JPMorgan in talks on Quorum merger with ConsenSys as U.S. plans crypto rules
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.
JPMORGAN IN TALKS ON QUORUM MERGER: JPMorgan Chase (JPM) is in talks to merge its marquee blockchain unit Quorum with Brooklyn-based startup ConsenSys, Reuters' Anna Irrera reported Tuesday, citing people familiar with the plans. The deal is likely to be formally announced within the next six months, but financial terms are still unclear. JPMorgan has been considering spinning off Quorum, which employs roughly 25 people, for around two years, evaluating options including setting up an open-source foundation, creating a new startup or merging it with another company.
U.S. PLANNING CRYPTO RULES: U.S. Treasury Secretary Steven Mnuchin said the country will soon announce new regulations link to cryptocurrency and digital payment systems, Bloomberg’s Saleha Mohsin reported Wednesday. In a Senate Finance Committee hearing, Mnuchin said the Financial Crimes Enforcement Network is readying rules that will increase transparency and prevent digital currencies from being used as “secret bank accounts.” “We will be rolling out new regulations to be very clear on greater transparency so that law enforcement can see where the money is going and that this isn’t used for money laundering,” Mnuchin said, adding he does not think the U.S. needs to mull central-bank issued cryptocurrency, although it may be a consideration “down the road.”
RIOT RECEIVES ADDITIONAL ANTMINERS: Riot Blockchain (RIOT) announced Tuesday that it has received an additional 1,060 S17 Pro Antminers from BitmainTech at the Oklahoma City mining facility. Riot is currently deploying the new S17 Pro generation miners and expects to complete the final installation in the next seven business days. Upon full deployment, Riot estimates the aggregate operating hashrate to be approximately 248 petahash per second. Riot anticipates that total deployment of the 4,000 S17 Pro new miners will represent approximately 90% of the Oklahoma City's mining facility's total current power capacity.
JAPAN PANEL WANTS DIGITAL YEN ON MID-YEAR POLICY: Kozo Yamamoto, who leads the research commission on finance and banking systems at the Liberal Democratic Party of Japan, said the country should establish its own yen digital currency and include the plan in the government’s mid-year policy guidelines, Reuters’ Tetsushi Kajimoto and Takahiko Wada reported Monday. “The sooner the better. We’ll draft proposals to be included in government’s policy guidelines, and hopefully make it happen in two-to-three years,” Yamamoto said. His remarks follow similar comments from another group of lawmakers, ked by former economy minister Akira Amari, who wants to issue digital yen amid China’s move toward issuing its own cryptocurrency.
DPW ANNOUNCES EXCHANGE AGREEMENT: DPW Holdings (DPW) announced Monday that it has entered into a Master Exchange Agreement with a family office to resolve debt previously in default in an aggregate amount of up to $7.7M. The family office has purchased $4.2M of outstanding debt currently in default and has committed to purchase up to an additional $3.5M of outstanding debt upon receipt of stockholder approval. In connection with the entry into the agreement, Dominion Capital has sold its secured promissory note to the family office, as has another creditor, of which the notes in the hands of the family office are no longer in default, and all litigation between the parties is resolved. The remaining note holders have entered into forbearance agreements and, upon receipt of stockholder approval, the family office has agreed to acquire the debt held by these parties.
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 (OSTK), DPW Holdings, Kodak (KODK), Ideanomics (IDEX), Riot Blockchain, 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 5.4% this week to $10,321 in U.S. dollars, according to TradeBlock.