Snapshot Web3

November 2, 2023

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Regulatory and Legal News

PayPal scores UK crypto license after brief local Bitcoin buy halt

PayPal has gained approval from the UK's Financial Conduct Authority (FCA) to offer cryptocurrency services in the country. The approval, received on October 31, 2023, allows PayPal to engage in "certain crypto asset activities" with certain restrictions. These restrictions include halting onboarding of new customers and limiting existing customers to hold and sell functionality. PayPal is also prohibited from expanding its current offering in crypto assets, which encompasses services like crypto exchange, participation in initial coin offerings, staking, and more. This approval comes after a brief halt in PayPal's UK customers' ability to buy cryptocurrencies in early October. The UK has been increasingly establishing itself as a significant cryptocurrency economy.

US crypto custody firm BitGo wins BaFin license in Germany

BitGo, a leading cryptocurrency custody firm, has obtained a cryptocurrency license from the German Federal Financial Supervisory Authority (BaFin). BitGo has been providing cryptocurrency custody services under BaFin's supervision since 2019. This new license solidifies BitGo's presence in the European market. BaFin is known for its influential role in crypto regulation. The move follows BitGo's establishment of regulated entities in Germany and Switzerland in 2020 and obtaining a New York Trust license in 2021. This development reflects the increasing adoption of cryptocurrencies in Germany, which is considered the second-largest crypto economy in Central, Northern, and Western Europe.

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Innovation and Launches

Visa completes digital Hong Kong dollar pilot test with local banks

Visa, in collaboration with HSBC and Hang Seng Bank, has successfully completed the e-Hong Kong Dollar (e-HKD) central bank digital currency (CBDC) pilot program. The initiative involves tokenizing deposits, allowing money deposited with a bank to be minted on the bank's blockchain ledger. Key findings indicate that interbank transfers settled near real-time, and the system operated 24/7, outperforming traditional payment systems. The tokenized deposits were conducted with encryption, ensuring privacy while enabling transparency on blockchain explorers. Visa is now exploring tokenized asset markets and programmable finance for future phases of the project, which has received praise from the Hong Kong Monetary Authority.

HSBC and Ant Group test tokenized deposits under HKMA sandbox

HSBC, in collaboration with Ant Group, has successfully tested tokenized deposits, including issuance, transfer, and redemption, within the sandbox environment established by the Hong Kong Monetary Authority. The initiative aimed to explore the potential of deposit tokenization in facilitating real-time treasury fund movement between corporate accounts within the HSBC network. The test involved HSBC's connection to Ant Group's blockchain platform, and it is seen as a precursor for future research on how blockchain and tokenization can enhance efficiencies in corporate treasury management. HSBC is also exploring various central bank digital currency initiatives and introduced local cryptocurrency services earlier in 2023.

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NFT, Gaming and Metaverse

Elon Musk Blasts NFTs—And Bitcoin Fans Love It

Elon Musk criticized NFTs, highlighting that many are not fully stored on the blockchain but merely link to external servers, potentially risking the loss of the associated artwork if the hosting company shuts down. While some projects on Ethereum do store artwork on-chain, not all do. Musk's comments sparked discussions about Bitcoin's Ordinals protocol, which allows artwork and media to be inscribed directly onto the blockchain, making it more secure than some NFTs on other chains, according to its proponents.

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Scams and Hacks

SafeMoon executive team charged with multiple fraud counts, arrests made

The U.S. SEC has charged SafeMoon and its executives with fraud and unregistered securities sales related to the SAFEMOON token. The executives allegedly misappropriated $200 million in investor funds. CEO John Karony and CTO Thomas Smith have been arrested; creator Kyle Nagy remains at large. The SEC claims SafeMoon's marketing misled investors about fund accessibility. SafeMoon, initially surging in value, faced controversies before, including a previous lawsuit and a hack.

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Interesting Reads

Multiparty computation (MPC): Its effects on blockchain innovation

Multiparty computation (MPC) is a cryptographic concept that allows a group of participants to jointly compute a function over their inputs while keeping those inputs private. It's a powerful tool for ensuring privacy in collaborative processes. In comparison to Zero-knowledge Proofs (ZK), MPC offers an efficient and scalable approach for certain blockchain use-cases. Some potential applications include preventing front-running on decentralized exchanges, enhancing financial transaction security, verifying product authenticity in supply chains, revolutionizing voting systems, and improving healthcare research while protecting individual privacy, among others. MPC's integration into blockchain technology expands the possibilities for secure collaboration without compromising privacy.

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Quick Links

Worldcoin claims 4M app downloads and 1M active users

The ‘World App’ for iOS and Android has now been downloaded 4 million times, according to data collected by its development team, Tools for Humanity.

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Miscellaneous

Solana gains 80% in a month as Firedancer goes live on testnet

Solana's native token SOL has experienced a remarkable surge of nearly 81% in the past 30 days, reaching over $41 on November 2nd. This rally can be attributed to the testnet launch of Firedancer, a scaling solution aimed at enhancing speed, reliability, and validator diversity on the Solana network. Compared to its rival, Ethereum's native token ETH, which only saw gains of under 11% in the same period, SOL has significantly outperformed. The mainnet launch of Firedancer is anticipated in the first half of 2024, and it is viewed as a long-term solution to Solana's historical network outage issues. Despite this recent surge, SOL is still down around 84% from its all-time high in November 2021.

MicroStrategy’s Bitcoin bag is up $900M amid BTC price surge

MicroStrategy, led by CEO Michael Saylor, has seen a paper gain of $900 million on its holdings of 158,400 Bitcoin. This increase in value is attributed to optimism surrounding the potential approval of spot Bitcoin exchange-traded funds (ETFs). Despite the recent gains, MicroStrategy remains committed to its Bitcoin strategy. The company added 6,067 Bitcoin to its holdings since the start of the third quarter, taking advantage of a dip in Bitcoin's price during that period. While MicroStrategy's revenue increased by 3% year-on-year, it recorded a net loss of $143.4 million, partly due to digital asset impairment losses and income taxes. The firm remains optimistic about both its Bitcoin holdings and its business analytics products.

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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.