Coinbase to Connect BlackRock's Aladdin Institutional Clients to Crypto

<p>Coinbase, an American cryptocurrency exchange firm, has announced its partnership with BlackRock, a leading asset management firm.</p><p>Under the partnership, Coinbase will provide direct access to <a href="https://www.financemagnates.com/cryptocurrency/trading/" target="_blank">crypto trading</a> capabilities to institutional users of Aladdin, which is an end-to-end investment management platform owned by BlackRock.</p><p>Brett Tejpaul, the Head of Coinbase Institutional, and Greg Tusar, the Vice President of Institutional Product, announced the collaboration on Thursday in <a href="https://blog.coinbase.com/coinbase-selected-by-blackrock-provide-aladdin-clients-access-to-crypto-trading-and-custody-via-b9e7144f313d">a blog article</a> on the exchange's website. </p><p>The crypto trading feature will be kicked off with access to Bitcoin trading for <a href="https://www.financemagnates.com/terms/i/institutional-trading/" target="_blank">the institutional clients</a>, Tejpaul and Tusar noted.</p><p>“Our scale, experience and integrated product offering represented what BlackRock believes to be a logical partner for Aladdin,” it explained.</p><p>Coinbase Prime</p><p>Coinbase said the capacity will be delivered through Coinbase Prime, its institutional <a href="https://www.financemagnates.com/tag/prime-brokerage/" target="_blank">prime brokerage platform</a> for crypto assets.</p><p>Through Coinbase Prime, the exchange will provide access to custody, prime brokerage and reporting functionalities to Aladdin institutional users.</p><p>“Built for institutions, Coinbase Prime integrates advanced agency trading, custody, prime financing, staking and staking infrastructure, data, and reporting that supports the entire transaction lifecycle,” Tejpaul and Tusar explained. </p><p>These features will be enjoyed by institutional customers of Aladdin who are also customers of the publicly-traded exchange, Coinbase said.</p><p>The exchange noted that its institutional clients include asset allocators, financial institutions, hedge funds and corporate treasures, among others. </p><p>In his comment on the partnership, Joseph Chalom, the Global Head of Strategic Ecosystem Partnerships at BlackRock, noted that the Coinbase Prime connectivity with Aladdin will enable the company’s clients to manage their exposure to Bitcoin directly from their Aladdin workflows.</p><p>Chalom added that the new feature will give its clients “a whole portfolio view of risk across asset classes.”</p><p>“Our institutional clients are increasingly interested in gaining exposure to digital asset markets and are focused on how to efficiently manage the operational lifecycle of these assets,” Chalom explained.</p><p>Both companies noted that they will continue to work on the integration and introduce new features over time to interested clients.</p><p>“As the trusted partner enabling institutions to participate and transact in the cryptoeconomy, we are committed to pushing the industry forward and creating new access points as institutional crypto adoption continues to rapidly accelerate,” Coinbase noted.</p> This article was written by Solomon Oladipupo at www.financemagnates.com.

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UK Govt. Rejects Lawmakers’ Push to Regulate Crypto Trading as Gambling

The UK Government has opposed the call by a panel of cross-party British lawmakers to regulate 'unbacked' crypto assets such as Bitcoin and Ether as gambling. The executive arm argued that such treatment runs contrary to standards recommended by global bodies such as the G20 Financial Stability Board.

‘Same Activity, Same Risk’

In a report published in May, the House of Commons' Treasury Committee argued that unbacked cryptocurrencies lack any intrinsic value or ‘discernible social good’ but instead carry ‘huge price volatility’. As a result, the Committee, which is headed by Harriet Baldwin MP, called for digital asset trading to be subjected to the same rules as gambling, Finance Magnates reported.

However, in a letter received by the House of Commons last Friday, Andrew Griffith MP, the Economic Secretary to the HM Treasury, relayed the government’s objection to the proposal, according to a statement released by the UK Parliament today (Friday).

Griffith in the letter noted that international standards for crypto regulation are based on the ‘same activity, same risk, same regulatory outcome’ principle that requires extending rules imposed on traditional financial institutions such as banks, on digital asset firms.

“The Committee’s proposed approach would, therefore, risk creating misalignment with international standards and approaches from other major jurisdictions including the EU, and potentially create unclear and overlapping mandates between financial regulators and the Gambling Commission,” Griffith explained.

Furthermore, the Economic Secretary maintained that supervising cryptocurrency trading as gambling could fail to prevent many of the risks, including market manipulation, that are associated with digital asset trading.

“A financial services regulatory framework is more appropriate for addressing the risks of unbacked crypto assets and creating the conditions for safe innovation,” Griffith asserted. “This can – and will – come with a set of robust measures to mitigate consumer risks mentioned in the Committee’s report, including the risks of ‘consumers getting misinformed’”.

Crypto Regulation in the UK

Meanwhile, the debate between British lawmakers and government executives continues even as King Charles III recently ratified the Financial Services and Markets Act 2023. The law classifies the trading of cryptocurrencies as a regulated activity and brings stablecoins under the scope of payment rules.

Additionally, the Financial Conduct Authority (FCA), the British financial markets watchdog, is finalizing its rules on cryptocurrency marketing and advertising in the country. The rules are expected to begin on October 8 this year.

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Crypto Volumes Climb First Time in 3 Months amid TradFi Push for Spot BTC ETF

The combined value of spot and derivatives trading volumes on centralized exchanges (CEXs) jumped by 14.2% for the first time in three months, reaching $2.71 trillion in June. The bullish trend came amidst a new wave of applications for spot Bitcoin (BTC) exchange-traded funds (ETFs) by institutional investors.

The latest interest follows an application by BlackRock, the world’s largest asset manager, in mid-June. The increase in volatility that trailed the US Securities and Exchange’s (SEC) crackdown on Binance and Coinbase also pushed up the volumes, according to the latest report by digital asset data provider CCData.

'Historic' Lows despite Boom in June

Giving a breakdown of the figures, CCData noted that spot trading volume during the recent month jumped by 16.4% to $575 billion, with derivatives volume touching $2.12 trillion, which is a 13.7% increase.

In addition, the Chicago Mercantile Exchange (CME), the biggest derivatives marketplace in the world, saw the total derivatives volume traded on its platform increase by 23.6% to $48.3 billion. CCData pointed out that institutional investors particularly flocked into BTC futures, with trading in the derivative contract going up by 28.6% to $37.9 billion, which is the highest volume traded on CME since November 2021.

However, despite the positive outing last month, spot trading volumes on CEXs remain at 'historically low levels’ as the value touched down at a level not seen since the fourth quarter of 2019. Similarly, the market share of derivatives trading on CEXs plummeted for the first time in four months. The market shrank to 78.7% last month, declining from a peak of 79.1% achieved earlier in May.

“Binance remains the largest venue for derivatives trading in crypto, recording $1.21 trillion in volumes,” CCData noted. “However, the exchange’s market share has declined for the fourth consecutive month, falling to 56.8% in June, its lowest market share since October 2022.”

On the contrary, OKX, the second-largest digital asset derivatives trading platform, saw its trading volumes skyrocket by 44.9% to $416 billion last month, CCData noted. The exchange now handles 19.5% of derivatives trading on CEXs, which is its highest market share since April last year.

Court Penalizes Coinseed and Its Founder

In a separate development, a New York judge yesterday (Wednesday) ordered crypto trading platform Coinseed and its former CEO, Delgerdalai Davaasambuu, to cough out roughly $424,000 in civil monetary penalty, illicit profits and interest payments.

The SEC, which sued Coinseed in 2021 over its alleged unregistered sale of the ‘CSD’ tokens between 2017 and 2018, secured the order from Judge Paul G. Gardephe of the Southern District Court in New York. The federal securities regulator in its lawsuit had accused Coinseed and two of its top executives of defrauding victims of about $1 million.

In September 2021, prosecutors in New York secured a court order to shut down the operations of Coinseed. They also obtained a money judgment of $3 million against the company and its Founder.

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