Weekly Update: 27th of March

Hodl Team
Hodl Team
27 March 2024
Welcome to our weekly update for March 27th, 2024, where we offer insights into the latest developments in the digital assets market.

What happened between the 20th and 27th of March?

  • During the week, news broke that the Securities and Exchange Commission (SEC) reportedly has started an investigation into the Ethereum Foundation to classify Ether as a security. Read more

  • On the 20th of March, BlackRock unveiled its first tokenized asset fund on a public blockchain network, on Ethereum, providing qualified investors with an opportunity to earn U.S. dollar yields with the transparency and benefits of blockchain technology. Read more

  • For the first time since its inception, the Bitcoin exchange-traded fund (ETF) market experienced five consecutive days of net outflows, caused by Grayscale’s ETF (GBTC). Read more

  • New EU Anti-Money laundering laws ban the provision of services for anonymous cryptocurrency accounts and don’t affect unhosted wallets. Read more

  • Cryptocurrency exchange KuCoin and two of its founders were criminally charged for violating the Bank Secrecy Act and for unlicensed money transmission offenses, the Hodl Funds don’t have any capital located on the exchange. Read more

Ethereum vs SEC

The Ethereum Foundation has hinted that it's being investigated by a state authority which is very likely the SEC. Throughout the week, various U.S.-based companies purportedly received subpoenas from the SEC, mandating the submission of documents and financial records concerning transactions with the Ethereum Foundation. According to sources familiar with the matter, the commission launched a campaign to classify ETH as a security following the network’s transition from proof-of-work to proof-of-stake in 2022.

BlackRock launches its first tokenized fund

On Wednesday, March 20th, BlackRock introduced its first tokenized asset fund on the Ethereum network, the BlackRock USD Institutional Digital Liquidity Fund (BUIDL). This new fund allocates 100% of its assets to cash, U.S. Treasury bills, and repurchase agreements, enabling investors to earn yield by holding the token on the blockchain. Tokenization has been a significant focus for BlackRock in recent years, and we are now witnessing its first implementations.

BTC ETF market bleeds

For the first time since the 11th of January, the Bitcoin spot ETF market experienced five consecutive days of net outflows, as ETFs bled $1.3 billion between the 18th and 22nd of March. This is attributed to Grayscale’s ETF GBTC, which experienced $2 billion in outflows, while the other ETFs continued to experience inflows. These outflows are speculated to be from bankruptcies such as Genesis and Digital Currency Group due to their “size and consistency”.

EU implements new AML law

On March 19th, the European Union (EU) passed a new law prohibiting cryptocurrency service providers from offering services and custody for "anonymous crypto asset accounts." This legislation targets anonymity-enhancing coins and services facilitating the anonymization or increased obfuscation of transactions. Notably, these measures do not affect hardware or software vendors and providers of unhosted wallets, such as the Metamask wallet, which do not exert direct control over users' cryptocurrency wallets.

KuCoin and two founders face criminal charges

On the 26th of March, the US Department of Justice announced that it’s criminally charging cryptocurrency exchange KuCoin and two of its founders for violating the Bank Secrecy Act and unlicensed money transmission offenses. The charges mostly concern KuCoin’s lack of anti-money laundering and know-your-customer processes, reportedly receiving and transferring over $9 billion of suspicious and criminal funds. Although it’s currently unclear how this will affect the exchange, we would like to highlight that the Hodl Funds don’t have any holdings on the exchange.

In other digital assets news

  • As BlackRock announced its first tokenized fund, the Real-World Asset (RWA) sector experienced a resurgence of interest, resulting in strong upward momentum for RWA protocols.

  • The SEC has postponed its decision on Grayscale’s Ether spot ETF to the 30th of May, which is the decisive deadline for Grayscale’s application.


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