Berenberg Capital Markets recently published a research note suggesting that the upcoming Bitcoin halving event could potentially impact the share price of Microstrategy, a software firm based in the United States.

Berenberg speculates that the fourth Bitcoin halving might trigger a significant surge in the stock price for Microstrategy, as the company is known for its strong support of the flagship cryptocurrency.

The analysis focuses on the substantial Bitcoin holdings of Microstrategy, which currently exceed 150,000 units. The investment bank anticipates that a rally similar to previous halvings could have a positive effect on the prices for both Bitcoin and Microstrategy shares.

A recent research report from Standard Chartered further supports the positive outlook for Microstrategy. The British banking giant raised its Bitcoin price target, projecting that the leading cryptocurrency could reach $130,000 by the end of 2023.
 

Recent information provided by FiscalData reveals that on June 2nd 2023, the total outstanding public debt of the U.S amounted to $31.467 trillion. Just 28 days later, on June 30th, this figure surged to $32.332 trillion, indicating a remarkable rise of $865 billion.

The rapid growth in U.S debt during this 28 day period surpasses the combined Gross Domestic Product (GDP) of 3 significant global economies, namely Greece, Finland, and Hong Kong. Collectively, these economies produced a total of $859.71 billion in wealth last year, which is lower than the debt accumulated by the U.S in just 4 weeks.

In a recent report, the Congressional Budget Office (CBO) projected that the national debt will far outpace GDP growth and could reach nearly 3 times the local GDP within the next few decades. The CBO further anticipates that by 2053, U.S GDP will rise to $79.5 trillion, while the debt will skyrocket to $143.895 trillion.

The federal agency warns that such high and escalating debt levels would impede economic growth, increase interest payments to foreign holders of U.S debt, and pose significant risks to the fiscal and economic outlook. Moreover, it could potentially limit policy options for lawmakers while simultaneously encouraing alternative financial options such as cryptocurrencies and other digital assets.

Binance, the largest crypto exchange in the world, has reportedly terminated the employment of several of its staff members based in the United States. Recent departures include the General Counsel, Chief Strategy Officer, Head of Investigations, and Senior Vice President of Compliance.

Binance CEO Changpeng Zhao confirmed the resignation of Patrick Hillmann but did not disclose the reasons behind the other departures. In a Twitter post, Zhao acknowledged that changes occur within organizations due to evolving market conditions, the ever-changing crypto landscape, and personal circumstances.

As Binance conducted significant layoffs last week, some employees were not given any explanation for their terminations, while others were informed that their positions had become redundant. In any case, Binance is clearly implementing a plan to downsize its workforce in the United States.

The exchange has been engaged in negotiations with the United States SEC and the Justice Department for several months, hoping to reach a compromise. However, in June, the SEC filed a lawsuit against Zhao, Binance, and the U.S branch of the exchange, accusing Binance of operating an illicit trading platform in the country and misusing customer funds.

Binance has approximately 8,000 employees worldwide, about 150 of which are based in the United States. It is important to note that this figure does not include Binance.US employees. Recently, Binance.US also carried out layoffs, affecting roughly 50 individuals, which accounts for just below 10% of its total workforce.

The majority of officials supported maintaining interest rates at their current level during the June meeting. A portion of officials backed a 25 basis point increase at the same meeting. Some officials advocated for an increase but agreed to pause temporarily.

FED officials expressed concerns about the possibility of a moderate recession starting this year, similar to what was mentioned in the May meeting. All participants agreed that maintaining a restrictive stance would be appropriate.

Additional rate hikes in 2023 received approval from nearly all officials during the June 13-14 meeting. Resolving the debt limit issue was noted by some participants as removing a source of uncertainty. All members unanimously supported continuing with the tight monetary policy.

Moreover, proponents of rate hikes pointed to factors such as a tight labor market, stronger than anticipated economic momentum, and insufficient evidence of inflation returning to the 2% target over time. Members maintained their expectation of a mild recession towards the end of the year.

FED meetings are important as they provide guidance on the direction of future monetary policy. Given that government officials have indicated their intention to implement two more rate hikes this year in subsequent public statements, the June minutes are particularly interesting.

FED decisions are often communicated well in advance, and FED minutes serve as a means for officials to convey their message. For instance, at the June meeting, FOMC members chose to keep the benchmark interest rate unchanged, as expected, and maintained the federal funds rate target between 5% and 5.25%.

However, FED officials acknowledged that the decision not to raise interest rates in June allowed them to assess the impact of tighter monetary policy on the U.S. economy. They also noted that the pause is likely to be short term, with potential future increases occurring soon after the July meeting.

Nasdaq has resubmitted a 19b-4 form for the iShares Bitcoin Trust, a Bitcoin exchange-traded fund (ETF) led by BlackRock. This action follows similar filings made by the Cboe exchange last week.

According to the filing, Nasdaq has reached an agreement with Coinbase to establish a surveillance-sharing agreement. They anticipate finalizing a definitive agreement before the commencement of trading. The purpose of this agreement, termed the Spot BTC SSA, is to supplement the existing market surveillance program provided by Nasdaq.

This development comes in response to a report by The Wall Street Journal, which stated that the U.S. Securities and Exchange Commission (SEC) informed Nasdaq and Cboe that recent filings for spot Bitcoin ETFs by BlackRock, Fidelity, and others lacked clarity and comprehensiveness.

Promptly, Cboe updated its filings for separate proposals of spot Bitcoin ETFs, including one proposed by Fidelity. These particular filings now mention their expectation of entering into surveillance-sharing agreements with Coinbase. Nasdaq initially filed the proposal for the BlackRock fund last month.

Its important to note that the SEC has not yet granted approval for a spot Bitcoin ETF. The agency has repeatedly expressed concerns about fraud and market manipulation when evaluating previous applications. Hence, these proposals may encounter challenges during the regulatory review process.

In other news, BlackRock CEO Larry Fink recently declared Bitcoin as an international asset, acknowledging both its global popularity and potential as a long term store of value.

The lawsuit accuses Coinbase of facilitating unregistered trading in 12 digital tokens that are considered securities. Coinbase strongly disputes these claims and argues that the SEC is applying securities laws in a manner that deviates significantly from established legal frameworks.

Coinbase Chief Legal Officer, Paul Grewal, stated that these allegations go beyond any existing law and should be dismissed. In a legal filing submitted to the U.S. District Court for the Southern District of New York, Coinbase expressed concerns about how the SEC interprets securities laws, suggesting that the agency is overstepping its legal authority.

By filing a motion to dismiss, Coinbase demonstrates its determination to challenge the lawsuit. This type of motion asserts that even if the allegations in the lawsuit are true, there is no valid legal claim against the defendant.
Coinbase maintains that the assets in question are not securities.

As a government agency, the SEC requires platforms that facilitate trading of securities to register with it. The SEC defines securities to include investment contracts, which the Supreme Court has interpreted through the Howey Test.

However, according to the filing made by Coinbase, the identified digital assets are not securities, and therefore, secondary transactions involving these assets are also not securities.

Coinbase additionally highlighted various inconsistencies made by the SEC, noting that the agency did not previously raise objections to 6 of the tokens mentioned in their dealings with Coinbase in 2021.

The lawyers further argued that the SEC had approved the registration statement put forth by Coinbase, allowing the company to sell its shares to investors during its initial public offering. This approval followed a thorough review process and discussions with the exchange, enabling Coinbase to trade over 240 tokens on its platform, including 6 of the disputed tokens.

According to sources cited by the Wall Street Journal (WSJ), the U.S. SEC has informed the Nasdaq and Cboe exchanges that the recent filings for spot Bitcoin exchange-traded fund (ETF) funds made by BlackRock, Fidelity, and other firms were lacking in clarity and comprehensiveness.

The SEC returned the filings because they did not provide sufficient information about surveillance sharing arrangements. However, the asset managers have the opportunity to update the language and resubmit the filings.

A Cboe spokeswoman mentioned in the WSJ report that they plan to update and resubmit their filing, while both Nasdaq and the SEC declined to comment. The development nevertheless caused a sharp decline in the price of BTC, dropping from over $31,000 to $29,830.

Fidelity joined the race for a spot Bitcoin ETF, following other firms such as BlackRock, WisdomTree, and Invesco, all of whom have recently filed similar proposals. It is worth noting that the SEC has not yet approved any spot Bitcoin ETF.

Bloomberg ETF analyst Eric Balchunas tweeted that the situation is not as negative as the headlines may suggest. He explained that the request for more details on the crypto exchange and surveillance sharing arrangements is understandable and could be considered as potentially positive news. He had initially thought that the update would require more changes as well.

Canadian lawmakers have released a report on blockchain technology, offering recommendations to promote its adoption while balancing regulation and innovation. In contrast to the fragmented regulatory landscape in the United States, Canada aims to take a more comprehensive approach.

The report, titled Blockchain Technology: Cryptocurrencies and Beyond, was published by the Standing Committee on Industry and Technology in the Canadian House of Commons. It emphasizes the potential of blockchain technology to revolutionize various sectors of the economy and generate substantial value.

The first recommendation calls for the Canadian government to recognize blockchain as an emerging industry with significant economic and employment prospects.

The committee therefore proposes the development of a national blockchain strategy which would involve reviewing consumer protection regulations and safeguarding rights to self-custody of various digital assets.

Additionally, the committee suggests adopting a distinct regulatory approach for stablecoins as they consider stablecoins to have unique use cases and regulatory challenges that set them apart from other cryptocurrencies like Bitcoin and Ethereum.

The recommendations also address the importance of educational initiatives to raise public awareness about the risks and benefits associated with cryptocurrencies. Furthermore, the committee proposes the establishment of a sandbox environment to facilitate innovation by allowing entrepreneurs to experiment with new technologies without facing regulatory barriers.

One of the major asset-servicing groups in Europe has recently obtained a license from the financial market regulator Autorité des Marchés Financiers (AMF) to offer crypto custody services in France.

CACEIS Bank, the French banking arm of the CACEIS group, has been granted PSAN (Prestataires de Services sur Actifs Numériques) status by the AMF. This status allows CACEIS Bank to function as an authorized custodian of crypto assets, responsible for securely storing private keys for users.

CACEIS Bank, owned by banking giants Credit Agricole and Santander, is the sole French custody specialist to have received PSAN status. With the newly acquired PSAN status, CACEIS Bank aims to meet the increasing demand for digital asset custody services from investment management companies and institutional investors.

This development marks the initial step in establishing an innovative digital asset custody offering that prioritizes the same level of security as traditional assets. Arnaud Misset, CACEIS Chief Digital Officer, emphasizes that the institution will leverage advanced technology to provide secure storage for private digital keys for clients.

CACEIS officially registered as a digital asset service provider (DASP) on June 20th. With $2.3 trillion in assets under administration, CACEIS is a prominent player in the asset-servicing industry, catering to institutional and corporate clients.
 

While the ruling does not directly impact the crypto industry, it represents a notable milestone for digital asset firms, being the first time such a company has prevailed in a Supreme Court ruling.

By a narrow margin of 5 to 4, the Supreme Court ruled in favor of Coinbase, overturning a previous decision made by a lower court in response to a customer's lawsuit. The lawsuit alleges that Coinbase failed to reimburse funds that were fraudulently withdrawn from customer accounts.

Justice Brett Kavanaugh, who weighed in on the case, stated that the main issue at hand was whether the district court should halt its pre-trial and trial proceedings while an interlocutory appeal is in progress. The answer, according to Kavanaugh, is affirmative and the district court must suspend its proceedings.

Katherine Minarik, Vice President of Litigation at Coinbase, expressed her support for the decision, highlighting the importance of pausing lower court litigation while an appellate court determines whether a case should be handled in court or through arbitration.

Minarik believes it makes sense that lower court litigation should be paused while an appellate court decides whether a case belongs in court at all, before going on to say that companies like Coinbase and its customers bear significant burdens when cases that belong in an arbitration process instead proceed in lengthy and expensive court proceedings.

Paul Grewal, Chief Legal Officer at Coinbase, also commented on the ruling, considering it a significant triumph. Grewal expressed gratitude to the Supreme Court for their thorough examination of the case and emphasized his belief in the American court system, describing it as the last, best hope in an imperfect democracy, despite its occasional sluggishness and disappointing outcomes.

Crypto venture firm Paradigm recently launched an open-source node implementation called Reth v0.1.0, marking a significant contribution to the Ethereum network. Developed in Rust and released under an Apache/MIT License, Reth aims to enhance node performance, reduce latency, and maintain uptime.

The project involved a dedicated team of 8 core developers and 90 contributors, working diligently for 9 months. The primary objective with Reth is to improve stability, client diversity, and decentralization for Ethereum. They believe that by using Reth as a node, they can actively contribute to achieving these goals.

Reth is designed to be a performance-centric client software that supports block building, maximal value extraction, and Ethereum consensus nodes. It has already demonstrated impressive performance metrics, boasting the fastest sync speed among all client projects, able to sync with the Ethereum blockchain from its genesis to block number 17.4 million within 50 hours.

Still, the team has faced challenges in implementing edge cases correctly and optimizing node components. They have learned the importance of mature testing and benchmarking practices. Reth has therefore undergone extensive testing, including defense-in-depth approaches, monitoring, running Hive testing suites, and stress testing under high RPC volumes.

However, it is important to note that Reth is still in the alpha phase as of this time, and further testing and improvements are underway to ensure its resilience.

The Monetary Authority of Singapore (MAS) has awarded a total of 190 Major Payment Institution Licenses, including 11 to Digital Payment Token companies. The approval given to Ripple allows its Singapore branch to offer regulated digital payment token products and services while expanding the adoption of its crypto-enabled On-Demand Liquidity (ODL) platform in the country, which experienced a five-fold growth year-on-year.

Ripple Chief Legal Officer Stu Alderoty expressed satisfaction with the progressive approach adopted by Singapore to regulating digital assets. He commended the local licensing framework for establishing a clear classification system for digital assets that balances consumer protection and market integrity while fostering innovation and investment.

The Singaporean Ripple branch has also seen significant growth, with a 50% increase in headcount, now totaling 50 full-time employees across various departments such as business development, compliance, finance, legal, and sales.

Alderoty emphasized that this expansion in Singapore is due in part to the opportunities presented by the thriving licensed digital assets market in the country. He noted that Singapore is attracting responsible players in the industry, with Ripple joining the ranks of Coinbase, Circle, and others who have legitimate businesses and products and are committed to adhering to regulations.

To date, MAS has approved 190 Major Payment Institution licenses and 11 Digital Payment Token Service licenses. Various reports further indicate that MAS has received over 680 applications for payment services licenses since January 2020, with 17 rejections and 214 withdrawals. In December 2021, Binance withdrew from Singapore and canceled its application for a Digital Payment Token license.