As bitcoin, ethereum and other cryptocurrencies get increasing attention from investors, Wall Street and its traditional banks continue to adjust to the shift. Catch up on this week's top stories highlighting the intersection of these old guard and new school areas of finance with this recap compiled by The Fly.
BRITAIN SEEKS MORE CLARITY ON LIBRA: Britain’s Information Commissioner’s office said in a Monday statement that it has joined global data protection authorities in “calling for more openness about the proposed Libra digital currency and infrastructure.” The office sent a statement to Facebook (FB) and 28 other companies behind the project asking for details on how customers’ personal data will be processed in line with data protection laws. The UK’s Information Commissioner Elizabeth Denham said, “The ambition and scope of the Libra project has the potential to change the online payment landscape, and to offer benefits to consumers. But that ambition must work in tandem with people’s privacy expectations and rights. Facebook’s involvement is particularly significant, as there is the potential to combine Facebook’s vast reserves of personal information with financial information and cryptocurrency, amplifying privacy concerns about the network’s design and data sharing arrangements.”
BINANCE ANNOUNCES BLACKMAILER: Binance, the world’s largest cryptocurrency exchange by volume, announced Tuesday that an unidentified individual demanded “300 BTC in exchange for withholding 10,000 photos that bear similarity to Binance KYC data.” The firm said, “We are still investigating this case for legitimacy and relevancy. After refusing to cooperate and continuing with this extortion, this individual has begun distributing the data to the public and to media outlets. First and foremost, there are inconsistencies when comparing this data to the data in our system. At the present time, no evidence has been supplied that indicates any KYC images have been obtained from Binance, as these images do not contain the digital watermark imprinted by our system. With that said, our security team is hard at work pursuing all possible leads in an attempt to identify the source of these images…If you are able to provide any information to help identify this person and allow us to pursue the individual through legal action, we will offer a reward of up to 25 BTC, dependent on the relevance of the data supplied.”
COINBASE TO FACE NEGLIGENCE SUIT: U.S. District Judge Vince Chhabria ruled that buyers of bitcoin cash can proceed with a negligence suit against Coinbase for allegedly botching the launch of the cryptocurrency through an “incompetence born of haste”, Bloomberg’s Joel Rosenblatt reported Tuesday. Chhabria said the complaint details a “plausble account that Coinbase breached its duty to maintain a functional market.” Coinbase briefly allowed orders to be posted in U.S. dollars on its platform in December 2017 but ended it after two minutes citing “significant volatility”. Bitcoin cash jumped hours prior to a Coinbase announcement about enabling customers to buy the cryptocurrency, sparking an investigation of possible insider trading.
OVERSTOCK REPORTS Q2 RESULTS: Overstock.com (OSTK) reported third quarter earnings on Thursday posting a net loss of 69c on a revenue of $373.7M, which compared to analyst estimates of a loss of 79c and revenue at $377M. CEO Patrick Byrne said: "Our second quarter brought strong results for both our blockchain and retail businesses as we continue to innovate in both areas with our disruptive technologies. tZERO, the crown jewel of our Medici Ventures keiretsu, continues to expand its lead over the competition in the field of security tokens, which we believe is the killer app of the blockchain revolution. Most of Medici Ventures' keiretsu companies are generally progressing as planned, leading the effort to introduce blockchain products into the real world while focusing on the six areas we've identified as key components to building a technology stack for civilization. Our retail business has returned to positive adjusted EBITDA for the first time since the second quarter of 2017 and shows no signs of stopping. Finally, the recently announced shareholder dividend to be issued in shares of our Digital Voting Series A-1 Preferred Stock, OSTKO, has opened a wormhole that will further connect our retail, blockchain, and crypto universes."
WALMART CRYPTO MAY FACE LESS PRESSURE THAN LIBRA: Cowen senior policy analyst Jaret Seiberg said Walmart’s (WMT) push into cryptocurrency should face less political opposition than Facebook’s Libra and may appeal to Democrats seeking alternatives for non-bank users, Bloomberg’s Gregory Calderone reported Monday. The retailer’s coin, which doesn’t seem to share the “global intentions” of Libra, may resemble a stored value card and will be pegged to the U.S. dollar. The note comes after Walmart applied for a patent for a way to use a digital coin enabling cheaper and faster transactions as well as loyalty features. Kory Lundberg, a spokesman for Walmart, told Bloomberg on Friday that “we don’t have any plans for this patent at this time.”
CRYPTO STOCK PLAYS: Cryptocurrency revenues have been pointed to as reasons to be bullish on Advanced Micro Devices (AMD) and Nvidia (NVDA) in select research. Overstock, DPW Holdings (DPW), Kodak (KODK), Ideanomics (IDEX), Riot Blockchain (RIOT), Pareteum (TEUM) and Social Reality (SRAX) are other stocks that have been touted, or promoted themselves, as a way to play the crypto theme.
PRICE ACTION: As of time of writing, bitcoin rose roughly 10.3% this week to $11,724 in U.S. dollars, according to TradeBlock.
