MAS Chairman Questions: Will Regulating Crypto Legitimize Speculation?

• The Monetary Authority of Singapore’s Chairman Tharman Shanmugaratnam questioned if regulating the crypto industry would give credibility to speculation.
• Shanmugaratnam argued that lawmakers could steer clear from the crypto sphere and make it clear that the whole space is unregulated.
• He also acknowledged that this is only possible if crypto companies don’t offer services typical to traditional finance institutions.

The Monetary Authority of Singapore (MAS) recently held a discussion at the WEF23, wherein Chairman Tharman Shanmugaratnam raised a controversial take on crypto regulations and questioned if regulating crypto could legitimize speculation.

Shanmugaratnam noted that while crypto regulations need to be in place to combat money laundering, it may be better to leave the industry unregulated if crypto companies do not offer services typical to traditional finance institutions. He argued that by doing so, lawmakers could make it really clear that the whole space is unregulated and investors have to invest on their own risk.

However, Shanmugaratnam also acknowledged that this may only be possible if crypto companies don’t offer services similar to those of traditional finance institutions. He said that if crypto companies would like to do things that traditional finance is doing, they should be subject to the same regulations.

The MAS chairman further noted that crypto regulation is still in its infancy and that it is important that the regulations are thought through carefully and not rushed into. He concluded by saying that the crypto industry needs to be given time to develop before any regulations are implemented.

Overall, the discussion at the WEF23 revealed that even though crypto regulations are necessary, it is important to consider the implications of regulating the industry. While it could provide investors with more security, it could also make the industry more attractive to speculators, which could have unintended consequences.

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BTC, ETH Buying Power Increases Despite Risk-Off Environment

• Glassnode data suggests that investors are continuing to hold Bitcoin and Ethereum compared to stablecoins in spite of the current risk-off environment.
• The data indicates that BTC and ETH purchasing power is on the up, as billions of stablecoins have been redeemed for fiat in recent months.
• This could be due to the FUD surrounding the Binance insolvency, which sparked a run on the exchange, but as the FUD died down, BTC and ETH buying power is increasing relative to stablecoins.

In recent months, trillions of dollars have been withdrawn from exchanges in the form of stablecoins, potentially due to the FUD surrounding the Binance insolvency. However, despite the current risk-off environment, data from Glassnode indicates that investors are continuing to hold Bitcoin and Ethereum compared to stablecoins.

The data, which was analyzed by CryptoSlate, shows that the 30-day change in stablecoin buying power on exchanges has been increasing, suggesting that there is greater stablecoin-denominated buying power in proportion to BTC and ETH buying power. This suggests that investors are confident holding Bitcoin and Ethereum, over stablecoins, during the current risk-off environment.

Stablecoins fulfill multiple functions, including facilitating on/off ramping and as a store of value, particularly in Southern Hemisphere countries that typically experience high inflation. This could explain why there has been an increase in stablecoin-denominated buying power, as investors look to protect their assets from the potential volatility of the market.

Overall, the data from Glassnode suggests that investors are still confident in the long-term potential of Bitcoin and Ethereum, compared to stablecoins, despite the current risk-off environment. This could be a sign of investors’ faith in the future of cryptocurrencies, even in times of uncertainty.

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Digital Dollars: The Future is Bright for USDC Stablecoin

Bullet Points:
-Circle published a recap of 2022 and said it had kept its promise of dollar parity for USDC
-The company has redeemed $213 billion since its launch in 2018, and 80% of the asset reserves are 3-month U.S. Treasuries
-The future of „digital dollars“ looks bright with the growing consensus in favor of well-regulated and trusted offerings

Circle recently published a report on the state of the USDC economy, and in the report they devoted a section to reminding readers that the USDC stablecoin is always 1:1 redeemable for US dollars. This is a promise that Circle has kept since the launch of the USDC stablecoin back in 2018, and despite the challenging year of 2020, Circle has managed to keep this promise.

The report emphasized that this was possible due to the company’s prudent management of USD assets backing the token. 80% of the asset reserves relate to 3-month U.S. Treasuries, which are among the most price-stable and liquid assets in the world. The remaining 20% is held as cash across eight different U.S.-regulated banks. This helps to ensure the dollar parity of the USDC stablecoin.

The report also highlighted the growing consensus in favor of „digital dollars“ and the promise of well-regulated digital dollars like USDC. Digital dollars offer things that would not be possible with money if it remained in physical form and only traveled on largely-closed networks or analog rails.

The future of digital dollars looks bright, and Circle is regulated and licensed under U.S. federal and state money transmission laws. This helps to ensure that the USDC stablecoin remains a safe, trusted and reliable digital currency. With this in mind, the report concluded that the future of digital dollars looks bright.

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VC Firms Sequoia, Paradigm, Temasek Invest in Failed Crypto Exchange FTX

Bulletpoints:
• Failed crypto exchange FTX revealed the names of various shareholders and investors in a recent bankruptcy court filing.
• VC firms Sequoia, Paradigm, and Temasek led the four rounds of fundraising between July 2021 and January 2022.
• Sequoia Capital invested the most in series B and series A, obtaining 4.8 million preferred shares and 5.3 million shares, respectively.

FTX, a failed crypto exchange, recently revealed the names of various shareholders and investors in a bankruptcy court filing dated Jan. 9. The filing showed that four rounds of fundraising had taken place between July 2021 and January 2022. These fundraising rounds were led by prominent venture capital firms known for their involvement in the crypto industry: Sequoia, Paradigm, and Temasek.

Sequoia Capital made two large investments in series B and series A, obtaining 4.8 million preferred shares and 5.3 million shares respectively. It also gained just over 572,000 shares in Series B-1, though it was only responsible for 16% of that round. Paradigm made its largest investment in Series A, acquiring 16.5 million shares. Despite this, it only led Series C, where it obtained 1.6 million shares and was responsible for 20% of all funding. It also obtained 1.5 million shares in series B.

Temasek, a Singapore state-owned investment company that recently moved into crypto VC investment, led FTX’s ambitious series A funding round. Temasek obtained 26.3 million shares and accounted for 16% of that investment. Additionally, filings showed that the New England Patriots owner Robert Kraft, Coinbase Ventures, and Tiger Global Management had all invested in FTX during the four rounds of fundraising.

Overall, the filing from FTX showed that a number of prominent investors had taken part in the four rounds of fundraising, with Sequoia and Paradigm leading the way. The filing also revealed the New England Patriots owner, Coinbase, and Tiger Global Management had all invested in FTX. With this information now available, it will be interesting to see what other new investors join the fray in the coming months.

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Gemini Discontinues Earn Program, Seeks Resolution for Assets Recovery

• Gemini officially discontinued its interest-bearing product, Earn
• The exchange has terminated its loan agreement with Genesis Global Capital
• Gemini is seeking a resolution for customers wanting to recover their assets

Gemini, one of the world’s leading digital asset exchanges, has officially discontinued its Earn product, which allowed users to earn interest on their crypto assets.

The exchange has terminated its loan agreement with Genesis Global Capital, the provider of the Earn program, on behalf of its customers. This officially ends the Earn Program, and Gemini has assured users that existing redemptions are not impacted.

Gemini is now seeking a resolution for customers wanting to recover their assets, which have been inaccessible for nearly two months due to market conditions resulting from the collapse of FTX. Gemini has formed a committee to resolve the situation and is acting with utmost urgency to provide updates twice a week on Tuesdays and Fridays.

The company is doing its best to arrange the return of user assets, and it has stated that this is its highest priority. Gemini has not publicly announced the end of Earn, but the letter has been circulated on social media.

Though the situation is unfortunate, it serves as a reminder of the importance of being aware of the risks associated with investing in digital assets. Gemini’s decision to discontinue its Earn product demonstrates its commitment to providing a safe and secure platform for its customers.

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