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- Accounting Rules Unlock Bitcoin For Institutions 📈🧾
Accounting Rules Unlock Bitcoin For Institutions 📈🧾
PLUS: Grayscale becomes second largest BTC holder. Will Binance quit Russia after key executives resign?
Manan Vora
September 07, 2023
Snapshot Web3
September 7, 2023
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Regulatory and Legal News
Fair value accounting rules are now applied to Bitcoin, making it more attractive for institutions as a reserve asset. These rules allow assets, including volatile ones like Bitcoin, to be assessed based on their current market value. This simplifies regulatory concerns and may lead to increased institutional investment in the cryptocurrency, marking a significant step towards mainstream adoption.
Bankrupt crypto lender Celsius Network has filed an "adversary complaint" against EquitiesFirst Holdings to recover assets. EquitiesFirst owed Celsius around $439 million in cash and bitcoin as of July 2022. Celsius initially took collateralized loans from the lender in 2019 but failed to return collateral in 2021. The filing seeks injunctive relief and a declaratory judgment related to the "recovery of money/property." Celsius filed for Chapter 11 bankruptcy protection in July 2022, and co-founder Alex Mashinsky faces charges including securities fraud. Creditors are currently voting on asset sales to consortium Fahrenheit.
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Innovation and Launches
Visa's stablecoin pilot program on Solana could revolutionize crypto payments, attracting major e-commerce players. Stablecoin use may compound, making them a larger part of global payments. Visa plans to explore more stablecoins and blockchains. Companies like Airbnb and Uber, with extensive money distribution, stand to gain. Solana's efficiency could further drive stablecoin adoption.
Korean financial giant Mirae Asset Securities is partnering with Polygon Labs to develop tokenized securities networks. The collaboration aims to create the infrastructure and technology for tokenized securities issuance and distribution. Mirae Asset Financial Group, the parent company, manages $565 billion in assets. This initiative is distinct from the Next Finance Initiative consortium that Mirae joined in June. The partnership seeks to speed up web3 adoption and improve interoperability in South Korea's financial systems. Tokenization initiatives are gaining momentum among global financial institutions.
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NFT and Metaverse
The Bored Ape Yacht Club (BAYC) has postponed the opening of the HV-MTL Forge Rift due to bugs found during final testing. The delay aims to ensure a smooth experience. The new opening date will be announced next Monday. HV-MTLs are unique NFTs with customizable features, offering an interactive experience. Each HV has its own skills and characteristics, allowing for individual evolution. Owners are encouraged to participate in the Forge to shape their HVs' development.
Starting September 15, 2023, Google will allow advertisers to promote NFT games without gambling elements, provided they meet specific requirements and gain certification. This supports companies marketing NFT games through Google. Advertisers offering in-game asset purchases like character outfits and weapons are now compliant. The move aligns with Google’s responsible advertising practices, reflecting its recognition of Web3 technologies and the growing support for NFT games.
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Scams and Hacks
Scammers exploit government website URLs to trick MetaMask users. They redirect them to fake MetaMask sites, aiming to gain access to their wallets. The similarity between real and fake sites is key to their success. MetaMask is actively working on detection methods and urges users to report scams. They also advise users to be cautious with seed phrases and clarify they don't collect KYC info.
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Interesting Reads
Ethereum's Vitalik Buterin proposes "privacy pools," a protocol to differentiate legitimate transactions from criminal ones. This smart contract-based privacy feature aims to address concerns over blockchain privacy and regulatory compliance. By grouping honest transactions with zero-knowledge technology, users can prove their assets are legitimate. This approach seeks to demonstrate that privacy and regulatory compliance can coexist in blockchain technology.
Grayscale's Bitcoin Trust (GBTC) holds over $16 billion in over 1,750 addresses, affirming its major role in the crypto space. Despite attempts to keep addresses private, this information was uncovered. Grayscale is in a legal battle with the SEC to convert into an ETF, showing its dedication to adapting to changing regulations. Earlier, 500 wallets linked to Grayscale's Ethereum Trust were found, establishing it as a significant Ethereum entity. The crypto market's growth fuels demand for regulated products, boosting entities like Grayscale.
Short-term Bitcoin investors face challenges as supply in profit drops. Bitcoin's price fell below the 200-week moving average, signaling potential further decline. Historical data suggests such dips have presented buying opportunities. Parallels to 2019 indicate a potential shift in Bitcoin dominance. Reduced stablecoin market cap reflects lower investor confidence. Approval of Bitcoin ETFs or focus on the upcoming halving could change market dynamics.
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Quick Links
Key executives at Binance in Russia, including Vice President Gleb Kostarev and Director Vladimir Smerkis, have resigned amid rising regulatory concerns and potential sanctions. This creates uncertainty about Binance's future in the Russian market, which accounts for a substantial portion of its online traffic. The departures come in the midst of ongoing regulatory challenges faced by Binance worldwide.
The race for the first spot Ethereum exchange-traded fund (ETF) in the U.S. has begun. The Chicago Board Options Exchange (CBOE) filed for the ARK 21Shares Ethereum ETF and VanEck Ethereum ETF, officially triggering the SEC decision-making process. Bloomberg analyst James Seyffart predicts a decision around May 23, 2024. This marks a significant step as 19b-4 filings formally request rule changes and set the clock ticking for an SEC decision. More spot Ethereum ETF filings are expected soon.
Genesis Global Capital, a bankrupt crypto lender, filed two lawsuits seeking over $600 million in overdue loans from affiliated companies owned by Digital Currency Group (DCG). The parties are in negotiations, and Genesis has agreed to stay the action for further discussions.
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Funding
Trident Digital Group, a startup founded by former Coinbase executives, raised $8 million for its crypto lending platform. The company aims to address counterparty risk, a key concern in the crypto lending market, and restore liquidity. Trident plans to offer a yield product tied to the risk-free rate, backed by physical treasuries, targeting deposits from fintech firms, crypto treasuries, and venture capitalists. The seed round was co-led by White Star Capital and New Form, with participation from CMT Digital, Joint Effects, and Permit Ventures.
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The information provided in this newsletter is for informational purposes only and should not be interpreted as investment advice, endorsement, or recommendation. Cryptocurrency investments carry significant risk due to their volatility. You should consider your financial situation, investment goals, and risk tolerance before making any investments. We strongly recommend consulting a qualified financial advisor before making any investment decisions. Past performance is not indicative of future results.
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