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| Hey Insider! Welcome back to the Inside Cryptocurrency newsletter! Today's issue again includes some of the most thrilling stories in the crypto industry hitting the headlines within the day, such as Kraken's plans to offer stock trading services, Do Kwon's opposition to the U.S. securities regulator's extradition request, the institutional investors' Bitcoin price predictions for the year's end, 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
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| 1 | | The U.S.-based crypto exchange Kraken has started preparing to offer trading services for U.S.-listed stocks and exchange-traded funds (ETF) in the U.S. and the U.K., according to a recent Bloomberg report citing a person familiar with the plans. The company will make its first foray outside the crypto industry through the new offering. More: - According to the report, the company aims to launch the new service in 2024.
- The platform has already obtained the necessary regulatory approvals in the U.K. and submitted an application for a broker-dealer license in the U.S. with the Financial Industry Regulatory Authority.
- When Kraken's stock trading services go live, eligible customers will need to activate the offering.
- Customers will see their crypto, stock, and ETF portfolio as a single balance on Kraken.
- The sources also pointed out that the platform would launch a qualified custody service for institutional clients in the upcoming weeks.
- The service will be operated separately from the exchange, and the company has already applied for permits in the U.S. state of Wyoming.
Zoom Out: - Now-defunct crypto exchange FTX's U.S. arm, FTX.US, also announced that it would start offering stock trading services in May 2022.
- However, the company had to file for Chapter 11 bankruptcy six months later, with all the 130 entities under the roof of FTX Group, following 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.
Q: What is your opinion on the Kraken's plans to expand its business outside its crypto roots? Join the conversation here. |     | |
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What the numbers say: New global research from Nickel Digital Asset Management has revealed investors' Bitcoin (BTC) price expectations for the end of 2023. While conducting the research, the firm interviewed 200 institutional investors and wealth managers in the U.S., the U.K., Germany, Switzerland, Singapore, Brazil, and the United Arab Emirates (UAE), who collectively manage around $3.5T in assets. The results have shown that only 3% of respondents believe that Bitcoin will end the year below $30,000. In the poll, 78% of participants reported an expectation between $30,000 and $40,000, while a 1% portion said the leading cryptocurrency could close 2023 above $50,000. Relevance: On the other hand, another survey conducted by CryptoVantage also offered insights about Americans' expectations for when Bitcoin will reach its next all-time high (ATH). The popular cryptocurrency last reached an ATH in November 2021 at around $69,000. However, the poll showed that 23% of Americans believe this record would be renewed within the next year. In the survey, 47% of respondents also said Bitcoin would surpass that level again within the next five years. Brands that should care: Meanwhile, predictions of sky-high valuations for Bitcoin, especially among corporate actors, have gained massive popularity in recent years, though they mostly do not come to fruition. Most recently, one of the analysts at the U.K.-based banking giant Standard Chartered forecasted that Bitcoin would reach $50,000 by the end of the year. The bank analyst also set his price prediction for late 2024 to $120,000. Additional details: Bitcoin, the largest cryptocurrency by market cap, has increased its value by more than 60% since the beginning of the year, though it is still 61% below its ATH. | | | |
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| 3 | | Coinbase, the largest U.S. crypto exchange, has announced that its Bermuda-based international derivatives exchange received additional regulatory approval from the Bermuda Monetary Authority (BMA). The new approval will allow the platform to expand its perpetual futures trading services to include eligible retail customers outside the U.S. in addition to the institutional ones. More: - Before the new permits, Coinbase International Exchange was only able to offer crypto derivatives services to institutional clients.
- The platform will launch the new offering through the Coinbase Advanced platform in the upcoming weeks.
- In the announcement, the company pointed out that nearly 75% of crypto trading volume comes from the derivatives market.
- The exchange has accelerated its efforts to expand its derivatives business over the past months, mainly due to the decrease in its revenue from spot trading.
- The firm currently offers crypto derivatives services through its main app, the dedicated Coinbase Derivatives Exchange, and its international exchange.
- The latest approval from the BMA came more than a month after Coinbase received another regulatory approval from the National Futures Association (NFA), a self-regulatory organization designated by the U.S. Commodity Futures Trading Commission (CFTC).
- The NFA approval also allows the company to offer crypto futures trading services to eligible retail customers in the U.S.
Zoom Out: - Coinbase launched the Bermuda-based international derivatives exchange, only catering to crypto traders outside the U.S., in May, shortly after receiving a digital asset license from the BMA.
- The international exchange started operations in line with the company's global expansion plans that intensified following legal tension between the platform and the Securities and Exchange Commission (SEC) in its home country, the U.S.
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| 4 | | The U.S. Securities and Exchange Commission's (SEC) chair, Gary Gensler, has recently testified before Congress, answering questions about his approach to crypto regulations at a House Financial Services Committee hearing. During his testimony, Gensler reiterated his belief that Bitcoin (BTC) is not a security and, thus, is not subject to securities laws. More: - In September, Gensler appeared before Congress twice following 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.
- During the hearing, McHenry also alleged Gensler of not being transparent to Congress about his interactions with the bankrupt crypto exchange FTX and its former CEO, Sam Bankman-Fried (SBF).
- The U.S. representative said they would have to issue a subpoena if the SEC chair maintains this approach.
- Rep. Tom Emmer also accused Gensler of taking a regulation-by-harassment approach toward digital assets.
- Emmer added that Gensler is working to consolidate his own power even though this crushes opportunities for Americans and the financial future of the country.
- In the hearing, Rep. Wiley Nickel also asked questions about whether the SEC plans to approve the pending spot Bitcoin (BTC) exchange-traded fund (ETF) applications, reminding of a recent court decision rejecting the agency's reasons for the denial.
- In response, Gensler said they are still considering the applications.
Zoom Out: - The SEC classifies all cryptocurrencies other than Bitcoin as securities in the light of Gensler's approach, claiming jurisdiction over the digital asset market.
- Over the years, the agency head stated several times that there is no need for a new legal framework for digital assets, existing rules are clear, and firms offering crypto services to U.S. customers simply refuse to follow them.
- Within the last several months alone, many crypto exchanges, including Binance, Coinbase, Kraken, Gemini, and Bittrex, faced increased crackdowns by the SEC over alleged securities law violations.
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| 5 | | Lawyers for Do Kwon, the co-founder of the collapsed Terra ecosystem, have filed a new legal motion, asking the federal court to dismiss a request from the U.S. Securities and Exchange Commission (SEC) to question the former executive in the U.S. about the downfall. In the filing, the legal team stated that it would be impossible for Kwon to testify to U.S. regulators since he is detained in Montenegro indefinitely, adding that there is no scheduled release or extradition date. More: - The lawyers also said Kwon cannot provide written testimony, too, because it would violate his due process rights under U.S. law.
- The motion further added that an order mandating something impossible would serve no practical purpose.
- The filing underlined that Kwon did not directly oppose a deposition to the U.S. regulator, but it would need to take place in Montenegro.
- The latest legal motion came a week after the SEC asked the court for permission to interview Kwon about the Terra ecosystem's collapse before the case's discovery period ends on Oct. 13.
- Kwon was arrested at the Podgorica Airport in Montenegro in March while trying to fly to Dubai carrying falsified traveling documents and then released on bail, being put under house arrest in the country pending trial.
- Both the U.S. and Kwon's native South Korea seek his extradition, though they do not have a direct extradition treaty with Montenegro.
Zoom Out: - The SEC first filed a lawsuit against Kwon and Terraform Labs, the firm behind the Terra ecosystem, in February, accusing them of defrauding customers and selling billions of dollars in digital assets that were unregistered securities.
- In the lawsuit, the regulator also claimed that the firm misled investors about the stability of its stablecoin pegged to the U.S. dollar (USD), TerraUSD (UST), and promised a value increase in its tokens.
- The multibillion-dollar Terra ecosystem collapsed last year after the prices of its native tokens, Luna and TerraUSD, plummeted nearly to zero in May and lost all their value against USD, triggering a prolonged crypto winter and causing over $60B to be wiped off the crypto market.
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| 6 | | Speaking at a hearing in the National Congress, the Central Bank of Brazil's governor, Roberto Campos Neto, has stated that the country's lawmakers plan to tighten crypto regulations. The bank official cited the significant surge in cryptocurrency imports by Brazilians while explaining their goal to make the regulations stricter. More: - Neto also said the regulators would scrutinize the crypto-related activities since most are connected to tax evasion or illicit actions.
- The bank governor added that the local demand in Brazil has shifted toward stablecoins, the cryptocurrencies whose value is pegged to another reference asset, mostly a fiat currency.
- The Brazilian central bank recently revealed that cryptocurrency imports in the country from January to August this year reached $7.4B, with a 44.2% increase from the same period last year.
- Brazil is considered the crypto hub of South America and is one of the largest markets in the region.
Zoom Out: - Last year, the former Brazilian president, Jair Bolsonaro, approved a crypto regulation, marking the rollout of a virtual service provider license in the country and establishing a fraud crime involving crypto with a penalty of four to six years in prison alongside a fine in the event of a violation.
- In June, the new president, Luiz Inácio Lula da Silva, also specified jurisdictions on crypto to provide clarity within the Brazilian digital asset industry.
- Besides, the country's central bank is currently piloting its own central bank digital currency (CBDC), Drex, with 14 project participants, including several giant firms such as Visa and Microsoft.
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| 7 | | Quick Hits: - No-code development is here to stay, according to industry experts. Gartner predicts 80% of technology products will be built by those who are not IT professionals by 2024.*
- Crypto exchange Binance's CEO, Changpeng Zhao (CZ), has denied the rumors that he is the owner of CommEX, which recently acquired the platform's Russian unit.
- U.S. Judge Lewis A. Kaplan has approved a request from the bankrupt crypto exchange FTX's former CEO, Sam Bankman-Fried (SBF), to wear a suit and use a laptop with no internet access to take notes in court during his trial.
- The International Cricket Council (ICC) has announced that it would launch a blockchain-powered Web3 fan engagement app for the 2023 Cricket World Cup in India in partnership with Near Foundation, the non-profit organization behind Near Protocol.
- NEXT WEEK in LA, redefine development at DockerCon! Use DCHALF for 50% off in-person registration, or participate online for free. Come learn with us!*
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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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