| Hey Insider! Welcome back to the Inside Cryptocurrency newsletter! Today's issue covers several of the biggest stories hitting the headlines within the day, including Binance's halt of support for its own stablecoin BUSD, a new NFT loyalty program launched by Europe's second-largest airline, the U.S. Securities and Exchange Commission (SEC) Chair's upcoming testimony before U.S. Congress over his approach toward the crypto industry, and more. Enjoy your reading, and if you find this newsletter useful, please share it with your friends and colleagues! Doğa
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| 1 | | The U.S. Securities and Exchange Commission's (SEC) chair, Gary Gensler, has been urged to testify before the U.S. Congress twice in September over his aggressive approach toward digital asset regulation. The first testimony will be held before the Senate Banking Committee on Sept. 12 before the second one will be heard by the House Financial Services Committee on Sept. 27. More: - Gensler's appearance before Congress will follow a series of criticisms from lawmakers, including Rep. Patrick McHenry, who found the SEC's approach toward the crypto industry overly aggressive and accused him of the lack of crypto guidelines.
- The House Financial Services Committee also previously defined Gensler's call for registration to the crypto companies as a willful misrepresentation of a non-existing registration process.
- However, Gensler has repeatedly argued that all crypto assets other than Bitcoin (BTC) are securities over the years, laying out the SEC's approach to the industry participants.
- The agency head also stated several times that existing rules are clear, and firms offering digital asset services to U.S. customers simply refuse to follow them.
- In light of Gensler's approach, the SEC has been claiming jurisdiction over the crypto market in the U.S.
- Within the last several months alone, many crypto exchanges, including Binance, Coinbase, Kraken, Gemini, and Bittrex, faced increased crackdowns by the SEC for allegedly violating securities law.
Zoom Out: - Gensler testified before the House Financial Service Committee over his approach toward the crypto assets and his rulemaking practices once more in April, marking the first oversight hearing of the SEC.
- In his previous testimony, the SEC chair again accused crypto firms of refusing to comply with existing securities laws, advising them to register with the agency.
Q: Which federal agency do you think should have jurisdiction over the crypto industry in the U.S.? Join the conversation here. |     | |
| 2 | | 
What the numbers say: The number of Bitcoin (BTC) held in crypto wallet addresses tied to the centralized exchanges (CEX) retreated to 2M BTC, accounting for $54.5M. The figure represents the lowest level since January 2018. It also refers to a significant drop from the 2.5M levels seen before the collapse of the crypto exchange FTX. Relevance: The steady decline in Bitcoin reserves on the CEXs was attributed to the fear around the bankruptcy of FTX, previously the third-largest crypto exchange. The company filed for Chapter 11 bankruptcy in November 2022, with all the 130 entities under the roof of FTX Group. The downfall followed the claims that the former CEO Sam Bankman-Fried (SBF) used customer funds in FTX to compensate for losses at the sister company Alameda Research. The details regarding the collapse caused a strong distrust in the centralized crypto trading platforms among investors. This fear and distrust directed many users to self-custody solutions that allowed them not to hold all their crypto assets on a CEX, reducing the personal financial risks from a potential collapse. What it means: Self-custody solutions, or non-custodial wallets, let users manage their private keys, providing complete control of their assets. Custodial wallets, however, require a third party, such as a CEX, to control users' private keys to keep their crypto assets under custody. Brands that should care: FTX's collapse caused several other crypto-related firms, including crypto lenders Genesis Global and BlockFi, to go bankrupt since they had significant exposure to the exchange. | | | |
| 3 | | Binance, the largest crypto exchange by trading volume, has announced that it would gradually halt support for its own stablecoin, Binance USD (BUSD), by February 2024, delisting some trading pairs. The company has asked users to convert their funds in BUSD into other available stablecoins on the platform, especially First Digital USD (FDUSD), with zero fees. More: - The popular exchange will remove BUSD from the loanable assets on Sept. 6.
- Users will also become unable to withdraw BUSD through BNB Chain, Avalanche, Polygon, and Tron as of Sept. 7.
- However, BUSD withdrawals and deposits on Ethereum will continue until further notice, and the token will always be backed by the U.S. dollar (USD) in a 1:1 ratio.
- Binance's decision to stop supporting BUSD followed the issuer Paxos' announcement that it halted minting the token as of Feb. 21, 2023.
- Paxos had to stop the issuance of the stablecoin 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.
- At the time, Binance CEO Changpeng Zhao (CZ) said BUSD would slowly wind down over time without revealing any specific timeline.
Zoom Out: - BUSD launched through a partnership between Binance and the stablecoin issuer Paxos in September 2019.
- The latest move came amid a time when Binance faced increased scrutiny by regulators in many countries, including the U.S., Australia, Belgium, and France.
- The platform also recently had to withdraw from several markets in the West, such as Canada, Austria, the Netherlands, Cyprus, the U.K., and Germany, mainly due to compliance issues.
- Besides, the heightened regulatory pressure forced the company to sunset some of its services and products, including Binance Card and Binance Connect, as project partners were looking to cut ties with the firm.
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| 4 | | The data compiled by the blockchain analysis firm Arkham Intelligence has shown that crypto and stock trading app Robinhood is the five-largest Ether (ETH) holder with its $2.54B of ETH in a single wallet. In a recent post on social media, Arkham underlined that the ETH funds in the wallet are held under custody for user balances. More: - Robinhood also recently hit the headlines with its $3.3B of Bitcoin (BTC) holdings.
- Arkham stated that the 118,300 Bitcoins in the wallet make Robinhood the third-largest BTC holder in the world after the crypto exchanges Binance and Bitfinex.
- Besides, the data platform pointed out that other tokens held by Robinhood's wallets include $277.8M of Shiba Inu (SHIB), $29.7M of Chainlink (LINK), and $29.6M of Avalanche (AVAX).
Zoom Out: - On the other hand, recent data showed that Robinhood's exposure to Bitcoin and Ether is quite big despite the decline in its crypto trading revenue for four consecutive quarters.
- Most recently, the platform reported that its revenue from crypto trading decreased to $31M in Q2, with an 18% decline from $38M in the previous quarter.
NOTE: Inside.com founder and CEO Jason Calacanis is an investor in Robinhood. | | | |
| 5 | | SEBA Bank, a crypto-friendly bank based in Switzerland, has obtained in-principle approval from Hong Kong's Securities and Futures Commission (SFC) to offer its virtual asset services. The preliminary approval made the bank only one step away from offering crypto services in the region. More: - SEBA Bank will receive final approval from the SFC once it meets all the conditions.
- Hong Kong has become the third market where the Swiss bank sought a license after Switzerland and Abu Dhabi.
- The in-principle approval came more than three months after Hong Kong officially approved its long-awaited licensing regime for crypto companies to turn the region into a crypto hub, allowing retail investors to trade major tokens such as Bitcoin (BTC) and Ether (ETH) on licensed platforms.
- As part of the new regime, the SFC started accepting applications for digital asset trading platform licenses on June 1.
- HashKey and OSL have become the first crypto exchanges granted a crypto license under the new regime.
- HashKey recently started offering its crypto trading services to retail customers for BTC and ETH in the region.
Zoom Out: - Earlier this year, several other leading crypto firms, such as OKX, Huobi, Bitget, and Amber Group, also revealed their plans to apply for a license under Hong Kong's new licensing regime.
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| 6 | | Lufthansa, the second-largest airline in Europe, has recently launched its NFT royalty program in partnership with the Polygon network. As part of the new program, passengers will be able to turn their trips into NFTs to unlock rewards, including miles, business lounge vouchers, flight upgrades, airport lounge access, and frequent flier status. More: - The company built a mobile app dubbed Uptrip on Polygon for the program.
- The app will allow passengers to scan their boarding passes to exchange their tickets for NFT trading cards.
- Users will be able to mint and transfer Uptrip NFTs by connecting their own crypto wallets.
- Passengers will be able to access rewards when they complete specific NFT collections through the app.
- Lufthansa said more than 20,000 customers have already signed up for the program, and there are currently over 200,000 NFT trading cards minted.
Zoom Out: - Lufthansa revealed its plans to enter the Web3 space earlier this year.
- Several other airlines, including the United Arab Emirates' (UAE) largest airline, Emirates, Japan's largest airline, All Nippon Airways (ANA), and Argentinian low-cost airline Flybondi, also previously integrated NFTs into their services.
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- Crypto payments platform MoonPay has launched a venture capital (VC) arm dubbed MoonPay Ventures to support and invest in early-stage startups specializing in Web3 and financial technologies.
- BlackRock, the $8T asset manager, has turned out to be a major shareholder in four of the five largest Bitcoin (BTC) mining firms by market cap.
- Crypto exchange Binance has introduced a new solution dubbed Send Cash that allows users in nine countries in Latin America to send crypto funds directly to bank accounts.
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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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