Market updates in CBDCs, crypto funds, BD-ATS platforms and stablecoins; Enforcement by the DOJ and the CFTC continues; DeFi bug frees up millions in crypto | BakerHostler

[co-author: Lauren Bass]

CBDCs studied by the UK, New Zealand and the Major Payments Network

By Veronica Reynolds

This week the Bank of England and Her Majesty’s Treasury announced the appointment of members to their Central Bank for Digital Currency (CBDC) Engagement and Technology Forums, which include established industry, civil society and academic stakeholders. The purpose of the Engagement Forum is to encourage discussion and get strategic feedback on policy considerations and technical requirements related to the implementation of CBDCs. The establishment of the Engagement Forum was first announced in April 2021 in collaboration with the CBDC Task Force to facilitate the potential creation of a UK CBDC.

The Reserve Bank of New Zealand announced in a press release this week that it has published two papers on CBDCs, gathering public views on the operational and cybersecurity risks that the introduction of CBDCs could pose and the potential impact of their issuance on the Financial sector. The press release cites the Reserve Bank’s desire to explore CBDCs while preserving the integrity of New Zealand’s monetary system.

This week one of the largest digital payment platforms in the world announced a “conceptual protocol” demonstrating interoperability between different CBDCs to facilitate payments. The concept, known as the Universal Payments Channel, shows how unrelated blockchain networks can be linked together to enable the transmission of CBDCs by routing payments through a central hub that acts as a gateway to handle payment requests between senders and to facilitate receiving parties. To support these efforts, the payment platform has deployed its first sample smart contract on Ethereum’s Ropsten testnet, which offers an efficient off-blockchain payment channel that accepts Ether and the USDC stablecoin.

For more information, see the links below:

Launch of new products in crypto funds, BD-ATS platforms and stablecoins

By Kayley B. Sullivan

The Swiss Financial Market Supervisory Authority (FINMA) this week announced the approval of the first Swiss fund that will primarily invest in crypto assets, the Crypto Market Index Fund. FINMA determined that the fund is restricted to qualified investors.

In other capital markets news this week, Securitize Inc. announced the launch of Securitize Markets, a registered broker-dealer and alternative trading system that facilitates the trading of blockchain-based securities. According to a press release, “All investments in the Securitize Markets are tokenized as Digital Asset Securities (also commonly known as” Security Tokens “), which offer a variety of advantages over traditional paper stocks, including virtually instant settlement, minimizing counterparty risk with less efficiency Intermediaries and the possibility of partial ownership. “

In another recent press release, Circle, the issuer of the USDC stablecoin, stated that it has been integrated with a US-based technology platform and data network. According to the press release, the integration will streamline Circle’s fiat-to-crypto operations by allowing payments from automated clearinghouses (ACH) to be processed as USDC and withdrawals to be converted from USDC to ACH transfers. Meanwhile, Peru reportedly introduced the first stablecoin pegged to Peru’s local currency, Sol, on the Stellar blockchain this week.

For more information, see the links below:

Fashion, sports, graphic novels and art: NFT market continues to grow

By Lauren Bass

A global luxury fashion brand has reportedly partnered with the content lab of a men’s fashion magazine and a Singapore-based startup to develop and publish six NFTs (non-fungible tokens) inspired by the iconic designs of the luxury brand. The limited digital collectibles will be published using the ZK roll-up protocol and given to the winners of a “mix and match” design competition hosted on a Chinese social media platform.

Earlier this week, Dapper Labs, the creator of the Flow blockchain, reportedly announced a new partnership to develop and produce an NFT marketplace in collaboration with a major US sports league and their players. According to reports, this new digital partnership will be heavily focused on video content.

In other NFT news, a legendary comic book and graphic novel publisher has reportedly partnered with a ConsenSys-supported digital studio to design and publish a range of NFTs. According to a press release, the digital collectibles, which will include fan-favorite superhero characters, will be available for free to registrants of the publisher’s upcoming global virtual fan event.

Finally, one of the largest peer-to-peer NFT marketplaces reportedly re-listed a polygon-based NFT collection after its creators successfully filed a counter notice of the Digital Millennium Copyright Act (DMCA). The new list follows a month-long marketplace ban that came after a competing collection alleged the NFTs were infringing copyright and filed an initial DMCA deactivation notice.

For more information, see the links below:

Crypto Enforcement: DOJ and CFTC target sanctions and registry violations

By Keith R. Murphy

The U.S. Attorney General for the Southern District of New York announced in a press release this week that an Ethereum network developer, Virgil Griffith, pleaded guilty to helping the Democratic People’s Republic of Korea (DPRK) evade sanctions, among other things by providing technical services and advice on the use of blockchain technology and cryptocurrency. According to the press release, the defendant traveled to the DPRK to attend a blockchain and cryptocurrency conference where he allegedly presented information on how blockchain technology could be used for the benefit of the DPRK, including in the context of nuclear weapons negotiations with the US, allegedly attempting to assisting in the exchange of cryptocurrency between the DPRK and South Korea, knowing that such efforts violated existing sanctions. The defendant is due to be sentenced in January 2022.

One of the largest U.S. cryptocurrency exchanges has paid the $ 1.25 million in fees from the Commodity Futures Trading Commission (CFTC), which illegally offered margined commodity transactions in digital assets, according to a press release this week. According to the press release, the transactions were inadmissible because they were supposed to take place on a designated contract market, but the exchange did not register as a Futures Commission Merchant (FCM). The press release quoted a representative from the CFTC as saying: “[m]Trading in arginated, leveraged, or funded digital assets offered to retail customers in the United States must be conducted on properly registered and regulated exchanges in accordance with all applicable laws and regulations. “

In related enforcement news, another press release from the CFTC announced that the commission had brought indictments and injunctions against 14 companies, some of which have not registered as FCMs and others have falsely stated that they have CFTC registration and membership in the National Futures Association have. According to the press release, the majority of complaints allege that companies offered the general public opportunities to purchase options based on the value of commodities, including cryptocurrencies like Bitcoin, without ever registering as an FCM.

For more information, see the links below:

DeFi Flaw Frees Up Millions In Crypto; Bitcoin ATM security vulnerability reported

By Jordan R. Silversmith

According to reports this week, the DeFi Protocol Compound mistakenly paid out millions of dollars in COMP rewards after updating one of its smart contracts. According to reports, millions were falsely spent by COMP, including $ 27 million in one transaction. The botched payouts may indicate a bug related to a recent upgrade to the Comptroller contract that pays out the COMP Liquidity Mining Rewards.

This week, the security research team at a major US cryptocurrency exchange reported several hardware and software vulnerabilities in the General Bytes BATMtwo, a commonly used cryptocurrency ATM. The researchers found multiple attack vectors through the standard administrative QR code, Android operating system software, ATM management system, and the machine’s hardware enclosure. The known exploits in the hardware and software of the ATM are now known, say the researchers, and they encourage users of the BATMtwo to only use it in trustworthy locations.

For more information, see the links below:

Comments are closed.