Crypto Three Things (1/13)

Friday, Jan 13th 2023

Commentary

 "There is no such uncertainty as a sure thing." - Robert Burns


1) Samsung Fund to Bet on More Crypto: Samsung Asset Management is keen to launch a spot Bitcoin exchange-traded fund in Hong Kong if the financial hub greenlights such products. The announcement, reported by Bloomberg, comes just as the South Korean asset manager unveiled its futures-based Bitcoin ETF, also in Hong Kong. Samsung Asset Management, a member of the Samsung Group, is South Korea’s largest fund manager with roughly $260B in assets by December 2021.

Titan’s Takeaway: From what we’ve seen recently, Hong Kong’s administration is embracing the idea of becoming Asia’s crypto gateway. It wouldn’t be much of a surprise, then, to see the city give the go-ahead for investing directly in BTC tokens via a spot Bitcoin ETF.

2) Nexo Under Fire for Fraud:
The London-based cryptocurrency lender had its Bulgarian office raided by local authorities on suspicions of money laundering, tax crimes, terrorist financing, and other offenses. More than 300 police officers and prosecutors are taking part in the operation with 15 addresses searched so far. The probe comes three months after U.S. regulators sued Nexo, forcing the lender to phase out its products in the U.S. market.

Titan’s Takeaway: Global authorities are rightfully stepping up their scrutiny of crypto-native firms, especially lenders that offer appealing but unrealistic returns. At its peak a year ago, Nexo managed $12B in assets and offered a 36% annual interest rate. The high rate is what played a key role in tripping up all the other bankrupt lenders like Celsius, Voyager, and BlockFi. As the last major lender standing, could Nexo instill confidence in users even during an ongoing investigation? Or was Vauld right to back off from a deal with Nexo?

3) Crypto.com Accelerates Job Cuts:
Digital-asset exchange Crypto.com is the latest firm to add to the wave of industry-wide cutbacks. The Singapore-based company announced it is laying off 20% of its global workforce in another bid to rein in expenses amid unfavorable market conditions and weakened trading activity. The firm’s CEO, Kris Marszalek, said the headcount reduction was needed to focus on “prudent financial management” and “to position the company for long-term success.”

Titan’s Takeaway: Being one of the most-recognizable brands in the crypto space comes with a price. And Crypto.com is happy to pay it – the company spends lavishly on advertising and pours billions of dollars into sport sponsorships like Formula 1 and World Cup Qatar 2022. Flaunting publicity stunts could be a much bigger cash-burn than keeping people employed. But again, every company has its policies.

Main contributor: Rosen Traykov


We are changing some things up. Starting next week, our Crypto newsletter will be delivered on a weekly basis, rather than daily, to provide you with deeper analysis of the biggest news in crypto. 

As of this writing, BTC was a portfolio holding of Titan. This security may cease to be a portfolio holding at some point in the future.

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