Coinbase readies for stock market listings and more… | Crypto Market News
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Crypto Market News Highlights
[5:00] Kraken subsidiary scores license from UK regulator, opening futures platform to institutional clients
Kraken bought a licensed entity, a company that had a license to trade futures contracts in the UK. With that entity, they applied to extend that license to become an MTF.
Why become an MTF? Well, they’re already into futures. And now they probably want to offer options. There are many things you can trade under an MTF. It allows you to trade any transferable security, options being one of them.
On our side for example, on our sandbox in Montenegro, we’re looking at an MTF sandbox license specifically to trade specific types of tokens of securities, mainly in the secondary and primary markets — which are equities, bonds, convertible bonds, etcetera. So, very different business, even though it’s under the same license.
[6:12] Philippine SEC Warns Against Crypto Schemes
Well, that’s their job. The SECs all over the world, whether they are called the SEC, FCA, CMA — the majority of their job is to make sure that people don’t lose their money. They don’t just warn about crypto scams, but many of the finance-related scams nowadays tie into crypto.
So the SEC is doing their job — that’s great. Hopefully they do their job and only oust scams, not simply saying that crypto is a scam, which many regulators have done and some still do.
[7:10] Biggest Corporations Sceptical of Introducing Crypto Payment Option
Kevin would be sceptical, too. Why? Most crypto isn’t built for a payment rail. Payment rails need to be fast, scaleable, and robust. And to a certain extent, due to regulation, they need to be centralized. Why? Well, what happens when a payment is made incorrectly, or when there is fraud?
So, there is a need for a “software layer”, a tier one layer on crypto payments that allow some centralization of governance of those payments. Or mechanics like Metamask, but dumbed down a whole lot, so there is some layer of security so that a payment can basically almost 100% of the time be assumed it’s made on their own behalf.
Like with most of crypto, there is an UI/UX problem. It needs to be solved, and it will be. But most crypto out there right now, especially the big boys, were never really designed to be payment rails. They just can’t support the volume you would need to actually become a payment rail.
[8:50] 4th Amendment Does Not Protect Bitcoin Data, US Fifth Circuit Court Rules
If the transactions are tied to criminal activity, and they talk about allegedly making payments to child-pornography using Bitcoin, via a Coinbase account, that the data for those transactions are not protected under the 4th amendment. And that makes a lot of sense. Had that transaction been done through a bank or any other system, that data would also not be covered under the 4th Amendment.
So this is not a new precedent, it’s an old precedent ported over to new technology. So, good job to the Fifth Circuit Court.
[10:35] World’s Largest Pension Fund (GPIF — Japan’s government pension investment fund) Lost the Equivalent of Bitcoin’s Entire Market Cap in Just Three Months
That might sound crazy. It decreased in value in 11%. Losing 1.4 trillion yen. The entire AUM (Assets under management) is 9 times larger than crypto’s market cap, and they lost 11%. 11% is a pretty big loss in traditional markets. In crypto, an 11% loss is “eh, no news here”. But for something that probably earns single to low double digits in good years, they just lost a year. If not two, or even three.
But it just shows how large that single pension fund is, compared to the entire crypto market. We got a long way to go, guys.
[12:02] Lightspeed Venture Invests $2.8M in Crypto Market Maker Wintermute
Kevin has been talking to a lot of crypto market makers as of late. Probably in the triple digits. And the amount of market makers that Kevin finds to have any knowledge of what market making actually is, can be counted on two hands.
So we have a long way to go to mature this market in terms of market making. Market making isn’t just applying a bot that looks at Binance and opens an order and sends another order to Binance. That’s not market making.
At the end of the day, Kevin thinks it’s great that there are investments into market makers. Kevin had a look at Wintermule’s website literally yesterday because it came up in a conversation with somebody else, and Kevin sent them a query, but not gotten a response yet. Their website is not clear about what type of market making they do.
We need professional market makers in crypto. We need less washtrading, less frontrunning, and need actual players in the market that know how to take risk, manage risk, and actually profit from making markets where somebody is always on each side of the book.
[13:48] US CFTC Promises ‘Holistic Framework’ for Digital Assets by 2024
The CFTC should call Kevin and they can knock this one out in 2–3 weeks.
Just as most regulators, the CFTC moves slowly. At least we have a date now — 4 years from now. But that will give a lot of time for judicial precedent to be set. At least it’s good to know that they have a date on the calendar.
Kevin thinks that it’s almost sure that Bitcoin will be classified as a commodity. You will need a CFTC license to trade it — $25m net capital. Hopefully for micro-to-mid caps there will be different legislation that classifies them outside of the realm of futures and commodities.
[15:28] Circle Confirms Freezing $100K in USDC at Law Enforcement’s Request
That’s what a regulated stablecoin does. Criminal activity means frozen account.
Kevin isn’t saying that he likes it, because it will get innocent people snared in these types of activities as well, but that is the way current regulation works, and the way law enforcement works. It’s not the best method, but it’s the best that we have.
This shows you why there is not much of a difference in a regulated and well-run stablecoin versus a CBDC. So in the future when you have CBDCs backed by the government and are actually legal tender not tied to accounts held by third parties, why use a stablecoin?
[16:45] Italian Banking Industry Chose Decentralization Over Centralization
The Italian banking industry probably doesn’t get as many laughs around the world as Maltese banking industry, but it still gets a few laughs.
So, decentralization is great. But how much do you want to bet that decentralization here is only type to certain aspects of any type of protocol they are going to be testing? Governance is still going to be decentralized. It doesn’t matter where you are — Italy, Malta, UK — regulators aren’t going to allow you to use decentralized governance.
[17:45] Cryptocurrency Exchange Coinbase Readies Stock Market Listing
That is exciting for the industry as a whole. Coinbase is a big entity and has been around since the beginning of the mass adoption of crypto. Hats off to them for being able to do this, if they do it. It will be a milestone, for sure.
In some people’s eyes it might be “against the grain”, trying to create a company that goes against traditional markets and then you get listed in traditional markets.
Kevin understands why they want to secure itself, they probably want to secure a ton of funding to go into institutional markets, and IPO is the way to do it.
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