White Star Capital Digital Assets Fund - newsletter #125
MiCA passes through European Parliament, providing regulatory clarity for EU Crypto
MiCA passes through European Parliament, providing regulatory clarity for EU Crypto
Last week, the European Parliament voted through the landmark Markets in Crypto Assets (MiCA) legislation. After years of deliberations and two official delays, MiCA is a landmark framework that lays out a comprehensive, unified approach to crypto asset regulation across all 27 member states. MiCA passed with 517 votes in favour and only 38 against at the meeting in Strasbourg, and will come into affect from next year.
Stefan Berger, the MEP who led the bill’s creation, said that ‘in order for new coins to be approved in the EU, it must be ensured in future that their business model will not endanger our currency stability…the new supervisory structures will also be a bulwark against Lehman Brothers moments like the crypto exchange FTX.’ In light of this view, the EU legislators also passed the (separate but related) Transfer of Funds regulation that imposes stronger surveillance and identification requirements for crypto operators
MiCA requires crypto firms such as wallet providers and exchanges to comply with money laundering and terrorism finance safeguards to serve EU customers. It also will require them to be approved through higher standards of disclosure, including detailed white papers explaining each asset or token offered. Stablecoin issuers will be subject to a more stringent set of rules, including requiring the holding of sufficient cash to back customer funds with liquidity. A final core feature of MicA is that crypto firms will need to report the environmental impact of their activities, in a compromise measure after lawmakers removed a section in a previous draft that all-out banned proof-of-work mechanisms of securing networks.
The European Commission’s Mairead McGuiness described the rules as a ‘world first’ and Green Party lawmaker Ernest Urtasan deemed it the ‘end of the Wild West era for crypto assets’. Indeed, crypto firms including Binance, Coinbase and Kraken welcomed MiCA, and most of the industry recognises it as a pivotal and exemplary moment of providing solid, cohesive guidance for the emerging sector. This compares to two other large crypto markets- the US and China. The latter officially banned all crypto activity (albeit to limited success), while the US has recently been attempting to reach consensus on how to regulate the industry that many in top positions would rather ban outright. Ether is permanently stuck as a Schrodinger’s security- both lawful and not, after Gary Gensler, chairman of the US Securities and Exchange Commission (SEC) has described it as having maybe and maybe not fallen afoul of the Howey Test definition of a security. This nebulous legislative positioning makes it purposefully difficult for crypto companies to operate in the US, and Coinbase was the latest to be pushed to the brink recently as its CEO, Brian Armstrong, said it may have to leave the country to escape such constant legal insecurity.
So for many in the crypto industry, MiCA represents a welcome step forward, providing a blueprint for other regulators to provide clarity to crypto companies across the world. MiCA is symbolic as the first major attempt to provide a comprehensive set of rules, and the EU hopes this will set the global standard and set the stage for Europe to become an attractive hub for the industry operators.
🔦 White Star & Portfolio Spotlight
Multis allows the first-ever conversion from a Safe treasury wallet to a corporate bank account of USDC-USD.
Multis has partnered with Bridge.xyz and integrated with Plaid to enable the transfer of funds from Safe wallets to any bank account, including the first-ever USDC-USD conversion from a Safe treasury wallet to a corporate bank account.
Exclusible and HUGO BOSS co-created the future of fashion and retail with AI-driven Immersive Showroom.
Exclusible and HUGO BOSS's AI-driven Immersive Showroom is revolutionizing the future of fashion and retail with cutting-edge technology and design. The showroom is a case study for the transformative potential of AI in the fashion industry and the emerging phygital multiverse.
ALEX Bridge Mainnet launches, allowing for STX acquisition without Centralized Exchange
ALEX Bridge Mainnet is live, marking the first-ever bridge between Ethereum and the Stacks layer. With the STX/sUSDT pool open, ALEX Bridge links ETH USDT with sUSDT, enabling STX acquisition without centralized exchange through ETH USDT-Stacks USDT swap.
🏦 Enterprises & Institutions
Binance Bails on $1B Voyager Asset Deal
Binance.US terminated its deal to purchase Voyager Digital's assets due to the uncertain US regulatory environment. The acquisition faced significant government scrutiny, including a Department of Justice attempt to block the purchase and SEC staff opinions that Binance.US may be operating an unregistered securities exchange in the US.
Google pushes forward in Web3 with Cloud Startup Program
Google Cloud's Startups Cloud Program is now open to Web3 startups, offering benefits such as grants totaling up to $1 million from foundation partners including Aptos, Celo, Flow, HBAR Foundation, NEAR, and Solana.
Twitter ends legacy Blue Checks and Bluesky emerges as a decentralized alternative
Twitter's discontinuation of its legacy verification program has left some users searching for alternatives such as Bluesky, a decentralized Twitter alternative supported by former CEO Jack Dorsey. The removal of blue checkmarks has left notable figures and journalists vulnerable to impersonation, with non-verified accounts receiving lower visibility across Twitter feeds.
Euro-pegged Stablecoin from Societe Generale in the works
Societe Generale is launching a euro-pegged stablecoin called EUR CoinVertible (EURCV) on the Ethereum blockchain, providing institutional investors with a way to manage cash flow and bridge the gap between traditional and digital asset markets while complying with EU banking, legal, and regulatory standards.
⚖️ Government & Regulation
Europe ‘Ahead of the Game’ in Web3 after MiCA law
The EU's new crypto law, MiCA, puts them ahead of the US in Web3 technology regulations by offering a licensing regime for wallet providers, exchanges, and stablecoins from 2024, while similar bills in the US have failed to gain political support.
Coinbase sues SEC to demand regulatory clarity on Crypto
Coinbase is suing the SEC to obtain regulatory clarity for the cryptocurrency industry by asking a US federal court to compel the SEC to respond to its previous rulemaking petition within seven days. Coinbase claims that the absence of clear rules for determining which digital assets are securities and how securities laws apply to them impedes market efficiency.
DAOs could get official standing under proposed California Law
California's Assembly Bill 1229 would add a legal framework for DAOs, blockchain networks, and smart contract protocols to the state's corporate code, allowing DAOs to incorporate in California, pay taxes, and provide better protection for Californians in the Web3 economy.
Crypto exchange Binance is back in Russia
Binance has reportedly lifted its ban on deposits from Visa and Mastercard cards issued in Russia and larger accounts with balances exceeding 10,000 euros. However, the company has not yet officially confirmed these changes, and a spokesperson stated that all current restrictions related to sanctions against Russian nationals are still being applied.
Zimbabwe to introduce Gold-backed Digital Currency
The country's central bank wants people to be able to exchange Zimbabwe dollars for the gold-backed token so that they can hedge against the currency's volatility.
💰 Funding & Exits
Bitcoin Financial Services firm Unchained Capital raises $60M
Valor Equity Partners has led a Series B funding round of $60 million for Unchained Capital. The company intends to use the new capital to increase its customer base, enhance its product suite, and introduce new products.
DeFi-Focused Layer 1 Berachain Raises $42M Series A at $420.69M Valuation
Berachain, a DeFi-focused layer 1 blockchain, enables staked assets to be used in DeFi protocols, increasing on-chain liquidity and capital efficiency.
Ethereum staking provider P2P.org raises $23M Series A
Non-custodial staking provider P2P.org raised $23 million in Series A funding to expand its Ethereum portfolio, citing increased institutional interest from the recent Shanghai upgrade.
Karate Combat closes $18M to build Web3, mixed reality live sports
Karate Combat secured funding for its unique full-contact martial arts league, which features immersive CGI environments and real-time virtual effects. The funding will support the launch of the Karate Combat app, token, and unique DAO structure.
Thetanuts Finance Secures Institutional Funding Round, Raised $17 Million
Thetanuts Finance's newly onboarded strategic investors will support its ambition to advance structured products and derivatives in decentralized finance. With their backing, the company aims to forge valuable partnerships with L1/L2 projects, liquidity providers, foundations, market makers, and exchanges.
Fluree closes $10M Series A round for Web3 data management & modern data infrastructure
Fluree will use the new capital to expand its Web3 data platforms and enterprise offerings to adopt trusted data ecosystems and secure data collaboration
MetaGravity closes $9.5M Seed funding round
The company intends to use the funds to bolster its engineering and product teams to build the infrastructure layer to support the metaverse experiences.
EdTech startup TinyTap has secured $8.5 million in a funding round that includes Sequoia and other investors
TinyTap, an Israeli EdTech startup and Animoca Brands subsidiary, secured funding for staff expansion and product development. It offers a platform for user-generated educational content, claiming to be "the world's largest library of games by teachers."
CoinFund Leads $8M Round for Decentralized Database Firm Tableland
Tableland, a decentralized cloud database, raised an $8 million Series A round to support its mainnet launch, new developer tools, and the upcoming release of Tableland Studio.
DeFi protocol DFlow raises $5.5M to bring payment for order flow to Crypto
DFlow raised funds to introduce payment for order flow to the cryptocurrency market, allowing market makers to purchase order flow from wallet apps and ensuring execution at the best public price across centralized and decentralized exchanges.
🚀 Project Launches & Updates
Ethereum Shanghai Upgrade Brings Record Inflow of 572K ETH Staked in a Week
Institutional staking service providers and investors reinvesting rewards after withdrawal drove a record-breaking weekly inflow of ether (ETH) deposits for staking following Ethereum's Shanghai upgrade.
Binance adds AI-powered ‘Sensei’ chatbot to its Crypto academy
Binance has launched Binance Sensei, an AI-powered chatbot for its Binance Academy to enhance user engagement with crypto education. The chatbot uses ChatGPT to provide users with easily digestible information using keywords and natural language questions.
Binance launches liquid staking token
Binance has launched Wrapped Beacon ETH (WBETH), a liquid staking token on its Ethereum staking service that enables users to acquire Ethereum staking rewards and participate in decentralized finance protocols off the exchange. Users can wrap BETH tokens to WBETH and vice versa on Binance's Ethereum staking page without any fees.
Solana now measures Network Carbon Emissions data in real time
Solana will regularly update a dedicated dashboard with statistics monitoring key environmental metrics for the network: its energy consumption, carbon footprint, and network power intensity, among other data. It pulls real-time data from software installed on Solana validator nodes, but the dashboard is only updated every two weeks.
🔥 Other Bits We're Excited About
‘Avengers’ Director Predicts AI-Generated Movies Within Two Years
Joe Russo, director of Marvel Studios blockbuster “Avengers: Endgame,” has predicted that it'll only be two years until we see an AI-generated movie that's convincing enough to give viewers pause.
CryptoPunks NFT in Centre Pompidou
The world-renowned art museum in Paris has made special room for the emerging NFT space, adding a exhibition of blockchain-related art.
Dogecoin leads Meme coin rally with Pepe and Baby Doge
Dogecoin's surge this week has also led to an increase in the value of other meme coins such as PEPE and BABYDOGE.