Market Update & Industry News - Week ending 3 November 2023

•  Former FTX CEO, Sam Bankman-Fried, was found guilty on all seven federal charges of fraud, conspiracy and money laundering. It took less than five hours of jury deliberation and he now faces up to 115 years in jail.

Appold View: This is a good verdict for the digital asset industry and sends a clear message that the US Courts can go after and successfully prosecute bad actors that defraud innocent people.

• The Monetary Authority of Singapore (MAS) announced an expanded partnership under its “Project Guardian” programme which is a collaborative initiative with the financial industry. The recent announcement added a partnership with the Financial Services of Japan (FSA), the UK's Financial Conduct Authority (FCA) and the Swiss Financial Market Supervisory Authority FINMA. To share knowledge and examine the benefits, regulatory challenges and commercial use cases of asset and fund tokenisation.

Appold View: Given the cross-border nature of digital assets, this closer regulatory collaboration is very encouraging and will hopefully be expanded to more regulators from other key jurisdictions.

• HSBC, one of the largest custodians of precious metals, launched a platform utilising distributed ledger technology (DLT) which creates digital tokens that represent gold bars. These tokens can then be traded through the bank’s single-dealer platform. 

Appold View: HSBC is an institutional powerhouse and its adoption, reputation and sizeable institutional client book of business should create a successful outcome. More importantly, the DLT process should ensure faster settlement, lower fees and more efficient asset tracing and ownership for their clients and the bullion industry as a whole. 

• The UK's Financial Conduct Authority, released a 30-page handbook on further guidance in regards to digital asset marketing rules.

Appold View: Clearer rules make better business. A sound attempt by the FCA to lay out further clarity to all firms selling their crypto-related products within the UK. Within the first two weeks of issuing the final guidance, the FCA sent 221 alerts and warnings about common issues observed in this marketing. 

• Global payment provider, PayPal, was issued a subpoena from the U.S. Securities and Exchange Commission Commission over its stablecoin, PYLUSD launched in August. The disclosure was made this week during their quarterly results reporting.

Appold View: It is difficult to give a view at this point as the details of the subpoena have not been released. However, it indicates that the regulator's intentions to keep pressure on the industry remain strong despite losing the Grayscale Investments court case.