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.
BINANCE TO LAUNCH UK TRADING PLATFORM: In a Wednesday blog post, crypto exchange Binance announced the upcoming launch of Binance.UK, a Financial Conduct Authority regulated platform for buying and trading cryptocurrencies with British Pounds and Euros coming this summer. The service is designed for U.K. retail and institutional investors and Binance.UK will also serve European customers. The company said, “The platform will provide fast and easy deposits and withdrawals for the buying and selling of digital currencies through direct bank transfers via the UK Faster Payments Service and Single Euro Payments Area network. Additional features will include fiat-to-cryptocurrency on-ramps via debit cards and options for customers to open their own virtual bank accounts, each with dedicated sort codes & account numbers, combined with some of the lowest fees in the market. Verified users will be able to trade spot pairs with deep liquidity while leveraging Binance.com’s advanced trading platform. Up to 65 digital assets are being considered to be available at launch.”
NOMURA, PARTNERS LAUNCH KOMAINU: On Wednesday, Nomura (NMR), digital asset security company Ledger, and digital asset investment house CoinShares shared further details of Komainu, a digital asset custody business for institutional investors. The companies said, "Komainu is the first hybrid institutional-grade custodian for institutional investors designed by finance and security leaders with the belief that decentralized finance needs to be institutionalized, regulatory compliant and secure for institutions looking to incorporate digital assets into their investment strategies. Komainu is regulated by the Jersey Financial Services Commission as a custodian and depositary and provides custody for a range of digital assets on an institutionally compliant platform powered by a Ledger bespoke environment. Through the partnership, Komainu draws on expertise from banking, fund management and cyber-security and provides an optimized application-based solution allowing multi-asset support benefits, regulatory compliance and insurance, while giving peace of mind to digital asset owners with built-in security protocols." Komainu will be led by a team handpicked by leadership from Nomura, Ledger and CoinShares. Jean-Marie Mognetti, co-founder and CEO of CoinShares, will also take the helm of Komainu.
EBANG BEGINS U.S. IPO: Ebang International, a manufacturer of bitcoin mining gear, announced in a Wednesday filing it has launched a roadshow for its U.S. initial public offering. The company, which expects the IPO launch price to be between $4.50 and $6.50 for each of the 19.3M Class A ordinary shares offered, is targeting a raise from $86M to $125M. Ebang is the second Chinese bitcoin mining machine maker to seek a U.S. listing after competitor Canaan raised $90M in an IPO last November. In the filing, the company also cautioned investors on the recently passed Kennedy Bill, which may cause some Chinese companies being prohibited from U.S. exchanges. “Enactment of the Kennedy Bill or any other similar legislations or efforts to increase U.S. regulatory access to audit information could cause investor uncertainty for affected issuers, including us, and the stock price could be materially and adversely affected,” the company said. Ebang added that it expects to incur a net loss of $2.5M on a revenue of $6.4M for the first quarter.
WISDOMTREE LOOKS TO START BITCOIN ETF: In a Wednesday filing, WisdomTree Investments (WETF) announced plans to launch a fund that could invest as much as 5% of its net assets in bitcoin futures traded on the Chicago Mercantile Exchange. The proposed ETF, called the WisdomTree Enhanced Commodity Strategy Fund, would additionally offer broad-based exposure to the energy, agriculture, industrial metals and precious metals sectors through futures contracts. The move comes after the Securities and Exchange Commission has blocked many similar prior proposals urging issuers to address risks including hacking and theft.
CRYPTO FOUNDER PLEADS GUILTY: Robert Farkas, the founder of cryptocurrency firm Centra Tech, pleaded guilty to conspiracy to commit securities fraud and wire fraud after he mislead investors to hand over more than $25M to the enterprise, Bloomberg’s Chris Dolmetsch reported Tuesday. Farkas and two other founders Sohrab Sharma and Raymond Trapani were charged in 2018 with tricking investors with claims of a debit card that enables users to make purchases with cryptocurrency at any business accepting Visa (V) or Mastercard (MA). Sharma and Trapani are expected to go to trial in November.
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 (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 dropped roughly 1% this week to $9,391 in U.S. dollars, according to TradeBlock.
