Exchanges face new legal issues, Goldman Sachs clients eye crypto and more.

Crypto exchanges are facing new regulatory hurdles around the world, as the United States Department of Justice (DOJ) on March 26 accused KuCoin and its founders of conducting an unauthorized money transfer business and violating the Bank Secrecy Act (BSA).

The charges coincide with a civil enforcement action by the US Commodity Futures Trading Commission (CFTC) alleging multiple violations by the exchange. DOJ claims KuCoin handled more than $5 billion in suspicious and criminal funds.

Staying in the United States, Coinbase suffered another setback on March 27. District Judge Catherine Failla rejected a lawsuit filed by the US Securities and Exchange Commission (SEC), arguing that similar transactions were previously considered securities transactions. Coinbase sought an injunction to dismiss the case, challenging the SEC's ruling on the crypto exchange.

In the Philippines, the financial regulator decided to ban local users from accessing Binance on March 25, citing concerns about the company's unlicensed operations in the country. According to the agency, the exchange offered subsidized trading services and savings accounts to unlicensed domestic users.

Meanwhile, Binance's successor in Russia, CommEx, has officially announced that it has stopped operations and stopped accepting deposits. The company acquired Binance's Russian business in September 2023 for an undisclosed amount.

Along with dynamic challenges, this week's CryptoBiz reports on BlackRock's bitcoin exchange-traded fund (ETF) flow, Goldman Sachs' clients returning to crypto, Swift's central bank digital currency (CBDC) trials, and MasterCard's forecast in Latin America.

BlackRock's ETF Could Override GBTC in Bitcoin Holdings in Three Weeks

BlackRock's spot bitcoin ETF is on track to surpass its Grayscale Bitcoin Trust (GBTC) holdings in three weeks, given current inflows and outflows. In the year As of March 22, BlackRock's iShares Bitcoin Trust ETF held 238,500 bitcoins (BTC) on its books, worth nearly $15.5 billion at current prices, with an average daily income of 4,120 BTC. In contrast, Greyscale's Bitcoin Trust has 350,252 BTC worth $23 billion, but is experiencing an average daily outflow of $277 million or 4,140 BTC. In other ETF headlines, asset manager Hashdex has officially joined the space after completing a futures ETF conversion to hold a Bitcoin ETF. Hashdex has changed its name from Hashdex Bitcoin Futures ETF to Hashdex Bitcoin ETF under the symbol “DEFI”.

Galaxy Digital It reported a net income of $296 million in 2022 after losing $1 billion.

Digital asset management firm Galaxy Digital reports 2023 net income of $296 million. The performance shift is due to the increase in the value of major cryptocurrencies such as Bitcoin. The firm's assets under management grew from $1.7 billion to $5.1 billion in 2023 and nearly doubled in the first two months of 2024, reaching $10.1 billion at the end of February. The company reported mining revenue of $18.7 million for the fourth quarter of 2023, a 31 percent increase from the previous quarter. “In the fourth quarter, our mining costs increased compared to previous quarters due to fewer opportunities to economically block our mining operations and higher network hash rates,” the company said in a statement.

Goldman Sachs hedge fund clients are piling into crypto.

Goldman Sachs clients are jumping back into crypto, fueled by renewed appetite for spot Bitcoin ETFs. Goldman Asia Pacific's head of digital assets, Max Minton, told Bloomberg that many of the firm's biggest clients had recently become active or were exploring “on the move” in the crypto sector. Goldman's options and futures offerings are a primary source of interest, with hedge funds being the most involved among its clients, Minton said. Goldman's clients mainly use their derivatives to gain exposure to crypto volatility and make long-term predictions about prices, the executive said, adding that Bitcoin-related products are the most popular investment vehicles among active clients.

SWIFT Announces Success of Second Sandbox Connector Tests for CBDC and More

SWIFT has released the results of the second round of sandbox testing of its CBDC interlinking solution, which it calls the Messaging Network Connector. According to its report on the test results, the project identified four use cases, not all of which involved CBDC. Experimented with digital transactions with atomic (fast) settlement using smart contracts. He has worked with financial infrastructure firm CLS Group to connect token platforms to facilitate atomic supply and payment, and demonstrated the potential of connecting foreign exchange infrastructure using CBDC. SWIFT now plans to further develop the beta version of the connector.

Before you go: MasterCard released a white paper on remittances in Latin America, where remittances are growing faster than the global average in the region. Digital remittances are expected to reach $20 billion by 2026.

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