On Wednesday, the Federal Reserve took decisive action against United Texas Bank in Dallas, issuing a cease-and-desist order due to “significant deficiencies” in the bank’s compliance with anti-money laundering (AML) regulations concerning its cryptocurrency clients. This order highlights critical issues in the bank’s governance, customer due diligence, and monitoring of suspicious activities, particularly within its crypto transactions.

@FederalReserve Enforcement Action: A Cease and Desist Order for United Texas Bank in Dallas as Operation #Chokepoint 2.0 Continues

https://t.co/ZeNCsiyevn

— Dan Spuller (@DanSpuller) September 4, 2024

To address these deficiencies and avoid formal proceedings, the bank’s management has agreed to the order and is now required to submit a comprehensive five-part action plan within 90 days. This plan must include measures to ensure adequate staffing and regular reviews of staffing needs to improve AML compliance.

Customers Bank Faces Similar Compliance Challenges

In a related development, Customers Bank, another institution with a crypto-friendly approach, recently faced a similar situation. The Federal Reserve mandated that Customers Bank enhance its AML compliance and meet Bank Secrecy Act standards. The bank was also required to bolster its risk management strategies for digital assets. Following the identification of significant shortcomings, the Fed enforced an action plan demanding detailed improvements.

Increased Scrutiny Drives Banks to Reevaluate Crypto Relationships

The heightened regulatory scrutiny is prompting banks to reassess their relationships with cryptocurrency businesses. The recent closures of crypto-friendly banks such as Signature and Silvergate underscore the risks associated with the crypto sector.

Regulatory bodies like the Federal Reserve and the FDIC are tightening compliance requirements, especially concerning AML and Bank Secrecy Act regulations. This intensified focus is driven by concerns over money laundering, fraud, and the inherent volatility of cryptocurrencies, which present substantial financial and legal risks for banks.

As domestic banking options for crypto companies become increasingly limited, many are turning to international banks or developing their own financial systems. This shift not only presents challenges but also creates new opportunities, potentially accelerating the move toward decentralized financial systems outside traditional banking frameworks.

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On Tuesday, cybercriminals took control of the X accounts belonging to Lara Trump, co-chair of the Republican National Committee, and Tiffany Trump, the former president’s younger daughter. The hackers used these compromised accounts to push a cryptocurrency token linked to World Liberty Financial, a project recently endorsed by the Trump family.

Eric Trump, the former president’s son, swiftly denounced the fraudulent activity. “This is a scam!!!” he declared on X. “@LaraLeaTrump and @TiffanyATrump’s Twitter profiles have been compromised!!” He praised Twitter for its quick response in securing the accounts and removing the deceptive posts.

World Liberty Financial Addresses the Security Breach

World Liberty Financial has also acknowledged the breach. The fake posts were promoting their token, although the project is still in its pre-launch phase and has not yet gone live.

ALERT: Lara’s and Tiffany Trump's X accounts have been hacked. Do NOT click on any links or purchase any tokens shared from their profiles. We're actively working to fix this, but please stay vigilant and avoid scams!

— WLFI (@worldlibertyfi) September 4, 2024

Donald Trump and his sons have been teasing the launch of their DeFi project, which is set to operate on the Ethereum blockchain. The new venture is expected to draw inspiration from Aave and have a design similar to Dough Finance.

Concerns Over Security Risks for New Trump Crypto Project

The upcoming Trump-backed project is facing scrutiny over potential security risks. Dough Finance, known for its borrowing and lending features, experienced a significant security breach in July, resulting in a $2.1 million loss due to flash loans.

It remains uncertain whether World Liberty Financial will encounter similar vulnerabilities. Notably, the whitepaper for the project reveals that Chase Herro, a crypto influencer and former affiliate of Dough Finance, serves as the data and strategies lead for World Liberty Financial. This connection raises further questions about the project’s security and potential risks.

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The U.S. Securities and Exchange Commission (SEC) has issued a warning that it may contest FTX’s proposed repayment plan if it involves compensating creditors with stablecoins. This caution was detailed in a court filing submitted on August 30 to the U.S. Bankruptcy Court in Delaware.

While the SEC has not declared stablecoin repayments illegal, it reserves the right to challenge such plans if they involve US-dollar-pegged crypto assets. This development comes as FTX seeks ways to address its obligations to creditors following its collapse in November 2022.

FTX’s Repayment Strategies

FTX is considering multiple approaches to settle its debts, including the possibility of reviving the exchange, which has since been put on hold. The latest proposal involves liquidating FTX’s assets and using their U.S. dollar value at the time of bankruptcy to settle claims. Creditors would receive repayment in either cash or stablecoins under this plan.

The SEC has highlighted that the current repayment proposal does not yet include a “distribution agent” to manage the dispersal of funds, whether in cash or stablecoins. The agency’s filing indicates it is reserving its right to challenge transactions involving crypto assets, although it has not made any definitive statements on the legality of such transactions under federal securities laws.

Reactions and Criticisms

The SEC’s position has drawn criticism from notable figures in the cryptocurrency industry. Alex Thorn, head of research at Galaxy Digital, accused the SEC of “jurisdictional overreach,” especially given the regulator’s recent decision to drop its case against Binance USD (BUSD) issuer Paxos in July. Coinbase’s Chief Legal Officer, Paul Grewal, also criticized the SEC’s stance, arguing that it undermines market clarity and stability.

Broader SEC Scrutiny

The SEC faces mounting criticism for its “regulation-by-enforcement” approach to the crypto industry. Critics argue that the agency has not provided a clear regulatory framework for cryptocurrencies and instead relies on legal actions against major industry players.

A coalition of seven U.S. states, led by Iowa Attorney General Brenna Bird, has challenged the SEC’s approach. These states, including Arkansas, Indiana, Kansas, Montana, Nebraska, and recently Oklahoma, have filed an amicus brief asserting that the SEC’s regulatory actions represent an overreach that could stifle innovation and exceed its authority.

Earlier this year, SEC Commissioner Hester Peirce criticized the agency’s current stance, describing it as operating in an “enforcement-only mode” regarding cryptocurrency regulation.

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On Thursday, U.S. spot Bitcoin exchange-traded funds (ETFs) saw $71.73 million in net outflows, marking the third consecutive day of declines.

Among the affected funds, BlackRock’s IBIT, the largest spot Bitcoin ETF by net assets, recorded its first net outflows since May 1, with $13.51 million exiting the fund, according to SosoValue data.

Other major Bitcoin ETFs also faced withdrawals. Grayscale’s GBTC saw $22.68 million in outflows, while Fidelity’s FBTC experienced $31.11 million in net exits. Additionally, Bitwise’s BITB and Valkyrie’s BRRR reported outflows of $8.09 million and $1.68 million, respectively.

In contrast, Ark and 21Shares’ ARKB managed to defy the trend, reporting net inflows of $5.34 million.

Trading volumes for the 12 spot Bitcoin ETFs dropped to $1.64 billion on Thursday, a decrease from $2.18 billion the previous day.

Spot Ethereum ETFs Follow Negative Trend

Spot Ethereum ETFs mirrored the downturn in the market, with $1.77 million in net outflows on Thursday after a brief period of inflows. The Grayscale Ethereum Trust (ETHE) led the outflows with $5.35 million, although this was partially offset by $3.57 million in inflows into the Grayscale Ethereum Mini Trust (ETH). The remaining seven Ethereum funds saw no notable movement.

The total trading volume for the nine spot Ethereum ETFs fell to $95.91 million on Thursday, down from $151.57 million on Wednesday. The net outflows in Ethereum ETFs followed a net inflow of $5.8 million the previous day, marking the first positive movement after nine consecutive days of outflows.

Both Bitcoin and Ethereum prices experienced minor declines, with Bitcoin slipping 0.3% to around $58,984 and Ethereum dropping 0.29% to approximately $2,516.

Ether ETFs Struggle Post-Launch

Since their U.S. launch last month, spot Ether ETFs have struggled compared to their Bitcoin counterparts, according to a JPMorgan research report released on Wednesday. Ether ETFs began trading on July 23, approximately six months after the launch of Bitcoin funds.

In the first five weeks post-launch, Ether ETFs faced about $500 million in net outflows, while Bitcoin ETFs saw inflows exceeding $5 billion. JPMorgan analysts attribute the weaker performance of Ether ETFs to Bitcoin’s “first mover advantage,” a lack of staking options, and lower liquidity, which made Ether ETFs less appealing to institutional investors.

Notably, Grayscale’s Ethereum Trust (ETHE) experienced $2.5 billion in outflows, significantly higher than JPMorgan’s anticipated $1 billion. In response, Grayscale launched a mini Ether ETF, which attracted only $200 million in inflows.

JPMorgan’s team, led by Nikolaos Panigirtzoglou, suggested that the weaker demand for Ether ETFs compared to Bitcoin could be driving interest in a combined ETF offering exposure to both assets. The report also noted that institutional and retail ownership of spot Bitcoin ETFs remained largely stable from the first quarter, with retail investors holding approximately 80% of the funds.

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Pantera Capital, one of the leading venture capital firms in the cryptocurrency space, has made its largest investment to date by pouring over $100 million into Toncoin, the cryptocurrency linked with Telegram. This move comes as part of Pantera’s strategy to capitalize on the growing integration of blockchain technology within popular platforms.

A Strategic Investment at a Discount

Earlier this year, Pantera acquired Toncoin at a notable 40% discount from the market price. With the average price of Toncoin pegged at $6.32 in May, when the deal was publicly announced, the investment has proven to be lucrative. However, Pantera is bound by a one-year lockup period, during which it cannot sell any of its Toncoin holdings.

Toncoin is closely tied to Telegram through its integration with the TON blockchain. This integration allows Telegram users to buy, sell, and trade Toncoin directly within the app, thanks to the wallet integration that supports various blockchain activities such as transactions and tipping. This seamless incorporation aims to enhance user engagement and drive blockchain adoption.

Ryan Barney, a partner at Pantera Capital, highlighted the firm’s belief in Toncoin’s potential to reach a broader audience. “TON has the capacity to introduce crypto to the masses due to its extensive use within the Telegram network,” Barney stated in May. He also pointed out that Telegram’s commitment to privacy and its extensive user base could position TON as a major player in the crypto space.

Legal Troubles for Telegram’s CEO

The optimism surrounding Toncoin faces a setback due to recent legal issues involving Telegram’s CEO, Pavel Durov. On August 24, Durov was arrested by French authorities on multiple charges, including complicity in child pornography, trafficking, money laundering, and organized crime. He also faces accusations of failing to respond to legal requests and not registering cryptographic services. Durov has since been released on a €5 million bail but remains prohibited from leaving France.

The arrest led to a significant dip in Toncoin’s value, which fell by approximately 20%. While some of these losses have been recovered, the total value locked in TON has dropped to $33.2 million from $714 million in July, according to DefiLlama.

Investor Concerns Amid Legal Challenges

Investors, including Pantera, are now closely monitoring the impact of Durov’s legal troubles on Telegram and its integration of Toncoin. With a commitment to holding their shares for at least one year, they are evaluating how these legal issues might affect Telegram’s operations and Toncoin’s adoption.

Despite the concerns, some believe that the decentralized nature of blockchain projects like Toncoin may offer resilience against such challenges. If the TON community and its supporters remain active and engaged, the project could potentially navigate these turbulent times. Nevertheless, the risk of regulatory actions and shifts in Telegram’s strategy continues to loom over Toncoin’s future.

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Bitwise Asset Management has announced its acquisition of the Osprey Bitcoin Trust (OBTC), integrating Osprey’s $120 million in assets into its Bitwise Bitcoin ETF (BITB). The deal, revealed in a Tuesday press release, signifies a notable consolidation within the Bitcoin exchange-traded fund (ETF) sector.

Under the terms of the transaction, OBTC unitholders will receive shares of BITB as part of a liquidating distribution. Existing holders of BITB will not see any changes to their shares or the ETF’s operations.

Osprey, which launched its Bitcoin Trust in February 2021, has operated with a structure similar to the Grayscale Bitcoin Trust before it became an ETF. Unlike direct Bitcoin investments, OBTC shares have traded at varying premiums or discounts relative to the underlying Bitcoin, leading to price discrepancies.

#Bitwise #Bitcoin #ETF (#BITB) is set to acquire $120 million in Bitcoin from the #Osprey Bitcoin #Trust (#OBTC) as part of an Asset Purchase Agreement.

OBTC unitholders will receive BITB shares in exchange, with the transaction expected to close later this year.

This move… pic.twitter.com/zqI03AMrAx

— TOBTC (@_TOBTC) August 28, 2024

Recent performance data indicates that OBTC shares have fallen by 4.27% over the past month, while Bitcoin’s price has dropped by 9.34%. In contrast, BITB has seen a smaller decrease of 8.56%, showing closer alignment with Bitcoin’s price movements. The transition to BITB will offer OBTC unitholders tighter tracking of Bitcoin’s price and a lower management fee of 0.2%, compared to OBTC’s 0.49%.

Osprey has recognized the acquisition as a significant move in its exploration of a potential sale or merger of the Trust. “This announcement follows Osprey’s prior communication regarding the consideration of a potential sale or merger,” the company stated. “The acquisition by Bitwise represents a significant step in that process, providing OBTC unitholders the chance to benefit from Bitwise’s scale and expertise.”

BITB, which launched in January, is competing in a market with major players like BlackRock and Fidelity. Despite the competitive landscape, BITB has attracted significant inflows, managing $2.4 billion in assets and becoming the fifth-largest Bitcoin spot ETF in the U.S. The acquisition follows Bitwise’s recent purchase of ETC Group, boosting its total assets under management to $4.5 billion.

On the same day, U.S. spot Bitcoin ETFs experienced net outflows, ending an eight-day streak of positive inflows, according to SoSoValue. These funds had previously accumulated $756 million in inflows. On Tuesday, the U.S. spot Bitcoin ETFs reported $127 million in net outflows.

The Valkyrie BRRR fund’s data was not updated, but Ark & 21Shares’ ARKB led with $101.97 million in outflows, while Grayscale’s GBTC saw $18.32 million in outflows. Bitwise’s BITB recorded $6.76 million in outflows. Eight funds, including BlackRock’s IBIT, reported no activity. Excluding BRRR, total trade volume for U.S. spot Bitcoin funds was $1.2 billion. Since January, these funds have accumulated $17.95 billion in net inflows.

On August 27, the total net outflow of Ethereum spot ETF was $3.4452 million, and it has been outflowing for nine consecutive days. Grayscale ETF ETHE had a net outflow of $9.1798 million in a single day, Fidelity ETF FETH had an inflow of $3.8792 million, and Bitwise ETF ETHW…

— Wu Blockchain (@WuBlockchain) August 28, 2024

In contrast, spot ether ETFs continued to experience outflows for the ninth consecutive day, with a reported $3.45 million in negative flows. Grayscale’s ether fund posted a daily net outflow of $9.18 million, partially offset by $3.88 million in inflows into Fidelity’s FETH and $1.86 million into Bitwise’s ETHW.

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Donald Trump’s pro-crypto campaign promises may be difficult, if not impossible, to keep if he wins the November election, warns Professor Tonya Evans, a digital assets specialist. In an interview with Cryptonews, Evans highlighted that some of Trump’s pledges, such as his vow to immediately dismiss SEC Chair Gary Gensler, face significant legal and procedural hurdles.

Trump’s proposal to remove Gensler on his first day in office conflicts with the reality that such a move would require a lengthy and complex process, spanning months or even years, to finalize.

Evans, who recently chaired a panel at the Crypto4Harris virtual town hall, where industry leaders supported the Democrats, observed that Senate Majority Leader Chuck Schumer has suggested the possibility of crypto legislation being passed by Congress by the end of the year. However, the Democratic National Convention’s 92-page agenda did not address crypto policies, leading to questions about Vice President Kamala Harris’s stance on digital assets.

“I wasn’t surprised that the Democratic Platform didn’t include specific crypto policy positions at this early stage,” Evans commented. “We should be patient as Harris adjusts to her new role as the Democratic nominee. Political shifts on complex issues like cryptocurrency take time and deliberation.”

Evans contrasted this with Trump’s pro-crypto stance, which evolved over more than three years of criticism and harsh taxation. She cautioned that it’s unrealistic to expect an immediate shift from Harris on crypto policy and urged crypto enthusiasts to consider the long-term health of the digital asset ecosystem over short-term political promises. “The promise to fire Gary Gensler on day one is particularly unfeasible given administrative procedures,” she noted.

Evans advised voters to support leaders who understand the complexities of digital assets and are committed to fostering innovation alongside appropriate regulation.

Will Harris Diverge from Biden’s Crypto Approach?

The Biden administration has faced criticism for its stringent approach to crypto regulation, leading to concerns that Harris might continue the same policies if elected. However, Evans believes Harris has an opportunity to differentiate herself by pushing for clearer and more inclusive crypto regulations.

“Harris could set herself apart by focusing on innovation, financial inclusion, and a balanced regulatory framework,” Evans said. “Her ability to engage with the crypto community and address its concerns will be crucial in determining her leadership in crypto matters.”

Evans highlighted Harris’s background in tech policy and her connections to Silicon Valley from her time as a California senator. Her previous work as California’s Attorney General, addressing cybercrime and privacy issues, and her advocacy for digital inclusion suggest a strong grasp of technology and governance.

“VP Harris’s experience and recent appointments, like Gene Sperling and David Plouffe, position her well to tackle future challenges in technology and public policy,” Evans added. “I’m optimistic that she can foster a supportive environment for digital assets.”

With Trump gaining support from the crypto community and making notable appearances, including at Bitcoin 2024 in Nashville, the crypto landscape is actively engaging with both major parties. As discussions continue and pro-crypto groups rally behind Harris, it remains to be seen how her policies will evolve and whether she can address the industry’s needs effectively.

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Recently, former President Donald Trump has positioned himself as a champion of Bitcoin, attracting millions of dollars in donations from prominent figures in the cryptocurrency industry. He’s proposed that the U.S. should emulate El Salvador by creating a strategic Bitcoin reserve, suggesting that the government should retain seized crypto assets rather than liquidating them. Additionally, he’s floated a rather impractical policy idea: that all remaining Bitcoin should be mined exclusively in America.

Given these bold statements, one might assume that Trump is a fervent Bitcoin enthusiast, deeply invested in the cryptocurrency as a financial future. However, the reality is quite different. Despite his public support for Bitcoin, official records reveal that Trump does not own any Bitcoin. This contradiction should raise significant concerns for Bitcoin advocates.

Source: Arkham Intelligence

According to Federal Election Commission filings, Trump does hold some cryptocurrency investments—specifically, between $1 million and $5 million in Ether. Moreover, he has made over $7 million from licensing deals, where he appeared as a cowboy and a superhero in various NFTs. Arkham Intelligence, which tracks his cryptocurrency holdings, estimates their total value at approximately $3.4 million, including a notable portion in obscure altcoins like TROG (featuring a frog in a MAGA hat).

For many Bitcoin purists, any cryptocurrency that isn’t Bitcoin is seen as a speculative trap, driven by greed. While some American Bitcoin investors might support Trump in the upcoming election, it’s crucial to reflect on what his crypto portfolio really signifies.

A Shift in Stance

Just three years ago, Trump dismissed Bitcoin as a “scam,” criticizing it for competing with the U.S. dollar. In 2019, he stated:

“I am not a fan of Bitcoin and other Cryptocurrencies, which are not money, and whose value is highly volatile and based on thin air. Unregulated Crypto Assets can facilitate unlawful behavior, including drug trade and other illegal activity.”

Trump’s recent embrace of crypto, therefore, seems perplexing. There are several theories as to why his position has changed.

1. Financial Incentives

One plausible explanation is financial gain. Trump’s re-election campaign has reportedly received around $4 million in Bitcoin donations since he began endorsing crypto. With ongoing legal battles and significant attorney fees, this influx of funds is undoubtedly beneficial for his campaign.

2. Political Strategy

Another reason could be to differentiate himself from the Democrats. The Biden administration has faced criticism for its stringent approach to cryptocurrency regulation. By positioning himself as a pro-crypto candidate, Trump might be seeking to capitalize on this dissatisfaction and attract voters who are disillusioned with the current administration’s policies.

3. Ego and Image

Trump’s ego could also be a driving factor. Reports suggest that Trump became more interested in crypto after engaging with NFTs featuring his image, spending considerable time approving the designs. This obsession with personal branding aligns with his broader pattern of self-centered decision-making.

Reading Between the Lines

If asked basic questions about Bitcoin, Trump would likely struggle to provide accurate answers. His superficial grasp of the technology and policies he advocates reflects a broader tendency to prioritize style over substance. The fact that Trump owns no Bitcoin further suggests a lack of genuine belief in its potential.

Voters should be cautious about supporting Trump solely based on his cryptocurrency rhetoric. His history of policy reversals—on topics ranging from immigration to TikTok—indicates that his stance on Bitcoin could easily shift again. The allure of his crypto promises should be scrutinized carefully, with attention to whether they are feasible and sincerely intended.

In summary, Trump’s current crypto stance appears more about garnering campaign funds and political advantage than a true commitment to Bitcoin. For those considering his policies, it’s essential to look beyond the headlines and assess the substance and motivations behind his cryptocurrency positions.

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The International Monetary Fund (IMF) has reported that crypto mining and data centers together account for 2% of global electricity consumption, a figure expected to rise to 3.5% within the next three years. This significant energy demand has raised concerns about the environmental impact of these energy-intensive industries.

In response, the IMF suggests that increasing the electricity tax by 85% could compel the industry to adopt more environmentally responsible practices. By implementing a targeted tax, policymakers hope to encourage the crypto industry to reduce its carbon footprint and adopt cleaner energy sources.

Cryptocurrency mining is particularly energy-intensive, with a single Bitcoin transaction consuming as much electricity as the average person in countries like Ghana or Pakistan uses over three years. This substantial energy use has pressured governments and organizations to find solutions to mitigate the industry’s environmental impact, especially given the link between global energy consumption and rising greenhouse gas emissions.

The IMF has proposed a direct tax of $0.047 per kilowatt-hour as a potential strategy to incentivize miners to lower their electricity consumption or shift to more sustainable energy sources. This tax could help the crypto industry align with global emission reduction goals while generating an estimated $5.2 billion in annual revenue for governments.

If the tax were to also account for the adverse health effects of air pollution, the rate would need to be increased to $0.089 per kilowatt-hour. This would represent an 85% rise in the average electricity price faced by crypto miners, potentially raising their operating costs significantly.

The IMF estimates that such a levy could reduce global emissions by 100 million tons annually, a reduction comparable to Belgium’s current yearly emissions. The proposed taxation strategy aims to address the environmental challenges posed by the crypto industry while simultaneously providing a new revenue stream for governments.

As the global push for climate action grows, the impact of crypto mining on energy consumption and emissions is becoming a critical issue for policymakers.

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Coinbase recently teased the upcoming launch of “cbBTC,” a new wrapped staked Bitcoin token intended to compete with Wrapped Bitcoin (WBTC). The announcement was made in a tweet early Wednesday and was further elaborated by blockchain journalist Colin Wu, who noted that Coinbase aims to build a robust Bitcoin economic system on its Base network.

cbBTC.

— Coinbase (@coinbase) August 13, 2024

This move comes amid growing community concerns about Wrapped Bitcoin (WBTC) due to recent involvement from Justin Sun, founder of Tron. Sun has faced scrutiny over his role in WBTC’s custody operations, leading to debates and a transition plan announced by BitGo for WBTC’s multi-institutional custody. Additionally, MakerDAO’s risk management unit BA Labs has suggested offboarding WBTC, and Aave’s risk division, Chaos Labs, is evaluating its treatment of WBTC.

Coinbase released a tweet about "cbBTC" and said that it will be launched soon and will build a huge Bitcoin economic system on the Base network. WBTC has caused community concerns due to the involvement of Justin Sun recently. cbBTC is suspected to be a competitor of WBTC.…

— Wu Blockchain (@WuBlockchain) August 14, 2024

In response to Coinbase’s cbBTC announcement, Jesse Pollak, head of Coinbase’s Base network, expressed enthusiasm for Bitcoin, stating, “We’re going to build a massive Bitcoin economy on Base.

to say it out loud: I love bitcoin, am so grateful for it's role kickstarting crypto, and we're going to build a massive bitcoin economy on @base.

— Jesse Pollak (jesse.xyz) (@jessepollak) August 14, 2024

Speculators believe that cbBTC might be Coinbase’s own version of wrapped Bitcoin, potentially launched on the Base Layer-2 chain. One commentator suggested that cbBTC could provide more collateral options for DeFi on Ethereum (ETH).

Previously, Coinbase introduced Wrapped Staked ETH (cbETH), which allows staked Ethereum to be traded or used flexibly, without wrapping fees. The cbBTC could offer similar benefits, including lower minting and redemption fees, and could potentially increase the usage of wrapped Bitcoin.

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Uniswap Labs Hits $50 Million in Cumulative Front-End Fees

Uniswap Labs, the organization behind the Uniswap decentralized exchange (DEX) protocol, has surpassed $50 million in cumulative front-end fees. This achievement comes from a 0.15% fee implemented on user transactions through the Uniswap web interface and wallet app since October. In April, the company increased this fee to 0.25%, further boosting revenue.

Surge in Front-End Revenue

Since the beginning of the year, Uniswap’s front-end fees have skyrocketed from $3.7 million to over $50.6 million, reflecting a more than thirteenfold increase. Uniswap remains a dominant force in the DEX market, maintaining its position as the largest platform by trading volume. In July, Uniswap alone facilitated $54 billion out of a total $154 billion in swap volume across all DEXs, capturing nearly one-third of the market.

The cumulative frontend fees of #Uniswap Labs, the development company behind the Uniswap protocol, have exceeded $50 million.

In October 2023, the protocol began charging a 0.15% fee on user transactions made through its web interface and wallet app. These fees are solely for… pic.twitter.com/2UkiHoq59c

— Vincent.Crypto (@Vincent_Crypto_) August 13, 2024

Popularity and Alternatives

Despite the introduction of alternative options, users can bypass Uniswap’s fees by using DEX aggregators such as 1inch, Cowswap, and Paraswap. However, Uniswap’s front-end remains the most popular, accounting for 25.7% of DEX activity in July, compared to 19.8% for 1inch, the leading aggregator.

Uniswap Foundation’s Financial Snapshot

In related news, the Uniswap Foundation recently released its financial summary for Q2, highlighting substantial cash and stablecoin reserves. The foundation holds $36.81 million in cash and stablecoins, with an additional 680,000 UNI tokens. These funds are allocated for grant-making and operational purposes, with $26.12 million earmarked for grants and $10.69 million for operational costs.

During the second quarter, the foundation approved over $3.2 million in new grants and distributed nearly $2.5 million from previously committed grants. Operating expenses for the quarter totaled $1.6 million, with allocations of 8.2% for advertising and marketing, 47.9% for payroll, and 35.2% for professional fees. The foundation anticipates these reserves will support its activities through to the end of 2025.

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Santa Monica, California, is making strides in the world of cryptocurrency with the launch of a dedicated “Bitcoin Office.” This new initiative aims to educate residents and businesses on Bitcoin’s potential impact on the modern economy, and to foster broader adoption of digital currencies.

The Bitcoin Office will focus on forging partnerships within the cryptocurrency sector to support Santa Monica’s economic recovery. Its goals include creating job opportunities, developing strategic collaborations, and building a robust, future-oriented local economy.

Last night, I was honored to be part of a group of exceptional Bitcoiners, led by @workforcebtc and @Beiwatch1, advocating for the adoption of a #bitcoin Office in the City of Santa Monica (@santamonicacity)

The proposal was passed unanimously.

I hope this will inspire… pic.twitter.com/Uqidgdt4LY

— Matteo Pellegrini (@matteopelleg) July 10, 2024

The city’s vision is for Santa Monica to become a hub for Bitcoin innovation on the West Coast, unlocking new opportunities, attracting investment, and ensuring the community thrives in the digital era.

In addition to driving innovation, the office will explore job prospects in the Bitcoin industry for local residents and students. It will also investigate the use of the city’s surplus renewable energy to support environmentally friendly Bitcoin mining operations.

The establishment of the Bitcoin Office is the result of a partnership with the Proof of Workforce Foundation, a non-profit dedicated to promoting Bitcoin adoption among unions, organizations, and workers.

The initiative was spearheaded by Vice Mayor Lana Negrete, who drew inspiration from her visit to El Salvador last November. During her trip, Negrete studied the effects of Bitcoin as legal tender in El Salvador. The city of El Salvador has praised Santa Monica’s efforts to embrace Bitcoin.

Negrete hopes that this initiative will generate positive attention and attract more crypto-related conferences and businesses to Santa Monica. The upcoming Pacific Bitcoin Festival in October is expected to attract global attendees, with the goal of encouraging some to invest in the city’s burgeoning crypto landscape.

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The CBOE has withdrawn its initial application for Bitcoin ETF options but quickly resubmitted a revised and more detailed version. The new filing, which is 44 pages long compared to the original 15-page document, includes additional information on position limits and market manipulation concerns. This suggests the SEC might have given feedback, prompting the more thorough application.

Bitcoin ETF Options Could Be Approved by Q4

While it’s not confirmed whether the SEC is actively discussing the updated filing with the CBOE, Bloomberg ETF analyst James Seyffart hinted that the resubmission might be a tactic to extend the decision deadline, potentially pushing it to late April 2025. Despite this, analysts are hopeful that Bitcoin ETF options could be approved by the end of this year.

The SEC’s final decision is expected around September 21, but options trading will also need approval from the Office of the Comptroller of the Currency (OCC) and the Commodity Futures Trading Commission (CFTC) before it can begin.

In January, the NYSE American, CBOE, and Nasdaq all applied to offer options trading on spot Bitcoin ETFs. However, the SEC delayed its decision on the CBOE’s application in March and on the NYSE American’s application in April.

The recent CBOE resubmission suggests ongoing negotiations and adjustments as the industry waits for regulatory approval.

Options Trading Could Bring New Strategies

On August 9, Nate Geraci, president of ETF Store, pointed out that options are already available for some cryptocurrency derivatives ETPs, making a strong case for their introduction on spot ETFs. Options give traders the right, but not the obligation, to buy or sell a contract at a set price by a certain date.

If approved, options on spot Bitcoin ETFs could allow for new investment strategies, such as “covered call writing.” This involves selling a call option while holding the underlying asset through the spot ETF, allowing investors to earn regular income from the option premium while managing risks.

NYSE Seeks to List Ether ETF Options

In a related development, the NYSE American has proposed a rule change to list and trade options for three Ether ETFs managed by Grayscale and Bitwise. The proposed options include the Bitwise Ethereum ETF (ETHW), the Grayscale Ethereum Trust (ETHE), and the Grayscale Ethereum Mini (ETH). The NYSE American believes that adding options trading for these Ether ETFs would provide investors with a cost-effective way to gain more exposure to Ether.

The SEC will accept comments on this proposal for the next 21 days. If approved, this rule change would apply specifically to the Grayscale and Bitwise Ether ETFs, which are the only spot Ether funds listed on the NYSE American exchange.

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BitGo, a company that handles digital assets, has just received a Major Payment Institution (MPI) License from Singapore’s financial authority, the Monetary Authority of Singapore (MAS). This license allows BitGo to provide a range of services related to digital payment tokens (DPTs), such as securely storing and trading cryptocurrencies in Singapore.

BitGo is pleased to announce that we have obtained the Major Payment Institution Licence from the Monetary Authority of Singapore.

We are committed to meeting the rising demands of client needs in Asia through regulated digital payment token services. This includes our… pic.twitter.com/4DAgKvLVVD

— BitGo (@BitGo) August 8, 2024

This approval, announced on Thursday, means that BitGo can now offer unlimited payment services for digital currencies. BitGo’s Singaporean customers will be able to buy and sell crypto assets through the company’s secure, insured storage solution.

The MPI license is a big deal because it shows that Singapore is serious about having a clear and strong set of rules for digital asset services. BitGo sees this as a major step forward in expanding their international operations.

Just last week, another crypto company, HashKey Group, also received MPI approval from Singapore. So far, 27 companies have been given this license, including well-known names like Coinbase and Upbit.

Earlier this year, BitGo also received approval from Germany and New York for its operations, adding to its growing list of regulatory endorsements.

Source: Triple-A

Singapore is becoming a major hub for cryptocurrency, with one of the highest rates of crypto ownership in the world. The country’s strong regulatory framework supports its position as a global financial center. Recently, MAS has been tightening regulations around cryptocurrencies to prevent money laundering and ensure that blockchain technology is used productively.

Overall, this move reflects Singapore’s commitment to maintaining a safe and regulated environment for digital assets.

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Mox Bank, a virtual bank in Hong Kong, has started offering trading in cryptocurrency exchange-traded funds (ETFs), making it the first bank to do so. Mox Bank is a subsidiary of Standard Chartered and has become the first to let customers trade spot Bitcoin and Ether ETFs directly on its platform.

The bank is also looking to expand its crypto services, including allowing customers to buy and trade cryptocurrencies directly in the future through a partnership with a licensed exchange.

Mox Bank is positioning itself as a low-cost option for crypto ETF trading. For Hong Kong-listed ETFs, it charges 0.12% of the transaction amount, with a minimum fee of $3.85. For US-listed ETFs, the charge is 0.01% per share with a minimum of $5.

Source: Mox

Hong Kong approved spot crypto ETFs on April 30 as part of its plan to become a major crypto hub in Asia. Mox Bank, which started in September 2020, reports that 28% of its customers are already investing in crypto, with 18% actively trading.

Mox CEO Barbaros Uygun stated that the bank aims to lead in innovation and provide its customers with new investment opportunities. Jayant Bhatia, the bank’s chief product officer, mentioned that this launch is just the beginning, though he didn’t give details on when additional crypto trading services might be available.

So far, the three Hong Kong-based issuers of spot crypto ETFs—Bosera HashKey, ChinaAMC, and Harvest Global—have struggled to attract investors. According to recent data, these ETFs have not had any new investments in August and have a total of only $236.3 million in assets combined.

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Investors pulled around $168 million from nine U.S. Bitcoin ETFs on Monday. In just two days, these Bitcoin ETFs saw $405 million in withdrawals, according to Farside Investors.

Meanwhile, Ethereum ETFs had a better time, with nearly $49 million flowing into them during the same period.

Grayscale’s Bitcoin ETF (GBTC) and Fidelity’s Bitcoin fund (FBTC) saw the biggest withdrawals, with about $69 million taken out from each. On the flip side, Grayscale’s Bitcoin Mini Trust (BTC), which is a cheaper alternative to GBTC, gained nearly $29 million. Bitwise’s Bitcoin ETF (BITB) and Valkyrie’s Bitcoin fund (BRRR) also saw some positive movement, each adding around $6 million.

Bitcoin ETFs have traded about $2.5b so far, a lot for 10:45am, but not too crazy (full history below). If you bitcoin bull you actually DONT want to see crazy volume today as ETF volume on bad days is a pretty reliable measure of fear. On flip, deep liquidity on bad days is part… pic.twitter.com/TOQRjyriqp

— Eric Balchunas (@EricBalchunas) August 5, 2024

Other Bitcoin ETFs, like BlackRock’s iShares Bitcoin Trust (IBIT), didn’t see much change.

Trading volumes were high, with U.S. Bitcoin and Ethereum ETFs collectively trading nearly $6 billion on Monday. Bitcoin ETFs made up over $5 billion of that. IBIT and FBTC were the most active in trading. Spot Ethereum ETFs, led by Grayscale’s and BlackRock’s funds, contributed about $715 million to the total trading volume.

Eric Balchunas, an ETF analyst at Bloomberg, noted that high trading volumes during market dips indicate investor worry. He suggested that having lots of liquidity (easy-to-buy-and-sell assets) is good for traders and could be beneficial for ETFs in the long run.

BlackRock’s Ethereum ETF (ETHA) saw $47 million in new investments on August 5. VanEck’s and Fidelity’s Ethereum ETFs together attracted nearly $33 million. Bitwise’s and Grayscale’s Ethereum Mini Trust also gained some money. However, Grayscale’s Ethereum Trust (ETHE) had $47 million in outflows, marking the largest withdrawal since it became an ETF. Over the past ten trading days, ETHE has seen more than $2.1 billion in outflows.

Despite this, there are still around 234 million ETHE shares valued at about $4.7 billion. The recent drop in the crypto market started on August 4 when Jump Trading moved a lot of Ether to exchanges, causing a sharp market correction. Bitcoin briefly fell below $50,000, and Ethereum dropped more than 20% in a day.

As of the latest updates, Bitcoin has partly recovered to around $54,000, and Ethereum has rebounded by 6% to trade above $2,400.

Last week, digital asset investments experienced $528 million in outflows, marking the first decline in four weeks. This drop is thought to be due to worries about a potential U.S. recession and geopolitical uncertainties, which led to widespread sell-offs in various asset markets. Additionally, the Bank of Japan’s decision to raise interest rates for the first time in 17 years has increased anxiety in riskier markets, leading to more sell-offs.

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A memecoin experienced a wild ride recently. It took a huge hit when Ethereum co-founder Vitalik Buterin sold off his entire 17 billion Neiro tokens, but then it unexpectedly bounced back.

We are the people's $Neiro, on the people's chain, @ethereum.

And a little fun fact: @VitalikButerin is currently our largest holder. (4% of supply, ~$130k value as of the time of this post)

— Neiro on Ethereum (CTO) (@neiroethcto) August 3, 2024

The memecoin, Neiro, had tried to boost its profile by giving 4% of its total supply to Buterin, hoping his involvement would make the coin look more credible. But just an hour after getting the tokens, Buterin sold all of them for 44.5 ETH, worth about $103,000.

Source: Etherscan

This move caused the coin’s value to drop by around 60% as people noticed the sale. However, the story didn’t end there. The Neiro token suddenly surged by more than 200%, hitting a new high of $0.000038 the next day.

Source: Dexscreener

Meanwhile, the Neiro project’s social media account playfully responded to Buterin’s sale, asking him to donate some of the proceeds to a dog shelter and thanking him for bringing attention to their coin.

The Neiro coin saga is complex, with multiple versions of the token listed on different platforms, and even some potentially dubious ones. There’s also been controversy involving a Solana-based version of Neiro, where the developer reportedly made $2.85 million and then disappeared.

Adding to the chaos, a blockchain investigator recently warned that the major Neiro token on Ethereum might be a scam. Overall, the memecoin market is struggling, with many popular coins like Pepe and Floki losing between 18% and 20% of their value in just 24 hours.

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A recent survey by Pantera Research Lab reveals that women in the U.S. crypto industry are earning nearly 15% more than their male counterparts. The median annual salary for full-time women in the crypto sector is $172,000, significantly higher than the median salary of $150,000 for men.

This finding marks a notable deviation from the gender wage gap prevalent in many other fields. One reason for this salary disparity could be women’s higher average experience in the crypto industry. Women in crypto average 5.3 years of experience compared to 4.5 years for men. Moreover, women are more commonly found in mid-level to senior positions, whereas a larger share of men hold entry-level roles as they enter the sector.

CoinDesk featured our 2024 Compensation Survey and one key finding was: Women in Crypto Earn 15% More Than Men!

— Pantera Capital (@PanteraCapital) July 31, 2024

Despite these encouraging trends, Pantera researchers acknowledge that challenges for women remain. The survey highlights a lack of female representation in top leadership roles, with only three out of the 50 leading crypto CEOs in 2023 being women. This underscores the ongoing need for increased gender diversity and inclusion within the crypto industry.

Pantera researchers Matt Stephenson, Ally Zach, and Nick Zurck noted, “Our analysis shows that gender wage differentials in the crypto sector are the opposite of those seen in most other industries.” This trend indicates a move towards greater gender equity in the relatively young field of cryptocurrency.

In contrast, women in non-crypto sectors typically earn $0.84 for every dollar earned by men, illustrating the wider gender wage gap prevalent across industries.

Pantera’s study, which surveyed 502 full-time U.S. employees between June 4 and July 20, 2024, through various professional networks and channels, reflects a progressive shift towards more equitable pay in the crypto space.

Fed Survey Shows Decline in U.S. Crypto Ownership and Usage

The Federal Reserve’s latest annual household survey indicates a significant decline in cryptocurrency ownership and usage among U.S. adults. The survey found that around 18 million adults reported using cryptocurrencies in 2023, a decrease from previous years.

Of those using crypto, only 1% reported using it for financial transactions or money transfers, marking a 50% drop from the previous year. Conversely, 7% of respondents reported buying or holding cryptocurrencies as an investment.

Millennials (aged 30 to 44) remain the largest demographic of crypto users, followed by Generation Z adults (aged 18 to 29). Men are three times more likely than women to use cryptocurrencies.

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The team behind the recent controversial “governance attack” on Compound Finance has agreed to withdraw their contentious proposal in favor of a new one.

On July 28, the “Golden Boys” voting bloc narrowly passed Proposal 289, despite significant community opposition. This proposal aimed to create a wrapped “goldCOMP” token and a treasury using 499,000 COMP tokens—worth about $25 million—to provide passive income for COMP holders. However, it gave the Golden Boys considerable control over how the funds could be invested, sparking accusations of a governance attack.

By July 30, a member of the Golden Boys, known as “Humpy,” agreed to retract the controversial proposal in exchange for a new plan. Bryan Colligan, CEO of AlphaGrowth and a member of Compound’s growth team, announced that Humpy had requested the new proposal.

The revised proposal introduces a staking product that aligns with the Golden Boys’ interests while maintaining the integrity of Compound DAO governance. It suggests allocating 30% of both current and future market reserves to COMP stakers based on their stake amounts.

Colligan noted, “The Compound Growth Program, with support from key delegates in the Compound community, will proceed with this new plan following the immediate cancellation of Proposal 289.”

In response, Humpy commented on the new proposal, saying, “I fully approve this message.”

Major Compound stakeholders, including blockchain service providers Gauntlet and WintermuteGovernance, have expressed support for exploring the new staking product. They stated, “We support exploring a Compound staking product.”

Consensys also welcomed the resolution, appreciating the efforts of all delegates in addressing the issue.

Following these developments, the price of COMP, the native token of the DeFi protocol, rebounded by 6% over the past 12 hours, trading at $51.55 according to CoinGecko. Despite this, COMP remains down approximately 94% from its all-time high of $910 reached in May 2021.

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The Ronin blockchain has become the leader in daily active users among all blockchains, hitting 2 million daily users on July 29. This puts it ahead of other popular blockchains like Tron and Solana.

According to Token Terminal, which tracks on-chain activity, Ronin’s daily active users are the number of unique addresses interacting with important contracts on the network. This data shows people actively using the network to make transactions and engage with services.

Source: Token Terminal

Ronin’s growth in 2024 has been significant. Factors contributing to this include a boom in activity on its NFT marketplace, Mavis Market, and the listing of the Ronin (RON) token on Binance, which made it more accessible to users. The network now has 12 million RON token holders and over three million downloads for its Ronin Wallet. Additionally, there are 15 games available on the network, with more in development.

In February 2024, one of the biggest Web3 games, Pixels, moved to Ronin. By June, Pixels had 1.7 million monthly active users, and players spent over 15 million PIXEL tokens on VIP coupons.

Ronin is also improving its technology. On June 18, it announced plans to launch Ronin zkEVM, a new system that uses zero-knowledge proofs to enhance security and scalability. This upgrade aims to make the network more decentralized and capable of handling a massive number of transactions in the future.

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