Block 1 : Key news:
- Citi launches its own blockchain
Citi, the third largest bank in the USA, has launched its own blockchain-based cross-border payments solution, called Citi Token Services. The technology uses smart contracts to automate and secure transactions such as letters of credit and bank guarantees, enabling instant transfers under certain conditions. Citi has teamed up with Maersk, a shipping giant, for the first tests of this technology. Unlike decentralized blockchains, Citi's solution operates privately and with permission, similar to JP Morgan's Onyx blockchain.
- The USA continues to tighten the screws on the cryptosphere
The US Securities and Exchange Commission (SEC) is stepping up its regulatory actions against the cryptocurrency ecosystem, including platforms such as Binance, Kraken and Coinbase as well as decentralized finance (DeFi). David Hirsch, head of the SEC's crypto branch, says the agency will continue to take action against any entity in this space that fails to meet its obligations. He points out that even DeFi, despite its decentralized nature, is not immune to regulatory action. Major US crypto players such as Grayscale and Ripple are planning to fight back in court.
- Nomura launches bitcoin fund
Nomura, Japan's largest investment bank, has launched a "Bitcoin adoption fund" aimed at institutional investors for long-term investments. The fund is managed by Laser Banking, Nomura's crypto arm, and uses Komainu for the secure custody of cryptocurrencies. Nomura has also announced plans to launch more Bitcoin-focused investment solutions in the future.
- Deutsche Bank expands its crypto-asset-related offerings
Deutsche Bank, Germany's leading bank, is teaming up with Swiss company Taurus to offer cryptocurrency custody services to its institutional customers. In addition to storing digital currencies, the bank also plans to tokenize real-world assets. According to Paul Maley, Deutsche Bank's Global Head of Securities Services, the initiative is designed to meet the growing demand from institutional clients for digital assets. With this move, Deutsche Bank joins other major international banks, such as Société Générale, in adopting cryptocurrency-related services.
We’re pleased to announce that Deutsche Bank has entered a global agreement with Taurus! 🤝Deutsche Bank will leverage Taurus custody and tokenization technology to manage cryptocurrencies, tokenized assets, and digital currencies.https://t.co/HRJx76NvWt pic.twitter.com/EhTB3gsJgF— Taurus (@taurus_hq) September 14, 2023
Block 2: Crypto Analysis of the week:
The legal quagmire surrounding Sam Bankman-Fried (SBF) and his former company, FTX, has taken a family twist.
Sam Bankman-Fried's parents have been thrust into the spotlight in what is already shaping up to be one of the most high-profile cases of the year. Once seen as peripheral figures providing moral support to their troubled son, Stanford professors Joseph Bankman (Dad) and Barbara Fried (Mom) now find themselves accused of playing a key role in the alleged wrongdoings that led to the collapse of the FTX empire.
The legal intrigue thickened earlier this week when court documents were released accusing Papa Bankman and Mama Fried of "capitalizing on their insider access to engage in a process of personal enrichment". These accusations fly in the face of SBF's earlier assertions that his parents were not involved in FTX's critical operations. Prosecutors disagree, claiming that the duo were involved in the company's affairs from its inception through to its implosion.
According to legal documents, Joseph Bankman's involvement apparently went beyond paternal advice. He was said to be present at FTX's impromptu board meetings and was a tax expert for the company. But it didn't stop there. Court documents reveal that Bankman felt his annual salary of $200,000 didn't measure up to the million he expected, which led to an email exchange with the company and his son.
According to court documents, Joseph Bankman sent the following e-mail to his son: "Sam, I don't know what to say. This is the first I've heard of a salary of 200,000 euros a year! I'll get Barbara on it".
Barbara Fried, meanwhile, has exerted considerable influence on FTX's political contributions strategy. Not only did she co-found a political action committee, but she also reportedly pressured her son to make substantial donations to it. And let's not forget Gabe Bankman-Fried, SBF's youngest son, who runs a charity funded mainly by FTX funds - or rather, by funds stolen from customers.
Bankman and Fried's defense has issued a counter-statement, dismissing the latest allegations as "patently false and an attempt to manipulate the judicial process just days before their son's trial". Yet all indications are that prosecutors are far from calming down. The current allegations could be just the tip of the iceberg, as prosecutors are expected to widen their scope, potentially turning insiders into state witnesses.
With the trial set to begin in October, it's clear that the FTX takedown involves more characters than initially thought. The title of this courtroom drama could well be: "It takes a family to destroy a $40 billion empire".
What was initially seen as a not-very-fun one-man show - the astonishing rise and fall of SBF and FTX - now appears to be a family show, featuring not only a "prodigy entrepreneur" but also a set of family members who, according to the prosecutors, should have known better. Ultimately, all this raises the stakes in a trial that is already attracting worldwide attention.
Bloc 3 : Gainers & Losers:
Block 4: To read this week
- Behind the scenes at Paradigm (The Information)
- How can I stop my son from investing his inheritance in cryptos (Financial Times, in English)
- Crypto companies seek growth outside the US (WSJ)