The Digital Asset Landscape March 2021
The month began with the adoption of digital currencies for use by institutions and individuals, and its daily purchase experienced an increase. The first indication of digital assets' adoption was when Google Finance added a dedicated digital currency field as one of its placements, making the digital market one of the five default markets available for users to choose from when making the comparison. The digital currencies being tracked by the platform are limited to Bitcoin, Ethereum, Litecoin, and Bitcoin Cash. For many, this signaled the digital currency's rise to prominence, as even bitcoin has recently been adopted mainly by the corporate world. This new surge is said to be institution-driven trumps that of 2017 was retail-driven.
Success Loves Speed
As digital currencies and assets continue to gain prominence, it has become necessary to adapt to the growing change in technology and accommodate the increasing crowd. When the meme-based digital currency Dogecoin released a new version of its protocol's core on Sunday, February 28. Its last significant update was done back in July of 2019.
According to them, this new version comes with reduced default meme pool expiry time and improved synchronization speed. Dogecoin, the digital currency that started as a joke back in 2013, now has a market value of over $6 billion. This new update means an improved speed for the upload of nodes, eliminating expensive integrity checks performed during the transfer of one block to another. Therefore, it removes the default time for cached transactions 24 hours from its previous 336 hours. Tesla CEO and billionaire Elon Musk began a series of tweets about it. His tweets over the last month increased the interest of individuals in the digital currency, moving it up to the list of the top 10 most valuable digital currencies with a market cap of over $10 billion. The digital asset later dropped back down the list but remained among the top 20 with a market cap of $6.27 billion as of the time of said publication.
Rakuten Accepts Digital Currencies
As the digital currency world expands, it will get a lot of adoption by many sectors of the economy. A perfect example is the case of the adoption of the use of digital currency by the e-commerce giant Rakuten. Being one of the dominant e-commerce platforms in Asia, they seem to remain that way, and allowing users to spend Bitcoin and other digital currencies on their platform is their way of staying on top. Digital currencies like bitcoin, ethereum, and bitcoin cash can be exchanged for its e-money Rakuten Cash. This will enable customers to make payments at thousands of merchants across Japan as long as they accept Rakuten Pay or Rakuten point card. With over 95 million registered users on its e-commerce service and integration of new technologies, it's no wonder they are giants among many.
Another Fraudulent ICO
The month of March saw many activities around the digital asset communities, and one of the most common seems to be that of digital currency fraud as another case made its way to court early in the month.
Bagging an eight-year sentence for conducting an illegal initial coin offering (ICO), which relieved investors of about $25 million, Centra Tech's co-founder Sohrab Sharma was also sentenced to 3 years of supervised release. He was also ordered to pay a fine of $20,000 and forfeit $36,088,960. Sharma, along with the ICO disguised fraud, also pleaded guilty to conspiracy to commit securities fraud, mail fraud, and wire fraud and using material misrepresentation to get investors to purchase securities along with his co-conspirator Robert Farkas. In December, Farkas was sentenced to a year and one day for his part in the scam and faces three years of supervised release. About $33.4 million worth of Ether (ETH) which was seized from Centra Tech, was also sold by the U.S. Marshal Service, and some other items bought with the fraudulent money.
CoinSmart Raises $3.5million
CoinSmart, a Canada-based digital currency exchange, had announced the close of a seed funding round worth CAD$4.5 million, which is about US$3.5 million.
Owned by Simply Digital Technologies, CoinSmart, in a statement on Monday, March 1, said they raised the investment by issuing convertible debentures which bear interest as an instrument of debt. With this, Simply Digital Technologies can prepare for a reverse takeover as planned ahead of a public listing on the TSX Venture Exchange as they had hoped.
They say the funding will expand the exchange platform into the European market and also support operational changes. As European expansions go, Italian supercar makers, Mazzanti, seem to be driving towards the digital asset sphere by accepting bitcoin (BTC) payments and launching their security token offering (STO).
These Mazzanti (MZZ) tokens require a buy-in of €50 or $60 as a minimum for a share in the sale of the Evantra Millecavalli R. These tokens, according to STOKR's co-founder Arnab Naskar will empower investors to actively participate in the firm's growth through the acquisition of future revenues.
Nvidia Off The Hook
Meanwhile, in California, a federal district court dismissed a three-year-old lawsuit that claimed that graphics processing unit (GPU) company Nvidia mislead investors about digital currency mining revenue.
According to some investors, Nvidia gave false statements regarding revenue growth from the sales related to digital assets mining in which about $1 billion in revenue were misrepresented. The case was dismissed as the prosecutors didn't have enough evidence to back their claim. The first week ended with the genesis tweet made by Twitter CEO Jack Dorsey began heating up as attention was called to its tokenized version.
His first tweet was tokenized on the non-fungible token (NFT) platform Valuables. The 2006 tweet, which was minted in December 2020, ignited a bidding war, and as of the morning of Saturday the 6th, it had gotten a bid of $2 million from the founder of TRON and CEO of BitTorrent Justin Sun.
Tetragon Files for $175m
The second week began with Tetragon Financial Group, one of the most prominent financial backers of the digital asset company Ripple Lab losing its effort to make a reclaim of the $175 million investment it made in the company.
In January, Tetragon filed a suit to reclaim $175 million out of the $200 million Series C financing it had made for the Ripple blockchain company in 2019. As part of the suit, Tetragon also sought to freeze Ripple's liquid assets until they were paid. Their case was, however, was rejected on Thursday by a Delaware Chancery Court Judge. According to Ripple, the Tetragon lawsuit was, and I quote, "an opportunistic move to take advantage of the SEC's allegations." As the case between the SEC and Ripple continues, many desperately anticipate the outcome.
PayPal to Acquire Curv
In another story from the same week, the popular payment facilitating platform PayPal had on Monday, March 8, disclosed that it would be acquiring Curv, the cloud-based digital asset security infrastructure based in Israel.
Report on the acquisition's progress was first announced on March 2 and given their status as one of the top e-payment giants, and it is no surprise how the whole acquisition process was able to kick off within two weeks. PayPal, which expects the acquisition deal to be finalized within the first quarter of the year, had partnered with Paxos to enable the sales of digital currencies by October and on the lookout for digital custody acquisition.
Even though the $750 million deal to buy BitGo fell through, it is challenging to find multi-party computation (MPC) shops like Curv around the digital asset community.
Coinbase Hits $100bn
Coinbase was valued at approximately $100 billion last month ahead of a public listing. Even as the most prominent digital currency exchange platform in the U.S., some believe that regardless of the digital currency market's growth to over $1.5 trillion, it is still "not worth it" even though they manage to strike while the iron is hot.
According to the company's S-1 form published by the U.S. SEC, its total revenue is generated from transaction fees on their platform. However, in their business model, 96% of their net revenue for 2020 originated from transaction revenue. A division of its $100 billion valuations by its 2020 revenue gives a valuation multiple of 76x. This makes many curious about how they intend to justify the $100 billion valuations.
Meanwhile, Twitter CEO Jack Dorsey, whose genesis tweet sits at $2.5 million since March 6, had announced that the bid for his genesis tweet would end on March 21, and the proceeds would be donated to the non-profit @GiveDirectly.
The charity was $5 million short of its goal for the "Africa Response" campaign. As of February, they had received digital coin donations worth over $20 million. Dorsey had indicated that he would be donating after converting the proceeds to bitcoin, even though he is one of the strong supporters of BTC development in Africa.
Still, in Africa, the Central bank of Nigeria (CBN) announced that it would be rewarding its citizens with incentives. Tagged the "Naira 4 Dollar Scheme", the CBN incentive program, which commenced on Monday the 8th, will end on May 8. The incentive is an additional ₦5 for every $1 received by an individual through diaspora remittances. After the CBN had in the previous month placed a ban on any digital-asset-related transaction, they aim to use the incentive to foster official channels for international payment transfers.
NZD Stable coin
Outside the African continent, a New Zealand-based firm announced its creation of the first compliant, stable coin backed by the New Zealand Dollar (NZD). Regulated company Techemynt will issue this New Zealand Dollar Stablecoin ($NZDs).
The initial launch shows the coin at a dollar per coin. The company had stated that the $NZDs would combine the digital currency's intrinsic nature with the stability and value of the NZD to allow for payments, remittance, and arbitrage. The $NZDs operates on the Ethereum blockchain network, and its code uses a framework created by Coinbase and Circle-founded Center group. To ensure transparency, an accounting firm has confirmed reserves of the stablecoin with regular quarterly reports being delivered.
Komodo Launches DogeDEX
The second week ended with another Dogecoin news as open-source digital assets and blockchain solutions providers Komodo announced that they had launched a dogecoin-focused platform for peer-to-peer exchanges of digital currency.
Powered by the AtomicDEX engine, the service is available on both desktop and mobile applications. Going live on March 1, the platform already had over 3000 downloads at the said report. Also, acting as a wallet, users can store their digital assets on the forum.
Visa expands into crypto
The third week was somewhat uneventful until the Hong Kong-based platform Crypto.com became a principal member of Visa Australia, allowing them to extend their card offering services to the nation. This also gives them a direct relationship with the customers.
The groundwork was laid in December when they used an acquisition to get an Australian Financial Service Licence. With this, Crypto.com now has its Visa card available in 31 countries, including the U.S, Canada, Europe, and Asia.
With the Visa card, users to convert their digital currencies into fiat currencies for use at retail outlets that accept Visa payments. The company also said that it would offer fiat currency lending backed by digital asset collateral. As a way of extending their cards to new markets, they intend to begin offering virtual cards in Europe before month-end.
LUGH Introduces EUR-L Stablecoin
Meanwhile, as others plan to penetrate the European market, a French firm launched a Euro stablecoin through partnerships between the digital asset trading platform Coinhouse and the Lugh Company. Built on the Tezos blockchain, the stablecoin has technical assistance from Nomadic Labs.
The announcement, which came on Thursday, March 18, stated that the Lugh (EUR-L) stablecoin would be anchored to reserves of Euro held in a Societe Generale account. The report also noted that the stablecoin had been presented to France's regulatory authorities, saying that they intend to comply with the current regulations and its frameworks. With this, the EUR-L becomes the first digital asset pegged to the Euro to originate from France.
Crypto Lender Hodlnaut Teams With Insurance Alternative Nexus Mutual
Decentralized finance took the stage in the third week of March as most events seemed centered around it. A perfect example was the team-up between digital asset lender Hodlnaut and the insurance alternative Nexus Mutual.
The platform allows for the purchase and holding of digital assets by users to earn interests with relatively high-interest rates through lending. This team-up now allows Hodlnaut to offer insurance on assets held on their platform with available assets ranging from BTC, ETH, DAI, and USDC to USDT.
WIREX WINS TRADEMARK INFRINGEMENT CASE
The third week in the digital asset community would be incomplete without a piece of court-related news. This week's court case was the trademark infringement claim made against several businesses in the U.K. for the unauthorized use of the name of a digital currency reward scheme.
The case was against the defendants for their use of the registered trademark "Crypto back" as Wirex was the first company in the world to use the term in its reward scheme. Although the defendants had a counterclaim to invalidate Wirex's trademark, their counterclaim was dismissed. The report also contained a notice on the importance of companies protecting and enforcing their trademarks. Post-court battle in the U.K. was a warning to traders and digital asset companies in the Republic of Ireland to comply with the country's new anti-money laundering rules. The country's central bank stated that the necessary checks should be made on the accounts of customers and that their funds' destination and province should be displayed. This part of the statement was aimed at companies and platforms offering digital assets' sales and purchases. It is believed that this new rule aims to put mainstream financial services providers and digital assets organizations on the same footing.
BITCOIN DEPOT LAUNCHES OVER 100 NEW BITCOIN ATMS
Defi retakes the stage this week as it made its way to the hot topics of the week when it talks about how decentralized finance has brought about a more transparent playing field for the automation of financial primitives like lending and insurance, without the need for intermediaries.
Presently, Defi is mainly used as part of third-party applications like yield generating strategies or arbitrage bots. The evolution of decentralized finance aims to move it from third-party applications to core Defi protocols. Meanwhile, the Atlanta-based Bitcoin Depot says it will be launching one hundred new Bitcoin ATMs in the United States. In the coming weeks, the company stated that about 115 kiosks would be found across 24 States, including 12 in Florida, 14 in Alabama, 12 in California, and 13 in Minnesota. Over the last six months, the number of its ATMs has doubled with over 2000ATMs worldwide.
Twitter hacker sentenced to three years in prison
News concerning the Twitter hack that caused a ruckus last year might finally be laid to rest. The hack that involved a mass digital currency phishing scheme has earned the hacker a three-year jail term and another three years’ probation after an agreement to plead guilty was reached.
The hacked Twitter account was those of some prominent individuals, including Tesla CEO Elon Musk, former U.S. president Barack Obama, then-presidential candidate Joe Biden, and others. Hacker Graham Ivan Clark can serve part of his sentence at a booth camp after serving his 239days in prison. The hack involved taking over more than 100 high-profile accounts resulted in a scam of about $120,000 and was done by Clark and two other co-conspirators, all of whom were arrested last year. The attorney for the defense, David Weisbrod, confirmed that all the stolen digital currencies had been handed over to the officials for restitution purposes.
Coinbase to Pay $6.5 Million to Settle CFTC Investigation
Ending the third week was Coinbase's settlement of $6.5 million with the Commodity Futures and Trading Commission (CFTC) over allegations that the Exchange self-traded its digital assets.
It was discovered that between 2015 and 2018, the Exchange self-traded some of its digital holdings on two of its trading platforms. It was also found that an employee also traded some amount of Litecoin around the same period. Shocking though it might sound, this is common in the digital asset community.
New cash market?
The month of March ended with BlackStar Digital Enterprise Group (BDEG), a publicly listed company announced that it would be working on enabling trading company shares and digital trading through a proprietary blockchain platform. In a statement, the company said that its trading platform, the Blackstar Digital Trading Platform (BDTP), should be completed, and this platform will utilize the Amazon blockchain technology.
They aim to establish a cash market for investors in public companies, and according to the company's CFO, this will "even the playing" with professional investors that are leveraged. However, in compliance with the broker-dealer rules, a partnership or registration as an alternative trading system will be required. The company has stated that this is currently being evaluated.
NFTs continue to excite interest
Amid the non-fungible token (NFT) events in recent weeks, the noise became even louder when the digital Exchange Crypto.com on Tuesday announced its very own launch non-fungible token (NFT) platform on March 26.
The platform - according to them, "will the most user-friendly NFT platform." the Hong Kong-based exchange said the platform, which will be invite-only, will also feature collaborations between both digital artists and mainstream artists. This venture, being led by Joe Conyers III, a music veteran and the new global head of NFTs on Crypto.com, promises to announce other sports leagues and teams that will be part of the collection in the coming weeks.
Meanwhile, a lot of activities have been seen at the Bitcoin corner of the digital community. Most of which are centered around the announcement by Tesla CEO Elon Musk about the company's acceptance of Bitcoin for Tesla vehicles' purchase.
For now, the purchase of Tesla vehicles with Bitcoins is only available to U.S. residents. Still, the company has assured those outside the United States that the option would soon be made available later in the year.
de-fi on the rise in china
In other news on the happenings around decentralized finance (Defi), the Chinese government, which does not allow the sales and purchase of digital currencies with money, provides decentralized finance. In light of this, a blockchain startup, Conflux, backed from Shanghai's city, announced on Wednesday concerning its partnership with OKEX's decentralized public blockchain.
This partnership, according to them, will help introduce decentralized finance into the Chinese market. Conflux, which refused to have a public sale to stay regulatory compliant, is not needed for Defi projects to enter the Chinese market. However, with the Conflux-retrofitted digital assets being regulatory-friendly, Defi projects looking to be listed on a public exchange in China can stay compliant.
Jamaica to pilot CBDC
Concerning banks and digital assets, the Bank of Jamaica (BoJ) on Tuesday shared its intention to pilot its central bank digital currency (CBDC).
According to them, the program, which will kick off in May, already has the BoJ working with eCurrency Mint, an Ireland-based tech firm for rollout support, and this, according to them, came "after an extensive procurement process." This transition to the digital community is (according to the government) a way of recovering economically after the pandemic.
McLAREN ANNOUNCES NEW LONG-TERM PARTNERSHIP WITH BITCI.COM
Meanwhile, famous Formula 1 auto racing team McLaren has announced its long-term partnership with Turkish digital asset firm But I.com to create the team's official fan token. On Wednesday, the announcement put McLaren among several other prominent sports teams that have already launched fan tokens. Bitci.com, which will be in charge of housing the fan token, is a Turkish digital currency exchange with a 24-hour traded volume of $50 million.
Coinsquare Ordered to Hand Customers’ Records to Canadian Tax Agency
Concerns related to the court battle between the Canada Revenue Agency (CRA) and digital currency exchange Coinsquare threaten the anonymity enjoyed by digital asset investors and traders. The CRA, which requested access to the numerous high-value customer data held by the Exchange, won the battle, which seems only to be the beginning for them. The CRA had stated that their request was to ensure that these high-value customers were "meeting their digital assets reporting burdens," to which the court was in agreement. According to court documents, those whose account information is demanded are only the high-value accounts. As the new month approaches, there are many things to look forward to in the digital assets community.