| Take a quick look at the hits from today's Inside Cryptocurrency briefing: - Texas securities regulator's settlement with crypto trading platform Abra,
- U.S. Rep. Maxine Waters' letter to Meta on the tech giant’s crypto-related plans,
- An almost 50% flash crash in OKX's native token, and more.
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| 1 | | The Texas State Securities Board has announced that it settled its lawsuit against the crypto trading platform Abra and its CEO, Bill Barhydt, in principle. The move will allow Abra's 12,000 investors to withdraw their funds that were frozen after the regulator's enforcement action against the platform. More: - At the time of enforcement action, the frozen crypto funds deposited in the interest-bearing Abra Earn and Abra Boost accounts were worth around $13.6M.
- The state's securities regulator will dismiss enforcement actions filed against Abra after June 15, 2023.
- Abra will have to open withdrawals and complete other obligations in the settlement agreement within the next 30 days.
- The firm will notify users with balances over $10 about how to claim their deposited funds and give them a seven-day withdrawal period following the notification.
- Any unclaimed funds will be automatically converted into U.S. dollars (USD) and sent to the investors in Texas in the form of paper checks.
Zoom Out: - The board filed a cease and desist order against Abra in June 2023, accusing the platform of committing securities fraud through Abra Earn and Abra Boost.
- At the time, the regulator also said Abra hid its financial troubles, disclosing that the firm was insolvent or about to be insolvent since at least March.
- In addition, the board claimed that the company secretly moved its assets to Binance Holdings Ltd.
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What the numbers say: Bitcoin (BTC), the largest cryptocurrency by market cap, declined by over 5% in price within the day, maintaining its recent downward trend. The token's value retreated to as low as the $38,600 mark, down from $40,915 on the previous day. The popular cryptocurrency later saw a slight recovery, though it failed to return above the $40,000 level. Relevance: The strong decrease in Bitcoin took the token's price to its lowest level since the much-awaited spot Bitcoin exchange-traded fund (ETF) approvals in the U.S. The country's Securities and Exchange Commission (SEC) approved all 11 spot Bitcoin ETF applications before it on Jan. 10, meeting analysts' expectations. Following the green light, Bitcoin ETF products began trading the next day in the U.S. Bitcoin's price climbed past $49,000. However, the token later entered a downward trend as the hype around the ETFs slowly faded away, losing all the gains since the approvals. The price fell to below $39,000, marking the lowest level since early December. Brands that should care: The latest decline in Bitcoin's price was also triggered by the massive outflows from Grayscale Investments' Bitcoin trust, which was converted into an ETF with the latest approvals. $1B of these outflows were offloaded by the bankrupt crypto exchange FTX as the firm sold its 22 million shares in the fund. The figure accounted for two-thirds of FTX's stake in the Grayscale Bitcoin Trust ETF (GBTC). | | | |
| 3 | | The U.S. House Financial Services Committee's ranking member, Maxine Waters, has written a letter to the tech giant Meta requesting the company disclose its ongoing crypto and blockchain plans. The letter pointed out that the firm still has five active crypto and blockchain-related trademark applications. More: - In the letter, Waters directly addressed Meta CEO Mark Zuckerberg and Chief Operating Officer (COO) Javier Olivan.
- Water said the five active applications reflect that Meta maintained its intention to expand its involvement in the digital asset ecosystem, though it told the committee that it did not have ongoing work on digital assets in October 2023.
- The trademarks cover various services related to the trading, exchange, payments, transfers, wallets, hardware, and software infrastructure of crypto and blockchain assets.
- The trademark applications were all filed in March 2022, and Meta has already received initial approval for each filing, which requires the company to file a statement that it will use the trademark within six months or request an additional six months to file the statement.
- Meta has until Feb. 15 and July 16 to respond to the first and latest approvals, respectively.
- Waters' letter asked Meta how it would respond to the approvals, how its metaverse will enable crypto-related functions, whether it plans to launch any project related to Web3, crypto, digital wallets, or stablecoins, and if it intends to adopt blockchain technology.
Zoom Out: - Meta previously worked on two crypto-related projects, including the blockchain-based stablecoin payment system Diem and the digital wallet Novi.
- However, the firm ultimately had to abandon both projects in 2022 amid increased pressure from U.S. lawmakers.
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| 4 | | EDX Markets, a U.S.-based crypto exchange backed by major financial institutions such as Citadel Securities, Fidelity Digital Assets, and Charles Schwab Corp., has raised funding from both new and existing investors in its second financing round. The firm has yet to disclose the exact amount of funding. More: - The platform will use the funding to build its own technology infrastructure and expand its presence to new markets abroad, starting with Singapore.
- EDX Markets CEO Jamil Nazarali said the company plans to transit away from the existing technology developed in partnership with MEMX, also known as Members Exchange.
- Nazarali added that Singapore will allow them to expand EDX Markets' products, launch trading for more tokens, hire new financial talent, and build a trusted team.
- The firm will launch both spot and derivatives trading services in the city-state after obtaining approval from the Monetary Authority of Singapore (MAS), the region's financial market regulator, to operate an exchange.
- The latest fundraising round was co-led by digital asset-focused hedge fund Pantera Capital and venture capital (VC) firm Sequoia Capital.
- The round also included EDX Markets' original backers, such as Citadel Securities, Virtu Financial Inc., and Fidelity Digital Assets.
- Paradigm, Miami International Holdings, GTS, GSR Markets, and HRT Technology are among other investors in the platform.
Zoom Out: - EDX Markets was first announced in September 2022 and went live in June last year.
- Currently, the platform only caters to institutional clients and offers trading in several tokens, including Bitcoin (BTC), Ether (ETH), Litecoin (LTC), and Bitcoin Cash (BCH).
- The exchange does not keep customer assets under its custody during trading, and it works with a third-party custodian, Anchorage Digital, separating trading services from other functions as in traditional finance.
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| 5 | | Seychelles-based crypto exchange OKX has recently suffered from a flash crash in its native token, OKB, which caused the token's price to decline by nearly 50% in just three minutes. The cryptocurrency has since recovered, returning to its average levels. More: - OKB's price fell from $46.80 to as low as $25.17 before returning to the $46 level with a swift recovery.
- The plummet followed a series of liquidations triggered by an abnormal price fluctuation.
- The exchange said it would compensate for the losses of all users affected by the flash crash.
- The platform also pointed out that it would announce a specific compensation plan within 72 hours, taking additional measures to prevent similar problems from happening again.
- OKX is currently the fourth-largest token affiliated to an exchange, with a $2.8B market cap.
Zoom Out: - A flash crash refers to a sudden decline in an asset's price due to an abnormal market activity.
- After a flash crash, prices generally rebound to their average levels as if the plummet never took place.
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| 6 | | The debut of NBA star Dwight Howard's NFT collection, Ballers by Dwight Howard, was a failure, forcing the American professional basketball player to step up to attempt to turn the tables. In its first 24 hours after the launch, barely 10% of the 3,000-piece collection was sold. More: - Howard launched his picture-for-profile (PFP) NFT collection on the Avalanche blockchain network last weekend.
- At the launch, each NFT in the collection had a mint price of 2 AVAX, worth around $60.
- After the collection reached only a handful of buyers on its first day, Howard announced that Ballers by Dwight Howard would undergo a substantial redesign in light of feedback related to its art quality and underlying value.
- The NBA icon also pledged to personally send 1 AVAX, accounting for $30, to 10 different holders every time 100 additional NFTs from the collection were minted.
- Also, the famous basketball player reduced the total supply of the collection from 3,000 to 1,500 pieces.
- However, the attempts failed to help the collection attract more buyers as only around 15% of the original supply has been minted so far, and the collection's floor price fell below the mint price, 1.735 AVAX.
- The negative goings-on also caused Ava Labs, the firm behind the Avalanche network, to distance itself from the project, stating that it had no involvement in the collection as a firm.
Zoom Out: - The PFP NFTs refer to the digital collectibles in the form of an exclusive digital image designed to serve as its owner's profile picture across various platforms.
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- The U.S. Securities and Exchange Commission (SEC) has stated that the attacker who hacked its official X account earlier in January shared the fake spot Bitcoin exchange-traded fund (ETF) approval post by gaining control of an employee's phone number.
- Japanese bankrupt crypto exchange Mt. Gox has started contacting its creditors to confirm their identity and the existence of their accounts for repayments.
- Bankrupt crypto exchange FTX's sister company, Alameda Research, has voluntarily dropped its lawsuit against the investment management company Grayscale Investments.
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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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