by Iulia Vasile | Dec 7, 2023 | News
In a landmark development for Europe’s financial landscape, France’s third-largest bank, Société Générale, has made a bold entry into the digital currency domain.
A French bank is launching its euro-pegged stablecoin
The bank has unveiled its native euro-pegged stablecoin, named EUR CoinVertible (EURCV), marking a significant stride in the European banking sector’s adaptation to the evolving world of cryptocurrency.
This groundbreaking stablecoin, set to debut on the Luxembourg-based Bitstamp crypto exchange as reported by the Financial Times, is fully backed by the euro.
This move allows Société Générale’s customers to seamlessly engage with the digital asset market, opening up new avenues for trading and investment.
Jean-Marc Stenger, CEO of Société Générale Forge, has emphasized the EURCV’s pivotal role in the bank’s ongoing journey within the crypto sphere, highlighting its potential utility in settling trades involving digital bonds, funds, and various assets.
The EURCV extends beyond the confines of Société Générale, promising widespread applicability across different financial service providers.
Société Générale is also launching a crypto bond
In a parallel yet equally innovative venture, Société Générale has issued its first digital green bond as a security token on the Ethereum public blockchain.
This bond, valued at 10 million euros, carries a three-year maturity and is earmarked for financing environmentally sustainable activities. The bank stated, “This enables issuers and investors to measure the carbon emissions of their securities on the financial infrastructure.”
The bond’s digital infrastructure offers around-the-clock access to data on its carbon footprint through a smart contract, pioneering transparency in green financing.
The first licenced crypto provider in France
Société Générale’s subsidiary, Forge, has recently earned the distinction of becoming the first fully licensed crypto service provider in France.
Forge, a part of Société Générale, which is France’s third-largest bank, has become the first company in the country to get the top license for offering cryptocurrency services. This license, known as PSAN, allows Forge to hold digital assets for customers, buy and sell them for real money, and trade them against other digital assets.
On July 19, 2023, the French stock market regulator, the Autorité des Marchés Financiers (AMF), added this information to their register. According to Société Générale, this license is the highest regulatory approval possible for handling digital asset transactions.
Already, about 90 companies are licensed by the AMF.
For example, Crédit Agricole, a major rival of Société Générale, got permission for holding digital assets in June 2023.
But Forge is the first to receive this top-level approval for many different services. Business FM, a French radio station, pointed out that these tough requirements for the license favour big, established banks over smaller crypto companies.
This accreditation by the French stock market regulator, the Autorité des Marchés Financiers (AMF), signifies a high level of regulatory endorsement for digital asset transactions, setting a precedent in the French financial sector.
Société Générale has been very active in the crypto world.
It has issued euro bonds on the Ethereum blockchain, created security tokens on the Tezos blockchain, and offered Dai stablecoin loans for bond tokens.
In April 2023, Forge introduced EUR CoinVertible, a stablecoin tied to the euro, for big, institutional clients. This new digital asset is available only to investors who have gone through Societe Generale’s standard customer verification and anti-money laundering checks.
As Europe gears up for the Markets in Crypto-Assets Regulation in 2024, Société Générale’s ventures into the euro-pegged stablecoin market and the issuance of a green bond on Ethereum signify major milestones.
While France is generally open to crypto, the French branch of Binance, a global crypto company, is currently under investigation by the French finance investigation service, directed by a specialized court in Paris.
by Iulia Vasile | Nov 30, 2023 | News
In just six years, Changpeng “CZ” Zhao transformed Binance from a startup funded by a $15 million ICO into a $60 billion titan of the crypto world. His recent resignation as CEO, part of a deal with the U.S. Department of Justice, marks a significant moment not only for Binance but for the broader crypto industry.
This event is part of a larger scrutiny faced by key players in the crypto space, with Kraken and Coinbase also facing legal challenges from U.S. authorities for various regulatory issues.
The crypto landscape is clearly in a state of flux, with regulatory actions signaling a shift towards more stringent oversight.
This period of change is evident in the diverse developments across the industry, from Grayscale and BlackRock’s dealings with the SEC to Circle’s new initiatives, Bittrex Global’s closure, and CoinGecko’s latest acquisition.
What happened to Binance?
Binance, under its CEO Changpeng “CZ” Zhao, agreed to a $4.3 billion settlement with U.S. officials for failing to implement adequate safeguards against illicit activities.
U.S. authorities accused Binance of allowing criminals to transfer stolen funds through the exchange.
As part of the settlement, Binance will pay significant penalties to various U.S. departments, including over $3.4 billion to the Financial Crimes Enforcement Network and around $1 billion to the Treasury’s Office of Foreign Assets Control.
Additionally, Binance and CZ will face stringent monitoring and reporting requirements moving forward. This settlement resolves many civil and criminal investigations into Binance, but a civil case with the SEC remains pending.
Following the settlement with U.S. officials, Changpeng “CZ” Zhao has decided to step down from his role as chair of the board for Binance.US, distancing himself from the exchange’s governance.
This move aligns with his earlier resignation as Binance CEO after pleading guilty to a felony charge related to anti-money laundering deficiencies.
Binance.US, led by Norman Reed, remains separate from these legal issues but is still involved in an SEC lawsuit. CZ’s future involvement in the crypto industry and his legal status, particularly his travel permissions while awaiting sentencing, are currently under consideration by the court.
Binance’s mistakes may be reflected in the industry standards
The recent $4.3 billion settlement of a major cryptocurrency exchange with the U.S. Department of Justice is being viewed positively by industry experts.
This settlement is seen as a step towards reducing apprehensions about engaging with this global exchange, thereby potentially enhancing its trustworthiness in the eyes of investors and users.
Industry observers point out the significance of adhering to regulatory standards, emphasizing that even traditional financial institutions have faced similar challenges. The resolution of the exchange’s compliance issues, particularly around KYC protocols, is considered a positive move for its future operations and for the cryptocurrency industry at large.
Looking ahead, there is growing optimism about the future of Bitcoin.
Expectations are high for the approval of a Bitcoin exchange-traded fund (ETF) in the United States, and the anticipated Bitcoin halving in 2024 is also drawing attention.
These factors, combined with the potential for reduced interest rates by the Federal Reserve, are expected to positively influence Bitcoin’s value.
Furthermore, the forthcoming U.S. elections and ongoing fiscal challenges in major global economies are seen as factors that could increase Bitcoin’s attractiveness as an investment option.
Binance’s future plans
End support for BUSD
Binance has outlined its plan to phase out support for Binance USD (BUSD) products.
Beginning December 15, Binance will no longer support the minting of new BUSD coins, following a decision by Paxos to stop its production.
Users are advised to either withdraw or convert their BUSD into other assets on the exchange before this date.
After December 31, Binance will deactivate BUSD withdrawals, and any remaining BUSD balances will be automatically converted to First Digital USD (FDUSD) for certain users.
This decision is part of Binance’s broader strategy to gradually reduce its reliance on BUSD.
Initially, the exchange will discontinue borrowing and lending services for BUSD, with complete support cessation planned by February 2024.
This move follows regulatory challenges, including the U.S. Securities and Exchange Commission labeling BUSD as an unregistered security and the New York Department of Financial Services ordering a halt to its issuance.
The change in strategy coincides with significant shifts within Binance, including a $4.3 billion settlement with U.S. authorities and a leadership transition, with the former CEO stepping down and the head of regional markets assuming the role.
Once one of the largest stablecoins in terms of market capitalization, BUSD has seen a significant decrease in value over the past year.
Binance to end support for crypto card in Europe
Binance, facing increased regulatory scrutiny globally, is set to end its crypto card services in the European Economic Area (EEA).
The service, which allowed for the direct conversion of digital assets in Binance accounts to local fiat currency, will cease from midnight (UTC+0) on December 20, 2023, affecting all 27 EU member states and others like Iceland, Lichtenstein, and Norway.
Binance’s decision follows the discontinuation of the service by UAB “Finansines passages ‘Contis,’” the issuer of the Binance Visa Debit card.
This change will not affect the accounts of EEA residents but will end the Refugee Crypto Card service introduced for Ukrainian refugees.
The discontinuation in the EEA, alongside earlier service stoppages in Latin America and the Middle East, reflects the challenges Binance faces, including the loss of operating licenses in several countries and ongoing legal battles with regulatory bodies like the SEC.
Binance launches pilot program for bank custody of collateral
Binance has launched a pilot program allowing institutions to trade without depositing collateral directly on the exchange.
This innovative approach enables banks to keep trading collateral off-exchange, such as at a third-party bank, reducing counterparty risk.
The program, mirroring traditional financial market practices, offers flexibility for institutions to manage their crypto-asset allocation according to their risk tolerance. Institutions can hold collateral in cash or Treasury bonds, earning yields while trading.
This initiative, in development for over a year, aims to address institutional investors’ concerns about counterparty risk – the risk of a party defaulting on its contractual obligations.
By not requiring crypto or cash deposits on the exchange, the program lessens the risk of asset loss due to potential exchange issues.
Binance plans to expand this program, engaging with banking partners and institutional investors interested in participating. This move by Binance follows similar efforts by other exchanges to enhance security and trust in crypto trading.
by Iulia Vasile | Nov 24, 2023 | News
Raiffeisen Bank’s Austrian branch and top Australian crypto exchanges, including Independent Reserve, BTC Markets, Swyftx, Kraken, and Binance Australia, are gearing up for an anticipated surge in the crypto market. The Austrian Bank is set to offer cryptocurrency trading, while Australian exchange leaders are bolstering their infrastructure and customer education initiatives.
Raiffeisen Bank’s Austrian branch is gearing up to introduce cryptocurrency trading for its customers. This means you will be able to trade Bitcoin directly on the bank’s platform. This move, first mentioned in April 2023, is now taking shape through a partnership with Austrian crypto company Bitpanda.
The plan is to launch these crypto trading services in Vienna, starting in the early months of 2024.
A bank spokesperson shared that they’ve teamed up with Bitpanda to create a user-friendly digital investment platform, responding to their clients’ growing interest in easy and accessible digital investments.
Raiffeisen wants to keep up with its customers’ investment desires
The bank is enthusiastic about this new venture, emphasizing its commitment to meeting customer needs and preferences.
“We have seen the demand from customers for easy, intuitive, digital investment platforms. Our main intention to take customer-centric decisions has triggered these efforts, which we are excited about bringing to market.”
As part of their new crypto initiative, customers of RLB NÖ-Wien, a branch of Raiffeisen Bank, will have access to a wide range of cryptocurrencies offered by Bitpanda, their partnering firm.
Bitpanda’s Deputy CEO, Lukas Enzersdorfer-Konrad, had mentioned that this collaboration would include Bitpanda’s extensive digital asset portfolio, which boasts over 2,500 cryptocurrencies, such as Bitcoin and Ether.
Furthermore, Enzersdorfer-Konrad highlighted that Raiffeisen aims to make these crypto trading services available to all types of clients, including those in retail, private banking, and the corporate sector.
“As we announced in April, the end goal is to make our offer available to all RLB NÖ-Wien customers. However, the rollout will begin with their customers in Vienna,” a spokesperson for Bitpanda noted.
Raiffeisen Bank’s venture into cryptocurrency trading is a further indication of the increasing acceptance of Bitcoin and other digital currencies.
This trend is also reflected by companies such as Ferrari, which began accepting cryptocurrency payments in October 2023.
Historical Context and Market Position
Established as one of Europe’s oldest banks, Raiffeisen’s roots date back to its first branch opening in Mühldorf, Austria, in 1886.
As of June 30, 2023, the Raiffeisen Group managed assets totalling 247 billion Swiss francs (equivalent to about $280 billion) and had client loans amounting to 219 billion CHF (around $248 billion).
Banks are taking note of the increase in popularity of cryptocurrencies, just as the bull market is expected to start.
Australian Exchanges Anticipate Market Growth
Australia’s top crypto exchange leaders are preparing for an anticipated bull market, expecting a rapid increase in business. Adrian Przelozny of Independent Reserve is ensuring his exchange is ready with the necessary processes, people, and infrastructure to handle a potential tripling of business overnight. He optimistically predicts the next two years to be promising for the crypto market.
BTC Markets’ Caroline Bowler has observed more bullish market conditions since January, with notable growth in asset prices and technological applications in the industry. She cites the influx of new users and increased trading volumes as signs of an emerging bull market.
Tommy Honan from Swyftx reports a rise in buying activity and is enhancing direct debit functions, a recent challenge in Australia’s crypto sector. He attributes this increase to improved market fundamentals, not just investor FOMO, noting a return of customers who were inactive during the bear market.
Jonathon Miller of Kraken Australia urges caution, pointing out the grey area between bull and bear markets. However, he acknowledges reasons for optimism, such as the upcoming Bitcoin halving and Ethereum’s Dencun upgrade, which are attracting both institutional and retail investors. He highlights the growing institutional interest in crypto assets.
Ben Rose from Binance Australia observes an increase in new registrations and trading activity but refrains from confirming a bull market. Focusing on educating users, Rose aims to avoid FOMO-driven buying, emphasizing sustainable and responsible engagement with crypto as part of financial management rather than just price-driven interest.
by Iulia Vasile | Nov 13, 2023 | News
In a significant move since the FTX collapse, former executives have collaborated to create a cutting-edge cryptocurrency exchange. This platform emphasises security, incorporating a self-custody approach with advanced multiparty computation techniques to ensure robust protection of customer funds.
A group of former employees from the cryptocurrency exchange FTX have joined forces to create a new crypto exchange in Dubai.
This new venture aims to address a key issue FTX struggled with – keeping customer funds safe.
Who is involved in this new crypto exchange?
Can Sun, previously a lawyer for FTX, is leading this initiative with a company called Trek Labs. Trek Labs, based in Dubai, recently got a license to provide crypto services in the region. They will operate under the name Backpack Exchange.
Supporting Sun in this endeavour is Armani Ferrante, another ex-FTX employee. Ferrante is the CEO of Trek’s parent company in the British Virgin Islands. He also oversees Backpack, a crypto wallet that’s part of Backpack Exchange. This collaboration was detailed in a report by The Wall Street Journal on November 11.
Claire Zhang, who worked closely with Sun at FTX and is Ferrante’s wife, is also a key member of Trek’s executive team. However, she plans to leave the company after an investment round is raised. The Wall Street Journal mentioned that Zhang has been contributing without a salary to support the early stages of the exchange’s development.
Will this new exchange be better than FTX?
Sun and Ferrante, both former FTX executives, are keen on applying the lessons they learned from the downfall of FTX, particularly in safeguarding customer assets.
They’re introducing a self-custody feature in their new venture, Backpack, which uses a multi-party computation (MPC) method. This approach requires multiple approvals for any transaction, enhancing security.
Additionally, Backpack will allow its customers to check their funds at any time. Sun highlighted to The Wall Street Journal the importance of trust and transparency in the current financial landscape, especially after the FTX collapse.
Backpack Exchange is currently undergoing beta testing, with plans for a broader rollout later in the month, as per the company’s announcement.
Sun was also involved in the recent fraud trial of Sam Bankman-Fried, FTX’s former CEO. He testified, revealing that Bankman-Fried had consulted him for legal advice regarding the use of FTX’s funds by Alameda Research. Bankman-Fried was found guilty on all seven charges related to fraud.
Disillusioned by the misuse of customer funds, Sun resigned from his role as FTX’s general counsel the day after learning about these practices. He expressed his disappointment, noting that this went against his principles and what he was led to believe by Bankman-Fried.
The collapse of Bankman-Fried’s empire was marked by the misuse of billions in customer funds through Alameda Research for investment purposes, resulting in approximately $9 billion in missing customer funds.
What happens when you deposit funds on a crypto exchange?
In simple terms, here’s what’s happening with your funds when you interact with a centralized crypto exchange.
Crypto exchanges are where you can buy, sell, or store your cryptocurrencies. However, not all exchanges operate the same way. Some might use your funds in ways you don’t expect, like investing them in other ventures, which can be risky.
The collapse of FTX is a key example. The CEO allegedly used customer funds for other investments, leading to huge losses. This shows that if the people running the exchange are not trustworthy, your funds could be at risk.
Exchanges use hot wallets (online) and cold wallets (offline) to store crypto. Cold wallets are safer from hacking but less convenient for quick transactions. Most exchanges keep a mix of both to balance safety and convenience.
Exchanges are now focusing more on self-custody options, meaning you have more control over your crypto. They are also using advanced security measures like multi-party computation to protect funds.
Exchanges with securities registration are held to higher standards, which include keeping comprehensive records and being subject to regulatory inspections. This is important for the safety of your funds.
What can you do to protect your funds?
Always research an exchange or broker before investing.
Understand their business model, how they store and use your funds, and what security measures they have in place.
It’s crucial to be aware of the risks and choose platforms that prioritise the safety of your funds.
by Eduard Banulescu | Nov 13, 2023 | News
WhiteBIT has entered an exclusive circle of crypto firms upon reaching its five-year milestone. On the eve of its anniversary, it’s well worth turning our attention to this crypto exchange and looking back on the things that helped build its legacy.
How WhiteBIT became one of the noteworthy crypto exchanges
WhiteBIT’s emergence as a noteworthy force as a cryptocurrency exchange can be traced back to a series of choices that propelled it to the vanguard of the market. WhiteBIT was founded in Ukraine in 2018 and quickly grew to amass a substantial user base. This now exceeds 4 million individuals, making it a significant player in the European market.
WhiteBIT’s exchange encompasses over 270 digital assets across 350 trading pairs. Its suite of services includes margin trading and futures, giving it a wider scope than traditional crypto exchanges and helping it land alongside the industry’s biggest players.
What further set WhiteBIT apart were the strategic alliances it cultivated, notably its endorsement as the official crypto exchange of FC Barcelona, a globally renowned football club. Also complementing its diverse asset selection was the inclusion of 10 fiat currencies for funding user accounts, among them major denominations such as USD, EUR, and GBP, ensuring widespread accessibility for a global audience.
Furthermore, the introduction of its proprietary WhiteBIT Token (WBT) and the innovative WhiteBIT Earn program showcased the platform’s commitment to user-centric innovation, providing a spectrum of benefits and earning opportunities for its users.
The landscape of crypto is a dynamic one. The robust regulatory framework and the high-performance trading infrastructure have helped its rise in the industry during the five years that it has been active.
WhiteBIT’s Five-Year Anniversary
WhiteBIT turns five years old. For all the reasons listed above, this is a big deal. The Baltic Exchange has been a symbol of consistency in an often uncertain crypto space and an advocate for cutting-edge innovation.
With Bitcoin and most other major cryptocurrencies seemingly turning a corner in recent weeks, and with hopes that crypto can enter into a bright new future, it will be companies up to companies like WhiteBIT to offer solutions to both regular and experienced consumers.
by Iulia Vasile | Nov 6, 2023 | News
While the new regulatory framework for UK stablecoins is slated for a 2025 rollout, recent papers from the Financial Conduct Authority and the Bank of England provide an early look into the future landscape of digital currency regulation, revealing the direction and thought process of the UK’s financial watchdogs.
The UK is serious about launching a stablecoin. On November 6th, a collection of important papers was shared with the public about new rules for stablecoins, which are cryptocurrencies designed to have a stable value.
The Financial Conduct Authority (FCA), which looks after the fairness of financial markets, and the Bank of England (BOE), the UK’s central bank, both presented their ideas on the subject. Also, the BOE’s Prudential Regulatory Authority (PRA), which supervises banks, sent out a special note to the heads of banks. Moreover, the BOE created a plan to connect all these different pieces.
Before these papers came out, the UK Treasury gave us a sneak peek on October 30th of what to expect regarding new stablecoin rules. The FCA then went into much more detail, sharing their thoughts on how stablecoins could be used in day-to-day shopping and in big financial dealings, what kind of checks and balances might be needed, and how the coins and the assets backing them should be managed separately to avoid conflicts of interest.
According to the FCA, getting the regulation of stablecoins right is a critical first step towards creating a broader set of rules for all sorts of digital currencies.
The document focused on how to ensure that the same level of risk would lead to the same regulatory treatment. It suggested taking the current rules for looking after clients’ assets as a starting point for new guidelines on how people can get their money back from stablecoins and how those coins should be safely kept.
It also referred to an existing manual for senior managers on how to set up their company’s systems and controls properly. The paper mentioned that there are already rules in place for keeping financial operations running smoothly and for preventing financial crimes, among other things.
The Financial Conduct Authority (FCA) is thinking about adjusting the current financial rules for those who issue stablecoins and look after them, with the aim of applying these adjusted rules to other types of cryptocurrencies in the future.
The Bank of England (BOE) considered how stablecoins, which are tied to the value of the pound and aimed at everyday use, could be integrated into major payment systems. It looked at how stablecoins should be transferred, what the providers of digital wallets and related services should do, and how this connects with the FCA’s ideas about issuing stablecoins and protecting deposits.
While the BOE expects to lean on the FCA to oversee those who keep stablecoins safe, it hasn’t ruled out setting some of its own rules if needed. It highlighted the challenges in regulating wallets that don’t rely on a third party and transactions that take place outside of the blockchain, especially when it comes to preventing money laundering and ensuring that businesses know their customers.
Source: Bank of England
The letter from the Bank of England’s Prudential Regulatory Authority (PRA) made it clear that banks need to distinguish between “e-money or regulated stablecoins” and traditional deposits. They pointed out that as various new digital currencies and currency-like options become available, it’s easy for everyday customers to get mixed up if banks were to market e-money or stablecoins the same way they do with regular bank deposits.
The PRA suggested that banks should focus their creative efforts on traditional deposits and keep any activities related to issuing digital currencies or stablecoins separate, including using different branding. If a company that issues these digital assets wants to also accept deposits in the traditional sense, they should act swiftly and keep the PRA in the loop from the start. The letter also reminded these institutions that any new developments in the area of deposit-taking are still governed by existing rules and regulations.
Source: Bank of England Prudential Regulatory Authority
The plan set out by the Bank of England includes a schedule that aims to have the new system up and running by the year 2025.
