Crypto weekly update
14. September 2023  • clock 3 min •  Daniel Mitrovsky

VISA Expands in the Crypto World – Market Info

Over the past three weeks, the total market capitalisation exceeded €973 billion. The decrease in market capitalisation over a 21-day period is 0.71%. The price of Bitcoin has risen by 0.4 % over the last 21 days to a current value of over €24,500. Bitcoin’s dominance is currently around 49.1 %.

Source: Coinmarketcap

VISA Expands in the Crypto World

A few days ago, payment giant Visa released information regarding the expansion of its presence in the world of cryptocurrencies. Its latest ambitions to move forward in the crypto world relate to its plan to create the financial system of the future in collaboration with the Solana crypto project.

According to a press release published by Business Wire, Visa intends to expand the settlement and usage capabilities of stablecoins by integrating USDC’s stablecoin and Solana’s blockchain to launch pilot programs with Worldpay and Nuvei.

Cuy Sheffield, Visa’s head of cryptocurrencies, had also commented on the decision. Sheffield stated that the use of stablecoins such as USDC and global blockchain networks such as the Solana or Ethereum blockchains will significantly improve the speed of transaction settlement.

Visa has been experimenting with the second-largest stablecoin on the market since 2021 and is exploring how it could be used within its treasury operations to shorten and reduce currency conversion for cross-border payments.

Visa’s expansion into the crypto world only underscores the trend of digital assets becoming more widely used and gradually merging with fiat currencies. The growing popularity of cryptocurrencies is evidenced, for example, by PayPal’s recent creation of its own stablecoin, while payment giants from the traditional financial world are increasingly seeing the potential of cryptocurrencies and implementing innovative technologies into the world of traditional banking. Source

Grayscale Wins Lawsuit With SEC

At the end of August, Grayscale Investments achieved a very important victory in its lawsuit against the US Securities and Exchange Commission (SEC). Grayscale has long sought to convert its over-the-counter Bitcoin Trust (GBTC) into an exchange-traded fund (ETF). The SEC has long refused to review Grayscale’s application to transform the fund, arguing that the product was not designed to “prevent fraudulent and manipulative practices.”

According to published court documents dated August 29, Judge Neomi Rao of the U.S. Court of Appeals for the D.C. Circuit ruled that Grayscale’s request for review would be granted and the SEC’s decision to deny GBTC’s transformation into a spot ETF would be reversed. In her ruling, Judge Rao stated that the SEC did not provide any relevant explanation as to why it should not review Grayscale’s request. It should be added, however, that this decision does not imply a transformation of the fund into a spot ETF.

As recently as late June 2022, the SEC denied Grayscale’s application to convert GBTC to a spot ETF. Grayscale’s Chief Legal Strategist Donald B. Verrilli filed a petition for review with the U.S. Court of Appeals for the District of Columbia for the Central District of Columbia the very next day. Grayscale CEO Michael Sonnenshein said in a statement at the time that the firm was deeply disappointed and strongly disagreed with the SEC’s decision to deny its application.

Grayscale Bitcoin Trust (GBTC) is currently the largest Bitcoin over-the-counter fund with over $14 billion in assets under management. Thus, Grayscale, like several other companies, including BlackRock and Fidelity Investments, must wait for its spot ETF decision. It is expected that the SEC could make a decision on whether to launch or reject spot ETFs as early as early next year. Source

Chinese Crypto Exchange Victim of Hack

Chinese crypto exchange CoinEx saw abnormally large outflows of cryptocurrencies to an unknown address with no history the day before yesterday, leading security experts to suspect the exchange was the victim of a hack. According to the information released so far, it is highly likely that as much as $27 million in cryptocurrencies were stolen.

On Tuesday at approximately 3:21 p.m. CST, approximately 4,947 ETH was transferred from the CoinEx crypto exchange’s Hot Wallet to an unknown Ethereum address that had no prior history prior to this transaction. The value of the stolen ETH at the time was around $7.9 million.

Shortly after this transfer, a large number of tokens started disappearing from the CoinEx wallet, which were routed to the same unknown address. A few minutes later, approximately 408,741 DAI, 2.7 million GRT tokens and 29,158 UNI tokens were stolen.

Blockchain security-focused platform PeckShield almost immediately identified these outflows as suspicious, as ETH reserves on crypto exchange CoinEX’s wallet remained virtually zero.

About four hours later, the crypto exchange CoinEx confirmed on Twitter that their risk control system had detected abnormal withdrawals from the wallets used to custody the exchange’s assets. The crypto exchange immediately set up a special investigation team to find out what happened. The crypto exchange also declared that the stolen funds represent only a small part of the exchange’s total reserves and that users will be 100% compensated for any loss due to the unauthorised breach of the system. According to the latest information, the exchange has now suspended deposits and withdrawals and is working with several companies to investigate the situation. Source

El Salvador Will Educate About Bitcoin

El Salvador’s Ministry of Education and the non-profit NGO Mi Primer Bitcoin (MPB) have teamed up to include Bitcoin education in the public school curriculum starting in 2024.

John Dennehy, founder of MPB, also confirmed that this is a project of the Ministry of Education that MPB is working on with Bitcoin Beach. The primary source material for teaching about Bitcoin will be the Mi Primer Bitcoin curriculum, from which students will receive a diploma of completion.

Training for the pilot program reportedly began as early as September 7. The Bitcoin Diploma of Completion program will be taught by up to 150 teachers in 75 public schools to provide its graduates with a basic understanding of Bitcoin.

After the initial training, the teachers will return to their schools and teach according to a curriculum created by the Department of Education. If successful, the project will be made available to every school in the country next year. “As the first nation to adopt Bitcoin, El Salvador will be an example for the world. Quality education is our best chance to ensure that that example is a positive one,” said John Dennehy, founder of MPB. Source

HSBC Reportedly Partnered With Fireblocks

London-based HSBC, one of the largest banks in the world, is reportedly working with Fireblocks, a technology firm focused on cryptocurrency custody, according to two corporate insiders.

Fireblocks specialises in cryptocurrency custody technology such as multi-party computation (MPC), and prior to this partnership, had experience working with large banks. In early 2021, Fireblocks became the custody service provider for BNY Mellon and is also working with BNP Paribas.

Even as big banks gradually enter the crypto space, their enthusiasm has been dampened in part by regulatory uncertainty around digital assets. The uncertainty stems mainly from the situation in the US, where regulators have been hunting down crypto companies and pursuing lawsuits against them for months. However, the lack and ambiguity of regulation in the US allows financial institutions in Europe or Asia to gain an advantage over their US competitors.

HSBC, which owns about $3 trillion in assets, allows customers of its Hong Kong branch to trade Bitcoin and Ethereum exchange-traded funds (ETFs). However, both parties declined to comment on the collaboration between the companies.

We at Fumbi also work with Fireblocks, which has long been one of the leaders in crypto asset custody. The goal of this cooperation is to bring our clients the best and most secure way to store their assets. Source

Interesting Fact: Another Giant Joins Bitcoin ETF Race

Another financial giant is joining the race to launch its own spot ETF fund. Franklin Templeton, an asset manager that manages more than $1.5 trillion in assets, has filed to launch a bitcoin spot ETF.

The S-1 registration was officially filed this Tuesday and came just weeks after the SEC postponed its decision on several filings from BlackRock, WisdomTree or Fidelity until early next year.

According to the filing, the company plans to structure its fund as a trust that would work with Coinbase to manage bitcoins and Bank of New York Mellon to manage its cash. The fund’s shares would trade on the Cboe BZX exchange. The US Securities and Exchange Commission (SEC) now has until 16 October to comment on the application and decide whether to approve the ETF or ask for more time in the review process.

Spot ETFs have been a major topic in the crypto world in recent months, considered by many to be the gold standard for institutional investors’ entry into Bitcoin. The only thing standing in the way of spot ETFs is the SEC, which has long rejected these types of applications due to concerns of market manipulation. Source

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Daniel Mitrovsky


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