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Coinbase invested in a record 49 projects in Q3- report

Coinbase Ventures struck a new investment deal almost every two days in Q3 of 2021, details published in the Coinbase blog show.

According to the October 29 blog post, Coinbase Ventures had inked a record 49 investments over the quarter, becoming one of cryptocurrency’s “most active VC investors.”

“In Q3, Ventures made a record 49 investments, averaging a new deal every ~1.8 days,” Coinbase wrote, adding that the platform has seen investments jump from 24 in the first quarter and 28 in Q2.

Coinbase launched the Ventures platform in April 2018, targeting financial investments into early-stage start-ups in the crypto and blockchain space. The project has seen deals ranging from six-figure dollar investments to multi-million financing rounds across decentralised finance (DeFi), Web3 infrastructure, centralized finance (CeFi), NFTs, and Metaverse platforms.

Protocols and Web3 have seen most of the investment at 29%, while DeFi (24%), CeFi (18%) and Developer Tools (15%) make up the top five categories.

As a result of the growth in invested deals, CV now has helped more than 200 companies and projects across the market.

Crypto growth in 2021

Since its inception four years ago, Coinbase Ventures’ focus has been on projects aimed at accelerating growth within the crypto ecosystem.

While commercial partnerships and M&A formed part of the investment strategy in the last couple of years, 2021 has seen a lot of focus fall on projects and companies targeting growth across the entire crypto ecosystem.

As such, 90% of invested capital across the Coinbase Ventures portfolio has come in 2021, with half of the companies in the 200+ list added year-to-date.

Coinbase Ventures’ record investment comes as a host of crypto-focused companies also look to establish a presence in the crypto space. Square and Twitter are two of the highlights, offering Bitcoin-focused adoption features recently to add to efforts by Stripe and Tik Tok.

The post Coinbase invested in a record 49 projects in Q3- report appeared first on Coin Journal.

Coinbase signs multiyear sponsorship deal with the NBA

This is the second major deal Coinbase has sealed this week following a collaboration with Facebook

Coinbase has a new sponsorship deal with the NBA, making it the official cryptocurrency platform for the sports franchise. CNBC reported yesterday that the crypto platform intends to expand its reach, and the sports league will provide the necessary exposure.

“Beginning with tonight’s tip off of the NBA’s 75th Anniversary season, Coinbase will have a brand presence featured during nationally televised games.  The company will also become the presenting partner of the WNBA Commissioner’s Cup and the USA Basketball men’s and women’s national team exhibition tours, as well as a partner of NBA G League Ignite,” the NBA shared in a press release.

Through this exclusive partnership, Coinbase will reach the divisions under the NBA umbrella, including the WNBA, NBA 2K League, USA Basketball and the NBA G League. The deal didn’t mention anything about NBA fans being able to buy tickets and merchandise using crypto.

This is not the first time US basketball has crossed paths with cryptocurrencies. Mark Cuban’s Dallas Mavericks made significant steps in adopting crypto as the team has been accepting payments using digital assets via BitPay since 2019. In addition, The Sacramento Kings have previously ventured into Ethereum mining. The California-based Kings also became the first major sports team to offer player salaries in Bitcoin earlier this year.

Yesterday, the Los Angeles Lakers announced a partnership with blockchain-based fan token platform Socios to offer virtual events for fans, reflecting Socios’ continual expansion in the US. Now, fans can interact and debate matters around their favourite team.

The Lakers’ President of Business Operations, Tim Harris, noted that the partnership with Socios.com would allow the team to offer better support to fan initiatives. Socios.com chief executive Alexandre Dreyfus lauded the LA Lakers as a strong brand that would help his company expand.

The Los Angeles Lakers are one of the most prestigious brands in sport, and I’m thrilled to be working with them as Socios.com rapidly expands into the US market. What an awesome way to round off another great incredible week of growth. We’ve laid down some really significant foundations to take fan engagement to the next level in US sport, and we couldn’t be more excited about what’s to come next.”

The token provider is continually growing in sports and is a massive investor in football as well. It has collaborated with some giant European football clubs including Barcelona, Juventus, PSG and Milan. Last month, it reached an agreement for a fan token with Argentinian outfit Boca Juniors that could generate about $10 million for the club.

The post Coinbase signs multiyear sponsorship deal with the NBA appeared first on Coin Journal.

Coinbase confirmed as custody partner for Facebook crypto wallet

Facebook yesterday launched its new crypto wallet Novi, initially meant to hold Facebook’s own Diem stablecoin

Social networking service company Facebook yesterday tagged Coinbase as its custody partner for Novi. The news was terrific for Coinbase, whose shares surged after being earmarked as the exchange of choice to offer custodial services to users who will sign up to the wallet.

Coinbase confirmed the news on Tuesday and explained that the offering would start with a pilot programme. Users of the Novi platform will enjoy the ability to promptly receive and send cash overseas with no fees, with the security of their transactions assured. Coinbase Custody will facilitate the transactions. Users will hold their money in Pax Dollar (USDP stablecoin), which they will then use in executing transactions.

“Remittances are a critical way to achieve financial inclusion. Today, we’re rolling out a small pilot of the Novi digital wallet app in two countries — the US and Guatemala. People can send and receive money instantly, securely, and with no fees,” said Facebook’s head of the ‘F2’ financial division, David Marcus.

Facebook says its choice of the USDP stablecoin was motivated by consumer protection, crucial regulatory aspects and the full fiat backing the currency holds. However, Facebook plans to eventually shift its wallet from USDP to Diem. The tech giant explained that the switch is because the latter offers better consumer protection measures and checks.

The goal for Novi has been and always will be to be interoperable with other digital wallets, and we believe a purpose-built blockchain for payments, like Diem, is critical to deliver solutions to the problems people experience with the current payment system,” Facebook stated.

Diem was launched in 2019 under the name Libra, but the proposed stablecoin was plagued by setbacks and endless scrutiny. In particular, Senators Brian Shatz and Sherrod Brown wrote to the social networking company to complain that the project subjected both consumers and the financial system to several risks.

Not long after Facebook launched its Novi wallet, the two senators alongside Richard Blumenthal, Elizabeth Warren and Tina Smith penned a letter asking Facebook to halt the Diem and Novi projects. The senators faulted Facebook for the failure to show how it intends to thwart criminal activities and illegal financial transactions in its new product.

“Facebook cannot be trusted to manage a payment system or digital currency when its existing ability to manage risks and keep consumers safe has proven wholly insufficient. We urge you to immediately discontinue your Novi pilot and to commit that you will not bring Diem to market.”

The post Coinbase confirmed as custody partner for Facebook crypto wallet appeared first on Coin Journal.

Weekly Report: Centralised exchanges are joining the NFT space

Bitcoin and Ethereum appear to be on the path towards hitting new all-time highs after recent gains. Elsewhere, the cryptocurrency and NFT spaces saw a lot of action this week

The US eclipses China as home to Bitcoin mining

Researchers at Cambridge University on Wednesday released data confirming that the US is now responsible for the highest Bitcoin mining power—a third of the total hashrate. The report from the Cambridge Centre for Alternative Finance indicated that Bitcoin’s hashrate in the US has increased by 428% since September last year.

The data also showed that the US had a 35.4% share of Bitcoin’s hashrate by the end of August this year. China has been its own villain in the reduction of the hashrate given how unwelcoming the government has made it for crypto in general. The country’s government, through the People’s Bank of China, has massively changed the crypto scene in the country, by intensively clamping down on crypto mining and trading.

From an approximated 75% share in Bitcoin in hashrate in 2019 to 44% in May, the Chinese proportion had fallen to zero by July this year. Miners have fled the Chinese region in droves to other less hostile regions, and US states like Texas have been favourite destinations.

ARK Invest looks into a Bitcoin futures ETF

Cathie Woods’ ARK Invest has joined the list of applying firms seeking SEC approval to offer an ETF. The investment firm is said to have partnered up as a marketer with Alpha Architect as the ETF issuer and 21Shares as the sub-adviser. The filings made on Wednesday indicated that the proposed product will strictly trade in futures rather than directly in cryptocurrencies.

The recent inclination towards crypto futures makes sense given that SEC chair Gary Gensler has previously suggested that ETFs based on futures would receive higher consideration for approval. Experts have predicted there could be a Bitcoin ETF coming as soon as before the end of the year.

The rumours of possible approval around the corner have played a part in pushing up the price of Bitcoin which is currently changing hands at around $59,000. However, not all are optimistic about an approval coming soon, as CFRA’s Todd Rosenbluth told CNBC that approval could well be delayed to Q1 2022.

Vladimir Putin sees value in crypto

Russia’s President Vladimir Putin has said that he sees crypto serving as a unit of account in the future, maintaining that digital assets are still too premature for that use right now, due to their volatility. In a Wednesday interview with CNBC’s Hadley Gamble, he added that he sees the use of crypto in cross border payments.

Though he agreed that crypto holds value, President Putin was also cynical of the idea of using crypto in making energy settlements, considering that they are unbacked assets. Putin also suggested that in response to the US’ targeted sanctions, Russia could move to non-dollar denominated trades. When asked if crypto could offer an alternative to the dollar for Russia, the President said it was too early to discuss the use of crypto in transacting energy resources.

However, he acknowledged that given time, crypto has the potential to mature enough to be used in trading. Russia has in the past implemented legal regulations that bar the use of crypto in making payments, to maintain its currency’s sovereignty. Also, Deputy Finance Minister Alexei Moiseev confirmed this week that the state would not bar the purchasing and trading of crypto assets like China has recently done.

TradingView locks latest funding round at $298 million

Price charting and investing platform TradingView has received $298 million from its most recent funding round led by Tiger Global Management, Bloomberg reported Thursday. The funding round, which gave the London-based firm a $3 billion valuation, was pushed up by increasing interest from retail investors seeking to trade in public markets. This round raised the highest amount yet, having only netted a total of about $40 million in its previous funding rounds.

The financial information platform has been around for about ten years, and it currently has 30 million monthly users from more than 180 countries where the platform is accessible. A significant chunk of the growth that TradingView is seeing has come from a 237% increase in the number of visitors and a 400% increase in the newly created accounts over the last eighteen months.

TradingView tracks the performances of several asset types while also providing a social forum for user discussions. The latest capital injection will help the firm extend its goal of enhancing informed financial trading decisions through global expansion, according to Co-Founder and CEO Denis Globa.

‘Coinbase NFT’ waiting list reaches a 1.5 million users

Coinbase’s peer-to-peer marketplace for non-fungible tokens (NFTs) has now accrued over 1.5 million users on its waiting list despite only being announced on Tuesday, the very day when the one million mark was also reached. The crypto exchange said users would be able to trade and mint their own NFTs on the platform: ‘Coinbase NFT’.

Such numbers of interested users are showing developing interest in the NFT sector, which recorded $10 billion in sales volume in the third quarter compared to the $1.3 billion in Q2 this year. The NFT space has seen tremendous growth in just the space of a few months and Coinbase is setting itself up appropriately to make a killing off it. The entry of crypto exchanges into the NFT marketplace business is expected to have an impact on investor entry into NFTs.

The 1.5 million users on the Coinbase waiting list by far dwarfed the 261,000 users on the OpenSea marketplace. Coinbase’s announcement followed Monday’s FTX revelation that it would be launching a Solana-based NFT marketplace. The exchange also detailed that it is planning to add support for Ethereum tokens soon.

The post Weekly Report: Centralised exchanges are joining the NFT space appeared first on Coin Journal.

Swiss Exchange lists ADA as Coinbase Pro adds support for AVAX

Lykke Wallet, a Switzerland-based digital assets platform, posted a tweet detailing that it was adding Cardano to its list of tradable crypto assets

Swiss exchange Lykke earlier this week announced that Cardano’s native token ADA had been listed on the platform. As the exchange’s press release explained, Lykke Wallet users will be able to trade crypto commission-free. The Swiss FinTech company is offering ADA in trading pairs with BTC, CHF, ETH, EUR, GBP and USD.

The wallets’ users will, however, be required to complete KYC verification before enjoying zero trading fees. CEO of Lykke Richard Olsen reacted to the listing, saying it would help set up even stronger partnerships to serve more users. He further described the decision as being on the path towards gaining better usability of blockchain to redefine the financial space.

“The ADA listing is a major milestone for our community that now can trade ADA for free. We are inspired by Cardano’s commitment to scientific rigor and excellence. The listing sets the foundation for a deeper partnership that can serve the bigger community to unlock the full potential of blockchain…”

Elsewhere, a recent blog post from Coinbase confirmed on Wednesday that Coinbase Pro is allowing users to transact in Avalanche’s AVAX token for inbound AVAX transfers. The exchange is to launch order books across three trading pairs; AVAX-USD, AVAX-USDT and AVAX-EUR, and rollout will be split into post-only, limit-only and full trading phases. The exchange also clarified to users that Coinbase Pro would only have support for C-Chain AVAX tokens.

“Coinbase Pro only supports C-Chain Avalanche (AVAX) tokens. […] Sending Avalanche on P-chain or X-chain or any other assets to a Coinbase Pro wallet will result in permanent loss,” the post read.

The Nasdaq-listed exchange added that it reserved the right to suspend trading if it was felt that the new order books didn’t meet certain healthy market requirements as per Coinbase Pro’s assessment. Even with the announcement, AVAX is yet to feel the Coinbase effect, a breakout effect that sees tokens soar when they are listed by the exchange. Instead, the token has continued changing hands within a tight range.

The listing, which sees Coinbase join Binance and BitPanda among the AVAX-listing exchanges, was lauded by Avalanche. A Twitter post in response to the news revealed that the listing would expand the accessibility of the token to more users.

“AVAX is now available to transfer to Coinbase Pro. Trading is expected to begin tomorrow, Sept. 30, on or after 9 AM PT. This listing increases the accessibility of Avalanche to a broader set of users, including those in the US,” the post read.

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Monthly Report: UAE regulators embrace trading of crypto assets, Turkey state leader rejects cryptocurrencies

The debt crisis involving China’s second-largest property developer, the Evergrande Group set off a sell-off across cryptocurrency markets at the beginning of the week. Here is a summary of other top cryptocurrency news:

Dubai World Trade Centre Authority to add support for crypto trading

On Wednesday, the UAE’s Dubai World Trade Centre Authority (DWTCA) and the Securities and Commodities Authority (SCA) reached an agreement to allow the offering, listing, regulation, and trading of crypto-assets in the country. 

Helal Saeed Al Marri, the Director-General of the DWTCA explained that alongside the growth in the industry, the DWTCA needed to establish support for crypto tech products such as NFTs, which are expected to play a huge role in the future finance world. Further, it is expected that the SCA will help provide the necessary regulatory guidance towards the adoption (issuing and listing) of these assets for all the entities seeking to operate crypto assets under the DWTCA’s jurisdiction. 

The FCA would be required to supervise, control and investigate the entities licensed to operate within the free zone. The UAE has previously (July 2021) stated that it plans to launch its CBDC by 2023.

Suex sanctioned over illegal operations

The US Treasury Department took a rather unique step on Tuesday when it said that it was enforcing sanctions against crypto exchange Suex over its connection to money laundering for ransomware offenders. The exchange was sanctioned as it had been identified to have processed ransom amounts for at least eight ransomware variants.

The Czech-based crypto exchange sanctions come at a time when President Biden’s administration grapples with getting a foothold on crypto and the laws around it. Previously, such ransomware activities have been associated with extremist groups, but even nation-states are suspected to be involved in some cases. For instance, earlier in the year, the Treasury Department found out that a Russian intelligence Agency had ties to a ransomware group, Evil Corp–a group that came into the limelight for a ransom attack on Colonial Pipeline.

Further, the treasury said that even though cryptocurrencies may be legal, the technology facilitating payments in these currencies could be easily exploited to allow rogue actors to get away with the money. Several institutions in the US have been victims of ransomware attacks in recent months. The rise of these ransomware attacks has resulted in losses of $400 million in 2020, an over 300% increase from 2019.

FTX to extends presence to the Bahamas and Gibraltar

The crypto exchange FTX has enjoyed good fortune this week as the exchange announced on Monday that it had received the legal go-ahead to operate in the Bahamas through its subsidiary in the country. This added to late last week’s announcement of a similar arrangement in Gibraltar.

FTX, through its Zubr Exchange subsidiary, gained a license from the Gibraltar Financial Services Commission (GFSC) to operate as a DLT provider. However, the approval was contingent on addressing issues raised from the regulatory feedback it had received. At the time, CEO Sam Bankman-Fried had lauded the move as one that would push FTX towards compliance and trust for all users around the world.

In the Bahamas, FTX’s subsidiary, FTX Digital Markets was registered as a digital asset business with the securities commission in the country. With the announcement, it was revealed that Ryan Salame would head the FTX Digital Markets, with headquarters in Nassau, Bahamas.

CEO Bankman-Fried has taken a more positive approach towards regulatory requirements. He has in recent days been pro-regulation, arguing that without the regulations, illegal activity (scams) would cause the regulators to clamp down on the industry further. 

Coinbase calls it quits on Lend program plans

Crypto exchange Coinbase had planned the scheduled release of a new Lend feature for months now, but the SEC intervention may have well led the Lend product to its demise. Coinbase announced at the end of last week that it would halt the planned launch of the lend feature as it seeks to understand the regulatory hurdles put against it. The exchange added that even pre-launch, hundreds of thousands of customers had already signed up to the program. 

The exchange reassured its customers that it would continually find ways to offer its customers ‘innovative, trusted programs and products’. The Coinbase decision comes even as the SEC chair Gary Gensler takes an even firmer approach towards crypto. 

Gensler told the US Senate Banking Committee that the crypto set-up needed to talk to the regulators. He also noted that given the diversity of tokens on these platforms, there was a huge likelihood of some of them being securities, which have to be registered under the law. In the particular case of Lend by Coinbase, the SEC was of the opinion that the feature was a security but Coinbase didn’t think so.

Turkish President declares war on crypto

Bloomberg reported that the President of Turkey, Recep Tayyip Erdogan said on Saturday that the country was at war with cryptocurrencies, with several measures established to streamline their use even as the country plans to test and launch its digital Lira. As he spoke to students from 81 provinces, the Turkish president said he had no standing issues with the spread of digital assets but he insisted that the sovereignty of The Turkish Lira would have to be retained. 

Erdogan explained that the country’s currency was part of its national identity. Turkey has been unfriendly towards crypto. Back in April, the Turkish central bank banned the use of crypto in making payments. 

The bank cited the market volatility, regulatory uncertainty and criminal activity involved with crypto as the main reasons for the ban. A month later, the Turkish government placed all crypto asset providers under existing anti-money laundering and terrorism financing regulations, as instructed by a presidential decree.

The post Monthly Report: UAE regulators embrace trading of crypto assets, Turkey state leader rejects cryptocurrencies appeared first on Coin Journal.

Coinbase backs down on crypto lending program amid SEC row

The cryptocurrency exchange revealed it had ditched the lending product citing regulation issues

Publicly-traded crypto exchange Coinbase has seemingly yielded to pressure following an announcement that it would not be launching its high-yield lending product. The Coinbase team didn’t share the news on Twitter or address the matter in a dedicated blog post. Instead, the exchange discreetly confirmed that the product wouldn’t be hitting the market as planned in a  17 September update to the initial June post.

Coinbase didn’t specify the exact reason for abandoning the programme, but the updated blog post hinted at regulatory difficulties in the path of the exchange and the cryptocurrency sector in general. It could be that the exchange gave in to the threats from the US Securities and Exchange Commission (SEC) and decided to drop the product. The top regulator previously sent a Wells notice to the exchange, warning it would sue if the exchange proceeded to introduce the crypto lending programme into the market.

Coinbase chief executive Brian Armstrong didn’t take the notice lightly and took to social media to lambast the commission, specifically its poor handling of the matter. Many took the exchange’s side, calling out the commission for its antics. The majority of users didn’t see it coming, especially since the company disclosed the cancellation quietly. 

In a social debacle, Armstrong revealed that the exchange had remained compliant with regulations, and it was a surprise to receive the warning. The bone of contention was the status of the product which the regulator views as a security. The company’s chief legal officer Paul Grewal, however, revealed that the commission did not offer any clarification on how it arrived at the decision. The watchdog only warned that it would file a lawsuit if the exchange proceeded to roll out the product.

The crypto lending programme would have offered a relatively high annual percentage yield on some tokens, including 4% yearly yield returns on deposits of the USDC stablecoin. Coinbase reports that “hundreds of thousands of customers from across the country” were already on the waiting list for the programme at the time of the tussle. The exchange has since discontinued the waitlist but pledged to continue working on better offerings for its customers.

Many platforms have shown interest in bringing crypto yield products into the market in the last few months. Cryptocurrency platform Gemini, secured non-bank lender BlockFi and crypto lending platform Celsius are some of the names that have or are working on lending offerings. The latter is the latest to be restricted by state authorities in Texas and New Jersey.

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Weekly Report: More firms launching crypto trading services

Institutions in the banking and trading sectors are gradually bringing cryptocurrency services to their customers. Here is a look at the top headlines this week

MoneyLion customers to benefit from crypto trading services

US-based banking and investing company MoneyLion announced on Monday that it had added a crypto services option to its financial app. The company also confirmed it remains on schedule to go public later in the month. Users will only be able to trade in Bitcoin and Ethereum, but the firm intends to embrace other crypto coins in the long run.

According to a shared press statement, MoneyLion’s Dee Choubey noted that the new offering would help customers manage their finances better. Choubey argued that these digital assets fell in line with the company’s objective to provide relevant education and tools to guide customer decisions. In what he defined as part of early measures geared towards entry into the decentralised finance (DeFi) market, Choubey added that the firm would start by creating more awareness among its consumers.

He also highlighted that the organisation could explore more crypto products, including non-fungible tokens (NFTs) and yield products. The FinTech company further revealed that it would be sponsoring a $1 million crypto prize pool that would see early members of MoneyLion Crypto bag themselves part of the Bitcoin reward.

MicroStrategy now holds more than 114,000 bitcoins

Via a tweet on Monday, Michael Saylor, one of the most vocal Bitcoin proponents, announced to the crypto community that his company MicroStrategy had bought a new stash of 5,050 bitcoins for $242.9 million. The addition means that the company now owns a total of 114,042 bitcoins acquired at an average price of $27,713 per Bitcoin.

In addition, the company’s filings to the SEC detailed that in Q3 2021, MicroStrategy bought up 8,957 bitcoins for an approximate total of $419.9 million. Saylor, the firm’s chief executive, prioritised getting MicroStrategy into the Bitcoin business in 2020 as a security strategy. Jack Dorsey’s Square and Elon Musk’s Tesla were among the major companies to follow suit and shift part of their reserves into Bitcoin.

Not all the executives seemed impressed with the addition of another significant chunk of crypto into the company’s portfolio. Some reportedly sold their MicroStrategy stock soon afterwards, which did little to instil confidence in the Bitcoin decision. Last week, Saylor made remarks that suggested getting into crypto instead of Gold saved his company from making “a multi-billion dollar mistake”.

AMC Theatres to accept crypto payments

Cryptocurrencies have continued forging a path into mainstream acceptance. AMC CEO and Chairman Adam Aron revealed on Wednesday that the entertainment company would, by the end of the year, enable ticket purchases via Ethereum, Litecoin and Bitcoin Cash.

This announcement followed an initial one made in August, though the previous one only mentioned Bitcoin as the sole digital asset to be accepted. In addition, the initial announcement revealed that AMC would enable Apple Pay and Google Pay services at theatres. It is worth noting that both of these services have recently partnered with publicly traded exchange Coinbase for Coinbase card offerings.

Not all were pleased with the announcement, and the DOGE community particularly stood out as they questioned why the coin had been left out of the payment options. The community claimed that Dogecoin is significantly used — even more than some of the listed cryptocurrencies. It might well be justified to claim the coin has gained popularity as a means of payment, given that Mark Cuban recently revealed that his Dallas Mavericks team received 95% of merchandise sales payments in DOGE.

Interactive Brokers launches crypto services in the US

Financial services company Interactive Brokers announced at the beginning of the week that it would be partnering with Paxos to bring cryptocurrency trading to its clients. The firm revealed that users would be able to trade in and hold Bitcoin, Litecoin, Ethereum and Bitcoin Cash through the Paxos Trust Company.

The announcement further revealed that the service would be initially limited to customers residing within the US, with the company planning to launch it for international markets in the future. Interactive Brokers becomes just the second major broker after Robinhood to directly invest in crypto.

To make its entry into the market even more appealing, the online brokerage firm said it would charge users low fees. Specifically, the platform will charge between 0.12% and 0.18% of trade value, hinging on monthly volumes, and users would need to stretch to a minimum of $1.75 per order.

Coinbase sells debt offerings worth $2 billion

Rising market interest has pushed Coinbase, one of the world’s largest crypto exchanges, to up its junk-bond offering to about $2 billion from an initially announced $1.5 billion. The sale is facilitated by investment banking institution Goldman Sachs.

Citing an anonymous source, Bloomberg reported on Tuesday that investors offered interest rates that were lower than Coinbase initially wanted. This showed that investors had a much stronger belief in Coinbase’s creditworthiness than the company predicted. It was also reported that bidding of up to $7 billion in total value was seen.

The sale was finally made in equal amounts of seven and ten-year bonds that would receive interest rates of about 3.375% and 3.265%. However, despite being lowered, these rates are still higher than the average 2.86% yield gained on similarly rated debt. Coinbase intends to use the funds gained from the development to enhance its investment in product development and the probable acquisitions of other technologies, companies and products in the future.

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SEC blocks Coinbase’s high-interest crypto product

Coinbase’s CEO revealed yesterday that the top regulator had threatened to sue the exchange if it continued working on its crypto lending programme

Coinbase CEO Brian Armstrong had a lot to get off his chest on Tuesday through his Twitter account as he responded to the SEC’s conduct concerning the exchange’s soon-to-be-launched yield product. With several players in the crypto industry increasingly moving towards allowing their customers to lend out crypto assets to earn interest, Coinbase announced earlier this year that it would be introducing its very own yield-generating product dubbed Lend.

The product would be based on USDC, with users able to earn up to 4% annual percentage yield (APY). The now-publicly listed platform marketed the product as one that would see users earn up to 50x the average interest rate — which is at 0.07%. It also revealed that the high interest rates would be without any heightened risk as customer savings would be protected with a guarantee.

The product’s launch was set to be in a few weeks, so Coinbase updated the SEC, and according to Armstrong, the SEC was not welcoming. The agency said that the Lend feature was a security without offering any explanation of this view.

“They refuse to tell us why they think it’s a security, and instead subpoena a bunch of records from us (we comply), demand testimony from our employees (we comply), and then tell us they will be suing us if we proceed to launch, with zero explanation as to why.”

Armstrong, who also doubles up as a co-founder of crypto donation organisation GiveCrypto, was evidently not impressed by the SEC’s antics, noting that while his company had made efforts to do what was right, the SEC had resorted to threats.

The exchange’s CEO was also wary of the SEC’s attitude towards crypto, citing an instance that occurred earlier in the year when SEC Chair Gary Gensler categorically refused to meet with him.

Chief Legal Officer Paul Grewal revealed that Coinbase has been in communication with the financial watchdog for six months and has also been compliant with the regulator’s requests. The exchange remained shocked by the SEC’s intent to sue without a specific explanation – an action he categorised as an unhealthy regulatory relationship.

“A healthy regulatory relationship should never leave the industry in that kind of bind without explanation,” he wrote.

It remains to be seen what the SEC has planned for the crypto industry and its players. Coinbase joins the list of crypto entities under the SEC’s radar, with others such as BlockFi under investigation for illegal offerings.

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Japan’s FSA seeks stricter crypto regulations to protect users

A series of high-profile hacks have seen Japanese regulators ask crypto exchanges to implement strict measures meant to curb illegal activities as well as protect customers

Japan’s Financial Services Agency (FSA) is eyeing stricter regulations related to cryptocurrencies, a local news outlet has reported.

The FSA is said to have initiated broader deliberations on the topic as it seeks to protect Japanese investors. 

As highlighted by the local media outlet, the FSA-established group consists of experts whose primary goal is to come up with oversight for the cryptocurrency and decentralised finance (DeFi) space in the country.

In addition, Japan’s regulator is also keen on keeping tabs on the central bank digital currency (CBDC) project, even as the broader crypto sector sees significant developments. Concerns that exchanges have not fully implemented measures meant to curb price manipulation and money laundering are also the reason behind the new push.

According to the report, the FSA expects to have new policies in operation by mid-2022.

Japan was among the first countries to recognise cryptocurrencies in their financial system, helping to catalyse the 2017 bull market. However, the country has recently sought to adopt a stricter stance on crypto, especially on cryptocurrency exchanges in the aftermath of a massive hack on Coincheck in January 2018.

The security breach, and the resultant loss of over $500 million worth of digital assets, saw the FSA toughen up against cryptocurrency exchanges as it sought better user protection.

In 2019, the regulator introduced new rules that demanded crypto exchanges be registered and to ensure they implement measures that put customer safety first. While the market regulator now looks to augment those efforts, recent setbacks such as that seen with the hack at Liquid exchange means a tougher stance from the watchdog is likely.

The Japan Times notes that about 31 platforms, including one of the largest in the world, namely Coinbase, have registered to provide crypto trading activities in the country. This week, major US crypto exchange Coinbase officially entered the Japanese market, partnering financial giant Mitsubishi UFJ Financial Group (MUFG) to allow customers to easily buy and hold cryptocurrencies.

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