HyperLinq : Weekly Digital Asset Digest 8

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Rohan Raman
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The HyperLinq Weekly Digest is the one-stop source for the HyperLinq community to access relevant news involving digital assets, where we essentially outline key industry updates that our members may have missed. We are always open to suggestions and feedback so please do not hesitate to let us know what you think!


Chinese company mines cryptocurrency under the shadows; loses 90% of its valuation amidst crypto-winter : Aakash Athawasya | AMBCrypto

Since the emergence of decentralized currency, China has been the focal point of cryptocurrency mining. With the market falling to the "crypto-winter" in 2018, several miners suffered severe setbacks due to the plummeting market. Huatie HengAn, a Chinese construction company which ventured into cryptocurrency mining due to its lucrative appeal, has seen its valuation drop by 90 percent due to the bear market. A local Chinese media outlet 8BTC reported that the subsidiary of Huatie was sold for a mere $2 million, in comparison to its valuation of $25 million. 8BTC further added that the prominence of the sale was because the company could be "the first listed company in the country revealed to be engaged in crypto business though it may operate under the name of cloud computing." Based on the company’s financial report dated December 31, 2018, the loss of the year amounted to $14 million, while the collective coin market dipped from over $800 billion to under $105 billion. The reported loss was over 50 percent of its initial investment of $25 million and over 25 percent of its total revenue. To make matters worse, in the first two months of 2019, the loss as mentioned above increased to $23 million. The Hong Kong Stock exchange failed to further the IPO application filed by mining equipment manufacturing giants, Bitmain, Canaan, and Ebang, citing industry volatility. Nvidia, the manufacturer of GPU used by miners, sank to become the worst performer on the S&P500 in December 2018. In the final quarter of 2018, the company’s share price dropped by 54 percent to $21 from $129.57, with Jensen Huang, the CEO of Nvidia crediting the same to the "crypto hangover."

India Shuns Bitcoin Legalization Again, Excludes Crypto Startups from Fintech Sandbox : Joseph Young | CCN.com

The Reserve Bank of India has published its official document on a draft framework for fintech regulatory sandbox entitled "Draft Enabling Framework for Regulatory Sandbox." The report explicitly excluded crypto assets like bitcoin, demonstrating a lack of intent to regulate the local crypto market. The current stance of India on bitcoin and crypto regulation is unexpected given that many significant governments in Asia including the likes of Japan, South Korea, Singapore, Hong Kong, and others have taken the approach of regulating the crypto market. The central bank of India has prohibited local banks from working with cryptocurrency exchanges, eliminating fiat-to-crypto trading in the local market. The policy of the RBI has left the overwhelming majority of crypto businesses in India in disarray, most of the entities involved with crypto either shutting down their services or moving out of the crypto market of India. The RBI’s exclusion of crypto from its regulatory sandbox framework demonstrates the lack of intent of the authorities in India to acknowledge cryptocurrencies as an asset class and as a payment system. A central bank could consider cryptocurrencies a threat as they enable users to initiate peer-to-peer transactions and circumvent the services provided by banks. However, in January, the Financial Stability Board, an inter-governmental body involving the government of India said that cryptocurrencies like bitcoin do not pose a threat to the global financial system.

Bloomberg: Institutional Crypto Trading Platform Bakkt May Seek New York BitLicense : Adrian Zmudzinski | CoinTelegraph

Intercontinental Exchange - lead institutional cryptocurrency trading platform Bakkt is considering acquiring a New York BitLicense to launch its bitcoin futures, Bloomberg reports on April 18. Bakkt has seen resistance from the United States Commodity Futures Trading Commission to approve its bitcoin futures because of its intentions to custody user’s assets. The CFTC recognizes state bank and trust licenses and could potentially allow the listing of futures if Bakkt obtained a crypto custody license from the New York Department of Financial Services. While the permit would reportedly permit the company to hold custody of customers’ crypto assets itself, Bakkt would still need a permit from the CFTC on the broader project. The difference is that Bakkt contracts, after they expired, would payout in bitcoin rather than dollars, thus granting a regulated way to obtain the coins. Furthermore, the platform would also facilitate the use of bitcoin for payments by providing businesses an easy way to convert BTC to U.S. dollars.

Japan’s SBI Holdings Invests in Local Crypto Exchange Applicant FXCoin : Marie Huillet | CoinTelegraph

Japanese crypto startup FXCoin revealed it had completed a third-party allotment of shares with financial services giant SBI Holdings. The development, which contributes to FXCoin’s aim of launching a crypto exchange business in the country, was reported by Cointelegraph Japan on April 15. FXCoin, which currently focuses on providing market information for investors, was founded in December 2017 by Tomoo Onishi — the former head of foreign exchange sales at Deutsche Bank. The membership tier is designed for businesses who are seeking to apply for an official crypto exchange operating license from the country’s financial watchdog, the Financial Services Association. As previously reported, JVCEA is a self-regulatory crypto exchange association that formed in March 2018 in a bid to establish industry-wide investor safety standards. The past couple of years have seen SBI pursue multiple ventures in the crypto sector, including its exchange — VCTrade — alongside a series of investments in businesses developing crypto infrastructure and services. In October 2018, SBI and Ripple’s XRP-powered payments app, MoneyTap, went live for account holders at selected Japanese banks.

BitMEX CEO Arthur Hayes Reveals Plans to Open Crypto Options Platform : Marie Huillet | CoinTelegraph

Arthur Hayes, co-founder, and CEO of major crypto derivatives exchange BitMEX has revealed that the firm is hoping to open a cryptocurrency options platform in the medium term. Hayes made his remarks during an interview on the Venture Coinist podcast on April 12. Options are a type of financial derivative that give a buyer the right — but not the obligation — to buy or sell an asset at an agreed price in the future. They are designed to serve as strategies for hedging, protection or speculation in different market conditions. As a derivatives-only platform, it is, however, not included in CoinMarketCap’s price and volume averages for Bitcoin. As previously reported, Hayes has recently predicted that Bitcoin will get back to the $10,000 price point this year, anticipating the market recovery will begin in early Q4 2019. Alongside its trading platform, BitMEX also researches the crypto industry, in January releasing a report on the impact of the 2018 bear market on ICO projects’ token holding valuations.

France Passes Bill to Allow Insurance Providers to Invest in Crypto and Tokens : Helen Partz | CoinTelegraph

French insurance markets can now invest in cryptocurrencies, following the passage of a new law, foreign exchange news agency FXStreet reports April 11. On April 11, the National Assembly of France adopted a bill that is designed to stimulate local business development, including redirecting savings from individuals to businesses, according to local news agency Les Echos. Known as "Plan D’Action pour la croissance et la transformation des entreprises," the act reportedly allows insurance providers in France to invest in cryptocurrencies such as Bitcoin with no limit on the amount of investment. Joel Giraud, deputy and budget manager of Emmanuel Macron’s party La République En Marche, confirmed the news while claiming that the new crypto-related initiative "was not the primary objective of the Pacte." The bill mainly targets the privatization process, including a sale of the state’s stake in airports group ADP to raise money for an innovation fund.

Japan’s Biggest Bank Confirms Launch of Digital Currency ‘Coin’ in 2019 : David Hundeyin | CCN.com

Following months of speculation about its proposed release date, Japan’s largest bank, Mitsubishi UFJ Financial Group Inc. has finally announced plans to launch its long-awaited in-house digital currency. Japan Times reports that Group President, Mike Kanetsugu revealed this week that the firm intends to rollout Coin before the end of 2019. Unlike JPM Coin, Coin has the much grander intention of fundamentally changing how Japanese consumers interact with money. The financial behemoth has previously indicated that Coin will have ‘instantaneous transfer capabilities’ as well as the ability to process micropayments in decimal value increments. The smartphone app will also allow users to manage their reward points services as well as perform a variety of other managerial functions and is expected to be released by the end of June 2019. This is particularly emphasized by the daunting reality of Japan’s cash-heavy corporate and consumer culture which even the government is struggling to make a dent in. The jury remains very much out on whether Coin will be a success or not, but if anyone were to attempt this experiment in the world’s third largest economy, it should probably be its largest bank.

Coinbase Crypto Exchange Debuts Visa Card for UK Customers : Ana Alexandre | CoinTelegraph

Major American cryptocurrency exchange Coinbase has launched Coinbase Card, that enables its United Kingdom-based customers to pay in-store and online with cryptocurrency. The development was announced in a blog post published on April 10. The Coinbase Card is a Visa debit card powered by customers’ Coinbase account crypto balances, which allows them to make purchases with digital currencies worldwide. Coinbase also released the Coinbase Card app for iOS and Android, which links customers’ Coinbase accounts with the app and allows them to choose a particular wallet to fund their Coinbase Card. The app additionally provides access to receipts, transaction summaries, spending categories, and other features. The card reportedly supports all digital assets available to purchase and sell on the Coinbase platform. Currently, Coinbase Card is available for customers in the U.K. However, Coinbase reportedly plans to add support for other European countries in the near term. Earlier this month, Visa itself published a crypto and blockchain-related job opening. The firm is ostensibly seeking someone to fill the position of Technical Product Manager at Visa Fintech at its Palo Alto office.

SEC Chairman Flags Crypto as Continued Regulatory Focus in Latest Speech : William Suberg | CoinTelegraph

The head of United States regulator the Securities and Exchange Commission reiterated its focus on the cryptocurrency space in a new speech on April 8. Speaking at the SEC Speaks conference in Washington, chairman Jay Clayton highlighted the digital currency space while giving a broad overview of the organization’s activities and roles. This path includes appropriate disclosures to investors so they can make a more informed decision as to whether to seek reimbursement or continue to hold their tokens. Clayton meanwhile also drew further attention to cryptocurrencies' appearance in the SEC’s in-house Examination Priorities for 2019, compiled in December by its Office of Compliance Inspections and Examinations. The same day, April 3, the agency also concluded a new initial coin offering token from startup TurnKey was not a security. In recent months, the ongoing battle between the regulator and players involved in bringing a cryptocurrency-based exchange-traded fund to market has been more conspicuous.

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Rohan Raman

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