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Quick Take

• 2021 was a record year for crypto-related monetary sanctions from the SEC and CFTC
• The Block Research analyzed press releases from the SEC and the CFTC to draw insights on crypto-related enforcement efforts

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The U.S. Securities and Exchange Commission has rejected a proposed effort to list a spot bitcoin exchange-traded fund.

The agency, which regulates securities markets in the U.S., had previously punted its final determination on VanEck’s proposed fund. The most recent delay took place in September, setting the stage for a final deadline of November 14 (though it was expected sometime Friday given the weekend timing).

“This order disapproves the proposed rule change,” the SEC said in its notice, published Friday. “The Commission concludes that BZX has not met its burden under the Exchange Act and the Commission’s Rules of Practice to demonstrate that its proposal is consistent with the requirements of Exchange Act Section 6(b)(5), in particular, the requirement that the rules of a national securities exchange be “designed to prevent fraudulent and manipulative acts and practices” and “to protect investors and the public interest.”

This story is developing and will be updated with new information.

© 2021 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.

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Bakkt has published its first quarterly financial report as a public company with the digital asset platform recording a $28.8 million net loss for the reporting period ended September 30, 2021.

According to Friday’s financial report, Bakkt’s revenue for Q3 came in at $9.1 million as against $6.6 million recorded in the corresponding period last year. The firm also recorded a loss of $24.1 million in earnings before interest, taxes, depreciation and amortization (EBITDA), almost twice the figures reported in Q3 2020.

The increase in Q3 loss year-on-year is likely due to the significant business expenses undertaken by the company during the period. The report shows $39 million in operating expenses, more than 60% of the outlay on expenditure for the third quarter of 2020.

Bakkt has inked several partnerships with numerous payments, fintech, and crypto companies including Mastercard and Fiserv. These collaborations are reportedly part of the firm’s bid to pivot from being only an institutional Bitcoin futures exchange to a more retail-focused digital asset outfit.

The Intercontinental Exchange-backed firm also began trading on the New York Stock Exchange in October. The firm’s public listing came after a merger with VPC Impact Acquisition Holdings.

“As we move forward, we will invest the proceeds from our recent business combination to activate our partnerships, further deploying our capabilities with consumers, businesses and institutions,” said Bakkt CEO Gavin Michael in a statement.

© 2021 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 has come a long way from its fringe origins, and even though there are still questionable projects to this day there is no denying that the overall asset class is increasingly gaining legitimacy.

A wide range of legacy financial institutions that previously wrote off blockchain technology are beginning to embrace it, both from a technological and investment standpoint. In fact, JP Morgan was quietly buying BTC dips at the same time Jamie Dimon was publicly decrying Bitcoin as a fraud, and earlier this year Chase Bank opened up access to six crypto funds for clients who are looking to increase their crypto investment exposure. 

The past year has seen a seismic shift in terms of cryptocurrency acceptance among larger professional investors, and 52% of institutional investors worldwide currently invest in digital assets, according to new research by Fidelity Digital Assets. Moreover, 71% of these institutional investors plan to buy or invest in more digital assets in the future.

Clearly, there is a growing demand and acceptance of cryptocurrencies as investments – and not just from casual traders on Robinhood. However, while smaller crypto traders are busy swing trading and gambling with Dogecoin and other “memecoins”, many of the larger investors are generating steady profits in the world of decentralized finance (DeFi).

DeFi is a broad term that encapsulates a wide variety of decentralized lending platforms and crypto exchanges – all capable of operating without a centralized intermediary. The automation of essentially all back-end processes dramatically eliminates overhead costs and allows for significant investor yields that are essentially unheard of within the world of legacy finance.

For instance, our DeFi lending platform Vauld allows investors to earn up to 12.68% APY on USD-backed stablecoins – which maintain the same value/purchasing power as the U.S. dollar and are therefore insulated from broader crypto/stock market movements. Investors who use Vauld are able to generate significant yields the moment they fund their account, with zero deposit or withdrawal fees and no mandatory lockup periods. And even though Vauld has yet to encounter any serious security breaches, Vauld’s investor funds are insured to the tune of $100 million by Lloyd’s London, meaning our users can recover their funds even in the event of a serious platform breach. 

Every day, more individual and institutional investors are taking advantage of the impressive yields enabled through DeFi platforms – and Vauld offers the highest yields in the industry. As a result, record sums have been poured into DeFi protocols, and the total value locked up in DeFi protocols spiked to $60bn this May — up from less than $1bn at the start of 2020. In other words, this growing sector is already generating substantial, tangible wealth for countless people around the world. 

It’s possible to become a millionaire overnight by risking it all in a game of roulette. However, Vauld is meant for investors who are tired of gambling and would rather prioritize consistent, long-term value creation. Register with Vauld today and start building lasting wealth.

© 2021 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

• Investors are looking to snap up land in the digital metaverse, and new products are emerging to help them do that.
• But how do you value virtual land in a limitless digital world?

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Quick Take

• Pocket Network launched in July 2020 as an independent, application-specific blockchain solution to the node incentivization problem
• Despite exogenous benefits to running full nodes such as increased privacy and security, there is a lack of endogenous or native incentives for individuals and companies to run full nodes for multiple blockchains
• Pocket Network set out to solve this problem by creating a two-way marketplace between applications and relay nodes, where applications stake POKT to pay relay nodes to service API requests
• Here, we examine Pocket network activity and revenue to understand the surge in activity over the past couple of months

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members of The Block Genesis.
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this Genesis research on The Block.

Dating and friendship app Bumble is exploring how to integrate the Metaverse and Web 3.0 into a relaunch of its platform for finding friends, executives said this week. 

While many details about Bumble’s blockchain strategy remain unclear, the Austin, Texas-based tech company appears to be taking the Metaverse — a term that refers to virtual worlds and integrated digital experiences and assets — into consideration as it embarks on revamping its Bumble BFF platform for finding platonic friendships. 

“Bumble BFF gives us a platform for Bumble to become a leader in the Web 3.0 world,” Bumble founder and CEO Whitney Wolfe Herd said during the company’s third-quarter earnings call on November 10. She emphasized that Web 3.0 is focused on community and the participants who build it, which squares with its mission of healthy relationships and women’s empowerment.

“In the near term, this means new engagement, participation and creator models,” Wolfe Herd said. “But longer-term, it becomes a way for members to own their experience on Bumble. This could happen through the communities they build, the virtual goods and experiences they acquire, or through new ways of owning their identity as they navigate the Metaverse.”

Bumble’s app is probably best known for its focus on allowing women to make the first move when searching for potential romantic partners, but it also has modes for finding platonic friends (Bumble BFF) and business networking opportunities (Bumble Bizz). 

The company is starting its exploration of the Metaverse by weighing how it fits into the next version of Bumble BFF, which Wolfe Herd said will help people find “a broader community for shared joys and shared struggles.”

Bumble is “taking a Web 3.0 lens,” Bumble, Inc. President Tariq Shaukat told an analyst during the earnings call. In the near term, the company is interested in how it can apply blockchain and crypto in the realm of community experience.

“We’ve got a couple of tests that we’re very excited about that we will be rolling out in the upcoming months around this, but we think that’s the first toehold there,” Shaukat said. “This is something that is going to evolve. We want to make sure we’re setting the technical and engineering foundation for whatever emerges in the metaverse and in the Web 3.0 world.”

Twitter users also noted that Bumble posted a job offer for “Head of Crypto and Web3” on LinkedIn, with the firm seeking a candidate with more than 10 years of experience “designing and engineering large scale systems” as well as a “keen understanding of the challenges and rewards of mobile app development.”

However, the post now says the company is no longer accepting applications.

Mainstream interest in the Metaverse has grown since Facebook revealed a broad pivot toward virtual worlds and experiences on Oct. 28 and changed its overarching corporate name to Meta.

Bumble, Inc., the parent company of Bumble and another dating app called Badoo, grew paying users between the two apps to 2.9 million in the third quarter. The company went public in February after raising $2.2 billion for its IPO, and reported having 42 million monthly, active users in the third quarter of 2020. 

Elsewhere in the connections app world, Tinder parent company Match Group also discussed a pilot project in South Korea called Single Town that has Metaverse elements.

© 2021 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 European Commission, the executive branch that proposes legislation for the European Union, is urging its members to agree on its proposed Markets in Crypto Assets (MiCA) regulations this autumn, according to statements by the EU commissioner for financial services during a web forum Wednesday.

Mairead McGuinness said that the commission is also hoping to finalize its proposed regulatory sandbox for financial products based on distributed ledger technology (DLT) by the end of the year.

“Crypto assets are evolving fast, enabling homegrown firms to enter the market, while also attracting retail investors,” McGuinness said. ”It is our policy and our duty as policy makers to put sound rules in place as quickly as possible.”

The tight deadlines underscore EU regulators’ more urgent pace than their U.S. counterparts in developing a sweeping regulatory framework for crypto assets. Only last week, U.S. regulators released their first recommendations for regulating stablecoins or cryptocurrencies pegged to the value of other assets like the U.S. dollar. Meanwhile, McGuinness said that MiCA is introducing a “bespoke regime” for previously unregulated crypto assets, including stablecoins.

While some critics fear that MiCA’s hyper-focus on stablecoin issuers may drive innovation from the region, the commission says that proposed legislation in the framework will make it easier for crypto companies to expand through the EU via a licensing system that allows firms regulated in one member state to start operating in others.

Despite McGuinness’ call to action, Eva Maydell, a member of the EU Parliament said on Wednesday during a webinar that there are still open questions concerning MiCA. While the European Commission supports the interests of the EU as a whole, the European parliament directly represents the citizens of the union.

Maydell warned it will “take a bit longer than planned” to finalize a position on the framework, although she did not specify a timeline. “But we have to make clear that we don’t want to ban businesses in that particular sphere,” Maydell said.

Meanwhile, the DLT pilot regime will create a safe space for market players to experiment with issuing, trading and settling securities using blockchain technology, McGuinness said.

EU parliamentarian Eva Kaili, who reports on the proposed DLT regime, said during an interview with CoinDesk that the provisions in the proposed regime “will operate in a uniform manner across the EU just like what MiCA is trying to do for crypto assets.”

McGuinness said on Wednesday that the sandbox will run for five years, and at the end of that period, regulators will decide on reviewing the legislation to ensure it is “fostering responsible innovation.”

McGuinness is hopeful that the Commission will agree on the pilot regime by the end of the year. “So as of next year, market participants will be able to test the use of DLT on a large scale in asset classes such as shares on bonds,” McGuinness said.

Bitcoin (BTC) buyers took some profits after the cryptocurrency reached an all-time price high near $68,950 on Wednesday. The cryptocurrency is down about 2% over the past 24 hours and could find lower support around the $56,000-$60,000 price range.

Upside momentum is starting to slow, especially given recent overbought signals on the charts. This suggests BTC’s pullback could extend into Asian trading hours, although buyers will likely return around $60,000.

The relative strength index (RSI) on the daily chart is at the highest level since Oct. 20, which preceded a near-10% drop in BTC’s price.

Further, BTC’s recent all-time price high occurred on lower trading volume and a weaker RSI reading, which means additional buying activity could be limited over the short-term.