Crypto News Bites 2022/12/13
SBF ARRESTED / CPI today FOMC tomorrow / DoJ may charge Binance / MoonPay UK registration / Uniswap fee switch / Oasys launches mainnet
Top News Summaries
Had to edit my post just a minute after publishing, to say SBF HAS BEEN ARRESTED.
Tue CPI, Wed FOMC. Inflows into BTC while outflows from altcoins.
Reuters reports DoJ split between charging Binance. MoonPay gains UK regulator registration. Coinbase saw 66% increase in law enforcement requests.
Uniswap to votes on turning the fee switch on. Oasys game-focused blockchain launches mainnet. Bermuda-based bank issues stablecoin. Bitcoin Group buys German bank.
More details, news and analysis below! Also follow me on Twitter!
Market Overview
Quick edit of this post, happened just a few minutes after I hit publish. FTX founder SBF has been arrested in the Bahamas after US files criminal charges.
Another rangebound day yesterday during Asia/EU hours punctuated by a late rally following US equities. Microsoft’s 4% stake in the London Stock Exchange and Pfizer’s $10-15b outlook on vaccines boosted the stock indices, but it was a low volume day which indicates to me that it could have been short covering after markets dropped 3.5% last week and de-risking ahead of the CPI data out an hour before US markets open. A lot of expectations for confirmation that inflation is easing, which would be a precursor to tomorrow’s FOMC where markets are pricing in a 72% chance of a 50bp hike after four consecutive 75bp hikes. I believe this is the last macro event of 2022 that will affect crypto markets, with BTC & equities’ 30 day correlation increasing since the start of the month.
Bitcoin miner Argo Blockchain ARBK 0.00%↑ which suspended trading last Friday says it is close to restructuring, without having to declare bankruptcy. Although a welcome relief if it actually happens, it goes to show the difficult times that the BTC mining industry is in, being squeezed by lower BTC prices and higher costs.
Bitcoin miner Terawulf WULF 0.00%↑ on the other hand, has raised $10m in new capital to repay some of its debts and will increase their mining capacity. The industry is consolidating separating the strong from the weak.
Adoption
Bank of England seeks proof of concept for a sample wallet for a Central Bank Digital Currency (CBDC), taking applications until 23 Dec. The wave of crypto adoption for Central Banks are coming. Already around a dozen countries are already piloting or have launched a CBDC with many more researching or in the proof of concept stage.
MoonPay, a crypto payments app, gains UK regulator registration, signifying compliance with money laundering rules. Current bottleneck is fiat to crypto & back. Goldman Sachs wrote in a research report last Friday that blockchain technology did not fail, but that regulators should protect crypto investors at the point of trust. Hopefully this MoonPay news is a step in that direction.
Crypto exchange Coinbase COIN 0.00%↑ says law enforcement requests rose 66% from a year ago to 12,320. 43% of those came from US. Another data point that shows increasing regulation and scrutiny.
Oasys, a new gaming-focused blockchain, has launched their mainnet. This is particularly exciting as traditional gaming companies such as Sega, Square Enix, Bandai Namco, Ubisoft, Com2us, Netmarble are involved, and have even become validators for the blockchain. In my view, games can usher in the next wave of crypto adoption.
Bermuda-based Jewel Bank is issuing a fully backed stablecoin called Jewel USD (JUSD) on the Polygon (MATIC) network. The bank received approval from the Bermuda Monetary Authority. Just another data point for continued institutional / regulatory adoption.
Bitcoin Group (ADE), a holding company focused on blockchain, to buy a German bank for EUR14m. Yet another data point on institutional adoption.
Centralized Finance (CeFi)
Reuters reports that US Department of Justice is split over charging crypto exchange Binance. An investigation began in 2018 focused on Binance’s compliance with US anti-money laundering laws & sanctions.
Crypto exchange Bybit also releases Proof of Reserves following other centralized exchanges (CEXs). It’s not perfect, but it’s better than nothing and a step in the right direction towards transparency.
Follow the money
The latest CoinShares report is out, which shows outflows from altcoins (i.e. coins not called Bitcoin) but outflows from short BTC products and inflows into long BTC products, despite last week seeing almost no move in the big orange coin.
Evertas, a crypto insurance firm, raised $14m series A from investors including PolychainMorgan Creek, Matrixport, Hashkey.
Other News
Uniswap (UNI), one of the earliest decentralized exchanges (DEXs), the 5th largest DEX by total value locked (TVL) and the largest DEX by fees generated, have started voting on a proposal to turn on its ‘fee switch’, which will divert a portion of the trading fees generated to its treasury in a pilot program lasting 120 days. As one of the pioneers in the decentralized finance (defi) space, it will be interesting to see whether other protocols will also divert trading fees to the treasury instead of to token holders.
Neon Labs, a protocol that allows Ethereum applications to build on Solana via an Ethereum Virtual Machine (EVM), was to go live on mainnet yesterday, but has been postponed. Despite Solana being a non-EVM chain and losing the backing of bankrupt crypto exchange FTX, Solana is still a top 10 blockchain by TVL. In the past, non-EVM chains which received an update to become EVM compatible had seen success in attracting users and TVL, so perhaps when Neon Labs finally launches it could help the blockchain overcome the FTX crisis.
In a random piece of news, Twitter has seen a reduction in crypto spam bots after CEO Elon Musk shuts down IP addresses of a small number of people behind a large number of bot accounts. Musk also looking to prosecute scammers on Twitter in the future. Regardless, if you see some crypto investment that is too good to be true on Twitter, do some research to see where the returns are coming from, otherwise it will be coming from you.
Just idle gossip at this point, but the new CEO of FTX who was hired to restructure the company will say that FTX US was not independent of the parent company in a US House testimony today. By the way, FTX founder SBF will only testify virtually…
Bankruptcy of 2nd largest crypto exchange FTX causes contagion risks. How many funds & protocols have yet to announce their exposure? Learn to self-Custody!
Decentralization no longer just a tagline. Centralized to decentralized movement for remaining crypto traders & investors.
Global crypto adoption and increased regulation, launches of Centralized Bank Digital Currencies.
Bitcoin mining industry consolidation as margin squeezed on lower BTC prices and higher costs (electricity, funding, hashrate difficulty etc).
Macro: US CPI peaking & potential slowing of Fed rate hikes / Russia Ukraine war may be thawing / China pivoting from zero-Covid policy
Tokens Mentioned Today
BTC ETH JUSDT MASTIC UNI