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Law Decoded: Loose ends and long dramas, Feb. 19–26

Republished by Plato

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Every Friday, Law Decoded delivers analysis on the week’s critical stories in the realms of policy, regulation and law.

Editor’s note

One day in the not-so-distant future, the curious experience of episodic television with its week-by-week gaps will be a weird thing that old people strain themselves not to talk about around the youths, until they eventually get, like, really old and stop caring and start turning all of the logistical inconveniences of their early memories into little moral parables. And by “they,” I mean me. And I’m looking forward to it.

It’s possible that entertainment’s on-demand, all-the-time availability is a pipeline to an obsession with news (and maybe professional sports). They are the last stories that make us wait. Where else do you find a cliffhanger these days?

For example, today is also the day that we learn that the person the world assumed to have ordered the torture and death of Jamal Khashoggi in fact did order the torture and death of Jamal Khashoggi.

The big policy stories in crypto this week are also long-anticipated events, must-see episodes to drawn-out dramas. And though, after a while, all big events start to look linked, crypto has seen a set of especially fascinating plot points reaching conclusions.

Coinbase sets out for public listing

It’s been one of the most hotly discussed prospective events in crypto for years: Coinbase, the giant of U.S. crypto exchanges, goes public.

An S-1 form, also known as an initial registration, filed with the SEC yesterday is a major step in that journey. It’s the first proper public disclosure a company makes in advance of public trading.

Consequently, a venn diagram of separate but linked worlds — crypto, tech and Wall Street — has been crowding together to pour over info about Coinbase that is available publicly for the first time. We all knew the company was big, but how big?

Quite big. Founder and CEO Brian Armstrong raked in a cool $60 million last year. Revenue topped $1.1 billion last year. And, based on the backstage scurrying of private shares, it’s set to hit a valuation of just over $100 billion, which would make it the biggest tech IPO to hit American markets ever, a record that Facebook currently holds. Sort of.

Here begins the speculation. We’re seeing a retracing in crypto markets following record surges that were synchronous with a massive inflow of revenue to Coinbase at the end of last year. What if this is a long-term retraction? Coinbase’s net valuations have shifted wildly, and it’s pretty clear that it’s heavily tied to crypto markets in general, and Bitcoin’s price in particular. The specific qualities of its ever-finicky trading platform? Not so much. More extreme: What if Coinbase puts its public vehicles back up on the blocks?

While the company hasn’t publicized a date for its IPO yet, it really does seem past the point of no return. As for its valuation and BTC price, there’s little doubt that a public Coinbase will serve as some sort of barometer for public interest in crypto, which really does correlate to bull markets. So while radical shifts in valuation both before and after the IPO are likely, that’s hardly new to anyone used to holding crypto.

The tale of BitFinex, Tether, and the New York Attorney General

To spoil the ending: No, they did not live happily ever after.

That is, despite the groundswell of crypto public opinion calling the recent settlement between the IFinex clan and the New York regulator an exoneration, a repudiation of longstanding accusations that Tether printed stablecoins without having reserves of dollars, because those reserves were off solving BitFinex’s capital problems. It’s a settlement, and, despite being bearable, a pretty expensive one. The agreement not to press criminal charges is, however, a license to live.

Effectively, the Attorney General has banished the IFinex family that houses Tether and BitFinex, run by the maybe-fictional Jan Ludovicus van der Velde, from New York. The AG also maintained that the reserves that were supposed to be here, on-hand, were in fact way over there, offshore and inaccessible. Per the AG, Tether was unbacked or underbacked for the bulk of the 2017 bull run.

IFinex managed to avoid admitting guilt as part of the settlement, but that’s a far cry from being innocent. The optimism we see from the crypto industry is likely a sigh of relief that IFinex is not likely to capitulate, an event that would ultimately be catastrophic for all corners of the crypto industry. Tether daily volumes continue to dwarf all others, as it is the preferred medium of transaction to or from all other crypto currencies on exchanges all over the world.

It will be interesting what sort of impact this settlement has on the huge class action market manipulation suit in Manhattan, which is gunning for Tether’s largesse by claiming it manipulated the market into the 2017 bull run. But what will be really interesting is what the decision does for future requirements that stablecoins will have to report and verify their reserves.

Powell’s Inferno

Not so much a decent through the concentric rings of hell as an hour-long collapse of the undergirdings of America’s payments system, the recent tech issues at the Federal Reserve were nonetheless their own sort of divine comedy.

The central infrastructures of American money are not as dependent on armored truckloads of cash and bullion as they once were. They are networks, and any time two banks are trying to transfer value, those Fed systems are their trusted third party.

So while it’s good that the outage was as brief as it was, the crypto community took no little joy in pointing out the frailty of even that most revered of third parties — a central bank being but another centralized point of failure.

Is that crash in systems likely to change anything in federal policy towards crypto? Eh, probably not. But crypto stakeholders will certainly get to add it to their books as a cool little parable from which to preach the righteous resilience of strong peer-to-peer systems.

Further reads

Attorneys for Osbourne Clark spell out recent developments in UK law that are adding legal protections to crypto ownership.

The Wall Street Journal’s Alexander Gladstone writes on the role Reddit-enhanced trading played in saving AMC’s line of movie theaters, which have been shuttered amid the pandemic.

DeFi developers are considering legal implications of their projects in a new way, but they are still advancing the industry, argues Anthony Tu-Sekine of Seward & Kissel.

Source: https://cointelegraph.com/news/law-decoded-loose-ends-and-long-dramas-feb-19-26

Blockchain

Mike Novogratz’s Galaxy Digital Filed for Bitcoin ETF With the SEC

Republished by Plato

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The number of companies filing to receive approval to launch a Bitcoin ETF in the US continues to increase with the addition of Mike Novogratz’s Galaxy Digital. If approved, the Galaxy Bitcoin ETF will trade on the NYSE Arca exchange. 

  • Based in New York, Galaxy Digital is a diversified financial services firm dedicated to the cryptocurrency and blockchain industry. The company has made another pro-crypto step by filing with the US Securities and Exchange Commission to launch its own Bitcoin exchange-traded fund. 
  • The document reads that if the Commission approves the application, the Galaxy Bitcoin ETF will issue common shares of beneficial interest that trade on NYSE Arca.  
  • The value of the shares will follow the performance of the Bloomberg Galaxy Bitcoin index, which includes multiple pricing sources. 
  • “In seeking to achieve its investment objective, the Trust will hold bitcoin and will value its Shares daily based on the value of the Index, which is calculated based on data from bitcoin pricing sources selected by Bloomberg Index Services Limited.” 

  • With Galaxy Digital’s application, the number of US-based companies striving to launch a Bitcoin ETF continues growing. However, the SEC has yet to approve the first such product. VanEck’s filing seems to be a step ahead as the Commission put its Bitcoin ETF proposal for discussion in March. 
  • At the same time, Canada has led the way with several operational BTC ETFs. In fact, Galaxy Digital already has a functioning one in North America. Novogratz’s firm partnered with CI Global Asset Management, and the CI Galaxy Bitcoin ETF launched on the Toronto Stock Exchange (TSX) on March 9th.  
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Coinsmart. Beste Bitcoin-Börse in Europa
Source: https://cryptopotato.com/mike-novogratzs-galaxy-digital-filed-for-bitcoin-etf-with-the-sec/

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Where fiat holders lose out, Bitcoiners can gain from inflation

Republished by Plato

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Currency instability and hyperinflation seemed unreal until a global pandemic struck, sending many nations into economic turmoil. Most economists began to wonder if the end of the pandemic would mean the birth of another Venezuela, which faced a 438% (hyper) inflation rate. However, like several other Bitcoin enthusiasts like Max Keiser thinks that inflation and the price of Bitcoin are correlated.

The aforementioned data is the long-term compounding of past, present, & possibly future base money, since 1970.

In a recent interview Matthew Mežinskis spoke about the inflation rate of the global monetary base, weighted averaged by each base money’s equivalent in USD. What’s important to note here is, it matched the overall 12.8% CAGR (6-year doubling time) we already saw above.

Source: https://platoblockchain.net/wp-content/uploads/2021/04/where-fiat-holders-lose-out-bitcoiners-can-gain-from-inflation.jpg

For all of 2019, central banks were actually on track to deflate their currencies. This would have been a first in the modern fiat era. So interestingly, no matter what one argues for money printing, 2019  ended with positive inflation, weighted at 1.5%.

Furthermore, he touched upon the role of monetary metals like gold. Gold’s rate of growth had, in fact, been around 1.8% per annum for the last 170 years.

Source: https://platoblockchain.net/wp-content/uploads/2021/04/where-fiat-holders-lose-out-bitcoiners-can-gain-from-inflation.png

Almost similar with silver – it’s almost as politicized as its “bigger brother of gold”. Lastly, he shed some light on Bitcoin. He added:

“Remember why the overall compound growth, thus far, is so high, and why it will never be that high again. And now is about the time for a clarification note on the Bitcoin system’s compound annual growth rate, specifically.”

Bitcoin’s finite supply, which may overcome inflation risks is what comforts many. However, this narrative keeps evolving as well.

Source: https://platoblockchain.net/wp-content/uploads/2021/04/where-fiat-holders-lose-out-bitcoiners-can-gain-from-inflation-1.jpg

What’s interesting to note here is, the phrase “supply issuance” for Bitcoin’s chart titles, and not “inflation.” Bitcoin’s “inflation,” economically, was already baked in. As already demonstrated, its growth rate is known until 2141, per the protocol. So when it comes to bitcoins, “inflation” is not the best term.

Even though the price of Bitcoin may indeed surge, its path to the target could be volatile. In the past, the asset’s price has appreciated and even collapsed several times. But some stated that even as Bitcoin increased in price, the rate of inflation, and forecasts for inflation, “remained stable.” Some provide a contrary opinion that economies need a bit more inflation, not less. At the same time, they do not expect hyperinflation to occur again, after the last great recession.


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Coinsmart. Beste Bitcoin-Börse in Europa
Source: https://ambcrypto.com/where-fiat-holders-lose-out-bitcoiners-can-gain-from-inflation

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Holdefi: A Unique Decentralized Lending Platform Shaping the Future of DeFi

Republished by Plato

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The DeFi industry offering an alternative to traditional financial services is evolving at a rapid pace. There are few platforms that are using the latest advances in the blockchain space to create DeFi solutions that could not only outperform their peers but also capable of adapting to new developments in the blockchain technology itself.

Holdefi is one such open-source, non-custodial decentralized lending platform that offers an attractive passive income stream to investors while enabling the masses to borrow at attractive interest rates. Like its counterparts, Holdefi allows users to instantly secure credit against crypto collateral. The platform does not require the borrowers to provide their KYC or prove their creditworthiness before borrowing. All they have to do is to deposit their crypto assets as collateral to secure a loan in any of the supported cryptocurrencies including stablecoins like USDC, DAI, USDT and BUSD. Users can deposit collateral in one or more types of crypto assets. Similarly, they can borrow different cryptocurrencies using single collateral as long as the value meets the platform requirements.

Attractive Interest Rates and Better ROI

Holdefi uses a mechanism that calculates interest rates for borrowing based on the market and competitive conditions. By doing so, it will balance the demand and liquidity to provide an attractive interest rate to borrowers. Meanwhile, lenders providing liquidity to the supply pool will receive a portion of the interest payments in proportion to the invested amount.

Lenders on Holdefi will get a bigger share of interest payouts in comparison to those on other DeFi platforms as borrowers do not receive any reward or interest on their collateral deposits. So, the lenders end up receiving a proportional share from the overall interest received by the platform from its borrowers.

What Makes Holdefi Stand Apart from the Rest?

Holdefi is an advanced DeFi solution based on the Ethereum protocol. Powered by a native ERC20 standard HLD token, the project is designed to work flawlessly on Ethereum’s existing PoW protocol while being future-ready to operate on ETH’s upcoming PoS upgrade.

The platform witnesses significant upgrades that impart certain qualities of CeFi platforms without affecting decentralization. One such sought-after feature of CeFi is the availability of collateral insurance. While such an option is not available with other DeFi projects, Holdefi solves the issue by separating the collateral deposits from borrowers and liquidity provided by investors into different pools. That way, the collateral won’t be utilized, and borrowers can withdraw it at any time, thus eliminating the need for insurance.

The separation of liquidity and collateral pool will also have a positive effect on Holdefi when ETH 2.0 is implemented as it will speed up the process while keeping transaction costs at a minimum.

Using HLD

HLD is a native ERC20 utility token of the Holdefi ecosystem. Apart from being a mode of value exchange within the ecosystem, it also acts as a governance token imparting voting rights to tokenholders. It can also be used for liquidity mining, staking, and revenue sharing between the participants.

The project has set the maximum supply cap for HLD at 100 million of which 13 million was offered to investors through private and public sales. Recently, Holdefi successfully concluded its private and public sale.

The public sale, a 2-day event starting March 31 was completely sold out within hours of launch. Meanwhile, those who didn’t participate in the token sale can purchase HLD on Uniswap and PancakeSwap

Buy HLD and HODL?

Holdefi is one of the few platforms that has made significant improvements to DeFi lending. It offers a lot of flexibility to users while maintaining strong security features. The future-proof design of Holdefi ecosystem is an added advantage that will make it popular with the crypto community.

While there is no definitive forecast on whether HLD will be an asset due to the volatile nature of crypto markets, Holdefi is an innovative project that is playing a major role in shaping DeFi platforms of the future.

Learn more about Holdefi at – https://holdefi.com/

Coinsmart. Beste Bitcoin-Börse in Europa
Source: https://www.newsbtc.com/news/company/holdefi-a-unique-decentralized-lending-platform-shaping-the-future-of-defi/

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