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With debates raging about potential DeFi regulation, Ethereum co-founder Vitalik Buterin has broken down what he sees as productive solutions.

Buterin noted that the two main regulatory goals are protecting consumers and making it harder for bad actors to move money around, according to a tweet thread. He suggested three ways of achieving this — such as limiting leverage on DeFi protocol front-end websites, requiring transparency about what audits have been done and restricting access to tools through the use of knowledge tests.

Buterin added that he would like to see zero-knowledge technology being used to meet requirements like these. This technology allows for something to be mathematically proven without necessarily giving away the information behind it.

He also criticized some other potential ways of regulating DeFi protocols. He said that putting know-your-customer requirements on DeFi front ends would only annoy users and not frustrate hackers. This is because bad actors interact directly with the protocols and don’t need to access them via the front ends. He added that centralized exchanges are a much better place for this type of regulation.

Kicking the hornet’s nest

The Ethereum co-founder claimed that the crypto industry needs more time to mature before it’s ready for mainstream adoption, which would come with more stringent regulations.

Buterin added he was happy that a lot of the exchange traded funds are getting delayed — giving more time for the crypto industry to develop and improve. 

“Basically, especially at this time, regulation that leaves the crypto space free to act internally but makes it harder for crypto projects to reach the mainstream is much less bad than regulation that intrudes on how crypto works internally,” he said.

Buterin’s comments come on the back of widespread debate within the crypto community on how it should be regulated. The debate has largely focused on comments made by FTX CEO Sam Bankman-Fried, who created a possible manual for regulating the industry. Since then, he has debated the issue with ShapeShift CEO Erik Voorhees and, in light of a lot of backlash, has seemingly given up fighting so hard and has let “crypto Twitter” take charge.

© 2022 The Block Crypto, Inc. All Rights Reserved. This article is provided for informational purposes only. It is not offered or intended to be used as legal, tax, investment, financial, or other advice.

RakkaR Digital, a Singapore-based crypto custodian that uses technology from Fireblocks, has raised $10 million in a seed funding round.

The round was backed by a single investor — SCB 10X — a unit within Thailand’s oldest bank, Siam Commercial Bank (SCB), according to an announcement.

The investment is contingent on RakkaR achieving certain milestones, including the soft launch and full launch of RakkaR’s platform and app, Mukaya (Tai) Panich, CEO and CIO of SCB 10X, told The Block, while declining to comment on the deadlines for those milestones. SCB 10X is bullish on crypto adoption in Southeast Asia, which is an area of focus for RakkaR, she added.

Panich has also joined RakkaR’s board of directors, RakkaR’s founder and CEO Arthit Sriumporn, who is a former SCB 10X executive, told The Block.

RakkaR was founded in February of this year and aims to serve institutional clients in Southeast Asia. Its services are currently live on the Fireblocks platform, Sriumporn said, adding that RakkaR will launch its own mobile app next year.

The app will allow users to transact and access digital assets on the go and obtain yield-generation services, among other services, he said.

There are currently 20 people working for RakkaR across its Singapore and Thailand offices and Sriumporn plans to add 50 more people next year with the fresh capital in hand.

While SCB 10X is currently the only investor in RakkaR, Sriumporn said other investors will be approached in future rounds.

“Southeast Asian markets have some of the highest digital asset and crypto adoption rates in the world, especially in areas such as DeFi, GameFi and web3,” Michael Shaulov, CEO and co-founder of Fireblocks, said in a statement. “Fireblocks is proud to power and secure the RakkaR Digital platform to serve this fast-growing segment with secure MPC [multi-party computation] custodial technology and a broad platform for users to engage with and trade digital assets in the region and beyond.”

© 2022 The Block Crypto, Inc. All Rights Reserved. This article is provided for informational purposes only. It is not offered or intended to be used as legal, tax, investment, financial, or other advice.

Aptos-based DeFi project Arco Protocol has handed over a decision to its community: back it or let the whole thing shut down.

The project explained that it had come under heavy criticism after its token sale was struck by issues, leading to the loss of key partnerships with exchanges and other protocols. Among all these issues, the project faced accusations that it was a scam and that the team intended to run away with the funds, it said on Twitter.

As a result, it has put out a Twitter poll asking for support in order to continue. It gave three options: back the project and keep it running; hand over control of the project to the community; or shut the whole thing down and issue a refund.

While the poll still has hours left, nearly half of the 9,000 votes — 48% — are in favor of a refund. This is followed by a third of votes backing the community and a remaining 20% that want it to be decentralized. While this does mean 52% of voters are in favor of the project continuing in some form, it will likely have to go with the most popular vote and shut down.

Arco claimed that “ArcoFamily” was the largest community on Aptos and that it was “unstoppable.” Alas, if the vote continues on its current trajectory, that will no longer be the case.

© 2022 The Block Crypto, Inc. All Rights Reserved. This article is provided for informational purposes only. It is not offered or intended to be used as legal, tax, investment, financial, or other advice.

The HUSD stablecoin has dropped by 60% over the last few hours and is now worth just $0.30. This comes just days after the stablecoin was delisted from crypto exchange Huobi, which it was associated with.

The stablecoin was trading below the peg since Oct. 28 and sat at around $0.76 over the weekend. At 4 a.m. this morning, it sharply plummeted to a low of $0.28 before bouncing slightly.

The price of HUSD dropped sharply this morning. Image: CoinGecko.

Huobi said on Oct. 27 that it would be delisting HUSD. It added that it would convert users’ assets to the stablecoin tether (USDT).

CoinDesk first reported today’s significant price drop.

Abandoning HUSD

Earlier this month, Huobi said that it would be delisting 21 HUSD trading pairs, which caused an initial — but brief — dip in its price. At the time, the stablecoin fell as low as $0.89 before rebounding.

The stablecoin is issued by Stable Universal. Its current custodian is Huobi Trust. Huobi is also an investor in Stable Universal.

It’s unclear why Huobi has made the move to abandon its preferred stablecoin. The only big change the exchange is going through is its sale to Hong Kong-based About Capital Management. News publication Wu Blockchain reported that Tron founder Justin Sun was the “real” buyer behind Huobi Global’s stake sale, a claim that Sun denied in a comment to The Block. Sun said he is “only an advisor” to Huobi. 

© 2022 The Block Crypto, Inc. All Rights Reserved. This article is provided for informational purposes only. It is not offered or intended to be used as legal, tax, investment, financial, or other advice.

Singapore-based financial services group DBS is partnering with Open Government Products, a tech team within the Singapore government, to launch a live pilot for the issuance of purpose-bound money-based vouchers.

Notably, the vouchers are issued using tokenized Singapore dollars on a blockchain, according to an email from DBS.

The pilot is part of Project Orchid, led by the Monetary Authority of Singapore, which aims to enable a programmable digital Singapore dollar. DBS will issue digital Singapore dollars, while Open Government Products will enable smart contract capabilities.

The goal of this effort is to allow retail shopfronts to benefit from instant settlements, payments and collections through customer usage of the vouchers — purportedly increasing cash flow and saving time on administrative backend tasks, according to the email.

DBS claims the pilot may prove useful to the Community Development Council voucher scheme to assist with the negative effects of rising inflation and increased cost of living — again citing instantaneous payments and doing away with backend administration.

The live pilot will start relatively small, with six merchants and 1,000 select consumers.

© 2022 The Block Crypto, Inc. All Rights Reserved. This article is provided for informational purposes only. It is not offered or intended to be used as legal, tax, investment, financial, or other advice.

Alta, a Singapore-based alternative-assets marketplace formerly known as Fundnel, has acquired the digital securities exchange Hg Exchange, according to a company release. The financial terms of the acquisition were not disclosed.

The deal means that Hg Exchange will now become a wholly-owned subsidiary of Alta, and Phillip Securities, Nomura Holdings, Integra Partners and Prime Partners will become shareholders in Alta.

The acquisition will enable Alta to support the tokenization and digital custody of alternative assets. “Today, by standardizing processes around our tokenized listings, we make investing in alternative cost-effective and transparent for investors,” said Kelvin Lee, CEO and co-founder of Alta, in the release.

A number of other investment firms are exploring the tokenization of alternative assets. Investment manager Hamilton Lane, which has $832.5 billion in assets under management, recently tokenized three funds in partnership with Securitize, while private equity giant KKR has also been exploring tokenizing funds on the Avalanche blockchain. 

Alta recently rebranded from Fundnel to demonstrate the firm’s vision of “alternative assets for all.” Since 2016, Alta has completed over 1,000 transactions valued in excess of $600 million, the company claims.

Hg Exchange is a private exchange that was formed in 2019 by an alliance of financial intermediaries, including Alta and PhillipCapital, and is regulated by the Monetary Authority of Singapore. Last year, the Singapore entity of Binance, Binance Asia Services, took an 18% stake in Hg Exchange.

Hg Exchange will now be rebranded to Alta Exchange following the acquisition and will continue to be led by its current CEO, Willie Chang.

“With the new brand launch and acquisition of Hg Exchange, Alta is affirming its leadership in private markets and continues to pave the way for broader acceptance of tokenized, asset-backed securities,” said Hajime Ikeda, head of digital company at Nomura Holdings, in the release.

© 2022 The Block Crypto, Inc. All Rights Reserved. This article is provided for informational purposes only. It is not offered or intended to be used as legal, tax, investment, financial, or other advice.

Argo Blockchain, a UK-listed Bitcoin miner, has announced that it could be facing negative cash flow in the near term after seeing a financing deal fall through.

Argo previously had plans to raise £24 million ($27 million) via a subscription deal with a strategic investor earlier in October. This deal was in addition to a $5.6 million inventory sale that involved selling 3,843 Bitcoin mining machines for cash. However, the company announced on Monday that it does not believe the deal will go forward.

With the proposed financing plan falling through, Argo says it is exploring other options. However, the news could have some negative implications for the company in the short term. “Should Argo be unsuccessful in completing any further financing, Argo would become cash flow negative in the near term and would need to curtail or cease operations,” the company stated.

A company becomes cash flow negative when its expenses exceed its revenue.

Monday’s announcement is the latest in a string of bad news for the Bitcoin miner. The firm’s share price has collapsed more than 50% on the back of the announcement. Argo’s shares are down 91% year-to-date. The company also slashed its hash rate growth estimate by 42% in August.

Argo’s troubles are a common theme among Bitcoin miners struggling with the bear market and surging energy costs. Core Scientific, another Bitcoin mining company, saw its share price decline by 75% last week amid talk of a potential bankruptcy filing.

© 2022 The Block Crypto, Inc. All Rights Reserved. This article is provided for informational purposes only. It is not offered or intended to be used as legal, tax, investment, financial, or other advice.

Episode 105 of Season 4 of The Scoop was recorded at SALT NY 2022 with The Block’s Frank Chaparro and HomeCoin Co-Founder Karl Jacob.

Listen below, and subscribe to The Scoop on Apple, Spotify, Google Podcasts, Stitcher or wherever you listen to podcasts. Email feedback and revision requests can be sent to podcast@theblockcrypto.com.

A project called HomeCoin is tapping into the trillion-dollar real estate industry with a mortgage-backed stablecoin called HOME.

In this episode of The Scoop, HomeCoin Founder Karl Jacob unpacks the mechanics behind HomeCoin’s mortgage-backed stablecoin and shares why he believes the best way to move the real estate industry on-chain is incrementally over time.

According to Jacobs, HOME is over-collateralized by mortgages, and yield is paid to holders of HOME from payments made on those mortgages:

”Unlike other stablecoins, where the return is fueled by marketing dollars and a whole bunch of other things and things going to the moon, these are actually real payments from real people on houses that exist in the real world.”

While Jacob sees room for HomeCoin to expand to other types of loans, such as car loans or loans against commercial equipment, he doesn’t think tokenizing actual real estate is an effective strategy: 

“The reality is we’ve got a $13 trillion industry that isn’t on-chain, and how can we move to a world where part of it is on-chain and slowly eat that world, versus trying to swallow it whole — which is basically what those guys are trying to do.”

During this episode, Chaparro and Jacob also discuss:

• How HomeCoin utilizes real-world decentralization
• Why all the loans backing HomeCoin are over-collateralized
• How HomeCoin users are able to choose different risk profiles

This episode is brought to you by our sponsor Tron, Ledn

About Tron
TRON is dedicated to accelerating the decentralization of the internet via blockchain technology and decentralized applications (dApps). Founded in September 2017 by H.E. Justin Sun, the TRON network has continued to deliver impressive achievements since MainNet launch in May 2018. July 2018 also marked the ecosystem integration of BitTorrent, a pioneer in decentralized web3 services boasting over 100 million monthly active users. The TRON network completed full decentralization in December 2021 and is now a community-governed DAO. | TRONDAO | Twitter | Discord |

About Ledn
Ledn was founded on the unshakeable conviction that digital assets have the power to democratize access to the global economy. We help you to experience the real life benefits of your Bitcoin without having to sell it. Start a savings account, take out a loan, or double your Bitcoin. For more information visit Ledn.io

© 2022 The Block Crypto, Inc. All Rights Reserved. This article is provided for informational purposes only. It is not offered or intended to be used as legal, tax, investment, financial, or other advice.

FTX US, the crypto exchange operator, is pushing staff to move to Miami a month after naming the city as its U.S. headquarters. Staff has been encouraged to make the move by mid-November, according to people familiar with the matter.

While FTX’s other offices in the United States are not fully closing down, they are being downsized as the startup looks to concentrate its workforce in Miami, the sources said. The move is about getting staff in the same place and ensuring they can communicate well, one person added. Currently, most of the available roles on FTX’s careers page are based in Miami.

FTX was contacted for comment but did not respond by 2:00 am ET.

Sam Bankman-Fried, FTX’s CEO, announced that the exchange would be shifting its U.S. headquarters from Chicago to Miami in a tweet in September. Miami mayor Francis Suarez — who has been vocal about his hopes to turn the city into a crypto hub — lauded the move.

FTX has invested heavily in Miami. In April 2021, the exchange operator was named the exclusive crypto partner of the Miami Heat. The American Airlines Arena was renamed FTX Arena as part of a 19-year sponsorship deal worth $135 million.

FTX’s leadership in the U.S. is also in transition, with former president Brett Harrison — who was based in Chicago — stepping down in late September to take on an advisory role. Miami resident Zack Dexter, who previously led FTX US’s derivatives unit, took over from Harrison.

© 2022 The Block Crypto, Inc. All Rights Reserved. This article is provided for informational purposes only. It is not offered or intended to be used as legal, tax, investment, financial, or other advice.

Regulators in Hong Kong unveiled plans to explore opening the crypto market to retail investors. 

The Securities and Futures Commission will launch a public consultation on potentially allowing retail investors to trade virtual assets (VA), with access to crypto through exchange-traded funds (ETFs) also on the table, a government announcement said this morning.

“We recognise the increasing acceptance of VA as a vehicle for investment allocation by global investors, be they institutional or individual,” said the Financial Services and the Treasury Bureau, in a statement. “Having these products launched in Hong Kong will provide the connectivity between VA players and traditional financial institutions, offering investors with well-designed products, hence promoting the overall growth of the sector in our market.”

The news comes as senior officials outlined plans, at the opening sessions of Hong Kong FinTech Week, to try to turn the city into a global center for the digital asset industry. 

In a recorded video, finance secretary Paul Chan spoke of plans for Hong Kong to launch a Central Bank Digital Currency (CBDC).  

“The HKMA has begun preparatory work to launch our very own CBDC,” he said. “It is also working with the People’s Bank of China, the Bank of Thailand, the Central Bank of United Arab Emirates and the Bank of International Settlements Innovation Hub in Hong Kong on a multiple CBDC project enabling real time cross border foreign exchange payment versus payment transactions.”

In a separate speech, Eddie Yue, chief executive of the Hong Kong Monetary Authority, touched on a wide range of crypto-related topics, including the use of the metaverse by financial institutions for brand-building; the benefits of “composability” in DeFi; and how tokenization could be used to foster innovation in everything from bond issuance to art ownership. 

But Yue cautioned that “a radically open mind does not mean that financial stability will fall by the wayside,” stressing the need for the “right guardrails.”  

Hong Kong has long positioned itself as the world’s trading gateway into China and in recent weeks officials there had spoken of their goal to also become an international virtual assets center. At the fintech summit, which this year focused on Web3 and the metaverse, visitors were given proof of attendance protocol tokens issued as a non-fungible token.

The city was one of the first to introduce a regulatory licensing regime for fund managers and exchanges that traded digital assets, with other governments around the world trialling their own approaches to supervising crypto-related activities. Singapore last week proposed new rules for retail crypto investors, including that they should not trade with borrow funds. The south east Asian city-state at the same time also issued a consultation paper on the regulation of stablecoins. Also last week, UK lawmakers voted through amendments to a finance bill that will widen regulatory supervision of digital assets.

Hong Kong lawmakers are currently reviewing new rules on crypto regulation that seek to broaden a licensing regime for crypto exchanges and service providers. At present, only professional investors in Hong Kong, who have to prove a set minimum net worth, can trade on exchanges run by BC Group and Hashnet, the only two operators to have gained licenses so far under local rules.

To date, other exchange operators looking at applying for licenses have been hesitant to proceed because of rules restricting the services they can offer, including a ban on more lucrative areas like taking leverage positions and derivatives trading, as well as limitations on providing liquidity, said Urszula McCormack, partner at King & Wood Mallesons. Firms can only offer pure automated matching, meaning international exchanges could instead offer brokerage or pursue an offshore reverse inquiry model without the same hurdles. ”While many are asking why would you bother, a lot of exchanges do value licenses, they are valuable from a reputational standpoint,” McCormack said.

The consultation on retail access marks a clear shift from recent comments to lawmakers scrutinising the new supervisory framework for digital asset service providers. It was prudent that only sophisticated investors be allowed to trade crypto, government officials told lawmakers in July at a hearing on the proposed rule changes. After lawmakers pushed back at the meeting, suggesting that if retail investors were unable to trade on locally licensed exchanges they would use unlicensed overseas ones, officials said the regulator would likely hold a public consultation on the issue.

© 2022 The Block Crypto, Inc. All Rights Reserved. This article is provided for informational purposes only. It is not offered or intended to be used as legal, tax, investment, financial, or other advice.