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.
AG BARR ANNOUNCES CRYPTOCURRENCY ENFORCEMENT FRAMEWORK: U.S. Attorney General William Barr announced Thursday the release of "Cryptocurrency: An Enforcement Framework," a publication produced by the Attorney General's Cyber-Digital Task Force. The framework provides a comprehensive overview of the emerging threats and enforcement challenges associated with the increasing prevalence and use of cryptocurrency; details the important relationships that the Department of Justice has built with regulatory and enforcement partners both within the United States government and around the world; and outlines the Department's response strategies. "Cryptocurrency is a technology that could fundamentally transform how human beings interact, and how we organize society. Ensuring that use of this technology is safe and does not imperil our public safety or our national security, is vitally important to America and its allies," said Barr. "I am grateful to the Cyber-Digital Task Force for producing this detailed report, which provides a cohesive, first-of-its kind framework for those seeking to understand federal enforcement priorities in this growing space."
SQUARE INVESTS $50M IN BITCOIN: Square (SQ) announced Thursday that it has purchased approximately 4,709 bitcoins at an aggregate purchase price of $50M. The investment represents approximately one percent of Square’s total assets as of the end of the second quarter of 2020. “We believe that bitcoin has the potential to be a more ubiquitous currency in the future,” said Square’s CFO, Amrita Ahuja. “As it grows in adoption, we intend to learn and participate in a disciplined way. For a company that is building products based on a more inclusive future, this investment is a step on that journey.” The company launched bitcoin trading in 2018 with Cash App, formed Square Crypto, an independent team solely focused on contributing to bitcoin open-source, in 2019 and also recently launched the Cryptocurrency Open Patent Alliance, a non-profit organization encouraging crypto innovation.
FCA BANS SALE OF CRYPTO-DERIVATIVES TO RETAIL INVESTORS: The Financial Conduct Authority announced Tuesday has published final rules banning the sale of derivatives and exchange traded notes that reference certain types of cryptoassets to retail consumers. The agency said, “The FCA considers these products to be ill-suited for retail consumers due to the harm they pose. These products cannot be reliably valued by retail consumers because of the: inherent nature of the underlying assets, which means they have no reliable basis for valuation; prevalence of market abuse and financial crime in the secondary market; extreme volatility in cryptoasset price movements; inadequate understanding of cryptoassets by retail consumers; lack of legitimate investment need for retail consumers to invest in these products. These features mean retail consumers might suffer harm from sudden and unexpected losses if they invest in these products.” To address these harms, the FCA has made rules banning the sale, marketing and distribution to all retail consumers of any derivatives and ETNs that reference unregulated transferable cryptoassets by firms acting in, or from, the UK. The FCA estimates that retail consumers will save around GBP53M from the ban on these products. The ban will come into effect on January 6.
RIOT CONTINUES HASH RATE EXPANSION: Riot Blockchain (RIOT) announced Tuesday it is continuing its operational expansion with the purchase of an additional 2,500 next generation S19 Pro Antminer cryptocurrency miners for $6.1M from BitmainTech, scheduled for receipt and deployment delivery in December 2020. With this purchase, the Company expects to reach 842 PH/s in operational hash rate with 9,540 miners deployed by late December 2020. This represents an increase of approximately 50% over Riot's previous estimate of its deployed hash rate as of the end of 2020. Combined with the previously disclosed purchases of Bitmain S19 Pro Antminers, the Company now expects to achieve a total hash rate capacity of 2.3 EH/s by June 2021, with 22,640 total miners deployed.
SRAX NAMES BIGTOKEN CEO: SRAX (SRAX) announced Monday that Malcolm CasSelle, one of its board members, will be appointed chief executive officer of BIGtoken. As previously announced, SRAX has entered into a definitive agreement with Force Protection Video Equipment Corp, pursuant to which SRAX will receive 88.9% of the issued and outstanding shares of FPVD in exchange for 100% of the shares of BIGtoken. Upon completion of the transaction, FPVD will be rebranded as BIGtoken. CasSelle previously was SVP & GM of digital media at SeaChange International (SEAC), CEO of Timeline Labs, and GM of Groupon's (GRPN) joint venture with Tencent (TCEHY) in China.
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), Ideanomics (IDEX), Riot Blockchain, Pareteum (TEUM) and Social Reality 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 5.3% this week at $11,078 n U.S. dollars, according to TradeBlock.
Bitcoin
+ (+0.00%)
Bitcoin
+ (+0.00%)
Block
-0.015 (-0.01%)
Riot Platforms
+ (+0.00%)
Srax
+ (+0.00%)
SeaChange
+ (+0.00%)
Groupon
+0.03 (+0.14%)
Tencent
+ (+0.00%)
AMD
+0.01 (+0.01%)
Nvidia
+0.04 (+0.01%)
OSTK
+
Ideanomics
-0.004 (-0.41%)
Pareteum
+ (+0.00%)