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.
TEENAGER PLEADS NOT GUILTY IN TWITTER HACK: Following the July 15 attack on Twitter (TWTR) in which hackers used the accounts of high-profile to perpetrate a cryptocurrency scam, 17-year-old Graham Ivan Clark pleaded not guilty to hacking the accounts, Bloomberg’s Chris Dolmetsch reported Wednesday. Clark entered the plea to over 30 charges filed against him for hacking over 100 high-profile accounts and luring additional users to sending him more than $100,000 worth of bitcoin. Clark, who is charged along with two others, is accused of gaining access to the accounts by convincing Twitter employees he was a colleague who needed log-in credentials.
GOLDMAN APPOINTS HEAD OF DIGITAL ASSETS: Goldman Sachs (GS) has named Matthew McDermott, former managing director for the bank’s internal funding operations, as global head of digital assets last month, CNBC's Hugh Son reported Thursday. McDermott, who is based in London, replaced Justin Schmidt, a former crypto trader and quant who lead Goldman’s digital assets team since 2018. “In the next five to 10 years, you could see a financial system where all assets and liabilities are native to a blockchain, with all transactions natively happening on chain,” McDermott. “So what you’re doing today in the physical world, you just do digitally, creating huge efficiencies. And that can be debt issuances, securitization, loan origination; essentially you’ll have a digital financial markets ecosystem, the options are pretty vast.”
JAPAN REGULATOR CAUTIOUS ON CRYPTO: Ryozo Himino, the new commissioner of Japan’s Financial Services Agency has voiced warnings over deregulating cryptocurrency, contending that doing so might not support technical innovation, Reuters’ Leika Kihara and Takahiko Wada reported Wednesday. Himino said the country should instead focus efforts on issuing central bank digital currencies as the COVID-19 outbreak could accelerate the arrival of a cash-free society. “Deregulating bitcoins and other cryptocurrencies may not necessarily promote technical innovation, if doing so simply increases speculative trading,” said Himino. “We’re not thinking of taking special steps to promote cryptocurrencies.”
NBA PLAYERS BACK DAPPER LABS: Dapper Labs, the company developing Flow blockchain for digital collectibles, announced Thursday that it has closed $12M in new funding from investors including NBA players Andre Iguodala, Spencer Dinwiddie, Garrett Temple, JaVale McGee and Aaron Gordon. Other new investors in this round include Coinbase Ventures, Distributed Global, Valor Capital Group, A.Capital, BlockTower Capital, Blockchange Ventures, EONXI Ventures, Reed Company, Greenfield One, North Island Ventures, Republic Labs, L1 Digital AG and Pirata Capital. Existing investors participating include Samsung NEXT, Andreessen Horowitz including their Cultural Leadership Fund, Union Square Ventures, Venrock, Accomplice, Animoca Brands, and AppWorks, among others. Dapper Labs also announced initial results from its first phase of beta testing for NBA Top Shot, its upcoming flagship title developed for the Flow blockchain. The company said, “The first 500 players on NBA Top Shot have spent thousands of hours opening packs, trading moments, and completing collections together.”
CRYPTO VENTURE FUND RAISES $110M: On Monday, Electric Capital announced the close of its second fund, an $110M Seed and Series A fund focused on cryptonetworks and blockchain-enabled businesses. The firm said, “We are fortunate to partner with world-renowned university endowments and philanthropic foundations for our second fund…As we did with our first fund in 2018, we aim to be the first to commit to a founder and are long term investors. We hold tokens for many years and use our tokens to participate in networks. With our larger fund size we will invest from $250,000 to $10M in tokens or equity.” The company added it continues to focus on “Programmable Money”, which includes three key areas: Layer 1 Protocols, Decentralized Finance & Community Owned Networks and Crypto Enabled Businesses and Marketplaces
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), 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 5.2% this week to $11,728 in U.S. dollars, according to TradeBlock.
