Blockchain Bites: Figure Files for Banking Charter, Cred for Bankruptcy

Cred is the first US cryptocurrency lender to file for bankruptcy in the country. Ripple is opening the regional office in the Middle East. The incoming administration of President-elect Joe Biden appears to be courting at least two pro-crypto political actors for government positions.

Bankruptcy filing
Cryptocurrency lender Cred filed for bankruptcy protection this weekend. In a statement relating to Chapter 11, the company announced that it has hired a new board member to oversee the restructuring and will consider merger and acquisition opportunities. CoinDesk’s Nathan DiCamillo reports that Cred previously disclosed “irregularities” in the management of corporate funds by a “fraudulent perpetrator”, a situation that required the company to temporarily stop its CredEarn lending program. According to his filing, Cred has listed estimated assets of between $ 50 million and $ 100 million and liabilities between $ 100 million and $ 500 million.

Bank card
Figure Technologies, a blockchain-based financial lender, has applied for a national banking statute. Approval by the U.S. Office of the Comptroller of the Currency would simplify compliance and cut costs by allowing the startup to offer its services nationwide and consolidate its reporting duties into one office. Currently holding 96 licenses from 49 states, CEO Mike Cagney said without the national card the figure could end up with 200 licenses within the next year. Cagney previously ran SoFi, a crypto lender, which received an OCC national banking statute last month.

New office
Ripple has established a regional base in Dubai, following several instances where the initiation of payments publicly stated that it would consider leaving the United States due to strict financial regulations. The company’s new San Francisco-based office – its headquarters in the Middle East and North Africa (MENA) – will be within the Dubai International Financial Center (DIFC), a financial hub with its own “independent judicial system and framework. regulatory, “according to its website. Despite statements from CEO Brad Garlinghouse, there are still no indications that Ripple plans to cut ties with the United States

Pro-encryption?
It’s still unclear how, if at all, President-elect Joe Biden’s administration will affect the cryptocurrency industry, experts say. According to Kristin Smith, executive director of the Blockchain Association, depending on how Biden’s cabinet fills, they could sow “many changes” in federal cryptocurrency management. Boston Fed Director Lael Brainard, who is overseeing research on the digital dollar, is reportedly one of the top candidates for the U.S. Department of the Treasury, while former Commodity Futures Trading Commission Chairman Gary Gensler is considered the best cop on Wall Street.

Privacy standards
California’s Proposition 24, also known as the California Privacy Rights Act (CPRA), could be a boon for cryptocurrency companies seeking to comply with strong European privacy safeguards. An update to California’s currency consumer data protections, the new law, if passed, would allow people to manually opt out of collecting biometric, racial, and other data. Hence, bringing California internet startups closer to European standards. Although the proposal has criticism, at least one crypto company has supported the measure. “An increasingly digital world means that more and more personal data is available for businesses to profit from, and reads like this are a good step to ensure user privacy,” said Kosala Hemachandra, founder and CEO of MyEtherWallet.

Gradual gains
Bitcoin closed at least $ 1,600 last week above its 2019 annual high of $ 13,880, supported by increased sales from the cryptocurrency mining network. On Sunday, nearly 1,129 BTC was moved from miners’ wallets to cryptocurrency exchanges – the largest single-day outflow since December 2019 – in a seven-day trend that saw miners sell more than they brought. (Miners tend to sell during strong markets). However, CoinDesk Omkar Godbole reports that bitcoin is consolidating towards an initial support price of $ 13,880, with some signs that the crypto is overbought.

Financial planners
Financial advisors are waking up to the prospect of bitcoin as a portfolio investment.

In a recent CoinDesk editorial, macro trader Damanick Dantes wrote that cryptocurrencies such as bitcoin could be a way to diversify a client’s assets, without taking outsized risks, in an increasingly risky environment.

Given the Federal Reserve’s stated commitment to raise inflation while depressing interest rates, wealth managers see bitcoin as a monetary hedge. Dantes specifically examines bitcoin’s strong correlation with negative-yielding debt and low correlation with traditional assets like the S&P 500 to guide his thinking.

“Even a small bitcoin allocation could help offset the impact of rising inflation, which will erode the purchasing power of cash, which currently produces next to nothing,” he wrote.

But it’s not just family office managers or individual financial planners who have caught the smell. JPMorgan analysts have found that the grayscale Bitcoin Trust is outperforming exchange-traded funds (ETFs) on gold. (Grayscale and CoinDesk are both owned by the Digital Currency Group.)

In a November 6 report, obtained by CoinDesk’s Nathan DiCamillo, analysts speculate that institutional investors, such as family offices and asset managers, could be driving this question.

Analysts further stated that “the long-term upside potential for bitcoin is considerable if it competes more intensely with gold as an ‘alternative’ currency”. It was a point taken up by Legg Mason Capital Management CEO Bill Miller, in an appearance on CNBC.

The risks of bitcoin going to zero are “lower than they have ever been before,” Miller said, further predicting that all major investment banks and high net worth companies will eventually have exposure to bitcoin or commodities. like them.