First Mover Americas: JPMorgan Goes Live With First Blockchain-Based Collateral Settlement

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JPMorgan has carried out its first live blockchain-based collateral settlement transaction involving BlackRock and Barclays, the U.S. banking giant said on Wednesday. JPMorgan’s Ethereum-based Onyx blockchain and the bank’s Tokenized Collateral Network (TCN) was used by BlackRock to tokenize shares in one of its money market funds. The tokens were then transferred to Barclays Plc for collateral in an OTC (over-the-counter) derivatives trade. The tokenization of traditional financial assets is a big deal for banks, and it’s an area JPMorgan has been leading the charge with, now joined by the likes of Citi and others.

Coinbase’s legal fight over the status of crypto met a new hurdle Tuesday, as U.S. state authorities and legal experts joined a campaign by federal securities regulators to argue the company unlawfully operated an unregistered exchange. The Securities and Exchange Commission’s action against one of the country’s biggest crypto exchanges has been seen as existential for the future of crypto, with the sector accusing the agency of regulating by enforcement in the absence of new laws from the U.S. Congress. Now, three new amicus briefs, which allow parties who are interested but not directly affected by the case to aid the court’s reasoning, argue crypto is neither significant nor special, and that the SEC can take on digital assets under existing law.

Caroline Ellison, former CEO of Alameda Research, testified that she committed fraud at the direction of her ex-boyfriend and former colleague, FTX exchange founder Sam Bankman-Fried. Ellison, 28, is the government’s highly anticipated star witness in the six-week trial of Bankman-Fried. She was the CEO of Alameda Research, the hedge fund prosecutors say stole billions of dollars from customers of its sister company, the cryptocurrency exchange FTX. (Read the government’s indictment here.) Prosecutors began their questioning of Ellison by asking her if she committed crimes and if so, who she committed them with.

Chart of The Day

• The chart shows monthly changes in the number of active developers in crypto since 2016.
• The tally has declined to 19,630, its lowest level since late 2020.
• Per Reflexivity Research, the decline represents an exodus of "tourists" during the bear market as "hard-core believers/builders/investors" prevail.
• Source: Electric Capital, a16z

- Omkar Godbole

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