Coincover's Crypto News Update [13/11/2023]

Coincover brings you a roundup of key events shaping the crypto landscape last week, just in case you missed it. So what’s been going on? HM Treasury and BlackRock, have set the stage for significant shifts in the industry whilst the SEC might approve all 12 spot Bitcoin ETF applications. Join us as we explore the potential impact of HM Treasury’s proposed crypto framework in the UK and delve into BlackRock’s latest moves, further signaling the convergence of traditional finance and blockchain technology. 

Navigating the Impact of HM Treasury's proposed crypto framework in the UK

The regulations, outlined in HM Treasury's response to a consultation in October 2023, have sparked division among stakeholders. The full implications of these regulations on the market are not entirely clear, but it is evident that the UK's crypto industry is on the brink of significant change.

The proposed framework involves regulating key activities like custody and lending, marking a notable shift by bringing centralised crypto asset exchanges under financial services regulation for the first time.

The introduction of regulations outlined in HM Treasury's response signals a critical turning point for the crypto industry in the UK. Slight divisions raised in the framework highlight differing perspectives on how the crypto market should be governed.

The overall impact could be incredibly positive, including increased legitimacy, investor protection, and market stability, but it may pose challenges and require adjustments for businesses and participants in the space. In the coming months, the effects of these regulations will become more evident as investors start to comply and navigate them.

BlackRock paves the way for traditional finance and blockchain convergence

Last Thursday marked a pivotal moment as BlackRock, a leading asset management giant, officially registered and confirmed an iShares Ethereum Trust in Delaware. The registration, facilitated by BlackRock Advisors, with Daniel Schwieger, a managing director at BlackRock, as the registered agent, has created ripples in the crypto sphere. 

The impact was swift—Ether (ETH) surged by approximately 7% during the session, buoyed not only by this specific development but also riding the wave of a broader crypto market rally, reaching an impressive $2,105.

BlackRock's continued venture into crypto not only solidifies its presence but signals the convergence between traditional financial powerhouses and the world of blockchain. The involvement of such heavyweight BlackRock acts as a confidence catalyst, not just for larger institutions but consumers and smaller investors alike. This move speaks to the growing synergy between traditional finance and the dynamic world of cryptocurrencies.

HSBC's strategic move to pioneer custody services for blockchain-based assets following a growing industry demand

HSBC is aiming to launch a custody service for “blockchain-based assets” (excluding cryptocurrencies). In partnership with Swiss digital company Metaco, HSBC is developing a “vault” for storing tokens on a blockchain that are tied to traditional financial assets. The move aligns with the increasing demand for custody and fund administration of digital assets from asset managers and owners, as stated by HSBC's Chief Digital, Data, and Innovation Officer Zhu Kuang Lee.

While the development is specific to blockchain-based assets rather than cryptocurrencies, it shows a broader trend of financial institutions exploring and embracing blockchain technology. Those in the industry will likely observe how this move influences further developments, collaborations, and the merging of traditional finance and blockchain in the coming years. Similar to BlackRock’s interest in the world of crypto and blockchain, HSBC’s custody service may also help improve market legitimacy and increase institutional adoption.

FTX requests to sell key trust fund assets

FTX has asked the bankruptcy court in Delaware to sell certain key trust fund assets, valued at around $744 million. The assets include holdings from crypto asset manager Grayscale Investments and custody service provider Bitwise.

The request emphasises FTX’s proactive risk mitigation to safeguard trust asset values, ensuring maximum returns to creditors during the firm’s reorganization.

NFT sales volume reached $129 million in November

Analytics firm Nansen reports NFT sales volume reached 68,342 ETH on November 6^th. Following news on a bear-like market, NFT sales have been increasing week on week with its biggest jump at the start of November to be worth over $129 million. Blur, an NFT marketplace place holds the largest share of NFT trading volume for the last 30 days (161,433 ETH). OpenSea holds the second-largest trading volume with 52,307 ETH, however, there is still a substantial difference between the two.

El Salvador improves the speed of crypto ATMs with Lighting Network

El Salvador plans to use Lighting Network to improve the speed in 100 of its ATM machines owned by Athena Bitcoin. The layer-2 payment protocol allows for smaller transaction fees and faster withdrawals. El Salvador is the only country where Bitcoin is the legal tender.

The UAE outlines tighter guidelines for VASPs

The Central Bank of the United Arab Emirates (CBUAE) and other regulators in the country have issued new rules for virtual asset service providers (VASPs). These guidelines outline for VASPs operating without the required licenses in the UAE. On November 6^th, the UAE published a list of “Red Flags” for virtual asset services providers (VASOs) in collaboration with anti-money laundering committees. This list includes signs like lacking a regulatory license, making unrealistic promises, poor communication, and other indicators for spotting suspicious parties. The central bank said that unlicensed VASPs could face civil and criminal penalties, including financial sanctions. Additionally, any support from licensed entities for unlicensed VASPs may result in actions from law enforcement.

The SEC could approve all 12 spot Bitcoin ETFs this week

The SEC has the opportunity to greenlight all 12 pending spot Bitcoin ETF applications within the next eight days. The short timeframe is due to the deadline set by the SEC for the comment period on several pending applications. The comment period will end on November 8^th and after that, the SEC can make decisions on these filings.

Coincover bolsters executive team with Head of Legal and Chief Financial Officer

Last week, here at Coincover we welcomed two new executive members. Chief Finance Officer Pablo Pinillos and Head of Legal Yoann Lewkowitz.  New Head of Legal, Yoann Lewkowitz has held significant positions at Symmetry Investments, Credit Suisse, and LendInvest. Coincover also welcomed Pablo Pinillos who was formerly CFO at Bitrise.

Chief People Officer, Vikki Sly said, "Coincover is thrilled to welcome Pablo and Yoann. Their extensive expertise and track records are precisely what we need at this critical juncture. We're excited to have them on board and are confident that their contributions will make a significant positive impact on our business, ensuring that we continue to protect our customers' assets and drive innovation in this ever-evolving industry."

This weekly update marks another exciting week in the crypto and wider blockchain landscape. Interesting debates among stakeholders and further developments between traditional finance and crypto demonstrate the dynamic and ever-evolving nature of the landscape.