Diginex’s Crypto Custodial Arm Digivault Bags Approval From UK FCA

Digivault, the custodial arm of Singapore-based digital assets company Diginex, has been granted approval to register as a cryptocurrency custodian wallet provider from the UK Financial Conduct Authority (FCA).

Digivault Approved By The FCA

The firm announced in a statement released today that the regulatory approval is in line with the Money Laundering, Terrorist Financing, and Transfer of Funds (Information of the Payer) Regulations.

With this FCA approval, Digivault hopes to further provide compliant and secure custody services to corporate and institutional investors in crypto assets.

Speaking about what this feat means for Digivault and in turn, Diginex, the CEO of Diginex Limited, Richard Byworth, said the FCA approval is continued validation of its strategy to deliver fair, transparent, and compliant crypto products for institutions. He added that,

“Digivault’s market-leading custody solution is a foundational pillar of the Diginex ecosystem and acts as a key enabler to the EQUOS Exchange, OTC, and Lending business lines.”

According to the firm, its custody solutions include having digital assets in cold storage third-party vaults owned by renowned vault services provider, Malca-Amit.

Digivault provides both cold and warm storage, incorporating a series of hardware and software firewalls so that assets are protected yet readily available.

Assets available for custodial services in the company include Bitcoin, Ethereum, and USDC, and other assets hosted on ERC-20 and ERC-1400 protocols.

Commenting on the approval Rob Cooper, CEO of Digivault, said the backing of the FCA would help assure its clients that their assets are being secured within the highest possible standard of governance, control, and oversight.

Digivault’s regulatory approval from the UK financial watchdog follows its newly signed partnership with Torstone Technology, a post-trade securities, and derivatives processing provider.

The partnership is aimed at providing Digivault’s clients with post-trade services via Torstone’s settlement platform and at the same time enable Torstone’s customers to access digital asset custody solutions.

FCA’s Stance On Crypto Assets

The FCA has never been so keen on cryptocurrencies. For years, the regulator has made its concerns regarding digital assets known.

In October, the FCA declared that companies in the UK could no longer offer crypto derivatives products, including futures and exchange-traded notes.

Just recently, the FCA chief Nikhil Rathi advised young investors to avoid the crypto craze amid the soaring popularity of the likes of Bitcoin. He said that direct investment in crypto assets is a high risk, with few regulatory protections, which is why it is not advisable.

Meanwhile, Digivault happens to be the first stand-alone digital asset custodian approved by the FCA. Its parent company Diginex which went public in October 2020, was the first digital assets group with a crypto exchange to launch on Nasdaq in the US publicly.

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Author: Jimmy Aki

Fidelity Launches Digital Asset Analytics Tool For Institutional Investors

Financial services firm Fidelity investment has launched a digital assets analytics platform for institutional investors.

Fidelity’s Sherlock To Guide Institutional Investors

Fidelity named the platform Sherlock, which is a digital assets analysis tool that will provide fundamental and technical analysis for fund managers and investors.

According to the firm, Sherlock will collate valuable pieces of information on the blockchain, market, social sentiment analysis, as well as industry news into a single portal.

The platform will also research crypto-assets relying on quality institutional data providers coupled with the provision of unique analytics to guide investors.

Fidelity’s Sherlock is expected to provide much-needed competition against existing solutions produced by companies like Messari.

In 2018, Messari launched a data solution service and had gained valuable recognition worldwide by integrating with Kaiko’s Rest API.

Other giant forces to be reckoned with in the provision of data and analytics are Dune Analytics, Glassnode, Skew, Coin Metrics, and Santiment.

Speaking on the new development, Kevin Vora, Vice president, Product Management, Fidelity Center for Applied Technology (FCAT), said Sherlock would deliver comprehensive data and deep analytics as clients will no longer face numerous irrelevant resources.

Fidelity Dominating the Crypto Space

Besides developing Sherlock to help institutional investors, Fidelity investment has been making significant contributions to the crypto space.

Earlier, Fidelity Charitable, the charitable arm of the mutual fund giant, reportedly raised $28 million in cryptocurrency donations.

The acceptance of cryptocurrencies as part of donations for the non-profit was a welcome development in the crypto space.

More importantly, the investment firm plans to launch its bitcoin exchange-traded fund (ETF) for digital assets and virtual currency, per Form S-1 filed with the Securities and Exchange Commission.

While SEC is yet to approve any firm to date, Fidelity might be feeling lucky due to its track record in the traditional finance space.

Given the prevalence of existing data and analytics solutions for institutional investors, observers will be eager to see if the newly introduced Sherlock solution by Fidelity investment will also turn things around.

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Author: Jimmy Aki

“Very Significant Demand for Digital Assets,” says BNY Mellon Investing in Fireblocks

“Very Significant Demand for Digital Assets,” says BNY Mellon Investing in Crypto Custody Startup, Fireblocks

Bank of New York Mellon Corp. is investing in cryptocurrency startup Fireblocks that builds tools for the transfer and storage of cryptocurrencies, reported the Wall Street Journal — yet another move by a traditional Wall Street player to embrace crypto assets.

This latest one came just after last month, the bank announced that it plans to serve as a custodian for crypto assets on behalf of institutional investors.

“There is very significant demand for digital assets in general,” said Roman Regelman, chief executive of BNY Mellon’s asset-servicing and digital businesses. “They’re becoming part of the mainstream.”

One of the world’s largest custody banks, BNY Mellon has $2 trillion in assets under management (AUM), as of 2020.

Earlier this month, PayPal also acquired Curv, a Fireblocks rival. Another major custody bank State Street Corp. is working on a digital asset custody service as well.

BNY Mellon’s strategic investment in Fireblocks is part of the New York-based startup’s larger funding round of $133 million from investors that include venture-capital firms Ribbit Capital and Stripes and hedge-fund firm Coatue Management.

“Eventually, the major cloud providers will either have to buy these infrastructure companies or build them in-house. Lacking the domain expertise alone of custody or scaling public chains will put them at a massive disadvantage longer term,” said trader Joe McCann, founder of NodeSource.

Amidst the ongoing bull market that has Bitcoin becoming a trillion-dollar crypto asset and the total cryptocurrency market cap surpassing $1.8 trillion, the companies in the industry are using this as an opportunity aggressively to raise funds, with Coinbase in the lead.

Founded in 2018, Fireblocks has raised $179 million, including the new round, to date. The Series C round gives the firm a valuation of over $900 million.

The startup moved over $100 billion in crypto assets last month, which was more than double the amount done three months earlier.

With over 200 clients, Fireblocks is working with some of the larger crypto-focused trading firms and several multinational banks as well.

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Author: AnTy

Bitcoin Having Almost No Correlation to Gold Since Late 2020

Compared to the $1 trillion crypto asset’s 85% YTD gains, the bullion is down -11.19% in 2021 so far. As for month-to-date, gold prices are again down 3%, while BTC is up nearly 20%.

It’s been nearly six months that the correlation between Bitcoin and gold has been on a downtrend. Currently, this correlation is near 0, which points to no correlation at all.

This made sense given that ever since hitting a new all-time high above $2,000, the prices of precious metal have been going down, hitting a nine-month low on Monday to $1,675 before making some recovery to $1,700 in tandem with all the other assets.

Based on BTC/GOLD 60d Spearman Correlation, “Bitcoin has had almost basically no correlation to Gold since late 2020,” noted Coin Metrics.

Compared to the $1 trillion crypto asset’s 85% YTD gains, the bullion is down -11.19% in 2021 so far. Even month-to-date, the spot gold prices are down 3%, while BTC is up nearly 20%.

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Source: CoinMetrics

Stock markets made a recovery on Monday on the back of a $1.9 trillion stimulus plan winning US senate approval on Saturday, only to end up lower. Tech-heavy Nasdaq is also selling off, now down 10.5% from Feb. 12 high of 14,095.

U.S. Treasury Secretary Janet Yellen said the package would fuel a “very strong” U.S. recovery, and as spending increases, she does not expect the economy to run too hot either.

However, investors are back to bracing themselves for another bout of sell-off in US Treasuries as a trio of large government debt auctions this week. “Investors will remain on pins and needles until the auctions are behind us,” said Gennadiy Goldberg, a rates strategist at TD Securities.

This could present a danger for all risky assets, including Bitcoin, as we have seen over the last couple of weeks.

Rising treasury yields are helping the US dollar strengthen, which fell to nearly 89 level earlier this year, a level not seen since April 2018. But since late February, the greenback has been climbing, going to 92.5 today before sliding to 92.

This is why the stock market and Bitcoin have been enjoying the gains finally, with BTC going above $54,000.

But in the near term, the macro presents a challenge in the form of rising yields and dollars. Additionally, March hasn’t been a bullish month for Bitcoin historically, which combined with 100k Bitcoin options outstanding for the March expiry points to continued volatility.

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Author: AnTy

Ripple Rolls Out XRP Ledger Updates to Boost Software Efficiency

Ripple Labs has rolled out new upgrades to its asset’s ledger to improve functionality. The company continues to deal with the fallout of the SEC’s probe into its affairs.

Top blockchain company Ripple Labs continues to make progress with its XRP asset and other affiliated projects despite the looming lawsuits against it.

In a recent update, the company has announced operational developments that will improve its XRP Ledger’s efficiency.

Improved Speed, Reduced Bandwidth

Yesterday, the Silicon Valley firm published a press release confirming the launch of version 1.7.0 of its XRP Ledger. In the release, Ripple confirmed that the updates would go a long way in bolstering the ledger’s security, efficiency, and operational decentralization.

RippleX, Ripple’s open payment integration platform, has been working to improve the XRP Ledger’s resources and compatibility with various server configurations.

David Schwartz, Ripple’s technology chief, was given the most credit for this, following his work to reduce several caching layers. With his move, the payment platform has reduced execution time and memory by 50 percent.

Along with the optimizations, the latest update will also provide enhanced proposal routing, and transaction validation, and validator manifests, which will improve visibility into operators’ work across the XRP ecosystem.

There is also the introduction of forward ledger replay, which will enhance security on the XRP Ledger and improve server synchronization with the rest of the network. This way, the Ledger can reduce bandwidth and work faster.

On its plans, Bharath Chari, a member of the XRP Ledger Foundation, explained that they would be working to support the broader XRP ecosystem even more. For now, their focus will be on expanding the validator list and enhancing the XRP Ledger’s core code.

MoneyGram Joins the Movement to Ditch Ripple

The recent updates show that Ripple Labs isn’t entirely giving up on XRP yet. The company has had a bit of a rough patch over the past few months, following a lawsuit from the Securities and Exchange Commission (SEC) that accused it of organizing an illegal securities offering in its XRP Initial Coin Offering (ICO) back in 2013.

Since the SEC suit came out, Ripple Labs has been faced with significant industry pushback as exchanges, investment firms, and more distanced themselves from it.

Another pushback came earlier this week as payment processor MoneyGram, one of Ripple’s high-profile partners, suspended trading from its end. In its quarterly outlook, MoneyGram reported that it doesn’t plan to see any benefits from its Ripple market development fees in Q1 2021. Due to litigation from regulators, it has chosen to close all Ripple trades for the time being.

The MoneyGram partnership is one of Ripple Labs’ crown jewels. Ripple purchased 10 percent of the company in 2019, while MoneyGram incorporated its on-demand liquidity (ODL) tool to make quicker and safer cross-border transactions. While the relationship appeared rosy, Ripple did sell off a chunk of its MoneyGram shares last November 2020.

Asides from suspending its asset, the payment processor has also reiterated that it never used the ODL tool for direct customer transfers or forex transactions. With MoneyGram further distancing itself from Ripple amid its SEC lawsuit, the blockchain company is finding itself further in need of supporters.

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Author: Jimmy Aki

Rising Treasury Yields are a Danger to Bitcoin & They Are Soaring Right Now

The ongoing yield debacle is not good for risky assets and gold, and the leading digital currency is still struggling to recover from the losses.

Risky assets are back on the incline as Treasury yields ease off after hitting multi-year highs on Thursday. Also, the Federal Reserve Chairman calmed the nerves by committing to keeping the interest rates low and that it will continue to pump money into the economy.

In the early hours of Thursday, 10-Treasury yields jumped to 1.427%, last seen in March 2020, but ended the day lower at 1.3740%. Yields on 30-year Treasury soared to 2.888%, Dec. 2019 high to end lower at 2.226%. Bond prices and yields have an inverse relationship.

Today, they both are back on the rise by about 0.059%.

“Bonds puking, again… Need this to stop going down (i.e., rates going up) to have nice things,” said trader and economist Alex Kruger.

The 30-year German yield has also turned positive, rising to 0.2% from -0.2% in three short months. German 10-year yields are still negative though at -0.3%.

This spooked the central bank, and now “the ECB is closely monitoring the evolution of longer-term nominal bond yields,” said European Central Bank President Christine Lagarde this week.

Fed, however, is not that concerned when asked about the rise in yields; Jerome Powell said, “It’s a statement of confidence on the part of markets that we will have a robust and complete recovery.”

Rates going up is negative for stock valuations, particularly tech, and assets that benefited from negative real yields the most, gold and bitcoin, Kruger said,

“The thesis is the Fed will intervene to bring rates down.”

“If that trend is not stopped hold on to your horses because risk assets, gold and highly likely bitcoin as well are all in for a very rough ride down. You want to watch interest rates like a hawk.”

Risk On or Off?

This fall in yields, meanwhile, has sparked a rally in stocks. S&P 500 is yet again reaching its peak at nearly 3,935 from Feb. 12.

Tech-heavy Nasdaq, which slid 5.6% this week, is back at 13,600, still in need of a pump to hit its 14,095 all-time high from Feb. 12.

“In institutional circles, corporate treasuries are often looked down on as dumb money,” notes Kruger.

While stocks are clearly enjoying this fall in Treasury yields, the same is not the case for the traditional safe-haven asset.

Gold is not having a good week, and today the spot gold went under $1,790 per ounce. The precious metal is on a downtrend ever since it hit a new high in August at about $2,075.

The US dollar is also not enjoying the increase in yields and is back under 90, aiming to go for fresh multi-year lows at 89.2 in early January.

Coming to digital gold, Bitcoin had a brutal week, losing 23% of its value with a drop under $45k. For now, the market struggles to recover completely despite the price of Bitcoin going above $50,000. Trader Cantering Clark said,

“Rates are rising. Risk-on assets don’t really benefit in that situation. All assets would get hurt with a rapid rise. Saylor purchase and Tether news came out, and we don’t have a very obvious response. Would not get overly bullish.”

However, according to him, this is all just short-term as “Bitcoin has already cleared the runway and is now on its way to further appreciation and adoption.”

Alex Kruger is of a similar opinion as he notes that there’s a chance Bitcoin will do its thing as “institutional penetration remains very low.” This means the institutional inflow may continue, and retail will be busy stacking regardless. Also, corporates may join in and “be more focused on inflation or digitalization than rates.”

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Author: AnTy

Former TD Ameritrade Digital Assets Head Joins Fed Reserve as Chief Innovation Officer

Former TD Ameritrade Digital Assets Head Joins Fed Reserve as Chief Innovation Officer

Sunayna Tuteja has joined the Federal Reserve System as the Chief Innovation Officer. Before heading this position, Tuteja was previously working at TD Ameritrade as the Managing Director, Head of Digital Assets & DLT (Blockchain, Crypto), reads her LinkedIn profile.

TD Ameritrade has been providing its services to cryptocurrency users for some time now. It also made a strategic investment in ErisX, the cryptocurrency spot, and futures exchange during the bear market.

Tuteja joined the broker in 2014 to head its digital strategy department, following which she changed the department that specifically dealt with cryptocurrencies and blockchain technology. Here, Tuteja only spent less than two years.

Under her latest role, she will be working on the Federal Reserve System’s digital innovation strategy. As a CINO, the official is required to stay abreast of the technology industry and market trends to understand their impact on the Fed system. The description for this position reads,

“This role will be responsible for identifying, researching, enabling and evangelizing for innovative new technologies while fostering a culture of technical innovation, encouraging System-wide collaboration and experimentation.”

This is another positive development for the cryptocurrency market, bringing us all that much closer to positive and clear regulations.

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Author: AnTy

Russian Legislators Advance the Crypto Tax Bill Recognizing Digital Assets as Property

Russian Legislators Advance the Crypto Tax Bill Recognizing Digital Assets as Property

  • Russia’s lower legislation house, State Duma, advanced the crypto tax bill, which aims to recognize digital assets as property for taxation purposes.

The world’s largest country is moving closer to setting up crypto taxation laws after the lower representative house. State Duma passed the first reading on the draft bill affecting digital assets. The crypto tax bill, introduced to parliament by the government, aims to recognize cryptocurrency assets like Bitcoin and Ethereum as property to apply the Tax Code, the report reads.

According to Prime Minister Mikhail Mishustin, these new laws will enable crypto owners to have a legal standpoint in court and defend themselves as property.

Additionally, the new amendments to the Tax laws state that income from cryptocurrency transfers and transactions will be liable to property or income tax payments. Citizens and organizations will also have to declare any transfers above 600,000 rubles (~$8,200) per year. However, digital asset transactions will not be liable to VAT and depreciation.

According to the report, non-payment or incomplete payment of the tax on digital assets will attract a penalty of 40% of the required amount. Lack of reporting, untimely submission, or submission of a declaration with inaccurate information will attract a 10% fine on the amount required by the government.

In the second reading, the State Duma plans to release a comprehensive report clarifying which digital asset transactions are tax-exempt, who submits the reports to the tax office, and how to inform authorities on disposing of the assets.

The newly amended bill does not change President Putin’s signed law requiring Russian state officials to disclose their digital asset holdings and maintains digital assets are not a legal means of payment.

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Author: Lujan Odera

Bermuda-based, CrossTower to Launch a Bitcoin Fund for Accredited Investors

Bermuda-based, CrossTower to Launch a Bitcoin Fund for Accredited Investors

  • Digital assets trading and investment firm, CrossTower, launches a crypto hedge fund to compete with Grayscale’s Bitcoin Trust (GBTC) and other institutional crypto hedge funds.
  • The fund gains its competitive advantage by offering a lower management fee and no lockup periods for its client’s assets.

In an announcement on Wednesday, CrossTower, a Bermuda-based crypto investments firm, plans to launch its bitcoin hedge fund at the end of February for accredited investors. The fund will not be tradable in the secondary market but aims to compete with other Bitcoin-based hedge funds such as GBTC in management fees and liquidity.

The fund will only accept accredited investors with the minimum fund requirement set at $100,000. The fund has already raised $20 million in assets under management (AUM) from early-stage investors, most of the demand coming from family offices and high net worth individuals.

Kristin Boggiano, CrossTower co-founder, and president confirms the fund will charge up to 60 basis points (0.6%) in management fees, lower than GBTC’s 2%, and have no lockups for clients’ funds. The fund trades Bitcoin on a Net Asset Value (NAV) basis. Notwithstanding, CrossTower is also planning to include different crypto-based instruments in the future, Boggiano further confirmed.

“This is the most plain-vanilla of the suite of offerings that we expect to be popular.”

“We’re building infrastructure at CrossTower so that entities that want to shape their risk have different instruments whether they want to use an exchange, they want a loan, they want to go short.”

Anchorage, which recently acquired the first license to become a crypto bank, will be the custodian of CrossTower digital assets and Apex as the fund’s legal counsel. Grant Thompson will lead accounting for the firm.

As alluded to, the fund will focus on accredited investors from the U.S. and across the globe. This will allow investors with offshore accounts to easily invest in Bitcoin without the tax implications set in the U.S. However, the fund is limited to a maximum of 99 U.S. investors. Still, it is open to an unlimited number of offshore investors due to the daily liquidity provisions set on the fund.

The fund is starting its journey of a thousand steps (pun intended) towards reaching Grayscale’s GBTC $20 billion AUM and is looking for ways to add more U.S. based investors to its fund. The fund will also be competing with BlockFi who recently filed for a Bitcoin Trust with the US Securities and Exchange Commission (SEC).

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Author: Lujan Odera

Digital Assets Lender, Nexo, Rolls Out Crypto Exchange Platform With Instant Swaps

Digital Assets Lender, Nexo, Rolls Out Crypto Exchange Platform With Instant Swaps

  • Nexo, a Cryptocurrency lending platform, announces its new exchange service that provides 75+ cryptocurrency trading pairs on its mobile application. The exchange comes with a “Smart Routing” system to minimize slippage cases and guarantee the best price swaps.

In an announcement this Monday, leading regulated digital assets lender Nexo launched its in-built Nexo exchange service, offering a broader suite of financial tools to its users. The new swap feature offers users over 75+ cryptocurrency and fiat pairs and supports 17 cryptocurrency assets. It aims to offer no-limit, fast, and cost-effective transfers across assets provided on the exchange.

In a statement, Nexo confirmed traders would have no limits on the number of trades made on the platform with a maximum amount of $50,000 set per trade. Additionally, the exchange will allow direct fiat deposits from bank transfers and wire transfers and allow crypto deposits and withdrawals from any other wallet or exchange.

Speaking on the capabilities that the new exchange offers in onboarding new clients, Nexo Co-founder and Managing Partner Antoni Trenchev said,

“Fast, transparent, and inexpensive transactions are the backbone of fintech, but making them easily accessible and secure in a seamless, intuitive environment is the single most important step towards mass crypto adoption.”

To prevent price fluctuations or slippage cases, Nexo exchange has integrated a “Smart Routing” system, an in-house innovation. The system connects to multiple exchanges and splits your orders according to the available prices and volumes, ensuring the order is executed at the same price as is submitted.

The statement did not mention the exchanges that will execute the trades. Still, a spokesperson from Nexo confirmed that the Smart Routing system would connect to five of the “most trusted and well-capitalized exchanges.”

The exchange is registered and ISO compliant to provide clients with an impeccable risk assessment, data protection, and state-of-the-art cybersecurity of their assets. Users’ assets in custody will be insured up to $100 million by the Lloyd’s of London.

Finally, the exchange is also building a full-suite banking platform announcing a series of product launches, including the Nexo crypto credit card. Furthermore, Nexo is also looking to expand its already broad banking licenses to strengthen its compliance with global regulators.

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Author: Lujan Odera