What Did The SEC’s G. Gensler Say To The WaPo About Stablecoins And Evergrande?

The Chairman of the Securities Exchange Commission, Gary Gensler, showed his cards. He spoke with legacy-media-operation The Washington Post and host David Ignatius for their series “The Path Forward” and spilled the beans. We at NewsBTC saw the whole interview so you don’t have to. We selected the most crucial quotes, and present them in all their splendor for you all to read them and reach your own conclusions. 

Of course, we’re going to offer our two cents. We’re not made of steel. In general, though, you’ll get Gary Gensler’s unadulterated words. They’re shocking enough as it is.

Gary Gensler Is Looking Directly At Stablecoins

Even though host David Ignatius had no questions about stablecoins, the topic was on Gensler’s mind. The SEC’s Chair brought it up a couple of times. First, he said:

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“On something called stablecoins, and how the banking agencies–and we, too, market agencies–coordinate because these stablecoins may have attributes of investment contracts, have some attributes like banking products, but the banking authorities right now don’t have the full gamut of what they need.”

But his organization is not only thinking about stablecoins and trying to define them and isolate their attributes. They’re preparing a formal document:

“We’re working right now under the guidance of Secretary Yellen and working on a report around stablecoins, and in the world of stablecoins, I do think that there would be some help from Congress.” 

This doesn’t seem that bad. Their report could conclude that stablecoins are a useful innovation and tool that the whole financial system can benefit from, right? Wrong. This is what Gensler and the SEC think about stablecoins, and pay attention to the language:

“These stablecoins are acting almost like poker chips at the casino right now; so, add to the Wild West analogy. I mean, we’ve got a lot of casinos here in the Wild West and the poker chip is these stablecoins, you know, at the casino gaming tables.”

Things are about to get interesting for stablecoins, it seems.

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USDT market capitalization - TradingView

USDT market capitalization - TradingView

USDT Market Cap by Cryptocap | Source: USDT on TradingView.com

Does The SEC Want Crypto Exchanges To Register?

Look, there are no two ways about this. Gary Gensler wants all exchanges, including decentralized ones, to register with the Securities Exchange Commission. To convince them, he asks for the exchanges to come to him:

“I think it would be better–the platforms that are trading securities, the platforms that have lending products, who have what’s called “staking products,” and I’m glad to describe that for your listeners, but where you actually put a coin at the platform and you earn a return–that they come in and we sort through, figure out how best to get them within the perimeter.”

And, you might ask, what perimeter is that? Well, this quote makes it very clear:

“I think at $2 trillion, 5- or 6,000 projects, that it would be better to be inside investor-consumer protection, inside the tax compliance and anti-money laundering and financial stability.”

This goes in line with recent declarations from Gensler about the need for crypto regulation:

“Gensler believes that if the market is to grow, then it needs to embrace regulation. The SEC chairman explained that regulation would provide trust in the market, which is important if the market does not want to become irrelevant over time. “Finance is about trust, ultimately,” Gensler said. Gensler’s focus is mostly on trading platforms, given that this is where the majority (~95%) of activities in the crypto market are carried out.”

Is Gary Gensler Even a Cryptocurrency Enthusiast?

Since the new Head of the SEC once taught a class on Cryptocurrencies at MIT, people assumed he would be a pro-crypto legislator. Is he, though? Let’s read what he said about the subject specifically:

“I do think this new technology is a very interesting–and whomever she was, Satoshi Nakamoto, it’s led to change. It’s pushing at the side of central banks around the globe to reconsider how to provide payment systems. It’s pushing on the side as a catalyst for change in finance, so-called “fintech,” the intersection of new technologies and finance.”

So, a non-comital opinion. However, Gensler feels strongly about bringing cryptocurrencies into a public policy framework. So strongly, that he said, “I don’t think technologies long last outside of a social and public policy framework.” And then, “I think it’s better to bring it inside the public policy framework and ensure that we address these important public policy goals.” And later on one more time, “So, new technology is generally a good thing; it challenges the establishment. But I don’t think that new technologies really long exist outside of public policy frameworks.

Does Any Of This Have To Do With Evergrande?

Days after our report about the situation, Evergrande became one of the biggest stories of the year. We explained that the company reportedly owes $300B, and the most likely cause for all that:

“Apparently, China Evergrande was caught in a loop. The company was pre-selling apartments and using that money to fund other projects, in which they also pre-sold the apartments and the cycle started again. Evergrande bonds are suspended, and there’s a chance they won’t be active ever again. They might be worthless. The stock is near its all-time low, it has lost nearly 80% of its value this year.”

Of course, The Washington Post’s Mr. Ignatius had to bring the subject up. He said that analysts are worried that there could be “contagion in financial markets, like what we remember from 2008 and the failure of Lehman Brothers.” Then, he asked: “Are you confident that our financial markets today are protected in the event that there was such a failure, not necessarily over this company but any large company with that level of debt?” 

Gensler refused to comment on a Chinese company, that’s out of his jurisdiction. To the question, he answered:

“I do think the reforms after the 2008 crisis stood up a much stronger U.S. financial system. It doesn’t mean that there aren’t issues that we look at, at the SEC and other important regulators like the Federal Reserve and the bank regulators and CFTC, that I once was honored to chair. But I do think that we’re in better position in 2021 to absorb some of those shocks than we were prior to the ’08 crisis, but it doesn’t mean we’re isolated. Our economies are connected around the globe.”

Featured Image: Screenshoot from the interview | Charts by TradingView


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Exchange Tokens Hit New All-time Highs as Stock Traders Rush to Crypto

Some retail equities traders, frustrated with recent restrictions on stock buying on trading platforms including Robinhood, are turning their attention to centralized and decentralized cryptocurrency exchanges (CEX and DEX, respectively), according to new data. That’s helping to drive several of these exchanges’ tokens to new highs.

Last week GameStop (GME) and and other stocks involved in a battle between a short-selling hedge fund and a Reddit group captured the imagination of the general public, a battle that drove these stocks’ prices higher and squeezed the short seller.

Now, some of that buying excitement has spilled over to crypto where CEX and DEX trading volumes have risen over the past week, according to several crypto trading data sites.

Read More: After GME, Dogecoin and Bitcoin, Chinese Traders Are Betting What Will Pump Next

CEX volumes rise, taking tokens with them

Trading volumes for bitcoin futures on Binance and FTX surged over the weekend, according to data site Skew.

Source: Skew

Binance’s BNB token hit a new all-time high at $50.27 during early U.S. trading hours on Monday, while FTX’s FTT token logged a record price of $12.95 on Friday, according to data from Messari.

“ATH [all-time highs] on a few different matrices” [for BNB], Changpeng Zhao, chief executive of Binance, tweeted earlier Monday.

Through a spokesperson, Zhao told CoinDesk that Binance’s utility token’s price rally is driven by its multiple use cases.

“[BNB’s] use cases have expanded to hundreds of applications on numerous platforms and projects within the crypto ecosystem [and] these are reflected in its growing price,” said the spokesperson, quoting Zhao. “…To become a true mass-adopted application, BNB must be able to facilitate billions of transactions per day. In its current form, we still have a long way to go.”

The traffic spike last weekend pushing BNB and FTT to the record highs likely resulted from increased trading traffic by retail traders coming from the traditional stock market, according John Todaro, director of institutional research at TradeBlock. (Cryptocurrency analytics firm TradeBlock is a subsidiary of CoinDesk.)

“The recent retail trading saga has shown that trading platforms, brokerages and even exchanges can shut down aspects of the trade process without much notice,” Todaro said. “This pushed some retail traders into cryptocurrency markets, as we saw with dogecoin, xrp, and stellar lumens catching a bid on the week.”

Read More: Crypto Long & Short: GameStop, Dogecoin and a New Market Paradigm

In an effort to capitalize on the retail trading frenzy caused by the GameStop stock drama, FTX last week listed a WallStreetBets (WSB) index quarterly futures contract, named for the Reddit group involved with the GameStop drama. The basket of stocks in the contract include GameStop plus Nokia (NOK), BlackBerry (BB), AMC Entertainment (AMC) plus the iShares Silver Trust (SLV) because of recent interest in silver.

Read More: FTX Exchange Lists WallStreetBets Futures to Capitalize on Investing Movement

“FTX lists tokenized equities, so investors could also be anticipating that Robinhood users and others may switch over to FTX to continue investing in stocks without the limits that various traditional brokerages have applied on their retail users,” Todaro added.

As of press time, FTX did not respond to CoinDesk’s requests for comment.

UniSwap and SushiSwap lead way for DEXs

Activity in decentralized finance (DeFi) is on the upswing. Total January trading volume on DEXs soared to an all-time high above $50 billion. On a seven-day basis, UniSwap and SushiSwap, the two leading DEXs, took 48.8% and 23.3%, respectively, of all DEX trading volumes, according to Dune Analytics’ DEX metrics tracker.

Read More: Decentralized Exchange Volumes Hit Record Above $50B in January

Monthly trading volumes on Uniswap and Sushiswap since September 2020.

Source: Dune Analytics

“Overall, the [crypto] market has had a lot of volume increased, both on CEX and DeFi,” Peter Chan, lead quant trader at Hong Kong-based OneBit Quant, told CoinDesk. He credits growing trade volume on SushiSwap for its SUSHI token’s price surge.

At the same time, Uniswap (UNI) and SushiSwap tokens exceeded their previous high prices, on Jan 31. and Feb. 1, respectively, according to data from Messari’s decentralized finance tracker.

Retail traders appear to be driving at least part of the price movement. The number of Google searches for “Uniswap,” the biggest decentralized exchange by market cap, is almost as high as during last year’s “DeFi summer” boom. That is an indicator of retail demand for DEXs, according to TradeBlock’s weekly newsletter of Feb. 1. It also reflects some retail traders’ growing concerns regarding centralized trading platforms, with more people wanting to learn about decentralized exchanges such as Uniswap.

Uniswap Google search interest over time.

Source: TradeBlock

“Within DeFi, arguably the most ostensible applications in the sector are the DEXs [such as] Uniswap and SushiSwap,” Todaro said. “As the sector heats up, UNI and SUSHI have been the primary benefactors as they are the most visible.”



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The Age of Uniswap: DEX Volume Grows 1100x Year-Over-Year

The greater DeFi category has given birth to a variety of cryptocurrency market winners over the last year or so, but few have become as dominant as Uniswap.

Not only has the related UNI token performed incredibly well itself, Uniswap’s dominance has resulted in DEX volume growing more than 1,000 times from this point last year until now. What’s behind this explosive trend, and when – if ever – will it come to an end?

DEX Trading Volume Grows More Than 1000x In The Last Year

The “DeFi summer” of 2020 put the category on the map, and gave birth to the next wave of altcoin all-stars. During the tail end of the ultra-hot trend, Uniswap debuted its UNI token, which has since risen 700% from its November low.

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Related Reading | Millions Learn About DeFi From Wheel Of Fortune Contestant

Demand for the token is soaring, signaling that there’s magic happening on the platform itself, and investors know it.

Uniswap dominates all other DEX platforms, driving the 1100% increase | Source: Dune Analytics

Uniswap has not only experienced rising trading volume as a result, total decentralized exchange (DEX) volumes have grown by over 1,100x from one year ago from $39.5 million, to $43.5 billion, according to the most recent monthly report from Arcane Research.

All major platforms ballooned from rising crypto market interest, but few have dominated like Uniswap has. Of January’s decentralized exchange volume breakdown, Uniswap represents 46% of the total volume, or nearly $20 billion.

The platform represents nearly half of all DEX volume | Source: Arcane Research

Decentralized exchanges such as Uniswap, allow investors to quickly and easily swap one token for another, all through a privately-owned Ethereum wallet.

The Rise And Dominance Of DeFi Platform Uniswap

Exchanges of this nature have existed for some time, but Uniswap’s unique take, Unicorn logo, and vibrant colors provided the allure that attracted investors to begin actually using them.

The brand power of Uniswap and the fact that it is thriving as a platform has put its native UNI token in similar demand. The buying frenzy has taken the token to as high as $13, up from under $1 per token.

uniswap uni defi

uniswap uni defi

Uniswap is up over 700% from the November low | Source: UNIUSDT on TradingView.com

A large portion of UNI tokens were initially given away for free. At the time, worth roughly $3 per token, the 400 free UNI were essentially the cryptocurrency market’s form of a stimulus check.

Related Reading | Altcoin Expert: Buy Crypto That Holds Up During Bitcoin Breakdown

What it stimulated, however, was the platform and token’s longevity, and cemented it as a major contender in the DeFi space. Decentralized exchange volume’s 1,100x year-over-year growth is proof of its impact, and it only just the beginning for the young, budding brand.

Featured image from Deposit Photos, Charts from TradingView.com


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DeFi Christmas: DEX Aggregator 1inch Launches Governance Token to Take On Uniswap

Decentralized exchange (DEX) aggregator 1inch has issued its own governance token. 

Users of 1inch and the Mooniswap DEX, founded by the same execs, will get rewarded with a Christmas gift of sorts and have a say on matters like fees, referral rewards and other governance issues.

The token, named 1INCH and running on the Ethereum blockchain, will be distributed to all wallets that have previously interacted with 1inch (under certain trading conditions). The giveaway follows the approach taken by Uniswap, which made a surprise airdrop of UNI tokens to past users (worth well over $1,000 at the time) in September.

Again similar to Uniswap, 1inch is also announcing a liquidity mining program that will be launched Dec. 28 for 1INCH liquidity providers.

Mooniswap, in turn, has just been rebranded as 1inch Liquidity Protocol, so that the team has all its startups consolidated under one brand, 1inch spokesperson Sergey Maslennikov told CoinDesk. 

Just as Uniswap’s UNI airdrop boosted activity on that site, CEO Sergej Kunz said the new token will help speed up the growth of 1inch.

“With the right community incentives, we see a chance to get a critical mass of liquidity to beat Uniswap,” Kunz told CoinDesk through a spokesperson. 

Kunz estimates that around 50,000 wallets will get the 6% of 1INCH supply in the first round of distribution. The current supply of 1INCH is 1.5 billion tokens.

Among other things, 1INCH token holders will be able to vote on the settings of the so-called Spread Surplus pool, which accumulates the “leftovers” of swap transactions when the price of a swapped token changes during the time of transaction.

“Let’s say, a user swaps some ETH for DAI and sees the amount of DAI they should get. If while the transaction is processed the price changes and the user should get more DAI for their ETH, this is the spread surplus,” Maslennikov explained. 

These “leftovers” will get accumulated in a special pool, the proceeds from which will be swapped for 1INCH and either claimed by the governance participants or distributed to the referrers.

1inch was launched in 2019 at the ETHGlobal hackathon by Kuntz, a former software engineer at Porsche, and CTO Anton Bukov, a former smart-contract developer at NEAR Protocol. The project raised $14.8 million in two rounds from Binance Labs, Pantera and others earlier this year.



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