Coin360 Daily Dispatch | Crypto Market Updates & Highlights | October 19, 2023

Crypto Market Update

Table of Contents

Regulatory and Legal Updates

• Grayscale's Push for Bitcoin ETF Approval
• NYAG Files Complaint Against Gemini and Affiliates
• Shocking Revelations in Sam Bankman-Fried Trial
• BaFin Warns MEXC Over Crypto Custody

Market and Investment Insights

• Tesla's Q3 Report and Bitcoin ATMs Decline
• SynFutures Secures $22M in Series B Funding
• Binance Research: Q3 Crypto Market Trends
• Ethereum Whale Sells Off Massive ETH Holdings
• Standard Chartered's Crypto Plans in Dubai

Blockchain and Protocol Developments

• Polygon Labs Introduces Governance Proposal PIP-29
• Lightning Labs Launches Taproot Assets
• Chainlink Preps for Staking v0.2 Launch

Tools and Platforms

• Circle Unveils Web3 Development Tools
• Developer Activity in Crypto Takes a Dip
• Coinbase Picks Ireland for European Hub
• Aptos Platform Faces Outage on Anniversary

Security and Risk Management

• Atomic Wallet Freezes $2M After Hack

Country-Specific Developments

• ECB and Finland Advance Digital Euro Projects

The Metaverse and Gaming

• MultiversX CEO on Meta and Apple's Metaverse
• Bandai Namco Suspends Gundam Metaverse Game

Grayscale's Push for Bitcoin ETF Approval

Grayscale is pushing to convert its Bitcoin Trust into a spot Bitcoin ETF, backed by a recent court ruling. The SEC is under pressure to re-review the application. JPMorgan analysts predict multiple spot Bitcoin ETF approvals within months, possibly before January 10, 2024. Grayscale's Bitcoin Trust, with $17.7 billion AUM, could see its fees drop and its discount to NAV vanish upon ETF conversion. 

Meanwhile, BlackRock's potential ETF approval could spike Bitcoin prices to $42,000-$56,000, according to Matrixport. The SEC has been cautious, but the landscape is ripe for change, with growing institutional interest and potential for massive capital inflows.

NYAG Files Complaint Against Gemini and Affiliates

The New York Attorney General has filed a complaint against Gemini, Genesis, DCG, and two executives for their involvement in the Gemini Earn program. The complaint alleges fraudulent misrepresentation of Genesis' financial condition and claims that the entities involved disguised losses of $1.1 billion. 

The NYAG also accuses Gemini of understating the risk and making false assurances about Genesis' loans. The complaint seeks restrictions on the defendants and monetary damages.

Shocking Revelations in Sam Bankman-Fried Trial

Forensic accountant Peter Easton and FBI accountant Paige Owens testified in the Sam Bankman-Fried (SBF) trial, revealing that nearly 70% of Alameda's loans were serviced with FTX customer funds. Easton disclosed that out of the supposed $11.3 billion in FTX customer funds, only $2.3 billion were found in Alameda's accounts. These funds were diverted for various purposes, including political contributions and property acquisitions. 

Easton also stated that FTX's digital wallets held billions less than what was indicated in customer accounts. The prosecution contends that $9 billion in customer funds went missing, used for various activities like investments in SkyBridge Capital, Modulo Capital, and political donations. 

BaFin Warns MEXC Over Crypto Custody

Germany's financial watchdog, BaFin, has issued a warning about MEXC's crypto custody services, stating they must be authorized to operate in the country. The regulator emphasized that financial services can only be offered in Germany with BaFin's approval.

Tesla's Q3 Report and Bitcoin ATMs Decline

Tesla's Q3 2023 report reveals it held steady with its $184 million Bitcoin investment, marking the fifth quarter without changes. The company also doubled its computing resources, mainly for AI projects. Financially, Tesla missed Wall Street estimates, with $23.35 billion in revenue and a $0.66 EPS. Operating expenses surged to $2.41 billion, largely due to R&D activities. 

Meanwhile, the number of bitcoin ATMs worldwide has reached a two-year low, dropping to 32,500, a decline of 7,000 since the end of last year, according to AltIndex. The US, which has the largest number of machines, saw the biggest drop, with around 26,700 machines in the country. 

SynFutures Secures $22M in Series B Funding

Decentralized derivatives exchange SynFutures has raised $22 million in a Series B funding round led by Pantera Capital. The exchange is open to the idea of launching a native token in the future. SynFutures plans to use the funding to expand its team and enhance its trading efficiency.

Binance Research: Q3 Crypto Market Trends

According to Binance Research’s report, in Q3 2023, the crypto market faced challenges, with an 8.6% QoQ drop in total market cap. Despite this, institutional adoption grew. Layer 1 activity dipped, but Ethereum's Layer 2s showed promise due to the Base launch. 

DeFi's total value locked (TVL) fell 13.1% to $38.5B, impacted by low yields and a risk-averse climate. NFT sales hit a near three-year low at $299M, influenced by falling floor prices and ETH value.

Ethereum Whale Sells Off Massive ETH Holdings

An Ethereum whale liquidated 13,871 ETH for $21.87M, stirring market concerns. Vitalik Buterin, Ethereum's founder, denied involvement, clarifying he hasn't sold ETH for personal gain since 2018. Analysts are divided: some warn of ETH potentially dropping below $1,000, while others see this as a buying opportunity, predicting a rally if ETH stays above $1,500.

Standard Chartered's Crypto Plans in Dubai

Standard Chartered plans to launch a crypto custody service for Bitcoin and Ethereum in Dubai in Q1 2024. The bank also aims to establish a cryptocurrency settlement network. The custody service will be operated by Zodia Custody, a digital asset custodian. 

The UAE's favorable regulatory environment and digital asset adoption make it an attractive location for crypto companies. Standard Chartered will be able to offer its custody services globally with the UAE license.

Polygon Labs Introduces Governance Proposal PIP-29

Polygon Labs has introduced a governance proposal, PIP-29, to form a Protocol Council responsible for overseeing smart contract upgrades. The council, comprised of 13 members, will supervise changes to Polygon's system-level smart contracts to ensure security and smooth transitions. Proposed council members include influential individuals and organizations in the industry.

Lightning Labs Launches Taproot Assets

Layer-2 infrastructure firm Lightning Labs has released Taproot Assets, a protocol that allows stablecoins and real-world assets to be issued on the Bitcoin and Lightning Network. This version, Taproot Assets v0.3, enables developers to issue financial assets on-chain in a scalable manner. 

The integration of existing Bitcoin liquidity on the Lightning Network aims to extend Bitcoin's network effects. The release of Taproot Assets is expected to move closer towards "bitcoinizing the dollar" and making Bitcoin a global routing network for the internet of money.

Chainlink Preps for Staking v0.2 Launch

Blockchain oracle network Chainlink is preparing to launch Chainlink Staking v0.2, which will feature a total pool size of 45 million LINK tokens. The upgrade includes an unbonding mechanism for withdrawing staked LINK and focuses on stakeholder flexibility and increased security guarantees. The launch will involve a three-phase process: priority migration, early access, and general access.

Circle Unveils Web3 Development Tools

USDC issuer Circle has introduced Gas Station and Smart Contract Platform, two beta tools designed to facilitate web3 development. Gas Station eliminates transaction fees when used with Circle's programmable wallets, while Smart Contract Platform simplifies smart contract importation and management. 

Both tools aim to simplify the integration of blockchain experiences and improve user experience for businesses and developers. Circle plans to support additional blockchains with Smart Contract Platform starting next year.

Developer Activity in Crypto Takes a Dip

Monthly active developers in the cryptocurrency ecosystem decreased by 28% in October. However, Ethereum layer-2 scaling solutions Starknet and zkSync saw increases in their developer counts. Other platforms, including Ethereum, Polygon, and Solana, experienced declines. Starknet's "Quantum Leap" and zkSync's zero-knowledge solutions have contributed to their growth.  

Coinbase Picks Ireland for European Hub

Coinbase has chosen Ireland as its European crypto hub to comply with the upcoming Markets in Crypto-Assets Regulation (MiCA). With MiCA, Coinbase can serve 450 million people across 27 EU countries under a single regulatory framework. The company already holds licenses in Ireland, Germany, and other member states.  

Aptos Platform Faces Outage on Anniversary

Aptos, a blockchain platform, experienced a five-hour outage during a mass drawing application event held to celebrate its one-year anniversary. The outage resulted in a halt of on-chain transactions and a spike in transaction fees. The platform was eventually restored, but the cause of the outage is unknown. The value of Aptos' native token, APTOS, dropped slightly but quickly recovered.

Atomic Wallet Freezes $2M After Hack

Hacked wallet Atomic Wallet freezes $2M in suspicious deposits with the help of forensic companies and exchanges. The threat actor used advanced methods to move funds to the Tron blockchain and Bitcoin network. This comes after Atomic Wallet suffered a major hack in June 2023.  

ECB and Finland Advance Digital Euro Projects

The European Central Bank (ECB) is advancing to the next phase of its digital euro project, focusing on rule finalization and provider selection. This follows a two-year research period and aims to lay the groundwork for potential issuance. 

Meanwhile, the Bank of Finland is developing a Finnish instant payment solution compatible with the digital euro. Both projects are in the preparation phase, which will last two years. ECB President Christine Lagarde emphasized the digital euro's role in future payments but noted privacy concerns. Finland's Membrane Finance has also released a euro-backed stablecoin.

Top Altcoin Gainers and Losers

Gainers:

Rollbit Coin RLB (+10.86%)

Bitcoin SV BSV (+6.59%)

Solana SOL (+5.71%)

Losers:

Conflux CFX (-4.35%)

Internet Computer ICP (-4.27%)

Flow FLOW (-4.22%)

NFT Market Map

MultiversX CEO on Meta and Apple's Metaverse

MultiversX CEO discusses Meta and Apple's approaches to the metaverse. He believes Apple's spatial computing approach is more intuitive than Meta's virtual reality focus. MultiversX is aligning with spatial computing through technical upgrades to increase scalability and transactional throughput.  

Bandai Namco Suspends Gundam Metaverse Game

Japanese game publisher Bandai Namco has temporarily suspended downloads of its newly launched Gundam Metaverse game following rumors that design files for highly anticipated Gundam models were leaked. The company did not provide further details on the reason for the suspension. The Gundam Metaverse Project aims to bring together Gundam fans from around the world and allow user-generated content.

This article has been refined and enhanced by ChatGPT.