- CFTC Releases Digital Asset Primer
- Coinbase Submits Form S-1 to the Securities and Exchange Commission
- CME Announces Ethereum Futures Product Launch in February 2021
- Paxos Conducts $142 Million Series C Raise
- FinCEN Issues Notice of Proposed Rulemaking with New Recordkeeping and Reporting Requirements for Digital Asset Transactions
- Figure Applies for OCC Charter
- Compound Releases Whitepaper Describing Product to Add Interoperability Between Chains
- Germany Legalizes Electronic Securities on the Blockchain
CFTC Releases Digital Asset Primer
On December 17, 2020, the CFTC announced a 36-slide Digital Assets Primer. The Digital Assets Primer seeks to build on a prior 2017 release that focused on virtual currencies. This update describes the market more broadly, addressing not just virtual currencies but “smart contracts and other digitized representations of value or ownership” according to Brian Trackman of LabCFTC. The primer provides a high-level overview and explains the CFTC’s views on the distinctions between digital assets, which can have a variety of uses, forms, and features, and virtual currency, which it describes as akin to a “unit of account and/or store of value.” The CFTC report also notes that “[d]epending on its design, function, and use, a digital asset may be characterized differently, including as a commodity, swap or other derivative.”
Coinbase Submits Form S-1 to the Securities and Exchange Commission
In a brief December 17, 2020 blog post Coinbase announced it had submitted a draft registration statement on Form S-1 with the SEC. While few other details were forthcoming, press outlets speculated about different routes to listing and potential valuations.
CME Announces Ethereum Futures Product Launch in February 2021
On December 16, 2020, the CME Group announced it will list an Ethereum futures product on February 8, 2021. While reflective of Ethereum price movements, the product would be cash-settled and priced from CME’s Ethereum-USD reference rate, with each contract representing 50 Ether. The firm stated that this product would build on “the success of Bitcoin futures and options” in a statement reported by the Block. CME Group noted the launch was subject to regulatory approval alongside contract specifics at the bottom of their product page.
Paxos Conducts $142 Million Series C Raise
Following a partnership with PayPal to provide virtual currency services on the payments platform and a December submission to the Comptroller of the Currency (OCC) to become a federal bank, Paxos has conducted a Series C raise of $142 million. The firm cited a desire to grow both its staff and financial institution client base as a reason for the raise, naming banks Credit Suisse and Societe General specifically in statements reported by CoinDesk.
FinCEN Issues Notice of Proposed Rulemaking with New Recordkeeping and Reporting Requirements for Digital Asset Transactions
FinCEN released a 72-page Notice of Proposed Rulemaking on Friday, December 18, 2020. The controversial proposed rule sets out a $10,000 reporting requirement on banks and money service businesses (MSB), similar to the currency transaction report requirement, specific to digital asset transactions. It also details a recordkeeping requirement for banks and MSBs on digital asset transactions of more than $3,000 which includes the name and physical address of all counterparties where any funds are not sent to a bank, MSB, or other exempt wallet. The proposed rule allowed only a 15-day window for public comment asserting a national security grounded foreign affairs function for the proposed rule change, which specifically made reference to a range of illicit finance risks including international terrorism, illegal drugs, and ransomware. The text of the proposed rule is available here.
Figure Applies for OCC Charter
Figure Technologies announced on Friday, November 6, 2020 that they had applied for a national bank charter through the OCC. Figure aims to issue home equity lines of credit on a private blockchain network called the Provenance platform, alongside other proposed credit and point-of-sale products still in development. Company CEO Mike Cagney stated “We’ll have over 200 state licenses next year without such a charter,” while noting Figure’s potential ability to leverage potential efficiency and cost savings.
Compound Releases Whitepaper Describing Product to Add Interoperability Between Chains
On December 17, 2020, Compound released the whitepaper for Compound Chain, “A distributed ledger capable of transferring value and liquidity between peer ledgers.” The 10-page white paper describes a blockchain using its own native token, CASH, which will pay for transaction fees. Notably, the blockchain will still be governed by the Compound governance structure, using COMP tokens on the Ethereum networks. Release is expected in early 2021.
Germany Legalizes Electronic Securities on the Blockchain
On December 16, 2020, German Chancellor Angela Merkel’s cabinet passed new legislation allowing all securities to be recorded using blockchain technologies. While this change does not require blockchain registration, it does end a paper requirement in an effort to cut costs and administrative burdens related to paper certificates. Justice Minister Christine Lambrecht noted the law would “provide legal clarity and enhance the potential of the new technologies.”