SEC Charges DeFi Trader over Solana-based Exchange

Market Overview:

 A Sharp Rebound in the Markets

The crypto markets experienced quite a significant rally over the last few weeks, with Bitcoin trading at $22,500 (a 44.17% increase from it’s lows) and Ethereum trading at $1,575 (a 33% increase from its January lows). After the FTX collapse, it appears investors have regained confidence and participants are willing to purchase risk assets again. Last week, Genesis Lending, whose parent company is Digital Currency Group, officially filed for chapter 11, which had no negative effect on the market whatsoever. Quite surprisingly, the markets actually rallied 7%+ following the major news. Some notable gainers include Aptos (+346% from its January lows) and Lido (+154% from its January lows). With such a high surge in buys within such a short period of time, the next couple weeks are crucial to confirm whether the market has truly bottomed out, or if this was a manipulated rally.

NFT Market News:

WGMI.IO Gets Acquired by Floor

Floor, the token-gated app for NFT collectors, has made a strategic acquisition of NFT analytics platform WGMI.io in order to accelerate its expansion plans and reach its goal of becoming the go-to app for NFT valuations, and trading. Last year, Floor raised $8 million in seed funding led by 6th Man Ventures, and numerous sources report  significant growth for its app despite the NFT bear market. The platform debuted in October 2021 and quickly gained traction through word-of-mouth among traders, and through subsequent NFT mints in the following months. In June 2022, Floor announced that Christine Hall, previously the COO at Robinhood Crypto, had joined as COO and co-founder.

We see the acquisition of WGMI.io as a key step in Floor’s plans to expand its feature set and reach a larger audience. WGMI.io is focused on providing analytics around market activity and trading trends, while Floor delivers a streamlined way for NFT collectors to view and track their holdings. Together, the two companies aim to deliver a more comprehensive and user-friendly experience for NFT enthusiasts. Floor CEO and co-founder Chris Maddern said in a statement, “There were big chunks of what they do that we thought could help accelerate us. I saw a real interest and passion from WGMI founder Thomas Mancini in expanding the platform’s features and functionality beyond its relatively small audience of die-hard ‘degen’ traders, and there was a ton of alignment on a united path forward.”

As part of the deal, Thomas Mancini has joined Floor full-time and will be working closely with the team to integrate WGMI’s analytics capabilities into the Floor app. The terms of the deal have not been disclosed. In the short term, users can expect new features like trading analysis and trait pricing, which will allow them to track demand for the individual traits of NFT projects, such as the various visual details that make up a Bored Ape Yacht Club profile picture. Maddern also envisions a feature that would let users specify what kind of NFT they want from a certain project at a specific price point, and receive an alert when a marketplace listing matches those criteria. This feature will be similar to what StreetEasy offers for real estate, but for digital assets like Doodles and Apes.

Floor’s larger vision is to ultimately become the go-to destination for NFT collectors to not only view their own assets and track trends, but also to stay connected with projects, receive updates, and connect with other collectors. The acquisition of WGMI.io is a significant step in achieving this goal and positioning Floor as a leader in the NFT space.

Latest News:

Hundreds of institutions and prominent individuals have invested directly in crypto, adopted the value thesis, or started building technology to support digital assets since Wave started tracking this metric in late 2020. Now the rise of the Metaverse, Decentralized Finance (DeFi), Non-Fungible Tokens (NFTs), and Decentralized Autonomous Organizations (DAOs) is driving mainstream adoption of blockchain technologies everywhere we look. We’re continuing to keep track of it every week here:

• Seoul’s government has opened the city’s metaverse project to the public. According to Seoul Mayor Oh Se-hoon, the virtual environment will allow residents to access official documents, file complaints, and receive answers to questions on filing taxes.
• The National Australia Bank announced that it will soon launch a new stablecoin backed by the Australian dollar on Ethereum and Algorand later this year.
• Cité Gestion, an independent Swiss private bank founded in 2009, is using Taurus technology to tokenize its own shares. The move will be the first by a private bank to issue shares as ledger-based securities under Swiss law. Cité will be partnering with digital assets firm Taurus to issue its tokenized shares, as well as manage the smart contract that creates the shares and perform asset servicing of its securities

REGULATORY ROUNDUP

We’re living through the era of regulatory recognition of digital assets. The legislation, litigation, and regulation happening today will dictate the entire future of our industry, and we have a historic chance to shape those changes by staying informed and exerting political influence.

• The U.S. SEC charged decentralized finance (DeFi) trader Avraham Eisenberg over his draining of $116 million from Solana-based decentralized exchange Mango Markets. The SEC’s charges rest on the agency’s assertion that MNGO, Mango Markets’ governance token, is a security. The SEC noted that despite MNGO’s labeling as a “governance token,” it “was purchased and sold as a crypto asset security.” Its holders had expectations of profit and “entered into a common enterprise” – two of the factors the SEC looks for in identifying investment contracts that fall under securities laws.

Disclaimer: The views and opinions expressed herein are those of the author alone and do not represent Wave Digital Assets LLC or any of its affiliates (collectively, “Wave”). The author and/or Wave may hold investment positions in some of the assets discussed. Nothing in this material or linked information should be interpreted as an offer or recommendation to buy, sell or hold any security or other financial product. This material is not intended to provide accounting, legal or tax advice. Certain information contained herein has been obtained from third-party sources, has not been independently verified and should not be viewed as being endorsed by Wave. Such information is believed to be accurate as of the date of its publication. No representation or warranty is made, express or implied, with respect to the accuracy or completeness, and readers should not place undue reliance on the information contained or linked to herein. Certain statements in this material provide predictions and there is no guarantee that such predictions are currently accurate or will ultimately be realized. Past performance is not indicative of future results.

Wave is federally regulated by the US Securities & Exchange Commission as an investment adviser. Registration with a federal or state authority does not imply a certain level of skill or training. Additional information including important disclosures about Wave Digital Assets LLC also is available on the SEC’s website at www.adviserinfo.sec.gov. Or, learn more information about Wave at www.wavegp.com.

Ethereum’s Deflationary Trend Signals Long-term Value

Market Overview:

Crypto Market Hints at a New Era of Growth: A Rally, Neutral Sentiment and Deflationary trend

Last week, the cryptocurrency market experienced a notable uptick, with both Bitcoin (BTC) and Ethereum (ETH) leading the charge with gains surpassing 20%. This rally propelled the total crypto market capitalization to briefly reclaim the $1 trillion mark for the first time since November 2020, a positive indicator for the market’s overall health and sentiment.

The Fear and Greed Index, which is a widely used metric for gauging market sentiment, recorded a neutral score of 52 for BTC, a marked improvement from the previous week’s score of 25 (extreme fear). This suggests that investor sentiment towards BTC has improved, and that the market may be shifting towards a more optimistic outlook.

Ethereum also performed well, with a deflationary trend being observed, where the supply growth rate for ETH currently stands at -0.10% per year. This indicates that the demand for the cryptocurrency is outpacing the new supply, which is a positive sign for the long-term value of ETH.

In terms of fund flows, digital asset investment products saw minor inflows totalling $9.2 million last week, which is a positive development as it shows that investors are becoming more confident in the market and are starting to see potential for growth. Additionally, Ethereum broke an 8-week streak of outflows, indicating that the trend is shifting towards a more positive direction.

Furthermore, the founders of 3AC, Zhu Su, and Kyle Davis, and the founders of CoinFlex, have launched a new project named GTX, which aims to raise a seed fund of $25 million to trade claims from creditors. This is a noteworthy development as it showcases the continued development of new and innovative projects within the crypto space, providing more options for investors and traders.

The past week has been a positive one for the cryptocurrency market, with various indicators pointing towards a more optimistic outlook. It is important to note that the crypto market is highly volatile and investors should always conduct their own research and diversify their portfolio accordingly.

NFT Market News:

Chinese NFT Platforms Move to Hong Kong to Avoid Compliance Risk

NFT platforms in China are expanding into Hong Kong to offset compliance risk for an industry that remains in a legal gray area on the mainland. ShucangCN, a rapidly growing NFT platform that debuted in China in January 2022, has established NFT China Ltd. The CEO stated that this decision was made following the release of supportive cryptocurrency policies by the government in October. “We’re in the process of launching a simple NFT platform in Hong Kong in about two weeks that can facilitate NFT airdrops,” Pengfei Wang, CEO of ShucangCN, told Forkast in a phone interview. “Sales and trading features will follow when the team sets up payment routes” he added. This move to Hong Kong may both help to offset compliance risk, and allow for a wider range of services to be offered to users. The Hong Kong platform will allow mainland users to transfer their NFTs on the mainland – to the company’s Hong Kong marketplace and trade there. “Once our secondary trading platform in Hong Kong is set up, users can choose to mint and trade directly in Hong Kong, or they can mint on the mainland platform and trade in Hong Kong,” Wang said.

China banned cryptocurrency transactions in 2021, but Hong Kong in contrast has set up a new licensing regime that may eventually extend to retail cryptocurrency trading. Current regulations in Hong Kong, a special administrative region of China, allow only institutions and professional investors with portfolios of $1 million or more to trade digital assets. Although Chinese regulators have yet to spell out hard and fast rules for NFTs, state media has attacked “speculative behavior” in the sector. But that hasn’t stopped China’s consumers from buying and trading digital collectibles, and many platforms including ShucangCN offer such services. In 2022, ShucangCN had about 30 million yuan ($4.5 million) in revenue with a gross profit margin ratio of 30% according to CEO Wang. In June, it launched its main NFT trading platform Huashu Wenchuang in collaboration with Chinese cultural equity exchange Huaren Exchange Center of Culture Property, a platform that typically trades property rights and ownership of traditional artworks, and saw tens of millions of yuan of NFT trades through the end of last year, according to Wang.

Latest News:

Hundreds of institutions and prominent individuals have invested directly in crypto, adopted the value thesis, or started building technology to support digital assets since Wave started tracking this metric in late 2020. Now the rise of the Metaverse, Decentralized Finance (DeFi), Non-Fungible Tokens (NFTs), and Decentralized Autonomous Organizations (DAOs) is driving mainstream adoption of blockchain technologies everywhere we look. We’re continuing to keep track of it every week here:

• Ava Labs and Amazon Web Services (AWS) have partnered to accelerate enterprise, institutional, and government adoption of blockchain. AWS supports Avalanche’s infrastructure and dApp ecosystem through the AWS Marketplace. Also, Avalanche node operators can run in AWS GovCloud for FedRAMP compliance use cases , a vital capability and a pre-requisite for enterprises and governments.
• South Korea is bringing Seoul to the metaverse, launching a virtual replica of the capital city with a goal of improving its public services. Known as Metaverse Seoul, the virtual world is estimated to be completed by 2026. The initial stage invites citizens to use avatars to get their tax questions answered, access youth counseling, find support for small businesses and even read e-books.
• Bradesco, Brazil’s second-largest private bank, launched its first tokenized bank credit note on Friday. The bank completed the transaction for a total of 10 million Brazilian reals – equivalent to $1.95 million.

REGULATORY ROUNDUP

We’re living through the era of regulatory recognition of digital assets. The legislation, litigation, and regulation happening today will dictate the entire future of our industry, and we have a historic chance to shape those changes by staying informed and exerting political influence.

• In a UK Parliamentary hearing last week, the Economic Secretary of the Treasury and City minister, Andrew Griffith, outlined the regulatory agenda for the crypto-asset sector and HM Treasury’s stance towards the industry. This includes the regulation of stablecoins in the Financial Services and Markets Bill (FSM) and the promotion of crypto-assets.
• El Salvador’s congress has passed a digital securities law that would allow the nation to issue Bitcoin-backed bonds, also known as Volcano Bonds.
• The European Union’s landmark crypto legislation, the Markets in Crypto Assets regulation, or MiCA, has been delayed until April because of issues in translating the rules into the 24 official languages in the EU.

Disclaimer: The views and opinions expressed herein are those of the author alone and do not represent Wave Digital Assets LLC or any of its affiliates (collectively, “Wave”). The author and/or Wave may hold investment positions in some of the assets discussed. Nothing in this material or linked information should be interpreted as an offer or recommendation to buy, sell or hold any security or other financial product. This material is not intended to provide accounting, legal or tax advice. Certain information contained herein has been obtained from third-party sources, has not been independently verified and should not be viewed as being endorsed by Wave. Such information is believed to be accurate as of the date of its publication. No representation or warranty is made, express or implied, with respect to the accuracy or completeness, and readers should not place undue reliance on the information contained or linked to herein. Certain statements in this material provide predictions and there is no guarantee that such predictions are currently accurate or will ultimately be realized. Past performance is not indicative of future results.

Wave is federally regulated by the US Securities & Exchange Commission as an investment adviser. Registration with a federal or state authority does not imply a certain level of skill or training. Additional information including important disclosures about Wave Digital Assets LLC also is available on the SEC’s website at www.adviserinfo.sec.gov. Or, learn more information about Wave at www.wavegp.com.

Unleashing the Potential of All-in-one DEXs and Blockchain Networks

Market Overview:

As we enter a new year, it is essential to assess the progress of the industry and identify new opportunities within the realm of DeFi. Based on our analysis, we have identified five segments that we believe possess significant potential and new narratives for the year 2023.

1. Ethereum Layer 2s: The popularity of Optimism and Arbitrum has been on the rise, and the launch of the first zkEVMs is imminent. While Polygon leads the way with its zkEVM testnet, we believe that Arbitrum will maintain its position as the strongest Layer 2 in 2023. The project has effectively united its community and attracted a substantial number of projects. Furthermore, we anticipate that innovation will continue to occur on the platform. Nevertheless, we are also excited to see the developments within other Layer 2s.
2. On-chain Options: Our analysis indicates that on-chain options are the next frontier in DeFi. Despite the popularity of options in traditional finance, on-chain options currently account for a daily volume of less than $10M, in contrast to the daily crypto options volume of nearly $1B on centralized exchanges. Furthermore, options protocols are working on exciting developments, such as the launch of @aevoxyz, an orderbook options DEX by Ribbon Finance set to launch in Q1-Q2, with over 100 instruments and deep liquidity through partnerships with top market makers. @dopex_io will also introduce Perps Protection to eliminate liquidation risk for leveraged trades, and @PremiaFinance designed to enable the creation of options pools without permission. These advancements are expected to attract more attention to these projects.
3. Composable protocols: Over 10 projects have joined the GMX ecosystem, and all of them have contributed to its success. Similarly, the growth of Curve was accelerated by projects built on top of it. Composability is a strength of DeFi, and we believe protocols should focus on enhancing it. We are bullish on teams that understand this concept.
4. All-in-one DEXs: Despite the recent collapse of FTX, the volume of centralized exchanges remains higher than that of decentralized exchanges. This disparity can be attributed to the absence of all-in-one DeFi apps. However, initiatives such as @vela_exchange, @spin_fi, and @vertex_protocol aim to bring a user experience similar to centralized exchanges on-chain, which we anticipate will drive more users towards DEXs.
5. Blockchain Networks: Most Layer 1s are unable to support dApps that require high transaction throughput and fees lower than $0.01. As a result, protocols such as @dYdX are migrating to Cosmos. Customizable blockchains are required for games and orderbook exchanges, and Avalanche subnets and Cosmos chains appear to be the optimal choice for these types of applications. Furthermore, Avalanche’s recent launch of Warp Messaging enables subnets to communicate with each other, enabling competition with Cosmos chains. Additionally, Cosmos’s Interchain Security, set to launch in Q1 2023, will enable smaller chains to enjoy the same level of security as the Cosmos Hub.

NFT Market News:

Art Blocks “Friendship Bracelets” Take the Top Spot in Trading Volume

A collection called Friendship Bracelets created by Art Blocks, has taken the top spot by volume amongst all NFT projects in the week following the conclusion of their mint. Art Blocks is an art collective that specializes in the minting of generative art NFTs, and is home to other popular collections such as Tyler Hobbs’ Fidenza and Matt Kane’s Gazers. The collection was conceptualized by Art Blocks founder Erick Calderon (Snowfro) and designed by artist and Japanese Generative Art Foundation Director Alexis André. The NFT’s were free to mint 2 per wallet for holders of existing Art Blocks NFTs up until the claim period ended on Tuesday 1/10. Following the end of the claim period, the collection quickly rose to the top of the leaderboard on popular exchanges such as OpenSea, Blur, and LooksRare. As of Tuesday January 10th, the collection had the highest 24-hour trading volume on Opsensea at 996 ETH (over $1.3 million) and amassed a total trading volume of 7,437 ETH (about $10 million). At the time of writing, the floor price is around 0.62 ETH, roughly $830. The Friendship Bracelet collection is also larger than most NFT projects with 38,414 pieces in total making the sustained volume all the more impressive.

According to Art Blocks, this mint is a way to give back to the community that has purchased artwork from the company’s roster of artists since its launch in 2020. “The project is a token of our appreciation to the creators, makers, builders, and collectors who have all contributed to making the Art Blocks community what it is today,” said the company on its collection page. “Participating in this project is a signal, both online and IRL (in real life), that you’re a participant in this evolution of art and community.” In addition to the digital bracelet, the token’s owners will receive instructions on how to replicate their bracelet in a physical form.

Latest News:

Hundreds of institutions and prominent individuals have invested directly in crypto, adopted the value thesis, or started building technology to support digital assets since Wave started tracking this metric in late 2020. Now the rise of the Metaverse, Decentralized Finance (DeFi), Non-Fungible Tokens (NFTs), and Decentralized Autonomous Organizations (DAOs) is driving mainstream adoption of blockchain technologies everywhere we look. We’re continuing to keep track of it every week here:

• Hong Kong authorities are looking for new designs for a central bank digital currency (CDBC), now proposing to issue a CBDC in the form of a stablecoin backed by the government. A member of their legislative council highlighted that developing e-HKD into a stablecoin would provide better integration between the CBDC and DeFi.
• The Bank of England has published answers to questions from applicants for their CBDC wallet project. The BoE includes details of the specifications and requirements for the proof of concept wallet.
• Shopify expanded its non-fungible token (NFT) integration allowing merchants to begin designing, minting and selling Avalanche NFTs. The e-commerce giant launched its first NFT integration in July 2021, allowing merchants to sell NFTs directly from their stores instead of through third-party marketplaces.
• LG Electronics has teamed up with cloud-based technology platform Oorbit and Pixelynx — a company building an integrated music, gaming and Web3 ecosystem — to bring interoperable metaverse platforms to TVs.
• Mastercard has announced a Web3 spotlight program to support the development & launch of emerging musical artists in the digital economy.

REGULATORY ROUNDUP

We’re living through the era of regulatory recognition of digital assets. The legislation, litigation, and regulation happening today will dictate the entire future of our industry, and we have a historic chance to shape those changes by staying informed and exerting political influence.

• The Bank of France’s governor, Francois Villeroy de Galhau, has called for more stringent licensing requirements for crypto companies in France, citing the current turmoil in the crypto markets. During a speech in Paris, he said France shouldn’t wait for upcoming EU crypto laws to enact obligatory licensing for local digital asset service providers (DASPs).
• The Central Bank of Nigeria (CBN) has published an 83-page report titled, “Nigeria Payments System Vision 2025”, as it considers the development of a regulatory framework for the potential implementation of a stablecoin. In addition to stablecoins the document pays attention to the regulation of initial coin offerings (ICOs) and highlights the current absence of regulation in the area.

Disclaimer: The views and opinions expressed herein are those of the author alone and do not represent Wave Digital Assets LLC or any of its affiliates (collectively, “Wave”). The author and/or Wave may hold investment positions in some of the assets discussed. Nothing in this material or linked information should be interpreted as an offer or recommendation to buy, sell or hold any security or other financial product. This material is not intended to provide accounting, legal or tax advice. Certain information contained herein has been obtained from third-party sources, has not been independently verified and should not be viewed as being endorsed by Wave. Such information is believed to be accurate as of the date of its publication. No representation or warranty is made, express or implied, with respect to the accuracy or completeness, and readers should not place undue reliance on the information contained or linked to herein. Certain statements in this material provide predictions and there is no guarantee that such predictions are currently accurate or will ultimately be realized. Past performance is not indicative of future results.

Wave is federally regulated by the US Securities & Exchange Commission as an investment adviser. Registration with a federal or state authority does not imply a certain level of skill or training. Additional information including important disclosures about Wave Digital Assets LLC also is available on the SEC’s website at www.adviserinfo.sec.gov. Or, learn more information about Wave at www.wavegp.com.

MetaMask Teams Up with PayPal for Seamless Ethereum Transactions

MARKET OVERVIEW

Liquid Staking Derivatives: A Beacon of Hope in a Volatile Crypto Market

The Ethereum Shanghai Upgrade, set to be released in March, is poised to have a significant impact on the world of liquid staking protocols in the DeFi space. Currently, staked ETH withdrawals are not available, leading to a relatively low percentage of the ETH supply being staked. However, the ability to withdraw staked ETH is expected to change this dynamic, potentially leading to an increase in the number of people choosing to stake their ETH.

In this scenario, it seems likely that a growing number of individuals will opt for liquid staking derivatives as a means of earning staking yields without giving up their staked ETH. We believe this trend could potentially lead to a significant boost in the revenue of liquid staking providers, and could have a corresponding effect on the value of certain tokens.

Based on our analysis, three such tokens that may potentially benefit from this trend are Lido Finance’s LDO, Rocket Pool’s RPL, and Frax’s frxETH. Lido Finance, the largest ETH liquid staking provider, collects a 10% fee on staking rewards, with a portion of this fee being sent to the DAO treasury. Lido is currently the market leader in its segment and is the fifth most undervalued protocol based on the price-to-fees ratio. However, it should be noted that LDO does not offer revenue sharing to its holders.

Rocket Pool, the second largest liquid staking protocol, prioritizes decentralization, allowing anyone to run a node. Additionally, RPL has low inflation and the potential for higher staking rewards. However, it also does not offer revenue sharing to its holders.

Frax’s frxETH has seen rapid growth in its total value locked and offers attractive yields for providing frxETH on Curve. Additionally, 8% of the ETH staking yield is shared with veFXS holders. However, frxETH is relatively new and less popular than other liquid staking derivatives, and its current inflation rate is 24%.

It is still too early to determine which of these protocols will see the greatest benefit from the Ethereum Shanghai Upgrade. However, the release of the upgrade is likely to drive a new narrative around liquid staking in the DeFi space and could lead to significant changes in the market.

NFT MARKET NEWS

MetaMask Partners with PayPal

ConsenSys has announced the integration of a new feature that allows users to purchase ether (ETH) via PayPal on MetaMask’s mobile app. The feature is currently available only to a select group of US customers and will allow Web3 users to transfer ETH held on PayPal or purchase the cryptocurrency using PayPal-linked bank accounts. The feature is expected to be available to all US customers in the coming weeks, and MetaMask will charge a 1% service fee on purchases. This new addition to the MetaMask app offers users an additional on-ramp to Ethereum joining options such as instant bank transfer, Apple Pay, and debit or credit card. Regarding the new PayPal partnership, MetaMask’s product manager Lorenzo Santos told Blockworks that “MetaMask never collects or processes KYC [know-your-customer] data or payment details.” He views the integration as an opportunity to onboard hundreds of millions of users to Web3 who have already entrusted their payment details to PayPal. This is designed to also help to bring NFT’s to the mainstream as MetaMask is the most popular used to purchase NFT’s.

Gaming Platform Forte Partners With SuperLayer to Advance Web3 Gaming

Forte, a blockchain platform that allows game publishers to integrate blockchain technology into their games, has announced a partnership with startup venture studio SuperLayer. The partnership will see Forte serve as SuperLayer’s preferred crypto payment and liquidity services provider, while SuperLayer will provide the infrastructure support to expand Forte’s verticals beyond just gaming. Forte received a valuation of over $1 billion and $910 million raised in two funding rounds last year. The company’s platform is designed to enable game developers to easily incorporate blockchain features such as token wallets and non-fungible token (NFT) transactions into their games.

In addition to the partnership, Forte has also invested $5 million in SuperLayer’s recent $25 million funding round, which was led by Polygon. The funds will be used to support companies in SuperLayer’s second incubation round, which is expected to include between eight and ten companies. The capital will be used to provide pre-seed investments for each company. Forte’s Chief Development Officer, Linda Chew, commented on the partnership, stating that “the core tenets of blockchain are applicable much more broadly than just games, whether it’s e-commerce or loyalty systems or social. There’s really a number of different verticals where we see enormous potential.”

LATEST NEWS

Hundreds of institutions and prominent individuals have invested directly in crypto, adopted the value thesis, or started building technology to support digital assets since Wave started tracking this metric in late 2020. Now the rise of the Metaverse, Decentralized Finance (DeFi), Non-Fungible Tokens (NFTs), and Decentralized Autonomous Organizations (DAOs) is driving mainstream adoption of blockchain technologies everywhere we look. We’re continuing to keep track of it every week here:

• China will be launching its first regulated NFT marketplace. The China Digital Asset Trading Platform, a collaboration between state owned enterprises and private firm Huban Digital, will be going live on new year’s day.
• The Central Bank of Turkey (CBRT) has conducted the first tests of its Turkish digital lira. The CBRT successfully carried out the first payment transactions on its central bank digital currency (CBDC) network as part of an initial test phase.
• BMW plans to integrate blockchain technology into its daily operations and create a blockchain loyalty program for its customers in Thailand. The popular carmaker has onboarded blockchain infrastructure firm Coinweb as its decentralized architecture provider and BNB Chain for settling transactions.
• Indonesia plans to launch a national crypto exchange. The launch will occur amidst regulatory reforms which shift oversight of the industry from the Commodity Futures Trading Regulatory Agency of Indonesia to the Financial Services Authority.
• Ukrainian pharmacy chain ANC Pharmacy has partnered with Binance Ukraine to accept payments in cryptocurrency. Customers of ANC and ANC operated stores can now purchase goods via Binance Pay.

REGULATORY ROUNDUP

We’re living through the era of regulatory recognition of digital assets. The legislation, litigation, and regulation happening today will dictate the entire future of our industry, and we have a historic chance to shape those changes by staying informed and exerting political influence.

• Japan’s Financial Service Agency (FSA) will lift the ban on the local distribution of foreign stablecoins like USD Coin (USDC) in 2023.
• Italy’s Senate approved its budget for 2023 last week, which included an increase in taxation for crypto investors — a 26% tax on capital gains on crypto-asset trading over 2,000 euros. As an incentive for declaring crypto profits, the new bill also sets a “substitute income tax” for investors at 14% of the value of the assets held as of Jan. 1, 2023, instead of the cost at the time of purchase. Also included in the new rules, losses from crypto investments can be deducted from profits and be carried forward.

Disclaimer: The views and opinions expressed herein are those of the author alone and do not represent Wave Digital Assets LLC or any of its affiliates (collectively, “Wave”). The author and/or Wave may hold investment positions in some of the assets discussed. Nothing in this material or linked information should be interpreted as an offer or recommendation to buy, sell or hold any security or other financial product. This material is not intended to provide accounting, legal or tax advice. Certain information contained herein has been obtained from third-party sources, has not been independently verified and should not be viewed as being endorsed by Wave. Such information is believed to be accurate as of the date of its publication. No representation or warranty is made, express or implied, with respect to the accuracy or completeness, and readers should not place undue reliance on the information contained or linked to herein. Certain statements in this material provide predictions and there is no guarantee that such predictions are currently accurate or will ultimately be realized. Past performance is not indicative of future results.

Wave is federally regulated by the US Securities & Exchange Commission as an investment adviser. Registration with a federal or state authority does not imply a certain level of skill or training. Additional information including important disclosures about Wave Digital Assets LLC also is available on the SEC’s website at www.adviserinfo.sec.gov. Or, learn more information about Wave at www.wavegp.com.