Appold Market Watch - Week ending 2 August 2024

Market Update & Industry News - Week ending 2 August 2024

🔷 The European Securities and Markets Authority (ESMA) released an opinion report to aid firms dealing with overseas firms in preventing violations of the Markets in Crypto Assets (MiCA) rules and preventing non-authorised firms from finding loopholes.

Appold view: This report specifically targets firms that operate across borders and is a further step in preventing non-authorised firms from exploiting regulatory loopholes. We will review and comment on this document. 

🔷 A pro-digital assets US Senator introduced legislation for a new Bitcoin Strategic Reserve that would direct the US Government to start a reserve Bitcoin fund. The reserve fund would be held through a series of decentralised Bitcoin vaults under the control of the US Treasury. The bill also stated that it intends to acquire 1 million Bitcoins over a period to acquire 5% of the Bitcoin supply.  

Appold view: This move will certainly increase the legitimacy of the asset and could significantly impact its price due to stronger demand and less market volatility. Asset diversification of treasury reserves would not be a bad strategy.

🔷 The Law Commission of England and Wales released a supplemental report and draft bill proposing a new property category for digital assets. The independent commission urged that digital assets fall under tangible and intangible property and suggested that digital assets fall under a new category to help create a new robust legal framework.

Appold view: This proposal acknowledges that digital assets do not neatly fit into traditional tangible (physical) and non-tangible (IP rights) asset categories. It should allow the creation of a legal framework to govern the ownership, transfer, and protection of these assets better.

🔷 The U.S. Securities and Exchange Commission retracted its request for a court ruling to classify tokens such as Solana, Cardano, Polygon, and others as securities in its lawsuit against global digital assets exchange, Binance. In the lawsuit against Binance, the SEC claimed that over 60 of Binance’s tokens were securities and should have been regulated accordingly.

Appold view: While the retraction may alleviate short-term concerns, it also highlights the ongoing lack of regulatory clarity in the US regarding digital assets. As for Binance, this probably won’t change much regarding the ongoing legal and operational challenges.

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