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. CITI WORKING ON ALTERNATIVE TOOL FOR CRYPTO TRADING: Citi (C) is working on a plan to offer "digital asset receipts," or DARs, which are designed to enable trading by proxy of cryptocurrencies like Bitcoin without direct ownership of the underlying assets, Business Insider reported Monday. The structure is designed to fall within current regulatory regime. 2. MORGAN STANLEY PLANS TO OFFER BITCOIN SWAP TRADING: Morgan Stanley (MS) is planning to deal in contracts that give investors synthetic exposure to the performance of bitcoin, Bloomberg reported Thursday. Investors will be able to go long or short using the price return swaps and the bank will charge a spread for each transaction. 3. SEC CHARGES DIGITAL FUND MANAGER: On Tuesday, the Securities and Exchange Commission announced its first-ever enforcement action finding an investment company registration violation by a hedge fund manager based on its investments in digital assets. The SEC entered an order finding that Crypto Asset Management offered a fund that operated as an unregistered investment company while falsely marketing it as the "first regulated crypto asset fund in the United States." According to the SEC's order, CAM and its sole principal Timothy Enneking raised over $3.6M over a four-month period in 2017 while falsely claiming that the fund was regulated by the SEC. After being contacted by the SEC, CAM ceased its public offering and offered buy backs to affected investors. 4. OVERSTOCK COMPANY LAUNCHES DIGITAL WALLET BETA: Medici Ventures, a subsidiary of Overstock.com (OSTK), announced Friday that its portfolio company Bitsy.com has commenced the limited beta launch of a digital wallet service. The initial beta release of the technology will support bitcoin purchases, with additional cryptocurrencies to follow. Medici Ventures plans to use the Bitsy service to offer bitcoin for sale on the Overstock website. 5. IDEANOMICS ANNOUNCES DEALS: On Tuesday, Ideanomics (SSC), formerly known as Seven Stars Cloud Group, announced a three-year, $6B deal with First Auto Loan and said financing activities will be completed through a hybrid of both traditional distribution channels and Velocity Ledger's blockchain-based offering. On Wednesday, the company announced a joint venture with Asia Times Holdings, a provider of online English language business and financial news on Asia, and a 10% ownership stake in the company. On Thursday, Ideanomics announced an agreement to acquire secure communications and information platform FinTalk and also announced a transaction with Liberty Biopharma in order to deliver asset digitization for green, clean tech, medical and healthcare industries. 6. RIOT BLOCKCHAIN NAMES NEW CEO: On Saturday, Riot Blockchain (RIOT) announced that Chief Operating Officer Chris Ensey would be named chief executive officer in connection with a restructuring of the company's senior executives. The move follows the resignation of John O'Rourke, chairman and CEO and comes after the SEC alleged that Barry Honig, a Florida investor who was once Riot's largest shareholder, engaged in "pump-and-dump" schemes that enriched defendants and "left retail investors holding virtually worthless shares." In addition, current lead director Remo Mancini was appointed as chairman. 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, DPW Holdings (DPW), Kodak (KODK), Ideanomics, Riot Blockchain, 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 1% this week to $6,441 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.