CoinDesk Crypto

Bittrex announced Friday it will be delisting monero (XMR), zcash (ZEC) and dash (DASH), continuing a trend of so-called privacy coins being delisted by cryptocurrency exchanges.

• In a release, the exchange said the coins’ markets will be removed on Friday, Jan. 15, at 23:00 UTC.
• While Bittrex gave no reason for the removals, exchanges around the world have been moving to delist coins that seek to preserve the privacy of their users as a way to be compliant with know-your-customer (KYC) and anti-money laundering (AML) regulations that are spreading around the world.
• For instance, the U.S. Secret Service has urged Congress to create ways to limit the use of privacy-focused cryptocurrencies.
• Dash responded via Tweet, calling the label “privacy coin” a misnomer in its case, saying “From a technical standpoint, Dash’s privacy functionality is no greater than Bitoin’s.” Dash said it’s requesting a meeting with Bittrex’s compliance team in an effort to be reinstated.
• Shares of all three coins fell on the news: XMR is down 14.44% to $133.75, ZEC fell 12.28% to $55.76.

UPDATE (Jan. 1, 20:16 UTC): Adds coin price reactions, Dash’s response.

• Crypto.com to Delist, Suspend XRP in the US After SEC’s Ripple Suit
• Monero Breaks 2-Year High Amid Rising Concerns Over Online Ransom
• Privacy Coin Advocates Persevere Amid Multiple Crypto Exchange Delistings
• Ukrainian Politician Discloses Owning $24M in Privacy Coin Monero

Bittrex announced Friday it will be delisting monero (XMR), zcash (ZEC) and dash (DASH), continuing a trend of privacy coins being delisted by cryptocurrency exchanges.

• In a release, the exchange said the coins’ markets will be removed on Friday, Jan. 15, at 23:00 UTC.
• While Bittrex gave no reason for the removals, exchanges around the world have been moving to delist coins that seek to preserve the privacy of their users as a way to be compliant with know-your-customer (KYC) and anti-money laundering (AML) regulations that are spreading around the world.
• For instance, the U.S. Secret Service has urged Congress to create ways to limit the use of privacy-focused cryptocurrencies.

• Crypto.com to Delist, Suspend XRP in the US After SEC’s Ripple Suit
• Monero Breaks 2-Year High Amid Rising Concerns Over Online Ransom
• Privacy Coin Advocates Persevere Amid Multiple Crypto Exchange Delistings
• Ukrainian Politician Discloses Owning $24M in Privacy Coin Monero

The Financial Crimes Enforcement Network (FinCEN), the U.S. Treasury Department wing tasked with monitoring potential legal violations of domestic financial laws, wants Americans to report if they have more than $10,000 in cryptocurrencies with foreign financial or virtual asset service providers.

FinCEN announced its intention to amend the Bank Secrecy Act’s Foreign Bank and Financial Accounts (FBAR) regulations in a rulemaking notice published on New Year’s Eve, just three weeks before the Treasury Department’s leadership is expected to change.

According to a brief notice published Thursday, “FinCEN intends to propose to amend the regulations implementing the Bank Secrecy Act (BSA) regarding reports of foreign financial accounts (FBAR) to include virtual currency as a type of reportable account.” 

Related: Proposed FinCEN Rule on Crypto Wallets Would Likely Be Ineffective, Elliptic Says

It did not provide a timeline for when this new proposal might be published or implemented.

The rule change would appear to bring FBAR rules around crypto holdings in line with cash held outside the U.S. by citizens or other U.S. persons. It could have the most visible impact on users of crypto exchanges like Bitstamp and Bitfinex.

At present, FBARs must be filed by individuals who have an aggregate of over $10,000 in foreign financial accounts, including currencies. Current regulations do not designate virtual currencies as an FBAR-reportable account, however. This amendment would end that exemption. 

According to the Internal Revenue Service (IRS) website, FBARs must include the name on the account, account number, name and address of the foreign bank, type of account and the maximum value held during the year. 

Related: Presidential Advisory Group Weighs In on Regulatory Approach to Stablecoins

Individuals who fail to file face various penalties, including fines, according to the website. 

Read more: Presidential Advisory Group Weighs In on Regulatory Approach to Stablecoins

What’s unclear is what additional information crypto holders might have to file, such as blockchain addresses. 

Thursday’s notice comes just days before the public comment period for another FinCEN initiative – one that would require exchanges to store customer information when transferring more than $3,000 in cryptocurrencies to unhosted wallets and file Currency Transaction Reports for transactions aggregating more than $10,000 in crypto per day – comes to a close. 

The public notice, published just a week before Christmas, has drawn the ire of the crypto community both for its potential impact on various crypto projects and having a shorter-than-usual comment period over U.S. federal holidays. 

If both these proposed rules are implemented, U.S. persons might have to report crypto holdings and transactions in excess of $10,000 regardless of where they’re held.

• FinCEN’s Proposed Crypto Wallet Rule Might Hit DeFi
• ‘There Is No Emergency Here’: Coinbase Asks FinCEN to Extend Comment Period on Wallet Regs

Bitcoin nearly triples its price in 2020 and ends the year close to $29,000 but ether gained 450%.

• Bitcoin (BTC) trading around $28,963 as of 21:00 UTC (4 p.m. ET), gaining 1.5% over the previous 24 hours.
• Bitcoin’s 24-hour range: $27,916.63 – $29,280.05 (CoinDesk 20)

Bitcoin printed a new record high above $29,000 early Thursday before charting a quick pullback to $27,900 during U.S. trading hours, according to data compiled by the CoinDesk 20.

Despite the minor drop, the number one cryptocurrency by market value is eyeing its third consecutive monthly gain, a feat last achieved in the second quarter of 2019. The cryptocurrency has rallied by over 45% this month alone and is on track to end 2020 with at least a 290% gain.

Related: The Most Important Bitcoin Infrastructure Developments of 2020, feat. Alyse Killeen

The price rally puts bitcoin far ahead of traditional assets such as gold and stocks. The yellow metal has gained 25% this year, and the S&P 500, Wall Street’s benchmark index, has added 15%.

The year 2020 will go down in history as the period of bitcoin maturing as a macro asset, with prominent publicly-listed companies such as MicroStrategy diversifying their cash reserves into the cryptocurrency.  

Most observers expect a continued rally in 2021. “The longer-term economic impacts of COVID are unknown. However, as we’re still in the midst of major economic disruptions and historical volatility, I believe bitcoin/crypto will continue to rise and be at the pinnacle of positive change,” Changpeng “CZ” Zhao, CEO of cryptocurrency exchange Binance, said in a New Year’s message. 

Analysts at the investment banking giant JPMorgan foresee bitcoin’s increasing mainstream adoption hurting gold’s price. 

Related: EToro USA Becomes Latest Exchange to Suspend XRP Trading

However, a correction could be seen in the short run if the spot inflow from institutional investors slows down, according to Ki Young Ju, CEO of cryptocurrency data provider CryptoQuant. 

“We haven’t had significant Coinbase outflows since $23,000,” Ju told CoinDesk. “Tokens transferred are decreasing and the fund flow ratio for all exchanges is increasing. Grayscale BTC holdings are 607,000 since Dec. 25,” 

From a technical analysis standpoint, $27,300 is key support which, if breached, would open the doors to $25,300, according to crypto exchange EQUOS’ daily bitcoin analysis email.

• Ether (ETH) trading around $742.19 as of 21:00 UTC (4 p.m. ET), down 0.8% over the previous 24 hours.
• Ether’s 24-hour range: $723.18 – $755.56 (CoinDesk 20)

Ether, the second-largest cryptocurrency by market value, has gained over 450% this year versus bitcoin’s 300% rally. The cryptocurrency rose to a 31-month high of $757 on Wednesday and was last seen trading at $730. 

Ether received a boost from the decentralized finance’s explosive growth in 2020, and stronger gains could be in the offing next year. 

According to Ryan Watkins, an analyst at crypto data provider Messari, the CME’s recent announcement to launch ether futures in February is a sign of growing institutional interest in the cryptocurrency.

Bitcoin charted a strong rally in the run up to futures listing on CME three years ago. The exchange announced bitcoin futures on Oct. 31, 2017, when the cryptocurrency was trading near $6,300, and traded the first contract on Dec. 27. By then, prices had neared $20,000. 

Digital assets on the CoinDesk 20 are mostly down Monday.

Notable winners on the day as of 19:00 UTC (2:00 p.m. ET): 

• cosmos (ATOM): +11.5%
• chainlink (LINK): +1.7%
• OMG network (OMG): +1.6%

Notable losers:

• orchid (OXT): -5.0%
• stellar (XLM): -4.5%
• bitcoin cash (BCH): -4.0%

Global equity indexes

• Japan: Nikkei 225: 27,444.17 (-123.98 or -0.45%)
• UK: FTSE 100: 6,460.52 (-95.30 or -1.45%)
• U.S.: S&P 500: 3,756.07 (+24.03 or +0.64%)

Commodities

• Oil was down 0.22%. Price per barrel of West Texas Intermediate crude: $48.18.
• Gold was in the green 0.3% and at $1,900 as of press time.

Treasurys

• The 10-year U.S. Treasury bond yield fell Thursday to 0.917%.

• Number of People Holding Lots of Bitcoin Surges in Rare ‘Whale-Spawning Season’
• Bitcoin Hits $29K for First Time Ever, Raising HODLer Hopes for $30K by New Year’s

Bitcoin mining equipment maker Ebang (EBON) announced Thursday it is preparing to officially launch a cryptocurrency exchange in the first quarter of 2021.

• Shares of the Nasdaq-listed mining equipment manufacturer rose on the news, jumping to as high as $6.18 a share before settling down to $5.71 at the time of this writing, up 16%.
• Ebang said it has started publicly testing its cryptocurrency exchange and will officially launch in the first quarter of 2021.
• Very little has been revealed about the proposed exchange, except that Ebang has said it will be a regulatory-compliant cryptocurrency exchange that would strictly operate outside of China, where the government has cracked down on trading platforms.
• Recently Ebang set up a wholly owned subsidiary in Australia as part of its strategy to create a digital asset trading platform.
• In a statement, Ebang Chairman and CEO Dong Hu said the completion of the internal testing of the cryptocurrency exchange is a step forward in expanding its blockchain financial services business.
• “We will also explore other business opportunities in the blockchain and cryptocurrency industry such as establishing mining farms and cryptocurrency mining to optimize the structure of our offerings in the blockchain industry value chain,” said Hu.

Read more: Bitcoin Miner Producer Ebang Blames Coronavirus for 50% Slump in Revenue

• Marathon Patent Agrees to Buy 70K ASIC Miners From Bitmain for $170M
• Coinbase, Other Big Exchanges ‘Between Rock and a Hard Place’ on Delisting XRP
• EXMO Exchange Now Says It Lost 6% of Total Crypto Assets in Monday’s Hack
• Craig Wright’s Wife Wins UK Lawsuit Over Bitcoin Trading Account Closure

The U.S. division of Israeli crypto exchange eToro is suspending XRP trading for its customers effective next month.

The exchange announced Thursday it would stop facilitating XRP purchases or conversions for U.S. customers effective Jan. 3, though customers can still withdraw XRP from their eToro wallets to other unaffiliated addresses.

It’s the latest crypto trading venue to suspend XRP support in the U.S. after the Securities and Exchange Commission (SEC) sued Ripple earlier this month on allegations that it has been selling XRP as an unregistered security for over seven years.

Related: Market Wrap: Bitcoin Closes 2020 Near Record Highs

Other exchanges to delist or suspend XRP trading or markets include:

• Coinbase
• Binance.US
• Crypto.com
• OKCoin
• Ziglu
• Wirex
• Bittrex
• Swipe Wallet
• Crosstower
• Beaxy
• OSL
• Jump Trading
• Galaxy Digital
• Bitwise

Most of these platforms have only removed XRP from their U.S. markets or platforms, though a few have suspended support internationally.

According to the SEC suit, which was filed last week in the U.S. District Court for the Southern District of New York, Ripple, CEO Brad Garlinghouse and Chairman Chris Larsen have sold some $1.3 billion in XRP since 2013. The SEC alleges that Ripple did not register XRP as a security or seek an exemption for the token, of which it holds nearly 50 billion in escrow.

For its part, Ripple has called the allegations “unproven,” and has promised to file a response in court in the coming weeks. The San Francisco-based firm has repeatedly called the SEC’s suit an “attack on crypto” in the U.S., with CEO Garlinghouse claiming the agency’s actions “directly benefit China.”

Related: Market Wrap: Bitcoin Nears $29K While Ether Options Trader Makes Long-Shot Bet

A pretrial conference has been scheduled for Feb. 22, 2021, according to public court records, with the parties required to submit a joint letter describing the case and the arguments each side plans to make, potential motions and any potential settlement details the week before.

The SEC and Ripple must also file a joint letter by Feb. 15 stating whether both parties are willing to consent to having a magistrate judge oversee proceedings (rather than a district judge).

• Binance US Says It Will Delist XRP on Jan. 13
• Coinbase Sued for Allowing the Sale of XRP

Large investors continue to accumulate bitcoin, possibly putting upward pressure on the cryptocurrency’s price.

The number of whale entities – clusters of crypto wallet addresses held by a single network participant holding at least 1,000 bitcoin – rose to a new record high of 1,994 on Wednesday. The previous peak of 1,969 reached in 2016 was surpassed on Dec. 18, according to data source Glassnode.

The metric has increased by over 16% this year and 7.3% this quarter alone. Bitcoin’s price has rallied by over 300% in 2020 and 160% in the October-December period. At press time, the leading cryptocurrency is changing hands at over $28,800 per bitcoin, after reaching an all-time high of $29,280 on Wednesday, as per CoinDesk 20 data.

Related: Market Wrap: Bitcoin Closes 2020 Near Record Highs

“We have just entered a rare whale-spawning season, with ultra-high net worth and institutions recognizing the last call to build significant stores of bitcoin,” Jehan Chu, co-founder and managing partner at Hong Kong-based trading firm Kenetic Capital, told CoinDesk. “The final land grab has started, and by this time next year accumulating [over] 1,000 bitcoin will be nearly impossible for most people.”

The steep rise in the whale entity population validates the popular narrative that increased participation by large investors has fueled bitcoin’s recent rally.

According to Sumit Gupta, CEO and co-founder of CoinDCX, the data shows the cryptocurrency is going through a shift from being a speculative asset to a macro investment asset, and that switch is mainly being driven by the increasing acceptance from global institutions as well as investors from around the world.

JPMorgan analysts say the recent bitcoin purchases by insurance firm MassMutual indicate growing mainstream adoption and could have a bearing on gold in the long run.

• The Most Important Bitcoin Infrastructure Developments of 2020, feat. Alyse Killeen
• Bitcoin Hits $29K for First Time Ever, Raising HODLer Hopes for $30K by New Year’s
• Market Wrap: Bitcoin Nears $29K While Ether Options Trader Makes Long-Shot Bet

The U.S. Treasury Department’s proposed rules requiring users to comply with know-your-customer (KYC) requirements if they want to send their crypto from an exchange to a private wallet could end up being ineffective, according to blockchain analytics firm Elliptic. 

In its published response to the rule, Elliptic said the rules could “adversely impact” the effectiveness of existing anti-money laundering (AML) and countering the financing of terrorism (CFT) regulations. 

Earlier this month, the Treasury Department released an advanced notice of proposed rulemaking, which laid out that users of centralized cryptocurrency exchanges who wish to move their holdings to their own private wallet, or to someone else’s, would have to provide detailed personal information for transactions greater than $3,000. The exchanges would also be required to report either individual or groups of transactions that add up to more than $10,000.

Related: FinCEN Wants US Citizens to Disclose Offshore Crypto Holdings of $10K+

According to the Financial Crimes Enforcement Network’s (FinCEN) announcement, the general public will have until Jan. 4 to provide comments or feedback on the rules. 

In its response, Elliptic said the rules overstate the risks proposed by unhosted wallets because transactions involving cryptocurrencies can already be traced by analyzing the associated blockchain ledger. 

Such analytics are already used by law enforcement to track criminal activity, and therefore, according to Elliptic, the new rules would only add documentation costs for information that can already be accessed using existing means. 

The proposed rules were met with concerted pushback even before their release. Regulatory experts said the rules could have widespread repercussions, including on decentralized finance (DeFi) projects. 

Related: Presidential Advisory Group Weighs In on Regulatory Approach to Stablecoins

Concerns include unclearly defined terms such as “unhosted wallets” and the technical inability of financial institutions to collect information from DeFi counterparties.

Data cited by Elliptic shows fewer than 10% of illicit-origin funds remain in unhosted wallets, and the vast majority of them are “simply dormant.” Elliptic noted that since crooked actors are also entirely dependent on their ability to cash-out and convert crypto to fiat, information about such funds is shared with the FinCEN using suspicious activity reports (SAR). Therefore, the proposed rules just add more paperwork. 

Also, the Treasury Department’s 15-day comment period on its proposal is “unjustifiably short,” and should be extended to 90 days. 

Elliptic said the rules “would impose an unjustified tax” on financial innovation and said rules involving counterparty record-keeping requirements should be removed. 

• FinCEN’s Proposed Crypto Wallet Rule Might Hit DeFi
• ‘There Is No Emergency Here’: Coinbase Asks FinCEN to Extend Comment Period on Wallet Regs

Xapo, one of the earliest bitcoin custodians, is ending its service to U.S. customers as of March 1, according to a customer email dated Dec. 30 obtained by CoinDesk.

“Due to a change in our global business strategy, Xapo, Inc. is leaving the U.S. market and will be closing all U.S. customer Xapo accounts. As a result, we’ll need you to transfer your funds to an external Bitcoin address,” the company writes in the email.

Read more: Xapo.

Related: Xapo Suspends Credit Card Crypto Purchases, Shifts Operations to Gibraltar

Xapo is in the midst of pivoting to a digital banking service, according to a May blog post. Confirming the move to CoinDesk in an email, founder Wences Casares wrote, “Our core value proposition is to protect our client’s life savings, mostly in emerging markets. Our target clients are people who have more than $30,000 in savings but less than $1 million who do not want to keep all of their savings in their local currency or in their country. Because of the amounts they have, they do not have access to international private banking services.”

After attaining a banking license in Gibraltar, the company realized that it would need to set up a separate organization to comply with U.S. banking regulations, in a market without strong demand for their specific services. “Serving the US market would require quite a lot of effort, time and investment, it would require a separate organization within Xapo to support it and it would still yield a worse product than what we can offer internationally,” Casares added.

Read more: Xapo Suspends Credit Card Crypto Purchases, Shifts Operations to Gibraltar

The email to customers asked them to transfer their BTC holdings to an external address. Buying and receiving bitcoin within the app has also been disabled.

Related: Custody Battle Pits Institutional Boomers Against Crypto Upstarts

Xapo has also been one of the earliest participants in the Facebook-led libra initiative, which became the stablecoin project, diem.

• Lawsuit Accuses Xapo, Indodax of Negligently Holding Stolen Bitcoin
• Xapo

The price of bitcoin (BTC) crossed $29,000 Wednesday evening for the first time ever, pushing further into record territory after hitting what had been an all-time high earlier in the day.

• With the day’s surge, the leading cryptocurrency resumed its rapid upward pace after seeming to be catching its breath on Monday and most of Tuesday following a record-setting run over the weekend.
• Bitcoin prices hit a high of $29,280.05 before dropping back to $29,231.01, up 5.28% in the last 24 hours. The price of bitcoin has now risen more than 300% year to date and no doubt put visions of $30,000 in the minds of holders of the cryptocurrency, colloquially known in crypto circles as “HODLers.”
• “Should the expected wave of retail flows materialize, I would expect to see bitcoin charge past $30,000 as we enter the new year,” Denis Vinokourov, head of research at the London-based prime Brokerage Bequant, told CoinDesk earlier.
• Institutional investors are perceived to be driving this record-setting run. Among them: Anthony Scaramucci’s Skybridge Capital ($25 million in December); MassMutual ($100 million in December); and Guggenheim (up to 10% of its $5 billion macro fund).
• With the end of the year looming, some fund managers may also be buying bitcoin so they can brag next year about being smart enough to get in in 2020 while neglecting to say at which price they had done so. This is referred to as “window dressing” on Wall Street.
• In addition, the U.S. Federal Reserve, along with other central banks, has been printing money with abandon, trying to stave off the worst economic effects of the pandemic, while U.S. President Donald Trump has been pushing Congress to allow for the issuance of larger stimulus checks. These actions are viewed by many as potential catalysts for inflation and bad for the U.S. dollar, both of which could be positive for bitcoin.

Read also: 2020 Saw the Fewest Bitcoin ‘Obituaries’ in 8 Years

• Market Wrap: Bitcoin Nears $29K While Ether Options Trader Makes Long-Shot Bet
• Bitcoin Prices in 2020: Here’s What Happened
• All Major Mining Pools Now Support Taproot, Bitcoin’s Biggest Upgrade in Years
• Statechains Scaling Solution Offers New Potential for Bitcoin Privacy

In a reversal of previous policy, the Serbian government will now permit the issuance and trading of digital assets and related services under a law that went into effect Dec. 29. 

The draft law was announced in October and local media reported the law was passed by the nation’s legislators in late November. The “Digital Asset Law” officially went into effect Tuesday following its publication in the official gazette, and will be applied six months from now. 

Under the new specifications, digital asset service providers in Serbia can operate after “obtaining permission from the supervisory authority.” The country’s Securities Commission and the National Bank of Serbia (NBS) are tasked with supervision and applying the law.

Related: DLT Regulation in 2020: Backwards or Sideways?

Serbia was not always friendly towards crypto. In 2014, the NBS declared that bitcoin was not legal tender in the country. 

The new law comes at a time when Eastern European countries, including Romania and Bulgaria, are expanding their tech industries. Serbia is experiencing a tech boom, with the industry accounting for more than 6% of the country’s GDP. 

With the new rules, digital assets can be issued in Serbia with or without an approved white paper, though an asset with an unapproved white paper cannot be advertised in the country and there are limitations on the amount of such assets that can be distributed. 

When it comes to trading, digital asset exchanges will need licenses to operate, according to the new law. Secondary trading of digital assets issued in Serbia (with an approved white paper), over-the-counter (OTC) trading and use of smart contracts in secondary trading are also allowed.

Related: Hong Kong ATMs Must Be Excluded From Coming AML Regulations, Group Says

The provisions of the new law do not apply to digital transactions that are carried out within a limited network of people accepting digital assets “as a form of loyalty or reward, without possibilities of its transfer or sale.” The law also doesn’t apply to miners, who are permitted to acquire digital assets by mining, according to the law. 

Read more: Paxful, Turkey-Based BiLira, Cointral to Expand Crypto Offerings in Eastern Europe

However, financial institutions under the supervision of the NSB are still prohibited from engaging with digital assets except in keeping cryptographic keys. They cannot convert their assets to virtual currencies or “instruments associated with digital assets,” provide services related to digital assets or participate in businesses offering such services. 

Digital asset service providers are required to request for permission from a supervisory body within the six months before the law is implemented. 

• Hong Kong Trading Platform OSL Suspends XRP Services as SEC Sues Ripple
• Huobi Crypto Exchange Returning to US After Winning Nevada Trust License

The takeaway:

• Bitcoin (BTC) trading around $28,775 as of 21:00 UTC (4 p.m. ET). Gaining 7.3% over the previous 24 hours.
• Bitcoin’s 24-hour range: $26,796.90 to $28,969.90 (CoinDesk 20)
• BTC above its 10-hour and 50-hour moving averages, a bullish signal for market technicians.

Another day, another all-time high in bitcoin as the cryptocurrency changed hands as high as $28,969.90, according to data compiled by the CoinDesk 20.

Bitcoin’s price began its upswing at around 17:00 UTC (12:00 p.m. ET) Tuesday and barely let up, taking off from $26,400 to the brink of $29,000 in just 26 hours.

Related: Bitcoin Hits $29K for First Time Ever, Raising HODLer Hopes for $30K by New Year’s

According to analyst Alex Krüger, action in the bond market spurred gains in cryptocurrencies. “Rates came off in the 48 hours leading to yesterday’s [Tuesday’s] pump,” he told CoinDesk. On Monday, the U.S. 10-year bond yielded 0.950%. By Wednesday afternoon, it was 0.926%.

Calling Wednesday’s action a “strong market,” Chris Thomas, head of digital asset at Swissquote, said bitcoin’s price was “being pushed higher by retail flows. We have seen a few [institutional investors] but not too many,” adding that “most are on holiday until next Monday.”

And while Thomas said he had expected the market to trade sideway this week, “the fact that it has moved higher to me suggests we may see a short-term pullback,” he said.

Read more: Bitcoin Prices in 2020: Here’s What Happened

Related: What Is Proof-of-Stake?

“Bitcoin is extending its parabolic uptrend after gapping up at the start of the holiday week,” said technical analyst Katie Stockton, managing partner at Fairlead Strategies. “The rally has no new signs of exhaustion from an overbought/oversold perspective, and there is no resistance left to hold back bitcoin.”

Similar to Swissquote’s Thomas, Stockton warns a pullback is possible and, should it happen, “the gap from Monday is likely to be filled in an abrupt reversal.”

Meanwhile, a string of bad news hit XRP as more exchanges announced halts in trading the cryptocurrency U.S. regulators claim is a security. Genesis, owned by CoinDesk parent company DCG, announced it was suspending trading and lending in XRP. Cryptocurrency exchange Binance is also suspending XRP trading for its customers, effective Jan. 13. The token was down 3.5% in the 24 hours leading up to publication time.

Ether, the second-largest cryptocurrency by market capitalization, was up sharply Friday and trading around $750. That marks a 3.5% gain in 24 hours as of 21:00 UTC (4:00 p.m. ET).

Despite hitting a multi-year high, trading on ether was lighter than average Wednesday. Just $618 million worth of ether was traded on the eight exchanges tracked in the CoinDesk 20 compared to the previous seven-day average of $726 million. 

Yet, at least one trader has sights set on an astounding rally in the months ahead. On Deribit, the largest crypto options exchange, someone bought 153 contracts of September 2021 calls with a strike of $5,000 for a premium of around $25 each. That means the trader bet roughly $3,825 that ether will rally sevenfold over the course of the next nine months. Calls give the owner the right, but not obligation, to buy the underlying asset (in this case, ether) at a set price on a set date. 

Prices need not come close to $5,000 for the trader to make a profit; a mere spike in volatility or even a relatively modest rally could increase the now-low probability of the options being in the money, albeit by a very small percentage. Still, that could be just enough for the bet to pay off. As of now, though, it has the same risk profile of a lottery scratch-off game.

Digital assets on the CoinDesk 20 were mixed Monday.

Notable winners as of 21:00 UTC (4:00 p.m. ET): 

• orchid (OXT) +2%
• bitcoin cash (BCH) +2%
• litecoin (LTC) +2%

Notable losers: 

• chainlink (LINK) -2.2%
• eos (EOS) – 3%
• stellar (XLM) – 3%

Equity indexes: 

• Japan: Nikkei 225: 27,444.17 (-123.98 or -0.45%)
• U.K.: FTSE 100: 6,555.82 (-46.83 or -0.71%)
• U.S.: S&P 500: 3,732.04 (+5.00 or +0.13%)

Commodities: 

• Oil was up 0.6%. Price per barrel of West Texas Intermediate crude: $48.29
• Gold was in the green, up 0.7% and at $1,896.40 as of press time.

Treasurys:

• The 10-year U.S. Treasury bond yield fell Monday to 0.926%.

• Binance US Says It Will Delist XRP on Jan. 13
• Coinbase Sued for Allowing the Sale of XRP

Bitcoin custodian firm BitGo agreed to pay $93,830 in a settlement pact with the U.S. Treasury Department over 183 “apparent violations” of multiple sanctions programs.

• Because of deficiencies related to the company’s compliance procedures, BitGo failed to prevent persons in the Crimea region of Ukraine, Cuba, Iran, Sudan and Syria from using its non-custodial wallet service, the Treasury Dept. said in announcing the settlement.
• The maximum civil monetary penalty was $53,051,675, the department said.
• Last week, it was reported that talks regarding a possible acquisition of BitGo by PayPal had fallen through.

• PayPal Talks to Buy Crypto Firm BitGo Have Ended, Other Targets Eyed: Report
• Ethereum Developer Virgil Griffith Will Likely Face Trial Next September
• Virgil Griffith Still Doesn’t Know What Exact Crimes He Is Accused of, Attorneys Say
• How BitGo Is Getting Into the Events Business

Cryptocurrency exchange Binance is suspending XRP trading for its customers effective next month.

The exchange announced Wednesday that U.S. customers will not be able to deposit or trade XRP on the platform effective 10:00 a.m. ET on Jan. 13, 2021, though withdrawals remain unaffected at this time. Binance is the latest crypto trading venue to suspend XRP support in the U.S. after the Securities and Exchange Commission (SEC) sued Ripple earlier this month on allegations it has been selling XRP as an unregistered security for over seven years. After the news broke, the price of XRP dipped 2.1% to a 24-hour low of $0.199910 but is slowly recovering.

Other exchanges to delist or suspend XRP trading or markets include:

• Coinbase
• Crypto.com
• OKCoin
• Ziglu
• Wirex
• Bittrex
• Swipe Wallet
• Crosstower
• Beaxy
• OSL
• Jump Trading
• Galaxy Digital
• Bitwise

Related: Market Wrap: Bitcoin Nears $29K While Ether Options Trader Makes Long-Shot Bet

Most of these platforms have only removed XRP from their U.S. markets or platforms, though a few have suspended support internationally.

According to the SEC suit, which was filed last week in the U.S. District Court for the Southern District of New York, Ripple, CEO Brad Garlinghouse and Chairman Chris Larsen have sold some $1.3 billion in XRP since 2013. The SEC alleges that Ripple did not register XRP as a security or seek an exemption for the token, of which it holds nearly 50 billion in escrow.

For its part, Ripple has called the allegations “unproven,” and has promised to file a response in court in the coming weeks. The San Francisco-based firm has repeatedly called the SEC’s suit an “attack on crypto” in the U.S., with CEO Garlinghouse claiming the agency’s actions “directly benefit China.”

A pretrial conference has been scheduled for Feb. 22, 2021, according to public court records, with the parties required to submit a joint letter describing the case and the arguments each side plans to make, potential motions and any potential settlement details the week before.

Related: Coinbase Sued for Allowing the Sale of XRP

The SEC and Ripple must also file a joint letter by Feb. 15 stating whether both parties are willing to consent to having a magistrate judge oversee proceedings (rather than a district judge).

• Genesis to Suspend XRP Trading, Lending
• Ripple to Meet With SEC in First Pretrial Conference on Feb. 22

In an interesting consequence of Ripple Labs’ battle with the U.S. Securities and Exchange Commission, a Missouri man claiming to be a Coinbase client is suing the crypto exchange for selling the XRP token.

In a complaint filed in the Northern District Court of California, Thomas C. Sandoval, the St. Louis County-based plaintiff, alleges Coinbase knowingly sold XRP as an unregistered security and gained commission on these sales.

The lawsuit, which seeks class action status, argues Coinbase violated California’s unfair competition laws by “[gaining] an unwarranted competitive advantage over digital asset exchanges that only sold commodities.”

Related: Market Wrap: Bitcoin Nears $29K While Ether Options Trader Makes Long-Shot Bet

“Coinbase sold a token called Ripple (hereafter referred to by its trading symbol: XRP), the value of which was entirely linked to the success or failure of Ripple Labs, Inc. (Ripple Co.) the company that created the token, and the managerial efforts of Ripple Co. executives. Investors in XRP, such as Plaintiff, reposed an expectation of profit in such managerial efforts by Ripple Co. executives and purchased the token in order to make money on their investment,” the complaint reads.

The SEC filed suit against Ripple Labs last week, claiming XRP is a security Ripple has been selling for seven years without registering it or seeking an exemption, raising $1.3 billion in the process. As a result of the SEC action against Ripple, Coinbase said Monday it would be suspending trading in XRP as of Jan. 19.

The lawsuit against Coinbase seeks unspecified compensatory damages, attorneys’ fees and other relief.

Anderson Kill partner Stephen Palley told CoinDesk he sees “a couple of issues” with this lawsuit. He said its allegations of fraud regarding unfair competition laws rests “on ‘information and belief,’ which is the legal equivalent of ‘I think so but am not really sure’,” Palley wrote in an email.

Related: Binance US Says It Will Delist XRP on Jan. 13

He added that Coinbase has “a pretty good record” of backing itself up in legal matters involving clients through the arbitration clause in its terms of service.

In the grand scheme of things, he concluded, Coinbase has more than client lawsuits to worry about with the SEC breathing down Ripple’s neck. 

“This is going to be hard fought in motion practice and will likely end up in private arbitration unless the court finds that a fairly narrow public policy exception applies,” he said about the Coinbase lawsuit. “I’d assess the risk here to Coinbase (and other exchanges) as quite a bit less than that from continuing to list an asset the SEC has targeted and face much more dangerous enforcement action risk.”

Coinbase has not responded to CoinDesk’s request for comment.

• Genesis to Suspend XRP Trading, Lending
• Ripple to Meet With SEC in First Pretrial Conference on Feb. 22

As 2020 draws to a close, one of the prior proponents for an exchange-traded fund (ETF) based on bitcoin is trying again: VanEck has submitted an application to the U.S. Securities and Exchange Commission (SEC) for a “VanEck Bitcoin Trust.” 

An ETF is seen as advantageous because it trades on the stock market in much the same way as shares in popular companies such as Apple and Microsoft. 

VanEck has previously proposed ETFs, withdrawing its most recent application in September 2019. At the time the company said it remained committed to an exchange-traded product. 

Related: Crypto.com to Delist, Suspend XRP in the US After SEC’s Ripple Suit

As it has in previous applications, VanEck said this ETF would trade on the Cboe BZX Exchange. 

So far the SEC has considered many applications for bitcoin-based ETFs and rejected them all. In August 2018, it rejected nine such proposals on the same day.

Read more: The Case for a Bitcoin ETF

In October, SEC Chairman Jay Clayton said the agency was still open to considering ETF proposals.

Related: Tierion to Repay ICO Investors Up to $25M Plus Interest in SEC Settlement

Chairman Clayton stepped down officially last week. Dalia Blass, the director of the division of investment management, will also end her tenure in January, according to the agency. Blass was the author of a 2018 letter within the SEC expressing concerns the bitcoin market was not large enough or liquid enough to be ready for an exchange-traded product.

According to the application, the number of the outstanding shares will depend on how much BTC is delivered to the Trust and held by an as yet undesignated custodian.

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Digital currency prime broker Genesis is halting XRP trading and lending in light of the Securities and Exchange Commission’s lawsuit against Ripple.

According to an email sent to clients and shared with CoinDesk, the firm, which is owned by CoinDesk parent company Digital Currency Group, is suspending XRP trading and lending.

Clients will have until Jan. 15 to sell XRP “as long as sufficient liquidity exists,” the email read, after which time Genesis will suspend trading and deposits in the token, although withdrawals will still be allowed. 

Related: Market Wrap: Bitcoin Nears $29K While Ether Options Trader Makes Long-Shot Bet

Ripple’s regulatory trouble is apparently driving the decision. The SEC is suing Ripple for what it’s calling a $1.3 billion unregistered security sale. Genesis’ “team is actively monitoring the evolving regulatory situation with XRP,” the email read.

For its XRP lending markets, the email said Genesis is calling all loans and that all fixed-term loans that mature on or after Feb. 1, 2021, have been called back or terminated.

Genesis’s XRP derivatives markets will continue trading. 

The announcement makes Genesis the latest in a host of crypto exchanges suspending XRP trading until the outcome of the lawsuit becomes clear. 

Related: Binance US Says It Will Delist XRP on Jan. 13

Genesis has not responded to CoinDesk’s request for comment.

• Coinbase Sued for Allowing the Sale of XRP
• Ripple to Meet With SEC in First Pretrial Conference on Feb. 22

Binance Pool, the mining pool run by one of crypto’s biggest exchanges, is prepared to support Taproot, a good omen for the next major Bitcoin upgrade. The addition of Binance Pool to the “yes” column means that all the major pools are now on board.

Taproot is a scaling and privacy change that will be the biggest upgrade the digital currency has received in years – and it’s far less controversial than the last one. 

According to crypto mining pool Poolin VP Alejandro De La Torre, Binance Pool says it will support the Taproot upgrade, clearing up any ambiguity, since the pool was the only one with over 10% of the network that hadn’t said “yes” to the proposal. Binance Pool represents 11% of the Bitcoin mining hashrate, so its support pushes mining pool support up to about 91% of the hashrate.

Related: Bitcoin Hits $29K for First Time Ever, Raising HODLer Hopes for $30K by New Year’s

Binance did not respond immediately to request for comment.

De La Torre leads Taproot Activation, an initiative to find out if there is agreement on Taproot as a change. According to the website, a few smaller mining pools, including Lubian.com and BTC.TOP, have not responded about whether they support the upgrade or not.

This support from miners comes in stark contrast to SegWit, Bitcoin’s last major upgrade, which activated in 2017. SegWit was deployed by way of BIP 9, requiring that 95% of mining pools flag support the change before the change would officially activate. To block the change, mining pools simply did not flag, 

So far, mining pools have no problem with Taproot. Binance Pool’s support is a bellwether sign that the change could activate soon if no one finds some sort of fatal flaw in it.

Related: Market Wrap: Bitcoin Nears $29K While Ether Options Trader Makes Long-Shot Bet

This news is particularly consequential because if Taproot is deployed by way of BIP 9, then mining pools will need to flag that they’re ready for the change before it can activate.

But there’s still some debate about this process. The mechanics of Taproot itself are not controversial. Bitcoin’s most active developers all but universally agree it’s a positive change. 

Still, how to deploy the change is still up for debate. Over the last several months, developers have been discussing the best way to deploy Taproot. To oversimplify a complex debate, some think BIP 8 would be better because it doesn’t allow mining pools to block the change out of sluggishness or apathy. 

Knowing that mining pools, such as Binance Pool, support the change might give BIP 9 a boost.

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The first pretrial conference in the U.S. Securities and Exchange Commission’s lawsuit against Ripple for the sale of XRP has been set for Feb. 22, 2021.

Ripple and the SEC will meet over video call, according to a court order from the U.S. District Court of the Southern District of New York.

In the order, United States District Judge Analisa Torres asks the parties to reply with a joint statement covering the case’s arguments and legal bases, potential motions and the likelihood of settlement.

Related: Market Wrap: Bitcoin Nears $29K While Ether Options Trader Makes Long-Shot Bet

The pretrial conference would mark the first meeting between the two sides since the SEC filed its lawsuit against Ripple Labs for the sale of some $1.3 billion worth of XRP tokens. This is the first time the regulator is taking a digital asset issuer with its own network to court, though it has sued many Ethereum token issuers in the past. 

As with other instruments in its regulatory purview, the SEC views digital tokens under the lens of the Howey Test. The result of a 1946 court case, the Howey Test is a checklist used to judge whether or not an investment contract is a security under the Securities Act and Securities Exchange Act of 1933 and 1934. 

Under the test, a security is offered if “a person invests his money in a common enterprise and is led to expect profits solely from the efforts of the promoter or a third party.”

Since the SEC first announced its suit, multiple popular exchanges have announced they are halting XRP trading. Currently trading at $0.21, XRP is down 56% since the SEC first announced the lawsuit last week.

CORRECTED 12/30/2020 at UTC 15:37 to note this is the first meeting between the two sides since the filing, not the start of the trial portion.

• Binance US Says It Will Delist XRP on Jan. 13
• Coinbase Sued for Allowing the Sale of XRP
• Genesis to Suspend XRP Trading, Lending

Gazpromneft, the oil subsidiary of Russia’s natural gas giant Gazprom, is getting into a different kind of exploration. 

The company opened a venue for cryptocurrency mining on one of its oil drilling sites in Siberia, unlocking the power of Russia’s oil and gas resources for the needs of bitcoin mining. 

Gazprom, a company that counts the Russian government as a shareholder, is the country’s gas monopolist and world’s 10th-biggest oil producer. The company has been spearheading several mega-projects of cross-border gas pipelines such as the Nord Stream and the South Stream, which bring Russian gas to Europe. 

Related: Digital Currencies May Make SWIFT Redundant, Says Russian Central Bank: Report

Gazpromneft is a direct subsidiary of Gazprom and one of the very few Russia’s government-owned companies that has openly expressed interest in the crypto mining industry. Earlier this year, CoinDesk reported that Rosatom, Russia’s nuclear power monopolist, is opening up its energy supplies for miners, too. 

The venue, located in the Khanty-Mansiysk region of northwestern Siberia, is using the associated gas from its oil field as an energy source and has its own power plant transforming the gas into electricity. 

The CO2 that gets freed during the oil drilling is normally a liability for oil companies as they have to burn it into the atmosphere, which results in fines. However, there are ways to utilize it instead of wasting it, and electricity generation is one of them.

In cryptocurrency mining, one of the greatest costs is for the electricity needed to power the mining rigs. By locating mining operations at oil drilling sites where there’s abundant gas to provide virtually free electricity, both miners and the oil companies benefit.

By doing this, Gazpromneft is following the lead of the North American companies Upstream Data and Crusoe Energy Systems that are making use of gas at drilling sites in the U.S. and Canada. 

Related: Crypto Exchange Livecoin Begs Users to Stop Trading After Losing Control of Servers

Although Gazpromneft is not planning to mine for crypto itself, the company’s spokesperson told CoinDesk it’s ready to open its energy resources to miners and has already piloted a small-scale mining operation with the mining firm Vekus this past autumn. 

Vekus placed a shipping container housing 150 units of Bitmain’s Antminer S7 ASICs on the site, Gazpromneft announced via the Russian crypto news outlet Forklog, and in one month the machines mined 1.8 BTC using 49,500 cubic meters of gas. 

Gazpromneft is planning to expand the mining farm and get more clients’ ASICs, as well as more contractors like Vekus. The company did not disclose how big the future farm will be.

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