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.
PBOC CRACKS DOWN ON CRYPTO IN SHANGHAI: The People’s Bank of China said it would crack down on a revival of illicit activities around cryptocurrencies in Shanghai and warned investors not to confuse the instruments with blockchain technology, Reuters’ Winni Zhou, Samuel Shen and John Ruwitch reported Friday. “The issuance, financing and trading of virtual currencies involve multiple risks,” PBOC said, promising to uproot such activities. The PBOC is planning to launch its own digital currency and the statement comes after a resurgence in interest in such instruments after Chinese President Xi Jinping said China should accelerated development of blockchain.
BINANCE, TRON BANNED ON WEIBO: Crypto firms Binance and Tron were banned on Chinese micro-blogging service Weibo in what appears to be new efforts to crack down on virtual currency trading, Bloomberg’s Zheping Huang reported Monday. The move comes after China’s central bank and Shanghai’s financial regulator signed a notice that local government agencies should work with any companies linked to cryptocurrencies to exit such business immediately. Binance, which is appealing the ban, said Weibo suspended its account prior to the notice and did not give a reason for the suspension. Tron founder Justin Sun said he doesn’t believe the ban is related to the notice and the company is working on restoring the account. Additionally, Binance said it does not have any “fixed offices in Shanghai or China” amid reports police raided the facilities, Bloomberg’s Olga Kharif reported Thursday. “Any reports of a police raid are false,” a spokesperson said. “We do not have an office in Shanghai.”
FIDELITY DIGITAL ASSETS SECURES NY LICENSE: Superintendent of Financial Services Linda Lacewell announced Tuesday that the New York State Department of Financial Services has granted a charter under New York Banking Law to Fidelity Digital Asset Services to operate as a limited liability trust company as part of the state’s rapidly growing virtual currency marketplace. DFS has authorized FDAS to provide a virtual currency custody and execution platform, on which institutional investors and individuals can securely store, purchase, sell, and transfer Bitcoin. FDAS is a subsidiary of the Fidelity financial services company, which had assets under administration of nearly $7T as of December 2018. Including the charter granted to FDAS, to date DFS has approved 23 charters or licenses for companies engaged in virtual currency business activities.
ICE ANNOUNCES LAUNCH OF BAKKT BITCOIN CASH FUTURES: Intercontinental Exchange (ICE) announced Thursday the launch of the Bakkt Bitcoin Cash Settled Monthly Futures contract. The new contract will be listed on ICE Futures Singapore and cleared by ICE Clear Singapore, which are regulated by the Monetary Authority of Singapore. Bakkt Bitcoin Cash Settled Monthly Futures will be settled against data from the physically delivered Bakkt Bitcoin Monthly Futures contract. “Our new cash settled futures contract will offer investors in Asia and around the world a convenient, capital efficient way to gain or hedge exposure in bitcoin markets,” said Lucas Schmeddes, president and COO of ICE Futures and Clear Singapore. “Building off the success of our deliverable futures contract, the cash settled futures will leverage ICE’s regulated, globally-accessible market to offer a safe, secure and compliant environment for the trading of bitcoin.”
RIPPLE TOKENS LINKED TO ILLEGAL ACTIVITY: According to findings by Elliptic, roughly $400M of XRP tokens, the currency for the Ripple network, is linked to illegal transactions, Reuters’ Gertrude Chavez-Dreyfuss reported Wednesday. Elliptic chief scientist Tom Robinson said the illicit transactions of XRP, which currently has a market capitalization of about $10.98B, account for less than 0.2% of all XRP transactions that took place. In comparison to bitcoin, a previous study from Elliptic found that dark web purchases represent approximately 0.5% of all bitcoin transactions.
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 dropped roughly 18% this week to $6,937 in U.S. dollars, according to TradeBlock.
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AMD
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