Here’s What You Missed in Crypto This Week

As bitcoin, ethereum and other cryptocurrencies get increasing attention from investors, Wall Street and its traditional banks continue to adjust to the shift. Catch up on this week’s top stories highlighting the intersection of these old guard and new school areas of finance with this recap compiled by The Fly.

SEC DENIED APPEAL OF RIPPLE LABS RULING: On Wednesday, Reuters’ Jonathan Stempel reported that U.S. District Judge Analisa Torres rejected the U.S. Securities and Exchange Commission’s bid to appeal her recent ruling involving Ripple Labs. In her July 13 decision, Torres ruled the sale of Ripple’s XRP digital token on public exchanges complied with federal laws as purchasers has no reasonable expectation of profit based on Ripple’s efforts. The SEC tried to appeal the judge’s findings regarding “programmatic” sales of XRP and “other distributions” of XRP as a means of payment for services, however Torres found no “substantial ground for difference of opinion” about her findings and disagreed that an appeal would materially advance the case. (read more)

Additionally on Tuesday, Ripple announced that its Singapore subsidiary Ripple Markets APAC has secured its Major Payments Institution license from the Monetary Authority of Singapore. The issuance of Ripple’s MPI license for digital payment tokens follows the MAS’ in-principle approval of its license application in June 2023. “Since establishing Singapore as our Asia Pacific headquarters in 2017, the country has been pivotal to Ripple’s global business. We have hired exceptional talent and local leadership, doubling headcount over the past year and plan to continue growing our presence in a progressive jurisdiction like Singapore,” said CEO Brad Garlinghouse. “Under MAS’ leadership, Singapore has developed into one of the leading fintech and digital asset hubs striking the balance between innovation, consumer protection and responsible growth.” (read more)

COINBASE GRANTED MPI LICENSE IN SINGAPORE: Coinbase (COIN) Singapore announced Sunday that it has obtained a Major Payment Institution license from the Monetary Authority of Singapore. The company said, “This development, coming after our initial In Principle Approval, amplifies our commitment to the Singapore market, enabling us to expand our provision of Digital Payment Token services to both individuals and institutions in Singapore…At Coinbase, we’re deeply committed to reshaping the financial landscape by developing trusted products that bolster the utility and adoption of crypto. Our core belief is that blockchain and crypto technologies have the power to amplify economic freedom and opportunities globally. We’ve seen many international markets crafting innovative policies to emerge as crypto hubs. In this light, our recent achievements in Singapore resonate even stronger. The newly acquired license is not only a validation of Coinbase’s operations but also represents a promise and responsibility to the growing crypto and Web3 community in Singapore.” (read more)

On Wednesday, Mizuho reiterated an Underperform rating on Coinbase with a $27 price target ahead of the company’s Q3 report. The analyst expects “dwindling” volumes combined with an expected “drought” in retail trading to meaningfully weigh on the company’s revenue. The firm expects Coinbase to report revenue 10% below current consensus levels. In Q2, average daily trading volumes on the Coinbase platform were $1B, and this decelerated to $900M in July, $790M in August, and $665M in September, the analyst said. As a result, the firm lowered its Q3 volume estimate from $88B to $72B. It said lower volumes are likely to drive a Q3 revenue miss. (read more)

Additionally, the U.S. Securities and Exchange Commission has asked a federal judge to deny a motion from Coinbase to dismiss the regulator’s lawsuit against the company, Reuters’ Hannah Lang and Chris Prentice reported Tuesday. The SEC said Coinbase was wrong to rely on the current ruling, which found Ripple Labs did not violate federal securities law by selling its token on public exchanges. (read more)

MARATHON INITIATED WITH HOLD: On Monday, Needham analyst John Todaro initiated coverage of Marathon Digital (MARA) with a Hold rating and no price target. The analyst believes the upcoming halving will be a “disruption event” for higher cost bitcoin producers. The firm estimates Marathon’s cash breakeven costs of $24,000-$27,000 per bitcoin will effectively double in Q2 of 2024. It believes bitcoin prices will need to be at or above $450,000 after the halving or more than 30% of total network hash rate will come offline. Given the stock’s valuation premium to lower-cost peers, Needham does not see material upside from here and are sidelined on Marathon Digital. (read more)

IRIS ENERGY TO INCREASE MINING CAPACITY TO 7.0 EH/S: Iris Energy (IREN) announced Friday it is increasing its self-mining capacity by 25% from 5.6 EH/s to 7.0 EH/s. Iris Energy has partnered with Bitmain Technologies to acquire approximately 7,000 Bitmain S21 miners. Shipping is scheduled for early 2024. The company said, “Bitmain’s S21 miners exhibit industry-leading efficiency, thereby increasing fleet resilience post-halving; capital efficiency of data centers; and upside to bitcoin.” $16.7M of the purchase price will be paid prior to shipment. The remaining 15% of the purchase price is deferred until one year after shipment. The purchase is expected to be funded from existing capital sources, including cash in bank, operating cash flow and other recently disclosed funding programs. The company’s 80MW expansion at Childress remains on track, with data centers expected to be delivered progressively from early 2024. The company is now targeting near-term expansion in potential operating capacity of up to 9.4 EH/s and continues to monitor the market for additional hardware acquisition opportunities. The company continues to progress its single site expansion program to 30 EH/s. (read more)

REGULATORS MULL ACTION AGAINST VOYAGER’S EX-CEO: Staff at the Commodity Futures Trading Commission’s enforcement division have concluded that Stephen Ehrlich, co-founder of Voyager Digital (VYGVQ), broke derivatives regulation prior to the crypto lender sinking into bankruptcy last year, Bloomberg’s Allyson Versprille reported Friday. The investigators recommended internally that the agency accuse the former CEO of violating its rules by misleading customers about the safety of their assets following a probe of the company’s conduct. CFTC commissioners are now voting on whether to approve enforcement action against him. (read more)

CRYPTO STOCK PLAYS: Publicly traded companies in the space include Bit Digital (BTBT), Coinbase, Core Scientific (CORZ), Greenidge Generation (GREE), Marathon Digital, MicroStrategy (MSTR), Riot Platforms (RIOT), Stronghold Digital Mining (SDIG) and TeraWulf (WULF).

PRICE ACTION: As of time of writing, bitcoin rose roughly 2% this week at $27,499 in U.S. dollars, according to CoinDesk.