The Week in Crypto: Oct. 15 - 21
Stablecoin Tether gets majorly unstable
Tether, which once accounted for 95% of the stablecoin market, fell below $.90 USD this week, breaking its peg to the USD and causing widespread doubt on the coin’s future viability. Specifically, investors are worried Tether’s failure to produce a fully independent audit confirming their USD reserves indicates the insolvency of Tether and Bitfinex, which are reported to share a number of owners and managers. The doubts are compounded by earlier news Puerto Rico’s Noble Bank, which was reportedly Tether’s primary reserve bank, will be sold for pennies on the dollar. More recently, Bitfinex has bought $630 million USD worth of Tether with the intent of taking it out of circulation, leading some commentators to speculate Tether will be exiting the stablecoin business.
Fidelity Investments announced it will formally enter the cryptocurrency market via the creation of Fidelity Digital Asset Services (FDAS), which will provide digital-asset related tools, including custody services. Headed by Tom Jessop, a 17-year Goldman Sachs vet and former president of blockchain infrastructure company Chain, FDAS will also introduce a trade execution platform to clients and only grant access to exchanges complying with the “Fidelity Standard” (details still to come).
SEC announces portal for crypto-community regulatory engagement
The US Securities and Exchange Commission (SEC) announced this week its intention to launch FinHub, a portal designed to connect government regulators with crypto insiders and the public at large. The government also intends to use the portal to broadcast a range of FinTech-related activities and initiatives. SEC Chairman Jay Clayton commented, “FinHub provides a central point of focus for our efforts to monitor and engage on innovations in the securities markets that hold promise, but which also require a flexible, prompt regulatory response to execute our mission.”
Week in Crypto Investment of the Week
This week we’d like to throw a big shout-out to BitGo, (co-founded by early ZenLedger supporter Ben Davenport) a crypto-wallet and custody services company for securing close to $60 million in a Series B round led by Goldman Sachs. We applaud BitGo for securing the involvement of Goldman, as we believe increased institutional involvement will quicken the pace at which cryptocurrencies enter mainstream financial life.