News Weekly | Initial Signs of Recovery in the DeFi and NFT Markets, Charlie Munger Passes Away

Positive Signs of Rebound in DeFi and NFT Markets, Remembering the Legacy of Charlie Munger

LianGuai Weekly is a column launched by LianGuai, summarizing the blockchain industry on a weekly basis. The content covers key news, mining information, project updates, technological advancements, and other industry trends. This article is the news summary, giving you an overview of the major events in the blockchain industry this week.

Headlines

▌Judge in the United States says CZ cannot return to the United Arab Emirates until next year’s verdict

According to Coindesk, Binance founder Zhao Changpeng (CZ) currently has to stay in the United States because US Federal Judge Richard Jones is considering a motion from the Department of Justice, which requires CZ to stay in the US until his sentencing in February next year. The Department of Justice believes that if CZ leaves the US, he may face the risk of fleeing, and they point out that he still possesses a significant amount of wealth, and there is no extradition treaty between the US and the UAE. The Department of Justice stated that CZ could face imprisonment ranging from several months to up to 10 years, but he can appeal any sentence exceeding 18 months.

In a hearing on Monday, Judge Richard Jones did not indicate whether he would schedule a hearing or when he would make a ruling on the motion.

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▌Charlie Munger passes away at the age of 99

Berkshire Hathaway announced that Charlie Munger peacefully passed away today in a hospital in California, at the age of 99, just one month shy of his 100th birthday.

Munger was known for his role as Vice Chairman of Berkshire Hathaway and his close collaboration with Warren Buffett, making him a legendary figure in the finance and investment industry. Warren Buffett stated in a statement, “Without Charlie’s inspiration, wisdom, and involvement, Berkshire Hathaway would not have reached its current position.”

Munger was the Vice Chairman of Berkshire Hathaway and one of its largest shareholders, with his stock valued at approximately $2.1 billion as of March 2, 2022. His total net worth was around $2.5 billion at the beginning of 2023. Munger had made several critical remarks on cryptocurrencies and Bitcoin during his lifetime.

▌JPMorgan report: Preliminary signs of recovery in the DeFi and NFT markets

In a research report on Thursday, JPMorgan stated that the approval of the listing of Bitcoin Exchange Traded Funds (ETFs) in the United States in recent months has improved sentiment in the cryptocurrency market, leading to a revival in decentralized finance (DeFi) and non-fungible token (NFT) activities. The report mentioned that this growth comes after a slowdown in the past two years, and “thus, people are optimistic that the worst period for DeFi/NFT activities may be over in terms of the mid-term trajectory.”

The report also stated that the Ethereum blockchain does not seem to have benefited from the recent recovery in DeFi and NFT activities and faces issues related to “network scalability, slow transaction speed, and high fees,” as well as intensified competition from other layer-one chains.

▌New York Department of Financial Services may surpass the US SEC to become the most influential cryptocurrency regulatory agency

The New York Department of Financial Services (DFS) may ultimately surpass the US Securities and Exchange Commission (SEC) to become the most influential cryptocurrency regulatory agency. Adrienne Harris, the head of the DFS, stated at the Washington Policy Summit hosted by the Blockchain Association, a trade organization in the cryptocurrency industry, that we currently have more than 60 people, possibly making us the largest cryptocurrency department in the world. We are also the only cautious regulatory agency with specific authority over cryptocurrencies. I take this very seriously and plan to continue expanding the team and further promoting cryptocurrency regulation in the state.

Policy

▌WSJ: SEC still seeking more evidence of fraud from Binance.US

According to The Wall Street Journal, the US Securities and Exchange Commission (SEC) is actively seeking more evidence to prove potential fraud by Binance.US. Earlier this month, the US Department of Justice charged Binance and its former CEO, Changpeng Zhao, who has pleaded guilty. The SEC is still looking for evidence to show that Binance and its founder, Changpeng Zhao, may have a backdoor to control assets stored on the Binance.US platform. The agency is concerned that Binance may control the cryptocurrencies of Binance.US through fraudulent actions similar to those of FTX.

▌Monetary Authority of Singapore Director: Bitcoin lacks underlying assets and cannot be used for cross-border payments

Ravi Menon, the director of the Monetary Authority of Singapore, stated that the future monetary system will include central bank digital currencies, tokenized bank liabilities, and “well-regulated” stablecoins. Regulatory agencies are shifting towards establishing a stablecoin system fully supported by high-quality government securities or cash. Regarding stablecoins and other assets in the current market, Menon stated that stablecoins issued by non-financial institutions lack proper regulation in terms of capital, liquidity, and reserves. They are difficult to demonstrate their “stability” when market conditions are volatile. Therefore, when used for payment purposes, strict regulatory stablecoins must be used. Bitcoin, on the other hand, lacks underlying assets and “no one uses it for savings, only people hope to make a quick buck through speculation.” Therefore, it cannot be used for cross-border payments. Menon also mentioned that the Monetary Authority of Singapore, in collaboration with other regions, is developing a cross-border network for central bank digital currencies called mBridge. If in the future, it can cooperate with regions involved in relevant applications, such as tokenized deposits, it will be able to connect the flow of funds across different regions, solving the issues of lengthy cross-border payment process and high costs.

▌SEC seeks public feedback on Franklin Templeton and Hashdex spot Bitcoin ETF

According to publicly available regulatory documents, the SEC is seeking public feedback on the proposed spot Bitcoin ETFs from Franklin Templeton and Hashdex, asking about concerns with manipulation and fraud, as well as the fund’s relationship with Coinbase. Opinions need to be submitted within 21 days, and the rebuttal period will continue for two weeks thereafter.

Bloomberg analyst James Seyffart pointed out that Franklin is the only issuer that has not submitted an updated S-1, which may be preparing for full approval in early January.

▌The US SEC met with Grayscale and seven other spot Bitcoin ETF applicants at the end of November

Information disclosed by the SEC shows that the agency met with Bitwise, VanEck, Fidelity, and Invesco at the end of November regarding their respective proposals. The agency also met with 21Shares representing Ark Invest’s spot Bitcoin ETF proposal around the end of this month. The SEC does not appear to have met with WisdomTree, Valkyrie, or GlobalX regarding their respective spot Bitcoin ETF applications. Although the US Securities and Exchange Commission has disclosed several recent meetings, it has not publicly announced any plans to approve spot Bitcoin ETFs.

▌US lawmakers are still working to include provisions related to cryptocurrency in the year-end legislative package

US lawmakers are still working to include measures related to cryptocurrency in the year-end legislative plan. Among them, Republican Senator Cynthia Lummis of Wyoming, Democratic Senator Kirsten Gillibrand of New York, Republican Senator Roger Marshall of Kansas, and Democratic Senator Elizabeth Warren of Massachusetts have proposed an amendment to the National Defense Authorization Act, calling for regulatory agencies to establish review standards for financial institutions engaged in cryptocurrency activities, and also requesting the Treasury Department to propose recommendations on cryptocurrency mixers to Congress. Senator Lummis said that the amendment is still evolving, “more progress may be seen early next week.”

▌Florida Governor: SEC is the judge, jury, and executioner in the crypto space

Florida Governor and Republican presidential candidate Ron DeSantis strongly criticized the Biden administration’s attitude towards cryptocurrencies in an interview with The Washington Observer. DeSantis said, “The SEC led by Biden is the judge, jury, and executioner in the crypto space, while the Fed continues to promote the development of CBDC.”

DeSantis opposes the lawsuits filed by the SEC against cryptocurrency companies, stating: Innovation is fleeing overseas due to regulatory reform. I will defend the rights of Americans to hold digital assets without government interference. Cryptocurrency regulations should be enacted by Congress, not regulatory agencies that do not understand the industry.”

Blockchain Applications

▌Pudgy Penguins launches exclusive “Celebrity Gift Box” at Walmart

To celebrate the North American Cyber Monday shopping festival, Pudgy Penguins has launched an exclusive “Celebrity Gift Box” at Walmart, priced at $25, which includes toys and collectibles and can only be purchased through Walmart.com. The gift box includes a 12-inch plush toy, a poseable figure, a smaller clip-on plush toy, an ice house toy, and a certificate that allows buyers to claim a free NFT (minted on zkSync Era) for the Pudgy World gaming platform.

▌Lido DAO has approved the deployment of the Simple DVT module

Lido DAO has approved the deployment of the Simple Distributed Validator Technology (DVT) module, which is a step towards quickly achieving diversification of Lido node operators and driving innovation within the Ethereum staking ecosystem. DVT is a system that operates similar to running validators in a multi-signature setup, relying on multiple NOs (Node Operators) instead of a single operator. These NOs manage different nodes that communicate and reach consensus together to fulfill the responsibilities of validators.

In addition, the role of DVT is to improve validator resilience, reduce single points of failure and downtime risks, enhance decentralization between infrastructure, geography, and clients, and add an additional layer of protection through Distributed Key Generation (DKG).

▌Phantom integrates LI.FI for in-wallet cross-chain swaps with Solana

Phantom has announced its integration with LI.FI to support the newly launched in-wallet cross-chain swap feature. This collaboration marks an important step in connecting Solana with the broader EVM ecosystem, enabling its millions of active users to seamlessly transfer assets between EVM chains and Solana, and vice versa.

▌SwapGPT launches on-chain order book and hybrid DEX aggregator on Aptos Mainnet

SwapGPT has announced the launch of its on-chain order book and hybrid DEX aggregator on the Aptos Mainnet.

▌LayerZero launches modular blockchain Caldera

LayerZero has announced the launch of the modular blockchain Caldera, bringing full-chain interoperability to Caldera rollups. LayerZero will now support full-chain message transfers between different Caldera rollups, allowing use cases to aggregate and compound across the ecosystem.

▌Horizen ecosystem integrates with Ascent Exchange

The Horizen ecosystem has announced its integration with Ascent Exchange and provides simple yield opportunities through the ICHI Vault. Each ICHI Vault allows depositors to stake a single token and use it as liquidity in the underlying pool. Vaults prioritize token deposits while preventing impermanent loss.

▌Yearn v3 launches on Polygon

According to official X Account news, Yearn v3 is now live on Polygon, aiming to serve as the foundational layer for all DeFi yields. With a commitment to openness, permissionless accessibility, and composability, v3 will progressively add new insurance vaults and strategies before its release on other chains.

▌Bank of China applies for blockchain leasing management patent for information sharing and process time reduction

According to the announcement by the National Intellectual Property Administration, Bank of China Limited has applied for a patent titled “Method, Device, and Medium for Blockchain-based Container Leasing Management,” with publication number CN117151831A, filed on August 2023.

Cryptocurrencies

▌Assets under management for Brazil’s spot Bitcoin ETF nears $100 million

A study in Brazil has found that the assets under management (AUM) for Brazil’s spot Bitcoin ETF is nearing $100 million. As of November 21st, the total AUM for these ETFs is $96.8 million, with Hashdex’s Nasdaq Bitcoin reference price FDI (BITH11) leading the pack with $57.8 million AUM, representing around 60% market share.

Other providers of spot Bitcoin ETFs in Brazil include Itau Asset Management, which launched a fund in partnership with Mike Novogratz’s Galaxy Digital last year, and QR Capital, which launched its product in 2021 with $36 million AUM.

▌Bitfinex: Bitcoin circulation speed reaches historical low

In a report, Bitfinex analysts have stated that the circulation speed of Bitcoin has reached a historical low, indicating significant changes in market sentiment compared to the previous bear market cycle.

Circulation speed is an indicator of the frequency of trading or transfer of digital assets. According to Bitfinex, low circulation speed suggests that digital asset holders are reluctant to sell, while buyers are seeking new supply. The analysts added, “Therefore, it is not surprising that Bitcoin reached a new high for this year, $38,410, on November 24th, as holders are unwilling to sell and buyers are in search of supply.”

▌Franklin Templeton updates its prospectus for spot Bitcoin ETF with SEC

Bloomberg analyst James Seyffart, on the X platform, stated that Franklin Templeton has updated its prospectus for the spot Bitcoin ETF with the SEC, keeping the possibility of physical and/or cash conversions intact.

Earlier in the day, James Seyffart stated that Franklin Templeton was the only applicant that had not submitted an amended S-1, and the SEC had opened a public comment period for its application. Scott Johnsson, General Partner at Van Buren Capital, commented in an X post, “They may choose to do so sooner rather than later, so that they can finish the comment period by January 10th and have all applications approved together.”

▌Binance.US: CZ steps down as Chairman of the Board, no longer involved in governance

Binance.US announced on the X platform that with CZ stepping away from Binance, he has decided to step down as Chairman of the Board and transfer voting rights through a proxy arrangement, taking no further part in our governance. Binance.US will continue to be led by Norman Reed and the existing knowledgeable management team. We have ample capital to continue building and growing the platform with a renewed clarity and drive towards our goal, while maintaining the same customer-first commitment.

The team also stated that Binance.US was launched with the explicit purpose of serving US customers in accordance with all US rules and regulations, operating independently from Binance.com. Binance.US is not a party to the recently announced settlement agreement and does not have any pending enforcement issues with the DOJ, FinCEN, OFAC, or CFTC. The platform will continue to operate fully and remain committed to providing customers with the same products and services as before.

▌Celsius Network’s proposed transition to Bitcoin mining business may require seeking new creditor votes.

US bankruptcy judge Martin Glenn stated in Thursday’s court hearing that the cryptocurrency lending firm Celsius Network may have to seek new creditor votes on its proposed transition to a Bitcoin mining business. Celsius stated last week that it had narrowed down its post-bankruptcy business plan to focus solely on Bitcoin mining, citing skepticism from the US Securities and Exchange Commission (SEC) towards other planned business lines. 

Glenn expressed disappointment with Celsius’ delayed shift and stated that his record for Celsius’ need to reach an agreement with the SEC had been broken. The judge noted that this was not a transaction approved by creditor votes and that the modified agreement could face “strong opposition” from the creditors.

▌Kaiko: After Binance settlement, Coinbase and Bybit emerge as major beneficiaries.

Riyad Carey, an analyst at Kaiko Research, stated that after Binance reached a $4 billion settlement with US authorities last week, competitors Coinbase and Bybit emerged as major beneficiaries. Carey noted that Coinbase’s stock price had performed well in November, with the Binance settlement agreement driving COIN’s surge by over 75% that month. Carey added that, in terms of market share following the announcement of the settlement agreement, Bybit was the “direct standout winner” for Bitcoin, with its market share rising by 50% while Binance’s fell by 4% at certain times, and Coinbase’s rose by 34%.

Important Economic Developments

▌Banks expected to increase support for real estate developers, credit investments targeting key areas and weak links next year.

“During this period, we have started to visit and conduct research on some real estate companies, mainly to understand their demands and the difficulties they currently face, and to see if we can find suitable business cooperation opportunities,” said a spokesperson from a state-owned bank company department. Looking ahead to next year’s credit allocation, several banks have indicated to reporters that they will continue to increase targeted support for key areas and weak links in the national economy. Inclusive finance, green finance, manufacturing, private economy, rural revitalization, and other sectors will remain the focus of credit support.

▌Market doubts the commitment to further production cuts by OPEC+ Oil price further declines on Friday.

On Friday, the price of crude oil futures declined for the second consecutive trading day. Traders are skeptical of the “voluntary” decision by OPEC+ to further cut production in the first quarter. Craig Erlam, senior market analyst at OANDA, stated, “Traders seem to either not believe that member countries will abide by the rules, or they believe that the production cuts are not sufficient. Or they believe that the lack of formal commitments suggests a division within OPEC, which may affect its ability to achieve its goals, let alone further reduce output when necessary.”

▌St. Louis Fed Study: Fed May Need Four Years to Return Profits to Treasury

A recent study by the St. Louis Fed reveals that it may take nearly four years for the Federal Reserve to recover from historic operating losses and begin returning profits to the U.S. Treasury. The losses are a result of the interest rate hike cycle, as the Fed significantly reduced its balance sheet while raising rates, leading to losses starting in September 2022. As of November 22nd, the “deferred assets,” which measure the net negative income, stood at $120.4 billion. Deferred assets must be covered before the Fed can return any excess earnings to the Treasury. The St. Louis Fed study estimates that the Fed will be able to cover these assets by mid-2027. The Fed has been consistently profitable for many years, but the rising interest rates in the fall of 2022 exceeded the income generated from bonds and services, resulting in losses. As interest rates rise and the Fed’s bond holdings, which generate income, decrease, the deficit further increases.

Disclaimer: LianGuai, as a blockchain information platform, publishes articles for informational purposes only and does not constitute actual investment advice. Please establish the correct investment concept and be sure to increase risk awareness.

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