The Intersection: Crypto and Wall Street This Week
As bitcoin, ethereum and other cryptocurrencies get increasing attention from investors, Wall Street and its traditional banks continue to adjust to the shift. Catch up on this week's top stories highlighting the intersection of these old guard and new school areas of finance with this recap compiled by The Fly: 1. BITMAIN CEO CONSIDERS IPO: Bitmain Technologies CEO Jihan Wu is pursuing an expansion beyond the crypto market that could eventually lead to an initial public offering, Bloomberg reported Thursday. Wu told Bloomberg that the company booked $2.5B of revenue last year, that he and co-founder Micree Zhan together own a roughly 60% of Bitmain and that he has a smaller holding than Zhan. He added that while he has no specific plans, he's open to a listing in Hong Kong or in an overseas market with U.S.-dollar denominated shares as it would give investors like Sequoia Capital and IDG Capital the chance to cash out. 2. SEC NAMES DIGITAL ASSETS ADVISOR, SAYS CRYPTOCURRENCIES ARE NOT SECURITIES: On Tuesday, the SEC named Valerie Szczepanik associate director of the division of corporation finance and senior advisor for digital assets and innovation for division director Bill Hinman. In this newly-created advisory position, Szczepanik will coordinate efforts across all SEC divisions and offices regarding the application of U.S. securities laws to emerging digital asset technologies and innovations, including initial coin offerings and cryptocurrencies. In a CNBC interview, SEC chairman Jay Clayton said the agency will not be changing the rules for cryptocurrency when it comes to defining securities. He added that the agency is also not adjusting rules for ICOs saying, "If you have an ICO or a stock, and you want to sell it in a private placement, follow the private placement rules. If you want to do any IPO with a token, come see us." Clayton also reiterated that all ICOs constitute securities and that "if it's a security, we're regulating it." 3. COINBASE 'ON TRACK' FOR BROKER-DEALER OPERATIONS, ACQUIRES COMPANIES: In a blog post, Coinbase said it is on track to operate a regulated broker-dealer, pending approval by federal authorities. If approved, Coinbase will soon be capable of offering blockchain-based securities, under the oversight of the SEC and FINRA. Coinbase, which also announced that it acquired Keystone Capital, Venovate Marketplace and Digital Wealth, said securing these licenses will "bring us a step closer to our goal, which is to be the most trusted way for our customers to buy, sell, and use many different types of crypto assets." 4. SEVEN STARS FORMS JV WITH C4DR: Seven Stars Cloud (SSC) announced a joint venture with The Centre for Digital Revolution, or C4DR, to "establish and develop the premier global standards of issuance, sales and distribution of digital assets, with operations out of the UK and mainland Europe." 5. DPW REDUCES DEBT WITH BITCOIN: DPW Holdings (DPW) announced that it has used Bitcoin to reduce the company's debt. DPW incurred new debt recently to support the purchase of Enertec Systems 2001 by another of its subsidiaries Coolisys Technologies. DPW has made a payment of $500,000 towards this new debt thus leveraging the mined Bitcoin through a non-dilutive transaction to shareholders. CRYPTO STOCK PLAYS: Cryptocurrency revenues have been pointed to as reasons to be bullish on Advanced Micro Devices (AMD) and Nvidia (NVDA) in select research. Overstock (OSTK), DPW Holdings, Kodak (KODK), Seven Stars Cloud, Riot Blockchain (RIOT), Pareteum (TEUM) and Social Reality (SRAX) are other stocks that have been touted, or promoted themselves, as a way to play the crypto theme. PRICE ACTION: As of time of writing, bitcoin rose about 2.2% this week to $7,582 in U.S. dollars, according to CoinDesk. WANT BITCOIN NEWS ALERTS?: To receive alerts on stories relating to bitcoin and other cryptocurrencies, Fly subscribers can enter "Bitcoin" into the "Add symbols" box of their portfolios.