Regulatory Dynamics

1. The U.S. Department of the Treasury's Financial Crimes Enforcement Network has proposed a new rule draft.

The U.S. Department of the Treasury's Financial Crimes Enforcement Network (FinCEN) recently proposed a new rule draft titled "Requirements for Certain Transactions Involving Convertible Virtual Currency or Digital Assets." According to the proposed rule, users will need to provide personal information to exchanges when transferring cryptocurrency from centralized exchanges to private wallets. Exchanges will also need to submit and retain relevant cryptocurrency transaction records. The draft is scheduled to be published in the Federal Register on December 23, with the public given 15 days to provide comments or feedback. This rule will be in line with the Financial Action Task Force ( FATF ) guidance proposed last year, which requires countries to implement KYC rules for Virtual Asset Service Providers ( VASP ). The FATF guidelines suggest treating individual cryptocurrency wallets as VASPs.

2. The Hong Kong Securities and Futures Commission issues the first license for a virtual asset trading platform.

The Hong Kong Securities and Futures Commission recently announced that it has issued the first virtual asset trading platform license to OSL Digital Securities Limited. OSL is a subsidiary of the Hong Kong-listed BC Technology Group. Under the strict regulation of the SFC, the platform only serves professional investors and must comply with specific requirements similar to those for securities brokers and automated trading venues.

3. Estonia has revoked licenses for over a thousand cryptocurrency companies this year.

Due to the increasing severity of money laundering issues, Estonia has strengthened its regulation of the cryptocurrency industry this year. The Estonian Ministry of Finance revealed that the country's financial intelligence unit (FIU) has revoked licenses from over 1,000 cryptocurrency companies this year. This announcement came after the government's anti-money laundering committee discussed regulatory issues concerning cryptocurrency service providers. Veiko Tali, Secretary General of the Ministry of Finance and Vice Chairman of the committee, emphasized that the "regulation and supervision" of cryptocurrency service providers still require significant attention.

Industry News

1. Bitcoin's market value jumps to 12th place globally.

As the price of Bitcoin breaks through the historical high of $20,000 and continues to rise, its market capitalization has reached $445.442 billion. Compared to the market capitalizations of well-known company stocks, Bitcoin has risen to 12th place, surpassing retail giant Walmart. If the price of Bitcoin exceeds $28,000, it will enter the top ten by market capitalization; if it exceeds $42,500, it could enter the top five. Analysts point out that the increased demand for safe-haven assets under the influence of the global pandemic and loose monetary policies is a significant driver of Bitcoin's recent surge.

2. A certain cryptocurrency exchange platform plans to IPO, with a valuation possibly reaching 28 billion USD.

According to reports, a well-known cryptocurrency exchange platform has selected Goldman Sachs to lead its upcoming IPO and has submitted preliminary documents for the public offering to the U.S. Securities and Exchange Commission (SEC). Researchers have estimated that the platform's potential valuation could reach $28 billion by analyzing its business and trading data. This valuation model takes into account multiple business segments, including trading fees, custody fees, and debit cards. Data shows that the platform's trading volume mainly comes from institutional clients, but the average holding amount for retail clients is $703.

3. Wall Street investment banks adjust pension fund allocations, increasing Bitcoin investments.

Christopher Wood, the Global Head of Equity Strategy at Jefferies, a well-known investment bank on Wall Street, recently stated that he plans to shift 5% of the physical gold allocation in the global pension fund portfolio he manages into Bitcoin. This portfolio was established at the end of the third quarter of 2002. Wood also mentioned that if Bitcoin experiences a significant pullback from its high of $20,000, the team may consider increasing this position further.

4. Bankruptcy compensation plan of a certain cryptocurrency exchange submitted to the court

A cryptocurrency exchange that was previously attacked by hackers recently announced that it has submitted a draft liquidation compensation plan to the Tokyo District Court. The court and reviewers will examine the draft to decide whether to proceed with the relevant compensation procedures. The specific contents of the compensation plan will be communicated to the relevant parties at the appropriate time.

5. The Chicago Mercantile Exchange will launch Ethereum futures.

The Chicago Mercantile Exchange ( CME ) announced plans to launch Ethereum futures on February 8, 2021, with the new contracts to be cash-settled and currently awaiting regulatory review. Ethereum is currently the second-largest cryptocurrency by market capitalization and daily trading volume. Since 2020, CME Bitcoin futures contracts have averaged 8,560 contracts traded per day, equivalent to approximately 42,800 Bitcoins.

6. A cryptocurrency asset management company has completed the split of Ethereum trust shares.

A well-known cryptocurrency asset management company recently completed the share split of its Ethereum Trust Fund (ETHE). The split ratio was 9:1, and shareholders registered on December 14, 2020, will receive an additional 8 times the shares. Before the split, ETHE had issued 29,502,100 shares, with each share corresponding to 0.09 Ethereum (ETH). After the split, the number of ETHE shares increased to 285,269,400, and the amount of ETH per share decreased to approximately 0.1.

In the past month, the company has purchased over $1 billion worth of digital currencies such as Bitcoin, Ethereum, and Ripple from investors. Currently, the total value of digital assets managed by the company has reached $15.5 billion. Additionally, the company plans to launch new cryptocurrency commercials on major cable networks in the United States early next year.

7. The founder of a DeFi insurance protocol was hacked, resulting in losses exceeding $8 million.

The personal address of Hugh Karp, the founder of the DeFi insurance protocol Nexus Mutual, was attacked, resulting in the theft of 370,000 NXM tokens, with losses exceeding $8 million. The official statement indicated that this was a targeted attack, affecting only Karp's address, while the protocol itself and other members were not impacted. It is reported that the attacker gained remote access to Karp's computer and modified the MetaMask wallet plugin, inducing him to sign a transaction for the transfer of funds.

Subsequently, the hacker demanded a ransom of 4,500 ETH from the founder of Nexus Mutual. It is understood that the hacker's address sold approximately 35,000 WNXM through the 1inch exchange, and currently has about 162,000 WNXM remaining.

8. Canadian wealth management firm completes $72 million Bitcoin fund IPO

Canadian wealth management firm CI Financial has completed a $72 million Bitcoin fund IPO. The company's CEO Kurt MacAlpine stated that this IPO has attracted interest from various parties including institutional investors, individual investors, high-net-worth clients, and financial advisors. Shares of the CI Galaxy Bitcoin Fund will be traded on the Toronto Stock Exchange in both USD and CAD.

9. A large adult website only accepts cryptocurrency payments.

One of the largest adult websites in the world recently announced that its paid memberships now only accept cryptocurrency payments. Previously, The New York Times reported that the site had a large number of non-consensually uploaded adult videos, which attracted widespread attention. Under public pressure, Visa and Mastercard announced an investigation into this and stopped providing settlement services for it. According to the site's 2019 report, its annual traffic reached as high as 42 billion visits, with approximately 80,000 visits per minute.

10. A large mining machine manufacturer has initiated a business spin-off.

According to reports, a well-known mining machine manufacturer recently reached an internal agreement to initiate a business split. According to the agreement, one of the company's founders will borrow $600 million to acquire the shares of another founder. BTC.com, Bit Deer, and the overseas mining business will be split off with a valuation of $90 million, belonging to one team; the company's other businesses (including mining machines, AI, Ant Pool, domestic mining sites, etc.) will belong to the other party. The company plans to hold a shareholders' meeting on December 28, but the possibility of changes cannot be ruled out.

In addition, the company's representative lawyer revealed at the court hearing that the company lost nearly 400 million yuan (approximately 61 million USD) in 2019, while it recorded a profit of 3 billion yuan (approximately 450 million USD) in 2018. This indicates that the company's losses may have begun as early as before 2019.