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Stable again? ⚖️
Stablecoins are strutting their stuff again - PYUSD leads. Regulators play catch-up, and Bittrex is coughing up millions. Ripple's XRP hints at a mega-surge. Who’s burning millions just for kick?
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Stablecoins are gaining their reputation back after the 2022 incident.
And branded stablecoins like PayPal USD is gonna pave the way for it.
Brokerage firm Bernstein anticipates the stablecoin market to skyrocket from its current value of $125 billion to $2.8 trillion in the next half-decade.
Why the growth? The report underscores the potential of stablecoins, a kind of cryptocurrency typically anchored to the US dollar, to mesh with consumer platforms. This synergy is expected to create a "growth flywheel" for stablecoins, expanding their reach beyond platforms native to crypto.
The Bernstein analysts, led by Gautam Chhugani, believe that significant global financial and consumer platforms will roll out their co-branded stablecoins to bolster value exchange.
PayPal’s jumping in: Just this week, PayPal gave everyone a bit of a surprise. They're diving into the crypto pool with their own dollar-tied stablecoin named PayPal USD (PYUSD).
The growth trajectory will be mainly guided by "regulated, onshore stablecoins." The integration of stablecoins with "hyper-fast financial settlement layers" (like layer 2 or centralised consumer platforms) on prominent blockchains, such as Ethereum, is definitely a good thing.
Stablecoin regulation is on the horizon: Several jurisdictions, including Singapore, Hong Kong, and Japan, have initiated pilot projects that revolve around stablecoins and central bank digital currencies.s for both stablecoins and central bank digital currencies.
✍🏻 The WSJ Op-ed
An opinion piece in The Wall Street Journal suggests that stablecoins could play a pivotal role in ensuring the US dollar remains the world's primary currency.
Brian Brooks: Former CEO of Binance.US, ex-chief legal officer of Coinbase, and served as U.S. Comptroller of the Currency.
Charles Calomiris: Dean of economics, politics, and history at the University of Austin, and served as chief economist of the Office of the Comptroller of the Currency.
The proposition: Congress, they urge, should set up a "sound and stable regulatory framework" for stablecoins. They reference the Clarity for Payment Stablecoins Act, which was introduced in July by House Financial Services Committee Chairman Patrick McHenry. This legislation has stumbled because of political differences.
Why it matters: De-dollarisation concerns are growing, with fears that the dollar might lose its crown as the global reserve currency.
U.S. dollar reserves held by foreign central banks decreasing.
Countries like Brazil and Argentina are shifting away from the dollar.
The duo sees stablecoins as a potential solution, restoring the dollar to its post-World War II glory days when it became the go-to for international trade.
👀 The latest FSB guidelines
Financial Stability Board (FSB) has some new guidelines on stablecoins.
The FSB is suggesting that if you want to issue a stablecoin in any country, you need to get a local license there. Previously, this was more a thing for crypto platforms that did a bunch of stuff, including custody and exchange.
On July 17, the FSB brought forward a global crypto regulatory framework. Most of it was standard fare, but then they hit us with some heavy stuff about regulating global stablecoins (GSCs).
What's a GSC? It's a stablecoin that's not just local. It's global, has potential for huge adoption, and can have a big impact on economies. The FSB suggests that any country should be able to regulate, oversee, or even prohibit these GSC activities.
The FSB wants GSC providers to have a clear "governance framework." That means someone, or some entity, has to be in charge and accountable.
GSC issuers should comply with risk management standards, Anti-Money Laundering/Combating Terrorist Financing (AML/CFT) requirements, and the Financial Action Task Force (FATF) "Travel Rule".
Anonymity? Not really: Remember the FATF “Travel Rule” from 2019? It’s about making sure crypto transfers aren't anonymous. The FSB is emphasising that GSC issuers need to stick to this.
🏛️ BoE weighs in
The Bank of England (BoE) is moving forward with its plans to establish a systemic stablecoin regime in the UK. Systemic stablecoins are cryptocurrencies that are pegged to the value of other assets and have the potential to disrupt financial stability if they fail.
The BoE intends to supervise these stablecoins along with the Financial Conduct Authority (FCA), and relevant rules will be set by the central bank. The UK government will continue to work with regulators to review its approach and ensure the return of customer funds and the continuity of company operations. The BoE plans to publish its rules later this year.
TTD Lawsuits ⚖️
Bittrex faces the music
Cryptocurrency exchange Bittrex is in hot water with the SEC, and it's costing them a pretty penny — $24 million, to be exact.
The SEC's beef? They claimed Bittrex failed to register in some pretty important capacities, including as a broker-dealer and exchange. Oh, and there's the small matter of the alleged $1.3 billion in illicit earnings.
Bittrex's response? They've agreed to pay up, but they're not admitting (or denying) any wrongdoing. Also worth noting, Bittrex filed for bankruptcy earlier this year. Tough times.
Robinhood dodges a bullet (again)
If you remember the meme stock frenzy from early 2021 (GameStop, anyone?), you might also recall that Robinhood faced some serious backlash for putting restrictions on certain stock trades.
Some investors weren't happy, claiming they missed out on potential profits. They took Robinhood to court.
Fast forward to January 2022: The complaint got dismissed. Fast forward again to now: An appeals court has confirmed that dismissal, basically saying Robinhood was within its rights to do what it did.
Alameda vs. Grayscale
Alameda Research, an affiliate of FTX, is in the middle of a lawsuit against Grayscale. The goal? They want to unlock a whopping $9 billion in value for shareholders.
Here's the issue: they're alleging Grayscale has an "improper redemption ban," which is basically stopping FTX's folks from accessing about $250 million.
Alameda's been thrown a curveball, though. A potential co-plaintiff they were counting on has stepped away, leaving them in a bit of a bind. They need more plaintiffs to move forward with their lawsuit, so they're asking for more time to gather their forces.
TTD Fraud 😈
Bitsonic CEO arrested
The CEO of South Korea's Bitsonic crypto exchange, Jinwook Shin, has been arrested over an alleged scam involving around $8 million. Initiated in January 2019 and persisting until May 2021, Shin is accused of tampering with computer systems to artificially inflate cryptocurrency prices and trading volumes. This deceit reportedly continued until just months before Bitsonic ceased operations.
And while Mr. Shin is the main player in this unfolding drama, the Vice President of the exchange isn't exactly off the hook either. They're looking at obstruction of business charges.
From the looks of things, it wasn't just about messing with numbers in their own backyard. The top execs also reportedly played some international games, using foreign businesses (that existed only on paper) to boost their trading volumes.
To deal with an exchange deficit, Shin allegedly used a mix of cash and virtual assets, totalling around $8 million, in a turnaround transaction. Furthermore, the Vice President was found meddling in regular crypto trading, using a special program they created.
Meanwhile in North Korea
North Korean hackers, mainly Lazarus Group, are ramping up cyber attacks. Recent incursions have resulted in thefts surpassing $290 million. On August 1, the Lazarus Group reportedly transferred about $8.5 million across several blockchain networks.
Victims include crypto platforms like Alphapo, CoinsPaid, Atomic Wallet, and Harmony. Investigators believe the group is consolidating and laundering its stolen assets; notably, they recently distributed 4600 ETH across 125 new Ethereum addresses and later converted these into Bitcoin.
Scale of thefts in 2022
South Korea's National Intelligence Service estimate: $700 million stolen.
Chainalysis's claim: $1.7 billion in thefts, a 4x increase from 2021's $429 million.
North Korea responsible for 44% of the global total of $3.8 billion in crypto thefts for the year.
TTD Ripple 〰️
The crypto sphere is abuzz with a daring prediction of Ripple's XRP reaching $1,896, chiefly fuelled by its partnership with the International Swaps and Derivatives Association (ISDA).
Driving the Hype: Bradley Kimes from Digital Perspectives stirred the pot when he highlighted the possible impact of Ripple's alliance with ISDA on XRP's price, suggesting that a staggering price of $1,896 could be within reach due to heightened adoption.
The basis of this prediction is that XRP would account for a massive 10% of the derivatives market, estimated at around $1 quadrillion. This would mean XRP would need to handle $100 trillion, necessitating its market cap to balloon by approximately 2,865 times to reach the touted $1,896 price point.
Doubters have highlighted flaws in this optimistic prediction. A significant objection is the presumption that XRP's entire circulating supply would be used concurrently for derivative transactions.
Another point raised was that derivatives don't directly influence the underlying asset's price. The real driver of XRP's price would be the demand in spot XRP, not the derivatives market.
TTD Burn 🔥
An anonymous individual, known only by their Ethereum Name Service identifier as nd4.eth, has burnt a significant amount of crypto assets and NFTs. This includes previously burning 2,500 ether valued at around $4.5 million.
This unidentified individual destroyed GMX and GNS tokens amounting to $3.3 million, along with several precious NFTs. These assets were sent to a specified null address, effectively relinquishing ownership and taking them out of circulation. This comes shortly after the same person eliminated 2,500 ether worth $4.5 million.
Total Destruction: Cumulatively, nd4.eth has incinerated over $8 million in crypto assets.
Specific NFTs Burned: The NFTs sent to a designated burn address comprise:
Two from the Bored Ape Yacht Club (#289 and #71)
Three from the Mutant Ape Yacht Club (#3573, #1826, and #1368)
Crypto Punk #5237. The overall estimated value of the NFTs based on current market rates stands at about 122 ether or approximately $225,000.
A note: The term "burning" pertains to the act of permanently removing tokens from circulation. This is done by sending them to an address that nobody possesses the access to.
The actual motive behind these actions remains uncertain. No public comments or explanations have been provided by nd4.eth regarding these burnings.
TTD Surfer 🏄
Binance Japan is partnering with Liquid, a biometric data authentication service, to meet Japan's strict KYC regulations.
Gemini has added support for the XRP Ledger, making it the 13th blockchain network supported by the exchange.
Blockchain security firms are warning users about the security risks associated with Telegram trading bots.
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The Token Dispatch is a daily newsletter that takes you on a 4-5 minute drive through the wild west of the Crypto World. Daily in your email inbox @13:00 GMT. Almost always.