SEC Chairman Gary Gensler Targets Crypto Lending Platforms, Starting with Coinbase Lend

SEC doesn’t want Coinbase Lend to allow its users to earn a 4% interest rate on USDC “over 8x the national average for high-yield savings accounts.”

Coinbase has been warned by the US Securities and Exchange Commission (SEC) against launching a new product, Lend, that allows its users to earn interest on their crypto holdings.

The biggest crypto exchange in the US said it had received a Wells notice saying the agency will bring an enforcement action against them if the company goes ahead with its product. Coinbase said that it plans to delay the launch at least until October.

Coinbase Lend allows users to earn a 4% interest rate on USDC stablecoin, which it says is “over 8x the national average for high-yield savings accounts.”

In the company blog post, Paul Grewal, Chief Legal Officer, said they had been proactively engaging with the SEC about Lend for nearly six months. But didn’t get any response from the agency other than that the SEC considered Lend to involve security.

Instead of providing an explanation, the SEC has opened a formal investigation and has asked for documents and written responses, along with the name and contact information of every single person on their Lend waitlist.

“We have not agreed to provide that because we take a very cautious approach to requests for customers’ personal information. We also don’t believe it is relevant to any particular questions the SEC might have about Lend involving a security, especially when the SEC won’t share any of those questions with us,” said Grewal.

Coinbase CEO Brian Armstrong also took to Twitter to share the “really sketchy behavior” from the SEC.

He also pointed out how in his confirmation hearing, SEC Chair Gary Gensler said that it is “important for the SEC to provide guidance and clarity.” And now, they are doing exactly the opposite.

Earlier that month, in an interview with FT, Gensler asked crypto companies to “Talk to us, come in,” adding, existing platforms are “begging for forgiveness, rather than asking for permission.” And when Coinbase did just that, the SEC didn’t provide any explanations.

“If you don’t want this activity, then simply publish your position, in writing, and enforce it evenly across the industry.”

As we reported, Gensler has been targeting two areas: crypto trading and lending platforms and stablecoins that are embedded on these platforms. He also asked for legislative priority on them, whether centralized or decentralized.

The CEO then argued that while SEC claims to be working to protect investors and create fair markets, who exactly “are they protecting here and where is the harm?”

Armstrong also met with every regulator and branch of government in the DC that he could in May this year except the SEC that “refused” to meet him, “saying “we’re not meeting with any crypto companies.” This was right after we became the first crypto company to go public in the US,” he said.

In response to Armstrong’s Twitter thread, Dallas Mavericks’ Mark Cuban advised him to go on the offensive.

Meanwhile, the crypto community pointed to the fact that Gensler is a former Goldman Sachs partner and speculated that the banking industry is making the moves behind the curtain to try and curb the crypto industry that is revolutionizing finance and working on putting them out of business. Others speculate that it could be a personal political power grab by SEC leadership.

“Hopefully the SEC steps up to create the clarity this industry deserves, without harming consumers and companies in the process. America could really use us all working together to figure this out right now,” concluded Armstrong.

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Author: AnTy

Colombian Bank to Allow Deposits & Withdrawals with Crypto Exchanges in Government-Sponsored Pilot

Colombian Bank to Allow Deposits & Withdrawals with Crypto Exchanges in Government-Sponsored Pilot

Banco de Bogotá is the first commercial bank of Colombia that plans to test deposits and withdrawals with cryptocurrency exchanges.

This initiative is part of a year-long government-sponsored pilot that will test banking services for crypto platforms.

Colombia’s financial watchdog, the Financial Superintendency of Colombia (SFC), had announced earlier this year that nine crypto firms were chosen to test banking services for crypto platforms.

Crypto exchanges Binance and Gemini were chosen by the SFC, which will operate with Colombian banks Davivienda and Bancolombia, respectively.

Before this pilot, banks were restricted from transferring money to exchanges due to financial regulations.

Starting in August, Banco de Bogotá will allow its customers to send and withdraw money from Chilean crypto exchange Buda.com. Both the parties involved, however, are still working on the terms and definition of the contract.

This agreement between Banco de Bogotá and Buda.com is the second such to be launched as crypto exchanges Panda and Bitpoint started working with Colombian fintech Movii this month.

Banco de Bogotá will also operate with Mexican exchange Bitso, but that partnership is yet to be started.

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Author: AnTy

Australian ‘Buy Now, Pay Later’ Firm Looking to Allow Users to Trade Crypto on Customer Demand

Australian ‘Buy Now, Pay Later’ Firm Looking to Allow Users to Trade Crypto on Customer Demand

Zip Co Ltd, an Australian buy now, pay later (BNPL) firm, explores the option to allow its users to trade cryptocurrencies.

Trading in crypto using Zip digital wallets was one of most requested new product features from users, said co-founder Peter Gray on Thursday.

Zip said it would likely launch the new service in the US first and then in the next 12 months in Australia. The US is driving its fourth-quarter growth and is set to soon become its biggest market by volume.

The company’s fourth-quarter volumes and revenue doubled, with transaction volumes hitting A$1.76 billion ($1.29 billion) in the June quarter and volume at its US unit quadrupled.

Zip’s Australian user base is mature, with about 30% of adults having a BNPL account.

This attempt by Zip to go into crypto is also propelled by the company’s established competitors like Afterpay and Klarna expanding into more countries and planning new offerings like a banking app. The BNPL sector is also attracting the giants like PayPal and even Apple.

“We know our younger generation of customers seek additional products and services that are relevant to them,” Gray told Reuters. The company itself is also looking at expansion in Europe and the Middle East.

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Author: AnTy

Allied Payment Network to Put BTC on Balance Sheet & Allow Bill Pay In Bitcoin

Allied Payment Network to Put BTC on Balance Sheet & Allow Bill Pay In Bitcoin

Allied has partnered with NYDIG to offer Bitcoin services. According to its CEO, providing access to Bitcoin is a “game-changer.”

Fort Wayne-based Mobile digital payment services provider Allied Payment Network has partnered with NYDIG to become the first bill payment provider to allow its customers to buy, sell, and hold Bitcoin.

Allied will also add Bitcoin to its corporate treasury.

This partnership helps financial institutions meet the growing demand for Bitcoin, whose adoption has increased 207% over the 10-year period beginning July 2010. Ralph Marcuccilli, founder and CEO of Allied, said,

“Allied’s primary focus is to make it easier for financial institutions to provide value-based technology that differentiates them in the marketplace, attracts new depositors, retains through high engagement, and generates revenue.”

“Providing access to bitcoin does just that, and is a game-changer for many community institutions that are struggling to compete.”

Customers meanwhile get a secure, easy-to-use alternative to transacting with unregulated bitcoin entities. Allied and NYDIG will also provide additional capabilities for customers, such as the ability to make digital payments funded by BTC.

Recently, the Bitcoin service provider, which is a subsidiary of Stone Ridge, partnered with Fiserv, Q2, and enterprise payment giant NCR as well. As we reported, NYDIG’s banking infrastructure partnerships are estimated to let them offer bitcoin services to about 70% of US banks.

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Author: AnTy

NYDIG Collaborates with Q2 to Allow its 18.3M Registered Users to Buy, Sell and Hold Bitcoin

NYDIG Collaborates with Q2 to Allow its 18.3M Registered Users to Buy, Sell and Hold Bitcoin

Bitcoin services provider NYDIG is now collaborating with banking and lender provider Q2 holdings. This collaboration will allow Q2 to provide its more than 18.3 million registered users to buy, sell, and hold Bitcoin.

The digital banking platform Q2 powers about 30% of the top 100 banks in the US and enables one in ten digital banking customers to transact.

With this latest step, Q2 will be able to provide its customers with integrated Bitcoin services and further drive end-user acquisition, retention, and engagement along with increasing its fee revenue opportunities.

In the official announcement, Jonathan Price, EVP of Emerging Business, Corporate and Business Development, Q2 noted that a December 2020 study by Cornerstone Advisors found that 15% of US consumers own Bitcoin or some other form of cryptocurrency and that majority of these crypto owners would use their banks to invest in crypto if they had the choice to do so.

As such, they are now enabling “financial institutions to take advantage of this market opportunity and meet the demands of their account holders.”

This week, NYDIG also collaborated with Fiserv, a payments and financial services technology solutions provider with 74.84 billion in assets as of March 31, 2021. With this integration, Fiserv customers can manage bitcoin transactions directly within their customer bank accounts. Nic Carter, founding partner at Castle Island Ventures said,

“Quietly, one of the most important developments in the ongoing integration of bitcoin and financial services is happening right now.”

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Author: AnTy

Fiserv Integrates with NYDIG to Allow Customers to Manage Bitcoin Directly within Bank Accounts

Fiserv Integrates with NYDIG to Allow Customers to Manage Bitcoin Directly within Bank Accounts

Fiserv, Inc. (NASDAQ: FISV) announced its integration with Bitcoin services provider NYDIG that will enable banks and credit unions to meet growing mainstream interest in bitcoin, grow their customer base, and increase non-interest income opportunities.

The payments and financial services technology solutions provider has 74.84 billion in assets as of March 31, 2021.

This integration, announced this week, means customers can manage bitcoin transactions directly within their bank accounts, providing them an easy way to buy, sell, and hold BTC through their trusted financial institutions. This partnership with Fiserv, Robert Gutmann, co-founder, and CEO of NYDIG, said,

“Represents a leap forward in bringing integrated bitcoin transactions to institutions of all sizes, positioning them to meet growing demand and interest from their customers.”

Besides using Bitcoin alongside bank accounts, both the companies are also working towards implementing the ability for banks to implement bitcoin-based rewards programs. Byron Vielehr, chief digital and data officer at Fiserv said,

“Interest in cryptocurrency, and particularly bitcoin, has skyrocketed over the past several years, to the point that bitcoin investing is now a commonplace activity,”

California-based First Foundation Bank is already working with Fiserv and NYDIG for the same. Its CEO Scott F. Kavanaugh said the banking industry “need(s) to lead in this area.”

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Author: AnTy

Coinbase Enables its Over A Million Wallet Users to Use DeFi — DEXs, NFTs, & More

The exchange is all set to allow its users to “engage in the exciting world of dapps” while preparing to “accelerate asset addition,” starting with Dogecoin and proposing a private offering of $1.4 billion of convertible senior notes to make acquisitions.

Cryptocurrency exchange Coinbase announced a new Coinbase Wallet extension to allow its users to connect to dapps and DeFi on the desktop more easily and securely.

Coinbase Wallet is non-custodial, meaning it is user-controlled, and with the new extension, its private keys are encrypted using the secure enclave or keystore of the mobile device.

“We want to empower millions of more customers to engage in the exciting world of dapps and the larger crypto ecosystem,” said Sid Coelho-Prabhu, Coinbase Wallet lead.

With this latest development, Coinbase allows its more than 150 million users access to the world of decentralized finance (DeFi) — trading thousands of cryptos on decentralized exchanges (DEX), earning interest, and collecting NFTs.

“More than a million Coinbase Wallet customers regularly use dapps like Uniswap and Compound.”

Users can also link their Coinbase account to the Wallet and buy and transfer crypto to use in DeFi without even leaving the Wallet.

This new Wallet extension works with every Ethereum DApp, namely Uniswap, Compound, Rarible, Aave, Synthetic, Matcha, dYdX, Oasis, Instadapp, SushiSwap, Zora, ZapperFi, and OpenSea.

Accelerating Asset Addition

Recently, Coinbase had announced its Q1 2021 results, which beat Wall Street estimates and as we reported during the earnings call, company CFO Alesia Haas said that they are working on adding more crypto assets to its platform to capture the increased trading volume.

Interestingly, meme coin Dogecoin is one such crypto the company investors are particularly invested in. During the company’s earnings call on Thursday, CEO Brian Armstrong said that the company is preparing to list DOGE, which he noted: “has been getting a lot of attention recently.” DOGE -2.16% Dogecoin / USD DOGEUSD $ 0.48
-$0.01-2.16%
Volume 4.8 b Change -$0.01 Open $0.48 Circulating 129.65 b Market Cap 61.77 b
6 h FTC Data Reveals Big Jump In Crypto Investment Scams, Losses Totaling $80M 10 h Coinbase Enables its Over A Million Wallet Users to Use DeFi — DEXs, NFTs, & More 1 d “Don’t Give Me Power in Your Project,” says Ethereum Co-founder on Burning SHIB Tokens

“We plan to list DOGE in the next six to eight weeks,” he said during the call. “And then, more broadly, we’re going to be focused on how we can accelerate asset addition in the future.”

“There’s more and more assets being created in the crypto economy,” Armstrong said. “I think it’s going to be something kind of like apps in the App Store on the iPhone.”

Meanwhile, the price of COIN shares remains subdued and trades under $250, on a downtrend ever since its listing in the mid of last month when it traded briefly at $430 on its debut day, in line with the Bitcoin market.

Amidst this, Coinbase announced its intention to privately offer $1.25 billion of convertible senior notes, with an additional $187.5 million due 2026.

To be sold to qualified institutional buyers, “this capital raise represents an opportunity to bolster Coinbase’s already strong balance sheet with low-cost capital that maintains operating freedom and minimizes dilution for Coinbase’s stockholders,” it said.

The company intends to use the net proceeds for general corporate purposes, enter into additional capped call transactions, and make investments in and acquisitions of other companies, products, or technologies.

“Just went public… using the debt markets already… probably smart to take cash if markets/revenues are expected to decline significantly… or go through another hypergrowth cycle,” commented Gabor Gurbacs, Director at VanEck, on Coinbase’s latest move.

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Author: AnTy

Nebraska Approves Bill Allowing Banks Offer Crypto Services

The Nebraska state legislature has approved a bill that would allow banks in the state to offer cryptocurrency services to customers.

Nebraska’s Crypto Banking Charter Bill

Nebraska state senators have voted for the bill that would allow banks to register as cryptocurrency depositories and offer crypto trading services to customers.

The bill passed with near-unanimous approval as 39 lawmakers voted to advance the bill to enrollment and initial review, with only one in disagreement.

Senator Mike Flood first introduced the bill in January, intending to adopt the Nebraska Financial Innovation Act to create digital asset depository institutions while providing for charter, operation, supervision, and regulation of such institutions.

According to Senator Flood, Nebraska had an opportunity to become an early adopter of cryptocurrencies which could help it benefit from finance and technology jobs.

“This is a once-in-a-lifetime opportunity not only for my district but the state of Nebraska,” he said.

Flood had introduced the bill alongside another also focused on crypto banking. The second, Legislative Bill 648, contains the “Transactions in Digital Assets Act,” which proposes a set of rules for Nebraska banks looking to hold cryptocurrencies or offer custodial services. However, this bill is yet to be adopted.

Nebraska Follows Wyoming’s Footsteps

This move by Nebraska follows similar legislation enacted by the state of Wyoming, thereby making it the second state in the US to set up a formal charter for crypto-powered banks.

Wyoming started its crypto-friendly constitutions when it passed its Digital Asset Law on February 26, 2019, and put into effect on July 1, 2019.

Wyoming went on to approve Kraken as its first crypto bank in September 2020. Kraken was granted the first special-purpose depository institution (SPDI) charter in Wyoming after the banking board approved the application.

After Kraken, another SPDI charter was approved for Avanti by the Wyoming State Banking Board, making it the second chartered bank in the state in 2020.

Nebraska is not the only state that has followed Wyoming’s lead.

Some months back, Texas had attempted to follow in Wyoming’s footsteps after Representative Tan Parker introduced the Texas UCC amendment bill, which aims to recognize virtual currencies under commercial law. This bill was supposed to help define crypto regulation clarity in the state but it did not pass due to lingering challenges.

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Author: Jimmy Aki

Germany Passes Law to Allow Electronic Securities on Blockchain

Germany, the largest economy in Europe, has passed a law that will allow all-electronic securities to be recorded and traded based on blockchain technology. According to Reuters’ report, this is part of a more effective strategy by the country’s Finance Ministry to integrate existing ecosystems with blockchain.

The newly passed legislation does away with paper certificate requirements for selling securities within Germany’s financial markets. Stakeholders who pivoted towards this shift cited lengthy administrative processes that have often been a barrier.

While the paper certificate may have acquired sentimental value, the future belongs to an electronic version, according to Olaf Scholtz, Germany’s Minister of Finance. Scholtz said that,

“The paper certificate may be dear to some for nostalgic reasons, but the future belongs to its electronic version.”

Meanwhile, Germany is still making significant strides in the nascent crypto industry has released new guidelines that recognize crypto assets as financial instruments earlier this year. Its second-largest stock exchange, Börse Stuttgart, is also working to integrate security tokens to shift to virtual assets.

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Author: Edwin Munyui

Crypto is the Only Way to Pay for Pornhub After Mastercard & Visa Drops Adult Platform

Last week, Mastercard and Visa announced that they would no longer allow their cards to be used on the popular adult website Pornhub.com. The decision came after the payment processors’ review of the website found unlawful content. Mastercard said in a statement,

“Our investigation over the past several days has confirmed violations of our standards prohibiting unlawful content on their site.”

“We instructed the financial institutions that connect the site to our network to terminate acceptance.”

Both the companies started the investigation after a New York Times column accused Pornhub of videos depicting child abuse and non-consensual violence, which the company said to be untrue.

In response, this week, Pornhub enacted safeguards including banning unverified uploaders from posting new content and eliminated downloads and partnered with non-profit organizations to combat illegal content. The company’s latest update reads,

“It is clear that Pornhub is being targeted not because of our policies and how we compare to our peers, but because we are an adult content platform.”

Regarding Mastercard and Visa severing its ties with the company, Pornhub said the move was “exceptionally disappointing,” adding that it affects hundreds of thousands of models who rely on the platform for their livelihoods.

Now, the website exclusively supports cryptocurrency as it has become the default payment method.

Currently, the supported digital currencies include Bitcoin (BTC), Bitcoin Cash (BCH), Ethereum (ETH), Ethereum Classic (ETC), Litecoin (LTC), Dash, Monero (XMR), Ripple (XRP), NEM (XEM), Tron (TRX), Tether (USDT), Verge (XVG), Waves, and Zcash (ZEC).

This development is expected to help digital currencies gain further adoption as Nic Carter of Coin Metrics states, “financial infrastructure is already thoroughly politicized, from top to bottom.”

Pornhub attracts 3.5 billion visits a month, which is more than Amazon, Netflix, or Yahoo. Venture capitalist Paul Graham, co-founder of startup accelerator Y Combinator tweeted,

“Possible future scenario: Credit card companies become increasingly picky about who they’ll process transactions for, and this becomes the thing that tips the general public into using cryptocurrency in transactions, ultimately killing credit cards.”

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Author: AnTy