Institutional Digital Asset Newsletter - October 2020

Newsletters Oct 25, 2020

Once a month, we summarize the best crypto news for Institutional Investors

🚀 Trakx just opened its exchange for Digital Asset Indices to the public after successfully launching in private beta with institutional clients and professional traders.

Trakx enables its clients to trade sophisticated digital strategies and indices on a secure and compliant platform. We hope that you will love trading with us, and we are looking forward to getting your feedback on the user experience and indices/strategies that we released. Please send comments to [email protected]


INVESTING

Harvest Finance: $24M Attack Triggers $570M ‘Bank Run’ in Latest DeFi Exploit

According to reports, an attacker used a flash loan – a technique that allows a trader to take on massive leverage without any downside – to manipulate DeFi prices for a profit. The exploit sent the platform’s native token, FARM, tumbling by 65% in less than an hour, followed by the project’s total value locked (TVL), which dropped from over $1 billion before the exploit to $430 million as of press time.

Total Value Locked in Harvest Finance
Total Value Locked in Harvest Finance

The total value locked (TVL) in Harvest Finance has dropped by more than half in the 12 hours since the exploit. (DeFi Pulse)

Silvergate Bank Sees 40% Increase in Deposits From Digital Currency Customers

Silvergate Bank added $586 million in new deposits from firms and individuals in the cryptocurrency industry in the third quarter of 2020, according to an earnings report released before the market opened last Monday.

The bank added 47 new digital currency clients, bringing its total customer base from the crypto industry up to 928.

The majority of new customers – 33, Silvergate reported – were institutional investors.

The bank also saw a $13 million increase in its bitcoin-backed fiat loans, called SEN Leverage, up to $35.5 million in the third quarter.


NEW ASSET OVERVIEW

YFI (Yearn Finance)

yEarn.finance is a decentralized asset management platform that has multiple uses ranging from liquidity provision, lending, to insurance. The most prominent product in its ecosystem is Vaults which maximize users' yields through various yield farming strategies proposed by the community.

YFI token was launched with no pre-mine for the team or early investors. Instead, the 30,000 tokens were distributed equally to users of the platform and liquidity providers through three different mechanisms.

  1. Providing liquidity on Curve to receive yCRV, which represents a basket of yearn's yield-optimized yTokens, which can then be staked
  2. Providing liquidity on Balancer's YFI pool which consists of 98% DAI and 2% YFI
  3. For those that provided liquidity on Balancer and received balancer pool tokens (BPT) they can stake BPTs and are able to participate in Balancer protocol governance


PLATFORM


REGULATION

FCA Bans Crypto Derivatives for Retail Consumers in UK

The Financial Conduct Authority (FCA) has published final rules banning the sale of derivatives and exchange-traded notes (ETNs) that reference certain types of crypto assets to retail consumers.

The U.K. financial regulator said it considers these products to be ill-suited for retail consumers due to the harm they pose, asserting they cannot be reliably valued by retail consumers because of the:

  • Inherent nature of the underlying assets, which means they have no reliable basis for valuation
  • Extreme volatility in crypto asset price movements
  • Inadequate understanding of crypto assets by retail consumers
  • Lack of legitimate investment need for retail consumers to invest in these products.

Specifically, the ban will affect “the sale, marketing and distribution” to retail investors of any derivatives contract or ETNs that linked to “unregulated transferable crypto assets” issued by entities in or outside the U.K.


PEOPLE MOVE

Gary Rebibo

CMO @Trakx