Global Crypto Exchanges Face New Regulatory Challenges; BlackRock's Bitcoin ETF Might Overtake Grayscale's
Summary:
Global crypto exchanges grapple with increasing regulatory challenges, the US Department of Justice and the U.S. Commodity Futures Trading Commission accuse KuCoin of violations, and Coinbase fails to dismiss a case by the U.S. Securities and Exchange Commission. In the Philippines, Binance is blocked over license concerns, and Russia's CommEx halts operations. Also, BlackRock's Bitcoin ETF may exceed Grayscale's Trust Holdings, Hashdex enters the Bitcoin ETF market, and Galaxy Digital records a net income of $296M for 2023. Meanwhile, Goldman Sachs’ hedge fund clients return to crypto, SWIFT declares CBDC tests successful, and Mastercard predicts Latin American digital remittances could hit $20B by 2026.
Global cryptocurrency exchanges are grappling with mounting regulatory challenges. The US Department of Justice is alleging that on the 26th of March, KuCoin and its founders were operating an unregistered money-transmitting service, breaching the Bank Secrecy Act. This coincides with a civil action against KuCoin by the U.S. Commodity Futures Trading Commission over a series of infractions. The DOJ claims that KuCoin processed over $5 billion in suspicious and illicit funds.
Moreover, Coinbase, another exchange based in the US, encountered a hurdle on March 27. District Judge Katherine Failla rejected Coinbase’s request to dismiss a case brought on by the U.S. Securities and Exchange Commission, stating that similar transactions had previously fallen under securities transactions. Coinbase's attempt to question the SEC’s jurisdiction over crypto exchanges was unsuccessful.
In the Philippines, Binance was blocked on March 25 by the financial regulator due to concerns about the company's unlicensed operations within the country. The organization alleged that Binance was offering leveraged trading services and crypto savings accounts to local users without the appropriate licenses.
On the other hand, in Russia, CommEx, which had acquired Binance’s Russian venture in September 2023 for an undisclosed sum, confirmed that it was ceasing operations and had stopped deposits.
This week's Crypto Biz also delves into BlackRock’s Bitcoin exchange-traded fund (ETF) inflows, Goldman Sachs’ returning clients, SWIFT’s trials with central bank digital currencies (CBDC), and Mastercard’s projections for Latin American remittances.
BlackRock’s Bitcoin ETF could potentially overtake the Grayscale Bitcoin Trust in Bitcoin holdings in roughly three weeks given the current rate of inflows and outflows. BlackRock’s iShares Bitcoin Trust ETF held 238,500 Bitcoin worth almost $15.5 billion as of March 22, with daily inflows averaging 4,120 BTC. Grayscale’s Bitcoin Trust holds 350,252 BTC worth $23 billion but has average daily outflows of 4,140 BTC or $277 million.
Also, Hashdex, an asset manager, officially entered the Bitcoin ETF market by converting its futures ETF to hold Bitcoin.
Galaxy Digital, a digital asset management firm, reported a net income of $296 million for 2023, bouncing back after a $1 billion net loss in 2022 due to a surge in the prices of cryptocurrencies like Bitcoin. The firm’s assets under management more than doubled, going from $1.7 billion to $5.1 billion in 2023, and nearly doublings again to reach $10.1 billion by end of February this year.
Meanwhile, hedge fund clients of Goldman Sachs are making a comeback to crypto, fueled by the authorization of spot Bitcoin ETFs. Many of the firm's largest clients were either re-engaging or looking at “getting into” the crypto sector, as stated by Max Minton, Goldman’s head of digital assets for the Asia Pacific region.
In other crypto news, SWIFT has declared its second sandbox connector tests a success for CBDCs. Notably, it emphasised its connector's ability to connect existing foreign exchange infrastructures using CBDC on a project with financial infrastructure firm, the CLS Group.
Lastly, Mastercard released a report on Latin American remittances, noting that remittance rates are surging faster than the global average in the region and predicting that digital remittances could be worth $20 billion by 2026.
Published At
3/30/2024 12:45:00 AM
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