July 4, 2018

Weekly Brief

The FBI's 130 open crypto investigations, Bank of England's crypto guidance, Coinbase Custody...

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Summary

The U.S. holiday week hasn't slowed the crypto markets, with several developments from top federal agencies and signs that institutional support is near its tipping point.

US exchange giant Coinbase announced a partnership with Electronic Transaction Clearing in a deal to bolster the firm's new institutional offering: Coinbase Custody. Across the pond, the Bank of England released a letter urging CEOs in financial service businesses to implement risk-management controls addressing cryptocurrencies.

After the results of a year-long undercover operation were unearthed last week, an FBI agent clarified that the Bureau still maintains more than 130 cryptocurrency-related cases. Meanwhile, the U.S. Securities and Exchange Commission (SEC) and U.S. Commodity Futures Trading Commission (CFTC) announced they signed a new Memorandum of Understanding (MOU), signaling that despite their contrasting views on cryptocurrencies, the commissions may be working closely in shaping U.S. crypto policy in the future.

Articles From the week

FBI Has 130 Cryptocurrency-Related Investigations 

Agent SaysIn an event last week, Federal Bureau of Investigation (FBI) special agent Kyle Armstrong posed that the agency currently maintains over 130 cases involving cryptocurrencies, with crimes including human trafficking, illicit drug sales, kidnapping and ransomware attacks. Following last week's disclosure of Operation Dark Gold - a year-long undercover mission which traced more than $20 million in drug-linked cryptocurrency transactions - Armstrong's statement serves as a clear reminder that cryptocrime remains a high-priority for top federal agencies.

Bank of England Issues Letter to Financial Services Providers About Cryptassets

The Bank of England's Deputy Governor circulated a letter last week which advises financial service company CEO's to implement proper compliance and risk management controls at their businesses with exposure to crypto. This guidance closely follows the Financial Conduct Authority's (FCA) recent issuance of a letter to U.K. banks regarding best practices for the service of crypto-assets. The U.K. has remained relatively soft-spoken on crypto regulation in comparison to its progressive European neighbors, like Switzerland. This guidance, though brief, is signal that more thorough British oversight is likely on the way. 

Coinbase Custody is Officially Open For Business

This week, Coinbase announced its partnership with SEC-registered broker-dealer Electronic Transaction Clearing (ETC), allowing the launch of their new institutional product, Coinbase Custody. The new solution will allow institutional clients in the U.S. and Europe to safely and legally store cryptoassets using Coinbase's preexisting cold-storage and ETC's license. The development is likely to free up sums of institutional money eager to enter the space but held by firms previously unable to surmount the challenges of holding their own cryptoassets.  

What we've been listening to

Unchained Podcast: Chris Dixon

Chris Dixon, partner at Andreessen Horowitz, talks about the new $300 million crypto fund he is leading with Kathryn Haun, the new general partner of Andreessen, and how a16z came to hire its first female GP.

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