Coinbase on Bybit Subpoena

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Happy Humpday 🐪. The markets are up with Bitcoin breaking above $38,000. The onchain world is also buzzing with Chainlink staking v0.2, DYDX trading rewards incentives, and Cosmos (ATOM) potential fork.

In Today's Email:

• What Matters: Coinbase & Bybit subpoena 🏛️

• Case Study: Binance Russia connection 🤔

• Governance & Features: Chainlink staking 🔒

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WHAT MATTERS

Coinbase & Subpoena Concerning Bybit

State of play: Coinbase has emailed certain users about a CFTC subpoena requesting their account information and transaction history.

• The email from Coinbase led to speculation about the CFTC targeting users linked to Bybit, hinting at possible legal action against Bybit.

• The email mentioned Coinbase might contest the CFTC subpoena, hence not releasing user information immediately.

• Bybit only introduced mandatory KYC checks in May this year.

• After Silvergate Bank's collapse, Bybit halted US dollar transfers.

• Bybit also faces regulatory scrutiny in the UK and Japan, with finance authorities issuing stern warnings and demanding compliance.

Why it matters: US federal agencies have started ramping up its crypto crackdown.

• This could be a way to prove that Bybit is serving US customers, potentially leading to CFTC actions like those faced by Binance and BitMEX.

For builders and investors: Go build a super buttoned-up centralized product in crypto, or go decentralized and serve non-US customers first.

• Don’t try to be cute and play in the middle. There are a lot of regulatory situations to navigate even when you have a clear target audience.

CASE STUDY

Binance, Rubles, The FCA & Failed KYC

Credit to DataFinnovation - ChainArgos - 4AC for the original piece.

State of play: DataFinnovation - ChainArgos - 4AC published a piece on the link between Binance and a conglomeration of payment processors that might have a “problematic” Russian connection.

• Binance has long promoted its partnership with Advcash, a licensed money transmitter in various jurisdictions.

• Advcash works with a company called Mercuryo, and Mercuryo also works with Binance and Consensys.

• Mercuryo is providing an off-ramp from Binance.

• Mercuryo operates in the West through a number of legal entities such as Monetley (UK) that have had an FCA restriction since 2019.

• The UK FCA mandated that Monteley cannot outsource its Risk and compliance function, yet Croatian-Estonian Revuto is involved in such outsourcing.

• The conglomeration of payment processors is also tied to a Ukrainian crypto exchange ‘Kuna’ that uses Advcash to send funds to ‘Hezbollah.’

What’s next: With the Binance DOJ settlement, we should be expecting more “grey area” business practices to be uncovered.

Take a peek at our referral reward at the bottom of this issue. Share this newsletter and receive our list of 500 crypto VC individuals 👇

INSIGHTS

Jito Announced $JTO Airdrop

On November 27, Jito introduced JTO, a governance token to enable community-driven leadership. 10% of the total $JTO supply will be retrospectively airdropped to Jito community members.

• JTO's total supply: 1B JTO

• Initial Circulating Supply: 115M JTO

• Initial Float Supply: 583M $JTO

Here are the things that you can do with JTO:

• Set fees for the JitoSOL stake pool.

• Update delegation strategies by controlling StakeNet parameters.

• Manage the DAO treasury of JTO tokens and revenue from JitoSOL.

@ponzirespecter made a simple calculator to estimate JITO airdrops worth:

Why it matters: Jito is the closest thing to Lido in Solana. Moreover, it combines MEV optimization on top of just providing a liquid staking service.

• With JTO, we might see a boost in LST-based DeFi in the Solana ecosystem.

FEATURES & GOVERNANCE UPDATE

Chainlink Staking v0.2 Goes Live

Chainlink Staking v0.2 is now officially live.

• From 28 November - 7 December, existing v0.1 stakers have a nine-day window to migrate their staked LINK in the ‘Priority Migration’ period.

• On December 7, early access will be open, and eligible addresses can stake ahead of general access.

• After Early Access ends on December 11, 2023, at 12PM ET, the v0.2 staking pool will open to General Access.

• On a high level, v0.2 evolves from v0.1's initial Staking program into a fully modular, extensible, and upgradable platform.

• The total pool size in v0.2 is increased to 45M LINK.

• Community staker can stake up to 15K LINK in v0.2.

• Node operator staker can stake up to 75K LINK in v0.2.

Why it matters: Chainlink is the most utilized crypto oracle with $15B in Total Value Secured (TVS), but the LINK token itself has not seen many use cases. This is a step in the right direction.

Other notable feature updates:

• Asymtrix launches V2.

• Movement launches M2.

• RainFi goes live on Solana.

• Beta Finance launches V2.

• Deri launches V4 on Arbitrum.

• Levana launches ryETH on Osmosis.

• Bedrock launches liquid staking for IOTX.

• unshETH launched Liquid Blast ETH (blETH).

• ZKP2P launches an alpha version on Base L2.

• Dyson full version goes live and launches the DYSN token.

QUICK BITES

• Chainlink upgrades staking mechanism.

• Genesis-DCG propose to settle lawsuit.

• dYdX Chain starts paying trading rewards.

• Solana LST Jito launches a governance token.

• CZ steps down as Binance.US board chairman.

• Coinbase dominates a key Bitcoin ETF service.

• UK Regulator welcomes fund tokenization plan.

• SEC asks the public for feedback on spot bitcoin ETFs.

• Binance Founder CZ stuck in the US for the moment.

• Arthur Hayes calls US treatment of Binance, CZ 'absurd'.

• Brian Armstrong comments on the Binance settlement.

• KyberSwap hacker promises to outline a potential treaty.

• Standard Chartered offers exchange services for Digital Yuan.

NOTEWORTHY READS & MEME

• Vitalik’s read on techno-optimism.

• @0x_emperor’s read on off-chain compute.

• Arthur Hayes’ read on the Binance & CZ situation.

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Disclaimer: All the information presented in this publication and its affiliates is strictly for educational purposes only. It should not be construed or taken as financial, legal, investment, or any other form of advice.