The US is Making Big Moves Towards Regulatory Clarity; A Different Sort of DeFi Startup; Professional Investors are Loving Digital Assets
Newsletter #17- Week of November 1st
Hi everyone! This week’s digital asset news brings hefty regulatory clarity, a startup that aims to provide stability in the DeFi space, and quite the bright outlook on investor sentiment towards digital assets. Join us as we delve into the latest stories of digital asset regulation, adoption, and ecosystem growth!
For our part, this week we have released our research report on tZero (TZRO). And for those of you who want to get quality insights into market trends as they relate to security tokens, we have just syndicated Security Token Market’s January 2020 report! You can find both of these invaluable resources on our website here.
And without further ado, let’s dive in!
- FCMs in the United States Get Regulatory Guidance
The CFTC (Commodity Futures Trading Commission), which regulates the US derivatives market, has handed down regulatory guidance as it relates to the holding of a customer’s digital currencies by future commission merchants. For reference, JP Morgan and Goldman Sachs are both FCMs.
This guidance seeks to protect an FCM’s customers from the volatility that another customer holding digital currencies can present. A requirement of note here is one that would make it mandatory for FCMs to deposit a customer’s digital funds with a “bank or trust company” with said funds being available “for withdrawal at request”. The requirement goes further, but in summation this regulatory guidance is meant to provide transparency and stability. (CoinGeek)
2. Digital Assets to Receive More Regulatory Clarity From the US Government
In yet another astounding and exciting move from the US, the US Federal Reserve as well as the Treasury Department have both just proposed a re-definition of money that includes digital currencies. This comes as government agencies seek to combat people who “have been exploiting the threshold loophole to launder illicit funds”. That is, as of now, transaction data is only recorded for transactions of $3,000 and over under the Bank Secrecy Act. A proposed amendment will lower that to $250. The proposed rules extend to digital assets as well, and are a substantial and correct step in the direction of regulatory clarity. (CoinGeek)
- A Different Sort of DeFi Startup
Decentralized lending startup, Yield, is standing out from its DeFi counterparts by offering a “stable long-term borrowing and lending” option in the oft-volatile decentralized finance space. Incubated by Paradigm, this novel lender likens itself to a Treasury bill. For the uninitiated, a traditional Treasury bill is a low-risk, stable security that is backed by the Treasury Department. Yield’s purpose is stated quite well by their whitepaper, which says that they “‘want to build a liquidity provision formula that works in ‘yield space’ rather than ‘price’ space. Specifically, they want the interest rate — not the price — to be a pure function of reserves.’”(NASDAQ)
2. A Powerful Acquisition
INX limited has announced that it is set to acquire Openfinance Securities. While INX itself is a company with strong government integration in that it received SEC clearance for its Ethereum-based security token IPO, Openfinance has also achieved a membership agreement with FINRA. All that makes this acquisition that much stronger. (AMBCrypto)
- Polymarket Has Garnered Attention that is Worth $4 Million
A momentous week for decentralized information marketplace Polymarket, as they, early this week, closed a very successful funding round, totaling $4 million. To give a little background on the company that has captured the attention of the likes of Polychain and Naval Ravikant, Polymarket allows users to bet crypto on “hotly debated topics, ranging from politics and health through to business and science.” (CoinDesk)
2. Professional Investors See the Advantage of Digital Assets
A survey conducted by CoinTelegraph Consulting has just come back with exciting and quantifying news about professional investor sentiment towards digital assets. The detailed report found that “61.15% of professional investors [in Europe] in the survey either already [own] digital assets or [are] planning to buy in the future.” These are truly exciting times for the adoption of digital assets! (CoinTelegraph)
References
Regulatory News
- “CFTC tightens digital currency rules for futures commission merchants”
2. “US feds propose changes to recognize digital currencies as money”
Industry Updates
- “This Paradigm-Backed Startup Is Offering DeFi’s First ‘T-Bill’”
2. “INX to acquire STO platform Openfinance”
Investment and Financing
- “Predictions Platform Polymarket Raises $4M From Polychain, Naval Ravikant and More”
2. “Survey: Most professional European investors bought digital assets or plan to”
Visit us at: redblockcap.com
For questions and business inquiries, contact us at info@redblockcap.com
About RedBlock
RedBlock Inc is a digital investment and fintech firm leveraging blockchain technology for asset digitization and management, from issuance to secondary liquidity. Its global network of capital market participants, including issuers, broker-dealers, secondary exchanges, funds, liquidity providers and custodians, are supported by its end-to-end blockchain-powered asset management platform. RedBlock also manages an investment fund to support companies in its ecosystem that align with its investment thesis. With a growing track record and pipeline, the RedBlock team hails from top tier global investment banks, venture capital firms and blockchain technology companies.
Stay up to date and connect with us!
