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South Korea’s Financial Services Commission (FSC) reaffirmed its view that non-fungible tokens (NFTs) generally do not fall under the definition of virtual assets and will not be regulated as such, according to a report from the Korea Herald.

• “According to the basic position expressed by the International Anti-Money Laundering Organization (FATF), NFTs are not regulated,” the report said citing an unnamed Financial Intelligence Unit (FIU) official.
• The FIU is the FSC’s anti-money laundering division and the Financial Action Task Force (FATF) is an international governmental body that drafts finance regulation, including on crypto.
• However, the official left the door open to NFT regulation in some cases, as outlined in the FATF’s definition.
• According to FATF’s latest guidance, NFTs are not virtual assets and don’t fall under its regulatory framework for crypto as long as they are used as “collectibles rather than as payment or investment.” Countries should consider whether NFTs are covered by FATF standards on a case-by-case basis, said the task force.
• Some NFTs are only digital collectibles in name and marketing, when in reality they are being used for investment or payment, the FATF warned regulators. Other NFTs that are not virtual assets, but are digital representations of assets regulated by the FATF, the task force said.
• “In order to be used as a payment method, a very large amount must be issued, but there is virtually no reason to make it an NFT that values scarcity,” the FIU official said.
• Despite regulatory ambiguity, the NFT industry has flourished in the intellectual property-rich country, with superstar band’s BTS agency announcing plans to enter the industry yesterday.
• S. Korea implemented a stringent registration framework for crypto exchanges in September, excluding dozens of firms from operating in the country.

Read more: FATF Crypto Guidance Looks to Bring Industry in Line With Banks

mBridge, a multilateral project by four monetary authorities to build infrastructure for connecting central bank digital currencies (CBDC), revealed 15 use cases and 22 participants for the project at Hong Kong Fintech Week on Thursday.

• The project is a collaboration between the Bank of Thailand, the Central Bank of the United Arab Emirates, Hong Kong’s Monetary Authority (HKMA), the People’s Bank of China and the Bank of International Settlements (BIS). It aims to lower costs and improve the speed of international transactions using CBDCs.
• According to the announcement, major financial institutions like Goldman Sachs, HSBC, Société Générale and China’s six biggest state-owned banks are also involved.
• A total of 22 industry participants across jurisdictions will test the 15 use cases during a pilot that will start in 2022, said a brochure posted by Bank of Thailand that also revealed the specific projects.
• Goldman Sachs Asia will test tokenized bond issuance and atomic settlement, DBS Bank Hong Kong will trial cross-boundary insurance payments between mainland China and Hong Kong, HSBC will try out “feature-rich” programmable trade finance, and Société Générale subsidiary FORGE will look into issuing digital native corporate bonds.
• Already, “testing of sample trade settlement transactions across 11 industries has commenced on the trial platform,” according to a video presentation of the project at the Hong Kong conference.
• The project’s steering committee has given priority to trade settlement because of the potential of mCBDC to lower costs and improve speed in the massive industry, according to the presentation. Trade between the four was more than $730 billion in 2019, the presentation noted citing World Bank data.
• In September, the participating banks revealed that they had built a phase 2 prototype.
• Head of the Hong Kong Centre of the BIS Innovation Hub, Bénédicte Nolens, described the project as a “massive undertaking.” Colin Pou, executive director at the HKMA, explained it is better to build a new system for CBDC settlement rather than try to recalibrate the existing infrastructure.

Read more: Central Banks of China, UAE Join Blockchain-Based CBDC Payments Project

Quick Take

• Curve v2 extends the concept of Curve v1’s pegged asset liquidity pools for generic pools comprising non-pegged assets
• Curve v2 pools utilize internal oracles to keep track of the price changes of the underlying assets
• Curve v2 is analogous to automated Uniswap v3 LP strategies but features more tunable parameters

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Craig Wright – the Australian computer scientist best known for his widely disputed claim to be Satoshi Nakamoto, the pseudonymous creator of Bitcoin – is now expected to testify in a Miami court on Monday.

• Wright was initially slated to testify Thursday, according to an earlier schedule drawn up for the jury by Judge Beth Bloom of the U.S. District Court for the Southern District of Florida.
• However, Wright’s defense team’s questioning of Ira Kleiman, the plaintiff in the case, went all day Thursday and is expected to spill over into late Friday morning.
• After Kleiman’s testimony wraps, the plaintiffs are expected to introduce pre-taped video testimony from two witnesses, including Wright’s ex-wife, Lynn Wright.
• Kleiman is suing Wright for what he alleges to be his brother Dave’s share of proceeds derived from business arrangements between the two men, including intellectual property and bitcoin that Ira says they mined together.
• Ira based these claims on information he received from Wright and others following Dave’s death in April 2013, as well as emails and other documents.
• However, it is unclear whether Wright has access to any of the alleged 1.1 million bitcoin (which would be worth over $67 billion).
• Much of it is in wallets associated with Nakamoto and other sources, but Wright has never been willing or able to demonstrate he controls the wallets of Bitcoin’s creator.
• Andres Rivero, lead counsel for Wright’s defense, focused his cross-examination of Ira on his strained relationship with his brother Dave before the latter’s death, in an attempt to depict Ira as purely motivated by financial gain.
• The defense also sought to downplay Dave’s purported role in the conception of bitcoin by establishing a timeline of his poor physical health in 2008, the year the Bitcoin white paper was published.
• Under cross-examination by Rivero, Kleiman said he erased and overwrote data on all but one of the 14 devices that were recovered among David’s belongings, and threw another away. The defense argues that if Dave had any bitcoin or other information and Ira couldn’t find it, that’s his fault.

Read more: In Craig Wright Trial, Plaintiffs Lay Out Pattern of Fraud, Deceit and Hubris

At the Securities Enforcement Forum on November 4, Gary Gensler denied that new technological labels alter the realities of securities definitions, specifically calling out decentralized finance and crypto products.

Gensler, who chairs the Securities and Exchange Commission, said: 

“Sometimes, people focus on labels. For example, we hear terms like ‘decentralized finance’ (DeFi), ‘currency,’ or ‘peer-to-peer lending.’ It can seem easy to take these words at face value. Make no mistake: regardless of the label or purported mission, we will be looking at the economic realities of a given product or arrangement to determine whether it complies with the securities laws.”

Gensler has made no secret of his belief that many cryptocurrency-based products fall under existing definitions of securities, citing the need to assess based on facts and circumstances, not new taxonomies. This is despite many in the crypto industry asking for specific guidance on, for example, which tokens are and are not themselves securities.

Later, referring to an accusation that many have leveled at the SEC — for example, in the ongoing case against Ripple over XRP issuance — Gensler said: “Some market participants may call this ‘regulation by enforcement.’ I just call it ‘enforcement.'”

© 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 Bank of Spain is asking the country’s leading financial institutions to provide information on their crypto-related plans for the next three years, the newspaper El Pais reported Thursday.

The central bank has requested that banks include information on their relationships with crypto service providers, stakes in crypto companies and exposure to crypto. It has also asked banks whether they plan to issue tokens or provide custody, trading or payment services for crypto, and to outline any initiatives to market products or offer services to customers through a digital platform over the next three years

According to unnamed Bank of Spain sources cited in the El Pais article, the purpose of the data request is to know “the impact that the ongoing process of digitalization and financial innovation may have on it.”

The request for information comes as Spain’s interest in cryptocurrency rises with multiple institutions launching initiatives or contemplating them to address demand.

Last week, the Bank of Spain issued instructions on how institutions may register to offer crypto-related services in the country.

Banco Santander, Spain’s largest bank, will be offering crypto ETFs, Santander’s Executive President Ana Botin said on Oct. 14 in a Bloomberg TV interview. “We have been quite slow in adopting that, because of compliance and regulatory and risk appetite,” Botin said. “But we are now getting into it.” When asked if Santander’s customers were asking to buy bitcoin, the executive said yes.

“The next big thing, which is already here actually, is crypto,” Botin said, adding that the bank issued an end-to-end bond on a blockchain.

In August, Partido Popular (PP), the leading opposition party in Spain, introduced a bill that would allow payment of mortgages with cryptocurrencies and create a national crypto assets council to analyze the implications of the use of crypto and blockchain in the country.

In June, the Spanish banking giant BBVA made its cryptocurrency trading and custody service available to private banking clients in Switzerland.

Singapore-based cryptocurrency platform AscendEX, formerly known as BitMax, has raised $50 million in a Series B funding round.

San Francisco-based Polychain Capital and Nevada-based private equity firm Hack VC led the round. Additional firms participating include Jump Capital, Alameda Research, Uncorrelated Ventures, Eterna Capital, Acheron Trading, Nothing Research, and Palm Drive Capital. Imperii Partners advised AscendEX during the raise process. 

AscendEX plans to use the funds to support international growth. The company was founded in July 2018 as BitMax and relaunched with its current name in March. 

“In an extremely competitive crypto exchange landscape, AscendEX has impressively emerged as the leading venue for innovative crypto projects in DeFi, GameFi and crypto infrastructure,” Jump Capital partner Saurabh Sharma said in a press release. “AscendEX remains ahead of the curve by constantly innovating and offering unmet needs such as broad staking access and DeFi yield farming for retail investors.”

© 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.

Payments firm Square said in its third-quarter earnings letter Thursday that its peer-to-peer payment service, Cash App, generated $1.82 billion of bitcoin revenue in the quarter and $42 million of gross profit, up 115% and 29% year over year, respectively.

• Bitcoin revenue and gross profit decreased in the third quarter versus the second quarter, however, Square said, citing the “relative stability in the price of bitcoin, which affected trading activity compared to prior quarters.”
• Square also noted bitcoin revenue and gross profit may fluctuate in future quarters given changes in customer demand and bitcoin’s market price. It said that may be particularly the case “as we lap strong growth rates on a year-over-year basis in the fourth quarter of 2020.”
• Square’s total net revenue was $3.84 billion in the third quarter, up 27% year over year, while gross profit was $1.13 billion, up 43% year over year.
• Shares of Square fell about 3% in post-market trading following the release of its Q3 results.

UPDATE (Nov. 4, 20:51 UTC): Added overall quarterly results in third bullet point.

Payments company Square said Thursday that it made $1.82 billion in bitcoin revenue during the third quarter of 2021 via its Cash App, producing $42 million in gross profit from that activity.

The numbers were included in Thursday’s Q3 earnings release. Square said that total revenue for the period came in at $3.84 billion, and $1.13 billion in gross profits.

“Compared to the second quarter of 2021, bitcoin revenue and gross profit decreased on a quarter-over-quarter basis, driven primarily by relative stability in the price of bitcoin, which affected trading activity compared to prior quarters,” Square said in its letter to investors.

 As shown in the chart below, the results indicate another quarterly decline, compared to Q2’s $2.72 billion in bitcoin revenue and the peak in Q1, when the firm posted $3.51 billion in bitcoin revenue. 

As for Cash App as a whole, Square said: “Cash App delivered strong growth in the third quarter of 2021, generating $2.39 billion of revenue and $512 million of gross profit, which increased 16% and 33% year over year, respectively.”

Square also noted in its letter that the fair value of its past investments in bitcoin was $352 million as of September 30. Square bought $50 million in bitcoin in October 2020 and $170 million worth in February of this year.

“As an indefinite-lived intangible asset, bitcoin is subject to impairment losses if the fair value of bitcoin decreases below the carrying value during the assessed period. In the third quarter, we recognized a bitcoin impairment loss of $6 million on our bitcoin investment,” Square said Thursday. “As of September 30, 2021, the fair value of our investment in bitcoin was $352 million based on observable market prices, which is $203 million greater than the carrying value of the investment.”

As previously reported, Square founder Jack Dorsey continues to expand the company’s bitcoin footprint, including efforts to develop a bitcoin hard wallet as well as an open platform for bitcoin-related financial services.. Last month, Dorsey suggested that Square might get involved in the creation of bitcoin mining hardware as well. 

© 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.

Bitcoin has traded mostly sideways over the past two weeks, prompting some traders to consider alternative cryptocurrencies such as ether for greater profit potential.

“Our models are still full risk-on ETH (whereas our bitcoin model started reducing exposure last week) but we are starting to see some slowing in conviction buying,” Ben McMillan, chief investment officer at quantitative research firm IDX Insights, wrote in a research report.

BTC’s price has been roughly flat over the past week compared to a 4% rise in ETH and a 23% rise in Solana’s SOL token over the same period.

“Investors are likely looking for the next catalyst for another leg higher, but the absence of such is likely to leave bitcoin vulnerable to a break below $60,000,” Daniela Hathorn, an analyst at DailyFX, wrote in an email to CoinDesk.

“Typically, we tend to see BTC sell off a bit after breaking to a new all-time high as traders front-run the hype,” crypto research firm Delphi Digital wrote in a blogpost on Thursday, referring to traders dealing on advance information .

But some analysts expect further upside despite signs of slowing price momentum.

“With MVRV [bitcoin’s market value relative to its realized value] currently trading at 2.72, far off from its recent peak of 3.96″ in February, crypto investment firm StackFunds said in a report it is “expecting further room for growth as [MVRV] retests the 4.0 handle,” along with blockchain metrics showing strong bitcoin accumulation.

Latest prices

• Bitcoin (BTC): $61,162, -2.95%
• Ether (ETH): $4,486, -3.17%
• S&P 500: $4,675, +0.32%
• Gold: $1,793, +0.95%
• 10-year Treasury yield closed at 1.52%

Why this bull run is different

Bitcoin’s two bull runs of 2021 have differed from those in past years. One key distinction has been decreased volatility expectation, CoinDesk’s Muyao Shen reported.

This metric, which shows the cryptocurrency’s expected price swings, did not spike when bitcoin’s price hit record highs in April and then in October, indicating that bitcoin may be evolving into a more mature investment asset.

Prior to 2021, bitcoin’s three-month implied volatility (IV) – investors’ expectation of how turbulent prices will be over the ensuing three months – spiked during both bull and bear runs, according to data from crypto data firm Skew. But this year, a similar spike only occurred when the market crashed in May.

Ether to extend outperformance

Some analysts remain bullish on ether, the world’s second-largest cryptocurrency by market capitalization. The price reached an all-time high around $4,600 on Wednesday.

FundStrat, a global advisory firm, expects ether to rally as high as $4,951 “with little to no resistance” after outperforming bitcoin recently and breaking through September highs.

“While weekly and monthly momentum do show overbought conditions, this won’t be a big deal until near-term technicals begin to show evidence of upside exhaustion,” Mark Newton, FundStrat’s global head of technical strategy, wrote in a research note on Wednesday.

Newton also sees further upside in ETH relative to BTC (ETH/BTC price ratio) if price resistance near 0.08 is broken. “At present, the most likely outcome is a bit more outperformance, followed by a stall out,” Newton wrote.

Altcoin roundup

• SHIB slumps amid speculation about large investor’s holdings: An increased SHIB sell-off on centralized exchanges occurred as the hype around the meme token has been tapering off, CoinDesk’s Muyao Shen reported. The canine-themed token has logged losses for three consecutive days after a SHIB whale (or large holder of the token) made a move on their holdings of 40 trillion SHIB, which was worth roughly $2.8 billion at the time.
• Ethereum alternatives and gaming tokens outperform: Tokens associated with Solana and Polkadot – both alternatives to the Ethereum blockchain – are outperforming along with gaming tokens like Axie Infinity’s AXS, CoinDesk’s Lyllah Ledesma reported. “Currently, it is a very mixed market, with coins moving pretty uncorrelated from each other,” said Patrick Heusser, head of trading at Crypto Finance AG. This presents more trading opportunities, Heusser said.
• Enjin forms $100M fund to support Metaverse projects: The Efinity Metaverse Fund will aim to support work on metaverse projects on Enjin and Polkadot, CoinDesk’s Jamie Crawley reported. The fund will focus on cross-chain non-fungible token (NFT) assets, digital collectible applications, gaming that harnesses mixed reality, virtual events and building multi=chain infrastructure.

Relevant news

• In Craig Wright Trial, Plaintiffs Lay Out Pattern of Fraud, Deceit and Hubris
• MetaMask, Phantom Wallet Users Targeted in Crypto Phishing Scam: Report
• US Lawmakers Call for Bitcoin Spot ETF in Letter to SEC Chair Gensler

Other markets

Most digital assets in the CoinDesk 20 ended the day lower.

Notable winners as of 21:00 UTC (4:00 p.m. ET):

• The Graph (GRT), +3.52%
• Aave (AAVE), +0.32%

Notable losers:

• Polygon (MATIC), -6.97%
• Algorand (ALGO), -4.84%
• Cardano (ADA), -4.58%