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- Binance launches pilot program for bank custody of collateral 🏦💰
Binance launches pilot program for bank custody of collateral 🏦💰
PLUS: Crypto thieves steal $363M in Nov, the most ‘damaging’ month this year. Australia’s confusing new crypto tax guidance is ‘toilet paper,’ says law firm.
Manan Vora
December 01, 2023
Snapshot Web3
December 1, 2023
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Regulatory and Legal News
Australia's recent guidelines on cryptocurrency taxation, released by the Australian Tax Office (ATO) on November 9, have been criticized by law firm Cadena Legal. The law firm described the guidance as "toilet paper," emphasizing its non-binding nature, which adds confusion to the taxation rules for decentralized finance (DeFi). The lack of clear public rulings is causing uncertainty, and the law firm founder, Harrison Dell, is advising clients to ignore the rules for now. The ATO's guidance lacks clarity on DeFi activities triggering capital gains tax (CGT) events, and Dell suggests waiting for a public ruling or new legislation for clarification.
The United Nations Development Programme (UNDP) is partnering with the Algorand Foundation to launch a blockchain academy in 2024. This initiative aims to upskill the UNDP's 22,000 staff members across 170 countries in blockchain technology. The curriculum will cover distributed ledger technology, blockchain applications for financial inclusion, supply chain transparency, real-world asset tokenization, and digital identity. The UNDP sees this education as a critical step in addressing complex global challenges using blockchain technology. The Algorand Foundation's head of education and inclusion, Doro Unger-Lee, emphasized the importance of identifying actionable blockchain use cases to achieve Sustainable Development Goals.
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Innovation and Launches
Swiss crypto bank Seba has rebranded to Amina Bank AG as part of its global expansion efforts. The decision to change the name from Seba was due to similarities with SEB Bank in Sweden, leading to an agreement for a name change in 2023. The new name, Amina, signifies the transference of one compound to another, reflecting the bank's mission to bring together various elements of traditional, digital, and crypto banking. Amina recently obtained a license from the Hong Kong Securities and Futures Commission to offer crypto trading services in the country and aims to accelerate growth in strategic hubs, including Switzerland, Hong Kong, and Abu Dhabi, in 2024.
The Central Bank of Solomon Islands has partnered with Japanese blockchain firm Soramitsu to launch a proof-of-concept for a central bank digital currency (CBDC) named Bokolo Cash. The CBDC will be worth one Solomon Islands dollar, and the project will test retail use cases, person-to-person transfers, wholesale transfers between commercial banks, and simulated cross-border payments and remittances. The CBDC will operate on a tailor-made blockchain based on Hyperledger’s Iroha, with connectivity to Soramitsu’s public Sora blockchain. The project aims to embrace digital currency and position the Solomon Islands at the forefront of global technological advancements.
Crypto exchange Binance has introduced a pilot program enabling banks to store trading collateral off the exchange, aiming to reduce counterparty risk for institutional investors. In this program, institutions can hold collateral at a third-party bank instead of depositing it on the exchange. The collateral can take the form of cash or Treasury bonds, allowing institutions to earn yields while trading. This move replicates a framework common in traditional financial markets, and Binance has been developing the program for over a year. The exchange plans to expand the program in the future and is in discussions with banking partners and institutional investors interested in participating.
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NFT, Gaming and Metaverse
Investment firm Tiger Global has reportedly marked down its stakes in the Bored Ape Yacht Club (BAYC) collection by 69% and NFT marketplace OpenSea by 94%. This move is part of Tiger Global's wider adjustments in valuations for multiple portfolio companies. Tiger Global has been active in the crypto space, investing in various areas such as NFTs, blockchain security, and privacy-focused projects. The company co-led a $24 million funding round for blockchain security firm CertiK in 2021 and participated in a Series B round for the zero-knowledge applications platform Aleo in 2022. Coatue Management, another investor in OpenSea, had marked down its investment in the NFT marketplace by 90% in early November.
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Scams and Hacks
November 2023 has become the most damaging month for crypto theft, scams, and exploits this year, with criminals netting $363 million, according to blockchain security firm CertiK. Exploits accounted for $316.4 million, flash loans inflicted $45.5 million, and various exit scams resulted in $1.1 million in losses. The largest exploits in November occurred on Poloniex and HTX/Heco Bridge, with losses of $131.4 million and $113.3 million, respectively. This monthly figure surpasses the earlier record of $329 million set in September. CertiK noted that $1.7 billion has been lost to exploits, exit scams, and flash loan attacks in 2023, making up 54% of the crypto losses in 2022.
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Interesting Reads
Withdrawals from Binance have largely subsided after the $4.3 billion settlement with the U.S. Department of Justice. Data from blockchain analytics firm Nansen shows that Binance had a net inflow of $87.4 million in Ethereum token deposits in the past seven days. Meanwhile, the net withdrawal of multichain tokens, including Ether, BNB, Avalanche’s AVAX, and Polygon’s MATIC, totaled $59.2 million during the same period. Since the settlement, Binance users have withdrawn more than $7.62 billion from the exchange but have also deposited $7.56 billion in digital assets. Binance's official token, BNB, has remained largely unchanged in the past month at $227.
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Miscellaneous
Amid the delisting and relisting process, Hut8 shareholders received 1 New Hut common stock for every Hut 8 share held, an official announcement confirmed.
The Starknet Foundation is warning community members to be on the lookout for scams relating to circulating screenshots of early iterations of a token distribution portal.
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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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