Appold Market Watch - Week ending 11 October 2024

Market Update & Industry News - Week ending 11 October 2024

🔷 UK-regulated digital assets exchange Archax and EU-regulated digital securities distribution platform Assetera announced a strategic partnership to offer tokenised funds in the UK, EU, and EEA. The partnership is reported to bridge traditional finance and digital assets, starting with tokenised money-market funds from abrdn, which manages £506 billion in assets. 

Appold view: This is one of the first high-profile tokenised products from a major asset manager to launch in the UK and EU. The partnership has enabled Archax to leverage Assestera’s EU and EEA distribution channels to a wider investor base.  

🔷 Digital assets exchange, Crypto.com, filed a lawsuit against the U.S. Securities and Exchange Commission (SEC) following a legal notice from the regulator, which warned of potential enforcement action. The lawsuit comes amid increased scrutiny from the SEC on digital asset firms.  

Appold view: This is most likely a preemptive strike following the Well’s notice from the regulator. The lawsuit against the SEC reportedly accuses the regulator of overstepping its authority by classifying most crypto assets as securities without proper legal procedures. The exchange may be aiming to stop what it views as unlawful regulatory overreach.

🔷 Collapsed digital assets exchange, FTX, received court approval for its liquidation plan, which allows the company to sell and redistribute its remaining assets to repay creditors. The decision is part of FTX's bankruptcy proceedings following its collapse in 2022. 

Appold view: The positive news is that it is estimated that 98% of capital will be recouped for creditors. The negative side is that the payment will most likely be in cash, not digital assets, meaning that creditors missed out on any asset appreciation. Nonetheless, good news for creditors as well the advisors and administrators who probably took huge fees from such a lucrative asset pool.  

🔷 Piero Cipollone, a member of the European Central Bank (ECB) board, proposed creating a unified European ledger for digital assets using blockchain and other digital technologies to enhance the efficiency, transparency, and speed of financial transactions. Piero stated that the current banking system remains complex and costly.

Appold view: A promising proposal by ECB board member Piero Cipollone, but there are still many hurdles to clear, including regulatory harmonisation across the EU and technological compatibility. Nonetheless, it is a good start and a step in the right direction for innovation.

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