the filter: the five most important stories in crypto [29 july – 5 august 2020]

More crypto service providers will hit mainstream stock markets after Hong Kong’s Diginex scores its NASDAQ coup, while institutional investors are pushing Bitcoin futures to record highs, at the same time as traditional hedging instruments like government bonds fall into negative yields. Russian cryptocurrency enthusiasts and businesses may undergo a mass exodus outside the country after President Putin signed the long-awaited bill making Bitcoin and other cryptocurrencies illegal as a means of payment. Cryptocurrency is now defined as property under Russia law but this step to restrict trading and payments puts the country out of step with much of the rest of the crypto-friendly world. Elsewhere, the DeFi trend shows no sign of slowing down as ETH volumes surge, and one of the world’s largest institutional traders sees a 300% quarter-on-quarter rise in lending.

putin signs bill making bitcoin illegal as payment in russia [31 july 2020]

Russia’s cryptocurrency legislation has been long in the making and took an expected dark turn with the State Duma passing the ‘On Digital Financial Assets’ law. Cryptocurrency is now defined as property but using Bitcoin or Ethereum as payment is officially illegal. With the FSB counter-intelligence agency keeping a tight grip on cryptography, Russia cryptocurrency enthusiasts will have to look outside the country for innovation. This regulatory move is out of step with the rest of the world, which is working closer with the FATF to appraise the Travel Rule, so crypto industry commentators are now expecting a mass exodus of cryptocurrency and blockchain businesses from Russia. Read more.

cryptoexchange diginex eyes NASDAQ coup with september debut [31 july 2020]

Last month all eyes were on the news that Coinbase could IPO, but it will be Hong Kong exchange operator Diginex who will win the first plaudits for a cryptoasset business gaining a main market listing. “Trading on a major US market would be a coup for a firm in a field of almost entirely private start-ups competing with each other across the globe,” write Bloomberg. Many more cryptoexchange operators and service providers, from custody specialists to brokers will be traded on traditional stock exchanges, Diginex CEO Richard Byworth predicts, saying: “That’s a really important step because it elevates that level of trust and credibility.”  Read more.

twitter hackers caught by FBI Coinbase photo ID link [31 july 2020]

Court documents reveal that the suspects in the biggest Twitter hack in history were caught by FBI investigators because their identities were revealed by Coinbase.

The pair, age 19 and 22, were known only by their online gaming handles Rolex0373 and eversoanxious001 but FBI investigators linked them to accounts — with photo ID — held by the San Francisco cryptoexchange. While Bitcoin got a bad name worldwide in the security breach, this news shows how legitimate cryptoexchanges are co-operating with security services and the success of the once-feared FATF Travel Rule. Read more.

genesis DeFi institutional lending surges 324% as firms hunt yield [5 august 2020]

The DeFi portion of the cryptocurrency market shows no sign of slowing down. One of the industry’s largest institutional lenders, Genesis Global Trading reported that it saw $2.2bn of new originations in Q2 2020, a 324% rise. “A major theme in Q2 was the demand for yield on cryptoassets,” the report said. “Yield drives markets in crypto and in other asset classes, but the last three months seemed specifically yield-centric.” Read more.

bitcoin futures interest hits record high as bond yields plumb record low [4 august 2020]

Perceived ‘safe’ investment opportunities in traditional asset markets are drying up, and Bitcoin futures are drawing record interest from institutional investors, analysts say. US Treasury bond yields are at a record inflation-adjusted low of -1%, with government bonds in Germany, Japan and Switzerland also below zero. Bitcoin by contrast is winning back its macro hedge status, with open futures interest surging to a $5.6bn lifetime high. Read more.