Crypto News Headlines (30-Jun-2023)

Banking giant Citigroup (C) is reviewing its partnership with Metaco a month after Ripple Labs announced that it has agreed to acquire the crypto custody firm for $250 million, according to a Bloomberg report, citing people familiar with the matter.

Citigroup has now started talks with several other custody providers, the report added.

Ripple announced the acquisition of Metaco in May. The deal announcement came on the back of Ripple’s ongoing legal tussle with the U.S. Securities and Exchange Commission (SEC), which is estimated to cost the blockchain firm around $200 million.

Citigroup initially selected Metaco as its custody partner in June last year as it looked to expand into tokenized securities and other blockchain-related products.

The U.S. state of North Carolina has advanced House Bill 721 (HB721) titled “State Precious Metals Depository Study.” The bill appropriates $50,000 from the state’s general fund, which is made up of tax revenues, excluding transportation, to the state treasurer to conduct a study that examines three key areas. The first area involves:

The process of acquiring, securely storing, insuring, and liquidating … virtual currency, such as bitcoin, that may be held on behalf of the state.

The second area is the “expected impact of allocating a portion of the general fund” to “virtual currency to hedge against inflation and systemic credit risks, reduce overall portfolio volatility, and increase portfolio returns over time.”

The Chicago Mercantile Exchange (CME) Group on Thursday revealed plans for the launch of Ethereum/Bitcoin (ETH/BTC) ratio futures on July 31, pending regulatory approval.

Per the product description on the company’s website, the ticker for the ETH/BTC ratio futures is EBR, with the ratio defined as Ethereum futures price divided by the Bitcoin futures price. The ratio will be calculated as the final settlement price of ETH divided by BTC and will always be positive across all contract months.

“Historically, Ether and Bitcoin have been highly correlated; however, as the two assets have grown over time, market dynamics may affect the performance of one more than the other, creating relative value trading opportunities,” CME Group Global Head of Cryptocurrency Products Giovanni Vicioso said in a statement.

According to Reuters, Coinbase, the largest U.S. cryptocurrency platform, plans to ask a judge to dismiss the U.S. Securities and Exchange Commission (SEC) lawsuit accusing the company of failing to register its business. In a letter submitted to the Manhattan federal court, Coinbase argued that the SEC does not have the authority to pursue civil claims since assets traded on their platform are not considered “investment contracts,” and therefore are not securities.

In their defense, Coinbase stated, “The SEC can pursue its claims only if the tokens and staking services it has identified are ‘securities.’ They are not.” SEC representatives have not yet responded to requests for comment.

The SEC filed the lawsuit against Coinbase on June 6, alleging that the company made billions of dollars acting as a middleman by trading at least 13 crypto assets, such as Solana, Cardano, and Polygon, which should have been registered as securities. Additionally, Coinbase faces scrutiny over its “staking” program, where it pools crypto assets in support of activity on the blockchain network and provides “rewards” to customers after taking commissions.

South Korea’s government is taking steps to protect cryptocurrency investors from implosions like Do Kwon’s Terra ecosystem by passing a new crypto bill.

On June 30, the National Assembly passed the Virtual Asset User Protection legislation. The bill is designed to regulate unfair trade practices and protect crypto investors, the local news agency SBS Biz reported.

The legislation reportedly integrates 19 crypto-related bills, providing a unified bill defining digital assets and imposing penalties for illicit trading activities like using undisclosed information, market manipulation and other unfair trading practices in crypto.

According to local media, the main point of the Virtual Asset User Protection Act is to apply the Capital Market Act first to virtual assets with a securities nature. The legislation also aims to establish a basis for imposing penalties and liability for damages caused by unfair crypto trading.

Binance, the world’s largest cryptocurrency exchange by market value, said its institutional clients are optimistic on the outlook of crypto for the next year and beyond, according to a survey it conducted between March and May 2023.

The study, conducted by Binance Research and Binance VIP & Institutional team, surveyed 208 of their clients from March 31 to May 15. More than half the respondents, 52%, had crypto assets under management (AUM) of less than $25 million and 22.6% had AUM larger than $100 million.

63.5% of respondents said they are positive on the outlook of crypto for the next year and 88% said they are optimistic for the next decade, according to the report.

Representatives of the European Parliament, the Council and the Commission reached a provisional agreement to amend EU regulations on capital requirements for banks. The changes seek to make EU banks more resilient to economic shocks by implementing the Basel III global standards while taking into account European specifics.

The third Basel Accord was agreed by the European Union and its G20 partners in the Basel Committee on Banking Supervision. It represents a framework of international standards for bank capital adequacy, stress testing, and liquidity requirements which was first announced in late 2010 but its implementation was repeatedly postponed until 2025.

The negotiators also agreed on a transitional regime for crypto assets. To address specific, associated risks, banks in the European Union will be required to disclose their exposure to cryptocurrencies and other digital assets.

The Financial Services and Markets Act 2023, a reform bill in the United Kingdom, has been granted Royal Assent from King Charles on Thursday, officially making it a law, according to a Thursday press release by the UK government.

Under this new law, cryptocurrency trading is recognized as a regulated financial activity. The amended Financial Services and Markets Act defines crypto assets as “cryptographically secured digital representation of value or contractual rights,” considering them as regulated financial instruments, products, or investments.

Royal Assent is a procedural stage that follows the agreement of lawmakers on a bill, turning it into an Act of Parliament in the country. The bill had received approval from the upper house of Parliament on June 19 before reaching this stage.

According to Bloomberg, South Korea’s parliament has passed the Virtual Asset User Protection legislation, which consolidates 19 crypto-related bills, aiming to enhance investor protection. The approval comes over a year after the implosion of tokens created by Do Kwon contributed to a $2 trillion crypto-market rout.

The newly passed legislation provides a clear definition of digital assets and imposes penalties for infractions such as using non-public information, market manipulation, and unfair trading practices, addressing concerns of potential abuse within the growing digital asset market.

The New Zealand central bank is ramping up its monitoring of stablecoins and crypto-assets following public submissions but has stopped short of calling for a regulatory approach.

Ian Woolford, the Reserve Bank of New Zealand’s director of money and cash, said in a June 30 statement that the RBNZ agrees that “a regulatory approach isn’t needed right now, but increased vigilance is.”

Accompanying Woolford’s statement was a summary of 50 stakeholder submissions to an earlier RBNZ paper discussing crypto and decentralized finance.

Respondents included the country’s crypto advocacy body BlockchainNZ, tech company Ripple, along with banks such as Westpac and the Bank of New Zealand.