Indian Securities Regulator to Restrict IPO Promoters from Holding Bitcoin: Report

India’s securities regulator is reported to be working on barring all IPO organizers from holding cryptocurrencies. This is another statement move from the government following its cryptocurrency ban.

The Indian government has shown no subtlety in its approach to banning cryptocurrencies from the country.

Now, it appears to be extending its anti-crypto stance to the traditional financial industry. Initial Public Offerings (IPO) promoters would be the first to feel its wrath.

No Crypto for Fundraisers

Recently, the Economic Times reported that the Securities and Exchange Board of India (SEBI), India’s securities regulator, is planning to force all IPO participants to divest all crypto holdings before proceeding with their listings.

Per the report, crypto selloffs will most likely become a prerequisite for anyone looking to raise funds through an IPO, forming what the latest in New Delhi’s plans to eradicate digital assets is.

The news source reported that the SEBI plans to send notices to merchant banks, underwriters, securities lawyers, and all other stakeholders in India’s IPO space, warning them to stay off digital assets.

A securities lawyer told the news source that this would most likely be a government directive, as they could believe that an IPO promoter holding an illegal asset could pose a risk to investors.

Some investment bankers have also explained that the SBI might move ahead with the restriction even if the Reserve Bank’s ban on digital assets doesn’t pass parliamentary approval – an improbable process on its own.

Mahesh Singhi, an executive at investment banking firm SInghi Advisors, explained that SEBI is looking to avoid a situation where IPO promoters divers their raised funds to crypto investments, which remain highly speculative.

SEBI has yet to release any written notifications to that effect, but many stakeholders seem to believe that this restriction will come into effect soon.

No Time to Waste

The IPO restriction is the latest approach from the Indian government, which has vowed to disrupt the crypto sector in the country. First announced last month, the ban is gaining traction ahead of a presentation at the country’s lower parliament.

Titled the “Cryptocurrency and Regulation of Official Digital Currency Bill,” the proposal is already in consideration at the Rajya Sabha, India’s upper house of parliament. However, the current budget session is expected to run till April 8, with a recess session already ongoing until March 7.

Earlier this month, local news source CNBC-TV18 reported that the government might as well skip the parliamentary process altogether. Per the report, it could look to take the “ordinance route” to ban the use of private digital assets while also allowing the Reserve Bank to create a digital framework for its planned Central Bank Digital Currency (CBDC).

CNBC-TV18 reported that all appropriate parties had already begun drafting the ordinance as they look to pass the crypto ban proposal within a month. Ordinances usually allow the Indian government, through President Ram Nath Kovind, to bypass parliament and take action.

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Author: Jimmy Aki

Janet Yellen and the Fed Will Continue to Push Bitcoin to New Highs in the Next 5 Years

US Treasury Secretary Steven Mnuchin hasn’t been really good for cryptocurrencies. As we reported, the Treasury said in a statement on Monday, “There is strong support across the G7 on the need to regulate digital currencies.”

The G7 finance officials discussed the responses to the evolving landscape of cryptocurrencies to prevent their use for “malign purposes and illicit activities,” Treasury said.

Just last month, Coinbase CEO Brian Armstrong said that Mnuchin is planning to “rush out some new regulation regarding self-hosted crypto wallets before the end of his term,” although exchange’s former employer Brian Brooks, the acting Comptroller of the Currency, said there is no plan on killing cryptos.

However, Munchin hasn’t much time left in his term with Janet Yellen chosen as the new Treasury Secretary by President-elect Joe Biden.

Yellen’s views on crypto aren’t positive; she has called Bitcoin a “highly speculative asset” in the past and expressed concerns about its volatility when she should have shown more concern about the decreasing value of the US dollar.

However, Yellen won’t be bearish for Bitcoin price rather the opposite, wrote Alex Mashinsky, founder & CEO of Celsius Network, in an article on Monday.

According to him, Yellen’s track record as an economist and a civil servant is unimpeachable, but her ability to manage the current economic crisis and mounting debt is something to be worried about.

MMT FIAT maximalists in the House

Coming from a long line of Keynesian believers in MMT, Yellen advocates for creating endless amounts for fiat to grow the economy, said Mashinksy.

The Fed has already been printing money like crazy, with over 20% of dollar supply created in 2020 alone.

“Joe Biden along with Janet Yellen and J-Pow are gonna drive the Dollar into the ground,” said analyst Mati Greenspan.

Mashinksy argues that MMT is a dangerous ideology that injects boatloads of cash into the market, pushing the asset prices up, which only benefits large corporations and billionaires.

Although Yellen’s appointment can lead to Bitcoin restrictions and regulating DeFi but the fact that Yellen and Biden Administration need to ensure that the US Dollar remains the reserve currency, it would involve “funding new businesses and technologies in future industries such as Blockchain, Machine Learning, and AI.”

Mashinsky said it is “overdue” for the Fed and Treasury to give up their old ways and start taking advantage of crypto.

“The FED and the White House will be filled with Keynesian MMT FIAT maximalists in 2021. This guarantees that Bitcoin continues to hit new highs during the 2021–2025,” he wrote.

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Author: AnTy

UK’s Leading Crypto Miner Increases Bitcoin Holdings by 30% in November

British digital currency miner Argo Blockchain reported an average monthly mining margin of 57% for November compared to 40% in October.

Last month was a good one for the price of Bitcoin, as it rallied 45%, and as a result, good for companies working with the cryptocurrency as well.

Argo Blockchain reported higher revenues for the period, recording a surge from £1.2mln to £1.48mln.

“This has been an extremely exciting month for cryptocurrency miners,” Argo chief executive Peter Wall said in a statement.

“We have seen the value of Bitcoin climb exponentially to over £14,000 as investors and payment service providers are turning their interest to cryptocurrencies.”

Despite the firm mining 115 Bitcoin compared to 126 BTC in October, this has been attributed to changes in the mining difficulty and Zcash halving. In total, the firm has mined 2,369 BTC year-to-date.

As of November 30, the London Stock Exchange-listed company held 178 BTC worth nearly $3.5 million, up from 137 BTC on October 31. The company also has a mining capacity of 16,000, increased from 5,000 machines in the first half of 2019. Wall said,

“At Argo, we are continuing to prioritise efficiency in our mining operations, and this has enabled us to increase our revenue by 23% this month and achieve our highest mining margin since the halving earlier this year.”

The shares of Argo are trading around $11, up 147% in the past two months.

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Author: AnTy

Canaan Reports a Q3 Net Loss $12.3 Million Despite the Crypto Market Comeback

Canaan Creative, a Nasdaq listed Bitcoin miner manufacturer, has reported another loss in Q3 according to the latest unaudited financials released on Nov 30. This time the number jumped to $12.3 million, which is around four times the $2.38 million reported for the previous quarter. Contrary to the BTC market performance, the firm appears to be struggling after its share price tumbled on the announcement of the Q3 results.

Revenues also dropped to $24 million compared to $100 million in Q3 of 2019; however, this was a 5% increase from Canaan’s Q2 revenues this year. The financial report quotes a figure of $26 million for cash equivalents, which is an 18% jump from its previous $22 million in Q2. It further highlights that Canaan has allocated $30 million into short-term financial products where it can withdraw liquidity conveniently at any time.

Canaan’s CFO, Quanfu Hong, defended the performance and attributed a big part of the loss to reduced activity at the onset of the COVID-19 pandemic. Hong noted that demand has started to increase, and they are set to be back on track with Q4 pre-sale orders,

“Demand for mining machines in the market continued to rebound in Q3 2020. We have received a large number of pre-sale orders scheduled for delivery starting in the fourth quarter.”

Nonetheless, Canaan is still taking a hit on its market share according to the latest stats; its terra hashes sales tanked to 2.9 million compared to 3.7 million in Q3 of 2019. On average, one T/H costs $8.27 this year, while last year’s price was well over $27 per T/H. Its competitors Microbt, Bitmain, and Ebaang, continue to capitalize on the shortcomings.

Currently, one Canaan share price is trading at $5, having lost 13% within the past 24 hours. Like Bitmain, the firm has also been a victim of internal wrangles, which saw some of its directors dropped from the registry back in July.

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Author: Edwin Munyui

FUD of the Week: China and US Treasury Unsuccessful in Attacking Bitcoin

This week as we reported, China Police seized more than $4.2 billion worth of the crypto asset from the PulsToken Ponzi scheme.

However, it was the officials informing the public, as the crypto market has known all along, about how and where these funds have been moving thanks to the transparency of the blockchain technology.

Researcher Ergo has been updating the community about the sale of these tokens over the years, which peaked in mid-2019. Only about 15k of the BTC are left of the original 201k BTC now.

What is really interesting about China’s latest summary is that the authorities might be the ones involved in the sale of crypto assets all this time.

“Chen Bo, the mastermind of PlusToken (arrested in June 2019), was entrusted with selling PlusToken’s BTC, via a third party business, on behalf of the CCP?” commented ErgoBTC adding, “In return, he only gets 8 years in the gulag for architecting a multi-billion $ Ponzi? What kind of communism is this?”

The good news about this all is the market won’t be getting smashed as most of the Bitcoin has already been dumped into the open market through OKEx and Huobi. It was this sale-off at that time in mid-2019 that sent BTC crashing from $14k to $6k in six months.

There isn’t really anything left to send to China’s national treasury as they already sold most of it all. However, the same can’t be said of ETH and other altcoins, including LTC, EOS, DASH, XRP, DOGE, BCH, and USDT.

“Most importantly, this can be seen as the first government attack toward Bitcoin via liquidity games and price manipulation. IT FAILED,” said market analyst David Puell.

The price of cryptocurrencies had already taken a big drop before this news hit the market, sending BTC to nearly $16,300. Today, the crypto market is actually green.

Besides, over-leverage and BTC already rallying 85% in less than two months being the reason for the crash, Coinbase CEO Brian Armstrong spreading the U.S. Treasury FUD is another one.

While “false, it should be taken seriously,” said Puell.

Regulating self-custodied wallets is already forced upon exchanges in countries like Switzerland, Singapore, and the Netherlands.

While the crypto community continues to oppose these regulations, more rules and laws are expected, which means “privacy and ownership, even more so than price, will be the most contested subjects in Bitcoin in the next few years.”

The implication of this in the US on the price of Bitcoin in the long term, however, isn’t expected to change anything.

“The fundamentals remain the same, so in my view, even if we continue correcting ($14k, 12k, or whatever), the cause would be simply out of major market actors taking profits with the aim to buy cheaper,” Puell said.

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Author: AnTy

Genesis Reports Largest Ever Quarter, Q3 Driven by ETH, Stablecoins, & DeFi

Digital currency prime broker Genesis reported a record quarter third of 2020 with $4.5 billion in spot volume — up 285% from the same quarter in 2019, $1 billion in bilateral derivatives volume — which was driven by the BTC spot becoming more tightly coupled to risk assets in the broader macro and the embedded optionality in DeFi, and $5.2 billion in new loan originations.

First, Grayscale announced its biggest quarter ever, the third time in a row, and now Genesis is reporting “tremendous growth in its lending business.”

According to its Q3 2020 Digital Asset Market Report, the company’s active loan outstanding grew 50% QoQ to $2.1 billion, adding $5.2 billion in new originations in just Q3, “marking its largest quarter ever by a landslide.”

Q1 Reading: New Loans Issuance Hits $2B In Q1 For Its Largest Quarter Ever

Q2 Reading: Hunt for Yield Drives a Record Q2 for Genesis Lending

Active Loans Outstanding
Source: Genesis Report

Its Cumulative originations increased 61.5% from the prior quarter, seeing the tenth consecutive quarter of strong growth and bringing total originations to $13.6 billion since launching the lending business in March 2018.

“Our loan portfolio substantially increased in value through increased cash and altcoin loan issuance, along with a modest increase in the notional value of crypto loans outstanding.”

The report also noted a growing “appetite for yield” on digital assets as it recorded 165 unique institutional lenders, up from 47.3% from the previous quarter and 275% from last year.

But it hasn’t been Bitcoin that was driving this growth as BTC as a percentage of loans outstanding fell sharply QoQ from 51.2% to 40.8%. It was actually ETH, USD, and equivalents, and “other” altcoins drove the increase in book size in Q3.

“The main driver of this portfolio shift came from the impact of liquidity mining on DeFi protocols,” leading to the active borrowing of ETH and stablecoins.

The report further noted “ample cash on the balance sheets of top tier trading firms,” which indicates that there has been a significant increase in credit distributed by banks to prime brokerage lines across hedge funds, trading firms, and high net worth individuals.

This was also seen in the vastly increased institutional participation in the CME that became the second biggest futures market in OI this month.

And Genesis expects these trends to persist for at least another quarter because Federal Reserve balance sheet expansion may continue in Q4. This means CME growth can continue into 2021.

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Author: AnTy

Silvergate Bank Q3 Earnings Call Upholds Bullish Trajectory; Net Income Shot Up 29% to $7.1M

Silvergate, a Fintech and crypto-focused bank, has reported another bullish quarter according to its latest earnings call. The Q3 Silvergate Bank stats show that they have been gaining on most fronts, especially with increased activity in the Silvergate Exchange Network (SEN). As earlier reported by BEG, this platform recently crossed the $100 billion mark in transfer volumes.

Notably, $36 billion of the total transfer volumes were done in the last quarter, according to the Silvergate Q3 report. The company’s CEO, Alan Lane, attributed this growth to increased activity and strong digital asset prices during the past quarter,

“During the third quarter, bitcoin and other digital currencies saw strong price appreciation and an active trading environment, which we believe contributed to the increase in the number of transactions occurring on the SEN.”

Silvergate’s Q3 Earnings Call Break Down

The California-based bank’s growth has been quite exponential, most of which can be pegged to a burgeoning crypto industry in 2020. On that note, Silvergate reported a 29% increase in net income to $7.1 million compared to the previous $5.5 million in Q2. The figure also jumped year-over-year compared to 2019’s third quarter, where the reported net income stood at $6.7 million.

As for the market growth, Silvergate’s clients are now over 900, with a larger part being institutions. Lane has also pointed out that there around 200 prospective clients who might soon be onboarded as well. With such growth, he is confident that the debut of heavyweights like JP Morgan is not a threat to Silvergate’s sustainability and market expansion. In fact, Lane believed that exchanges are better off with more banking options,

“Those exchanges really want to have multiple banking partners and multiple sources of liquidity … And when volumes increase across the ecosystem and volumes are increasing from other customers, we’re seeing the same type of volume increases from those customers that JP Morgan is reportedly banking.”

Silvergate also reported a spike in its clients’ deposits; the amount went up by $586 million, marking its second-highest quarterly increase after the 2017 bull-run. Consequently, the firm’s fee income increased to $3.3 million in Q3; this is a 40% gain compared to the Q2 $2.4 million fee income.

Another highlight is Silvergate’s lending service ‘SEN Leverage,’ which recorded a $13 million increase, bringing the total amount of credit approvals to $35.5 million. Lane is quite optimistic about this specific product, although there are no plans to scale past Bitcoin anytime soon,

“We anticipate a long growth trajectory for SEN Leverage and will judiciously expand credit availability to our customers over time.”

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Author: Edwin Munyui

PayPal Exploring Acquiring Crypto Companies, Already in Talks with Bitcoin Custodian BitGo

PayPal is now exploring acquisitions of crypto companies, including bitcoin custodian BitGo, reported Bloomberg.

This week, Paypal announcing support, buy, sell, and hold for cryptos has been the biggest news. The online payments company will also be soon allowing its customers to shop at its 26 million merchants within its network with digital currencies.

This led to a spike in bitcoins’ price past $13,000, a new 2020 high last seen in July last year, and the other three altcoins – Ethereum (ETH), Bitcoin Cash (BCH), and Litecoin (LTC), that are supported as well.

Now, PayPal is holding talks with BitGo, which are still in the early stage, and it could either be finalized within weeks or fall out as it is possible PayPal might opt to buy other targets.

BitGo basically helps investors store BTC securely. Besides custody, it also provides trading, lending, and staking functions. The company has also issued $1.5 billion worth of wrapped bitcoin (WBTC) on the Ethereum network.

Backed by investors like Goldman Sachs Group, Digital Currency Group, DRW, Craft Ventures, Galaxy Digital Ventures, Redpoint Ventures, Founders Fund, and Valor Equity Partners, BitGo raised $58.5 million in 2018 at a $170 million valuation.

The Palo Alto, California-based company, was founded in 2013 by CEO Mike Belshe and applied to New York regulators in August to become an independent, regulated qualified custodian under New York State Banking Law.

At the time of the crypto announcement, PayPal had said it would partner with the regulated crypto service provider and BitGo competitor Paxos Trust Company.

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Author: AnTy

Data Breach at Popular Hardware Crypto Wallet Ledger Affects Million; Trezor Fires Shots

Popular crypto hardware wallet Ledger reported the leak of 1 million email addresses and 9,500 detailed personal information of its customers.

Ledger’s competitor, Trezor, took this opportunity to advertise, “After 90 days, we get rid of all sensitive data about your order in our e-shop database (even e-mail addresses),” complete with promo code “DATAPRIVACY” to offer a discount on its products. But it’s limited to 9500 users.

The company came to know of the data breach on July 14th when a researcher participating in Ledger’s bounty program made them aware of it; Ledger shared in its official report. Ledger immediately fixed the breach and conducted an internal investigation.

Now, a week after patching the breach, the company discovered the vulnerability had been exploited on June 25th by an unauthorized third party. The entity accessed Ledger’s e-commerce and marketing database through an API key, which has now been deactivated and is no longer accessible.

The database access, which has been used to send order confirmations and promotional emails, including mostly email addresses along with contact and order details such as first and last name, postal address, email address, and phone number.

Approximately 1 million email addresses were affected, and a subset of 9500 customers was exposed for first and last name, postal address, phone number, or ordered products.

“Your payment information and crypto funds are safe,” as the data breach has no link and impact on hardware wallets, crypto assets, or Ledger Live security, ensuring the company.

The company has since then informed all of its customers about the situation, and those whose detailed personal information is exposed have been sent dedicated emails.

Ledger has also notified the CNIL, the French Data Protection Authority, which ensures that data privacy law is applied to the collection, storage, and use of personal data.

Last week, they partnered with Orange Cyberdefense to assess the situation and are actively monitoring the evidence of databases being sold on the internet.

The company is now extending the scope of its security and organizational program to e-commerce, which initially focused on Products (HW and Vault). Further steps are taken to meet the requirements listed in ISO 27001.

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Author: AnTy

Grayscale’s Record-Breaking Q2 Sees Influx of New Investors; GBTC Inflows 118% of BTC Mined

Grayscale reported yet another record quarter with the most massive quarterly inflows at $905.8 million in Q2 2020, a quarter characterized by unprecedented global events, which is almost double the inflows recorded in Q1 2020.

This demand shows investors are increasingly looking to diversify their portfolios amid aggressive monetary and fiscal intervention resulting from the COVID-19 crisis, reads the report. And the record inflows make it difficult to ignore the “shift in sentiment towards digital assets from individual and institutional investors alike,” it said.

Both Grayscale Bitcoin Trust (GBTC) and Grayscale Ethereum Trust (ETHE) had record quarterly inflows; the latter one accounted for 15% of total inflows into the Grayscale products. ETHE was the reason demand for Grayscale products excluding Bitcoin grew to $154.7 million in 2Q20, up 35% QoQ, and up over 649% from 2Q19.

Even Grayscale Litecoin Trust saw its largest inflows to date, while the one providing exposure to Bitcoin Cash had its largest inflow since 2Q18.

Grayscale AUM
Source: Grayscale

Also, inflows into Grayscale products over six months surpassed the $1 billion thresholds for the first time ever, “demonstrating sustained demand for digital asset exposure despite a backdrop characterized by economic uncertainty.”

According to Grayscale, GBTC inflows actually exceeded newly mined bitcoin, which was cut down by 50% post-halving, a phenomenon widely circulating in the market.

Apparently, inflows into GBTC were proportional to almost 70% of all Bitcoin mined during Q2 2020, which increased to 118% after Bitcoin completed its third halving in May 2020.

The company noted that this significant reduction in the supply-side pressure might be “a positive sign for Bitcoin price appreciation.”

Grayscale BTC Flows
Source: Grayscale

However, the company still did not mention how much of these purchases were “in-kind,” which was last disclosed at “58% of total quarterly contributions in 3Q18, 71% in 2Q19, and 79% in 3Q19.”

The positive thing is that $124 million of inflows were from new investors who made up 57% of its investor base while 81% were returning institutional investors. This time these investors were more heavily weighted to offshore investors.

Overall, the majority of the investment that is 85% came from institutional investors who were dominated by hedge funds.

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Author: AnTy