5 November

“Bitcoin hit a seven-week high after a better-than-expected U.S. jobs report in October showed that the labor market remains surprisingly robust even as the Federal Reserve pushes to cool down the economy. Ether (ETH) followed a similar trajectory, rising 5.6% to $1,620 as of press time.

Traditional markets also put up a strong performance Friday, with the Standard & Poor’s 500 Index up 0.2%.”

See Also: MATIC Rally Gathers Speed as Meta Announces Polygon-Powered NFTs, Chart Signals Golden Cross
See Also: DeFi Lender MakerDAO Goes TradFi and Doubles Revenue
See Also: Twitter Reportedly Halts Work on Crypto Wallet, Driving Dogecoin Down 10%

Fintech firm Ripple is garnering more support from the crypto and finance industry in its ongoing battle with the United States Securities and Exchange Commission (SEC).

For those of you keeping count, 12 amici briefs submitted. It’s unprecedented to have this happen at this stage. They each explain – in their own unique way – the irreparable harm the SEC will do to every facet of the US crypto economy if it gets its way.

That growing number of supporters that have already filed briefs include Coinbase, the Chamber of Digital Commerce, the Crypto Council for Innovation, the Blockchain Association, Valhil Capital, I-Remit, Spend The Bits, Tapjets, the Investor Choice Advocates Network (ICAN) and John Deaton on behalf of more than 75,000 XRP investors.”

“European Union lawmakers won’t vote on the Markets in Crypto Assets regulation (MiCA) until February, likely meaning further delays in the landmark licensing regime for crypto companies within the bloc. A previous tentative plan for the Parliament to vote at its December plenary session has been abandoned given the length and complexity of the text.

The law’s provisions, which require crypto companies such as wallet providers and exchange platforms to seek authorization from national regulators, start to apply between 12 and 18 months after the final law is published in the EU’s Official Journal – an event originally foreseen for spring of next year, but which now seems set to be pushed back.”

See Also: At Stake in the US Midterms: The Future of Money
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“Project Cedar, a research effort launched by the N.Y. Fed’s New York Innovation Center (NYIC), tested the speed of FX transactions using distributed ledgers, finding that in a simulated example, they could lower the speeds of transactions with multiple participants and observers. The project intended to research the benefits of wholesale CBDCs.

This indicates that a modular ecosystem of ledgers has the potential for continued scalability, and that distributed ledger technology could enable settlement times well below the current industry standard of two days, with the added guarantee of atomic settlement.

The test used an undisclosed permissioned blockchain network and was written in the Rust programming language – it did not provide many details about how the simulation was conducted or how they confirmed transaction settlements.”

Prosecutors have reportedly secured a “messenger conversation” in which Kwon ordered an employee to manipulate Terra’s market price.

CEO Kwon specifically ordered price manipulation.

The KBS report now suggests Kwon is residing somewhere in Europe, and as of Nov. 3, without a valid passport. ‘Do Kwon is now an illegal immigrant, wherever he is, in any country, and he cannot travel legally between countries.'”

“Bug bounty platform Immunefi has released its Whitehat Leaderboard — a scoring system that showcases the top 20 most elite white hats in Web3. According to the company, white hats who rank on the leaderboard will also be selected to earn further rewards, all-expenses-paid trips, exclusive merch, and speaking opportunities.

In Immunefi’s community, the top 10 white hats alone have generated over $42 million in total earnings by disclosing critical vulnerabilities that have led to big bounty payments.

See Also: Institutions are accumulating cryptocurrency: Where is their money going? (Video)

4 November

“Circle Internet Financial has begun moving the reserves for its USDC stablecoin into a dedicated fund set up by BlackRock and registered with the U.S. Securities and Exchange Commission. Placing the assets in a fund overseen by the SEC could further bolster the company’s assertions of safety.

The new fund’s assets will be held at the Bank of New York Mellon, according to Circle, where the fund will be subject to regulation under the Investment Company Act of 1940, which requires an independent board and daily reports on the portfolio. The current circulation of $43.9 billion in USDC is currently backed by $44.1 billion in cash and short-term U.S. government bonds, according to weekly company disclosures. The portfolio of the new fund will also consist of cash and U.S. Treasury bonds.

From the start, we’ve managed the USDC reserve to minimize risk – liquidity, counterparty, operational, reputational and more – so that USDC holders can be confident their money is sound and redeemable 1:1 for U.S. dollars at any time.”

The 375 million Swiss franc ($370 million), three-year bond is the first from a banking institution that will be listed, traded and settled on a digital exchange. The bond will be issued on the blockchain-based platform of the SIX Digital Exchange and traded on the SDX and SIX Swiss Exchange.”

See Also: Standard Chartered Invests in JPM and DBS-Backed Blockchain Payment Network Partior
See Also: Santander UK Puts Limits on Payments to Crypto Exchanges

“AR, the native token of blockchain-based data storage solution Arweave, surged as Facebook and Instagram’s parent company, Meta, said it will utilize the Web3 platform to archive their creators’ digital collectibles.

The integration means Instagram users can now issue digital collectibles for their posts, stored on Arweave. In other words, Meta is bringing data permanency to its platform with the help of decentralized storage technology. Arweave allows users to retain information forever. The data, once entered, cannot be altered. Users need to purchase the storage space by paying the AR token.

Early this year, the censorship-resistance platform was reportedly used to archive millions of documents from war-hit Ukraine and store the aggressor Russia’s misinformation and propaganda.”

The Bored Ape Yacht Club (BAYC) creators are hard at work on open standards to enable NFTs to migrate between Otherside and other metaverses. Those object standards will, Solano said, be ‘open standards that anyone can adopt, and can build on top of.

The idea is that a designer can create a 3D character model for BAYC’s Otherside metaverse and, ‘just as easily take it to another metaverse.‘ And vice versa. The other selling point for an open metaverse, as opposed to a Web2 “walled garden” such as Fortnite or Roblox, is “true ownership,” said Solano.

Earlier this month, the Open Metaverse Alliance (OMA3) launched with a vision to ensure that the metaverse ‘remains open and becomes truly user-owned,‘ part of which includes a working group to develop interoperability standards.”

See Also: Kraken Launches 70 Ethereum, Solana NFT Collections on New ‘Gasless’ Marketplace
See Also: Final Fantasy Maker Square Enix Reveals Its First Ethereum NFT Game

The new system will be called datonomy, and seeks to give crypto participants a standardized way to view and analyze the digital assets ecosystem. Crypto market participants will be able to track trends in different segments of crypto including smart contract platforms and decentralized finance (DeFi), and also screen various assets.

The collaboration brings together MSCI’s expertise in critical decision support tools and services, Coin Metrics’ intelligence in the digital assets space and Goldman Sachs’ innovative platforms.

Separately, MCSCI announced Thursday that it is launching its own set of digital assets indices.”

3 November

“The U.S. Federal Reserve on Wednesday raised interest rates by 75 basis points (0.75 percentage point) to a range of 3.75% to 4% in a move that was widely anticipated by market participants. At a press conference following the announcement, Powell gave several hints that the Fed is considering slowing the pace of rate hikes in the near future.

At some point it will become appropriate to slow … and it may come as soon as the next meeting, or the one after that.

In determining the pace of future increases in the target range, the Committee will take into account the cumulative tightening of monetary policy, the lags with which monetary policy affects economic activity and inflation, and economic and financial developments.

While slowing is a possibility, pausing isn’t at this point, Powell reiterated. He stressed that he doesn’t think that the Fed has overtightened and that it is “very premature” to discuss pausing.”

See Also: BTC Markets Entering a New Phase in Potential Accumulation Season

Singapore has quietly been playing host to some of the most advanced explorations into cryptocurrency and decentralized finance (DeFi) ever done by big banks, institutions and regulators. In particular, Project Guardian, which sets out to test asset tokenization and DeFi for banks, launched in early summer by the Monetary Authority of Singapore (MAS), saw Singapore’s DBS Bank joined by JPMorgan and Japan’s SBI Digital.

The first phase of testing involved trades in tokenized Singapore government securities, Singapore dollars (SGD), Japanese government bonds and Japanese yen (JPY), which was done using Ethereum public blockchain overlay system Polygon, DeFi lending platform Aave and Uniswap, a decentralized exchange and automated market maker (AMM).

We wanted to show it was possible to tokenize government securities and cash within a DeFi liquidity pool. Then using an AMM, and solving for that with price oracles and market data streaming services from Bloomberg or Refinitiv, we wanted to create an institutional-grade DeFi venue which regulators would be comfortable with.

Banks and traditional financial institutions see opportunities and efficiencies to be gained by copying DeFi’s success in crypto, with the boldest moves involving public blockchains and promising to bring trillions in existing financial instruments to the party.”

See Also: FIS Subsidiary Worldpay to Enable USDC Settlements on Polygon
See Also: Aave Community Members Vote to Deploy on zkSync v2 Testnet

“Project Mariana, coordinated by the Innovation Hub of the Bank for International Settlements (BIS), is looking at whether protocols used in intermediary-free decentralized finance (DeFi) can replace traditional, more laborious processes for matching buyers and sellers of different fiat currencies.

DeFi and its applications have the potential to become systemically important parts of the financial ecosystem. Automated market makers can become the basis for a new generation of financial infrastructure.”

The upcoming “end-to-end toolkit” for NFTs will allow users to create and launch their own NFTs for sale through Instagram. Instagram will also pull NFT metadata from OpenSea so that collection names and descriptions can be viewed on Instagram.

While Meta won’t initially charge its own fees for NFT sales made through its applications, that is on the horizon. ‘Meta won’t charge fees to create or sell digital collectibles until 2024.

Today, Facebook and Instagram support Ethereum, Polygon, and Flow blockchains, allowing users to connect their wallets to their accounts to display NFTs.”

“Billionaire Sam Bankman-Fried’s cryptocurrency empire is officially broken into two main parts: FTX (his exchange) and Alameda Research (his trading firm).

Alameda’s balance sheet is full of FTX – specifically, the FTT token issued by the exchange that grants holders a discount on trading fees on its marketplace. While there is nothing per se untoward or wrong about that, it shows Bankman-Fried’s trading giant Alameda rests on a foundation largely made up of a coin that a sister company invented.

As of June 30, the company’s assets amounted to $14.6 billion. Its single biggest asset: $3.66 billion of “unlocked FTT.” The third-largest entry on the assets side of the accounting ledger? A $2.16 billion pile of “FTT collateral.” There are more FTX tokens among its $8 billion of liabilities, including $292 million of “locked FTT.” (The liabilities are dominated by $7.4 billion of loans.)

It’s fascinating to see that the majority of the net equity in the Alameda business is actually FTX’s own centrally controlled and printed-out-of-thin-air token.”

See Also: Binance CEO Zhao Considering Buying Banks: Report

2 November

“Binance chipped in $500 million as an equity partner with Elon Musk to buy Twitter in hopes of using the social media platform as a “sandbox” to deal with Web 3 issues, according to the exchange’s chief strategy officer.

Hillman said the world’s largest cryptocurrency exchange by volume is looking to be a “critical partner” in Twitter’s growth and innovation and would turn to “Web3 solutions” to solve some of the challenges on the platform, such as non-fungible token (NFT) user authentication and whether the platform could be used as payments system to “create small micro transactions.”

We look at this as a massive historic opportunity for R&D.

Being able to attack and address that bot issue is going to be critical to reopening a healthy dialogue around crypto.”

See Also: Elon Musk Tweet Sparks Flurry of Twitter-Themed Dogecoin Tokens

Risk assets, including cryptocurrencies, have recently found a footing on hopes the Federal Reserve will pivot away from jumbo interest rate hikes from December to end the so-called liquidity tightening sooner than expected, and will signal that at its Nov. 2 meeting. However, major investment banks believe the Fed could keep the doors open for continued jumbo rate hikes, and a potential switch to smaller rate hikes would not necessarily imply an early end of liquidity tightening.

The markets appear to have run ahead of themselves in pricing a slowdown in terms of both frequency and magnitude of rate hikes starting from December. Traders expect the rate hike cycle to peak at around 4.8%, down from the terminal rate of 5% priced two weeks ago, according to the futures tied to the Fed funds rate. Bitcoin has gained 10% in two weeks, while the dollar index has dropped by over 2%.

The Fed isn’t done hiking until the data says so. Core CPI is at cycle highs, U3 unemployment is at cycle lows. Corporates tell us their top challenge is hiring. China and U.S. are decoupling. [Capital expenditure] is rising. Food and energy are increasingly scarce. Inflationary pressures seem broad-based and increasingly entrenched. Short-term survey inflation expectations have risen.

The Fed’s job is not done. The Fed will stress data dependence next week. They will get two more NFP and CPI prints before the [December] meeting; if they stay hot, another 75 bps is in the cards, if not, a deceleration to 50 bps is possible.”

See Also: Dollar Reversal Could Bring Inflationary Pressure, Former US Treasury Secretary Larry Summers Warns
See Also: Uniswap Surpasses Bitcoin as Fed Rate Hike Decision Nears
See Also: Bernstein: Small Economic Recovery Would Make Ether’s Tokenomics Favorable

Nearly 40% of voters under the age of 45 reported being more interested in crypto in the current economic climate. Approximately one-third of Black and Latino voters told pollsters they were more crypto-curious because of the economy. Poll results also indicated that young and diverse voters aren’t just more likely to be interested in crypto – they’re also more likely to own it already. Roughly a third of Black (30%), Latino (32%) and young voters under the age of 45 (33%) already own cryptocurrencies.

Of the 2,000 voters surveyed, 37% said they would factor candidates’ policy positions on crypto before casting a vote. The overwhelming majority of voters surveyed in Grayscale’s poll indicated that they want more crypto-savvy politicians in office – and that they want those politicians to establish a clear regulatory framework for the crypto industry.”

See Also: 38% of US voters will consider candidates’ position on crypto in midterms: Survey

Payments firm MoneyGram (MGI) has added a service to its mobile app allowing nearly all U.S. customers to buy, sell and hold bitcoin (BTC), ether (ETH) and litecoin (LTC). The company expects to expand those cryptocurrency selections over the coming year.

The new functionality is being enabled by crypto exchange Coinme, in which MoneyGram made a strategic minority investment earlier this year.”

“When it launches, Aave users will be able to mint GHO against deposited collateral, much like MakerDAO’s DAI stablecoin. But there are a few key differences. For example, Aave will allow users to mint GHO against multiple types of collateral rather than creating a separate vault for each asset, like Maker.

The AAVE community is using the AAVE protocol for creating that stablecoin. So as a liquidity provider, you actually provide liquidity into the AAVE protocol and you earn on those assets that you’re supplying. And at the same time, you can mint the stablecoin.

Kulechov thinks Aave’s GHO will help attract stablecoin users because DeFi makes it more affordable to process transactions. ‘These layer 2s radically decrease the cost of actually transacting and inheriting the Ethereum security in layer 2s.‘”

See Also: Now Anyone Can Create an Ethereum NFT DAO With Zora’s Nouns Builder

1 November

Recommended read: Erik Voorhees responds to Sam Bankman-Fried.

“Yesterday, Sam Bankman-Fried posted his “Possible Digital Asset Industry Standards.” He describes the document as “a set of standards that we as an industry could enact to create clarity and protect customers while waiting for full federal regulatory regimes.”

He stresses that his post is “just a draft” and he welcomes feedback.

Some have thrown Sam under the bus, questioned his motives, called him mean names, etc. While I’ve met Sam, I don’t know him personally, and I’m going to give him the benefit of the doubt. My assumption here is that Sam is a good actor attempting to make a productive contribution to crypto policy.

This whole topic is too important for a mere snipey Tweet, so below are some deeper thoughts on crypto industry regulation and Sam’s specific proposals.”

See Also: Bankless: SBF vs. Erik Voorhees – How Do We Regulate Crypto?

This year’s elections mark the first wave of races in which industry donations not only rose to significant levels but, with well over $80 million in play, it actually reached a level occupied by other U.S. industries famous for their political clout – such as health care, energy and Wall Street itself.

Sam Bankman-Fried, CEO of crypto exchange FTX, and fellow FTX executive Ryan Salame have drawn the most attention this year as campaign ATMs, with Bankman-Fried surging to become the country’s fourth-largest individual donor. That means he’s sandwiched between giants of U.S. investing – Ken Griffin of Citadel at No. 3 and Jeff Yass of Susquehanna International Group at No. 5. Yass is also a major donor for the crypto cause.

Much of the crypto industry’s giving is funneled through a small number of PACs that amassed major war chests. Two of the biggest PACs – Bankman-Fried’s Protect our Future and Salame’s American Dream Federal Action – are propped up almost entirely by the FTX executives. Apart from the FTX executives’ groups, the crypto industry has several others PACs. Two of the biggest are the Crypto Freedom PAC, a group backed by Yass and the conservative Club for Growth that’s deployed about $5 million so far this year, and GMI – which took in $12 million in this cycle and funds other industry PACs, including Web3 Forward and Crypto Innovation.

Overall, a lot of the industry money – when factoring in the conservative PACs with GMI’s more balanced approach – went to crypto-sympathetic Republicans. Friends in the GOP could serve the industry well because Republicans are expected to take over the House majority. They also have a chance to seize the Senate, though that remains a tougher path. Total ad spending is projected to approach $10 billion for the midterms.

Seats up and down the ballot – including the race for president – are very much on our radar, not just in 2024 but for at least the next decade.

Just tallying up the congressional election victories “misses the forest for the trees,” said Boltansky. The more important point is that the crypto field is making itself known as a significant political force.

The industry will have the relationships and standing necessary to engage with policymakers the next time we see either a bad bill or a harmful proposal.”

“Bitcoin’s price could be up for any number of reasons, but here are two key things that happened on Wednesday. The Bank of Canada surprised financial markets by raising interest rates by only 50 basis points instead of 75 basis points. And the U.S. Census Bureau also reported a 10.9% decline in new home sales in September around the same time.

Both feed into the same idea: Central banks might slow rate increases because the economy is cooling enough to tame inflation. Policy makers in Canada raised by less than expected. Meanwhile, U.S. inflation has been fueled, in part, by a hot housing market. We’ll find out what the Fed has in mind during next week’s Federal Open Market Committee meeting.

While bitcoin and crypto soared, most of Big Tech had a bad week. Last week, Alphabet (GOOGL), Amazon (AMZN), Apple (AAPL), Meta Platforms (META) and Microsoft (MFST) reported quarterly earnings. Each of these companies, except Apple, straight up had a bad time. Between October 24 and October 28: GOOGL shed 6.2%, Amazon dropped 13.3%, Apple gained 4.5%, Meta crashed 23.5%, and Microsoft lost 4.8%. Meanwhile, bitcoin gained 6.8%.”

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“Over the past month, as a part of the execution strategy for Lido’s Next Chapter, Lido has conducted an initial pilot integration of Distributed Validator Technology (DVT) with SSV Network on the Goerli testnet.

Distributed Validator Technology enables multiple Node Operators to run distributed validators, decreasing single points of failure and providing important benefits across decentralization and diversity, infrastructure resilience, and security. Additionally, Lido anticipates that DVT will play a crucial role in the path towards enabling permissionless validation for the protocol.

Lido is committed to allowing solo stakers to participate in the protocol, and DVT is among the most important mechanisms for this to be enabled.”

The government says it’s ready to engage with virtual asset service providers and invite them to the city. Hong Kong’s Securities and Futures Commission (SFC) will conduct a public consultation on how retail investors may be given a “suitable degree of access to virtual assets” to licensed exchanges, according to the policy statement.

The policy statement adds that Hong Kong is “open to the possibility” of having exchange-traded funds on virtual assets. [Further], the SFC takes the view that tokenized securities should be treated in a similar way to existing financial instruments.

The SFC has been actively looking to set up a regime to authorize ETFs [that] provide exposure to mainstream virtual assets with appropriate investment guardrails.”

See Also: Privacy Protection a Top Issue for Digital Yuan: China’s Central Bank Governor

“GameStop today announced that it has added support for NFTs minted via Ethereum layer-2 scaling network Immutable X to its marketplace—which means that assets from Web3 games can be bought and sold through the platform.

Immutable X-based games like Gods Unchained, Illuvium, and Guild of Guardians are among the titles that now have their respective interactive NFT items available through the GameStop marketplace. That includes tokenized, tradeable items such as digital trading cards and customizable land plots, among others.

Immutable, the firm behind the platform, achieved crypto “unicorn” status earlier this year. Investors like Tencent and Animoca Brands are betting big on Immutable’s vision for Web3 gaming, bringing the startup to a hefty $2.5 billion valuation via a $200 million total Series C funding round in March.”

“Filecoin essentially allows users to buy or sell computer storage on a network that offers decentralized storage of data and files. The service is meant to act as an alternative to centralized storage providers like Amazon Web Services.

The Decentralized Storage Alliance, launched in conjunction with the nonprofit Filecoin Foundation, will work to establish development standards that would help decentralized storage solutions meet the needs of enterprise customers, including making it easier for data centers to onboard onto a decentralized network.”

See Also: Slava Rubin Says Web3’s Future Will Be Based on Decentralized Data Storage

Musk originally said, both publicly and in private (since-leaked) text messages, that he aimed to put Twitter on-chain and make it open-source, accept Dogecoin for payments for Twitter services, and go after crypto spam bots.

Regardless of your opinion of Musk, anyone who believes in the future viability of crypto and blockchain solutions and would like to see more mass adoption should be excited to see what happens next.”

See Also: Bankless: The Next Steps for ETH – Justin Drake | Devcon 2022