Category: Cryptocurrency

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Coinbase’s Chief Legal Officer, Paul Grewal, affirmed the exchange’s readiness for the ongoing legal battle with the US Securities and Exchange Commission (SEC) after a court ruling allowed the case to move forward.

In a post on the social media platform X, Grewal stated that Coinbase had anticipated the court’s decision, following Judge Katherine Polk Failla’s ruling that the SEC had “sufficiently pleaded” its case against the leading US-based crypto trading platform.

Following this development, Coinbase shares experienced a decline of over 3% to $260, as reported by Yahoo Finance data.

Grewal emphasized Coinbase’s preparedness for the legal proceedings, noting the court’s decision to allow most of the SEC’s claims to proceed while dismissing claims against Coinbase Wallet. He conveyed the company’s eagerness to gain further insight into the SEC’s internal viewpoints and dialogues concerning cryptocurrency regulation.

Last year, the SEC filed a lawsuit against Coinbase, accusing the company of breaching federal securities laws in connection with the trading of at least 13 cryptocurrency securities tokens.

Despite the ruling, some within the crypto community have downplayed its significance, with one member describing it as a “nothing-burger.” Fox Business journalist Eleanor Terret echoed this sentiment, stating that the SEC had a low bar to secure a favorable ruling and that it was expected for Coinbase to have the opportunity to defend its case in court, similar to the ongoing legal battle involving Ripple.

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Coinbase has announced its intention to enhance the storage of corporate and customer USDC balances on Base, an Ethereum Layer 2 solution incubated by Coinbase and built on the open-source OP Stack. This strategic move aims to capitalize on lower fees and faster settlement times offered by Base, without compromising the user experience on the Coinbase platform. Max Branzburg, Vice President and Head of Consumer Products at Coinbase, expressed enthusiasm about transitioning more of their operations on-chain and encouraged other companies to follow suit.

The decision has been well-received, with Base contributor Jesse Pollak expressing approval and stating that they are excited to support Coinbase’s transition to on-chain operations.

In parallel with this development, Base has experienced a substantial surge in Total Value Locked (TVL), reaching over $1 billion. This significant milestone represents more than double the TVL recorded at the beginning of the month, according to data from Defi Llama. Notably, the decentralized exchange Aerodrome contributes the majority of Base’s TVL, witnessing remarkable growth since early February.

Transaction counts on Base have surged, outpacing other optimistic rollups, with Arbitrum also experiencing notable growth. In contrast, OP Mainnet’s daily transaction count has seen a more moderate increase.

Coinbase’s decision to leverage Base for storing USDC balances aligns with the broader trend of increasing adoption of Layer 2 solutions in the Ethereum ecosystem. As Base continues to gain traction and demonstrate its scalability and efficiency, it is poised to play a significant role in facilitating faster and more cost-effective transactions for Coinbase and its customers.

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BlackRock’s inaugural tokenized investment fund, the BlackRock USD Institutional Digital Liquidity Fund (BUIDL), has seen a surge of approximately $160 million in inflows within its first week of operation. The fund’s growth trajectory continues with recent injections from Ondo Finance, a tokenized real-world asset (RWA) platform.

The world’s largest asset manager, BlackRock, introduced BUIDL last week, marking a significant entry into the realm of tokenized investment vehicles. According to a Bloomberg report, the fund amassed $160 million in deposits during its initial week. Additionally, Ondo Finance announced plans to allocate a significant portion of its tokenized short-term U.S. Treasury bills ETF, OUSG, into BUIDL. Ondo Finance disclosed to CoinDesk that it intends to transfer $95 million onto the BUIDL platform, although it remains unclear whether this amount is included in BlackRock’s reported $160 million total.

The BlackRock USD Institutional Digital Liquidity Fund (BUIDL) functions as a tokenized money market fund primarily investing in U.S. Treasury bills, repurchase agreements, and cash. Leveraging the Ethereum blockchain infrastructure facilitated by Miami-based Securitize, BUIDL tokens are issued to investors. These tokens are designed to maintain a stable value of $1 per token and distribute dividends in the form of tokens representing U.S. dollar yield to eligible investors.

BlackRock’s foray into digital assets is gaining momentum, following its recent achievements in the cryptocurrency space. Earlier in January, BlackRock, along with nearly a dozen other funds, secured SEC approval for a spot bitcoin exchange-traded fund (ETF). The iShares Bitcoin Trust (IBIT), BlackRock’s ETF offering, has attracted over $15 billion in investments, positioning it as the second-largest spot bitcoin ETF, trailing only Grayscale’s GBTC, according to data from The Block’s spot bitcoin ETF tracker.

BlackRock’s successful debut of BUIDL underscores its commitment to embracing digital assets and underscores its growing influence in the evolving landscape of tokenized investment products.

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Deribit, a leading cryptocurrency derivatives exchange, is poised to witness historically high levels of bitcoin options open interest expiring this Friday. The surge in open interest, totaling over $9.5 billion, reflects increased liquidity and participation in the market.

According to analysts at Deribit, this end-of-month expiry represents one of the largest in the exchange’s history, accounting for approximately 40% of the total open interest. Comparatively, previous end-of-month expiries in January and February stood at significantly lower levels, around $3.74 billion and $3.72 billion, respectively.

A notable aspect of this expiry is the considerable portion of options set to expire in the money, amounting to $3.9 billion based on a current spot price of around $70,000. This suggests that a substantial number of options contracts hold value at current market prices, potentially leading to increased buying activity as traders seek to hedge or capitalize on further price movements.

Deribit analysts anticipate heightened volatility or upward pressure on bitcoin prices as option holders exercise their profitable contracts. The recent price rally in Bitcoin has contributed to this situation, resulting in higher levels of in-the-money expiries compared to typical scenarios.

Luuk Strijers, Chief Commercial Officer at Deribit, emphasized the bullish sentiment prevailing in the cryptocurrency market, particularly evident in derivatives data. Strijers highlighted the basis yield achievable by buying spot and selling longer-dated futures, indicating strong demand in the market.

Moreover, Strijers noted a significant increase in Bitcoin notional open interest in contracts valued at $100,000 and higher on Deribit. He also pointed out a shift in the put-call ratio for ether options, indicating evolving market sentiment towards short-term and long-term expiries.

Overall, the heightened levels of bitcoin options open interest on Deribit reflect the growing maturity and sophistication of the cryptocurrency derivatives market, underpinned by bullish market sentiment and evolving trader strategies.

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GSR, a crypto market maker, has revised its estimate of the likelihood of a spot Ether ETF approval in May to 20%. This represents a significant decrease from its earlier estimate in January, where it had placed the chances at 75%.

According to Brian Rudick, an analyst at GSR, the change in estimation is influenced by several factors. Rudick highlighted the lack of engagement from the SEC, potential political pressure against approving digital asset ETFs, and an ongoing investigation into whether Ether qualifies as a security. These factors collectively diminish the odds of approval.

Rudick also speculated that the approval process for spot Ether ETFs might extend well into 2025 or 2026, potentially involving litigation due to the complexities surrounding the regulatory environment.

In a notable shift, Rudick mentioned that some ETF applications have been amended to include Ether staking. While this could enhance the attractiveness of such ETFs, it also introduces additional complexities to the approval process. Rudick suggested that this move might either provoke a response from the SEC or indicate a concession to a delayed approval, potentially lowering the odds for May.

Similarly, Bloomberg ETF analysts have also adjusted their estimates, now placing the likelihood of a spot Ether ETF approval in May at 30%. This contrasts with their earlier projections, which were more optimistic, indicating a challenging regulatory landscape for Ether ETFs.

James Seyffart, a Bloomberg analyst, expressed growing pessimism, noting a lack of progress in the approval process as the deadline approaches. With little movement observed, optimism surrounding the approval of Ether ETFs seems to be waning.

Overall, both GSR and Bloomberg analysts paint a cautious picture regarding the prospects of a spot Ether ETF approval in May, highlighting regulatory uncertainties and the potential for prolonged approval processes.

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Bitcoin’s ascent faces a shaky $70,000 resistance, but data from the blockchain suggests participants are gearing up for a sustained rally. Recently, Bitcoin surged above $71,000, marking its highest point since March 15, propelled by capital inflows into spot BTC exchange-traded funds (ETFs).

On March 26, Bitcoin saw a 0.55% increase over 24 hours, reaching a weekly peak at $71,582. Factors driving this surge include consistent inflows into spot Bitcoin ETFs, the anticipation surrounding the upcoming Bitcoin halving, and positive sentiment among institutional investors.

Key to Bitcoin’s rally is the accumulation by large investors. Data from Sentiment reveals a rise in wallets holding between 1,000 BTC and 10,000 BTC, reaching 25.17% from 23% at the beginning of the year. Similarly, wallets holding between 10,000 BTC and 100,000 BTC saw a spike from 11.68% to 12.42% before settling at 11.98%.

This accumulation is reinforced by decreasing BTC deposits on exchanges, signaling reduced intent to sell. Instead, there’s been a surge in whale transfers from exchanges to self-custody wallets. Notably, one holder moved 2,400 BTC ($169.5 million) from Coinbase to an undisclosed wallet, while another withdrew 4,797 BTC ($339 million) to an unknown destination.

Anticipation surrounding the upcoming halving event is also bolstering Bitcoin’s price. Glassnode predicts that ETF buying power will overshadow the traditional supply squeeze expected from the halving, set for April. Analysts emphasize monitoring the activity of long-term holders (LTHs), whose decisions can significantly impact market liquidity and sentiment.

With the halving approaching, traders are eyeing Bitcoin’s next price level. Despite facing resistance, data from IntoTheBlock indicates strong support around $64,000, suggesting momentum for Bitcoin’s ascent back to the $70,000 range.

Traders are now focused on maintaining Bitcoin above $70,000, with $100,000 emerging as a key target for the price.

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The US Department of the Treasury’s Office of Foreign Assets Control (OFAC) has announced sanctions on 13 entities and two individuals involved in the financial services and technology sectors of the Russian economy. These entities, including those dealing with virtual assets, are accused of aiding Russian entities in evading US sanctions.

According to the Treasury Department, these designations come after reports of entities facilitating transactions or offering services that helped sanctioned Russian entities evade sanctions. The move follows previous actions by OFAC targeting companies servicing Russia’s financial infrastructure and restricting its access to the global financial system amid the conflict with Ukraine.

Under Secretary of the Treasury for Terrorism and Financial Intelligence, Brian E. Nelson stated that Treasury will continue to expose and disrupt companies aiding sanctioned Russian financial institutions in reconnecting to the global financial system.

Among the sanctioned firms are Moscow-based fintech companies like B-Crypto, Masterchain, Laitkhaus, and Atomaiz, which allegedly collaborated with OFAC-designated Russian banks to facilitate cross-border settlements and issue digital financial assets. Cyprus-based Tokentrust Holdings Ltd., the majority shareholder of Atomaiz, was also designated.

Other entities targeted include technology companies like Veb3 Tekhnologii and Veb3 Integrator, providing blockchain solutions to clients such as Sberbank and Alfa-Bank. Bitpapa, a peer-to-peer virtual currency exchange, and Crypto Explorer, a virtual currency exchange operating in Russia and UAE, were also sanctioned.

In addition to crypto-related sanctions, OFAC-designated companies associated with the OFAC-designated Echelon Union for Science and Technology, a Moscow-based entity licensed by Russian authorities.

As a result of these sanctions, all property and interests in property of the designated persons within US jurisdiction are blocked and must be reported to OFAC. Foreign financial institutions dealing with Russia’s military-industrial base risk facing sanctions as well.

These sanctions aim to disrupt Russia’s ability to use alternative payment mechanisms and financial technology entities to evade US sanctions and continue funding its conflict with Ukraine. The Treasury vows to monitor and respond to Russia’s evolving sanctions evasion tactics while upholding the integrity of the international financial system.

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Analysts anticipate significant growth for Bitcoin exchange-traded funds (ETFs) in Hong Kong, driven by the adoption of the in-kind creation model, which gives them a notable advantage over their US counterparts.

Eric Balchunas, a senior ETF analyst at Bloomberg, highlights Hong Kong’s adoption of the in-kind creation model as a potential catalyst for boosting assets under management (AUM) and trading volume for ETF products in the region. This view is supported by research from Bloomberg ETF analyst Rebecca Sin, who sees the in-kind model as an “opportunity for the market.”

Sin elaborates on the difference between the US and Hong Kong approaches, noting that while the US relies on cash transactions for Bitcoin ETF creation (cash in, Bitcoin ETF out), Hong Kong aims for Bitcoin-based creation (Bitcoin in, ETF out), presenting a unique opportunity for the market.

Earlier this year, Hong Kong authorities signaled their readiness to accept applications for spot crypto ETFs, with plans to introduce these financial products by mid-year. Several entities, including Harvest Hong Kong, have since filed applications to launch spot Bitcoin ETFs.

The in-kind creation model favored by Hong Kong contrasts sharply with the cash-creation model favored by US authorities. With in-kind redemptions, ETF issuers can exchange the fund’s underlying assets, such as Bitcoin, with market makers instead of transacting in cash during share creation and redemption. This mechanism allows ETFs to issue creation units without immediately selling the securities for cash.

In contrast, the cash redemptions required by the US SEC mandate fund managers to sell Bitcoin to provide cash for redeeming shareholders. Notably, BlackRock, one of the Bitcoin ETF issuers, has raised concerns about this method, citing challenges in maintaining share prices aligned with Bitcoin’s actual value.

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South American gold and precious metals producer Nilam Resources (NILA) is venturing into the world of cryptocurrency by announcing its intention to acquire 100% of the common stock of a special purpose entity holding 24,800 Bitcoin (BTC). This move comes as the exploration-stage mining company signed a letter of intent with Xyberdata Ltd.

The special purpose entity, to be named MindWave, will be established for this purpose. Nilam Resources plans to issue a newly authorized Preferred Class of Series C Stock in exchange for the Bitcoins, which will be offered at a discounted rate compared to current market prices.

With full control over MindWave’s capital stock, Nilam Resources aims to use the 24,800 Bitcoins, along with other assets, as collateral to raise capital for investment in high-yield generating projects.

Under the agreement, shareholders of MindWave will exchange their equity interest for the newly issued Preferred Shares of Class C stock authorized and issued by NILA.

The newly created Class C Preferred Stock is expected to offer conversion rights upon listing on NASDAQ, another national exchange, or other defined liquidity events. These shares will be issued pro rata to the shareholders and will be considered ‘restricted securities’ as per Rule 144 under the Securities Act of 1933.

Pranjali More, CEO of Nilam Resources, affirmed that the company and its team have been diligently working over the past few months to complete all agreements and due diligence required to advance towards a legally binding Letter of Intent.

Following this acquisition, Nilam Resources’ assets will surpass one billion dollars.

In a press release, the company emphasized that this move aligns with its vision, mission, and core values, aiming for an inclusive and sustainable financial future while driving positive change in the digital economy.

Pranjali More, COO of Nilam Resources, highlighted the company’s commitment to transparency, innovation, and sustainability, prioritizing clear communication and investing in projects with enduring social and environmental impact.

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Worldcoin, the project known for its “proof of personhood” concept where individuals receive cryptocurrency tokens after having their irises scanned to verify their humanity, has faced a setback in Europe. A regulator in Portugal has directed the project to halt its biometric data collection efforts.

According to a report from Reuters, the Portugal data regulator, CNPD, has instructed Worldcoin to suspend its collection of personal data for 90 days. This directive follows a similar ban imposed on the project in Spain last month. The CNPD cited a high risk to citizens’ data protection rights as the rationale for urgent intervention to prevent potential harm. The report notes that over 300,000 individuals in Portugal have provided their biometric data to Worldcoin.

In response to the regulatory action, Tools for Humanity, the lead software contributor to the Worldcoin project, emphasized that the initiative adheres to all relevant laws and regulations governing the collection and transfer of biometric data. Jannick Preiwisch, the data protection officer at Worldcoin Foundation, reiterated the project’s commitment to complying with data protection authorities and expressed willingness to address any reported concerns, including those related to underage sign-ups in Portugal.

In an attempt to address privacy concerns and enhance user control over personal data, Worldcoin recently introduced “Personal Custody,” a new process that eliminates the storage and encryption of individuals’ biometric data. Previously, users had the option to allow Worldcoin to store their data. Tiago Sada, an executive at Tools for Humanity, highlighted that the updated approach grants users greater autonomy over their data, offering reassurance by reducing the need to place trust in external entities.

Worldcoin’s unique model rewards individuals with cryptocurrency tokens, known as WLD tokens, upon undergoing iris scanning to establish a World ID. According to the project’s website, Worldcoin has garnered participation from over 4.5 million individuals across 120 countries.

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