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.
ING DEVELOPS DIGITAL ASSETS CUSTODY TECH: ING (ING) is developing technology to enable clients to securely store digital assets, Reuters’ Anna Irrera reported Wednesday, citing people familiar with the matter. The project, which is managed out of Amsterdam, is still in early stages and is one of the bank’s several initiatives related to blockchain. ING “sees increasing opportunities with regard to digital assets on both asset backed and native security tokens,” the bank said in a written statement to Reuters.
AMD JOINS BLOCKCHAIN GAME ALLIANCE: AMD (AMD) announced Friday that it has joined the Blockchain Game Alliance and forged partnerships with technology providers to help promote the development and proliferation of new blockchain-powered gaming platforms. The company said, “As the first major hardware manufacturer to join the BGA, AMD plans to enable alliance members with efficient and high-performance computing technologies for next-generation blockchain-based gaming platforms that could potentially transform the way games are created, published, purchased and played.” AMD also announced partnerships with blockchain technology providers, Robot Cache, which launched their online gaming marketplace in June, and ULTRA, which plans to launch its online gaming marketplace in the coming months.
ICE ANNOUNCES COMPLETION OF BAKKT BLOCK TRADE: Intercontinental Exchange (ICE) announced Thursday the first block trade of Bakkt Bitcoin Monthly Options submitted to ICE Futures U.S. Bakkt Bitcoin Options settle into the underlying Bakkt Bitcoin Monthly Futures contract two days prior to expiry. Price discovery for the contract occurs completely within a federally regulated market and has no exposure to unregulated bitcoin spot markets. The first trade was executed between Galaxy Digital Trading and XBTO. “Based on our benchmark physically delivered bitcoin futures, these options contracts offer our customers a capital-efficient new tool for trading and for managing volatility, price risk and income generation,” said Trabue Bland, President of ICE Futures U.S.
SHOPIN CEO PLEADS GUILTY: New York Attorney General Letitia James announced Thursday the convictions of Eran Eyal for operating a series of three securities fraud schemes, including a fraudulent initial coin offering in his new cryptocurrency, Shopin. Eyal pleaded guilty to felony securities fraud in violation of the Martin Act related to his scheme with Shopin. He also pleaded guilty to two counts of Scheme to Defraud in the First Degree related to his two prior companies, Springleap and Passo Sync. As part of his convictions, Eyal was ordered to pay $125,000 in restitution and $475,000 in judgments to investors in Springleap, and to surrender the remaining cryptocurrency received from Shopin investors currently valued at approximately $450,000. As a condition of his pleas, Eyal was also required to step down as CEO of Shopin and is banned from raising capital or serving as an officer in a business in New York for three years.
THREE MEN ARRESTED IN $722M CRYPTO SCHEME: U.S. Attorney Craig Carpenito announced Tuesday that three men were arrested in connection with a cryptocurrency mining scheme that defrauded investors of $722M/ Matthew Brent Goettsche and Jobadiah Sinclair Weeks are charged by indictment with conspiracy to commit wire fraud and Goettsche, Weeks, and Joseph Frank Abel are charged by indictment with conspiracy to offer and sell unregistered securities. Two defendants remain at large and their identities remain under seal. “The indictment describes the defendants’ use of the complex world of cryptocurrency to take advantage of unsuspecting investors,” Carpenito said. “What they allegedly did amounts to little more than a modern, high-tech Ponzi scheme that defrauded victims of hundreds of millions of dollars. Working with our law enforcement partners here and across the country, we will ensure that these scammers are held to account for their crimes.” From April 2014 through December 2019, the defendants operated BitClub Network, a fraudulent scheme that solicited money from investors in exchange for shares of purported cryptocurrency mining pools and rewarded investors for recruiting new investors. Goettsche, Weeks, and others obtained the equivalent of at least $722M from BitClub Network investors.
CRYPTO STOCK PLAYS: Cryptocurrency revenues have been pointed to as reasons to be bullish on Advanced Micro Devices and Nvidia (NVDA) in select research. Overstock (OSTK), 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 fell roughly 2.5% this week to $7,225 in U.S. dollars, according to TradeBlock.
