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FTX.US’s plan to offer crypto derivatives is moving forward with the Commodity Futures Trading Commission announcing on Thursday that it would open up the exchange’s plan for public comments. 

The 30-day comment period would allow market participants to weigh in on FTX’s plan to leverage the Derivatives Clearing Organization (DCO) license it obtained via its acquisition of LedgerX. The US-based firm has ambitions to offer crypto derivatives directly to users under the same umbrella as its spot trading offering — similar to its international affiliate FTX. 

It’s not clear when the CFTC will approve FTX.US’s plans, but the 30-day comment period is the latest step in the firm’s path to launch. 

As for the comment period, the CFTC’s questions focus on the unique risks of crypto trading, as well as the unique ways that crypto allows to mitigate those risks.

Unlike traditional derivatives exchanges in the US like the CME, FTX plans to offer its futures directly to users rather than through futures commission merchants, which typically handle clearing in traditional futures. 

On the margin

Currently, FTX.US allows users who have at least $100,000 in assets on the platform to apply to trade margin in spot markets.

“The most critical piece of the application was going through the actual margin model. Very few new margin models have been approved in the history of the CFTC,” FTX.US president Brett Harrison told The Block. 

The proposed system for margining would update its levels in more-or-less real-time — every 10 seconds or so rather than in the 24-hour windows that are the current standard. It would also allow the integrating of spot and futures portfolios, allowing traders in derivatives to use their spot holdings as collateral.

Harrison points out that the new model allows investors to put more of their portfolios to use and protects everyone from the sorts of market changes that accumulate over 24-hour intervals. In times of market volatility, those periods can result in cascading liquidations. 

“We can liquidate people in small batches and in a continuous fashion, but also make sure that people aren’t completely underwater,” he said. 

Harrison further noted, that their registration with the CFTC is not limited to crypto. “Crypto is our top priority, but farther down the line I think there is a real possibility that we could apply this to more traditional futures and options.”

FTX.US is the US affiliate of the global FTX exchange, which features significantly more trading offerings than US regulations currently allow. FTX.US has been working hard to obtain approval from American regulators, particularly the CFTC.

A major step was FTX.US’s acquisition of registered derivatives exchange LedgerX last fall. In November, the exchange also hired a former CFTC commissioner to head up its lobbying. 

© 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.

Goldman Sachs is shutting down its operations in Russia following the country’s invasion of Ukraine.

The company will become the first major Wall Street bank to do so, but other financial institutions have independently moved to restrict access to their services in Russia.

“Goldman Sachs is winding down its business in Russia in compliance with regulatory and licensing requirements,” a spokesperson for the company said in an email to The Block on Thursday. “We are focused on supporting our clients across the globe in managing or closing out pre-existing obligations in the market and ensuring the wellbeing of our people.”

Goldman Sachs had already started to relocate part of its staff out from Russia to Dubai days before, according to Bloomberg, which first broke the news.

Numerous payments firms, including PayPal, Mastercard and Visa, have also moved to exit the Russian market. 

Western Union announced on Thursday that it would suspend operations in Russia and Belarus, saying in a statement that it “stands with the world in condemning the unprovoked and unjustified invasion of Ukraine.”

Likewise, fintech firms like Revolut, Zepz (previously known as WorldRemit), Wise, TransferGo and Remitly have decided to ban transfers in Russia and Belarus.

Citigroup, which announced it would shut down its consumer banking operations in Russia and a handful of other countries last year, put out a statement on Wednesday saying that as they work toward the exit they would be “operating that business on a more limited basis given current circumstances and obligations.”

© 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.

Global payments giant Stripe has announced that it now supports crypto businesses including exchanges, wallet providers, and NFT marketplaces, among others.

According to a statement on its website on Thursday, Stripe now offers fiat payments API integration for crypto businesses to process crypto-to-fiat currency payments.

As part of the toolkit for crypto firms, Stripe says it is also offering flexible on-ramps for exchanges. These on-ramps, as co-founder John Collison put it on Twitter, will enable both fiat deposits and withdrawals for crypto exchanges.

Stripe’s crypto business toolkit also includes protocols for user identification and fraud prevention. Crypto exchange FTX and its US affiliate, FTX.US, have partnered with Stripe to improve their know your customer (KYC) protocols.

The partnership will see Stripe build user onboarding protocols including identity verification processes.

According to an announcement, the partnership will also see Stripe providing payment services for the exchange. Based on the partnership, FTX and FTX users will be able to buy crypto using debit cards and direct bank transfers via Automated Clearing House (ACH) transactions.

Today’s announcement is the first major crypto-related news from the company since it announced the creation of a team dedicated to Web3 payments in October last year.

At the time, the company stated that it was hiring engineers and designers to build the future of Web3 payments.

© 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.

On March 10, blockchain analytics firm Chainalysis announced the launch of new tools for identifying crypto wallets that fall under sanctions.

The announcement comes as crypto’s potential role in sanctions on Russia draws attention among policymakers and news publishers. 

In an announcement shared with The Block, Chainalysis said: 

“Given the transparency of blockchains, it would be difficult for the Russian government or financial elite to systematically evade sanctions at scale through cryptocurrency without detection. However, as with the traditional financial system, some sanctioned Russian actors may attempt to use cryptocurrency as a means to evade sanctions.”

Launching today are Chainalysis’ oracles, which are smart contracts identifying sanctioned wallets on Ethereum and EVM-compatible networks like Polygon and Avalanche. 

Later this month, the firm plans to release a free API that will allow the public to identify wallet addresses under sanctions from all chains. A representative confirmed to The Block the inclusion of BTC and LTC wallets, which, along with ETH, have appeared on sanctions lists with the greatest frequency.

Chainalysis provides blockchain tracing tools to government agencies and law enforcement and helps crypto firms like exchanges identify high-risk wallets. 

Crypto exchanges in particular have faced particular scrutiny over continuing operations in Russia, despite the fact that financial institutions are only barred from operating with certain financial institutions and specially designated nationals within the country. 

© 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 new bill in the US Senate takes aim at China’s new central bank digital currency (CBDC).

On March 9, Senators Bill Cassidy (R-LA) and Marsha Blackburn (R-TN) introduced the “Say No to the Silk Road Act,” with cosponsorship from seven other Republican senators.

“This bill holds China accountable as they introduce their new digital currency,” Cassidy said in a statement. 

The bill specifically calls on the Secretary of Commerce to produce a series of reports on China’s use of the digital yuan and particularly the expansion of its network into the United States. 

More immediate provisions include strict guidance limiting the use of the digital yuan on US government hardware and the requirement for governments receiving foreign military financing from the US to disclose their use of the digital yuan. 

Many players in the US government, particularly Republicans, view the digital yuan as a tool of Chinese surveillance that may also foster economic dependency in countries that adopt it. Moreover, they see it as a tool to undermine the global dominance of the US dollar.

The digital yuan’s grand opening for an international audience was during the Winter Olympics last month, which caused several Congresspeople to speak out against American athletes using the CBDC. 

© 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.

Crypto firm Paxos, which offers brokerage, custody and stablecoin services, has received in-principle approval from the Monetary Authority of Singapore (MAS).

It makes Paxos the first crypto company to hold regulatory licenses in both New York and Singapore, according to an announcement Thursday.

In 2015, Paxo secured the first limited-purpose trust charter for digital assets from the New York Department of Financial Services.

Paxos’ Singapore approval is in-principle, meaning it still has to get the final approval. That will follow after working with regulators and passing an exam, a Paxos spokesperson told The Block. The in-principle license allows the company to continue its Singapore operations, they said.

Paxos created its Singapore unit in 2012, but to continue operating in the country, it had to win regulatory approval under the Payment Services Act 2019.

“We’re excited to have MAS as our regulator, and with their oversight, we’ll be able to safely accelerate consumer adoption of digital assets globally by powering regulated solutions for the world’s biggest enterprises,” said Rich Teo, co-founder and CEO of Paxos Asia.

Paxos is one of the few firms to get a crypto license from MAS. More than 100 companies that applied for such a license have either been turned down by MAS or withdrawn their applications, according to a Nikkei Asia report in December.

Other firms that have received crypto licenses in the country include DBS Vickers Securities, Sygnum and Independent Reserve.

© 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.

Z Holdings, the internet arm of Japanese conglomerate SoftBank, reportedly plans to launch an NFT marketplace this year as part of efforts to meet its mid-term revenue targets.

 Z Holdings’ NFT mall could come as early as this spring with the marketplace poised to attract users from 180 countries. As part of the plan, Z Holdings aims to expand the user base of its PayPay fintech unit to 90 million, Bloomberg reported on Thursday, citing an interview with co-CEO Kentaro Kawabe.

The company cannot afford to miss out on the opportunities provided by the emerging web3 space that includes markets like crypto, decentralized finance, NFTs and the metaverse, Kawabe said in the interview. 

Z Holdings itself emerged from a merger between Yahoo Japan and popular Asian messaging service Line Corp. At the time, SoftBank indicated that Z Holdings will drive its technology mandate to compete with other major players in the arena of emerging technologies.

With its NFT mall plans, Z Holdings may have to compete with others in the Japanese market including Rakuten and Animoca Brands. Rakuten launched an anime and music-focused NFT platform in February and Animoca Brands reportedly has plans to float an NFT marketplace in Japan in the second quarter.

Z Holdings’ NFT push is yet another example of SoftBank solidifying its investment presence in the web3 space. In November, SoftBank led a $93 million funding round for blockchain gaming platform The Sandbox while also investing $150 million in South Korean metaverse platform Zepeto.

© 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 Europe, the European affiliate of crypto exchange FTX, is partnering with an electro-music festival called Tomorrowland to integrate web3 features into the festival.  

The collaboration will allow Tomorrowland Winter festival attendees to collect the first 1,500 of a total of 6,500 NFTs as part of a broader festival experience. Specifically, possession of the NFTs will unlock one of five locations hidden throughout the mountains in Alpe d’Huez France, where the festival is held at the end of March, with exclusive concerts that festival-goers will have to find and scan their bracelet for entry. The initiative has been dubbed The Quest by FTX.

“The evolution to web3 opens a lot of possibilities for our endless imagination and also the opportunity to tighten the bonds of our community in the coming years,” said Michiel Beers, the founder of Tomorrowland, in a statement. 

The partnership will explore things like the application of Web3 and blockchain technology including NFTs for music, ticketing and art, events in the metaverse, and cryptocurrency payments. “Tomorrowland’s evolution to web3 is an opportunity to establish a deeper connection to the community and engage festival goers with streamlined ticketing options, artists with new creative outlets, and fans of Tomorrowland with the ability to earn, collect or buy digital Tomorrowland assets,” said a company statement. 

The announcement signals the next culture-focused initiative pursued by FTX. In recent months, FTX has made significant moves into sports and fashion and luxury.

“We’re proud to partner with Tomorrowland to bring their truly unique and magical events to the digital space by supporting their Web3, NFT, and crypto related initiatives,” said Sam Bankman-Fried, FTX’s founder and CEO. “We’re also aligned in our shared belief that community, accessibility, transparency and sustainability are the leading factors for a better Tomorrow. The Quest by FTX will give attendees of this Tomorrowland Winter a fun and interactive way to gain access to exclusive events.” 

© 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.

Nordic neobank Lunar announced a $77 million round led by Heartland on Thursday while unveiling new crypto trading tools.

The company said in a press release that the fundraise, an extension of its $210 million Series D round in July last year, will be used to maintain momentum as it rolls out crypto trading tools, a separate blockchain arm, and looks at M&A in the Nordics. 

Founder and CEO Ken Villum Klausen said in an interview with TechCrunch that adding crypto trading tools will help the startup stand out in a market where incumbent players are already digitized. Lunar will offer trading in BTC, ETH, ADA, DOT and DOGE at launch. 

“It’s a hassle for Nordic consumers to use multiple platforms for their needs,” said Villum Klausen in a statement. “We’re excited to bring crypto to our universe of banking, payments and investments.”

Much like Monzo and Revolut, Lunar aims to become a one-stop shop for finance. It already offers a banking services, loans, loan products like BNPL, and stock and ETF investments.

The company’s new blockchain arm will explore how both crypto and blockchain technology can benefit its existing offering to customers. 

The news follows several neobanks’ moves into crypto. Revolut has long offered crypto investment tools and is said to be exploring a native token. Germany’s N26 is reportedly due to launch a crypto trading tool through a partnership with Bitpanda. 

© 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 announced on Thursday it has appointed Steve Sadin as its head of gaming partnerships for its newly-established gaming business. 

In a press release the firm said the WB Games exec will be responsible for collaborating with major gaming brands, while the new venture forays into tokens and digital asset ownership using FTX’s upcoming “crypto-as-a-service” platform.

Sadin has spent the last decade launching and operating free-to-play games for WB Games, part of WarnerMedia. Most recently, he headed up WB Games’ Boston studio, where he launched the mobile real-time strategy game Game of Thrones: Conquest. 

FTX said in a release that he is an avid collector of physical and digital goods, including games, comics, action figures and books. 

© 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.