TFU | Oct. 7-13

Leading Off

Mark Zuckerberg will testify before Congress on Libra and Facebook’s cryptocurrency plans, while several more large companies dropped out of the project; CFTC Chairman Tarbert said the ether cryptocurrency should be treated as a commodity; the SEC halted Telegram’s $1.7B token offering;  Robinhood rolled out interest-bearing accounts; BIS and the Swiss National Bank are exploring the potential for a central bank digital currency in Switzerland; and UNICEF established a fund for donations made in cryptocurrencies. 

 

In the News

Zuckerberg to testify to Congress on Libra.  Facebook CEO Mark Zuckerberg will appear before the U.S. House Financial Services Committee on Oct. 23 to discuss the Facebook-backed Libra cryptocurrency project. Global regulators have raised concerns about the project since it was announced in July, with Committee Chairwoman Maxine Waters (D-CA) even requesting a complete halt on Libra’s rollout. 

More companies unfriend Libra.  The Libra Association lost several more partners, with eBay, Stripe, Mastercard, Visa and Mercado Pago announcing their departures from the project. The decisions echo PayPal, which gave a thumbs-down to the Libra Association earlier this month. Libra has been plagued by uncertainty and regulatory criticism since it was announced in July.  

CFTC’s Tarbert calls Ether a commodity.  Chairman Heath Tarbert of the Commodities Futures Trading Commission (CFTC) said that the world’s second-largest cryptocurrency by market capitalization is a commodity and not a security, also noting that the CTFC and SEC have agreed that neither ether nor bitcoin are securities.

SEC halts Telegram’s $1.7B digital token offering.  The Securities and Exchange Commission (SEC) stepped in to prevent the messaging service’s unregistered token offering, valued at $1.7 billion. The regulator has taken the position that digital token like Telegram’s “Grams” are securities subject to SEC rules, and that the firm failed to register its offering with the SEC prior to promoting it to investors.

Robinhood rolls out interest-bearing account (for real this time!).  The zero-fee stock trading app launched Cash Management, offering users “2.05% APY interest on uninvested money in their account.” The firm attempted a similar move last December, but it became “a PR disaster” when it became clear that the Securities Investor Protection Corporation had not agreed to the plan.

Upgrade launches new credit card.  The online lender, founded by LendingClub founder and former CEO Renaud Laplanche, rolled out the Upgrade Card, which will allow customers to pay off their balances in equal monthly installments over one to three years, “like a mortgage or a car loan with a clear payment schedule,” said Laplanche. Upgrade will offer the card through Cross River Bank.

Bakkt’s launch disappoints.  After two weeks on the Intercontinental Exchange’s bitcoin futures platform, trading of bitcoin futures remains minuscule. The platform, which was delayed due to struggles getting CFTC approval, was considered a high-profile bet that Wall Street and institutional investors will embrace cryptocurrency as an asset class.

Tether is being sued for $1.4T.  The class-action alleges that Tether worked with the Bitfinex exchange, with which it shares managers and owners, to manipulate markets in 2017. Investors claim Tether promoted a “pump and dump” scheme that led to $265 billion in losses. The suit follows a March criminal probe by the Department of Justice.

BIS and Swiss National Bank to explore CBDC.  The Bank for International Settlements (BIS) and the Swiss central bank are partnering to explore central bank digital currency (CBDC) and distributed ledger technology at a Swiss innovation hub. The project will research a proof of concept on how CBDC could be used in the settlement of tokenized assets between market participants.

 

 

UNICEF establishes crypto fund.  The United Nations’ children’s agency set up a fund that will allow it to accept, hold, and disburse donations made in Ether or Bitcoin. The Ethereum Foundation made the first contributions to the fund, in support of the UNICEF Innovation Fund and “a project to connect schools to the internet.”

Ripple and Finastra partner up.  The global blockchain payments network and the provider of tech-enabled financial services solutions will collaborate to give Finastra’s customers access to RippleNet while Ripple’s customers will get access to Finastra’s network of banks. The firms aim to improve transaction speeds and allow mutual customers to easily access and partner with each other.

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