Block 1 : Key news

  • Kraken plans to expand into equity trading

Cryptocurrency platform Kraken plans to expand its services to include equity trading in 2024. To do so, in compliance with regulations, Kraken plans to launch "Kraken Securities". Initially, these new services will be available in the United States and the United Kingdom, where Kraken has reportedly already obtained the necessary licenses. This expansion would enable Kraken to diversify its offerings and position itself against competitors such as eToro and Robinhood, while also differentiating itself from the struggling Binance.

  • Tether invests in Germany

Tether (USDT) has invested $420 million in Germany-based cryptocurrency mining company Northern Data Group, acquiring 10,000 "GPU H100" graphics processes and becoming a significant shareholder. Although the exact amount of the stake has not been confirmed, these powerful and sought-after GPUs are used in cryptocurrency mining and artificial intelligence. The investment illustrates the diversification of Tether, which, while remaining a leader in stablecoins with a USDT capitalization of $83 billion, is expanding into other sectors such as power generation, Bitcoin mining and communications technologies.

  • Binance scares its French customers

Binance France customers are currently unable to deposit or withdraw funds since the end of the partnership with payment processor Paysafe. Although Binance has promised a seamless transition, many customers are left with blocked accounts. Binance is in negotiations to extend the partnership with Paysafe, but in the meantime, withdrawals and deposits remain inaccessible. This critical situation comes against a backdrop of regulatory and legal challenges for the platform in France, with ongoing investigations into the compliance of its services and procedures.

  • MicroStrategy continues to accumulate bitcoins

MicroStrategy, headed by Michael Saylor, has purchased a further 5,445 bitcoins (BTC) for $150 million, bringing its total to 158,245 BTC, equivalent to over $4.68 billion. The recent purchase was financed by the sale of $147.3 million worth of MSTR shares. The company thus consolidates its position as the world's largest corporate holder of BTC, with an average acquisition price of $29,582 per Bitcoin. Since the beginning of 2023, it has acquired 25,745 BTC, its largest transaction having taken place in June, for almost $350 million.

Block 2: This week's Cryptic Analysis

A first letter on Gary's desk - Tuesday, September 26

In the complex landscape of cryptocurrency regulation, a tension-filled episode unfolded this week. A bipartisan assembly of Congressional representatives took a definitive stance by sending a salty letter to Gary Gensler, Chairman of the US Securities and Exchange Commission (SEC). The letter, signed by Representatives Tom Emmer (R-Minn.), Mike Flood (R-Neb.), Ritchie Torres (D-N.Y.) and Wiley Nickel (D-N.C.), unequivocally called for immediate approval of an exchange-traded fund (ETF) for bitcoin.

The representatives' collective message was unambiguous: refusal to approve a spot Bitcoin ETF is indefensible and contradictory given the similarities between a spot Bitcoin ETF and a forward Bitcoin ETF. They stressed that without a rational explanation, such discriminatory regulatory treatment is illegal.

The letter stresses the urgent need for Congress to ensure that the SEC approves investment products that comply with Congressional requirements, urging swift approval of Bitcoin cash ETFs. Some of the quotes in the letter include:

A Bitcoin spot ETF is indistinguishable from a Bitcoin futures ETF. The SEC's current position is therefore untenable for the future.

The Court of Appeals concluded that "in the absence of a coherent explanation, this different regulatory treatment of similar products is unlawful".

Following the Court of Appeals' decision, there is no reason to continue denying such applications under inconsistent and discriminatory standards.

Congress has a duty to ensure that the SEC approves investment products that meet the requirements set by Congress.

To that end, we urge you to immediately approve the listing of cash bitcoin ETFs.

A second letter on Gansler's desk - Tuesday September 26

The first letter wasn't the last of the week. Another letter, just as important, arrived on Gensler's desk. This letter came from the Republican members of the House Financial Services Committee and had been meticulously timed to arrive just before a crucial hearing the following day. Although it doesn't explicitly address cryptocurrencies, it highlights the SEC's shortcomings in financial compliance rulemaking, issues that reverberate in the corridors of the cryptosphere.

The Gary Gensler Hearing of the Committee on Financial Services of the U.S. House of Representatives - Wednesday, September 27

At the hearing, Patrick McHenry, Chairman of the Committee on Financial Services, led discussions on a wide range of concerns - from environmental, social and governance (ESG) criteria to capital markets and the ubiquitous issue of cryptocurrencies. The hearing was punctuated by praise and criticism for Mr. Gensler. While some praised his efforts, others were blunt in their criticism. Representatives bombarded Gensler with questions and pointed remarks about transparency, consolidation of power and regulatory excesses.

From the outset, Chairman McHenry did not mince words. He immediately put a question to Mr. Gensler, asking him to clarify bitcoin's status as a security. Mr. Gensler's reluctance was palpable, but after a series of tense exchanges, he conceded that "bitcoin does not meet the Howey test, which is the law of the land for being a security".

It should also be remembered that the other American regulator, the CFTC (Commodity Futures Trading Commission), does not consider bitcoin a "security", but a "commodity". This shows just how far from clear the situation is in the US.

Finally, Mr. McHenry didn't mince his words when referring to the relationship between Gensler and the now-defunct FTX platform. "Our patience is running out. You refuse to be transparent with Congress about your interactions with FTX and Sam Bankman-Fried. I don't want to be the first chairman to issue a subpoena to Congress, and you don't want to be the first SEC chairman to receive one," he said. 

Ultimately, we'll see if this hearing has any effect on the SEC's acceptance of the many Bitcoin cash ETF applications. In any case, the vice is tightening on the American stock market watchdog.

Block 3 : Tops & Flops