Bybit Leans on Innovative Tech by Launching AI-Powered Trading Assistant

Matrixport, a Singapore-headquartered digital assets financial services firm, announced the acquisition of Switzerland-based Crypto Finance Asset Management (CFAM), a regulated crypto fund management firm. The acquisition, completed by way of an all-cash deal, signifies Matrixport’s expansion into the European market. The company announced the deal via a blog post published on the Matrixport website on Sept. 30. Photo by Lin Mei on UnsplashCFAM rebrandAs part of the acquisition, CFAM will be rebranded to Matrixport Asset Management AG (MAM), providing institutional-grade crypto investment solutions, while continuing to act as a crypto market infrastructure provider.  CFAM CEO Stijn Vander Straeten stated that the company’s strategy focused on “trading, custody and staking as well as other post-trade services.” He added, “This move allows us to put all our focus on expanding our core services within the digital asset ecosystem in Switzerland, Germany and across the European markets.” CFAM had formed part of the Crypto Finance Group, an entity part-owned by the Deutsche Börse Group. Regulatory complaint acquisitionIn its press release, Matrixport outlined that the acquisition has been completed with regulatory approval having been granted by the Swiss Financial Market Supervisory Authority (FINMA), the Swiss independent financial markets regulator, which supervises banks, insurance companies and financial institutions in Switzerland. CFAM became the first FINMA-approved manager of a crypto fund in Switzerland. Commenting on the acquisition, Matrixport Co-Founder and CEO John Ge, stated: “We are delighted with the establishment of MAM and warmly welcome the team to the Matrixport family. The acquisition enables clients access to the most innovative, compliant crypto asset management products, and aligns with our strategy to further expand services in Europe.” Personnel changesA number of personnel changes have been made as part of the acquisition. Stefan Schwitter has been appointed as CEO of MAM. Schwitter previously held the role of head of asset management at CFAM. The executive claimed that the complementary strengths of Matrixport and CFAM “will add value to the existing and future client base of Matrixport Group on a global level.” Matrixport was established in 2019 and currently holds over $6 billion in assets under management (AUM). Its founders include Jihan Wu, the co-founder of Chinese crypto miner manufacturer Bitmain and Singapore-based crypto cloud mining company Bitdeer. The firm is licensed as a money services business (MSB) in the United States, while also being licensed to trade in Hong Kong as a trust or company service provider (TCSP) and as a money lender. Matrixport offers its accredited investor and institutional clients over-the-counter (OTC) services, prime brokerage services, digital asset custody through qualified custodian Cactus Custody, asset management and access to real-world asset (RWA) tokenization. In September, the company offered tokenized RWA access in the form of XAUm, a gold-backed token, via its subsidiary company, Matrixdock. It emerged earlier this year that Matrixport had been listed on the Global Unicorn Index, a list of companies compiled by the Huron Research Institute, believed to have a valuation in excess of $1 billion while not yet listed on a public exchange.

HashKey Report Outlines Risks of Liquid StakingLiquid staking derivatives (LSD) are not without their potential pitfalls according to a report published by Hong Kong’s HashKey Capital.Photo by Shubham Dhage on UnsplashLiquid staking exceeds $22 billionThe report, which was published by the digital asset manager and finance house in July, emphasizes the pressing need for enhanced decentralization to counteract the risks associated with this growing trend of liquid staking.The figures themselves are impressive. This year, the total value locked in the liquid staking derivatives market has surged past the $22 billion mark. Correspondingly, the market capitalization of LSD projects has skyrocketed to $18 billion, indicating a substantial influx of interest and investment.However, the growth that these protocols are witnessing also presents a dual-edged conundrum for the Ethereum ecosystem. HashKey Capital’s report underscores that despite the advantages these protocols might offer their respective communities and token-holders, they could potentially destabilize the Ethereum ecosystem in multifaceted ways.Centralization riskAs evident in HashKey Capital’s overview, several LSD protocols heavily rely on a limited number of node operators, effectively centralizing a significant portion of validator nodes. This centralization trend, as highlighted by the report, is a cause for concern. The concentration of node operators raises red flags, as it contradicts the fundamental tenets of decentralization that underpin blockchain technology.The report articulates the adverse effects of centralization in the realm of liquid staking. It points to the dangers of reduced competition and a heightened risk of censorship.The report raises an important caution: “There is a heightened possibility of censorship with centralized staking players, as they may be subject to incentives or regulatory pressure to censor transactions. This can potentially result in a disruption of the trust within the network.”Security threatsCentralization also ushers in security threats. The dominance of major staking players makes the Ethereum ecosystem more susceptible to 51% attacks. Furthermore, the potential for collusion among centralized stakers looms large, leading to actions that counteract the very essence of decentralization, such as front running and malicious maximal extractable value (MEV) susceptibility.However, amidst these centralization risks, HashKey Capital acknowledges that most protocols are in their nascent stages. Many of them have devised strategies to incorporate distributed validator technology into their protocols, a proactive step towards fostering greater decentralization and resilience.HashKey Exchange awarded retail services licenseIn an unrelated development, HashKey Exchange received approval on Wednesday to upgrade type 1 and type 7 licenses, allowing it to cater to retail investors in Hong Kong. This accomplishment comes a mere two months after the city introduced its Virtual Asset Service Provider (VASP) licensing framework on June 1.In this evolving landscape, HashKey Capital and OSL were among the pioneer licensed exchanges under the city’s earlier voluntary program. Now, the new regulations stipulate that crypto trading platforms must obtain a license to serve retail investors, further solidifying Hong Kong’s commitment to cultivating a thriving crypto ecosystem.As the HashKey Capital report and recent developments in Hong Kong demonstrate, there’s a lot in play relative to both crypto regulation, protocol design and new product innovation. The challenges posed by centralization in liquid staking underscore the importance of vigilance and corrective action. Meanwhile, Hong Kong’s aspirations to become a crypto stronghold offer a beacon of hope in an ever-evolving regulatory landscape.

Zodia Custody to Commence Yield Offering on StablecoinsIn a play that’s designed to entice institutional investors, Zodia Custody, a portfolio company of Japanese financial services conglomerate SBI, is gearing up to offer a yield on digital assets.Photo by CoinWire Japan on UnsplashIntroducing “Zodia Custody Yield”The crypto startup has introduced “Zodia Custody Yield,” a crypto staking option designed to reward holders of crypto assets stored within its platform. The initiative has been launched in partnership with Singapore-based DeFi platform OpenEden. It promises returns on stablecoins although full details on the offering remain undisclosed.Jeremy Ng, Co-Founder of OpenEden, expressed his belief in the potential of cryptocurrencies to generate substantial passive income for their holders. Ng stated:“There are billions of dollars worth of stablecoins sitting on the sidelines when they could easily be generating yields for investors.”TradFi embracing digital assetsZodia’s move aligns with a growing trend in the financial industry. Yesterday, a leading US bank, Citi, disclosed its collaboration with Maersk to facilitate services that convert funds into digital assets. The primary goal is to enable the bank’s customers to execute nearly instantaneous payments, unrestricted by traditional business hours.Simultaneously, several prominent asset management firms are awaiting a pivotal decision from the Securities and Exchange Commission (SEC) regarding their applications to launch a spot Bitcoin exchange-traded fund (ETF). This list includes major players such as BlackRock, Invesco, WisdomTree, ARK Invest, Valkyrie, and Franklin Templeton. BlackRock, the frontrunner in the efforts being expended towards ETF approval, submitted its application for a spot Bitcoin ETF on June 16.In a recent interview, Bloomberg analyst Eric Balchunas said that he expects $150 billion in capital to flow into the Bitcoin market within two years of a spot Bitcoin ETF approval in the US.The financial strategies of these entities now prominently feature blockchain and crypto-based products, once considered niche but now integral to their operations. Nonetheless, even with widespread anticipation of the approval of BlackRock’s ETF, the firm faces substantial obstacles. US regulators have subjected BlackRock to intense scrutiny due to concerns regarding its ties to China. Additionally, political figures have criticized the asset manager for prioritizing environmental, social, and governance (ESG) criteria over investor returns.Zodia was spun out of British multinational banking firm Standard Chartered. The bank has a positive outlook relative to crypto. In a bold prediction made in June, the UK-based bank forecasted that the value of Bitcoin could potentially surge to $50,000 by the end of the year, with an even more optimistic projection of $120,000 for 2024.In 2021 Standard Chartered, in collaboration with Northern Trust, a leading asset servicing firm, founded Zodia Custody. Since its inception, the venture has garnered a respectable level of success. It successfully secured $36 million in investments and solidified a partnership with SBI Digital Asset Holdings, enabling its expansion into the Japanese market.In May, the firm launched its crypto custodian service in Dubai, having signed a memorandum of understanding (MOU) with the Dubai International Financial Center (DIFC). In June, Zodia partnered with blockchain infrastructure provider Blockdaemon, in an effort to further its crypto staking offering. Earlier this month, the company announced its arrival in Singapore, with a view towards expanding its digital asset custody service there.