THIS WEEK IN CRYPTO
- Tesla has dumped 75% of its bitcoin holdings. Tesla said in its second-quarter earnings statement that it has “converted approximately 75% of our Bitcoin purchases into fiat currency.” The company said those sales added $936 million in cash to its balance sheet. Musk said that the reason for selling was that they were uncertain as to when the Covid lockdowns in China would alleviate so it was important to maximize their cash position. Read more here.
- Stablecoins face US scrutiny as House lawmakers craft rules. Leaders of the House Financial Services Committee are eyeing July 27 to advance a bipartisan bill focused on digital tokens. Maxine Waters, a California Democrat, and Patrick McHenry, a Republican from North Carolina, have said they’re working together to create guardrails for stablecoins.
- Singapore plans to broaden crypto regulations after the shakeout. The Monetary Authority of Singapore plans to consult on proposed steps in September or October, Managing Director Ravi Menon said in response to questions after releasing the central bank’s annual report Tuesday. The revised rules may include further tightening retail-investor access to crypto, he added without providing details.
- Peter Thiel-backed crypto lender Vauld files for protection against creditors. Vauld Group filed an application on July 8 to seek a moratorium order in favor of the company, a spokesperson for the company confirmed. The move gives Vauld and its management the breathing space it requires to prepare for the intended restructuring for the benefit of all stakeholders.
- Genesis lent $2.4 billion to hedge fund Three Arrows Capital. Digital Currency Group Inc., the cryptocurrency conglomerate that owns Genesis Global Trading Inc., is the biggest creditor of the beleaguered hedge fund Three Arrows Capital Ltd., according to court documents compiled by Three Arrows’ liquidator. The hedge fund put down the equivalent of $1.2 billion in crypto and other collateral as of last month. Read more here.
- Crypto exchange Zipmex halts withdrawals. The exchange operates in markets like Singapore and Thailand. In a tweet Wednesday, the company cited “volatile market conditions, and the resulting financial difficulties of our key business partners” as reasons for its decision. A person with direct knowledge of the matter said Zipmex’s pause stemmed from the platform’s exposure to troubled crypto lender Babel Finance.
- Former Coinbase manager and two others charged in crypto insider trading scheme. U.S. Attorney Damian Williams charged Ishan Wahi, a former product manager at Coinbase, his brother, Nikhil Wahi, and a friend, Sameer Ramani, with wire fraud conspiracy and wire fraud in connection with a scheme to commit insider trading in cryptocurrency assets. The charges allege the individuals planned to use confidential Coinbase information about which crypto assets were scheduled to be listed on Coinbase’s exchanges.
Read more here. - SEC enforcement head asks congress for more resources to tackle crypto issues. The head has asked Congress for additional resources – including hiring more people – to shore up the agency's crypto regulation efforts. During a hearing, SEC Director of Enforcement Gurbir Grewal told the House Financial Services Subcommittee on Investor Protection, Entrepreneurship, and Capital Markets there have been so many more enforcement actions against crypto companies they are straining the regulator’s nascent crypto unit.
- Coinbase secures regulatory approval in Italy. San Francisco-based cryptocurrency exchange Coinbase has secured approval from financial regulators in Italy, allowing it to continue serving Italian customers. According to a blog post, the Organismo Agenti e Mediatori (OAM) has added a new requirement that mandates all crypto trading or custody companies to meet the criteria before continuing to offer services in Italy. Read more here.
- The crypto market hits $1 trillion again. Bitcoin and Ethereum are up 17% and 44%, respectively, over the past week. The silver lining of past liquidation events is that leverage is being worked out of the crypto market. In fact, a report from J.P. Morgan recently said the deleveraging process might be nearing an end. Of course, no one knows when the crypto crash will end, but that bit of good news should give investors confidence. Read more here.
- Coinbase clarified that it hasn't taken any losses from recent crypto bankruptcies. The company put out a blog post that said the company doesn't have any financial exposure to bankrupt crypto firms Celsius, Three Arrows Capital, and Voyager. Management also said that it had no losses from its financing book, no exposure to client or counterparty insolvencies, no loan recalls or withdrawals, and no changes to access to credit.
- Blockchain.com announced it will cut staff by 25%. The company said it will close an office in Argentina, cancel expansion plans in other countries, and cut back on institutional lending. It hasn't been widely reported, but Blockchain.com had lent $270 million to Three Arrows Capital, and when the company filed for bankruptcy, it exacerbated an already down market. Read more here.
