Morgan Stanley Discloses Holding More than 5.8 Million GBTC Shares

In its filing with the US Securities and Exchange Commission (SEC), banking giant Morgan Stanley revealed that it owns a large amount of Grayscale Bitcoin Trust (GBTC) shares, currently trading at $39.12, at a 13.36% discount to Bitcoin, which is hovering around $47k.

Morgan Stanley owns GBTC shares across multiple portfolios, with the largest 928,051 shares held by its Insight Fund.

Twelve separate mentions of Morgan Stanley Institutional Fund Inc show a collective 4,772,064 GBTC shares, while two of the three Morgan Stanley Variable Insurance Fund Inc. owns a total of 179,703 GBTC shares.

Overall, the bank owns 5,879,818 GBTC shares worth $230 million.

Additionally, all of the Morgan Stanley Institutional Fund Trust shows 611,868 GBTC shares in the filing.

Back in late June, when BTC was trading in the below $30,000s, Morgan Stanley had also disclosed a position worth $1.3 million in GBTC via their Europe Opportunity Fund.

With trillions of dollars in assets under its management, Morgan Stanley is one of the biggest traditional participants to explore cryptocurrencies and investing in crypto infrastructure.

Competitors Wells Fargo, JPMorgan, and Goldman Sachs, are also investing in the crypto space and planning to offer their clients access to cryptocurrencies.

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Author: AnTy

NYDIG CEO: We’ll See an ‘Explosion’ in Bitcoin-Driven Financial Innovation in Banking & Insurance

Ross Stevens also revealed that he had a meeting with the heads of three of the world’s largest central banks about Bitcoin and inflation. He believes that we could see a central bank adopting the bitcoin standard or purchasing BTC as a reserve asset in the next 12 months.

“Bitcoin is life insurance” is how Ross Stevens, founder, and CEO of NYDIG, a Bitcoin management company, which is the subsidiary of $10 billion asset manager Stone Ridge, defined the cryptocurrency in his latest interview.

Bitcoin, according to him, is a payout in the form of freedom and dignity. And when one is poor, and all they have is fiat, then “that’s a melting ice cube of value” as the Federal Reserve continues to print money.

And this has been through the thoughts of “exacerbation of wealth inequality, profound unfairness of central bank activities,” that Stevens “saw the awesome power of bitcoin.”

NYDIG bought a bunch of bitcoin way back when no one knew about it and held it all the way through. But in 2020, they bought more bitcoin than the previous five years combined and are “on a pace to buy even more this year.”

This is because the company sees Bitcoin as a “peaceful weapon of choice against central bank driven time theft.”

The firm basically went all-in in 2017, and “it had profound effects on our company,” said Stevens adding,

“if you think about that denominator of fiat money just never-ending and expanding, that means necessarily that bitcoin gets more and more valuable.”

Bitcoin is the “first store of value in human history whose supply is completely impervious to any amount of increased demand,” he said.

Cash No Longer An Asset But A Liability

As we have been since last year, ever since the Fed implemented ultra-loose monetary policy, the value of the currency took a hit, propelling companies to see Bitcoin as a treasury asset, a replacement to the cash.

“Cash is no longer an asset; it is a liability,” said Stevens, and as such, companies have to decide what to do with their reserves.

“For companies like Stone Ridge and others that have adopted the bitcoin standard versus companies in their industries that have not, the results are profound, and part of the key is a shift in mindset,” which is that “bitcoin is not vulnerable,” like fiat and not subject to the whims of human frailties like decision making, he added.

This means, if you are not long bitcoin, you are short bitcoin, which is “not going away.”

Others also realize it, and that’s why NYDIG is “seeing uptake from kind of all spectrums of financial services, all spectrum of investors.”

“We’re At A Time Of Great Transition”

Amidst the growing interest for bitcoin, the strangest pairing in the most active folks is millennials and life insurers. What they have in common is that “they have the longest fiat denominated liabilities basically in the world,” said Stevens.

“What you will see over the next 12 to 24 months is nothing short of an explosion in bitcoin-driven financial innovation in the banking sector and the insurance sector.”

The problem is that people don’t feel safe with trusting their financial solution, and NYDIG is partnering with them to solve this. And the beginning of the baby steps of a rollout would be seen in Q4 with 2022 as “the year of bank after bank after bank enabling their customers to buy bitcoin,” get BTC rewards on credit cards and receive interest in it as well.

As for fear and opposition from central banks on bitcoin, Stevens revealed that he is meeting with the top officials who want to understand this asset class. “We’re at a time of great transition,” he said.

Steven didn’t share the name of the officials but said that they had a four-hour-long discussion:

“This past Saturday, the heads of three of the largest central banks in the world wanted to talk about inflation and bitcoin with me.”

But one topic he thinks about is when a country will change their legal tender laws to adopt the bitcoin standard, or a central bank would purchase bitcoin as a reserve asset. According to him, there is a 50-50 chance this would happen, and his contemplation is that it will happen in the next 12 months, he said.

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Author: AnTy

Colonial Pipeline Capitulates to $5 Million Ransomware Demand: Report

Colonial Pipeline Capitulates to $5 Million Ransomware Demand: Report

Emerging reports have revealed that the cybercriminals that attacked the US fuel pipeline, Colonial Pipeline Co, were paid $5 million in cryptocurrency.

According to Bloomberg, sources familiar with the situation confirmed the extortion fee was paid to enable them to resume fuel shipments.

Colonial Pipeline Attack Associated With DarkSide

The hefty ransom fee was reportedly paid within hours of the attack due to the mounting pressure on the pipeline operator to get gasoline and jet fuel flowing again across cities.

This is contrary to earlier reports asserting that Colonial Pipeline was refusing to negotiate with the attackers.

The FBI had earlier confirmed that the hackers were part of a Russia-linked DarkSide group specializing in digital extortion.

The Georgia-based Colonial ransomware attack crippled gas delivery systems in Southeastern states. Half of the gas stations in North Carolina, Virginia, Georgia, and South Carolina were reported empty.

The cybergang had reportedly demanded that the ransom be paid with a privacy coin like Monero (XMR).

However, the ransom payment goes against the advice of the Federal Bureau of Investigation (FBI). The government agency has repeatedly discouraged American ransomware victims from paying hackers. According to them, payment isn’t guaranteed to work and could incentivize cyber crimes.

Crypto Surge Propelling Ransomware Attacks

Ransomware refers to a category of malicious computer programs that force users into paying a ransom fee before they can access their data. The hackers involved in this type of cybercrime lock up victim’s files and demand ransom or payment for them to unlock it.

According to data from the blockchain analytics firm Chainalysis, crypto payments via ransomware attacks rose in 2020.

In its annual Crypto Crime Report released in January, Chainalysis said the amount paid by victims increased by 311% in 2020, reaching about $350 million in cryptocurrency. The average ransom paid by organizations in 2020 was $312,493, as stated in the report.

The vast majority of criminal crypto payments included in the report had to do with darknet markets and the general category of scams. A major reason for the increase in ransomware-connected payments during 2020 was coronavirus work-from-home measures, which opened up new vulnerabilities for many organizations.

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Author: Jimmy Aki

Survey: South Korean Investors Welcome Controversial Crypto Tax Law

A new survey has revealed that a majority of South Korean investors support the proposed crypto tax law set to be unveiled next year.

53.7% Support Crypto Gains Tax

According to a recent survey sponsored by local television station YTN, many South Korean crypto investors support the government’s move to tax crypto gains.

The research carried on 500 respondents aged 18 years upwards by local research firm Realmeter showed that 53.7% of respondents support the proposed taxation regime scheduled to come into effect in Jan. 2022.

38.3% of responders feel it could hamper the sector’s growth, saying the move was biased.

The survey showed that respondents within the age bracket of 20 and 29 were strongly against the planned taxation more than any other age group.

47.8% of respondents in their 20s said they do not support crypto taxation, while 47.5% of respondents said it might be necessary to do so.

The data collated also showed that female crypto respondents were more supportive of the taxation scheme than their male counterparts.

Data collated by South Korean statesman Kwon Eun-hee showed that crypto investors in their 20s and early 30s were the most active participants with over 2.35 million confirming that they have traded digital currencies at least once in the top four crypto exchanges operating in the country: Bithumb, Upbit, Korbit, and Coinone.

But despite what may be a growing dissent against Seoul’s plans to regulate the burgeoning industry, Finance Minister Hong Nam-ki believes it’s only fair to tax capital gains on crypto transactions the same way other financial transactions are taxed.

But crypto stalwarts have called for a revision of the incoming tax law. The capital gains tax on virtual currency transactions has been pegged at 20% and will only affect trading profits that surpass the 2.5 million (about $2,234) mark.

South Korea’s Growing Regulations On Crypto

South Korea is determined to regulate its crypto sector. The Asian nation has been working steadily to bring the crypto industry under the purview of the government. It started by outlawing privacy tokens like Monero’s XMR.

It then extended its laws to comprise virtual assets service providers (VASPs), including cryptocurrency exchanges stipulating a hefty fine for any crypto company that fails to report suspicious transactions on its platform. It also said that failure to keep relevant customer data and separate management of customers’ transaction records would see them facing the full weight of the law.

These laws have since seen crypto exchanges like OKEx and Binance close shop in the country.

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Author: Jimmy Aki

Microsoft Warns Cybersecurity Threat Posing as XMR Miners Attempts to Extract Data

A recently released Microsoft report has revealed that threat actors at the state level are now using coin miner techniques to cover their tracks or blend in. The report, which was published on Nov 30, highlights a recent attempt by state threat actor ‘BISMUTH,’ which leveraged Monero coin miners to infiltrate both government and private sector institutions in Vietnam and France.

While crypto-related cyber-crime activity is considered low risk, it appears that malicious attackers are now capitalizing on the nascent technology to advance their agendas. Per the Microsoft report, BISMUTH used the Monero coin miners as a decoy to distract security teams from tracking their real activity, which was data extraction. The report reads,

“The coin miners also allowed BISMUTH to hide its more nefarious activities behind threats that may be perceived to be less alarming because they’re ‘commodity’ malware.”

BISMUTH also used the DLL replacing tactic to further reduce their conspicuousness, given that it takes long time periods to extract information from the compromised applications. The group, famous for blending in techniques, pulled a new one with crypto miners, although the report notes a consistency in their pattern.

“The use of coin miners by BISMUTH was unexpected, but it was consistent with the group’s longtime methods of blending in.”

The report recommends that organizations prioritize reducing surface attacks by elevating and inspecting common threats such as phishing and coin miner techniques in a more advanced manner.

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Author: Edwin Munyui

Founder of Mexico’s Second Largest Broadcasting Company Invests 10% of Assets in Bitcoin

Mexico’s second-richest person, Ricardo Salinas Pliego, revealed on Wednesday that he has 10% of his liquid assets in Bitcoin. Salinas Pliego is the chairman and founder of Grupo Salinas, the conglomerate that owns the second largest broadcasting company in the country, TV Azteca.

The Mexican business, whose estimated net worth is US$13.2 billion in February 2020, had some love to shower on BTC as he said, “Bitcoin protects the citizen from government expropriation.”

As Dan Held, Director of Business Development for crypto exchange, Kraken, said, “The institutional herd is stampeding.”

Salinas Pliego may have revealed his love for Bitcoin only now, but he clarified that he has been into the digital asset since 2016 through Grayscale. He said,

“For me it’s no “stampede”, started with Grayscale at 800 dlls BTC in 2016.”

Besides the 10% of his “liquid portfolio” in BTC, the other 90% is in precious metals miners.

While praising BTC, he recommended “Saifedean Ammous’s The Bitcoin Pattern,” the best and most important tool to understand the flagship cryptocurrency.

“Bitcoin is a monetary network that gets stronger as more individuals & corporations adopt it to protect their treasury reserves. The fire in cyberspace is spreading…” Michael Saylor, CEO of MicroStrategy, the first publicly-listed company to make Bitcoin part of its balance sheet, an investment now up over 50%, commented on this development.

In another news, as we reported, Maisie Williams, who played Arya Stark in Game of Thrones, name-dropped Bitcoin on Tuesday, asking Twitter users if she should go long or short on it.

In true Arya Stark fashion, she shared later that day that she “bought some anyway” after 53.4% of the 902,304 votes came against it.

“@Maisie_Williams is wiser than most professional investors, 45.6% of her fans know the answer, & only .1% of the money has figured this out and moved onto the Bitcoin monetary network. Bitcoin is a risk worth taking. Bitcoin is hope.com,” said Saylor.

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Author: AnTy

COVID-19 Accelerated Digital Payments Growth and Fintech Regulatory Innovation: Study

A joint study by the Cambridge Centre for Alternative Finance (CCAF) and the World Bank has revealed that COVID-19 greatly accelerated Fintech regulatory innovation developments. Dubbed Global COVID-19 Fintech Regulatory Rapid Assessment Study’, the report was released on Oct 28 as part of an effort to empirically equip regulators and central banks in the digital currency era. Notably, the study highlights that increased digital payments activity did not result in a similar spike in crypto exchange use; however, these platforms also grew by smaller percentages.

The study’s results are based on responses from 118 central banks and financial regulators in 114 jurisdictions, from both developed and developing economies. Generally, there have been increased efforts to further accelerate the current regulatory innovations and introduce new initiatives to further support the burgeoning sector. According to the study, 72% of the sample has increased or debuted digital ecosystem initiatives, while 58% have already pivoted on RegTech/SupTech focused policies. Innovation offices are also on the rise, with 56% of the respondents noting progress.

Despite the bullish outlook in digital payments adoption, the study found that developed and developing economies faired differently. As per the findings, emerging market and developing economies (EMDEs) made more progress in accelerating or introducing Fintech initiatives. Most notably, EMDEs initiatives to support digital ecosystems have been focused on remittances and payments; some respondents reported waiving fees and altering transactional thresholds to mitigate the pandemic’s effects.

Crypto Exchanges Lag Behind

Although not as much as the digital payments arena that was already in place for most economies, the nascent crypto sector grew. As per stats from the study, digital payments are reported to have grown by around 60%, while activity on crypto exchanges only managed to gain 3%. Interestingly, there was a clear difference in the crypto exchange growth for developed and developing markets. The former grew by 6% while the latter saw an increase of 2% in crypto exchange usage.

Prevailing Challenges in Fintech Integration

At the core of regulators’ decision-making process is the risks associated with volatile Fintech environments, especially in upcoming markets like crypto. This study’s respondents identified cybersecurity as the top threat of digital ecosystems, followed by operational risks, consumer protection, and fraudulent activity. The report reads,

“In particular, 90 percent of surveyed regulators from advanced economies see cybersecurity as one of the top three increasing risks associated with FinTech activities.”

As for oversight, it appears that most central banks and regulators are comfortable with adopting and being resilient to innovations. Nonetheless, the respondents highlighted some shortcomings; they include the performance of core regulatory functions, access to reliable data, restriction to essential tech or information, and cooperation with local domestic agencies.

A Prospectus Future with CBDCs

This study has painted out the current status of digital payment networks globally and coincides with an increased interest in CBDC research and development. Central Bank Digital Currencies (CBDCs) are now a hot topic with the latest insights from the Bank of International Settlements (BIS) in a collaborative report with 7 major central banks.

Developed economies have currently leaped research, while some like China has gone further and launched a pilot for its prospectus digital yuan. This initiative has been in place for some months and is a reference for most ongoing projects in the space. In 2021, South Korea and Japan are also set to pioneer their CBDC tests to prepare for the virtual currency shift.

Well, UK’s Minister for Africa at the Foreign Commonwealth & Development Office, James Duddridge, is optimistic that the study will complement the current approaches to Fintech policies,

 “I trust that this report will inform and inspire countries around the world, help support their FinTech regulatory strategies, and encourage greater collaboration across jurisdictions.”

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Author: Edwin Munyui

Low Financial Literacy Investors Twice As Likely to Own Crypto vs Market Gurus: Bank of Canada

A new study released by the Bank of Canada has revealed that folks with lower financial literacy are more likely to own Bitcoin than those with higher literacy levels. The paper’s main point of the research was the use of ‘Cash Alternatives’ in Canada throughout 2019; some of the points highlighted include the adoption of cryptocurrencies and the possibility of a Central Bank Digital Currency (CBDC).

According to the report, cash payments in Canada decreased from 54% to 33% between 2017 and 2019 as more people opted for credit or debit cards instead. It highlights that this trend was mainly fueled by the rise of e-commerce, hence ease of making digital payments. Nonetheless, most Canadians are still using cash within the local Point-of-Sales (PoS).

Crypto Ownership Demographics

With cryptocurrencies getting more hype by the day, the survey revealed that at least 89% of Canadians have heard of Bitcoin. Out of these, 5% percent own BTC while another 1.6% have portfolios in other crypto assets such as Ether and Litecoin. As for the gender and age demographics, the groups which were mostly aware or own Bitcoin fall under young, male, university-educated, or high-income Canadians.

While those demographics may seem to favor financial literate folks, the research revealed that BTC ownership is more correlated to the less financially aware Canadians, ranking the sample into three where 47% had high financial literacy followed by the medium at 35% and finally low at 18%. Interestingly, 8% of the latter group said they own crypto assets compared to 4% of the highly financially aware.

However, awareness is still high among the more financially literate, with around 93% having heard of crypto assets instead of only 72% at the lower financial literacy group. While the digital payments space may be booming, the researchers noted that at least 86% of Canadians have no plans of shifting from cash.

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Author: Edwin Munyui

Fed Reveals Details About Digital Cash ‘Without The Anonymity Of Physical Currency’

Federal Reserve Bank of Cleveland President Loretta Mester revealed that each American would receive digital dollars directly. She said,

“Legislation has proposed that each American have an account at the Fed in which digital dollars could be deposited, as liabilities of the Federal Reserve Banks, which could be used for emergency payments.”

This was revealed on Wednesday when Mester delivered a speech to the Chicago Payment Symposium titled “Payments and the Pandemic,” in which she talked about “Central Bank Digital Currencies.”

Here she wrote about how during the pandemic, CBDCs have gained traction around the world (China, Bahamas, Brazil, Bermuda, South Korea, Russia, UK, France, Thailand, Japan, and many more).

Fed Digital Cash

Other proposals include creating digital cash — which is just like the physical currency issued by central banks but in digital form and “potentially, without the anonymity of physical currency.”

Digital cash wouldn’t require the involvement of commercial banks as they would be directly issued to the users’ digital wallets with central-bank-facilitated transfer and redemption services.

However, the demand for and use of such instruments is to be further considered, she said, adding the potential risks and policy issues surrounding CBDC also needs to be better understood and costs and benefits evaluated.

Mester also said that the Fed has been researching about issuing CBDC for some time, and already the technology lab of the Board of Governors has been testing the benefits and tradeoffs of distributed ledger platforms.

While the Federal Reserve Bank of Boston is working with MIT on different technologies for the CBDC, the New York Fed has collaborated with BIS to understand the relevance of fintech for central banks.

Although the authorities have been doing all the research, she said it “does not signal any decision” by the Fed to adopt such currency as they need to first better understand the issues related to financial stability, market structure, security, privacy, and monetary policy.

Metser concluded her speech by saying that the payment system, which is a critical part of the US infrastructure, must remain modern, resilient, and able to adapt to changing customer needs as they evolve.

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Author: AnTy

Survey Suggest 40% of Yield Farmers Can’t Read Smart Contracts; Still Pulling 500% Returns

A recent survey from Coingecko revealed that almost half of the DeFi yield farmers couldn’t read the smart contracts of the project they join. A majority of these yield farmers depend on auditors to monitor the security aspects of the project.

The survey revealed that 40% of the yield farmers could not read the smart contracts of the project they joined in; the report also revealed that the defi yield farming is dominated by males with 90% representation. It further showed that despite these yield farmers not able to read or understand the project, they still managed to make hefty profits; in fact, 90% of the respondents said that they had made a 500% return or more.

Yield Farming Dominated By Limited Users

The Coingecko survey found 1,347 respondents, out of which only a minor 23% of the respondents had participated in some of the yield farming, despite more than 80% being aware of the trend.

However, the most surprising aspect of the survey was that almost half of the respondents never read the code or researched about the projects they were participating in. This is extremely troubling, given the hype around the defi space. This trend could lead to a number of major scams arising; similar to the ICO era of 2017.

Coingecko, in its statement, noted that,

“All farmers should conduct their research before farming in any pools, as there are more copy-paste yield farming tokens that could potentially expose them to a greater risk such as code vulnerability or scams.”

Decentralized Finance (DeFi) has been the trend of the crypto town in 2020, where its market cap grew from a few million to over $15 billion in just nine months, and more defi projects have debuted given the rising hype around the space. People joining the hype wagon is understandable, but one should be aware of the risk factor involved. In fact, in the past couple of months, many meme defi projects have launched, managed to raise millions, see it’s market cap grow into billions, and make an exit scam.

All this happened in a matter of a few days.

The Coingecko survey report suggested that astonishing returns like the current times might fade away from the defi space as the hype fades out, but some projects would still allow for it to garner attention.

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Author: Rebecca Asseh