14 September

Financial heavyweights including Charles Schwab (SCHW), Citadel Securities and Fidelity Investments announced the start of cryptocurrency exchange EDX Markets, the latest evidence Wall Street is forging ahead in digital assets despite the crypto winter.

The exchange will be led by CEO Jamil Nazarali, formerly a senior executive at Citadel Securities. Other high-profile EDX backers include trading firm Virtu Financial (VIRT) and venture-capital firms Sequoia Capital and Paradigm.

Crypto is a $1 trillion global asset class with over 300 million participants and pent-up demand from millions more. Unlocking this demand requires a platform that can meet the needs of both retail traders and institutional investors with high compliance and security standards.

The news follows an announcement last month from BlackRock (BLK), the world’s largest asset manager, that it will give its institutional clients a way to invest into cryptocurrencies.”

See Also: Wall Street Titans’ New Crypto Exchange Aims to Seriously Cut Costs for Investors

“In the guidance posted to its frequently asked questions pages on Tuesday, according to the government department, U.S. residents would not be violating sanctions by copying the mixer’s code, nor making it available online or publishing it through another medium.

While engaging in any transaction with Tornado Cash or its blocked property or interests in property is prohibited for U.S. persons, interacting with open-source code itself, in a way that does not involve a prohibited transaction with Tornado Cash, is not prohibited. For example, U.S. persons would not be prohibited by U.S. sanctions regulations from copying the open-source code and making it available online for others.

Similarly, U.S. persons would not be prohibited by U.S. sanctions regulations from visiting the Tornado Cash website if it again becomes active on the Internet.

The Treasury [further] specified that users could generally interact with the Tornado Cash code provided it didn’t involve a prohibited transaction. Those who initiated transactions using the mixer prior to sanctions being imposed on Aug. 8 can [also] apply for an OFAC license to complete the transaction or to make a withdrawal.

The seeming uncertainty around the U.S. sanctions and how companies were expected to be in compliance came amid many platforms removing or restricting the activity of individuals associated with Tornado Cash. On Sept. 8, Coinbase announced it would be supporting a lawsuit brought by Tornado Cash users against the Treasury Department, alleging it illegally sanctioned the crypto mixer’s smart contract addresses.”

See Also: US Treasury FAQ
See Also: US Treasury Explains How Americans Can Recover Crypto Locked in Tornado Cash

Risk markets declined across the board after inflation data disappointed investors on Tuesday. August’s consumer price index (CPI) data showed an unexpectedly high 8.3% increase in prices versus expectations for an 8.1% increase. Core inflation, which excludes volatile food and energy prices, rose 6.3% versus forecasts of 6.1%. Markets now forecasts an 82% probability that rates will increase by 75 basis points during the upcoming Fed meeting.

Both BTC and ETH’s hourly charts highlight the sharp sell-off during the 12:00 UTC hour. Both assets moved into oversold territory. A distinction between the two assets is the bid that ETH seemed to catch during the 15:00 UTC hour, which accelerated in subsequent hours.

Where BTC appears completely tied to macroeconomic news, ETH prices are also tied to this week’s Merge, which is expected to occur within the next 24-48 hours. The pause and reversal of ETH prices likely implies optimism ahead of the Merge, as traders see an opportunity to accumulate oversold ETH.

Traditional equities markets were down, with the Dow Jones Industrial Average (DJIA) and S&P 500, down 3.9% and 4.3%, respectively. The tech-heavy Nasdaq composite declined 5.3% and is on track for its worst period since May 2020. The Dollar Index (DXY) increased 1.22%, maintaining its inverse relationship to BTC prices.”

Crypto lending platform Maker, the world’s largest decentralized-finance (DeFi) app, doubled the debt ceiling of its staked ether (stETH) vault this week as it looks to reduce its reliance on centralized stablecoins after Centre, the issuer of USD coin (USDC), blacklisted 38 addresses linked to sanctioned crypto tool Tornado Cash.

More than 34% of all assets locked on USDC are locked on Maker, and the tokens are the single-largest source of collateral that backs DAI. Approval of the proposal to raise the ceiling to $200 million allows more stETH to be deposited against DAI, reducing USDC’s influence. Some $49 million worth of stETH has flowed into the vault since the ceiling was raised.

There’s a natural tension between centralized stablecoins and projects like DAI that want to be permissionless and uncensorable. The decision to lean on USDC allowed Maker to grow and focus on an easy user experience, but that came with trade-offs that are now fully visible.”

Ethereum’s historic Merge may change the way its native token, ether (ETH), is used, according to Lex Sokolin, head economist of decentralized protocols at software company ConsenSys.

A fairly large portion of people are going to be staking their ETH in the protocol, which in a sense is going to inevitably turn at least some ETH into a store of value inside of the network.

Sokolin added that ETH is not only “being used to power the protocol” but it is also oftentimes being used as “a unit of account for all sorts of goods and NFTs inside of Web 3.”

It has both of those functions. The sound money function as well as the store of value function.”

See Also: 4 Things Blockchain Analysts Are Saying About the Ethereum Merge
See Also: Ethereum Proof-of-Work Fork Timing Posted

“Brave popularized the concept of giving users crypto rewards for using its web browser, and has seen surging user counts as a result. But now you can add similar functionality to an array of browsers—including Chrome and also Brave—and earn Bitcoin in the process. Adtech startup Slice announced today that it has integrated Bitcoin payments into its browser extension, letting users earn cryptocurrency by viewing ads.

The newly-enhanced extension is based on technology from Bitcoin payments startup Zebedee, and utilizes Bitcoin’s Lightning Network for micropayments. As users browse the web, they’ll see additional advertisements inserted into pages. Viewing those ads earns users points called Slices, which can then be swapped for Bitcoin via a Zebedee account.

Today, people surfing the web are right to have high standards for receiving value in exchange for their attention, and to claim that value in the form of real money, delivered to them instantly.”

See Also: Linux Foundation Project Will Tackle Digital Wallet Interoperability

“SWIFT disclosed on Tuesday a partnership with fintech company Symbiont to provide more accurate data for financial firms through blockchain technology. Vanguard, Citigroup, American Century Investments, and Northern Trust are among the companies participating in the initiative.

Through Assembly, Symbiont’s proprietary technology platform, smart contracts will be used ‘to create a network effect that leverages the 11,000+ institutions connected to SWIFT globally. The pilot project could help providers distribute data in near real time to global custody clients.’

Due to the rise of Central Bank Digital Currencies (CBDC), the company has been making efforts to maintain its relevance in the international economic order.”