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Deputy Treasury Secretary Wally Adeyemo said the agency has its sights on stablecoin issuers based outside of the U.S., in a prepared speech for a Blockchain Association event in D.C. "We cannot allow USD-backed stablecoin providers…to have the privilege of using our currency without the responsibility of putting in place procedures” to prevent illicit use,” he said. Adeyemo, who has spoken positively about the “opportunity” presented by crypto, did not name any organizations (like Tether) directly, but said “both large and small” firms acting “above the law” represent “a clear and present risk to our national security." Elsewhere, Germany's financial regulator, BaFin, has ordered a subsidiary of Bitcoin Group (a company most known for its acquisition of one of the oldest banks in the world) to address alleged anti-money laundering shortcomings. |
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ProShares’ Bitcoin Strategy ETF (BITO) hit a high of $1.47 billion in assets under management this week, surging past a record set in December 2021. BITO’s average daily volumes since inception also place it in the top 5% of all U.S. ETFs, indicating renewed institutional demand for BTC trading vehicles. Meanwhile, Grayscale is looking to tweak the terms of service for its Grayscale Bitcoin Trust (GBTC) for the first time since 2018, in a move seen as preparation for GBTC’s conversion to an ETF. Separately, Microstrategy, the publicly-traded tech firm, bought 16,130 BTC (~$608 million) in November, boosting its holdings by over 10%. It now holds 174,530 BTC (averaging to ~$30,252 paid per coin), making it the largest corporate bag holder. Finally, a wallet mentioned in yesterday’s newsletter, which accumulated over 10,000 BTC this month appears to belong to BitMEX. |
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Binance is finally ending support for its BUSD stablecoin on Dec. 15. The exchange announced in August it would “gradually” fade out its branded stablecoin after issuer Paxos was ordered to stop minting the coin in February. Users will still be able to redeem BUSD until February 2024, though withdrawals will be halted on Dec. 31 and any remaining BUSD balances will at that point be automatically converted to FDUSD, a stablecoin issued by FD121. BUSD’s current 24-hour trading volume is just under $400 million down from around $900 million in August. Binance’s new CEO Richard Teng said he will work with regulators and comply with U.S. laws, after the exchange agreed to a $4.3 billion settlement with U.S. authorities this month. |
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A remnant of the blown-up Terra blockchain, LUNA Classic, gained 300% this week, fueled in part by a new Binance perpetuals contract listing and revitalization plan. Developers of the project, which is somehow limping along despite the “death spiral” that erased tens of billions of dollars from the stablecoin-focused protocol, said they are working on a token project that will be collateralized with bitcoin and an airdrop for USTC and LUNC holders. Trading volumes for the USTC stablecoin exploded above $1 billion in the past 24-hours, dwarfing the less than $10 million average earlier this month. |
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The FTX estate was granted approval to sell more assets, including shares of Grayscale and Bitwise investment funds worth ~$873 million, by its bankruptcy court. "The debtors are authorized, but not directed, to execute sales,” a Friday court doc read. The court also expanded crypto investment firm Galaxy's mandate to assist in FTX’s sales, in a Tuesday court filing. FTX tapped Galaxy earlier this year to manage the estate's vast digital asset holdings. |
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The Takeaway: Polygon's Paid Deal |
Polygon Labs gave DraftKings millions worth of MATIC tokens to become one of the Ethereum-scalable protocol’s 100 validators. The payments were never disclosed, but are visible on-chain, CoinDesk’s Danny Nelson found. However, DraftKings failed to maintain its validator's performance and was kicked off the network last month — despite receiving financial and technical support from Polygon as well as special privileges (like the ability to take 100% commission from delegators, well above the norm of 5%-10%). When the tie-up was announced in early 2022, Polygon called it an "important adoption milestone" and “the first time a major publicly-traded firm has taken an active role in blockchain governance." While it is not unheard of for Web3 companies to pay mainstream brands to promote or use their crypto protocols, discussing the deal as a signal of "mainstream adoption" is both an overstatement and undermining of crypto's supposed values.
There are other costs associated with these type of special arrangements, too. As Nelson writes: "DraftKings' earnings came at the expense of every other staker in Polygon's ecosystem. The network only issues a finite number of MATIC rewards to stakers annually. At least 80% of DraftKings' Polygon-delegated tokens came directly from the Foundation, meaning they were not previously being staked. These newly delegated tokens diluted how much rewards everyone else could get." And: "Polygon's undisclosed allocation to DraftKings – and its validator's near-complete reliance on Polygon – undercut the blockchain company's own characterizations about the validator being like all the others."
It'd be hard to say exactly that Polygon did wrong by subsidizing DraftKings' use of the network. DraftKings did participate in other Polygon-related efforts, and made good use of a Polygon-based NFT platform. But the imagine being projected of crypto being willingly used and chosen by major brands is a falsehood, and one that will only end up costing the industry more in the long run. If a false idea of usage is bought and paid for, then crypto may never find out what people and companies actually want from it. Read Danny's article online, it's worth it. – D.K. @danielgkuhn [email protected] |
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Bitget Asks: What’s in Your (Crypto) Wallet? In the ongoing debate over the merits of centralized versus decentralized exchanges, one crucial factor often overlooked is the pivotal role of the wallet. That factor, though, has been of keen interest lately to centralized exchange Bitget. The global platform, a leading spot and futures crypto exchange with an emphasis on copy trading, now offers three wallet options: a custodian wallet to trade on a CEX, another to self-custody with the seed phrase stored on a CEX and the last to trade on a fully decentralized environment with dapp functionalities. Read more here |
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