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.
LIBRA MAY HAVE VALUE FOR LAW ENFORCEMENT: Facebook (FB) executive David Marcus told Congress this month that its Libra cryptocurrency could be a valuable tool for law enforcement, partly because of the vast amounts of information that will be generated about its users, The Wall Street Journal's Paul Vigna reported Tuesday. Marcus implied during his testimony that law enforcement could have access to the data when necessary. "You're going to see an expansion of exchanges and wallet services that have stronger [anti-money-laundering] protocols and restrictions," said Yaya Fanusie, a former CIA analyst and security consultant. "That would be good for law enforcement."
FCA ISSUES GUIDANCE ON CRYPTOCURRENCIES: Britain’s Financial Conduct Authority issued guidance on Wednesday saying bitcoin and other cryptocurrencies have no intrinsic value and provide consumers with few protections. The authority said, “The Guidance will help firms understand whether their cryptoasset activities fall under FCA regulation. This will allow firms to have a better understanding of whether they need to be authorized and what they need to do to ensure they are compliant…Consumers should be mindful of the absence of certain regulatory protections when considering purchasing unregulated cryptoassets. Unregulated cryptoassets, e.g. Bitcoin, Ether, XRP etc., are not covered by the Financial Services Compensation Scheme and consumers do not have recourse to the Financial Ombudsman Service. Consumers should be cautious when investing in such cryptoassets and should ensure they understand and can bear the risks involved with assets that have no intrinsic value.”
BLOCKCHAIN.COM LAUNCHES CRYPTO EXCHANGE: Blockchain.com, which has created over 40M cryptocurrency wallets, announced Wednesday it is launching The PIT, an institutional-grade crypto trading platform. The company said, “Last July, we set out to build the fastest matching engine in crypto to ensure that the failed trades and broken markets that plagued the last crypto bull market wouldn’t hold-back traders in the next cycle…And what we delivered is not only the fastest in crypto by an order of magnitude – we measure in microseconds, not milliseconds – but a matching engine that could go head-to-head against any machine engine in the entire world…We can’t wait for you to meet The PIT, and begin trading crypto how it’s meant to be traded – fast, reliable, and liquid. You can now create your PIT Account by going to pit.blockchain.com so you’re all signed-up, funded, and ready to make moves on our first day of trading soon.”
BITFINEX BLOCKED FROM TETHER RESERVES: Cryptocurrency exchange Bitfinex continues to be blocked from the cash reserves as Tether as a judge reviews whether to dismiss a suit alleging the companies hid losses of over $850M, Bloomberg’s Chris Dolmetsch reported Monday. New York Attorney General Letitia James sued the companies in April claiming executives planned a series of “conflicted corporate transactions” in which Bitfinex gave itself access to as much as $900M of Tether’s cash reserves, which Tether told investors fully backed its coin. New York State Supreme Court Justice Joel Cohen extended an injunction on Monday blocking Bitfinex from accessing, loaning or making any claim on Tether’s cash reserves pending James’ investigation while he evaluates a bid by Ifinex to dismiss the case.
FORMER CENTRAL BANKER WARNS ON LIBRA: Hiromi Yamaoka, former head of the Bank of Japan’s payment and settlement systems division, warned that monetary policies could diminish significantly if Facebook’s Libra sees wide adoption, Reuters Leika Kihara and Takahiko Wada reported Friday. “If Libra becomes more widely used than the sovereign currency of a particular country, the effect of monetary policy may be severely undermined,” said Yamaoka, adding Libra’s use may cause or accelerate capital flight in countries where market trust in currencies is low. “It won’t be a big problem for countries that enjoy strong market trust in their currencies,” Yamaoka said. “Still, the emergence of Libra would pressure policymakers to discipline themselves.”
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 (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 7.8% this week to $10,540 in U.S. dollars, according to TradeBlock.
Bitcoin
+ (+0.00%)
Bitcoin
+ (+0.00%)
Ticker changed to META
-1.64 (-0.85%)
AMD
-0.58 (-1.94%)
Nvidia
-2.27 (-1.38%)
OSTK
+
Ault Global Holdings
+0.0002 (+0.14%)
Eastman Kodak
-0.01 (-0.41%)
Ideanomics
+0.015 (+0.81%)
Pareteum
-0.03 (-0.87%)
Riot Platforms
+0.02 (+0.94%)
Srax
+ (+0.00%)