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Institutional Crypto Flows, El Salvador’s Tax-Free BTC Profit + More News

Source: AdobeStock / Ascannio

Get your daily, bite-sized digest of cryptoasset and blockchain-related news – investigating the stories flying under the radar of today’s crypto news.

Investments news

  • Digital asset investment products saw inflows totaling USD 57m last week, posting their 4th week of inflows, according to CoinShares data. Volumes in investment products have now risen 143% since their lows in early July to USD 3.8bn. This rise in volumes and inflows indicates investors are now beginning to be more active following the seasonal summer doldrums, per CoinShares.
MTD – month-to-date; YTD – year-to-date; AUM – assets under management. Source: CoinShares
  • Singapore-based bank DBS said it expects to double the number of members on its new crypto exchange to 1,000 by the end of December, with a projected future growth of 20% to 30% annually for the next three years, Channel News Asia reported, citing Eng-Kwok Seat Moey, head of capital markets at DBS.
  • London-based hedge fund Brevan Howard Asset Management has formed a new unit focused on digital assets, Bloomberg reported. The new unit is said to be an attempt by the macro-focused fund to expand its reach into the crypto market, with CEO Aron Landy being quoted as saying that the move “underscores the firm’s commitment to rapidly expanding its platform and offerings in cryptocurrencies and digital assets.”
  • Ark Investment Management, the fund led by the well-known technology investor and bitcoin bull Cathie Wood, has revised the prospectus for its Next Generation Internet ETF to allow the fund to invest in crypto-backed exchange-traded funds (ETFs) listed in Canada, per a filing with the US Securities and Exchange Commission (SEC). The move may mean that the fund will drop its position in the US-listed Grayscale Bitcoin Trust (GBTC), and instead take a position in a Canada-listed bitcoin-backed ETF that may trade at more favorable prices, as suggested by Bloomberg’s ETF analyst Eric Balchunas.
  • Digital asset exchange has announced the launch of Gate Venture, a USD 100m early-stage venture capital fund for crypto projects. The fund will focus on supporting “technical and financial infrastructure, ecosystems as well as applications.”
  • Crypto-focused lending and borrowing firm X-Margin announced it has raised USD 8m in a Series A funding round led by Coinbase Ventures, HashKey Capital, and Spartan Group, with several other prominent investors in the crypto space also participating, such as Bixin Ventures, Miranda Ventures (Bybit), Gemini, Primitive Ventures, and Kenetic Capital.
  • Pantera Capital’s new Pantera Blockchain Fund has raised USD 360m from 107 investors, filings with the US SEC show. However, the amount is still short of the USD 600m target indicated in the fund’s investor deck. The Pantera Blockchain Fund invests funds in both venture equity, as well as in early-stage illiquid tokens and liquid tokens.
  • Digital asset manager Monochrome has completed a USD 1.8m Series A funding round, bringing its total valuation to USD 15m. The newly injected cash will be spent to develop new investment products focused on bitcoin (BTC) and other digital assets, the company said. The round was reportedly led by Litecoin (LTC) creator Charlie Lee, Blockstream’s Chief Strategy Officer Samson Mow, former Binance Chief Financial Officer Wei Zhou, and Synthetix (SNX) founder Kain Warwick.
  • Interactive Brokers Group (IBKR), a global brokerage firm, said it has launched a crypto trading service via Paxos Trust Company. Through Paxos, IBKR clients will be able to trade cryptoassets alongside other asset classes available on the Interactive Brokers platform.
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Tax news

  • Foreign investors who take up residence in El Salvador will be exempt from taxes on (high) bitcoin profits, a government advisor has said, according to an AFP report. “This (is done) obviously to encourage foreign investment,” the government advisor said, adding that “there will be no taxes to pay on either the capital increase or the income.”
  • In India, the government is taking the opposite approach to El Salvador, as it seeks to step up taxation of the crypto sector. The Indian government is reportedly in favor of taxing crypto exchanges, and “feels that any activity that generates income must pay tax,” a Reuters report on Monday said, citing local media outlet ET NOW.

Exchanges news

  • Coinbase said it intends to offer USD 1.5bn aggregate principal amount of its Senior Notes due 2028 and 2031 in a private offering. The company intends to use the net proceeds from the offering for general corporate purposes, which may include continued investments in product development, as well as potential investments in or acquisitions of other companies, products, or technologies that Coinbase may identify in the future, they said.

Payments news

  • Bancoagrícola, the largest financial institution in El Salvador, announced that it has enabled bitcoin payments for consumers and merchants through a partnership with the digital payments network Flexa. Bancoagrícola is now “accepting bitcoin across its network for payments toward loans, credit cards, and merchant goods and services in compliance with the new “Bitcoin Law” effective September 7,” the announcement said.
  • The blockchain-based micropayment network pingNpayis is aiming to become operational in 2022, with a focus on small payments of less than USD 20 per transaction, according to a report from Transaction fees on the platform will reportedly make up less than 1%, and the network will use stablecoins in each country it operates that are “100 percent backed by liquid fiat assets.”
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NFTs news

  • A Degenerate Ape Academy non-fungible token (NFT) became the most expensive NFT sold on the Solana (SOL) blockchain. The NFT sold to the blockchain advisory and investment firm Moonrock Capital for SOL 5,980, worth around USD 1.1m at the time, the buyer announced on Twitter.

Regulatory news

  • US Government officials are discussing the possible launch of a formal review by the Financial Stability Oversight Council into whether stablecoins such as Tether (USDT) “threaten financial stability,” Bloomberg reported, citing three undisclosed people familiar with the matter.  Being labeled a “systemic threat” by the council will typically set off “tough rules and aggressive monitoring by regulators,” the report said.
  • The SEC announced today that it has charged two media companies with “conducting an illegal unregistered offering of a digital asset security” by selling tokens referred to as G-Coins or G-Dollars. New York City-based GTV Media Group Inc. and Saraca Media Group Inc., along with a third company charged with selling “unregistered common stock of GTV,” have agreed to pay more than USD 539m in a settlement.