The Crypto Compass Issue #47

Hello to our dear readers!

In a dramatic shift in the cryptocurrency landscape, Binance, the world's largest crypto exchange, is navigating turbulent waters as CEO Changpeng Zhao steps down following criminal charges in the U.S., with industry veteran Richard Teng taking the helm.

Teng's appointment comes at a critical juncture, as regulatory scrutiny intensifies globally, evidenced by Singapore's Monetary Authority unveiling stringent regulations to protect retail crypto investors from speculative risks.

Concurrently, the crypto market is closely monitoring developments in exchange-traded funds (ETFs), with firms like Grayscale and BlackRock engaging with the U.S. Securities and Exchange Commission for approval of spot bitcoin ETFs, signaling a potential shift in the regulatory stance towards these innovative financial products.

Richard Teng Takes the Helm as CEO of Binance

Richard Teng has been appointed as the new CEO of Binance, the world's largest crypto exchange, following Changpeng Zhao's resignation amid legal challenges in the U.S. Teng, a seasoned professional with a strong background in global compliance, initially joined Binance as CEO of its Singapore branch in 2021 and was recently overseeing regional markets.

His extensive experience includes a significant tenure at the Monetary Authority of Singapore and leadership roles at Abu Dhabi Global Market and the SGX. Teng's deep understanding of regulatory frameworks will be pivotal in steering Binance through a critical phase, focusing on enhancing user confidence in the platform's financial strength, security, and safety. He also aims to foster collaborative relationships with global regulators, emphasizing innovation and consumer protection.

Changpeng Zhao, the outgoing CEO, expressed confidence in Teng's leadership, underscoring his capability to guide Binance through its next phase of development, particularly in areas of security, transparency, and compliance.

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Singapore Tightens Crypto Regulations to Protect Retail Investors

The Monetary Authority of Singapore (MAS) has announced new regulations aimed at protecting retail consumers in the cryptocurrency market. In a move to curb speculative trading, MAS has directed Digital Payment Token (DPT) service providers to implement measures such as prohibiting credit card payments for crypto transactions and removing incentives for trading. These regulations also forbid the offering of financing, margin, or leverage in crypto transactions.

DPT service providers are required to assess customers' risk awareness, avoid using crypto asset valuation in determining net worth, and manage potential conflicts of interest transparently. Additionally, they must clearly communicate their digital asset listing policies and establish effective customer complaint and dispute resolution processes. Like financial institutions, these providers are expected to maintain robust, recoverable critical systems.

Set to be phased in from mid-2024, these measures follow feedback on proposals released the previous year and are in response to the collapse of major crypto firms and the impact of events like Terraform Labs’ UST stablecoin failure. MAS Deputy Managing Director Ho Hern Shin highlighted that while these measures aim to protect consumers, they do not eliminate the inherent risks associated with cryptocurrency trading.

Grayscale and BlackRock Push for Bitcoin ETF Approval in Meetings with SEC

Grayscale Investments has recently engaged with the Securities and Exchange Commission (SEC) to discuss the conversion of its Grayscale Bitcoin Trust into a spot bitcoin exchange-traded fund (ETF). This meeting followed a court mandate last month, directing the SEC to re-examine Grayscale's application.

The discussion centered around the listing of the Grayscale Bitcoin Trust shares under NYSE Arca Rule 8.201-E. Grayscale has filed a new registration statement and is planning to list the shares under the symbol GBTC, subject to SEC approval.

In addition, BlackRock, another major asset manager, also held a separate meeting with the SEC, discussing the listing of the iShares Bitcoin Trust under NASDAQ Rule 5711(d), indicating a preference for an in-kind redemption model for their proposed bitcoin ETF.

These meetings underscore the ongoing efforts by leading asset managers to gain regulatory approval for spot bitcoin ETFs, a development that the crypto market is closely watching. SEC Chair Gary Gensler has acknowledged the regulator's work on these filings, suggesting a heightened focus on the potential for spot bitcoin ETFs in the U.S. market.

Happenings of the week

• Vitalik Buterin | Ethereum's Past, Present, Future & Thoughts on Türkiye (Podcast)

• What’s next for Binance’s Changpeng ‘CZ’ Zhao?

• British investment managers get green light for tokenised funds

• Austria’s Raiffeisen Bank to Roll Out Crypto Trading for Retail Customers in January

South Korea to Pilot Central Bank Digital Currency with 100,000 Citizens in 2024

The Bank of Korea (BOK) is preparing to launch a pilot program for a central bank digital currency (CBDC) in 2024, involving 100,000 citizens. This initiative, developed in collaboration with the country's Financial Services Commission (FSC) and Financial Supervisory Service (FSS), aims to explore innovative digital transaction methods and address current challenges in the financial system.

The announcement follows a meeting between BOK Governor Rhee Chang-yong and Agustin Carstens, General Manager of the Bank for International Settlements (BIS). The pilot program will allow participants to use "deposit tokens" issued by commercial banks as a form of CBDC, akin to using vouchers in stores.

Participants will be selected and recruited by these banks for a three-month trial, focusing on specific payment purposes. The BOK aims to use the pilot to assess the CBDC's potential in reducing transaction fees, settlement times, and fraud risks, particularly in voucher systems used during the COVID-19 pandemic and for government grants. Additionally, the BOK plans to test the integration of the digital currency in a simulated carbon emissions trading system to evaluate its broader applicability.

Stay tuned for more updates next week! If you haven't yet, hit that subscribe button to ensure you never miss an issue. Found value in this edition? Please consider sharing it with your friends, colleagues, and fellow crypto enthusiasts. Together, let's navigate the world of crypto with clarity and insight!