EOS maker Block.One must pay $24 MILLION in penalties!!!
As usual, we are going to share a list of breaking news to help you guys quickly catch up with the crypto sphere. In the first news segment, after the first week, Bakkt’s BTC warehouse has experienced a pretty low volume of just $5 million of total trading – with its daily product trading fewer than five contract across its first week. Second up, we have an update on Block.One’s unregistered securities – it looks like Block.One will be settling with the SEC’s fine and penalties for conducting an unregistered securities sale. Next up, the fintech-as-a-service platform and network Rapyd reportedly raised $100M in a Series C funding round to face off against the arrival of new stablecoins. In the fourth segment, Venezuela President Nicolas Maduro has officially announced the coming plan to enable crypto payments in the country, making it available to everyone. And finally to finish off the news segment, we will discuss the ‘Shadow Banking’ system that Libra may create with its Libra token.
The Market Today
Today the market is mainly in reds with big losses come from altcoins. Bitcoin is currently at $8,292, with a 0.05% loss. In the second and the third position, Ethereum and XRP are dropping 2.77% and 3.79% respectively.
Bakkt trading volume was just $5M in the first week
According to Coindesk, the newly introduced Bakkt BTC warehouse has had pretty low trading volumes. After being open for one week, the total transaction volume for Bakkt’s Bitcoin Futures hit just $5 million and its daily product traded less than five contracts across this first week. To give you guys a bit more context, if we compare these numbers Bakkt had 623 monthly Bitcoin Futures Contracts change hands last week, while 4,099 Bitcoin futures contracts traded on Friday alone at rival Chicago-based exchange operator CME. Executives at Bakkt claimed that the new offering should attract big institutional investors, who seem to be very slow and cautious with bitcoin and other digital assets. According to the exchange, Bakkt’s new offering should be very appealing to institutional investors like hedge funds and other money managers because Bitcoin must be delivered to fulfill the contract’s terms when the maturity date arrives. This feature is a key advantage for asset owners who want to hedge their portfolios, in contrast with CME’s contract, which is settled via cash payments but has become popular with individual investors. Regarding the low volume, many believe that it is normal as
“It takes time for people to move from one place to another unless there’s a cost reason or a liquidity reason. These things tend to develop slowly,”
said David Weisberger, the CEO of CoinRoutes.
Block.One will pay $24 million penalties
Here we have a new update on the Block.One’s case with the SEC, where they were accused of selling unregistered securities for over a one year period in an unregistered initial coin offering (ICO). The U.S. Securities and Exchange Commission (SEC) released the news on Monday. As a result Block.One must pay $24 million in penalties for conducting an unregistered securities sale, which the US SEC announced Monday evening. The SEC mentioned in a press release that Block.One “raised the equivalent of several billion dollars” – to which a total of $4.1 billion was raised. Block.One agreed to settle the charged according to the SEC. While the $24 million in penalties sounds like a large amount, the fine is only 0.58% of the initial raise. The press also interestingly reported that, while Block.One’s token sale began shortly before the SEC released its DAO Report, they, however “continued for nearly a year after the report’s publication.” The company failed to secure an exemption form the securities registration requirements and did not register the sale. In their own press release, Block.One noted that the penalties also only apply to the sale of the original ERC-20 token which is no longer in circulation and will not require the token to be registered as a security with the SEC. They wrote:
“The SEC has simultaneously granted Block.one an important waiver so that Block.one will not be subject to certain ongoing restrictions that would usually apply with settlements of this type. Block.one believes the SEC’s granting of this waiver evidences Block.one’s continuing commitment to compliance and best practices in the United States and globally.”
Rapyd raised $100 million to beat stablecoins
The stripe-backed digital payments platform Rapyd has successfully raised $100 million in a Series C funding round to compete against the arrival of stablecoins. For those who are not aware, Rapyd sells a global fintech as a service platform with the ability to accept cash, bank transfers, e-wallets, and local debit card payments in over 100 countries. Notably, it does not do cryptocurrencies. A company spokesperson mentioned to CoinDesk that global fintech as a service is a significant market as,
“This is a major challenge for global expansion, as local consumers around the world are unable to transact with foreign retailers, and businesses can’t pay employees in key local markets. It may be hard to grasp from a US perspective but consider that Brazil has certain payment methods that work only within the country, and not beyond its borders. In India, consumers still use cash as the primary method of payment due to a lack of trust that goods or services will be delivered.”
Arik Shtilman, the co-founder and CEO of Rapyd mentioned,
“As more than half of all transactions worldwide are facilitated via bank transfers and cash, merchants find it increasingly difficult to digitally enable local payment methods and process cross-border sales that are required for international expansion.”
it looks like General Catalyst and Tiger Global, both which backed the $35 billion valued stripe participated in both the Series B and C rounds. The latest Series C raise brings Rapyd close to “unicorn territory.” The spokesperson who mentioned this was unable to site its specific valuation. In February, when it raised a $40 million Series B, the round reportedly valued the Israeli company at $300 million. Raypd is currently in direct competition with IBM and the Stellar blockchain, where stablecoins can substitute any local fiat currencies to be processed in cross-border payments. While Raypd believes that their market has 2.3 billion people who transact without credit cards or limited access to process international payments, CoinDesk notes that these are the same unbanked people Libra and other stablecoins are also targeting when it comes to mass adoption.
Venezuela will enable crypto payments
In a televised press conference broadcasted on Tuesday, Nicolas Maduro, the President of Venezuela, talked about the upcoming plan to enable crypto payments in Venezuela. This will enable Venezuelans will be able to make free national and international payments through banks. Maduro shared:
“The finance minister and Venezuela’s central bank have new instruments which we will activate very soon so that everyone can do banking transactions, as well as national and international payments through the central bank’s accounts. Venezuela is working within the cryptocurrency world”.
For those who are unaware, last week, Venezuela was reportedly examining bitcoin (BTC) and ether (ETH), to add to its international reserves. As you may know, they also have a state-owned cryptocurrency named Petro, which is backed by the country’s oil reserves.
Will Facebook create the ‘Shadow Banking’ system?
Major U.S. banks at the Federal Advisory Council (FAC) are concerned that Facebook’s Libra will create a ‘shadow banking’ system. If you haven’t heard about this term, the shadow banking system is a collection of non-bank financial intermediaries that provide services similar to traditional banks but outside normal banking regulations. These unregulated activities are believed to cause detrimental effects to the society. According to a report on Bloomberg, banks hold a negative view towards the Libra, reasoning the risks of potential decline in demand-deposit accounts and bank payment volumes. In addition, pegged coins like Libra pose a possible threat to the privacy business model of the banking system. The banks pointed out:
“As consumers adopt Libra, more deposits could migrate onto the platform, effectively reducing liquidity, and that disintermediation may further expand into loan and investment services.”
And there you have it guys! So what are your thoughts regarding all the news?
Do you think that trading volume at Bakkt exchange will surge in the next few months?
Are you satisfied with the penalty Block.One has to bear?
Will Rapyd make it to beat stablecoins when it comes to international transactions?
What is the exact plan that Venezuela is going to adopt for cryptos?
Are Libra and other stablecoins really creating a ‘shadow banking’ system?
Please leave a comment right below to let me know what you guys are thinking.
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Disclaimer: Cryptopig content is written by a team of blockchain passionate people. We are not registered as investment advisors. Don’t take the information in this post as investment advice and make sure you do your own research before investing. Cryptocurrencies are a very risky investment, never invest more money than you can afford to lose.