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Crypto exchange Binance announced Friday that it will no longer offer crypto futures and options trading to users in Hong Kong.

With immediate effect, new users from Hong Kong will no longer be able to open accounts with Binance to trade crypto derivatives. As for existing users, Binance said it will announce a date later, and from that date, users from these countries will have 90 days to close their open positions.

“Binance will be the first major cryptocurrency and digital assets exchange to proactively restrict access to derivatives products to Hong Kong users,” said the exchange.

The move comes just a week after Binance shut down derivatives trading offering for three European countries: Germany, Italy, and the Netherlands. At the time, the crypto exchange said it will gradually wind down the offering across the European region.

Binance recently also ceased its stock tokens trading offering globally amid regulatory scrutiny from regulators around the world. Government agencies in the U.S, the U.K., Hong Kong, Italy, Japan, Thailand, Poland, and the Cayman Islands have recently issued warnings or taken action against the exchange.

Binance has been recently saying that it is committed to compliance measures. The company’s CEO Changpeng “CZ” Zhao acknowledged that the crypto space is now “relatively heavily regulated” and said that Binance has to make a “big pivot from a technology startup into a financial services company.”

Binance is, in fact, looking to set up physical headquarters in multiple jurisdictions, said Zhao. Until now, Binance says it has operated in a “decentralized” manner. Zhao is also open to the idea of having new Binance CEO with a “very strong regulatory background.”

© 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.

Can’t make it to a horse race in person? Have no fear, because you could soon be able to attend one in the metaverse.

American auto racing company NASCAR has partnered with the developers behind the blockchain-based digital horse racing game ZED RUN to create a “brand new, futuristic fandom experience,” the Virtually Human Studio team announced Thursday.  

The two companies are still finalizing details about distribution and sales, but to begin, VHS will work with NASCAR to create NASCAR-branded digital horses on its racing platform. 

“Recreating what fandom means through the concept of ownership, the NASCAR and VHS partnership will lay the foundation by exploring innovation around NFTs and what it means to have skin in the game,” VHS CEO and co-founder Chris Laurent said in a statement.

According to Tim Clark, senior vice president, and chief digital officer at NASCAR, the racing company hopes to use blockchain technology as a “launchpad” to discover a new, “deeply engaged” audience. 

“Partnerships like the one with VHS, have the ability to revolutionize the NASCAR brand by bridging the gap between an age-old sport and innovative new technology,” Clark said. 

Last month, VHS raised $20 million in a Series A round, with participation from Andreessen Horowitz and TCG Capital Management. Its NFT gaming platform, ZEN RUN, allows users to train, breed and race digital horses. Owners can enter their horse NFTs into races via an entry fee and can also win prizes if their collectibles win on the digital track. 

Image courtesy ZED RUN

© 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

• The so-called play-to-earn game Axie Infinity has seen its total number of daily active users increase by over 233% since the end of June, hitting 900,000 players last month.
• The platform, developed by game studio Sky Mavis, has grown at such a staggering rate that its server has struggled to keep up, causing several shutdowns in recent weeks.

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In a Thursday tweet, Senator Rob Portman voiced support for an amendment from Senators Wyden Toomey and Lummis that would explicitly exempt some types of crypto-related businesses from being considered as brokers under a tax provision that included a still-in-development infrastructure bill.

I agree with Senators Wyden, Toomey, Lummis that we can do more to clarify the intent of the cryptocurrency provision & the Senate should vote on their amendment.

— Rob Portman (@senrobportman) August 5, 2021

Portman’s support is especially notable because it was his language in the original version of the bill.

The crux of the issue was that the original bill required open-ended broker transaction reporting from any entity facilitating a crypto transfer. While it was likely targeting crypto exchanges, its phrasing could have extended to such non-broker activities as mining, or operating a node.

The crypto community reacted quickly. By August 2, Senator Toomey had revealed work to correct that language, ultimately working with Sens. Lummis and Wyden on the amendment. Sen. Ted Cruz has filed a separate amendment that aims to cut the language entirely.

Portman insisted that “the legislation does not impose new reporting requirements on software developers, crypto miners, node operators or other non-brokers.” However, the new amendment would codify that intention into law.

© 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.

Juan Sartori, a senator of Uruguay since 2020, has introduced a bill that would legalize digital assets within the country, allow businesses in Uruguay to accept crypto for payments, and provide a regulatory framework for incorporating crypto into its financial system. 

“Cryptocurrencies are an opportunity to create investment and work. Today we present a bill, pioneer in the world, that seeks to establish a legitimate, legal and safe use in businesses related to the production and commercialization of virtual currencies in Uruguay,” senator Juan Sartori wrote in a translated tweet.  

Uruguay’s bill has been compared to El Salvador’s move in early June to pass a law declaring bitcoin as legal tender. However, Uruguay’s proposed legislation differs in key ways. 

The first is that the bill does not mark any form of cryptocurrency as legal tender, a differentiation Sartori clarified with CoinDesk. Sartori notes in the bill that citizen use of crypto in Uruguay remains low. Rather, this proposed Uruguayan bill aims to act as a regulatory structure should cryptocurrency become more popular in the country. 

As reads translated portions of the bill: 

“We have been observing how in practice the percentage of people who invest in cryptocurrencies compared to the total number of inhabitants per country is low, and the number of people who use them to buy or cancel obligations is even lower, but we are not that far from this distant reality coming into the near future. In order to promote investment and protect investors, this bill aims to establish clear rules, legal, financial and fiscal security in businesses derived from the production and commercialization of Virtual Assets, also known as crypto assets, cryptocurrencies and tokens from blockchain technology. Uruguay needs to promote policies of inclusion of this type of industry, thus also promoting the generation of investment and work in Uruguay.”

In addition to legally incorporating crypto into Uruguay’s financial system, the bill provides the groundwork for financial regulation and anti-crime should it be passed:

“This law aims to legalize virtual assets as a means of payment and admit them as currencies, thus granting security to the production of virtual assets and the transactions carried out with them. It is also sought that the National Secretariat for the Fight against Money Laundering and Terrorism Financing (SENACLAFT) keeps a registry of Virtual Asset Providers to promote greater transparency in this sector, giving it greater clarity on what is produced and sold, fact key to a possible regulation of the purchase and sale of Virtual Assets in the future. Additionally, it is necessary to formalize this industry so that there is a traceability of the movement of funds linked to the sale of Virtual Assets. The standard also seeks to prevent the misuse of this type of instrument by regulating its use and preventing it from being used for illegitimate or illegal purposes. Later and with subsequent regulations to the proposal we will have to deal with more specific regulations of products and derivatives of Blockchain technology.”

Crypto firms have been placing attention on Latin America as a whole. In late May, the Stellar Development Network invested $15 million in the Mexican crypto exchange startup Airtm to boost cross-border payments in Latin America. Mercado, a Brazilian exchange, is using $200 million in recent funding in part to expand across the continent. 

© 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.

Virtu Financial, a multi-billion trading firm, has made a big move into the crypto market, announcing during its second-quarter earnings that it has been market making on major crypto venues. 

“Our expansion into cryptocurrency market making also continues to progress … with crypto market-making doubling in Q2 versus Q1,” noted CEO Doug Cifu. 

The firm has been active in the crypto market through its market making in futures and exchange-traded products in Canada. Market making refers to the function firms like Virtu and Jump provide to exchanges, stepping in to buy or sell an asset when there isn’t enough organic liquidity.

This is the first time Virtu has publicly said that it is trading spot bitcoin, the latest indication that Wall Street is warming up to the crypto asset class. A source told The Block that Virtu is market making on Coinbase and Gemini. 

Looking to the future, Virtu is also looking to integrate crypto into its singe dealer platform VFX, which streams prices of assets like foreign exchange, precious metals and treasuries to its counter-parties. 

“We are also in the early stages of developing our ability to stream cryptocurrencies over our direct-to-dealer streaming liquidity platform, VFX,” Cifu said. 

The growth of its crypto operations was one bright spot in an earnings release that disappointed Wall Street. The firm’s net trading income slid from $668.7 a year ago to $341.8 million. The stock fell by more than 8% on Wednesday, but has pared some of those losses during Tuesday’s session. 

© 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.

In a speech before the American Enterprise Institute on Aug. 5, Federal Reserve governor Christopher Waller expressed doubt about the touted benefits of a central bank digital currency (CBDC). 

“I remain skeptical that a Federal Reserve CBDC would solve any major problem confronting the U.S. payment system,” said Waller. He cited a fairly free market principle as his rationale:

“In general, the government should compete with the private sector only to address market failures. This bedrock principle has stood America in good stead since its founding, and I don’t think that CBDCs are the case for making an exception.” 

Instead of a Fed-issued digital dollar, Waller seemed to cautiously promote advancements of the private sector, specifically stablecoins. Waller noted that private stablecoins may well provide the competition to the banking sector’s mark-up on digital payment that advocates of a CBDC advertise. 

Stablecoins have, however, proven controversial. “There are many legal, regulatory, and policy issues that need to be resolved before stablecoins can safely proliferate,” said Waller, citing a pending report on the subject from the President’s Working Group. 

Waller’s comments join a growing chorus, particularly from the right-wing, promoting private-sector stablecoins over a CBDC.

In a recent hearing with Fed Chair Powell, Senator Pat Toomey — like Waller, a Republican — came to a similar conclusion. “If you have stablecoins and cryptocurrencies in use then maybe there’s no need for CBDC,” said Toomey.

© 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.

Huobi Trust, a wholly owned subsidiary of Hong Kong-listed Huobi Technology Holdings, has hired former Homeland Security agent Robert Whitaker as its chief operating officer (COO).

Whitaker began work at Huobi Trust last month as the firm’s first COO, after a four-year stint at blockchain analytics firm BIGG Digital Assets. He previously served for more than a decade at the U.S. Department of Homeland Security, where he oversaw the crypto investigation program in his most recent role.

When asked why he quit the government role to initially enter the crypto industry in 2017, Whitaker told The Block that he spent a considerable amount of time in government and “didn’t want to get locked into a routine and stay in one environment.”

“The crypto industry changes at such a rapid pace, so I saw retiring from the government to go private as a way to gain a new perspective on the space and continue growing as a professional,” he said. “2017 was really when crypto started gaining mainstream attention, so the timing was right.”

Whitaker was first exposed to crypto in early 2015, he said, when he was transferred to Homeland Security’s headquarters office in Washington, D.C., and landed in the finance division, which was launching a new crypto-focused program at the time called the Illicit Digital Economy Program. As a supervisor, he was tasked with learning about crypto and training other agents and agencies on matters related to crypto, said Whitaker.

Joining Huobi Trust

At Huobi Trust, Whitaker’s role is to oversee the growth and development of the company’s vision and strategy, as well as current and future product offerings, he said.

Huobi Trust currently offers fiat custody and a range of compliance services for blockchain companies as a Nevada state-chartered retail trust company, said Whitaker. The firm is also the primary custodian for the assets backing Huobi Global’s HUSD stablecoin. “In the future, Huobi Trust sees opportunities for deploying a wide range of additional trust, custodial, and compliance products using distributed ledger solutions, which are all subject to regulatory approval,” said Whitaker.

Whitaker believes that crypto has the potential to create new ways for people and businesses to transact worldwide. He said there’s a misconception among regulators that crypto is primarily used for financing illicit activities.

“Part of the reason behind that is there are still many who don’t yet fully understand crypto and the tech behind it, especially at the state and local levels,” he said. “But as regulation moves forward and we get more consumer protections, we’ll see a change in the overall perception of crypto.”

The pseudo-anonymous nature of crypto and blockchain data analytics, in fact, help track crypto transactions that would not be possible with fiat transactions, according to Whitaker. “There’s a lot more transparency in crypto than most people think,” he said.

Huobi Trust is based in Las Vegas, Nevada, and has a headcount of over 20 employees, said Whitaker, adding that the firm is looking to expand its team further across various functions, including compliance and operations.

While Huobi Trust’s parent company Huobi Tech shares the same brand and shareholders as Huobi Group, the owner of the Huobi Global crypto exchange, the two are separate legal entities that operate independently of each other, said Huobi Trust.

© 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

• This continuing series breaks down some of the latest developments from L1 chains, from DeFi and bridges to network activity and funding
• Recently, gaming and NFT projects have captured the attention of investors and DeFi users, and these verticals begun to spread from Ethereum to other chains
• This week, we look at Binance Smart Chain, Solana, Cosmos, and Terra

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Point72 Ventures, the venture arm of the hedge fund with $22.1 billion under management, is making one of its biggest steps into the crypto market, investing in crypto data startup Messari’s Series A funding round. 

Led by DCG and CoinDesk alum Ryan Selkis, Messari operates in the crowded market for crypto data and research. As part of the raise, the firm is raising $21 million at a pre-money valuation close to $100 million, according to a source familiar with the deal.

Other investors include Alameda Capital, Nascent and CMS Holdings. 

As for Point72, the deal marks a significant moment for the firm, which has made headlines in recent months for its journey into crypto. As The Block first reported in May, Point72 has been plotting its entrance into the crypto market for some time, exploring opportunities across its venture fund and hedge fund. 

A spokeswoman for the firm said that Point72 is still in the early stages of outlining its exact crypto investing strategy. In a podcast, CEO Steven Cohen divulged a bit more of his thinking on the market, saying that he’s been “fully converted’ on crypto, but that doesn’t “care about bitcoin,” specifically.” 

“The way those markets are developing could be a real interesting adjacency from what we are doing at Point72,” he said. “I’m not missing this.”

The YouTube video in which Cohen made these comments has since been removed. 

As for the logic behind investing in Messari, Adam Carson, an operating partner at Point72 Ventures, said that Messari offers “crypto research and analysis tools” that “more advanced investors need.”

Selkis plans to put the fresh capital to work quickly with the ambitious goal of bringing on more than 1,000 analysts. 

“We’re going to be aggressively expanding our Analyst Hub (goal is still to onboard 1000 analysts), and build governance and community management tools for DAOs,” he said in a message to The Block, referring to its research marketplace of freelance contributors. 

© 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.