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- Iota launches $100M Abu Dhabi foundation for Middle East expansion 💰🚀
Iota launches $100M Abu Dhabi foundation for Middle East expansion 💰🚀
PLUS: Former British Chancellor’s crypto firm Copper launches tokenized securities platform. Stakeholder urges swift implementation of Nigeria’s blockchain policy.
Manan Vora
November 30, 2023
Snapshot Web3
November 30, 2023
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Regulatory and Legal News
Bankrupt FTX has been granted permission to sell $873 million in trust assets, sourced mainly from Grayscale's flagship Bitcoin product, to repay creditors affected by its 2022 collapse. The court approval includes various cryptocurrency trusts. FTX has recovered around $7 billion in assets, with $3.4 billion in cryptocurrencies. Founder Sam Bankman-Fried, convicted on fraud charges, awaits sentencing in detention.
Brazil's Senate approved income tax rules requiring Brazilians to pay up to a 15% tax on income from cryptocurrencies held on foreign exchanges. Effective January 1, 2024, those earning over $1,200 on foreign platforms will be taxed. Funds earned before this date will be taxed upon access, with pre-December 31 earnings taxed at 8%. The government aims to generate $4 billion in 2024 through these measures. The move aligns with previous efforts to tighten cryptocurrency regulations in response to concerns about potential tax evasion.
Obinna Iwuno, President of Nigeria's Stakeholders in Blockchain Association (SiBAN), has urged the swift implementation of the country's National Blockchain Policy. Approved by former President Muhammadu Buhari in May, the policy aims to stimulate economic growth, job creation, and financial inclusion. Iwuno emphasized the need for a forward-thinking regulatory framework to expedite the integration of blockchain technology across various sectors of the economy. He sees Nigeria as well-equipped for blockchain implementation and believes the collaborative efforts of stakeholders and the government can position the country as a leader in the global digital economy landscape.
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Innovation and Launches
Copper, a London-based crypto trading firm led by former British Chancellor Phillip Hammond, plans to launch a tokenized securities platform in Abu Dhabi through its new arm, Copper Securities, in early 2024. The initiative aims to cater to institutional investors globally, leveraging blockchain technology to provide securities financing and payment solutions. The move follows Copper's acquisition of its securities arm and aligns with the increasing interest in asset tokenization and blockchain adoption in the financial industry.
Swiss asset manager Pando Asset has joined the race for a spot Bitcoin exchange-traded fund (ETF) in the U.S., becoming the 13th contender. Pando submitted a Form S-1 to the SEC for the Pando Asset Spot Bitcoin Trust, aiming to track Bitcoin's price. This move coincides with BlackRock's meeting with the SEC to pitch a revised ETF model, addressing concerns about balance sheet impacts and risks associated with offshore crypto entities. Bloomberg analysts question the timing of Pando's entry, speculating on potential implications for fair play in the ETF approval process.
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NFT, Gaming and Metaverse
Over 75% of blockchain games launched in the last five years have failed, according to CoinGecko. Out of 2,817 games studied, only 690 maintain an active player base. A "failed" Web3 game is defined as one with a 14-day moving average number of active users dropping 99% or more from its peak. While 2021 saw the highest number of blockchain game launches (738), the following year had the highest number of failures (742). The average failure rate for Web3 games is around 80% annually since 2018. However, the trend slowed in 2023, with 507 failed projects as of November 27, possibly indicating stabilization in Web3 gaming.
Sony and Microsoft are making strides towards integrating blockchain technology into gaming. Sony has filed a patent for a system using blockchain to enable players to transfer digital assets between PlayStation titles, allowing unified progress and asset ownership across different games. Microsoft is reportedly planning to add crypto wallets to Xbox, enabling asset trading securely across different platforms. Both companies aim to explore the potential of blockchain in gaming, offering true ownership of in-game assets, new revenue streams for players and creators, and more transparent and secure game economies. This move could revolutionize the gaming industry and bring blockchain into the mainstream.
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Scams and Hacks
On November 28, decentralized finance (DeFi) platforms Aerodrome and Velodrome experienced front-end compromises and advised users to avoid interacting with their platforms during ongoing investigations. A user reported around $40,000 in funds moving to different wallet addresses. According to DefiLlama, Aerodrome and Velodrome have total locked values of $63.59 million and $139.73 million, respectively. These incidents highlight the susceptibility of the DeFi space to hacks, which accounted for over 80% of the crypto industry's hacks in 2022, resulting in losses exceeding $3 billion.
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Interesting Reads
NFTs (non-fungible tokens) have the potential to transform daily life beyond the art world. In healthcare and education, NFTs could be used to issue certifications and credentials, allowing for transparent verification of educational achievements and preventing fraud. The Department of Motor Vehicles (DMV) is exploring the use of NFTs for digitizing car titles and registrations, aiming to improve efficiency and maintain accurate records. In the sports and entertainment industries, NFTs can revolutionize event ticketing, providing secure and authentic tickets while also facilitating direct interactions with fans. Overall, NFTs offer unmatched security, transparency, and authenticity, paving the way for innovative solutions in various aspects of daily life.
The potential approval of a Bitcoin exchange-traded fund (ETF) by the U.S. Securities and Exchange Commission (SEC) faces challenges due to concerns about market manipulation in the unregulated spot Bitcoin market. Surveillance-sharing agreements (SSAs) with cryptocurrency exchanges aim to address manipulation concerns, but their efficacy is debated. The choice between in-kind and in-cash creations and redemptions in the ETF process influences the susceptibility to manipulation. A well-designed ETF using spot prices derived from the futures curve for Net Asset Value (NAV) calculation, coupled with in-cash transactions, may resist manipulation, obstructing arbitrage paths between the ETF and manipulated spot prices. The dominant role of the CME Bitcoin Futures market in price discovery suggests alignment with its characteristics could enhance the integrity of a spot Bitcoin ETF.
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Funding and Acquisitions
Open-source blockchain developer Iota has announced the launch of the Iota Ecosystem DLT Foundation in Abu Dhabi, focusing on expanding its distributed ledger technology (DLT) in the Middle East. Endowed with $100 million in Iota digital tokens vested over four years, the foundation aims to accelerate DLT growth and tokenize real-world assets. With the support of Abu Dhabi's financial regulators, the Iota Ecosystem DLT Foundation becomes one of the first blockchain-focused organizations approved by the Abu Dhabi Global Market (ADGM) following the region's introduction of comprehensive regulations targeting DLT foundations. The move aligns with Abu Dhabi's ambition to be a leading jurisdiction for the blockchain industry.
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Miscellaneous
An unconfirmed report suggests Taurus will provide crypto custodial services to Spanish financial services giant Banco Santander.
Ocean, which raised $6.2 million in a funding round led by Jack Dorsey, plans to enable miners to get block rewards directly from Bitcoin.
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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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