ICE mulls seeking N.Y. license for bitcoin project as France plans to urge EU to adopt crypto framework
As bitcoin, ethereum and other cryptocurrencies get increasing attention from investors, Wall Street and its traditional banks continue to adjust to the shift. Catch up on this week's top stories highlighting the intersection of these old guard and new school areas of finance with this recap compiled by The Fly.
ICE MULLS N.Y. LICENSE FOR BAKKT: Intercontinental Exchange (ICE) has been planning to create a highly-regulated bitcoin ecosystem, called Bakkt, but the launch date has been delayed for months due to concerns from the Commodity Futures Trading Commission, Bloomberg’s Benjamin Bain and Matthew Leising reported Thursday. ICE, which is looking to attract institutional investors to the crypto space and make it easier for consumers to buy products with digital currency, is now considering seeking a license from New York financial regulators that would allow Bakkt itself to hold custody of customers’ tokens in an effort to placate the CFTC’s concerns. ICE would still need approval from the CFTC on the broader Bakkt project if it was to receive a state license.
FRANCE TO URGE EU TO ADOPT CRYPTO RULES: France will call on the European Union to adopt a regulatory framework on cryptocurrencies similar to the one it implemented at a national level, Reuters’ Inti Landauro reported Monday. “I will propose to my European partners that we set up a single regulatory framework on crypto-assets inspired by the French experience,” French finance minister Bruno Le Maire said. “Our model is the right one.” France’s new crypto bill, the first of its kind adopted by a major nation, will enable firms that want to issue new digital currencies or trade current ones to apply for a certification.
COINBASE EXPANDS TO 11 MORE COUNTRIES: In a Wednesday blog post, Coinbase said, “One year ago, Coinbase served customers in 32 countries across two continents. Over the past 12 months, one of our main priorities has been to bring Coinbase services to people in all corners of the globe. We’re excited to welcome 11 more countries across Latin America and Southeast Asia to the cryptoeconomy by allowing customers to store, trade, send, and receive cryptocurrencies on Coinbase Pro and Coinbase.com — increasing the reach to 53 countries, spread across four continents…Customers in Argentina, Mexico, Peru, Colombia, Chile, India, Hong Kong, South Korea, Indonesia, the Philippines and New Zealand can now sign up on Coinbase.com and download our iOS and Android apps, or sign up for a Coinbase Pro account, to access crypto-to-crypto trading options.”
JAPAN TO ESTABLISH NEW CRYPTO REGULATIONS: Japan’s Financial Services Agency will require cryptocurrency exchanges to bolster internal oversight of “cold wallets” used to store digital currency, Reuters’ Takahiko Wada reported Tuesday. The agency restricted use of “hot wallets”, in which virtual money is stored on platforms directly connected to the internet, after a series of security lapses at exchanges last year causing them to shift to “cold wallets”. However, the FSA has since found that there are risks of internal theft, even with cold wallets and some exchanges failed to have rules where the person handling the storage would be regularly rotated out.
OVERSTOCK OFFERS UPDATE ON TZERO TRANSACTIONS: Overstock (OSTK) released a Thursday statement from chief executive officer Patrick Byrne on the progress of the tZERO equity investment from GSR Capital and Makara Capital. Byrne said, "Makara's due diligence has progressed, and in the course of its due diligence Makara has proven to be a professional and serious fund. Still, the parties will not have a definitive deal in place by the mid-April target. tZERO plans to continue facilitating Makara's diligence, but is not under any exclusivity with Makara or GSR and has retained advisors to pursue parallel alternatives. We will update shareholders after tZERO signs definitive documents. I remind shareholders of the $30M binding tZERO security token purchase agreement between Overstock and GSR…Under that agreement, GSR has a binding $30M funding obligation for May 6. Overstock's annual shareholder meeting will occur on May 9: I look forward to reporting to shareholders about the completion of GSR's token purchase on that date.”
CRYPTO STOCK PLAYS: Cryptocurrency revenues have been pointed to as reasons to be bullish on Advanced Micro Devices (AMD) and Nvidia (NVDA) in select research. Overstock, DPW Holdings (DPW), Kodak (KODK), Ideanomics (IDEX), Riot Blockchain (RIOT), Pareteum (TEUM) and Social Reality (SRAX) are other stocks that have been touted, or promoted themselves, as a way to play the crypto theme.
PRICE ACTION: As of time of writing, bitcoin rose roughly 4.4% this week to $5,244, in U.S. dollars, according to TradeBlock.