LianGuai Morning Post | US to Crack Down on Hamas Cryptocurrency Assets, BlackRock Confirms Spot Ethereum ETF Plan

LianGuai Morning Post | US to Take Tough Stance Against Hamas' Cryptocurrency Holdings, BlackRock Affirms Plans for Ethereum ETF

Headlines

▌US Treasury announces more sanctions on Hamas in the coming weeks, including cracking down on their use of cryptocurrency

US Deputy Treasury Secretary Wally Adeyemo told Reuters on Thursday that the United States and its allies will impose additional sanctions in the coming days and weeks to prevent Hamas from getting funds, including cracking down on their use of cryptocurrency. Adeyemo said that while cryptocurrency is not currently a major source of Hamas’s assets, “over time, if the cryptocurrency industry does not take appropriate security measures and seriously fulfill its anti-money laundering responsibilities, Hamas and other organizations will use cryptocurrency.”

In addition, Brian Nelson, the top sanctions official at the US Treasury, held talks on Thursday with the private sector, including cryptocurrency companies and payment processors, on technologies to combat Hamas fundraising. The Treasury said in a statement that Deputy Assistant Secretary Nelson responsible for terrorism and financial intelligence had received briefings from currency services firms, payment processors, and blockchain analytics companies on the technology used by the extremist group to raise and transfer funds.

▌BlackRock submits 19b-4 filing, confirming plans for a spot Ethereum ETF

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A screenshot of a document published by Bloomberg analyst James Seyffart on the X platform reveals that BlackRock’s spot Ethereum ETF (named iShares Ethereum Trust) has been confirmed, with the company having just submitted a 19b-4 filing with Nasdaq.

The document description shows that there is a proposed rule change to list and trade shares of the iShares Ethereum Trust based on a commodity-based trust stock under Nasdaq Rule 5711(d). The document states that the proposed Ethereum ETF will have Coinbase Custody Trust Company as the custodian and will use the CME CF Ethereum Reference Rate.

According to James Seyffart, based on public information, there are currently 5 spot Ethereum ETF filings: Vaneck, ARKInvest/21Shares, Hashdex, Invesco US/Galaxy, and Grayscale’s filing to convert ETHE (no specific order).

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Market

As of writing, according to coinmarketcap data:

BTC recent trading price is $36,690.5, with a -1.06% change in the past 24 hours;

ETH recent trading price is $2,121.5, with a +4.28% change in the past 24 hours;

BNB recent trading price is $251.83, with a -0.05% change in the past 24 hours;

XRP recent trading price is $0.6651, with a -0.10% change in the past 24 hours;

DOGE recent trading price is $0.0731, with a -3.30% change in the past 24 hours;

ADA recent trading price is $0.3670, with a -2.59% change in the past 24 hours;

The recent trading price of SOL is $45.188, with a daily change of -2.46%.

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Policy

▌CFTC’s new proposal requires exchanges to segregate client and company funds to protect crypto derivatives traders

The US Commodity Futures Trading Commission (CFTC) is developing a proposal to ensure that more derivative exchanges separate client funds from company funds. The draft will expand the existing regulatory scope of the CFTC and will apply to exchanges that allow clients to trade without going through a brokerage firm. Kristin Johnson, a Democratic member of the CFTC, stated that this proposal would help prevent FTX from taking over the client funds of its subsidiary LedgerX, which is regulated by the CFTC.

Kristin Johnson stated that the rules requiring segregation of client assets should apply to any company that uses or seeks a similar direct-to-client model, whether they offer cryptocurrency products or other types of derivatives. Given the incidents like the collapse of FTX, the CFTC should take immediate action to formulate rules to prevent the misuse or loss of client funds.

▌BlackRock Ethereum ETF mentions “Grayscale Court Victory” in its 19b-4 filing

The President of The ETF Store, Nate Geraci, stated on X platform that BlackRock mentioned some key statements in its 19b-4 filing for its spot Ethereum ETF, including Grayscale Court Victory and the SEC’s approval requirements for spot Ethereum ETF should be the same as those for Ethereum futures ETF.

▌Bloomberg analyst: Supervisory Sharing Agreement (SSA) is not a necessary condition for SEC’s approval of 19b-4

Bloomberg analyst James Seyffart stated on X platform that he personally believes that the current approval of 19b-4 (Exchange rule changes) does not require an SSA (Supervisory Sharing Agreement). If the SEC requires, any applicant lacking this provision can quickly meet these requirements. Another Bloomberg analyst, Eric Balchunas, responded by saying, “SSA has now become a small issue for us. If the SEC’s Trading and Markets division needs it, it is either not a necessary condition or can easily be added to the filing.”

Analysts previously stated that the ideal path for the approval of a spot Bitcoin ETF is for 19b-4 to be approved quickly, and then the SEC prepares for some time to approve the S-1 (Registration Statement).

▌European Parliament approves controversial data legislation that may be detrimental to smart contracts

Members of the European Parliament voted on Thursday to approve a data legislation that includes a controversial smart contract termination design clause, which allows smart contracts to be altered, reset, and controlled manually. This provision could make most smart contracts illegal. This legislation still needs formal approval from the European Council, which consists of national leaders of the 27 member states.

The final version of the bill obtained by CoinDesk in July includes a clause that requires the ability to safely terminate automatic data sharing agreements. The document extensively mentions “smart contracts” instead of privately owned and licensed data records. Smart contracts are tools that automatically execute transactions when certain conditions are met. Blockchain-related organizations such as Stellar, Polygon, NEAR, and Cardano expressed their concerns months ago in an open letter.

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Blockchain Applications

▌Shanghai: Achieving interconnected blockchain infrastructure throughout the city to promote trusted circulation of value on heterogeneous chains

The Shanghai Economic and Information Commission recently released the “Implementation Plan for Promoting the Development of Productive Internet Service Platforms Empowered by Blockchain and Large-scale Model Technologies” and “Several Measures for Promoting the Innovative Development of Artificial Intelligence Large-scale Models in Shanghai (2023-2025)”. These plans require Shanghai to focus on developing cross-chain public service platforms that cover different types of consensus mechanisms, smart contract editing and operation, ledger storage standards, cryptographic algorithms, identity authentication and management, software-hardware synergy, and other aspects, supporting the creation of blockchain BaaS platforms and large-scale industry application scenarios, achieving interconnected blockchain infrastructure throughout the city, and promoting trusted circulation of value on heterogeneous chains. Shanghai will also establish a large-scale model corpus data alliance, making full use of technologies such as blockchain, deepening incentive mechanisms and evaluation and certification mechanisms driven by contributions. A language corpus data trading section will be established based on the Shanghai Data Trading Exchange.

▌Coinbase launches Coinbase Verification service

According to an official tweet, Coinbase has launched Coinbase Verification services, which are built on the EAS open standard and are public and composable. Users can prove their accounts and national/regional credentials on-chain, aiming to simplify the user experience without compromising security and compliance. Users can add anti-whale measures to airdrops, tasks, social or gaming applications.

▌EigenLayer, Cubist, and other protocols form a new “Security Staking Alliance”

Crypto wallet-as-a-service provider Cubist announced the formation of a new “Security Staking Alliance”, with other members including EigenLayer, Babylon, BridgeTower, Ankr, Redacted, and multiple security and interoperability protocols related to staking.

The press release states, “We are collaborating on technical standards and best practices that will help teams design, build, and operate secure staking infrastructure. For example, we are writing specifications to guide new protocols in evolving towards a ‘slashing-resistant’ design point from the start, where validators can run securely (i.e., validators that cannot be slashed) even in the presence of bugs and human errors.”

▌Flashbots co-founder launches Telegram trading bot Alfred

Former co-founder of Flashbots, Stephane Gosselin, has launched Telegram bot Alfred for executing token swaps on Ethereum. The bot aims to facilitate user-friendly execution of token swaps and prevent front-running transactions that generate maximum extractable value (MEV) profits.

Gosselin is now the CEO of Frontier Research. He collaborated with another research company called Kolibrio to develop Alfred, a robot designed to prevent MEV in social messaging applications and provide advanced trading tools for users. The team behind Alfred is considering various revenue models because the robot won’t have its own dedicated token, and they may charge service fees for transactions conducted through the robot in the future.

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Cryptocurrency

▌Cryptocurrency company Bitwise Asset Management announces no affiliation with the dissolved Bitwise Industries

Bitwise Asset Management stated on November 9 that they have no affiliation with the dissolved Bitwise Industries and have never had any connection. Bitwise Industries was a former tech company based in Fresno, California. Bitwise Asset Management, Inc., headquartered in San Francisco, is the largest cryptocurrency index fund management company in the United States. It appears that Bitwise Industries had no involvement with cryptocurrencies in any way.

Two US institutions have filed charges against the founders of Bitwise Industries today. The US Securities and Exchange Commission (SEC) stated that founders Irma Olguin, Jr. and Jake Soberal raised $70 million by falsifying company financial information. Meanwhile, the US Department of Justice (DOJ) stated that the founders conspired to commit wire fraud and embezzled $100 million before the company’s collapse. Both individuals have not been convicted but face a maximum of 20 years imprisonment each, as well as fines or penalties from each institution.

▌Bakkt plans to launch cryptocurrency business in new markets in Latin America, Europe, and Asia before the end of the year

Bakkt Holdings, Inc. (NYSE: BKKT) announced plans to expand its cryptocurrency business to numerous international markets, including existing and new contracted customers, before the end of the year.

Latin American Market: Bakkt and stock trading platform Hapi recently expanded their cryptocurrency trading capabilities in Latin America to include Mexico and Argentina, with plans to launch in Brazil by the end of 2023.

European Market: Bakkt and Hapi expect to launch in Spain by the end of 2023. Additionally, Bakkt will provide cryptocurrency trading and custody services for cryptocurrency application 3.0verse in the UK and European Union, planning to launch by the end of the year.

Asian Market: Bakkt will collaborate with 3.0verse throughout Asia, including Hong Kong and Singapore.

In addition to international expansion, Bakkt continues to conduct business with US-based institutions. Bakkt and EDX Markets (a digital asset marketplace for native crypto companies and large financial institutions) have preliminarily agreed for Bakkt to join EDX’s clearinghouse and custody network as an alternate qualified custodian.

▌MicroStrategy’s unrealized profit from holding BTC has reached $1 billion

According to Saylor Tracker data, MicroStrategy’s unrealized profits from holding Bitcoin have reached $1 billion.

In October, MicroStrategy purchased an additional 155 BTC for $5.3 million. As of the end of October, the company holds a total of 158,400 Bitcoins. The total cost is $4.69 billion, which is equivalent to $29,586 per Bitcoin.

▌Judge approves Celsius’ transformation into a Bitcoin mining company, will repay customers in tokens and equity

According to Bloomberg, crypto lending company Celsius Network LLC has received approval from a bankruptcy court judge to transform into a Bitcoin mining company owned by creditors. Approximately $2 billion worth of Bitcoin and Ethereum will be redistributed along with NewCo’s equity to Celsius creditors. Celsius’ lawyers stated that the asset distribution may start in early next year.

The company stated that the transformation plan still needs approval from the SEC. If everything goes according to plan, the new company will go public, but the SEC may question any crypto asset transactions they consider to be securities. If the proposal fails, Celsius may resort to liquidation. The judge urged the SEC to make a decision quickly regarding Celsius’ plan.

▌CME surpasses Binance to become the largest exchange for Bitcoin futures open interest

Coinglass data shows that the Chicago Mercantile Exchange (CME) has reached 111,080 BTC (worth $4.05 billion) in open interest for Bitcoin futures, surpassing Binance’s 107,290 BTC (worth $3.93 billion) and becoming the largest exchange for Bitcoin futures open interest.

Gabor Gurbacs, a strategy advisor at VanEck, commented, “Institutions are already here, and this is just the beginning.”

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Important Economic News

▌Fed Chair: Will not hesitate to further tighten monetary policy if appropriate

Fed Chair Jerome Powell stated that the uncertainty remains whether the US economy has reached a position to achieve 2% inflation. If appropriate, the Fed will not hesitate to further tighten monetary policy. Powell expressed satisfaction with the progress of inflation but acknowledged that there’s still a long way to go. The labor market remains tight but is moving towards a better balance.

At the time of Powell’s speech, US short-term interest rate futures traders pushed back their expectations for the Fed’s first rate cut from May to June next year.

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LianGuai Encyclopedia

▌What is metadata in blockchain transactions?

Metadata in blockchain transactions refers to additional data or information that can be attached to encrypted transactions on the blockchain. Metadata is data about data. In the context of blockchain transactions, it includes information that is not directly related to the transfer of cryptocurrencies but can provide additional functionality to the transactions. There are two types of metadata: on-chain metadata and off-chain metadata.

Disclaimer: LianGuai, as a blockchain information platform, publishes articles for informational purposes only and should not be considered as actual investment advice. Please have the correct investment mindset and increase your risk awareness.

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