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.
DOJ ANNOUNCES CRYPTO ENFORCEMENT TEAM: Deputy Attorney General Lisa Monaco announced Wednesday the creation of a National Cryptocurrency Enforcement Team, to tackle complex investigations and prosecutions of criminal misuses of cryptocurrency, particularly crimes committed by virtual currency exchanges, mixing and tumbling services, and money laundering infrastructure actors. The agency said, “Under the supervision of Assistant Attorney General Kenneth Polite Jr., the NCET will combine the expertise of the Department of Justice Criminal Division's Money Laundering and Asset Recovery Section, Computer Crime and Intellectual Property Section and other sections in the division, with experts detailed from U.S. Attorneys' Offices. The team will also assist in tracing and recovery of assets lost to fraud and extortion, including cryptocurrency payments to ransomware groups.” "Today we are launching the National Cryptocurrency Enforcement Team to draw on the Department's cyber and money laundering expertise to strengthen our capacity to dismantle the financial entities that enable criminal actors to flourish - and quite frankly to profit - from abusing cryptocurrency platforms" said Deputy Attorney General Monaco. "As the technology advances, so too must the Department evolve with it so that we're poised to root out abuse on these platforms and ensure user confidence in these systems."
U.S. BANK LAUNCHES CRYPTO CUSTODY SERVICES: U.S. Bank (USB) announced Tuesday that its cryptocurrency custody services are now live and available to their Global Fund Services clients. The services are intended for institutional investment managers with private funds in the U.S. or Cayman Islands who would like a safekeeping solution for bitcoin, with additional coin support coming soon. NYDIG, a technology and financial services company dedicated to Bitcoin, is the first crypto sub-custodian announced in the bank’s network of providers. “Investor interest in cryptocurrency and demand from our fund services clients have grown strongly over the last few years,” said Gunjan Kedia, vice chair, U.S. Bank Wealth Management and Investment Services. “Our fund and institutional custody clients have accelerated their plans to offer cryptocurrency and, in response, we made it a priority to accelerate our ability to offer custody services.”
ANALYST SAYS BUY COINBASE: DA Davidson analyst Christopher Brendler kept his Buy rating and $400 price target on Coinbase (COIN) on Monday, stating that the recent exchange data suggests a volume-based Q3 earnings beat. The stock has underperformed the recent rally in bitcoin, but exchange data also suggests that Coinbase continues to gain market share, the analyst said, adding that he would recommend for investors to build positions ahead of the company's Q3 results and given his bullish views on bitcoin into year-end.
MARATHON PRODUCES 1,252.4 BTC IN Q3: Marathon Digital Holdings (MARA) published unaudited bitcoin production and miner installation updates for September 2021 on Monday and announced a new $100M revolving line of credit with Silvergate Bank (SI). The company produced 1,252.4 new minted bitcoins during Q3, increasing production by 91% quarter-over-quarter and produced 340.6 new minted bitcoins during September 2021, increasing total bitcoin holdings to approximately 7,035 with a fair market value of approximately $336.3M. Cash on hand was approximately $32.9M and total liquidity, defined as cash and bitcoin holdings, was approximately $369.1M. Marathon also received approximately 26,960 top-tier ASIC miners from Bitmain year to date with an additional 8,459 ASIC miners currently in transit. The existing mining fleet consists of 25,272 active miners producing approximately 2.7 EH/s. As of October 1, 2021, Marathon's mining fleet has produced approximately 2,098 newly minted bitcoins during 2021.
RIOT PRODUCES 406 BTC IN SEPTEMBER: Riot Blockchain (RIOT) announced Tuesday that in September 2021, it produced 406 BTC, an increase of approximately 346% over its September 2020 production of 91 BTC. Year to date through September 2021, the company produced a total of 2,457 BTC, an increase of approximately 236% over its BTC production during the same 2020 period of 731 BTC. As of September 30, 2021, Riot held approximately 3,534 BTC, all of which were produced by its self-mining operations.
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, Pareteum (TEUM) and SRAX (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 12% this week to $54,390 in U.S. dollars, according to TradeBlock.
