NFTs Launch, Regulators Target Crypto Ads and Scams, Nebraska Adopts Digital Asset Banking Charter, Reports Detail Crypto Hedge Funds and Sanctions Evasion | Baker

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BD-ATS to Issue Blockchain Securities, Crypto Hedge Fund Report Released

Through: Teresa Goody Guillén

The blockchain-based trading platform tZERO recently announced an agreement with an energy project finance platform to digitize approximately $ 25 million stake in an energy fund that will invest in oil and gas assets across the United States. According to a press release, “digital security” will be “built on the Ethereum Blockchain” and “is expected to become tradable on tZERO ATS”. The energy project finance platform is expected to launch its D 506 (c) settlement offering this month.

A major US bank has reportedly announced plans to offer a cryptocurrency investment platform to its high net worth clients by mid-June. The bank’s investment institute reportedly wrote that “[c]rypto-currencies have gained in stability and viability as assets, but the risks lead us to favor investment exposure only for qualified investors, and even in this case through a fund managed by professionals. “

A Big Four accounting and consulting firm recently released its annual report on crypto hedge funds. Key takeaways from the report include:

  • The estimated total assets under management (AuM) of crypto hedge funds around the world increased from US $ 2 billion in 2019 to nearly US $ 3.8 billion in 2020.
  • The median crypto hedge fund reported + 128% in 2020 (up from + 30% in 2019).
  • Median management and performance fees remained unchanged at 2% and 20%, respectively; average management fees remained stable at 2.3%; and the average performance fee fell from 21.1% to 22.5%.
  • The vast majority of crypto hedge fund investors are either high net worth individuals (54%) or family offices (30%).
  • The most common crypto hedge fund strategy is qualitative (37% of funds), followed by discretionary long / short (28%), discretionary long-only (20%) and multi-strategy (11%).
  • The proportion of crypto hedge funds using an independent custodian decreased in 2020 from 81% to 76%; the proportion of at least one independent director on their board of directors increased from 43% to 38% in 2020; and the proportion using an independent fund administrator increased from 86% in 2019 to 88% in 2020.
  • The funds tend to be domiciled in the same jurisdictions as traditional hedge funds, the top three being the Cayman Islands (34%), the United States (33%) and Gibraltar (9%).

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NFTs, Loyalty Tokens Launch, Regulators Target Crypto Ads As Scams Rise

Through: Veronique reynolds

The Associated Press (AP) announced a non-fungible token (NFT) drop this week to celebrate 175 years of photojournalism. The organization plans to auction 10 NFTs that depict iconic photographs taken throughout history, some associated with musical scores. Proceeds from the auction will support the organization’s journalism efforts.

In Europe, the Italian Post, which operates an online marketplace in addition to mail delivery, turned to Hyperledger Besu to build an integrated loyalty points system. According to a press release, the system allows customers to accumulate points through merchant apps and convert those points into fungible loyalty tokens that can be redeemed on the platform for various rewards.

Spain’s economic authorities have launched a royal decree that grants the country’s financial services regulator the power to regulate crypto-asset advertising. According to some reports, the decree is based on the principle that cryptocurrencies present risks related to anonymity, self-preservation of private keys and accessibility.

In the UK, a self-regulating advertising industry organization recently banned an advertising campaign by Luno, a cryptocurrency exchange, “for being deceptive and irresponsible.” The ads are said to have encouraged people to buy bitcoin, stating that ‘it’s time to buy’, without warning consumers that the asset is very volatile and risky. The exchange has reportedly agreed not to post such announcements in the future and include a “risk warning” on future announcements.

According to a recent Federal Trade Commission (FTC) press release, consumers have lost over $ 80 million to cryptocurrency scams since October 2020 – an increase of more than 10 times a year over the past year. ‘other. The median amount that individual consumers would have lost as a result of the scams was $ 1,900. According to the FTC, consumers aged 20 to 49 “were more than five times more likely than older groups to report losing money to a cryptocurrency investment scam.”

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Nebraska adopts digital asset banking charter, tax case addresses crypto mining

Through: Keith R. Murphy

The Nebraska state legislature recently passed a bill to create a state banking charter for digital asset depositories, which was enacted by the state governor on Wednesday this week. According to recent reports, new companies are able to obtain a state banking charter as custodians of digital assets, and existing state chartered banks are now allowed to open cryptocurrency banking divisions. . The reports further note that while digital asset custodians may engage in custody and payment services related to digital assets, they are unable to accept deposits or provide currency loans. fiduciary and must maintain 100% of their assets in reserve by law.

Tennessee couple are challenging IRS right to tax cryptocurrency mining or staking in court, arguing mining is an act of creation and therefore not taxable, multiple sources say . The couple, who are asking for a refund of taxes paid, say the IRS must instead wait until the cryptocurrency is sold or traded for a taxable event to occur.

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China, Hong Kong implement new crypto regulations, Iran stops mining

Through: Keith R. Murphy

Three major Chinese banking and financial associations recently issued a directive severely limiting access to and protection of cryptocurrency in that country. According to a recent report, the restrictions prohibit banks from allowing their customers to access cryptocurrency trading or storage, and prohibits banks from providing insurance to cryptocurrency businesses or investments. The restrictions would also prohibit web platforms from hosting cryptocurrency coin companies and serving advertisements for cryptocurrency-related activities.

In Hong Kong, according to recent reports, the government has issued proposals to restrict cryptocurrency trading to professional investors and to require the exchanges to be licensed by the city’s market regulator. The current existing rules provide for an “opt-in” approach whereby exchanges can apply to the Securities and Futures Commission, but they are not required to do so.

Citing concerns about the power grid, the Iranian president has declared a moratorium on all cryptocurrency mining in the country until the end of September, according to a recent report. As noted in the report, a combination of licensed and unauthorized miners are using more than 2,000 megawatts of electricity, and the country is experiencing hydropower shortages due to an unusually dry spring this year.

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Report Provides New Data on Cryptocurrencies and Sanctions Evasion

Through: Joanna F. Wasick

A recent report from a major blockchain analytics company reveals that over 4.5 million unique bitcoin addresses are linked to over 72,000 unique Iranian IP addresses, which were either involved in direct cryptocurrency transactions , or used to query the blockchain to verify the funds in their control. The report continues to find that many of the identified bitcoin addresses were linked to multiple Iranian IP addresses, indicating the use of mobile wallets connected to multiple internet sources. The result of this, according to the report, is that financial institutions have little or no visibility into the link between a bitcoin address and users in sanctioned countries, like Iran. The report warns that financial institutions should complete all sanctions risk mitigation strategies to ensure that cryptocurrencies are not used to transact with sanctioned countries.

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