Crypto exchange Huobi Japan approved to offer derivatives trading

Huobi Japan, a bitcoin and crypto exchange company, today announced it has received approval from Japan’s Financial Services Agency (FSA) to register as a Type I Financial Instruments Business, as designated under the Financial Instruments and Exchange Act.

This will enable Huobi Japan to engage in the trading, underwriting, and management of cryptocurrency derivatives, as well as operate derivatives trading systems. The FSA is the chief regulatory authority for financial services in Japan, overseeing the banking, securities and exchange, and insurance sectors.

Currently, only seven out of the total 34 cryptocurrency exchanges in Japan possess this license, which requires the holder to meet specific asset levels. Without this license, the cryptocurrency exchanges may only offer limited spot trading services of cryptocurrencies for customers.

“We’re very excited to have reached this milestone. It will enable us to expand business beyond spot trading and fuel the next phase of our growth in Japan. Going forward, we plan to develop a number of crypto derivatives products to meet the growing demands of the market.”
– Huobi Japan CEO, Haiteng Chen

In June 2020, Huobi Token (HT) received approval from local regulatory authorities in Japan to list HT as a fully compliant crypto asset. Going forward, Huobi Japan plans to significantly expand its trading services and capabilities in Japan. As of September 2021, Huobi Japan offers spot trading services of 14 cryptocurrencies, including Bitcoin (BTC), Ethereum (ETH), and Huobi Token (HT).

Forte to expand its blockchain gaming platform to Cosmos

Tendermint, an open network infrastructure provider with a focus on the Cosmos blockchain ecosystem, and the Interchain Foundation (ICF) today announced a partnership with Forte, an organization building a blockchain platform for video games.

As core contributors to the Cosmos Network, Tendermint’s partnership with Forte creates accessibility to blockchain gaming for all developers and gamers who can easily integrate their gaming ecosystems with the Cosmos interoperable blockchain network.

“With almost three billion gamers around the world and immense interest surrounding NFTs, the partnership with Forte will help propel Cosmos to a wider audience and solidify our place as a leading blockchain ecosystem. We have already built the industry’s best tools for blockchain development like Cosmos SDK and Starport. Now we want to make it easier for game developers and players to join the Cosmos community as well,” said Peng Zhong, CEO of Tendermint.

Cosmos + Forte 

Forte provides the blockchain infrastructure for game developers and players, such as cryptocurrency wallets that store virtual assets and NFTs, in a secure, easy-to-use, and fully compliant package

“We’re thrilled to be partnering with Cosmos to bring their technologies to our community of developers, players, and fans,” said Josh Williams, Forte’s CEO and Cofounder. “Our alignment on scalability, usability, and interoperability makes them an ideal partner in building a more sustainable and equitable ecosystem for games, and the billions of people who play them.”

Earlier this year, the Forte team raised $185M in Series A funding led by Griffin Gaming Partners, and there are more than 25 game developers building on Forte’s platform, including pioneers Will Wright (SimCity, The Sims), Jeff Tunnell (Starsiege: Tribes, Social City), and Hi-Rez Studios (Smite, Paladins).

To date, Forte has created more than 10 million wallets, minted over 5 million NFTs, and has over 8 million monthly active users across its partner games.

“Forte and Cosmos share a vision of applications and economies built around passionate communities. Now that the technology is mature, I’m thrilled to work with Forte who can onboard the next generation of game developers and users, bringing Cosmos gaming to the mainstream,” said Billy Rennekamp, Grants Manager on the Board of Management at ICF.

Integration

Cosmos developers will work with Forte to ensure that all third-party game developers on the Forte platform can access Cosmos’ technology and easily integrate their games with the Cosmos network.

Plus, Forte will add ATOM and other Cosmos-enabled assets, such as stablecoins, to the Forte network to be used as payment, liquidity, or collateral for users, greatly increasing the utility of the ATOM token, and helping create a better experience for developers and players. Cosmos Hub wallets and accounts will too be integrated within the Forte wallet architecture.

Cboe to acquire crypto trading exchange platform ErisX

Cboe Global Markets, a provider of global market infrastructure and tradable products, announced it has entered into a definitive agreement to acquire ErisX, the operator of a U.S.-based digital asset spot market, a regulated futures exchange, and a regulated clearinghouse.

Ownership of ErisX presents a unique opportunity for Cboe to enter the digital asset spot and derivatives marketplaces through a digital-first platform developed with industry partners to focus on robust regulatory compliance, data, and transparency.

Founded in 2018, ErisX was designed and built with regulatory compliance and operational integrity at the fore. Its spot and futures exchanges utilize the high-performance infrastructure and real-time market surveillance. Its real-time clearing system is designed to address settlement risk while collateral management helps to allow seamless movement of collateral between spot and futures accounts.

As a global market infrastructure provider, Cboe is uniquely positioned to offer a digital asset marketplace focused on regulatory compliance and transparency to help institutions embrace the digital asset class and offer digital asset trading to their clients.

Cboe plans to operate the digital asset business as Cboe Digital. The company also has secured the support of a broad range of market participants, including well-established retail brokers, crypto-leading firms, and sell-side banks, who are expected to form a Digital Advisory Committee tasked with advising Cboe on the ongoing development of the Eris spot and derivatives markets.

As members of the Digital Advisory Committee, DRW, Fidelity Digital Assets, Galaxy Digital, Interactive Brokers, NYDIG, Paxos, Robinhood, Virtu Financial and Webull are committed to ongoing engagement with Cboe Digital markets.  Certain members of the Digital Advisory Committee listed above also intend to acquire minority ownership interests in Cboe Digital and to serve as partners in the growth of the business. Cboe Digital will leverage the engagement and collaboration with these market participants to continue to operate ErisX as a resilient, trusted, and transparent digital asset venue.

Thomas Chippas, CEO of ErisX, said: “Derivatives are an essential component of a scaled digital marketplace, and Cboe, as one of the world’s largest derivatives exchange operators, has the global customer network, international operations, and innovative vision to not only grow ErisX but the entire digital asset space. With Cboe’s support and network of industry partners, ErisX will enable new and established firms to compliantly and confidently offer cryptocurrency spot and derivative products to their clients, making our transparent and trusted digital asset market the destination of choice for any market participant offering crypto spot or derivative trading services now and in the future.”

Cboe plans to use its real-time, risk and derived data expertise and global network to provide a transparent view into digital asset markets and trade execution. Leveraging digital asset data from ErisX and Cboe’s existing index calculation capabilities, Cboe Digital intends to develop and distribute digital asset indices for potential use in ETP creation and other derivative product opportunities.

Ed Tilly, Chairman, President & CEO of Cboe Global Markets, said: “We believe our acquisition of ErisX, coupled with broad industry participation and support, will help us bring the regulatory framework, transparency, infrastructure, and data solutions of traditional markets to the digital asset space. ErisX has shown an unwavering commitment to improving spot and derivatives crypto trading, and I am confident that together we can not only meet the growing demand for institutional and retail trading solutions but also push the boundaries of digital asset innovation and unlock its next phase of growth.”

Cboe also plans to leverage the Digital Advisory Committee to provide input and guidance on the development of a market data offering based on actionable bid and offer prices from the ErisX spot crypto market. This market data offering is expected to be modeled after established best execution practices in other asset classes, ultimately intending to develop a benchmark to help Cboe Digital’s industry partners and other market participants evaluate the appropriateness of crypto execution prices.

Encrypted office suite CryptPad introduces ‘Document’ and ‘Presentation’ apps

CryptPad, an end-to-end encrypted office & collaboration suite, today announced the start of the roll-out of some major new features for CryptPad. The CryptPad team has integrated the two remaining OnlyOffice editors for text documents and presentations into CryptPad’s real-time encrypted collaboration engine. This completes the OnlyOffice suite, as spreadsheets have been available for some time. As CryptPad’s spreadsheet editor, these two new apps only rely on OnlyOffice’s client-side components, not its server.

Preview of the new Document application

Note, on cryptpad.fr only people with a subscription will be able to create new documents and presentations in the new applications. The CryptPad team relayed that the suite is still free software and will remain as such. The code for these new integrations is freely available and will be available to all other CryptPad instances if the administrators choose to enable early-access applications.

Preview of the new Presentation application

“Early access means that everything remains open-source, and eventually will be available to everyone. It rewards people who support the project with the first view of much-anticipated applications. This is a new thing for us, but we believe this delay to access new applications is a relatively minor step. The bigger picture is that we are working towards the long-term success of CryptPad. This involves being fully funded by our users while they currently account for only 1/3 of our budget (subscriptions on cryptpad.fr and donations combined). EU research projects such as NGI DAPSI currently cover the remaining 2/3. We have more ideas to encourage people to support the project, and to involve them in the future of the platform. Our recent work has advanced the state of the art in document conversion in the browser, rather than on the server where user data is exposed. This will be released independently of CryptPad so other projects can reuse it. If you are eager to see this in action and to test the new Document and Presentation applications, please consider subscribing to a plan on cryptpad.fr to help make CryptPad sustainable for everyone.”
– The Cryptpad Team

Crypto derivatives exchange BitMEX enlists Fireblocks to drive the development of new offerings

BitMEX, the popular cryptocurrency derivatives exchange, today announced that it has enlisted Fireblocks, a cryptocurrency and blockchain-asset custody, transfer, and settlement platform, to propel the development of the company’s forthcoming product offerings.

“We’re thrilled to support BitMEX as it diversifies its product offerings, and with Fireblocks’ infrastructure, it can be done in the most scalable and secure way. BitMEX’s growing customer base will also benefit from utilizing their digital assets securely, ” said Michael Shaulov, CEO of Fireblocks.

As part of our BitMEX’s ‘beyond derivatives’ plans, BitMEX will be expanding its offerings to include Spot, Brokerage, Custody, Information Products, and Academy. In the coming weeks, Fireblocks will help enable USDT functionality for its derivatives product, with future developments also on the roadmap.

Alex Höptner, CEO of BitMEX said, “Fireblocks will play an important role in our transformation strategy as we roll out a more diversified product set. Our users expect BitMEX to be secure, reliable, and easy-to-use, and Fireblocks will help to maintain and strengthen these core values as we evolve beyond derivatives.”

Cardano-based decentralized exchange RavenDex reveals demo

RavenDex, a Cardano-focused decentralized exchange, announced this week it has released its front-end demo for users to experiment with.

When live, RavenDex will enable users to offer liquidity and establish a market pair on any native Cardano token for others to swap while utilizing the performance, and low fees of the Cardano blockchain.

The RavenDex team is building one of the first decentralized exchanges for the Cardano blockchain.

Note, this demo release comes days after an oversubscribed private sale round for early adopters that saw them contributing to receive the utility token $RAVE.

Bitcoin’s Market Cap Reaches Heights Not Seen in 149 Days
October 7, 2021       /       Unchained Daily       /       Laura Shin

Daily Bits ✍️✍️✍️

  • The US FDIC is looking into whether stablecoin deposits would be eligible for its insurance coverage.

  • CoinSwitch Kuber, India’s largest cryptocurrency exchange, raised $260 million at a valuation of $1.9 billion in a round led by a16z and Coinbase Ventures.

  • The US Department of Justice announced a cryptocurrency enforcement team to strengthen the regulator’s ability to fight crypto-related crimes.

  • Based on a paper published yesterday, the Federal Reserve believes that digital currencies could “reduce reliance on the US dollar.”

  • MetaMask added crypto custodians BitGo, Qredo, and Cactus Custody to meet compliance requirements for its institutional arm.

  • The International Organization of Securities Commissions (IOSCO) and the Bank for International Settlements (BIS) think stablecoins should be regulated under the same rulesas traditional payments.

  • The price floor for CryptoToadz, an Ethereum-based NFT, has risen from .18 ETH to approximately 12 ETH in less than a month.

  • a16z released an outline for how regulators should handle crypto regulation.

  • MoneyGram, a cross-border payments company, announced partnerships with USDC and Stellar.

  • A bug was found in Rocket Pool, an ETH 2.0 staking platform, that could have affected millions of dollars in ETH staked across multiple protocols.


What Do You Meme?


What’s Poppin’?

Alright, Bitcoin is poppin’. Yesterday, the coin crossed the threshold of $55,000, increasing roughly 9% between Tuesday and Wednesday afternoon. At the time of writing, 6:14 PM ET, Bitcoin’s market cap was sitting above $1 trillion — a number not seen since May 10th.

It appears that rumors swirling around the approval of a bitcoin futures ETF could be pushing the BTC price up. SEC Chair Gary Gensler is most likely the source of such talk, twice sayingthat he would “look forward to staff’s review of such filings.” Eric Balchunas, the senior ETF analyst at Bloomberg, estimates a 75% chance that a BTC futures ETF is approved in October.

  

Backing up Balchunas’s bold prediction, CoinDesk reports that BTC-based futures contracts on the Chicago Mercantile Exchange are trading at a 12.8% premium to the spot price — marking the largest premium since mid-April. CoinDesk points out that many analysts consider CME sentiment to be swayed by institutions, who prefer to trade assets through regulated exchanges.

Mike Bucella, a general partner at Block Tower, believes the premium suggests that institutions could be “front-running” the news of a futures-based BTC ETF being approved.

  

In addition to speculation surrounding the approval of a bitcoin ETF, Bitcoin’s price also got a bump from a billion-dollar spot purchase yesterday, as noted by Ki Young Ju, the CEO of CryptoQuant. Based on Ju’s reading of the data, it appears that a whale purchased $1.6 billion of spot bitcoin in just under five minutes.

To round out a bullish day for Bitcoin, the CEO of the $27 billion family office of billionaire George Soros confirmed that the fund invests in Bitcoin. The CEO, Dawn Fitzpatrick, told Bloomberg, “From our perspective again, we own some coins, not a lot, and the coins themselves are less interesting than the use cases of DeFi and things like that.”

Fitzpatrick went on to add that cryptocurrencies have made it mainstream. “I’m not sure bitcoin is only viewed as an inflation hedge. Here I think it’s crossed the chasm to mainstream. Cryptocurrencies now have a market cap of over $2 trillion. There’s 200 million users around the world, so I think this has gone mainstream,” Fitzpatrick added.


Recommended Reads

  1. Pantera Capital dropped its October investor letter:

  1. Arcane Research on the state of the Lightning Network (Twitter thread + report):

  1. Puru Goyal, a chemical engineer, on Bitcoin’s energy usage:


On The Pod…

How does the SEC determine if a token is a security? Why is DeFi particularly hard to regulate? What will regulators do about stablecoins? On Unchained, Greg Xethalis, chief compliance officer at Multicoin Capital, and Collins Belton, founding partner at Brookwood P.C., dive into crypto regulation, discussing securities laws, DeFi regulation, and why the US should be promoting stablecoins rather than trying to shut them down. Highlights:

  • why the SEC and CFTC have not announced bigger crypto enforcement news at the end of their fiscal years

  • why the SEC is going after DINO (decentralized in name only) companies

  • what the Howey and Reves tests are and how the SEC uses them to determine whether an asset is a security or not

  • why Collins and Greg think the SEC has recently begun been applying Reves more often

  • why they think centralized crypto lending products should not be considered securities under the Howey test

  • whether new legislation needs to be written for cryptocurrency-based products

  • what makes Collins think the SEC is being “disingenuous” regarding the SEC registration process for crypto companies, like Coinbase

  • how regulators will end up handling DeFi and why both Greg and Collins are long-term optimistic

  • how the US government has a “great history” of respecting privacy and encryption

  • why regulatory pressure is likely to build up around centralized crypto exchanges and what we can learn from the EtherDelta case

  • why Collins thinks most cryptocurrency companies should be regulated

  • why the SEC is the best motivator for forcing protocols to fully decentralize

  • how smart contracts could theoretically be used to standardize SEC Commissioner Hester Peirce’s Safe Harbor proposal

  • how blockchain data makes cryptocurrency companies more transparent and easier to regulate than centralized entities

  • what Collins and Greg think will happen with stablecoin regulation going forward

  • why the US should be pushing to make dollar-pegged stablecoins more prominent


Book Update

My book, The Cryptopians: Idealism, Greed, Lies, and the Making of the First Big Cryptocurrency Craze, is now available for pre-order now.

The book, which is all about Ethereum and the 2017 ICO mania, comes out Jan. 18. Pre-order it today!

You can purchase it here: http://bit.ly/cryptopians

Why It Doesn’t Make Sense to Compare Lightning to DeFi

Ryan Gentry, business development lead at Lightning Labs, discusses the latest updates on the Lightning Network, the layer 2 solution for Bitcoin. Highlights:

  • how Lightning Network is bringing Bitcoin to the masses through partnerships with Twitter, Substack, and Paxful
  • what the significance of El Salvador adopting Bitcoin means for the Lightning Network
  • how many nodes are running Lightning Network nodes
  • why the capacity on the Lightning Network has grown rapidly
  • how Ryan has seen interest in Lightning has changed since the El Salvador announcement earlier this year
  • what stage of adoption Ryan thinks the Lightning Network is
  • why Lightning Network total-value-locked should not be compared to Ethereum L2s or other DeFi protocols 
  • how Lightning Network differs from DeFi
  • what metric Ryan believes is the best way to measure adoption on Lightning Network
  • how El Salvador has changed the types of transactions being made on Lightning Network
  • what’s next for Lightning Network and how Lightning micropayments could affect how podcasts (like Unchained!) are distributed

 

Thank you to our sponsors!

Crypto.com: https://crypto.onelink.me/J9Lg/unconfirmedcardearnfeb2021        

Nodle: https://bit.ly/3AXGydJ  

Sorare: https://sorare.com         

Episode Links

Ryan Gentry

The Summer of Lightning: Reaching the Tipping Point

Lightning Labs

Lightning Enabled Tips

Paxful Integration

Arcane Research Paper

Lightning Network stats

Lightning Network Resources

Preston Pysh episode with BTC Sessions

 

Should VCs Be Airdrop Farming?
October 11, 2021       /       Unchained Daily       /       Laura Shin

Daily Bits ✍️✍️✍️

  • Polygon increased its minimum gas price by a factor of 30.

  • Binance.US promoted Brian Shroder to CEO.

  • Bitmain confirmed it’s halting shipments of mining equipment to China.

  • Bloomberg reports the White House is considering an executive order that would require federal agencies to study and recommend actions based on their oversight.

  • Referring to El Salvador’s adoption of Bitcoin as legal tender, Vitalik Buterin says he believes “making it mandatory for businesses to accept a specific cryptocurrency is contrary to the ideals of freedom that are supposed to be so important to the crypto space.”

  • Bored Ape Yacht Club is currently looking at Q1 2022 to launch an ERC 20 token.

  • An SEC filing shows that Senator Cynthia Lummis purchased $100,000 worth of BTC in August.

  • Binance closed its crypto trading offering in South Africa.

  • Public US mining firms hold over $1 billion in BTC.

  • Crypto companies raised $6.5 billion in Q3 2021.


What Do You Meme?

 

 

 

 


What’s Poppin’?

On Friday, a pseudonymous researcher going by the name Gabagool.eth flagged a batch of transactions spouting from the .eth address of an analyst at Divergence Ventures, a crypto VC firm

 

 

Essentially, this researcher, at the behest of the company, was airdrop farming Ribbon Finance. Airdrops occur when DeFi protocols retroactively allocate tokens to early users of the project based on prior actions. Oftentimes, these airdrops come with requirements, such as that users had to have, for instance, purchased $100 worth of tokens or traded $1,000 worth of NFTs. 

In this particular case, Divergence was able to farm roughly $2 million worth of tokens by depositing a small amount of funds (.1 ETH) into Ribbon’s vaults across a number of wallets — leaving multiple wallets eligible for the airdrop. 

Here comes the thorny part: Divergence was an initial investor in Ribbon, which caused a great deal of speculation regarding trading on insider information. 

However, Julian Koh, a community manager at Ribbon, denies that any foul play occurred. In a tweet, he claimed that Divergence only knew that Ribbon would launch a token and that an airdrop would occur. Julian says that Ribbon did not offer any information about participation criteria, cutoff dates, or amounts needed to be eligible for the drop. 

Divergence released a statement stating that the company “simply guessed there would be an airdrop.” (Note: There’s a discrepancy, since Koh said they had been informed there would be.)

 

 

 

 

 

The company went on to apologize, saying they had “crossed a line.” After discussing with Ribbon’s team, Divergence actually sent the ~700 ETH ($2.5M) it had made from the airdrop farming back to the Ribbon DAO, where governance token holders can now decide what to do with them next. 

While this story ended with Ribbon tokens going back to the DAO, it does raise quite a few questions. Would Divergence have sent the tokens back to the protocol if Gabagool had not come across the transactions by chance? Are airdrops fair if whales can farm protocols without a token (while smaller crypto holders can’t due to gas fee limitations)? Have VCs been able to farm other airdrops? 

For now, those questions remain unanswered. But if DeFi is to reach its potential as a decentralized, permissionless financial ecosystem, then such fragile governance and distribution methods most likely need to be fixed. 


Recommended Reads

  • Senator Ted Cruz on BTC and energy:

 

 

 

 

 

 

  • Glassnode on long-term HODLers:

  • DappRadar on October’s play-to-earn games to watch:


On The Pod…

How does the SEC determine if a token is a security? Why is DeFi particularly hard to regulate? What will regulators do about stablecoins? On Unchained, Greg Xethalis, chief compliance officer at Multicoin Capital, and Collins Belton, founding partner at Brookwood P.C., dive into crypto regulation, discussing securities laws, DeFi regulation, and why the US should be promoting stablecoins rather than trying to shut them down. Highlights:

  • why the SEC and CFTC have not announced bigger crypto enforcement news at the end of their fiscal years

  • why the SEC is going after DINO (decentralized in name only) companies

  • what the Howey and Reves tests are and how the SEC uses them to determine whether an asset is a security or not

  • why Collins and Greg think the SEC has recently begun been applying Reves more often

  • why they think centralized crypto lending products should not be considered securities under the Howey test

  • whether new legislation needs to be written for cryptocurrency-based products

  • what makes Collins think the SEC is being “disingenuous” regarding the SEC registration process for crypto companies, like Coinbase

  • how regulators will end up handling DeFi and why both Greg and Collins are long-term optimistic

  • how the US government has a “great history” of respecting privacy and encryption

  • why regulatory pressure is likely to build up around centralized crypto exchanges and what we can learn from the EtherDelta case

  • why Collins thinks most cryptocurrency companies should be regulated

  • why the SEC is the best motivator for forcing protocols to fully decentralize

  • how smart contracts could theoretically be used to standardize SEC Commissioner Hester Peirce’s Safe Harbor proposal

  • how blockchain data makes cryptocurrency companies more transparent and easier to regulate than centralized entities

  • what Collins and Greg think will happen with stablecoin regulation going forward

  • why the US should be pushing to make dollar-pegged stablecoins more prominent


Book Update

My book, The Cryptopians: Idealism, Greed, Lies, and the Making of the First Big Cryptocurrency Craze, is now available for pre-order now.

The book, which is all about Ethereum and the 2017 ICO mania, comes out Jan. 18. Pre-order it today!

You can purchase it here: http://bit.ly/cryptopians