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- Singapore Plans Crypto Pilots With Japan, Switzerland And UK 🇸🇬🇯🇵🇨🇭🇬🇧
Singapore Plans Crypto Pilots With Japan, Switzerland And UK 🇸🇬🇯🇵🇨🇭🇬🇧
PLUS: UK publishes plans for stablecoins regulation. Saudi’s NEOM partners with Animoca Brands for regional Web3 development.
Manan Vora
October 31, 2023
Snapshot Web3
October 31, 2023
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Regulatory and Legal News
Bloomberg's ETF analysts speculate that SEC Chair Gary Gensler might consider denying pending spot Bitcoin ETF applications collectively, in a potentially surprising move. While analysts find this scenario unlikely, they acknowledge the possibility, refraining from estimating approval odds above 90%. Gensler's past comments on spot Bitcoin ETFs, along with the SEC's historical trend of denials, highlight the cautious approach towards such products. The SEC currently only approves ETFs for Bitcoin and Ether futures, citing concerns about market manipulation safeguards in spot products.
Terraform Labs co-founder Do Kwon and his firm are urging a U.S. district judge to dismiss the SEC's securities and fraud lawsuit, contending that the regulator has failed to substantiate any wrongdoing. They argue that Terra's cryptocurrencies, including Terra Luna Classic and Mirror Protocol, do not qualify as securities. Kwon's lawyers assert that the SEC's evidence is insufficient, and accuse the regulator of making false allegations, particularly regarding the movement of funds to Swiss bank accounts. The SEC had previously accused Kwon of sending 10,000 Bitcoin to a Swiss institution and committing fraud through false statements. Kwon is presently detained in Montenegro and is resisting extradition to the U.S.
The UK government has released an update outlining its plans to regulate fiat-backed stablecoins. The document, published on October 30, aims to oversee the use of these stablecoins in UK payment systems. It proposes introducing specific legislation in 2024 to bring the regulation of fiat-backed stablecoins under the Financial Conduct Authority's (FCA) jurisdiction. The Treasury is considering designating local companies as "arrangers of payment," responsible for ensuring overseas stablecoins meet local standards. Non-fiat-backed stablecoins, including algorithmic ones, will not be permitted in regulated payment systems. The FCA will have authority to demand stablecoin issuers hold reserve funds in a statutory trust. This framework falls under the recently passed Financial Services and Markets Act 2023, granting powers to regulate crypto and stablecoins.
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Innovation and Launches
The Monetary Authority of Singapore (MAS) is set to collaborate with financial regulators in Japan, Switzerland, and the UK for joint digital asset pilots. This initiative extends from Singapore's ongoing Project Guardian, focusing on asset tokenization. The MAS, FSA (Japan), FINMA (Switzerland), and FCA (UK) will form a policymaker group to discuss policies, identify risks, and explore common standards for digital asset networks. The goal is to enhance cross-border interoperability and support sustainable growth in the digital asset ecosystem. This move highlights global cooperation in understanding the opportunities and risks of digital asset innovation.
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NFT, Gaming and Metaverse
Saudi Arabia's NEOM Investment Fund has teamed up with web3 games developer Animoca Brands to drive web3 development in the region. They plan to establish a hub within NEOM, a futuristic region in northwest Saudi Arabia, to support the local web3 ecosystem. NEOM envisions becoming a global hub for innovation and emerging technology. As part of the collaboration, the NEOM Investment Fund is considering a $50 million investment in Animoca Brands, highlighting the potential of web3 technology to revolutionize various industries. This partnership aligns with Saudi Arabia's broader "Saudi Vision 2030" plan for economic, social, and cultural diversification.
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Funding and Acquisitions
Thailand's Kasikornbank (KBank) is venturing into the cryptocurrency industry with its acquisition of a 97% stake in the local crypto exchange Satang. The deal, valued at 3.7 billion Thai baht ($103 million), is facilitated through KBank's subsidiary, Unita Capital, focused on digital asset investments. Following the acquisition, Satang Corporation will rebrand to Orbix Trade Company Limited. KBank's crypto division will consist of Orbix Custodian, Orbix Invest, and Orbix Technology. Satang, a major player in Thailand's crypto space, offers exchange and digital asset services. This move underscores KBank's strategic push into the growing crypto and blockchain sector.
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Interesting Reads
Crypto exchange-traded products (ETPs) experienced their largest weekly inflow in over a year, totaling $326 million for the week ending Oct. 27, according to a report by CoinShares. This surge, compared to the previous week's $66 million, indicates increased investor interest in crypto funds. ETPs are investment funds designed to track the price of specific assets, in this case, large-cap cryptocurrencies like Bitcoin and Ether. The report suggests that optimism surrounding potential approval of a spot-based Bitcoin ETF by the U.S. SEC could be a contributing factor. Bitcoin ETPs saw the largest inflows, accounting for 90% of the total.
The article discusses the recent concerns about cryptocurrency being used for terrorist fundraising. While cryptocurrencies like Bitcoin have been associated with illicit activities, analysts argue that the extent of terrorism financing through crypto is relatively small compared to traditional methods. Recent reports suggesting large sums were transferred to terrorist-affiliated wallets were challenged by industry experts, who pointed out that the actual amounts were much lower. They emphasize that public blockchains are transparent and traceable, making them potentially less conducive for illicit activities compared to traditional finance methods. The article concludes that while there are legitimate concerns, the focus should be on educating and implementing better controls, rather than painting the entire crypto industry with a broad brush.
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Miscellaneous
SnowTrace, a popular blockchain explorer for Avalanche, is set to shut down its website powered by Etherscan's Explorer-as-a-Service (EaaS) toolkit on November 30. While the exact reason for the shutdown wasn't explicitly stated, some attribute it to Etherscan's service fees for EaaS, which can reportedly range from $1 million to $2 million annually. Critics argue that smart contract verification needs to be decentralized, as relying on a private company may not meet regulatory standards. Despite the shutdown, the Avalanche protocol itself is not ceasing operations, and the team is said to be moving towards an alternative solution.
The Chicago Mercantile Exchange (CME) has risen to become the second-largest Bitcoin futures exchange by notional open interest, closely trailing Binance. CME's open interest reached $3.58 billion, surpassing Bybit and OKX. The exchange's popularity is attributed to its cash-settled futures contracts, which have exceeded 100,000 BTC in volume. This surge in interest indicates growing institutional participation in Bitcoin futures trading, especially as Bitcoin experienced a significant surge in October, reaching over $35,000.
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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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