Copper’s Weekly Update – 28 December 2020

Highlighting what went right, and what went wrong, in this week’s crypto news analysis.

Copper

For what is traditionally a quiet news week, there sure is a lot happening in crypto.

Jay Clayton ended his term as the Securities and Exchange Commission (SEC) Chair with a bang last week, filing a major lawsuit against Ripple in his final act (more on that below). Now, SEC Commissioner Elad Roisman, who is widely considered an ally of the crypto community, is set to fill the vacant position.

On Friday, Turkey’s chief central banker announced the country will begin piloting a previously undisclosed digital currency in the second half of 2021. The surprise move would place Turkey among the handful of countries that are already in advanced stages of CBDC experimentation. In other CBDC news, Russia Today quoted an official from the Central Bank of Russia saying that the development of digital currencies may challenge the SWIFT international banking payment system and could eventually make it redundant.

And finally, another day and another all-time high for Bitcoin. The cryptocurrency continues its record-breaking tear, briefly piercing $28k yesterday before settling to $27.6k at the time of writing. With 2020 now drawing to a close, the crypto community joins Tyler Winklevoss in hoping to ring in the new year at $30k. 🥂

Below is our weekly roundup of industry news. If you’d like to get in touch with us about any of our products or services, we look forward to hearing from you. Just send us a note.

Top stories of the week

XRP crashes following announcement of SEC suit against Ripple

The US Securities and Exchange Commission has filed a lawsuit against Ripple Labs and two of its executives claiming that the company, which offers the XRP cryptocurrency, illegally sold unregistered securities. Immediately following the news, the value of XRP plunged by more than 25%.

Ripple’s troubles continued as exchanges started to delist Ripple, with Bitstamp becoming the first major exchange to take action as a result of the lawsuit by halting XRP trading and deposits for all US customers as of January 8, 2021. Swiss cryptoasset manager 21Shares, formerly known as Amun, also removed XRP from its exchange-traded products (ETPs).

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2020 saw over $3bn in crypto venture funding and over $690m in M&A activity

Despite an ongoing pandemic, a new report by The Block examining cryptocurrency financing and M&A activity in 2020, claims crypto retained steady venture funding throughout 2020. Total funding saw approximately $3.1bn in financing volume over a span of 774 transactions.

There were also 83 mergers and acquisitions this year, totalling $691m in volume – a 28% increase year-over-year and the highest M&A transactional volume ever.

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Presidential advisory group weighs in on regulatory approach to stablecoins

Ahead of the launch of Facebook’s Libra project in January, the White House has released an assessment on regulatory considerations for stablecoins.

The President’s Working Group on Financial Markets, which conducted the assessment, warns that broad regulatory oversight of stablecoins is forthcoming. In addition to highlighting the importance of AML and KYC verification among all parties (even unhosted wallets), the report also mentions stablecoin issuers should be able to comply with sanctions obligations, as well as have the ability to enable one-to-one redemptions.

It remains unclear how algorithmic stablecoins like Empty Set Dollar (ESD) and crypto-backed stablecoins like DAI which aren’t backed with fiat currencies might be affected by the Working Group’s suggestions.

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Ledger wallet data leak dumped on Raidforums for free, company regrets the situation

The hacker that breached hardware wallet provider Ledger’s marketing database earlier this year has released personal data for thousands of users, prompting many to threaten the firm with a class-action lawsuit. According to the hardware wallet manufacturer’s own testimony, the e-commerce marketing database was breached on June 25, 2020.

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In case you missed it…

⚡️ Microstrategy buys 29,646 more Bitcoin — now holds over $1.6bn in BTC. Read more

⚡️ Warp Finance recovers $5.8m days after hack. Read more

⚡️ EXMO exchange hacked, loses coins worth around $10 million. Read more

⚡️ Puerto Rican Digital Bank receives the green light to offer bitcoin custody. Read more

⚡️ India’s CoinDCX raises $13.9m from Block.one, Coinbase Ventures, etc. Read more

⚡️ Huobi secures Nevada Trust company license. Read more

⚡️ Bitwise’s crypto index fund has liquidated its XRP position. Read more

⚡️ Japan gears up to issue digital currency in both the public and private sectors. Read more

⚡️ Binance Korea to close operations next month. Read more

⚡️ South Korea’s Hashed raises $120m venture fund for crypto deals. Read more

⚡️ Germany passes new law to allow digital securities on the blockchain. Read more

⚡️ Mexico’s second richest man says Bitcoin is his ‘best investment ever’. Read more

 

Copper news

Coppercasts episode 10: Yichen Wu

We recently dropped a special Coppercasts episode filmed in Helsinki where we met with the smart, funny, and downright delightful Yichen Wu – CEO and co-founder of Tesseract Investment. The above Show & Tell segment sees Yichen outline some of the inefficiencies borrowers face in the crypto lending market, and how Tesseract and Copper are solving these issues.

In the longer conversation, he describes the trends he is seeing in institutional crypto borrowing and lending, why regulators are right to take a slow and prudent approach to crypto, nurturing the ‘shallow’ crypto talent pool, and why CrossFit is like airline food…

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The case for cryptoassets in institutional portfolios

In an op-ed for the Association of Corporate Treasurers’ magazine, our CFO Ralph Payne writes that with institutional investors throwing more weight behind Bitcoin, corporate treasurers must double down on understanding this fast-evolving global asset class.

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