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.

BINANCE CEO STEPS DOWN, PLATFORM HIT WITH OVER $4B IN FINES: On Tuesday, The U.S. Department of the Treasury, through the Financial Crimes Enforcement Network, the Office of Foreign Assets Control, and IRS Criminal Investigation, announced it had taken unprecedented action to hold Binance Holdings and its affiliates accountable for violations of the U.S. anti-money laundering and sanctions laws that protect American national security and the integrity of the international financial system. Binance is the world’s largest virtual currency exchange, responsible for an estimated 60% of centralized virtual currency spot trading.  On Tuesday, Binance settled with FinCEN and OFAC for violations of the Bank Secrecy Act and apparent violations of multiple sanctions programs. The violations include failure to implement programs to prevent and report suspicious transactions with terrorists, ransomware attackers, money launderers, and other criminals, as well as matching trades between U.S. users and those in sanctioned jurisdictions like Iran, North Korea, Syria, and the Crimea region of Ukraine. By failing to comply with AML and sanctions obligations, Binance enabled a range of illicit actors to transact freely on the platform. The settlements are part of a global agreement simultaneous with Binance’s resolution of related matters with the Department of Justice and the Commodity Futures Trading Commission. FinCEN’s settlement agreement assesses a civil money penalty of $3.4B, imposes a five-year monitorship, and requires significant compliance undertakings, including to ensure Binance’s complete exit from the United States. OFAC’s settlement agreement assesses a penalty of $968M and requires Binance to abide by a series of robust sanctions compliance obligations, including full cooperation with the monitorship overseen by FinCEN. To ensure that Binance fulfils the terms of its settlement and to ensure that illicit activity is addressed, Treasury will retain access to books, records, and systems of Binance for a period of five years through a monitor. Failure to live up to these obligations could expose Binance to substantial additional penalties, including a $150M suspended penalty, which would be collected by FinCEN if Binance fails to comply with the terms of the required compliance undertakings and monitorship. (read more)

Following the news, Changpeng Zhao, the former CEO of Binance, tweeted: “Today, I stepped down as CEO of Binance. Admittedly, it was not easy to let go emotionally. But I know it is the right thing to do. I made mistakes, and I must take responsibility. This is best for our community, for Binance, and for myself. Binance is no longer a baby. It is time for me to let it walk and run. I know Binance will continue to grow and excel with the deep bench it has. I’m pleased to announce that @_RichardTeng, our now former Global Head of Regional Markets, has been named the new CEO of Binance today… As a shareholder and former CEO with historical knowledge of our company, I will remain available to the team to consult as needed, consistent with the framework set out in our U.S. agency resolutions.” (read more)

JPMORGAN SEES CRYPTO ETFS AS THREAT TO COINBASE: On Tuesday, JPMorgan said it sees high expectations for the impact of a spot bitcoin exchanged traded fund on cryptocurrency markets as suggested by the nearly 50% increase bitcoin price over the last two months. The firm’s views are more subdued for crypto ETF adoption and growth. However, if the consensus view is correct, Coinbase (COIN) will be a beneficiary near term as bitcoin custody and surveillance revenue will more than offset declines in bitcoin trading volume as assets migrate to ETFs, the analyst said. However, over the intermediate term, JPMorgan sees crypto ETFs as a competitive threat to Coinbase, with new account growth slowing as novice crypto investors get their initial exposure and possibly final exposure through ETFs rather than Coinbase. The firm kept a Neutral rating on the shares with an $80 price target. (read more)

US BITCOIN STOCKHOLDERS APPROVE HUT 8 DEAL: U.S. Data Mining Group, doing business as US Bitcoin Corp, announced Tuesday that its stockholders have overwhelmingly voted in favor of the proposed business combination with Hut 8 Mining Corp. (HUT). This decision follows the recent approval by Hut 8’s shareholders as announced on Sept. 13, 2023. The transaction is expected to close by November 30, 2023, subject to customary closing conditions. Upon the closing of the transaction, the common stock of the combined company, Hut 8, is expected to be listed on Nasdaq and the Toronto Stock Exchange under the proposed ticker symbol “HUT”. The transaction will further allow the newly formed entity to expand its focus on high performance computing, hosting, and managed infrastructure operations, including the maintenance and management of third-party mining sites using purpose-built software. (read more)

BULLISH ACQUIRES COINDESK: On Monday, digital assets exchange Bullish announced that it had acquired CoinDesk from Digital Currency Group. Bullish plans to invest in CoinDesk’s global expansion and the growth of the media, events, and indexing businesses. CoinDesk will continue to be led by Kevin Worth and the existing management team and operate as an independent subsidiary within Bullish. Terms of the transaction were not disclosed. “With its acclaimed editorial coverage, premier events and market-leading data and indices, CoinDesk continues to shape the global crypto and blockchain ecosystem,” said Tom Farley, CEO of Bullish. “Bullish will immediately inject capital into several of CoinDesk’s most exciting growth initiatives which will power the launch of new services, events and products. We also want to express our unwavering support for CoinDesk’s commitment to journalistic independence.” CoinDesk also announced that it has appointed Matt Murray, former Editor-in-Chief of The Wall Street Journal, to serve as Chair of its Editorial Committee to ensure journalistic independence. (read more)

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

PRICE ACTION: As of time of writing, bitcoin rose roughly 3% this week to $37,717 in U.S. dollars, according to CoinDesk.