- The US vs. crypto. The US SEC has decided a duck is a duck even if it sometimes barks. I.e., a crypto token is a security, even if it sometimes has utility
- Crypto exchanges’ attitude of we’ll keep doing what we want regardless is now catching up with them, as the SEC is trying to show who’s boss
- The founders of failed crypto ‘fund’ 3AC have decided they don’t need to know or care about what the SEC may think about their having profited greatly at the $3.3 billion dollar loss of their users, and are chilling out living the good life in Bali
- New FCA crypto marketing laws in the UK are going to entire industry in the UK
EU’s Landmark Crypto Law MiCA Published in Official Journal
The European Union’s landmark Markets in Crypto Assets law (MiCA) has been published in its 252 page long Official Journal of the European Union. This sets the stage for its implementation on December 30, 2024. The law introduces comprehensive licensing rules for crypto firms. It will require crypto wallet providers to verify customer identities during fund transfers, permits crypto firms like exchanges and wallet providers to operate across the EU with a license, and imposes governance and financial obligations on stablecoin issuers, such as the stipulation that they will actually have to be backed by something, a feat which not all have managed to date. The law was formalised despite multiple delays due to translation issues into various EU languages. MiCA presents a clear regulatory path for the crypto industry in the EU, and so far seems to have been successful in attracting crypto companies towards the EU whilst the crypto industry in the US especially currently faces significant regulatory uncertainty and legal challenges.
FTX authorised to ‘permanently redact’ names of individual customers (i.e. keep the profit)
Bankrupt crypto exchange FTX has been granted the right to permanently redact individual customer names from all court filings. Several media outlets had tried to get access to the customer list citing public interest. FTX’s new management is trying to hold onto any money it can. It’s argued that disclosure could endanger individuals. More pertinently for the exchange, that data is potentially worth a lot of money to any new potential owner. Giving it away for free could lower the sale value of the exchange. Kevin Cofsky, a member of FTX’s restructuring team, argued that releasing the names would hinder the restructuring efforts and devalue the assets held by the debtor. Judge Dorsey acknowledged the potential risk of scams and identity theft for individuals, but deemed the risk less significant for companies and institutional investors. To keep the names of corporate and institutional investors confidential beyond 90 days, FTX would need to make a new request.
Since 3AC collapsed, the fund’s founders have reportedly been meditating in Bali, learning to surf, and taking shrooms
Just because your crypto fund has collapsed and lost your users $3.3 billion doesn’t mean you can’t hide away in Bali, which conveniently doesn’t have an extradition treaty with the US, ‘drink a lot of alcohol’, ‘take shrooms’ and pose with chained, caged tigers. Founders of collapsed hedge fund 3AC (Three Arrows Capital), Kyle Davies and Su Zhu, have reportedly been living comfortably in Bali, since their firm’s collapse last year. Davies spent his time painting, meditating, and attending a Formula 1 event in Bahrain, while Zhu indulged in video games, according to social brags. The so called fund’s crashed left it owing $3.3 billion to creditors. The founders, currently under investigation in the US and Singapore, were unresponsive in legal proceedings and did not attend emergency court meetings, and have not been located by liquidators. Despite this, they launched Open Exchange in April, ironically, a platform which claims to be for trading bankruptcy claims from the crypto collapse, such as of the firm they founded… They don’t seem to mind if the new venture takes off or not. They told the New York Times they have enough savings to not need to work again.
3AC: how to get rich quick and move to an island with your investors’ money
The 3AC model was financially smart- for its two founders. Take others’ money, invest it in leveraged risky crypto trades. Crypto goes up, pay people back some and keep some aside for yourselves. Take some more of others’ money, invest that in more leveraged risky crypto trades. Crypto goes down, don’t pay people back, take what you set aside for yourselves (a lot of money which means you’ll never have to worry about money or work again) and jet off to a nice tropical island and live a chill life.
VC firm A16z chooses London as destination for first office outside U.S.
Venture capital firm Andreessen Horowitz (a16z) has chosen London for its first international office, intending to invest in the crypto and startup ecosystem in the UK and Europe. The decision comes as the UK’s crypto regulatory outlook is slowly gaining grains of clarity, with the government aiming to bring crypto under existing financial services regulation. This move has been met with some controversy, as the House of Commons Treasury Select Committee suggests treating crypto like gambling, a proposal met with industry backlash. The new office is set to open later this year. A16z’s recent investment activities include leading a $43 million Series A funding round for U.K.-based Gensyn.
Abrdn tokenises money market fund on Hedera with Archax
UK asset manager Abrdn has debuted its first blockchain-based investment by tokenising a part of its £15 billion Lux Sterling money market fund. “We see the future for financial markets lies with leveraging new technologies, such as Web 3.0 and DLT,” said Russell Barlow, Global Head of Alternatives at abrdn. This tokenised security, covered by Abrdn’s existing regulatory permissions, marks Abrdn as the first major UK asset manager to issue one. The token was minted using the Archax Tokenisation Engine on Hedera Hashgraph, a platform where Abrdn is a member of the governing council.
Hong Kong legislator invites exchanges to the region despite SEC scrutiny
Hong Kong legislator Johnny Ng is encouraging cryptocurrency exchanges including Coinbase to establish operations in the region, and has mentioned potential stock listing opportunities. This invitation comes amid the recent SEC lawsuits against major crypto exchanges in the US. The Financial Secretary of Hong Kong, Paul Chan, stated the government’s commitment to fostering a robust ecosystem for cryptocurrency and fintech in January. Hong Kong has since been creating regulations and introducing compliance measures to support the growth of the cryptocurrency industry. Hong Kong seems to be doing everything it can to attract crypto businesses, whilst the US SEC seems intent on the opposite.
North Korean hackers linked to Atomic Wallet crypto hack
North Korean state-backed hackers, known as the Lazarus Group, are believed to be behind a recent hack on Atomic Wallet users, which reportedly led to millions of dollars in losses. Blockchain analysis firm Elliptic states with “high confidence” that the Lazarus Group is behind the attack, citing the hackers’ method of laundering the stolen assets through Sinbad, a crypto mixer previously used by the group, as key evidence. This mixer is believed to be a rebrand of the sanctioned Blender.io, which has been linked to the Lazarus Group in the past. The hack is estimated that the hack affected less than 1% of its monthly users, approximately 50,000 individuals, though number of users affected or the amount stolen aren’t known.
Is it crypto companies that are being complacent vs the North Korean hacking elite?
The Lazarus Group in particular are behind many if not most of the large successful hacks and seem to be getting more sophisticated by the hack, from a good starting point. There are many cyber security measures available for crypto (and any) companies to take, and it seems that not many companies are taking as many cyber security precautions as they could. Being realistic, one can’t assume the North Korean leadership is ever going to stop tasking its elite with hacking jobs. These hacks are funding a large part of the regime. One can’t help but feeling the onus needs to be on crypto companies to have better security measures than they have been.
U.S. credit unions back anti-CBDC Bill
Republican Congressman Alex Mooney introduced the “Digital Dollar aiming to stop the Federal Reserve from testing a central bank digital currency (CBDC). The bill has gained support from House Republicans, conservative advocacy groups, and the National Association of Federally-Insured Credit Unions (NAFCU). Many Republicans have expressed major privacy concerns over a federally-issued digital dollar, fearing potential government surveillance. Measures to limit the Fed’s attempts to develop and implement a CBDC have also been proposed at federal and state levels.
CBDCs are the scariest thing in crypto
Anti-CBDC votes is good. CBDCs are by core definition intended to reduce privacy or freedom. Reducing their potential and abilities is the only realistic hope there is, as one can’t expect governments to turn down the levels of control CBDCs offer them.