First Mover Americas: BTC Stabilizes as Fresh Regulatory Developments Surface in Europe

Good morning, and welcome to First Mover. I’m Lyllah Ledesma, here to take you through the latest in crypto markets, news and insights.

• Price Point: The crypto market appears to have stabilized, with altcoins taking the lead on Tuesday. Crypto lender Nexo is set to take over its troubled Singaporean rival Vauld.
• Market Moves: The Bank of England’s has called for “enhanced regulation” of the crypto asset market to mitigate against potential risks.

Price point

Crypto markets appeared to stabilize on Tuesday even as the fallout continued from June’s price plunge – with fresh developments on the regulatory front and an agreement by the crypto lender Nexo to take over its troubled Singaporean rival Vauld.

Bitcoin (BTC) was trading up 1.2% on the day while U.S. index futures and European equities fell as fears of an impending recession continued. The euro fell to a 20-year low against the dollar.

Some altcoins were outperforming BTC on Tuesday, with Cosmos (ATOM) leading the way, up 7.3%. Polygon’s MATIC followed with a 6.1% increase on the day.

Meanwhile, concerns over cryptocurrency regulation in Europe are progressing.

On Monday, European lawmakers said that non-fungible token (NFT) trading platforms should be made subject to European Union anti-money laundering (AML) laws. The amendment is part of a larger discussion of proposals submitted by European lawmakers.

In the U.K, the government has announced it is seeking views from investors, professionals and companies on taxation of decentralized finance (DeFi) activities. According to the statement, the government wants to gather evidence on the taxation of cryptoasset loans and staking.

In other news, Samir Shah, previously JPMorgan’s head of asset management sales, left the bank to take up the position of chief operating officer at cryptocurrency-focused investment firm Pantera Capital. In early April, Pantera announced plans to close a blockchain fund with about $1.3 billion in committed capital.

The London-based crypto lender Nexo announced it has signed a term sheet with Singapore-based Vauld. Pending due diligence, Nexo will acquire up to 100% of the troubled firm. Nexo aims to use the acquisition to accelerate its presence in Asia.

Market moves

By Camomile Shumba

The Bank of England’s Financial Policy Committee called for “enhanced regulation” of the crypto asset market to mitigate against potential risks.

Noting recent market turmoil, the committee said crypto assets did not yet pose a threat to the wider financial system. They might, however, in the future as they become more integrated into mainstream finance, according to meeting summary notes published Tuesday. The committee focuses on the central bank’s role in maintaining financial stability.

The collapse of Terra’s stablecoin in May and crypto lenders including Celsius and Babel Finance freezing withdrawals this month, have focused regulators’ attention on the digital asset industry. That’s on top of more than $2 trillion of market cap being wiped out over a period of months.

“This underscored the need for enhanced regulatory and law enforcement frameworks to address developments in crypto asset markets and activities,” the bank said in its quarterly Financial Stability Report.

The Treasury has already announced that the Bank of England is looking into bringing systemic stablecoins into its Special Administration Regime, meaning the central bank would regulate stablecoins that are connected with the wider financial system. A systemic stablecoin backed by a deposit with a commercial bank would introduce “undesirable financial stability risk,” according to the report.

Read the full story here: Bank of England Committee Calls for Enhanced Crypto Regulation to Limit Contagion

Latest headlines

• CoinShares Completes Napoleon Acquisition, Can Now Offer Products Across EU The acquisition of Napoleon Asset Management was subject to approval by the AMF, which was granted on June 28.
• WonderFi Closes Acquisition of Crypto Trading Platform Coinberry The Canadian crypto firm says it’s open to more deals for firms hit by the crypto winter.
• Lending Platform Vauld Looks to Restructure Amid Crypto Downturn, Suspends Transactions Vauld has seen withdrawals of around $198 million since June 12.
• Singapore’s Central Bank Weighs Further Safeguards on Retail Crypto Trading The Monetary Authority of Singapore (MAS) may introduce rules on the use of leverage in crypto transactions.
• Software Firm Meitu Lost Up to $52.3M in H1 Due to Slide in Crypto Prices The last purchase by the Central American country had been in May.

Today’s newsletter was edited by Bradley Keoun and produced by Stephen Alpher.