Market Updates in CBDCs, Crypto Funds, BD-ATS Platforms and Stablecoins; DOJ and CFTC enforcement continues; DeFi error frees millions of crypto | Baker

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[co-author: Lauren Bass]

CBDC explored by UK, New Zealand and major payments network

By Veronica Reynolds

This week, the Bank of England and Her Majesty’s Treasury announced the appointed members to its central bank’s Digital Currency Engagement and Technology (CBDC) Forums (Engagement Forum), which include parties incumbent stakeholders from industry, civil society and academia. The purpose of the Engagement Forum is to foster discussion and obtain strategic feedback on policy considerations and technical requirements related to the implementation of CBDCs. The creation of the Engagement Forum was first announced in April 2021 in collaboration with the CBDC Working Group to facilitate the potential creation of a CBDC in the UK.

The Reserve Bank of New Zealand announced in a press release this week that it has released two papers on CBDCs and is seeking public input on operational and cybersecurity risks that could arise from adopting CBDCs and the potential impact their issuance could have on the financial sector. The press release cites the Reserve Bank’s desire to explore the CBDCs while maintaining the integrity of the New Zealand monetary system.

This week, one of the world’s largest digital payment platforms announced a “Conceptual Protocol” that demonstrates interoperability between various CBDCs to facilitate payments. The concept, called the Universal Payments Channel, shows how unrelated blockchain networks can be interconnected to enable the transfer of CBDCs by routing payments through a centralized hub that acts as a gateway to facilitate payment requests between sending and receiving parties. . In continuation of this effort, the payments platform has deployed its first smart contract example on Ethereum’s Ropsten test network, which provides an efficient off-blockchain payment channel that accepts USDC ether and stablecoin.

For more information, please see the following links:

New product launch in crypto funds, BD-ATS platforms and stablecoins

By Kayley B. Sullivan

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

In other capital markets news this week, Securitize Inc. announced the launch of Securitize Markets, a broker-dealer registered with the Securities and Exchange Commission and an alternative trading system that facilitates trading in securities based on the blockchain. According to a press release, “All investments in Securitize Markets are tokenized as Digital Asset Securities (also commonly referred to as ‘security tokens’), which offer many advantages over traditional paper securities, including near instant settlement minimizing the counterparty risk, greater efficiency with fewer intermediaries and the possibility of fractional ownership.

In another recent press release, Circle, the issuer of the USDC stablecoin, said it has 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 Automated Clearing House (ACH) payments to settle in USDC and USDC payments to convert to ACH transfers. . Meanwhile, in Peru, according to reports this week, the first stablecoin indexed to Peru’s national currency, the sol, has been launched on the Stellar blockchain.

For more information, please see the following links:

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

By Lauren Bass

Reportedly, a global luxury fashion brand has 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 iconic designs from the luxury brand. The limited edition digital collectibles will be released using the ZK-Rollups protocol and will be awarded to the winners of a ‘mix and match’ design competition hosted on a Chinese social media platform.

Earlier this week, Dapper Labs, 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 its players. According to reports, this new digital partnership will focus heavily on video content.

In other NFT news, a legendary publisher of comics and graphic novels has reportedly partnered with a digital studio supported by ConsenSys to design and publish a series of NFTs. According to a press release, the digital collectibles, which will feature fan-favorite superhero characters, will be available for free to those who register at the publisher’s next global virtual fan event.

Finally, one of the largest peer-to-peer NFT marketplaces has reportedly relisted a Polygon-based NFT collection after a Digital Millennium Copyright Act (DMCA) challenge notice was successfully filed by its creators. The relist follows a month-long market ban that came after a competing collection claimed NFTs infringed copyright and filed a first DMCA takedown notice.

For more information, please see the following links:

Crypto Enforcement: DOJ and CFTC Targeted Sanctions and Registration Violations

By Keith R. Murphy

The US District Attorney for the Southern District of New York announced in a press release this week that Ethereum network developer Virgil Griffith pleaded guilty to plotting to help the Democratic People’s Republic of Korea (DPRK) escape the sanctions, including providing technical services and advice on the use of blockchain technology and cryptocurrency. According to the press release, the accused 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, particularly in the context of nuclear weapons negotiations with the United States. reportedly tried to aid the cryptocurrency exchange between the DPRK and South Korea knowing that the efforts violated existing sanctions. The defendant is expected to be sentenced in January 2022.

According to a press release released this week, one of the largest U.S. cryptocurrency exchanges has paid $ 1.25 million in fees by the Commodity Futures Trading Commission (CFTC) for illegally offering commodity trades from retail with margin in digital assets. According to the press release, the trades were irregular as they were supposed to take place in a designated contract market, but the exchange did not register as a futures trader (FCM). The press release quoted a CFTC official as saying that “[m]Exchanges of arranged, leveraged or funded digital assets offered to U.S. retail clients must take place on properly registered and regulated exchanges in accordance with all applicable laws and regulations.

In law enforcement news, another CFTC press release announced that the commission had laid charges and requested cease and desist orders against 14 entities, some for failing to be registered as FCM and others for falsely claiming they were registered with the CFTC and members of the National Futures Association. According to the press release, the majority of complaints claim that the entities have offered the general public opportunities to buy options based on the value of commodities, including cryptocurrencies such as bitcoin, without ever s’ be registered as FCM.

For more information, please see the following links:

DeFi error frees millions in crypto; Bitcoin ATM vulnerability reported

By Jordan R. Silversmith

According to reports this week, the DeFi Compound protocol mistakenly paid millions of dollars in COMP rewards following an update to one of its smart contracts. According to reports, millions of COMP were distributed in error, including $ 27 million in a single transaction. Sloppy sums may indicate a default related to a recent controller contract upgrade, which pays out the COMP liquidity extraction rewards.

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

For more information, please see the following links:

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