The upcoming debut of Bitcoin (BTC) and Ethereum (ETH) exchange-traded notes (ETNs) on the London Stock Exchange (LSE) on May 28th, 2024, marks a significant development amid dwindling trading activity and challenges facing the exchange. The LSE, renowned for hosting top-tier blue-chip stocks, announced this move earlier today, following its earlier indication of accepting applications for crypto ETNs in the second quarter of this year.

Beginning April 8th of this year, companies keen on listing their Bitcoin and Ethereum ETNs on the new market can initiate the application process, as confirmed by the exchange. Ahead of the scheduled launch, issuers will have ample time to fulfill listing prerequisites and assemble requisite documentation, including a prospectus subject to approval by the Financial Conduct Authority (FCA), as noted by the LSE. The aim is to facilitate maximum issuer participation on the inaugural day.

The Application Process

To qualify for the initial offering, issuers must furnish a comprehensive letter and a draft base prospectus by April 15th, showcasing adherence to the criteria outlined in the Crypto ETN factsheet. Mandatory FCA endorsement of these prospectuses is imperative for ETNs to secure listing on both the Main Market and the Official List, as emphasized by the LSE.

Emphasizing stringent criteria and deadlines, the LSE clarified that issuers failing to meet these prerequisites will forfeit participation in the launch of the LSE Crypto ETN market. Comparable to exchange-traded funds (ETFs), ETNs afford exposure to a diversified array of assets. However, their structures diverge. While an ETF represents partial ownership of underlying assets, an ETN resembles an unsecured debt note issued by a bank. The bank employs proceeds to invest in assets mirroring a specific index, with the value of the ETN reflecting asset performance.

Getting Back On Track

Under FCA regulations, forthcoming Bitcoin and Ethereum ETNs will be exclusive to professional investors, limiting participation to authorized credit institutions and investment firms operating in financial markets, while retail investors are excluded.

Amid challenges threatening its stature as a premier financial hub, the LSE has faced a substantial decline in listed companies, with 2023 marking the lowest IPO activity since 2009. Moreover, trading volumes on the LSE have significantly contracted compared to pre-crisis levels. Factors contributing to these challenges include shifting investor preferences, competition via global exchanges, and regulatory dynamics.

With mounting interest by institutional investors, the digital asset market presents a lucrative opportunity for the LSE. Establishing a regulated and secure digital asset environment could attract investments and bolster the digital asset economy of the United Kingdom.

The recent Anti-Money Laundering regulations in the European Union impose restrictions on cash and certain crypto transactions, but proposed limits on noncustodial wallets were not included in the final version.

As of now, the key committees have removed a proposed 1,000 euro cap on cryptocurrency payments regarding self-hosted crypto wallets as part of these new laws. The legislation, passed on March 19th, aligns with the provisions agreed upon by the European Council and Parliament in January.

More Regulations

Previously suggested restrictions, such as limiting businesses to 1,000 euros for transactions using self-hosted crypto wallets and implementing identity checks on recipients of funds, have been discarded. However, Crypto-Asset Service Providers (CASPs) in the EU are required to conduct identity verification checks on users engaging in business transactions of at least 1,000 euros.

These laws complement existing regulations, such as the Markets in Crypto-Assets (MiCA) laws, and reinforce prohibitions on CASPs offering accounts to anonymous users or dealing with privacy coins like Monero (XMR), which conceal transaction details.

CASPs are also mandated to take steps for transfers between their platform and self-custody wallets, including verifying the identity of the exchange wallet holder for funds sent through a self-custody wallet. Furthermore, the regulations cap cash payments at 10,000 euros, with member states having the option to set lower limits, and prohibit anonymous cash transactions over 3,000 euros.

A Mixed Bag

The full implementation of the AMLR is anticipated within three years, potentially by 2027, pending approval by the EU Council and the European Parliament plenary session scheduled for April 10th. Patrick Breyer, a member of the Pirate Party Germany in the European Parliament, criticized the new laws in a recent press release, arguing that they compromise economic independence and financial privacy, considering anonymous transactions a fundamental right.

The response by the crypto community to these regulatory actions by the European Union has been mixed, to say the least. While some view the regulations as necessary, others express concerns about potential privacy infringements and limitations on economic activities.

Daniel Tröster, host of the Sound Money Bitcoin Podcast, highlighted practical challenges and consequences of the legislation, particularly its impact on donations and cryptocurrency usage in the EU, expressing worries about its restrictive effects.

Institutional clients served by the Goldman Sachs Asia Pacific division are demonstrating renewed interest in Bitcoin, Ether, and other cryptocurrency assets. Goldman Sachs clients in Asia Pacific have reportedly reengaged with cryptocurrencies this year, spurred by the endorsement of spot Bitcoin exchange-traded funds.

According to a report on March 24th, Max Minton, the head of digital assets for Goldman Asia Pacific, mentioned that several major clients have recently become active in or are considering involvement in the crypto sector. Minton attributed much of this revived interest to the approval of ten new Bitcoin ETFs in the United States in January, which solidified cryptocurrency assets as a more integrated aspect of traditional markets.

A Resurgence

Minton claimed that the recent ETF approval has prompted a resurgence of interest and activities. The majority of the increased demand primarily originates via pre-existing clients utilizing the options and futures offerings of the firm, with hedge funds being the most engaged among them. Goldman Sachs recorded a record $2.8 trillion in assets under management by the end of 2023.

It is also noteworthy that currently, Goldman does not provide any spot crypto products to its clients, despite launching its initial crypto trading desk in 2021. The desk solely deals with exposure to crypto derivatives, such as Bitcoin and Ether options and futures. Minton remarked that it was indeed a quieter year last year, but that there has been a sudden surge in interest by clients in onboarding, pipeline, and volume since the start of 2024.

Ethereum Could Be Next

The aforementioned clients primarily utilize derivatives to gain exposure to crypto volatility and to make weighted predictions on mid-term price movements. Bitcoin-related products remain the most favored investment instruments among active clients. Once again, Minton discussed the potential approval of a spot Ether ETF in the United States, which could potentially shift institutional clients towards Ethereum.

However, various ETF analysts have assessed the likelihood of an Ether ETF approval by May at just 35%, with the United States Securities and Exchange Commission choosing to extend their radio silence towards potential fund issuers. Unsurprisingly then, this attitude by the agency is being frowned upon and many are becoming increasingly pessimistic.

Irrespective of an ETF approval, Minton indicated that Goldman aims to expand into a broader universe of clients, including asset management funds, banks, and more specialized crypto asset firms in the future.

CryptoWeekly is proud to bring you the latest fundraising deals in Web3! Well done to everyone.

Espresso Systems secured $28M in Series B Funding from a16z crypto, propelling innovation in the United States market. Espresso is designed to offer rollups a means of achieving credible neutrality, enhanced interoperability, and long-term alignment with Ethereum.

Succinct raised $55M in Series A round led by Paradigm, marking a significant milestone for disruptive solutions in the United States. Succinct primarily focuses on making zero-knowledge proofs accessible to any developer.

Tanssi Network raised $6M in Seed funding from KR1, enhancing blockchain solutions in France. Appchains connected to the Tanssi Network transform into ContainerChains, gaining access to a range of tools and resources.

CoinMart secured $4M in Seed funding from IDG Capital, fueling growth in The Netherlands. CoinMart aims to democratize crypto investment and trading for all. Their mission is to bring cryptocurrency into everyone's reach while offering unparalleled simplicity, unwavering safety & security, and modest fees.

Rails raised $6.2M in Seed funding from Slow Ventures, expanding opportunities from the Cayman Islands. Rails enables users to trade crypto derivatives at lightning speed while maintaining self-custody.

Ago successfully completed a $2.5M Initial Coin Offering, paving the way for innovation in The Netherlands. The company's mission statement is that users don't need banks anymore as Ago makes it easy to invest in crypto and manage money.

Kemet Trading secured $5M in Angel funding, driving advancements in the United States market. Kemet provides the first true institutional single-access point into the digital asset derivative ecosystem.

Matter Labs completed a $50M Initial Coin Offering with support from Sygnum, advancing blockchain technology in Germany.

Cathedral Studios raised $6.6M in Seed funding from Arca, fostering innovation in the United Kingdom.

MANTRA secured $11M in Seed funding from undisclosed investors, driving growth in Hong Kong. As the first RWA Layer 1 blockchain, MANTRA is capable of adherence and enforcement of real world regulatory requirements.

GRVT raised $2.2M in Seed funding from QCP Capital, expanding opportunities in Singapore.

Keyring Network secured $6M in Seed funding from Greenfield, enhancing blockchain solutions in the UK. Keyring focuses on permissioning tools for compliant transactions on-chain, powered by zero-knowledge privacy.

Tokenize Xchange raised $15.5M in Series A funding from TRIVE, empowering digital asset exchange in Singapore. The Tokenize team aspires to build the next-generation digital currency exchange that supports established and emerging virtual currencies.

Exciting times ahead for the blockchain and crypto industry! Be sure to follow CryptoWeekly for the all the latest updates about Web3 fundraising.

A significant portion of the cryptocurrency market experienced losses, with Ethereum (ETH) and Binance Coin (BNB) witnessing declines of approximately 4% and 5%, respectively. Bitcoin (BTC) continues to face price challenges, having dropped to $62,500 recently before recovering approximately two thousand USD.

Altcoins have also seen declines on a daily basis, contributing to the total crypto market cap remaining under $2.6 trillion. BTC faced a contrasting start to the current business week compared to the previous one, when it surged above $73,000 to reach its latest all-time high. However, bearish sentiment has dominated the market in the past week, evident via data provided by CoinMarketCap.

Bitcoin Down But Sentiments Still Up

Bitcoin experienced significant declines on Monday and Tuesday, preceding the second FOMC meeting of the year. It reached a 15-day low of under $61,000 amidst concerns over potential changes in monetary policies put forth by the Fed. Despite no such alterations by the US central bank, BTC quickly rebounded and surpassed $68,000 on Wednesday. However, this rebound was short-lived as the asset promptly dropped to $62,500 the following day.

Despite the recent declines, Bitcoin has shown resilience, possibly influenced by continuous ETF outflows, and has recovered more than two thousand dollars. Nevertheless, BTC remains down by over 2% on a daily basis, with its market cap below $1.3 trillion.

Altcoins also experienced losses on a daily basis, with Ethereum down 4% and struggling below $3,400, and BNB down by 4.5% below $560. Other altcoins such as Ripple, Solana, Cardano, Avalanche, Shiba Inu, Polkadot, and Tron have also witnessed declines in the past 24 hours, albeit to a lesser extent. TON emerged as the top performer among larger-cap altcoins, experiencing a daily surge of more than 11% and nearing $5. Bitcoin Cash is another notable gainer among the top 36 altcoins, with a daily jump of over 4% to $435.

Other Markets

Raphael Bostic, President of the Atlanta Federal Reserve, highlighted a shift in forecasts, with Bostic now projecting only one interest rate cut for the year. This adjustment sparked a bullish frenzy on Wall Street, prompting a surge in buying activity. Meanwhile, hedge funds are seen increasing their bearish Yen bets following a dovish policy hike by the Bank of Japan.

Elsewhere, China has downplayed economic risks while emphasizing policy flexibility, and retailers resort to extreme discounts amidst sluggish consumer spending. Additionally, Zimbabwe plans to maintain its local currency despite losses, while reduced cocoa crop yields in Ghana impacts local trade surplus. There is also concern in the chocolate market as prices surge due to cocoa deterioration in West Africa.

Meanwhile, El Salvador saw its economy go ahead of GDP figures. In Europe, Citi predicts continued growth in the stock market rally, while in the US, there is significant outflows by stocks leading up to the Federal Reserve meeting.

Apple recently encountered a critical vulnerability enabling the extraction of sensitive data. Numerous concerns were raised following the discovery of a potentially catastrophic flaw in the Apple M-series chips, which could apparently allow hackers to obtain the cryptographic private keys of Mac users. Without a direct solution, researchers propose an alternative approach, which could severely impact performance.

Vulnerability In M-Series Chips Enables Key Retrieval

The identified vulnerability operates as a side channel, facilitating the retrieval of end-to-end keys during the execution of common cryptographic protocols on Apple chips. Due to its microarchitectural nature, direct patching is not feasible, unlike conventional vulnerabilities.

Instead, the report suggests integrating defenses into third-party cryptographic software as a solution. However, this method might significantly impact the performance of M-series chips during cryptographic tasks, particularly noticeable in earlier generations like M1 and M2.

The researchers further explain that the vulnerability is exploited when both the targeted cryptographic operation and a malicious application, operating with standard user system privileges, are processed on the same CPU cluster.

The key insight is that while the DMP only dereferences pointers, an attacker can craft program inputs so that when those inputs mix with cryptographic secrets, the resulting intermediate state can be engineered to look like a pointer if and only if the secret satisfies an attacker-chosen predicate.

The GoFetch Exploit

The latest research reveals an overlooked issue concerning DMPs within Apple silicon. In specific scenarios, these DMPs misinterpret memory content, including critical key material, as the pointer value used for loading other data. Consequently, the DMP frequently accesses and interprets this data as an address, leading to memory access attempts, as explained by the team of researchers.

This process, termed dereferencing of pointers, involves reading data and inadvertently leaking it through a side channel, representing a clear breach of the constant-time paradigm. The researchers identify the exploit as GoFetch, operating under the same user privileges as most third-party applications, targeting vulnerabilities in clusters of M-series chips. It affects both classical and quantum-resistant encryption algorithms, with extraction times varying between minutes to hours depending on the key size.

Lawyers representing Sam Bankman-Fried (SBF) have contested certain legal cases referenced by the U.S. government in its sentencing memo, advocating for a more lenient punishment for the former FTX CEO. A court filing on Wednesday highlighted this pushback.

The legal team representing SBF responded to the memo earlier in the week, asserting that the portrayal of their client as a supervillain was unfair. In another letter on Wednesday, the defense team critiqued some of the legal arguments put forth by the prosecution.

The Bargaining Continues

Having been convicted of fraud and conspiracy, Bankman-Fried faces sentencing on March 28th. His defense attorneys argue that a sentence of no more than 6.5 years is appropriate, noting that FTX creditors will recover their losses. Conversely, the United States DOJ is advocating for a sentence ranging from 40 to 50 years. A presentence investigation report recommended a sentence of 100 years, primarily due to the significant loss incurred at the time of the FTX bankruptcy, exceeding $8 billion.

A key contention revolves around the interpretation of a precedent-setting U.S. Supreme Court case, Kisor Vs. Wilkie, particularly regarding whether punishment should be based on intended loss or actual loss, as outlined in the Wednesday filing. The government contends that SBF is attempting to align the sentencing court with the same definition of loss which was prevalent in the Kisor Vs. Wilkie case, and that this should be dismissed.

Defining Loss

The issue of the aforementioned loss pertains to the former FTX customers, now creditors of the bankrupt exchange. The bankruptcy team of the defunct exchange estimates that these customers may recover almost all of their assets partially due to recoveries secured over the past year and a half and the recent increase in crypto values.

Losses represent just one aspect Judge Lewis Kaplan must consider in determining the sentence. Other factors include trial evidence, character references, victim impact statements, and potential testimony during the upcoming sentencing hearing. The presentence report, recommending a 100-year sentence, is viewed as a guideline calculation rather than a definitive determination of an appropriate sentence.

The United States Department of Justice (DOJ) has filed a comprehensive antitrust lawsuit against tech giant Apple, alleging that its regulations in the app market and its perceived monopoly have unfairly suppressed competition and hindered innovation.

Filed on March 21st in a federal court in New Jersey, the complaint, supported by 16 state attorneys general, contends that the dominance of Apple within the smartphone market has been exploited to compel developers to utilize its payment system, thereby locking in both developers and users to its platform.

Manipulating The Market

According to the DOJ, the App Store guidelines and developer agreements impose a range of evolving rules and restrictions, enabling the company to charge higher fees, impede innovation, provide a less secure or diminished user experience, and stifle competitive alternatives. This situation may be why numerous crypto-based apps currently offer only limited functionality on iOS devices.

The DOJ also asserted that the anticompetitive behavior exhibited by Apple not only restricts competition in the smartphone market but also has repercussions on industries affected by these limitations, including financial services. For instance, Apple has allegedly eliminated alternative payment systems in ways deemed anticompetitive and exclusionary.

A Chokehold On The Industry

The DOJ highlighted the 30% fee, commonly referred to as the Apple tax, which the company imposes on apps and in-app payments for content, products, or services it did not create. This fee is only compatible with fiat currencies and has effectively prohibited the use of cryptocurrency in apps or made it economically unfeasible for crypto-based apps to offer in-app purchases.

Apple does provide certain enterprise and public sector customers the option to offer their own apps through custom app stores, but iPhone users and developers are not granted access to such alternative app stores, according to the DOJ.

The DOJ further alleged that Apple often applies its App Store rules inconsistently and employs them to penalize and restrict developers leveraging technologies that threaten its monopoly power. Some NFT marketplaces, such as OpenSea, have disabled features on their iOS apps due to the 30% fee on NFT sales. The Bitcoin-friendly social app known as Damus also had to remove a BTC tipping feature after Apple removed its app for not utilizing its in-app payments function.

The Ethereum Foundation, a non-profit organization based in Switzerland and a significant player in the Ethereum ecosystem, is currently under investigation by an undisclosed government entity. Details regarding the focus and scope of this investigation have not been made public. The revelation surfaced through GitHub on February 26th, 2024, indicating receipt of a confidential inquiry by a governmental source.

A Confusing Development

This inquiry coincides with a period of notable technological advancements within Ethereum, the second-largest blockchain by market capitalization. Ethereum, launched in 2015 through an initial coin offering (ICO) for its ETH token, recently underwent a significant technical upgrade known as Dencun.

Previously, the Ethereum Foundation made a statement affirming no contact by any entity requesting confidentiality. However, this statement, along with the aforementioned search warrant notification, was removed on February 26th in a GitHub update. Such notifications indicate that companies have not received confidential subpoenas or document requests via government authorities. Removal of such notices often indirectly suggests receipt of such requests.

More Than Meets The Eye

Legal experts familiar with the situation suggest that Swiss regulators may have solicited documents through the Ethereum Foundation and may be collaborating with the U.S. Securities and Exchange Commission (SEC). Additionally, it is speculated that other offshore entities might be under similar scrutiny.

The SEC is presently evaluating several applications for an Ethereum Exchange-Traded Fund (ETF). However, optimism regarding the approval of these applications has waned due to perceived limited communication between applicants and SEC officials. Speculation suggests that any reported interactions between the SEC and its international counterparts could be linked to the impending May 23rd ETF deadline faced by the SEC.

Trezor saw its X account recently encounter a breach, wherein a hacker utilized the social media account to promote a fraudulent crypto presale, accompanied by a malicious link. The crypto community promptly detected the suspicious activity and alerted other X users. As of now, the Trezor team has regained control of the account.

Exploiting Goodwill

In the now-removed tweets, the hacker claimed Trezor was supporting the $SLERF Community, leveraging ongoing fundraising efforts in the crypto sphere. The unauthorized post advertised a fake $TRZR token presale, requiring users to send SOL to the address of the hacker. Additionally, supporters were promised a separate bonus airdrop upon visiting a linked website, which is a typical tactic of a wallet drainer.

Unsurprisingly, many expressed concerns over the security breach, considering Trezor likes to emphasize its security features. Gratitude was extended to those who alerted others, potentially preventing further victims. Some users questioned the precedent set by fundraising for participants affected by the Slerf presale debacle, fearing it could enable similar behavior.

Damage Control

Despite the relatively small sum stolen, questions arose regarding whether the vigilance of the community or the limitations of the hacker led to the modest haul. This incident, although a minor victory, highlights a potential vulnerability nonetheless.

Lastly, the theft prompts speculation regarding the adequacy of security measures or the possibility of an inside job. Trezor acknowledged the incident, citing robust protections, including two-factor authentication, and reassured users of ongoing investigation and vigilance against future threats.

South Korean regulators engaged in discussions with officials representing ASEAN, the Association of Southeast Asian Nations, and the OECD regarding cryptocurrency policy in Seoul on March 18th, 2024. According to Yonhap, the event was organized by the Seoul-based Financial Services Commission (FSC), the primary financial regulatory body in South Korea.

The international conference aimed to share the progress of digital finance policies in ASEAN countries. The participants expressed their desire to address risks associated with cryptocurrencies and related issues. The regulatory meeting was part of an event titled South Korea-OECD Roundtable: On Digital Finance in ASEAN.

An Important Meeting

Various representatives by the Korea Institute of Finance also participated in the discussions. The discussions on March 18th focused on presentations and discussions related to topics concerning central bank digital currencies and crypto assets.

Joining South Korean regulators were representatives by financial regulatory authorities, central bank officials, and other major financial institution officials by Asia and OECD member countries. The FSC announced that the parties agreed to exchange findings on global trends and share opinions on digital finance. On March 19th, the participants convened to exchange views on artificial intelligence in the financial sector.

FSC Vice Chairman Speaks

In his opening address, Kim So-young, Vice Chairman of the FSC, highlighted the positive impact of financial innovation through digital technology, including increased productivity in the financial industry. He emphasized the importance of establishing an appropriate regulatory framework to manage the risks associated with new technologies and protect consumers.

Kim urged South Korean regulators, along with their counterparts by ASEAN and the OECD, to proactively address the challenges posed by digital finance and cryptocurrency markets. He also emphasized the expanding international cooperation in the financial industry and called for sharing the latest financial trends with international organizations and major global countries, including ASEAN nations.

Kim concluded that South Korea and ASEAN nations should enhance cooperation to ensure alignment with the international regulatory framework. The direct investment by South Korea flowing into China last year fell the most in data dating back more than three decades, indicating weakening economic ties. 

As per various recent updates, Fidelity has reportedly modified its prior Ethereum Spot ETF application to incorporate the Staking feature. The move has significance as it indicates a keen focus toward making the biggest altcoin more mainstream and accessible to everyone.

Still A Ways To Go

The introduction of the staking functionality in Ethereum followed the transition to the Proof of Stake (PoS) mechanism. Wallet holders who locked their respective coins were rewarded with ETH in exchange for contributing to the overall security of the network.

Still, it was very evident that the United States Securities and Exchange Commission (SEC) showed reluctance towards this feature, leading many Spot ETF applicants to omit it from their submissions. This is unsurprising, especially since SEC Chair Gary Gensler has long been against the idea of making cryptocurrencies mainstream.

Is The SEC Working With TradFi?

Former Yahoo Finance reporter Zack Guzmán expressed intrigue about the development, stating that the progression of Ethereum ETFs seems peculiar as it appears Fidelity might be adding a component to justify the denial of the ETH ETF by the SEC, potentially striking a deal with Gensler.

That statement has caused many to wonder if Gensler may in fact be aligned with traditional financial giants. In related news, CEO Dan Tapiero shares his projection for the price of Bitcoin over the next two years. Notably, the aforementioned adjustment by Fidelity stirred activity in the price department, with BTC trading at around $65,600 as of the time of this writing.