Bitcoin ETF public. The company said anyone can now verify the holdings and flows in Bitwise Bitcoin ETF, which trades as BITB on the New York Stock Exchange Arca (NYSE Arca). More: - The wallet addresses were shared with the public through a screenshot on X, formerly known as Twitter.
- The screenshot showed that the fund contained 11,858.63 Bitcoin, worth around $465M at the current price as of Jan. 23.
- In the announcement, Bitwise pointed out that on-chain transparency is core to Bitcoin's ethos, adding that publishing the wallet addresses is a first step toward increasing public transparency.
- Bitwise CEO Hunter Horsley also stated that the move came in response to clear feedback from investors, citing his X poll showing that 91.1% of 2,416 respondents voted for the Bitcoin holdings being made public.
- The move came around two weeks after the U.S. Securities and Exchange Commission (SEC) approved Bitwise's spot Bitcoin ETF application, along with 10 other applications, on Jan. 10, meeting analysts' expectations.
- The agency's green light marked the first time it approved such a product and paved the way for the funds to begin trading as soon as the next day.
- The new products allow retail and institutional investors to get exposure to Bitcoin (BTC), the largest cryptocurrency by market cap, through traditional brokerage accounts without dealing with crypto-native platforms that have come under scrutiny by regulators over the past years.
Zoom Out: - In December, Bitwise also became the first spot Bitcoin ETF applicant to release an advertisement for its proposed fund, which appeared across TV channels, social media platforms, and digital media outlets.
- Other Bitcoin ETF issuers receiving approval in the U.S. include VanEck, Fidelity, Franklin Templeton, Valkyrie, Hashdex, Ark Invest, Grayscale, BlackRock, WisdomTree, and Invesco Galaxy.
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| 2 | | 
What the numbers say: A recent report from the litigation consulting firm Cornerstone Research has revealed that the number of crypto-related enforcement actions brought by the U.S. Securities and Exchange Commission (SEC) hit a 10-year high last year, reaching the highest figure since 2013. The report suggested that digital assets were a top priority for the commission under the leadership of Gary Gensler, who became the agency's chair in 2021. The number of enforcement actions involving crypto has ramped up since the beginning of Gensler's tenure. The agency launched 47 enforcement actions in 2023, increasing the figure by 42% compared to the previous year. Relevance: On the other hand, the SEC classifies all cryptocurrencies other than Bitcoin (BTC) as securities in light of Gensler's approach, claiming jurisdiction over the digital asset market. Over the years, the SEC Chair came under fire many times for adopting a regulation-by-enforcement approach to the crypto industry. Many crypto firms repeatedly criticized Gensler and the agency for accusing them of noncompliance and bringing enforcement actions without establishing a clear regulatory framework for the industry participants to follow. However, Gensler consistently responded to those arguments, stating that there is no need for a new legal framework for digital assets, existing securities laws are clear, and firms offering crypto services to U.S. customers simply refuse to follow them. This dispute paved the way for a significant surge in the number of the agency's enforcement actions against crypto firms. Brands that should care: Over the past several years, many crypto firms, including Coinbase, Binance, Ripple, Gemini, Kraken, and Bittrex, came under increased scrutiny by the SEC over alleged securities law violations. | | | |
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| 3 | | Recently unsealed court filings have shown that Binance's co-founder and former CEO, Changpeng Zhao (CZ), pledged his entire stake in Binance.US, the U.S. arm of the largest crypto exchange by trading volume, as security last month to be able to leave the U.S. until his sentencing hearing on Feb. 23. CZ's equity in the company is estimated to be worth around $4.5B. More: - The filing revealed that Zhao's lawyers made the offer in an attempt to receive approval for the former CEO to travel to the United Arab Emirates (UAE) for up to four weeks in early January to see a family member or friend who underwent surgery and is staying in a hospital.
- However, the request was denied by U.S. Judge Richard A. Jones on Dec. 29 during a closed-door hearing.
- In November, Zhao stepped down as Binance CEO and chairman of Binance.US after pleading guilty to violating anti-money laundering requirements and sanctions in the U.S. by allowing terrorist groups to make crypto transactions on Binance.
- However, the former CEO still has a significant economic interest in the company.
- As part of the plea deal, the co-founder was ordered to pay a $50M penalty and blocked from engaging in Binance's management for three years.
- Although the co-founder was released on a $175M bond, Judge Jones recently overruled an earlier decision that allowed CZ to return to his home in the UAE while awaiting sentencing, ordering him to stay in the U.S. until Feb. 23.
- At the time, Jones said CZ is likely to flee if he returns to the UAE, considering his enormous wealth and property abroad.
Zoom Out: - CZ currently faces up to 10 years in prison, though he is expected to get no more than 18 months under a settlement agreement with U.S. regulators.
- Under the same deal, Binance also agreed to pay a $4.3B fine, one of the largest corporate penalties in U.S. history, to settle money laundering, unlicensed money-transmitting business operations, and sanction violations charges.
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| 4 | | The U.K. Treasury and the Bank of England (BOE), the country's central bank, have disclosed that they have yet to make a final decision on whether to issue a digital pound, also dubbed Britcoin, and there is a need for a further study. The update came as part of the two entities' joint response to a consultation on the design of a potential central bank digital currency (CBDC), which was held last year and received more than 50,000 items of feedback. More: - The agencies said the final decision is expected to be made in 2025 or 2026, and they will still need the approval of the country's parliament.
- The response showed that user privacy and security are still common concerns about the digital pound across the public and banks, and the legislation related to the CBDC will need to guarantee users' privacy and complete control over their money.
- During the consultation, commercial banks also showed their concerns about a potential bank run, urging the authorities to set a lower limit for each holder since the higher limits could put financial stability at risk as customers collectively move their money into a state-backed digital currency.
- The report confirmed that the CBDC deposits will generate no interest.
- The joint response ensured that the CBDC would not replace traditional cash, and its design would treat user privacy with great respect as government agencies would not have access to users' personal data.
- However, the report stated that the use of the digital pound would not be anonymous since it should support law enforcement agencies in combating financial crime.
Zoom Out: - The digital pound project, which explores the CBDC's feasibility, is currently in the design stage.
- Following the design stage, the country's financial regulators will decide whether they will issue a CBDC, and if they decide to proceed, they will provide a timetable for the consultation on legislation and the launch.
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| 5 | | South Korean prosecutors have recently issued an arrest warrant for a key person of interest on fraud and breach of trust charges as part of their investigation into ongoing withdrawal suspensions on local crypto lending platform Delio and crypto investment firm Haru Invest. The full name of the suspect, identified only as Bang, was not disclosed due to South Korea's privacy rules for media. More: - Delio suspended user withdrawals in mid-June last year, citing increased market volatility and the troubles at Haru Invest, which it worked with.
- Haru Invest also halted deposits and withdrawals a day before Delio.
- At the time, Haru Invest showed its partner B&S Holdings as the main cause of the service suspensions and filed a criminal complaint against it, accusing the firm of deceiving by providing false management reports.
- Meanwhile, the South Korean Financial Services Commission (FSC) seized all assets of Delio and its customers to investigate fraud, embezzlement, and breach of belief allegations.
- Besides, the local prosecutors have blocked key members of Delio, Haru Invest, and B&S Holdings from leaving the country.
- Delio and Haru Invest customers have also simultaneously filed complaints to the firms' executives.
- Bang reportedly owns the majority of B&S Holdings shares.
- The arrest warrant is still subject to review by a local court.
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| 6 | | Swiss crypto bank Sygnum has raised $41M in funding in its latest financing round at a valuation of around $840M. The firm said it would use the funding for its expansion to the new countries and acquisition plans. More: - The investment round was led by Italy-based asset manager Azimut Holding.
- The firm's co-founder and CEO of Singapore operations, Gerald Goh, said it plans to enter one more European and Asian market this year, and they are preparing to obtain necessary regulatory approvals in these jurisdictions.
- Besides, Goh underlined that they would enter the new European country by acquiring local companies offering services similar to its existing operations.
- The company also raised $90M in its funding round in January 2022 at the same valuation.
Zoom Out: - Sygnum operates a digital asset bank in Switzerland and offers asset management and crypto brokerage services in Singapore.
- The firm increased its client number to over 1,700 within the last two years.
- The company had around $4.2B in assets under management (AUM) at the end of 2023.
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- The U.S. Securities and Exchange Commission (SEC) has delayed the deadline for its decision on the asset management giant BlackRock's application to launch a spot Ether exchange-traded fund (ETF).
- Elon Musk-led electric vehicle (EV) giant Tesla has disclosed that the amount of its Bitcoin (BTC) holdings remained unchanged during Q4 2023 in its latest earnings report.
- South Korean telecommunications company KT Corporation has announced that it will shut down its NFT platform, dubbed MINCL, as of March 4 due to shifting business conditions.
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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 Aaron Crutchfield | |
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