PayPal Receives New York State Trust License
PayPal Digital has recently been granted a limited purpose trust license by the New York State Department of Financial Services (NYDFS), which is typically held by digital asset custodians and stablecoin issuers. In August of last year, PayPal launched its first stablecoin, PYUSD, which is technically issued by Paxos Trust Company, another holder of the NYDFS trust license and a long-time partner of PayPal since the launch of its cryptocurrency services.
The acquisition of the trust license may aim to take over the custody of PayPal customers’ crypto assets and internalize stablecoin issuance. Currently, the market value of PYUSD is close to $400 million, a significant increase from $190 million in early April. The top five wallets account for 71% of the stablecoin balance, with major holders including Paxos, Crypto.com, Curve (DeFi), Defiance Capital, and Frax (DeFi). Among them, Crypto.com and Bullish Exchange hold $103 million and $23 million, respectively.
In November of last year, the U.S. Securities and Exchange Commission (SEC) issued a subpoena requesting documents related to the issuance of the PYUSD stablecoin. PayPal did not respond to the specific use of the trust license prior to its release.
Former FTX Executive Ryan Salame Sentenced to 7.5 Years in Prison
Ryan Salame, former CEO of FTX’s Bahamas subsidiary, has been sentenced to seven and a half years in prison, becoming the first person to be sentenced after FTX’s collapse. Salame appeared in a Manhattan court on Tuesday after reaching a plea agreement with federal prosecutors in September of last year.
The sentence exceeds the prosecutor’s request. The government stated that Salame admitted to violating campaign finance laws and operating an unlicensed money transfer business, which should result in a sentence of five to seven years in prison, while the defense argued for a sentence of 18 months or less. This ruling may indicate the firm stance of Judge Lewis A. Kaplan towards FTX executives.
Market Update:
As of the time of writing, according to Coingecko data:
BTC recent trading price is $68,329.04, with a 1.5% intraday decrease;
ETH recent trading price is $3,840.49, with a 1.4% intraday decrease;
BNB recent trading price is $601.02, with a 0.5% intraday decrease;
SOL recent trading price is $168.69, with a 0.8% intraday decrease;
DOGE recent trading price is $0.165, with a 2.4% intraday decrease;
XPR recent trading price is $0.5281, with a 1.1% intraday decrease.
Policy:
Samourai Wallet Developers’ First Hearing, U.S. Department of Justice Prepared to Present Extensive Evidence
The U.S. Department of Justice (DoJ) held its first hearing against Samourai Wallet developers Keonne Rodriguez and William Lonergan Hill on May 28th in the Southern District of New York. Rodriguez and Hill are charged with money laundering and operating an unlicensed money transfer business. While Hill is still in Portugal and has not responded to the extradition request, Rodriguez and his lawyer Michael Krouse attended the hearing.
The prosecution stated that they are prepared to present extensive evidence and are awaiting Rodriguez to hand over the 2TB hard drive he possesses. Rodriguez’s lawyer plans to cite letters from Senators Cynthia Lummis and Ron Wyden to the Attorney General, requesting the dismissal of charges against their client. The letters state that non-custodial cryptocurrency software should not be considered a money service.
The judge announced that Rodriguez will remain under house arrest, and the next hearing is scheduled for September 4, 2024. The legal defense fund for Samourai developers is currently being raised.
Salvadoran President Meets with Cathie Wood to Discuss Bitcoin
Salvadoran President met with Cathie Wood to discuss Bitcoin, new capital markets, and innovation opportunities.
Judge Dismisses Debt Box Case, Orders SEC to Pay $1.8 Million in Attorney’s Fees and Litigation Costs
A U.S. federal judge has ordered the Securities and Exchange Commission (SEC) to pay approximately $1.8 million in attorney’s fees and receivership costs related to the civil case against Digital Licensing (operating under the name Debt Box). On May 28th, the U.S. District Court in Utah filed an order signed by Judge Robert Shelby, requiring the SEC to pay approximately $1 million in attorney’s fees and litigation costs, as well as $750,000 in receiver’s fees and litigation costs. The order was issued on the same day the court announced the dismissal of the case.
Blockchain Application:
SmartLayer Announces Integration with Multi-Chain Self-Custodial Wallet TokenPocket
SmartLayer has integrated with multi-chain self-custodial wallet TokenPocket. Users can view ERC-5169 NFTs and interact with them through the smart token viewer on the TokenPocket wallet.
Cryptocurrency:
XRP Ledger Q1 Update: Transaction Volume Increased by 350% to 2 Million Transactions per Day
Messari has released the Q1 2024 XRP Ledger update, highlighting a 350% increase in transaction volume to 2 million transactions per day. This activity started at the end of the fourth quarter and cooled off by the end of the first quarter. AMMs went live in this quarter, and DEX trading volume on CLOB increased by 41%.
Other highlights include the announcement of stablecoins pegged to the U.S. dollar to be launched on XRPL and Ethereum, utilizing XRPL native functionality and the ERC-20 token standard, respectively. New features such as rollback functionality help asset issuers maintain compliance. Integration of Axelar bridges and new stablecoins can serve as liquidity catalysts for new AMMs and tokenized assets like the upcoming Zioniqx RWA project. rippled 2.0 was released in January, proposing cross-chain bridges (XLS-38), DIDs (XLS-40), and two other amendments for community voting.
Luxor Technology and Bitnomial Launch Bitcoin Mining Derivatives in the U.S.
Luxor Technology and Bitnomial have launched the first fully regulated Bitcoin mining derivatives in the U.S. on May 28th – Bitcoin Hashrate Futures. This product allows miners to hedge their income and provides investors with a new way to enter the Bitcoin mining market. Each contract represents 1 PH and has a one-month maturity, with settlement using Luxor’s Bitcoin hashrate price index.
Matt Williams, Director of Derivatives at Luxor, stated that these contracts will bring more transparent, secure, and liquid hashrate trading. Luke Hoersten, Founder and CEO of Bitnomial, added that hashrate futures meet the mining community’s demand for new hedging tools and enhance Bitnomial’s Bitcoin derivatives portfolio.
Two BlackRock Funds Purchased IBIT Stocks in Q1 2024
According to filings with the U.S. Securities and Exchange Commission (SEC), two funds managed by BlackRock purchased shares of the Bitcoin spot Bitcoin ETF (IBIT) in the first quarter of this year. BlackRock’s Strategic Income Opportunities Fund (BSIIX) bought $3.56 million worth of iShares Bitcoin Trust (IBIT), while its Strategic Global Bond Fund (MAWIX) purchased $485,000 worth of iShares Bitcoin Trust (IBIT).
IBIT stocks represent only a small portion of the BSIIX and MAWIX portfolios, which have values of $37.4 billion and $776.4 million, respectively.
Bitcoin Faces $6.5 Billion Options Expiry on May 31st
Bitcoin is set to face a $6.5 billion options expiry on May 31st, with bulls attempting to push the price above $70,000 but facing challenges. Despite investors betting on Bitcoin reaching $80,000 and $90,000, it has recently failed to break the $70,000 resistance. Currently, 91% of the call options are set at $72,000 or higher, and aggregated data shows that if Bitcoin trades above $70,000 on May 31st, bulls will profit $270 million. However, if the price remains around $67,800, the market will be relatively balanced. Deribit holds a 71% share of the Bitcoin options market in May, followed by CME and OKX.
Chainlink Co-founder: Cryptocurrency Has Become “More Legitimized” Since the Approval of Spot Bitcoin ETFs
Sergey Nazarov, co-founder of Chainlink Labs, was interviewed by CNBC Crypto World, discussing the collaboration between DTCC, Chainlink, and ten financial institutions aimed at bringing net asset value (NAV) data on-chain. He also discussed the tokenization of real-world assets and the financial and political progress in the crypto space. Nazarov also stated that cryptocurrency has become “more legitimized” since the approval of spot Bitcoin ETFs.
Daily Active Addresses for Meme Coins Surge, with PEPE Increasing by 230%
In the past month, the number of blockchain addresses involved in trading with Pepecoin (PEPE) has surged, more than doubling in the past 30 days. According to data from IntoTheBlock, daily active addresses holding PEPE have increased by 230%. This growth rate surpasses other meme coins, such as Floki, which still had a 179% increase in daily active addresses during this period. Meanwhile, daily active addresses for Dogecoin increased by 10%.
Volatility Shares: Leveraged Ethereum ETF to Begin Trading on June 4th
Volatility Shares has announced that the first leveraged Ethereum ETF, Volatility Shares 2x Ether Strategy ETF (ETHU), will begin trading in the U.S. on June 4th. This marks the first leveraged Ethereum ETF in the U.S. market approximately a year after leveraged Bitcoin ETFs were first approved by regulatory agencies.
Stuart Barton, Chief Investment Officer of Volatility Shares, stated that this success may pave the way for the eventual approval of spot Ethereum ETFs. Last week, the SEC approved key regulatory documents related to the spot Ethereum fund, but has not yet approved its formal launch. Barton noted that while the details of the spot ETF are still being discussed with the SEC, the launch of the leveraged Ethereum ETF indicates an increasing interest from the SEC in further launching cryptocurrency-related ETFs.
Important Economic News:
U.S. Stock Market Indexes Close Mixed, Nvidia’s Market Cap Narrows Gap with Apple to $100 Billion
U.S. stock market indexes closed mixed, with the Dow Jones Industrial Average falling 0.55%, the Nasdaq Composite rising 0.59%, and the S&P 500 Index rising 0.02%. Most popular tech stocks saw gains, with Nvidia rising over 7% and reaching a total market cap of $2.8 trillion, only $100 billion less than Apple. AMD rose over 3%, while Tesla fell over 1%. Google, Amazon, and Meta had gains of less than 1%.
99.2% Probability of Fed Maintaining Interest Rates in June
According to CME “FedWatch,” there is a 99.2% probability of the Federal Reserve maintaining interest rates in June, while the probability of a 25 basis point rate hike is 0.8%. The probability of the Fed maintaining interest rates until August is 90.0%, with a 9.2% probability of a cumulative 25 basis point rate cut and a 0.7% probability of a cumulative 25 basis point rate hike.
