Crypto News Weekly 14.09.18: Citibank into crypto, SEC gets heavy, no more 1000x gains

Citibank and Morgan Stanley step into crypto, SEC flexes its muscles in a busy week, new stablecoin projects rush to enter the market, no more 1000x growth for crypto says Vitalik.

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Citigroup and Morgan Stanley step into crypto

According to Business Insider sources, Citigroup has developed a new product, the Digital Asset Receipt, that will allow American Institutional investors the ability to invest in cryptocurrencies. It’s similar to the American Deposit Receipt (ADR), a mechanism that allows US investors to hold foreign stock not listed in America, by means of a third party holding the stock and releasing receipts. Citigroup is one of the largest ADR issuers in the world, operating products since 1928.

And according to Bloomberg, Morgan Stanley is building its own derivatives product that would allow synthetic exposure to Bitcoin for its clients. Earlier this year, they poached Credit Suisse’s top Bitcoin expert, Andrew Peel, to strengthen their ability for future products.

In the same week, in a Cryptovest interview, a former Goldman Sachs trader criticized the firm for allegedly spreading false information that led to the recent market crash.

SEC flexes its muscles in a busy week

The SEC temporarily suspended two ETN products from the US market, Bitcoin Tracker One and Ether Tracker One, which are traded on the Swedish NASDAQ exchange, for 12 days until September 21st due to confusion amongst the market participants.

Also this week, the SEC initiated its first-ever action against a digital hedge manager who had claimed his offering was regulated by the watchdog. Wow, that must’ve been such a surprise that they came after him. Timothy  Enneking and Crypto Asset Managements raised $ 3.6 million in late 2017 to invest in digital assets and since then have been hit with a cease and desist order and forced repayments to investors.

Tokenlot has been penalized by the SEC in the last seven days for offering tokens from ICOs, describing themselves as an ICO superstore. After co-operating with SEC, the company has agreed to pay costs and fines of over half a million dollars and for a third party to digitally destroy the remaining assets.

And FINRA (the Financial Industry National Regulations Authority), which is an organization overseen by the SEC, has initiated its first-ever action against Hempcoin and its founder for misrepresentation, fraud and trading of an unregistered security.

New stablecoin projects rush to enter the market

Everybody is pushing their own new stablecoin products, with most of them being digital currencies pegged to the value of the US dollar. The Winklevoss twins, famed for suing Facebook’s Mr Zuckerberg and making their fortune with Bitcoin and the Gemini exchange, have released the Gemini Dollar, which has already started trading on China’s Bibox exchange.

An American Startup, Paxos, which has raised $ 75 million previously, have announced their Pixos stablecoin which similarly to the Gemini Dollar, they say has been approved by New York state authorities.

No more 1000x growth for crypto says Vitalik                    

At the start of the week, as the markets were crashing, Vitalik Buterin caused consternation when he commented that he thought the possibility of the crypto market providing 1000x gains again were over. As Ethereum was seriously sliding to below $200, the comments were quickly seized upon as further bad news with other well known names feeling they had to come to defend future growth. Chanpeng Zhao, the CEO of Binance exchange, said the market would grow 1000x more and derivatives even further, and Justin Sun of Tron, said the entire world’s wealth would turn into cryptocurrencies like a black hole. Maybe not the best thought-out analogy being something that might destroy all matter and freeze time at its center, but I am sure he meant well.

Vitalik came out later in the week to defend his comments or more realistically state some obvious facts; that if the crypto market cap grew by 1000x it would have to have 70% of the world’s wealth. But there has been a sharp backlash over the week for somebody pointing out the unspoken obvious facts.

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