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The Securities and Exchange Commission (SEC) rejected WisdomTree’s most recent attempt to list a spot bitcoin exchange-traded fund (ETF).

The securities regulator rejected the WisdomTree Bitcoin Trust Tuesday after rolling over the decision in both March and August. Like other recent rejections, the order states that WisdomTree has not sufficiently met its burden to protect investors and prevent fraudulent activity and price manipulation.

The SEC has yet to approve a spot-based bitcoin ETF, issuing wave after wave of rejections. Most orders cite these concerns of insufficient practices to prevent market manipulation.

WisdomTree received another rejection from the regulator in December of last year for a previous iteration of the product. 

© 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.

A bitcoin mining facility in Niagara Falls, NY, was ordered to shut down due to a zoning ordinance issue.

The city sent a cease and desist notice to Bit Digital regarding a site owned and operated by one of its hosting partners, Blockfusion, according to a U.S. Securities and Exchange Commission filing from Friday.

The notice ordered “any cryptocurrency mining or related operations” to stop until Blockfusion complies with the city’s zoning ordinance and other codes.

That ordinance had come into effect on Oct. 1, after a “related” moratorium expired on Sept. 30, Blockfusion told Bit Digital, according to the filing.

The city’s mayor, Robert Restaino, said that the moratorium was meant to prevent any bitcoin facility from expanding in the area, while a proposed zoning ordinance would counter noise pollution, the ABC affiliate in Buffalo, N.Y. reported in July.

“Blockfusion has further advised that it is preparing applications for new permits based on the Ordinance’s new standards and that the permits may take several months to process. Bit Digital management continues to monitor the situation,” the document says. “On October 5, 2022, Bit Digital further noticed Blockfusion that it expects it to comply with directives of the Notice.”

Around 17% of Bit Digital’s mining fleet is hosted at Blockfusion’s Niagara Falls site — totaling 13,980  active machines as of Oct. 6.

An explosion back in May had knocked thousands of machines at the facility offline, but power had since been restored, said Bit Digital.

© 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.

Daily volumes in trading of FTX’s Dollar Spot Index have declined following a period of volatility in foreign exchange markets.

The new perpetual contract is based on the so-called FTX Dollar Spot Index and went live on October 3. It tracks the performance of a basket of leading global currencies against the U.S. dollar, including the euro, Japanese yen, Canadian dollar, and British pound. 

Trading in the index came in just above $1 million on its first day of trading, raising to $1.25 million on day two before trending downwards, according to The Block’s Data Dashboard.

Trading volumes were as low as $52,600 on Saturday before recovering somewhat to just over $122,000 on Sunday. Volumes tripled on Monday to a little over $368,000, while open interest — the value of all outstanding contracts — is $777,000.

The lack of volume could be linked to waning volatility in foreign exchange markets, according to the Deutsche Bank FX Volatility index. 

The launch came amid a sustained period of volatility in foreign exchange markets. Both the British pound and the Chinese yuan fell to record lows versus the U.S. dollar in the same week.

The pound has largely recovered since, although JPMorgan analysts say the damage done by the Treasury’s budget could permanently scar U.K. bonds, known as gilts.

This, coupled with Thursday’s inflation data out of the U.S, may be cause for further volatility in FX markets as equities and cryptocurrencies have been pummeled by recent data releases.

© 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.

Axie Infinity creators Sky Mavis said the company will stake the 11,475,000 AXS tokens on its balance sheet to “reinforce [its] long-term commitment to the Axie Infinity ecosystem.”

“Staking this AXS represents our strong alignment with a new type of social contract, one where players and developers work and build together through aligned incentives,” it added in a tweet thread.

Sky Mavis is the creator of the play-to-earn game Axie Infinity, which experienced a meteoric rise in popularity in 2021 before declining in the new year due to the decreasing value of in-game token rewards, The Block previously reported. The game since announced a pivot away from the play-to-earn model in an effort to prompt users to receive more from the game than its tokens, Axie co-founder Jeffrey Zirlin recently mentioned on The Scoop. 

The most recent move could potentially dilute the 43 million AXS currently staked and decrease the annual percentage rate (APR) for current AXS stakers, according to The Block Research. As of publication, there is over 42 million AXS, worth $491 million, staked at a 43% annual percentage rate.

“I don’t understand how this signals long-term commitment when Sky Mavis can unstake whenever they want,” said Thomas Bialek, NFT analyst at The Block Research. 

© 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 U.S. Treasury Department has fined crypto exchange Bittrex for sanctions violations.

The Office of Foreign Asset Control (OFAC) and the Financial Crimes Enforcement Network (FinCEN) announced settlements totaling $29 million with Bittrex on Tuesday morning.

“Bittrex has agreed to remit $29,280,829.20 for its willful violations of the BSA’s AML program and SAR requirements. FinCEN will credit the payment of $24,280,829.20 as part of Bittrex’s agreement to settle its potential liability with OFAC,” the department said in a statement.

OFAC director Andrea Gacki said alongside the announcement: “Virtual currency exchanges operating worldwide should understand both who — and where — their customers are.”

Bittrex allegedly facilitated $263,451,600.13 in sanctioned transactions between 2014 and 2017, according to the releases. Despite implementing blocks on sanctioned individuals, the firm allegedly did not have a program to screen sanctioned jurisdictions like Syria or Crimea up until the end of 2017 and did not file any suspicious activity reports to FinCEN prior to May of the same year. 

Treasury has previously fined crypto payments platforms BitGo and BitPay for facilitating payments in sanctioned jurisdictions, but those fines were just over $98,000 and $500,000, respectively. Today’s actions are the largest of their kind involving a crypto company.

Bittrex has, however, fallen from the rankings of high-volume exchanges, seeing a recent daily volume of roughly $15.7 million, according to CoinGecko.

© 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 stablecoin HUSD has fallen below its intended dollar peg. The stablecoin lost its parity with the US dollar on Tuesday, falling to as low as $0.90 before rebounding to $0.98 as of 8:30 a.m. ET, according to data from CoinGecko. 

HUSD is a centralized stablecoin. It functions as an ERC-20 token on Ethereum that tracks the price of the U.S. dollar and has an estimated market capitalization of $187 million. While it is commonly associated with Huobi Global crypto exchange, HUSD’s operations are controlled by Stable Universal, a Hong Kong firm. In 2019, Huobi’s venture arm Huobi Capital made an investment in Stable Universal.

This is not the first time HUSD lost parity with the dollar. In August, the asset had fallen below $0.90 only to regain dollar parity a few hours later. At the time, the exchange blamed the stablecoin’s volatility on liquidity issues, explaining it made a “decision to close several accounts in specific regions to comply with legal requirements.” However, this time, the firm has not issued a statement yet.

While it’s not immediately clear why stablecoin lost its dollar parity, it may be due to Huobi Global’s decision to delist 21 HUSD trading pairs without offering a clear explanation.

Here, HUSD delistings on Huobi may have hurt the stablecoin’s market sentiment, leading to market sell-offs. The most notable HUSD sell-off came from an address tagged on Etherscan as Alameda Research which reportedly withdrew 70,000 HUSD from Huobi on Monday, only to later swap 50,000 HUSD for other stablecoins like DAI, USDT and USDC on Curve’s decentralized exchange, as reported by security analysts PeckShield.

Stablecoin depegs have become a recurring event during the broader downturn in the crypto space this year, particularly after the collapse of Terra’s algorithmic stablecoin UST, an incident which wiped more than $40 billion in value off the broader crypto market. In June, Tron’s decentralized stablecoin called Decentralized Dollar (USDD) similarly lost its parity with the US dollar but regained it in the following weeks.

Unlike stablecoins that derive their value via an algorithm or crypto collateral reserves, HUSD is claimed to be backed by cash reserves maintained by Stable Universal. 

© 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.

A senior U.S. banking regulator raised concerns that stablecoins could be seen as a term of “disguise” and that the technology looks much like banking, but without the same rules as the traditional banking sector.

“They want to borrow ideas out of bank deposits and this idea that you’ve got something that functions just like money, but on the internet,” said Acting Comptroller of the Currency Michael Hsu at Georgetown Law’s D.C. Fintech Week, a conference in Washington, DC featuring regulators and industry executives. “If we’re not careful, that’s not right. If you could not use the the term ‘stablecoin’ to describe it, how would you describe it?”

Hsu’s remarks echoed concerns raised in a report released Tuesday morning by the Financial Stability Board, an international organization of central bankers and senior regulators, warning that current stablecoins do not meet the organization’s “high-level recommendations,” and suggesting the need for authorities to be ready to apply relevant regulations to any stablecoins that could become Global Stablecoin Arrangements (GSCs).

The report was released ahead of the G20 Finance Ministers and Central Bank Governors (FMCBG) meeting starting Oct. 13.

“This concept is useful as shorthand,” Hsu continued, but when it comes to setting consumer expectations of how it’s going to function, he added that, “now we’re moving into the world of disguise, and that’s where I get worried.”

Hsu raised the topic of stablecoins when bringing up areas of “safety, soundness, and fairness,” that he is focused on as a subject of concern.

Still, Hsu said he didn’t want to completely discourage experimentation with financial technology.

“If the thing that is being discussed or being experimented with is not that big, I, as Acting Comptroller of the Currency, will probably not care that much about it,” said Hsu. “There’s a materiality threshold which I think provides plenty of space for the experimentation that folks want to do,” and that his agency would get involved only if a project started to violate the safety, soundness and fairness measures he raised as his focus.

© 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.

Trading in Coinbase shares took off in pre-market following its partnership announcement with Google, only to surrender those gains shortly after the open.

Shares in the exchange were trading at $$65.80 at the time of writing, after closing at $67.04 on Monday.

The stock traded up in pre-market trading, reaching highs of $69.42 before whipsawing at the open before trending downwards, according to Nasdaq data via TradingView. 

The move comes shortly after Coinbase and Google revealed plans for a strategic partnership, allowing select Google Cloud customers to pay services using crypto starting from early 2023. In turn, Coinbase plans to use Google Cloud to process blockchain data and Google’s fiber-optic network to improve its global reach.

Google will also use Coinbase Prime for its institutional offering, another vote of confidence in the exchanges product following BlackRock’s announcement in August. 

Shares in the exchange have come under increasing downward pressure through a variety of factors, including increased competition and worsening macroeconomic conditions — noted by Wells Fargo in September and Goldman Sachs throughout the summer. 

Exchange volumes in North America have also fallen throughout the year and throughout the crypto winter as opportunities to acquire new users become slimmer exchanges have begun to lower fees or even remove them entirely.  

© 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.

Google is now directly providing data about Ethereum addresses when they are searched for.

When an Ethereum address is pasted into the Google search bar, its ETH balance is displayed.

The data is being collected from Ethereum block explorer Etherscan.

This is what shows up when you search for Ethereum co-founder Vitalik Buterin’s wallet. Image: Google.

So far, it appears this only applies to Ethereum addresses — and not, for example, Bitcoin.

This was noticed by Han Hua, who is a crypto-focused principal investor at Google Ventures, and was previously an engineer at Google.

Google has started providing more cryptocurrency interactions recently. Ahead of The Merge — Ethereum’s recent upgrade to proof of stake — Google provided a countdown to the event, featuring two pandas moving closely together.

© 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.

Quick Take

• Following the broader route across technology and digital asset public equity performance, institutional asset managers have pulled back from the digital assets sector
• This piece looks at the largest holders of digital asset public equities across the ecosystem and their respective fund strategies
• This report is part of The Block’s ongoing market commentary series
• Disclaimer: This is a market commentary research piece and includes opinionated views from our research team. Nothing contained in this piece constitutes a solicitation, recommendation, endorsement, or offer by The Block Research

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