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Anchorage Becomes First OCC-Approved National Crypto Bank

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Crypto custodian Anchorage has secured conditional approval for a national trust charter from the U.S. Office of the Comptroller of the Currency (OCC), making it the first national “digital asset bank” in the U.S.

The safekeeping, management and trading of digital assets have been regulatory stumbling blocks for large financial institutions – but those obstacles are gradually being removed. The OCC, a part of the Treasury Department charged with keeping banks safe but also competitive, has now issued three interpretative letters that lay the groundwork for banks to custody crypto, participate in blockchain networks and become payment providers using the tech.

“In granting this charter, the OCC applied the same rigorous review and standards applied to all charter applications,” the bank regulator said in a statement. “By bringing this applicant into the federal banking system, the bank and industry will benefit from the OCC’s extensive supervisory experience and expertise.”

“We are a national bank. The only difference is our business line, that we’re doing crypto assets versus doing other assets,” Anchorage President Diogo Mónica said in an interview. “The benefit of having a federally chartered bank is that it preempts all the state laws. The clarity of being regulated by the oldest regulator for banks in the United States … sends a very clear message.”

Acting OCC chief Brian Brooks, speaking at a public event earlier Wednesday, expressed his belief that banks and financial services more broadly will transition to being blockchain-based.

“I think what’s necessary is the creation of crypto banks that are able to hold stablecoins that reflect value of a fiat currency, but that doesn’t change the native asset, and you need to have real cryptocurrencies over here where they interact directly with each other, with no need to ever off-ramp,” Brooks said. “Fiat will ultimately be a legacy thing of the past.”

Application process

Anchorage’s trust company unit first applied for a national charter from the OCC last November, and it joins Kraken and Avanti in being crypto-native banks, although the latter two are special-purpose depository institutions organized under Wyoming state law. Fellow crypto startups BitPay and Paxos have also applied for federal charters through the OCC.

The new bank is being ushered in under the auspices of Acting Comptroller of the Currency Brian Brooks, who’s headed up the regulator since this past summer. It’s the capstone to a multi-month effort to bring the crypto industry closer to the traditional banking world.

“Blockchains, fundamentally, are banking because what they’re doing is allowing the transaction of value across networks,” Brooks said at Wednesday’s event. “They’re [just] doing it in an orthogonally different way.”

During his tenure, Brooks, the former general counsel of Coinbase, has expressed his view that crypto startups may be better regulated under a federal framework, rather than at the state level.

“We’ve had a dual banking system in this country for 150 years. There are many, many banks chartered by the states out there because it’s the right business model for what they’re focused on,” Brooks told CoinDesk in June. “If you’re focused on the local and regional business, it makes sense to have a state charter. If you’re focused on a national business, it probably makes more sense to have a national charter.”

Georgia Quinn, Anchorage’s general counsel, told CoinDesk the process of applying for a national charter was made easier by the fact that the startup was already operating as a registered trust company in South Dakota.

“We were already a state-chartered bank and so already had an operating history and a lot of the relevant procedures and policies in place so it wasn’t a de novo application, it was just the conversion of a state trust into a national trust,” she said. “I really can’t stress enough the advantage we had from already operating as a trust company.”

Benefits

Granting crypto companies a bank charter has been a stated goal for Brooks since May, when the then–First Deputy Comptroller told an audience at CoinDesk’s Consensus: Distributed that in his view, “it looks a lot like crypto is banking for the 21st century.”

The advantages are clear: rather than require companies to apply for 49 state money transmitter licenses piecemeal, a national charter will allow businesses to operate throughout the country at once. 

It also lets Anchorage develop new services, Mónica and co-founder Nathan McCauley told CoinDesk.

“It means that there’s a crypto-native company that offers crypto services like lending, staking and now it’s allowed to actually be connected directly to the core of the financial system,” Mónica said. “We can go out and do all sorts of businesses, wrapped assets that financial institutions can do today, but backed by crypto assets.”

Anchorage stated in a blog post accompanying the announcement that its new federally chartered bank “unequivocally will meet the definition of Qualified Custodian.”

Qualified custodians are legal entities in the U.S. that maintain client funds and hold securities in specific, defined ways. Federal regulators like the Securities and Exchange Commission (SEC) can designate entities as qualified custodians, while state regulators cannot. 

Crypto companies have long had issues becoming qualified custodians, due to questions about how digital asset service providers can comply with aspects of the Securities Investor Protection Act of 1970 – specifically, how brokers can prove that no other entity has access to its own private keys. 

Mónica said any doubts around the management of cryptographic keys were now removed and this would pave the way for the largest, most risk-averse investors such as pension funds to enter the arena.

“Aside from crypto funds and hedge funds and VCs that are paid to take risk and to be on the bleeding edge, you have large institutions that are paid not to take risk,” Mónica said. “This means all of the doubts are now solved and in black and white.”

Kristin Smith, executive director of lobbying group the Blockchain Association, welcomed the news.

“Today’s announcement is a recognition that not only can banks engage with crypto, but that crypto companies can function as banks,” Smith said in a statement. “This is the most important step yet towards the full modernization of our financial services system.”

Out the door

The news comes as Brooks is rumored to be planning his departure from the federal regulator later this week. While Brooks has been nominated to serve a full term heading up the agency by President Donald Trump, it is expected that incoming President Joe Biden will pull the nomination.

There is already legislator pushback against many of the letters Brooks has overseen, with Rep. Maxine Waters (D-Calif.), the chair of the House Financial Services Committee, asking Biden to ensure his nominees revoke many Trump-era rules and regulations, including all of the OCC’s recent crypto guidance. 

A federal charter is one issue that would be more difficult for Brooks’ successor to overturn. 

It’s unclear who Biden will tap to lead the OCC. The President-elect has announced he will nominate former Federal Reserve Chair Janet Yellen to be Treasury Secretary. The Senate Finance Committee will hold a confirmation hearing for her on Jan. 19, a day before Biden is sworn in.

Yellen or Biden could designate an acting comptroller to lead the agency until someone is nominated to fill a full five-year term. Brooks was initially appointed to the OCC by current Treasury Secretary Steven Mnuchin.

Biden has reportedly nominated former Commodity Futures Trading Commission Chair Gary Gensler to lead the SEC, perhaps indicating that he may look for someone with less of a deregulatory focus. 

Disclosure

Source: https://www.coindesk.com/anchorage-becomes-first-occ-approved-national-crypto-bank

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Ethereum Price Moves up to $1,200 as Demand Threatens to Outstrip Supply on Exchanges

The price of Ethereum, the second-largest cryptocurrency by market capitalization, has moved back up to the $1,200 mark after falling below $1,000 earlier this week at a time in which outflows from cryptocurrency exchanges suggest demand could outstrip supply. According to Nuggets News’ Alex Saunders, data shows that exchange reserves have fallen by 3 million […]

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The price of Ethereum, the second-largest cryptocurrency by market capitalization, has moved back up to the $1,200 mark after falling below $1,000 earlier this week at a time in which outflows from cryptocurrency exchanges suggest demand could outstrip supply.

According to Nuggets News’ Alex Saunders, data shows that exchange reserves have fallen by 3 million ETH over the last two days, with 1 million ETH leaving crypto trading platforms on January 14, and 2 million leaving them the following day.

Saunders shared data from on-chain analytics firm CryptoQuant and pointed out that at this rate exchanges could soon run out of ETH.

Price predictions for ETH have been extremely bullish – with former Goldman Sachs executive and Real Vision CEO Raoul Pal saying he believes Ethereum could go to $20,000 this cycle based on Metcalfe’s law – and as such Saunders believes HODLers will not be selling their funds between $1,000 and $2,000 per ETH.

Some other data providers seemingly show that Ethereum reserves on cryptocurrency exchanges have dropped by 42.5% since mid-May. The analyst interprets the data as suggesting an incoming bull run to a new all-time high for ether, as “we all know what happened when demand outstripped supply of BTC.”

The price of bitcoin surged from about $12,000 to a new all-time high near $42,000 after reserves on exchanges dropped by about 4.5% and corporate adoption surged as MassMutual, MicroStrategy, Square and others bought BTC as a hedge against inflation and currency debasement.

Rafael Schultze-Kraft, CTO at data firm Glassnode, countered Saunders saying his data was “nonsense,” saying that a sudden drop of over 2 million ETH from a cryptocurrency exchange weren’t withdrawals, and that “exchange flows are completely within their normal range.”

It’s believed the 2 million ETH were moved to a new Bitfinex cold wallet for Ethereum that cryptoQuant did not account for. That, however, does not explain the 1 million ETH outflows seen the day before.

It’s worth noting that the decentralized finance (DeFi) space has been booming, and more Ethereum users could simply be withdrawing their funds to interact with these protocols on-chain.

Featured image via Unsplash.

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DOGE Breaks Out and Aims for Prices Above $0.01

This is a short/medium-term analysis. For a longer-term analysis, click here. Breakout and Retest DOGE has been decreasing alongside a descending resistance line since Jan. 2, when it reached a high of $0.014. After three unsuccessful attempts, it finally broke out on Jan. 14. However, DOGE has failed to increase significantly since the breakout, and … Continued

The post DOGE Breaks Out and Aims for Prices Above $0.01 appeared first on BeInCrypto.

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The Dogecoin (DOGE) price has broken out from a descending resistance line that had been in place since the beginning of Jan. DOGE should continue increasing towards $0.018 and possibly $0.021.

This is a short/medium-term analysis. For a longer-term analysis, click here.

Breakout and Retest

DOGE has been decreasing alongside a descending resistance line since Jan. 2, when it reached a high of $0.014. After three unsuccessful attempts, it finally broke out on Jan. 14.

However, DOGE has failed to increase significantly since the breakout, and is currently trading between support and resistance at $0.008 and $0.01, respectively.

The latter is the 0.5 Fib retracement level of the entire downward move and a horizontal resistance area, so a breakout above would confirm the bullish trend.

Technical indicators are bullish and support the possibility of a breakout.

Breakout
Chart By TradingView

The shorter-term two-hour chart further strengthens the possibility of a breakout.

DOGE has been following a short-term ascending support line since Jan. 11 and has flipped the $0.009 support level.

As long as DOGE is trading above these two levels, the short-term trend is bullish.

Short-Term
Chart By TradingView

Doge’s Wave Count

Cryptocurrency trader @DlinkBull outlined a DOGE chart showing a parallel channel. They suggest an increase toward $0.03.

As seen in the first section, DOGE has already broken out from the resistance line of this channel.

DOGE Breakout
Source: Twitter

DOGE seems to have begun a bullish impulse at the beginning of March (shown in white below), currently trading in wave 3.

The sub-wave count is given in orange, and DOGE is likely in the fifth and final sub-wave. A fall below the sub-wave 1 high at $0.0044 would invalidate this particular wave count.

Sub-wave 5 should end between $0.0181-$0.0184, a target found using an external retracement on sub-wave 4 and projecting the length of sub-waves 1-3 to the bottom of 4.

Afterwards, the entire impulse would likely complete at $0.021, the 4.61 Fib extension of wave 1.

DOGE Wave Count
Chart By TradingView

Conclusion

To conclude, DOGE’s rate of increase should accelerate once it moves above $0.01, with a possible target of $0.018.

For BeInCrypto’s latest Bitcoin (BTC) analysis, click here!

Disclaimer: Cryptocurrency trading carries a high level of risk and may not be suitable for all investors. The views expressed in this article do not reflect those of BeInCrypto.

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Valdrin is a cryptocurrency enthusiast and financial trader. After obtaining a masters degree in Financial Markets at the Barcelona Graduate School of Economics he began working at the Ministry of Economic Development in his native country of Kosovo.
In 2019, he decided to focus full-time on cryptocurrencies and trading.

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Source: https://beincrypto.com/doge-breaks-out-and-aims-for-prices-above-0-01/

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Tether (USDT) January 15th Deadline on iFinex Case: Everything You Need to Know

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Many in the cryptocurrency field have recently discussed the upcoming January 15th date as an important consideration for the ongoing case between the office of the New York Attorney General (NYAG) and iFinex, the parent company of Bitfinex and Tether.

With this in mind, below is a comprehensive summary of what happened and what to expect on this date.

The NYAG v. iFinex Case: What Happened?

Back in April 2019, the office of the New York Attorney General alleged that the popular cryptocurrency exchange Bitfinex lost $850 million and then used funds from its affiliated stablecoin operator Tether (the company that issues USDT) to cover the shortfall.

As CryptoPotato reported, later on, Tether issued a statement through a blog post which said that the allegations were written in “bad faith” and were also “riddled with false assertions.”

In May 2019, Judge Joel Cohen granted a partial stay on the NYAG office’s request for documents from the two companies until their hearing takes place on July 29th. During that hearing, the judge on the case, Joel Cohen, decided to extend the preliminary injunction as he was not ready to make a final decision on whether the case should go forward or be dismissed. Hence, he extended that injunction by 90 days.

In August, however, the NYAG presented new evidence on the case, alleging that apart from covering up the $850 million, Bitfinex and Tether had served New York customers for longer than they claimed. In part, the document stated:

The OAG has uncovered substantial ties between Respondents and New York concerning Respondents’ corporate operations; trading on the Bitfinex platform; the issuance, redemption, and trading of tethers; use of financial institutions to move money and process customer deposits and withdrawals; and representations to the market that might have been misleading.

Essentially, the NYAG also attacked Bitfinex’s LEO initial exchange offering, claiming that it “has every indicia of a securities issuance subject to the Martin Act, and there is reason to believe that the issuance is related to the matters under investigation,” meaning the alleged cover-up.

Additionally, the NYAG called iFinex’s motion to dismiss “an improper attempt to impede a lawful investigation.”

The Order to Turn in Documents

In September 2020, Judge Cohen ruled that Bitfinex and Tether must turn over documents detailing their financial relationship and history to the NYAG’s office. In addition to that, he also extended an injunction that barred Tether from loaning funds to Bitfinex by 90 more days.

However, on December 9th, 2020, Letitia James, the Attorney General, filed a document, asking Justice Cohen to extend the deadline to January 15th, 2021. James said that “the parties continue to cooperate on the production of documents in response to the 354 Order, and anticipate that the production could be finalized in the coming weeks.”

Why the January 15th Deadline is Important?

With this, we arrive at the time of this writing and the importance of the January 15th deadline. There are a few reasons for which this is a critical point in this case. First, it requires that iFinex produces the necessary information for the NYAG to continue its investigation and to further substantiate the merits of its claims.

And perhaps what’s even more important, however, is the nature of the documentation. In essence, iFinex has to produce materials on the process by which they determine whether, when, and how to issue and redeem tethers, banks, documents, and communications regarding specific issuances and redemptions, as well as trading activity on the Bitfinex trading platform regarding tethers and bitcoin.

This is a landmark case for the entire cryptocurrency space as USDT is the most popular and biggest stablecoin on the market. The company issuing it has been involved in many scandals in the past, with many questioning the fact that it’s actually backed by USD.

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Source: https://cryptopotato.com/tether-usdt-january-15th-deadline-on-ifinex-case-everything-you-need-to-know/

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