Auditing Giant, KPMG & CoinMetrics Launch Service to Monitor Risk for BitGo Institutional Clients

Auditing Giant, KPMG & CoinMetrics Launch Service to Monitor Risk for BitGo Institutional Clients

  • Big four auditing giant KPMG and crypto intelligence firm CoinMetrics partnership offers institutional crypto custodian, BitGo, clients a channel to monitor and mitigate risk on public blockchains.

Announced on Thursday, the partnership among the three firms aims to enhance institutional investment in crypto via a “deeply integrated combined offering.” The offering consists of BitGo’s custodial service, Chainalysis data, and intelligence on blockchains and KPMG’s Chain Fusion, which offers crypto asset management tools to institutional investors.

The alliance started in October 2020 when KPMG announced a strategic partnership with CoinMetrics to expand its blockchain product suite. The alliance aims at ensuring the delivery of reliable and accurate data and proprietary analytics to institutional investors.

In the report, CoinMetrics also announced its FARUM business product suite’s commercial launch allowing BitGo clients to efficiently mitigate and monitor risks on public blockchains such as Bitcoin. FARUM provides risk management tools that allow identifying and monitoring network attacks, fee volatility risks, and any unusual events on the blockchain.

According to BitGo Chief Revenue Officer Pete Najarian, the alliance is designed to increase institutional adoption of crypto while boosting the safety of funds. He said,

“Through this collaboration, we will be delivering the products and services that our institutional clients have needed to allow broad adoption of digital assets.”

KPMG will integrate its Chain Fusion system, which provides users with a suite of products to manage crypto assets. The data infrastructure also provides institutional investors a simpler way to keep up with reporting, regulations, and compliance.

The new product “marks a significant step forward in uniting the core capabilities” of the firms, Arun Ghosh, Principal and KPMG Head of Blockchain for One Americas, said in a statement. Institutions and banks can now leverage the experience in custody, system integration security, risk, and compliance in a one-stop-shop.

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Author: Lujan Odera

NYDIG Sees Institutional Order Books Pushing BTC Holdings to $25B by Year-End

  • NYDIG believes it could grow its AUM to $25 billion as institutions are still hungry for Bitcoin.
  • Increasing institutional demand is growing at impressive levels, giving more hope for Bitcoin’s long-term trajectory.
  • Institutional demand remains a significant point of focus for the crypto market, with more firms expected to enter into the industry soon enough.
  • In line with the phenomenon, the New York Digital Investment Group (NYDIG) expects to quadruple its assets under management this year.

This week, Ross Stevens, the founder and chairman of NYDIG, made an appearance at the MicroStrategy World Conference 2021. In his session, the executive explained that the crypto investment company could be sitting on $25 billion in assets under management (AUM) by year’s end.

Stevens explained that NYDIG’s AUM figures currently stand at about $6 billion. However, the firm has seen enough institutional investors’ commitment to push the figure past the $25 billion mark. Considering that none of the investors have walked back their intention to commit to Bitcoin, the firm expects a windfall going into the year.

NYDIG is a fund management firm that operates as the crypto-facing subsidiary of Stone Ridge Holdings Group LLC. The company provides an avenue for large investors to improve their crypto exposure. Last year, it helped facilitate the purchase of $100 million by MassMutual, the Massachusetts-based insurance giant.

As the Wall Street Journal reported at the time, MassMutual, a company with about $235 billion in AUM, had made the purchase through a backchannel with NYDIG. The insurance giant also purchased a minority stake in NYDIG for $50 million. The deal will also see NYDIG custody MassMutual’s Bitcoin stash. Now that more institutions appear to be lining up to make purchases, NYDIG could be in for its most fruitful year.

Institutional Demand: A MicroStrategy Case Study

Stevens had made the revelation to Michael Saylor, a businessman who has become overly familiar with cryptocurrencies over the past year. Since August 2020, under Saylor, MicroStrategy has purchased over $1.3 billion worth of Bitcoin, becoming one of the industry’s largest institutional players.

The company has benefited immensely from the decision. MicroStrategy built a $425 million Bitcoin holding when the asset was only trading at about $11,000. When the asset eventually grew to $21,000 apiece, the firm announced that it had issued $650 million in convertible senior notes and would use most of the raised capital to purchase more of it.

Now that Bitcoin is in the high $30,000s, it is anyone’s guess just how much MicroStrategy’s decision to move to the Bitcoin standard has grown its reserves.

Along with its bottom line, MicroStrategy’s Bitcoin obsession seems to be helping its stock price. In December, Tyler Radke, an analyst at investment banking giant Citigroup, downgraded MicroStrategy’s stock based on fears that the company was overpricing its Bitcoin play. As the analyst explained, while the company had made a sizable return on its Bitcoin investment, the market appeared to have been overpricing its core business.

However, Bitcoin’s rally in December helped the company’s reserve to balloon even more. While Radke’s criticism of MicsoStartey’s core business has some merit, the market appeared to have overlooked that as its stock surged over 100 percent. The stock, which traded at $286.21 when Radke downgraded it, has now jumped past the $740 mark and is surging on.

The Virginia-based firm is precisely the type of client that NYDIG appears to be looking for. Deep-pocketed and not afraid to take risks, MicroStrategy has become a whale among whales in the Bitcoin market.

Although some could criticize the effects of increasing institutional action on Bitcoin’s liquidity, everyone seems to agree that it would benefit the market in the long run.

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Author: Jimmy Aki

Grayscale Is Now Eyeing The DeFi Sector for its Institutional Clients

Grayscale Is Now Eyeing The DeFi Sector for its Institutional Clients

AAVE, Monero (XMR), Cardano (ADA), and Cosmos (ATOM) makes it to the list followed by last week’s Chainlink (LINK), Tezos (XTZ), Basic Attention Token (BAT), Decentralized (MANA), and Livepeer (LPT).

The world’s largest digital asset manager, Grayscale Investments, is not only focused on buying Bitcoin faster than it is being mined, but it is also ready to storm into other crypto assets as well.

This time, Grayscale’s focus is on the booming decentralized finance (DeFi) sector.

As per the latest filing, made on Jan. 27, the company aims to launch trust for DeFi blue-chip AAVE, a leading lending platform that is getting increasingly popular and recently revealed to be an application billionaire Mark Cuban is heavily involved in.

The registry also lists trusts for trending Polkadot (DOT), privacy coin Monero (XMR), Cardano (ADA), which switched to “proof of stake” last summer, and Cosmos (ATOM).

The filings were made by Delaware Trust Company, which is listed as Grayscale’s “statutory trustee” for the US states.

These new fillings came right on the heels of other filings for five crypto assets viz. Chainlink (LINK), Tezos (XTZ), Basic Attention Token (BAT), Decentralized (MANA), and Livepeer (LPT) with Delaware’s corporation registry, a week back. Before that, back in Oct. 2020, registration was also made for Filecoin Trust.

Interestingly, for its current products, Grayscale is focusing on buying the dips, when it comes to the leading digital asset.

Yet again this week, as the BTC price continued its weakness, GBTC added more than 2,000 BTC.

In Q4 of 2020, Grayscale “experienced unprecedented investor demand,” and record inflows were once again registered last week that saw Bitcoin sliding just under $29k.

While Grayscale continues to buy Bitcoin (BTC), Litecoin (LTC), Ethereum Classic (ETC), and Bitcoin Cash (BCH), the firm has yet to open its Ethereum (ETHE) product since it last made 131.25k ETH purchase on Dec. 9.

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Author: AnTy

Fireblocks Introduces Crypto Staking for Institutional Investors

Fireblocks Introduces Crypto Staking for Institutional Investors; Ethereum, Tezos and Polkadot

Fireblocks wants to help institutional investors access crypto staking opportunities. The company’s institutional focus comes at a time when interest in crypto is high.

Digital asset security platform Fireblocks has been working over the past year to improve institutional access to cryptocurrencies. Following the success in decentralized finance (DeFi) and more, the company is now turning its sights to the burgeoning staking scene.

Staking is for Everyone

Fireblocks plans to support hosted proof-of-stake (PoS) services for Ethereum 2.0, Tezos, and Polkadot, as it opens up token staking to its institutional client base.

Fireblocks has over 165 clients, which includes heavyweight crypto lenders Salt, Celsius, and UK-based Fintech firm Revolut. The crypto custodian is partnering with popular staking providers Staked and Blockdaemon to pull this off.

Company chief executive Michael Shaulov confirmed that the move was largely due to increased investor demand.

As he pointed out, most of Fireblock’s customers hold Bitcoin, while a small minority hold altcoins. That small minority is split in assets such as XTZ, DOT, and ETH, which total about $1 billion.

Institutional investors with idle funds, should expect between 5 and 15 percent in yields annually if they lock up their funds on the platform.

Fireblocks’ customers will maintain custody of their funds in their MPC-based wallets. From there, they can monitor their performance on Staked and Blockdaemon.

Data from Staking Rewards shows that the two are ranked first and sixth, respectively, on the list of crypto assets by staked value. With Polkadot staking in particularly high demand, Fireblocks appears to be in an excellent position to land its desired institutional clients.

Staking on Ethereum 2.0 is also on the rise. Industry news sources recently confirmed that Ethereum 2.0 staking on top crypto exchange Kraken had surpassed the billion-dollar mark.

Fireblocks’ Encompassing Institutional Crypto Play

Fireblocks’ cryptocurrency staking service is the latest in a flurry of efforts to drive institutional crypto investment.

Last June, the firm created an open network called Secure Asset Transfer Network, for institutions to connect, trade, settle and transfer crypto on-chain. The network launched with over 55 institutions and 26 exchanges. Participants included brokers, liquidity providers, asset custodians, and market makers. Shaulov said at the time,

“The launch of the Fireblocks Network makes it possible for users to store and transfer assets across the entire institutional ecosystem and removes the need for any middle-men. We’re redefining on-chain settlement processes by adding an unprecedented layer of security and efficiency, preserving the decentralized nature of blockchain, and allowing it to operate at the institutional level.”

The Asset Transfer Network was built on its multiparty computational technology (MCT). The Network also provides access to easy on-chain transfers while streamlining post-trade operations and settlements.

Fireblocks also has interests in the decentralized finance (DeFi) space. Last March, the company partnered with leading lending protocol Compound to allow institutional investors to access DeFi opportunities. Thanks to the integration, Fireblocks customers can now earn interest via Compound’s lending protocol.

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Author: Jimmy Aki

Regulation Will Only Boost Mass Institutional Buying and Selling: BitPay COO

Regulation Will Only Boost Mass Institutional Buying and Selling: BitPay COO

Sonny Singh says $20k is BTC’s floor price and expects $45k next month. According to him, Coinbase’s IPO is “very very instrumental” for the market and its numbers will blow Wall Street’s minds away.

$20,000 is the floor price for how far Bitcoin could go down, said Sonny Singh, Chief Commercial Officer at BitPay.

As for the upside, given that his $30k target has been hit in just 20 days rather than taking over a month, with “very little sell-side pressure,” he sees BTC going to $40k-$45k next month when some pressure will be seen.

Sonny also predicted that this year Bitcoin will “become a trillion-dollar currency” and the magic number for that is $54,000 roughly. At this point, he expects, even governments and the Treasury Department to start buying BTC “which may sound far-fetched but two years ago corporations buying bitcoin for the balance sheet was crazy too.”

Supply & Demand

Talking about the current price movement in the market, Sonny said Monday’s 20% correction was “just a minor blip in the road” — it wasn’t long-term fundamentals at all rather just futures getting liquidated. Singh said in his interview on Bloomberg,

“What you’re seeing over the last month is there’s supply and demand. There are a lot of institutional buyers out there and there’s very little supply.”

While these buyers have bought in all the BTC for a three to five-year time horizon, if Bitcoin hits about $45,000 next month or so and these institutions decide to start selling, the selling pressure of $200 million which the industry has never seen before can cause a catapulting event, to cause things to come down pretty quickly and there $20k will act as a floor, he explained.

Regulatory Concerns

On the regulation side, which remains a concern for outsiders, it is already happening. Governments are passing a lot of KYC/AML policies on the exchange but “that really won’t slow growth,” said Singh.

While it may slow the utility of sending Bitcoin to your friends or spending it at merchants, regulation will only help the actual mass institutional buying and selling, he said.

As for the Ripple part, Singh said it is to be seen if the SEC would want to do a long drawn out court case or do a quick settlement, especially as the administration changes under the new president.

According to Wayne Trench, chief executive officer at OSL, the main regulatory hurdles are already solved in terms of custody and clarity.

The last remaining pieces are regulators globally collaborating cross-border which is starting to happen now, said Trench noting that industry bodies are working on collaborating across borders that we’ll see play out a bit more in 2021.

Big for the Market

Singh also believes Coinbase’s IPO is “very very instrumental” for the market because while Wall Street loved that Square traded $1.6 bln with crypto in Q3 last year, Coinbase traded $1.5 bln on this last Saturday.

“The revenue numbers at Coinbase are going to blow people’s minds away and then Wall Street is going to really drive that stock price up,” he said. And then Charles Schwab, E-Trade, and others won’t sit back and let Coinbase have a sole market, Singh added.

“It’s going to put a lot of media frenzy around this whole industry.”

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Author: AnTy

Ethereum Is A ‘Huge Success Story’ But is ‘Undervalued’ in Terms of Institutional Buying

Ethereum Is A ‘Huge Success Story’ But is ‘Undervalued’ in Terms of Institutional Buying

Bitcoin is not the only asset that is rejoicing in greens. As a matter of fact, compared to Bitcoin’s 285% year-to-date rally, Ether recorded 455% gains in 2020.

It has actually been after 18 months that ETH finally breached the $700 mark.

As Jesse Powell, co-founder and CEO of cryptocurrency exchange Kraken noted, Ethereum has performed “amazingly well” this year, having seen tremendous returns. Powell in his recent interview with Bloomberg said,

“I think the future is extremely bright for Ethereum as well as for Bitcoin. And I think it’s another asset that people should be looking at if they’re looking for something else to get into an encrypted space.”

The second-largest digital asset is actually still down 49% from its all-time high of $1,420, on Coinbase.

Currently trading around $725, ETH’s uptrend only started at the beginning of last week while Bitcoin consolidated some following yet another new ATH.

Institutional Interest

Interestingly for ETH, in just over a month CME will be launching Ether futures contracts which are expected to bring a herd of institutional buyers.

“ETH is undervalued in terms of institutional buying. Institutional investors would eventually consider ETH for their portfolio next to Bitcoin,” says Ki-Young Ju of data provider CryptoQuant.

He further noted that there is a big gap between Grayscale Investments’ Bitcoin and Ethereum stash which he expects to contract soon.

ETHE — Ethereum product of Grayscale, the largest asset manager which caters to accredited and institutional investors and high net worth individuals — holds 2.94 million ETH.

This represents 2.54% of Ether’s circulating supply. ETHE is currently trading at a premium of 115.97%, which is much higher than GBTC’s 18.86% but much lower than the 2963.83% premium institutional investors are paying for buying LTCN, as per Bybt.

However, Grayscale hasn’t added any new ETH to its holdings since Dec. 9, which is unlike their BTC holdings which were last added on Dec. 25.

A huge success story

While mentioning Ethereum, Powell also noted decentralized finance (DeFi), a sector that has more than $14 billion locked in it and 7.1 million of ETH.

“The DeFi story is growing and becoming a bigger piece of the ecosystem. These days you’re seeing middlemen completely removed from financial contracts through DeFi which is largely happening on Ethereum. So that’s a huge success story that’s in the process of a major protocol upgrade.”

Jesse Powell Co-Founder & CEO Kraken

It was on Dec. 1st that Phase 0 of ETH 2.0 was launched, the first step towards making the network faster and cheaper that includes the transition from proof of work (PoW) to (proof of stake (PoS). Since then just over 2.31 million ETH has been locked in its deposit contract.

However, ETH miners continue to pump in hashing power insanely that pushed the network’s hash rate 100% up since the beginning of the year.

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Author: AnTy

$50,000 Per BTC ‘Is A Reasonable Price Target Even For Q1 To Q2 Of Next Year’

The appetite for Bitcoin among institutional investors continues to grow at a fast pace.

Every week, a new company or public figure announces its investment in Bitcoin or the digital assets’ potential as a store of value, much like gold.

This appetite can be seen with the Bitwise’s Crypto Index Fund — with 75% BTC, 13% Ethereum, and 12% other crypto assets weightage — which surged more than 70% in a couple of days of its launch, that too while the digital assets slipped by a few percentages.

But over the weekend, the crypto market took over as BTC went from $17,600 earlier in the week to $19,500 on Sunday.

Today, BTC/USD is trading around $19,150, down 0.09% with $2.24 billion in volume.

Ultimately Bullish

Still, the largest cryptocurrency is up 166% YTD, and this Bitcoin rally is “fundamentally sound,” according to Antoni Trenchev, co-founder of Nexo.

According to him, any dips are just Christmas coming early — “a great entry point for you to purchase some Bitcoin just before liftoff,” said Trenchev in a recent interview with Bloomberg.

These price drops, according to him, are profit-taking and the rumor about last-minute legislation from the Trump administration, which according to him are just going to be more anti-money laundering and know-your-customer policies “just like in the banking sector.”

However, the new legislation will ultimately be a “very valid bridge bullish sign for Bitcoin, and that will set the stage for the next leg up,” he said.

The regulatory threat has been taking the edge off the market, and Trenchev is extremely bullish on BTC price.

Nowhere Near the Top

According to Trenchev, his predicted a $50,000 BTC target price by the end of the year “is a reasonable price target even for Q1 to Q2 of next year.”

The reason for his bullishness is simple, since the summer, the market has seen retail, institutional investors, high net worth individuals, and family offices positioning themselves and purchasing Bitcoin and other cryptos. And this is

“very different from what we had 2017 and 2018 where this was a really retail-driven frenzy where everybody was maxing out on leverage and credits to buy bitcoin.

This has not yet happened.”

Although retail has come, it is nowhere near what we saw in 2017, which makes this rally “fundamentally much more sound,” he added.

In the macro scheme of things, all the stimulus unleashed by the central banks and government in 2020 will continue moving into next year. As we reported last week, the ECB has already announced its big numbers, and the US might reach a compromise on the relief package soon.

Morgan Stanley chief rates strategist also noted that G10 central banks would inject another US$2.8 trillion of liquidity next year – just in their government bond purchases.

This is to be seen if and when all this liquidity will find its way into the financial and Bitcoin market. We are already seeing some rotation out of gold and into Bitcoin this year, thanks to the latter’s digital gold narrative.

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Author: AnTy

Fidelity Digital to Custody BTC as Collateral for BlockFi’s USD Loans to Institutions

Fidelity Digital Assets will now allow its institutional customers to use their Bitcoin as collateral against cash loans.

This new offering has been introduced in partnership with blockchain startup BlockFi, which announced on Wednesday that it is “thrilled” to support “Fidelity’s entrance into the digital asset financing space.”

“Having an ability to finance positions is a critical component of financial services infrastructure, and this collaboration reflects an exciting development for the digital asset ecosystem,” said Zac Prince, CEO and founder of BlockFi.

BlockFi will be offering US dollar loans to institutional clients holding BTC as collateral in custody accounts at Fidelity Digital Assets (FDA), the unit of Boston-based asset manager Fidelity Investments. Christine Sandler, Head of Sales and Marketing for FDA said,

“We continue to see demand for increased capital efficiency from institutions that maintain long bitcoin positions, and with this collateral agent capability, our customers seeking that efficiency can access more opportunity with the capital that they trust us to keep safe.”

Cash will be offered worth 60% of loans backed by the digital asset with “room for client-level customization” and even adjusted to meet large firms’ needs, said Prince.

Combining risk-managed loan agreement with custody furthers the opportunity for institutions in the digital asset space. Sandler said,

“The business and market momentum we’ve seen this year have reinforced our belief that institutional investors are looking for a more comprehensive offering in the digital assets space.”

With this new offering, FDA is entering into the “thriving lending market” of digital assets that target those Bitcoin investors who want to turn their cryptocurrency into cash without selling.

Hedge funds, crypto miners, and over-the-counter trading desks are the potential customers, Tom Jessop, president of FDA, said in an interview with Bloomberg. He sees the loans to be longer-term than the typical repo trade.

According to him, holding BTC to back loans is “a foundational capability,” and “as the markets grow, we’d expect that this becomes a fairly important part of the ecosystem.”

Right now, BlockFi offers 8.6% APY for users that HOLD BTC on their platform.

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Author: AnTy

Guggenheim Fund Files for Buying 27,700 BTC, 0.15% of Bitcoin’s Total Minted Supply

Guggenheim Partners LLC is the latest one to join the institutional investors bullish on Bitcoin and bet on it.

The company is reserving the right for one of its funds to invest in Grayscale Bitcoin Trust, which is solely invested in Bitcoin and tracks the leading digital asset prices less 2% fees.

GBTC is currently trading around a 17% premium to BTC price, trading around $19,500. The filing said,

“Except for its investment in GBTC, the Fund will not invest, directly or indirectly, in cryptocurrencies.”

The $5.3 billion Macro Opportunities Fund of Guggenheim, which aims for total return through fixed income and other debt and equity securities, is planning to invest nearly $500 million in Bitcoin, which will be around 27,700 BTC — 0.15% of the total minted supply of the digital asset. According to the company’s filing with US Securities and Exchange Commission (SEC) on Friday,

“The Guggenheim Macro Opportunities Fund may seek investment exposure to Bitcoin indirectly through investing up to 10% of its net asset value in Grayscale Bitcoin Trust.”

With this investment, Guggenheim and its chief investment officer Scott Minerd will join the likes of legendary investors like Paul Tudor Jones and Stan Druckenmiller. They have put their money into the flagship cryptocurrency. A crypto analyst noted,

“Expect a lot of fund managers to follow in PTJ and Druckenmiller’s footsteps in disclosing BTC positions into year-end window-dressing season. Career risk of owning BTC has now turned into risk of not owning BTC.”

In the filing, the company described cryptocurrencies as “digital assets designed to act as a medium of exchange.”

It also listed a wide variety of risks, including “highly volatile” prices, trading on “largely unregulated” exchanges that may be exposed to fraud and failure, a crisis of confidence in the most extensive network, and user preference to shift to competing cryptos.

The largest cryptocurrency has been enjoying a strong rally in 2020, surging to its highest level of $19,500 since the peak of the 2017 bull run. Trading around $18,750, BTC is just 8% away from its ATH, while up 160% YTD.

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Author: AnTy

Binance US Joins Silvergate Exchange Network (SEN) to ‘Unlock’ New Institutional Clients

Binance U.S announced that it had debuted institutional client services following a partnership with Silvergate, a Fintech and crypto-oriented bank. This U.S affiliate of the Binance crypto exchange has now been operational for close to a year.

It touts a wide range of services, including buying, trading, and earning digital assets such as Bitcoin. A partnership with Silvergate Bank further increases the value proposition of Binance U.S by making it seamless for institutions to access their platform.

According to the official announcement by Binance U.S on Nov 9, the move will enable institutional clients to transact 24/7 via the Silvergate Exchange Network (SEN). This platform is used by a couple of crypto giants to process real-time transactions and access crypto services that would have otherwise been out of reach, given regulatory limitations. In fact, a recent earnings report by Silvergate revealed that SEN that been quite profitable in the past year, with net income for Q3 at $7.1 million.

As of yesterday, Binance U.S institutional clients can register for the SEN account to leverage transactional operations’ underlying efficiency. Catherine Coley, the CEO of Binance U.S, commented that,

“We’ve launched SEN for our corporate clients, so now they’re able to move dollars through Silvergate around the clock instantaneously …

It’s a huge advantage for clients that are trying to get funds into Binance.US to be able to buy and sell cryptocurrencies, and we’re excited to see the impact on the rest of our liquidity.”

She went on to add that the integration with SEN will open up opportunities for institutions that were previously blocked from Binance U.S or not able to use the platform due to the difference in operating style. Notably, the SEN API integrations have been successful with testing done on roughly a dozen institutional clients.

According to Coley, the exchange has witnessed around 5 times growth in their trading behavior within the testing period alone. Silvergate’s CEO, Alan Lane, also expressed confidence in the partnership,

“We are thrilled to welcome Binance.US to our rapidly growing Silvergate Exchange Network (SEN).

Binance.US’s vision to increase the freedom of money through its powerful cryptocurrency exchange benefits its customers and promotes the digital asset industry’s growth.

We are confident the SEN will accelerate their vision and bring value to their business.”

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Author: Edwin Munyui