The U.S. Treasury’s Financial Crimes Enforcement Network is moving to cut crypto exchange MEXC off from the U.S. financial system, alleging it handled at least $16 billion tied to Iranian, North Korean and Russian sanctions evasion, cybercrime and other illicit activity over five years. Issued Friday under a Russia-focused anti-money-laundering law, the order would bar U.S. financial institutions from sending funds to or receiving funds from MEXC, including crypto transfers, 30 days after it’s published in the Federal Register. MEXC is the largest exchange targeted under the law, which has previously been used against much smaller crypto firms. FinCEN alleges nearly $1.5 billion in Russian sanctions-evasion flows, about $1 billion in transfers to more than 40 Iranian exchanges and $22 million linked to Iran’s central bank and the Revolutionary Guard. MEXC says it’s operating normally and has launched an independent review of its anti-money-laundering and sanctions controls.
Crypto debit card provider Gnosis Pay disclosed a data breach that exposed customers’ names, home addresses, card numbers and linked crypto wallet addresses — information that could let attackers tie real-world identities to crypto holdings and target users with scams. The company says it detected the intrusion Nov. 3, began containing it within two hours, and fixed the flaw. It says customer funds and its separate enterprise platform weren’t affected, but didn’t say how many users were hit; it emailed each affected customer. Rotki founder Lefteris Karapetsas shared the notice he received. The breach comes weeks before Gnosis Pay shuts down its legacy consumer cards on Dec. 20, and after a roughly $1.5 million exploit in June that the company covered.
Your digital asset holdings could be working harder for you. With in-kind transfers available across 10 Grayscale products, eligible investors can exchange their crypto tokens for shares of the corresponding product — without first selling for cash.
Three core features of in-kind investing:
Put holdings to work. Shares may be eligible for use as margin or collateral. Where listed options are available, they may also help hedge exposure or generate income.
Bring investments together. Incorporate crypto exposure into portfolio management and estate planning, including beneficiary designations.
Simplify safekeeping. Underlying assets are held by institutional cusodians, reducing the burden of storing crypto and managing private keys.
Grayscale Exchange Traded Products (the “ETPs”) are not registered under the Investment Company Act of 1940 (40 Act) and therefore are not subject to the same regulations and protections as 40 Act registered ETFs and mutual funds. The ETPs are subject to significant risk, heightened volatility, and are not suitable for all investors. An investment in the ETPs is not a direct investment in any cryptocurrency.
Extreme volatility of trading prices that many digital assets have experienced in recent periods, and may continue to experience, could have a material adverse effect on the value of the Fund and the shares could lose all or substantially all of their value. Digital assets represent a new and rapidly evolving industry. The value of the ETPs depends on the acceptance of digital assets, the capabilities and development of blockchain technologies and the fundamental investment characteristics of the digital asset. Digital asset networks are developed by a diverse set of contributors and the perception that certain high-profile contributors will no longer contribute to the network could have an adverse effect on the market price of the related digital asset. Digital assets may have concentrated ownership and large sales or distributions by holders of such digital assets could have an adverse effect on the market price of such digital assets.
Converting tokens in kind into Grayscale’s spot crypto ETPs may require selling or swapping tokens into the underlying asset, creating exposure to market impact, slippage, and timing risk. The ETP shares received may trade at a premium or discount to NAV. Tax treatment is uncertain and may trigger taxable events, particularly when contributing assets other than the ETP’s underlying crypto.
Foreside Fund Services, LLC is the Marketing Agent and Grayscale Investments Sponsors, LLC is the sponsor of the ETPs.
Coinbase, Robinhood and Circle have expanded into stablecoins, payments and prediction markets, but their latest earnings show how hard it is to escape crypto’s boom-and-bust cycles. Coinbase’s third-quarter transaction revenue fell 23% from a year earlier to $590 million, though lower costs and newer products helped it hold total revenue near $1.22 billion; prediction markets now generate more than $200 million in annualized revenue. Circle’s reserve income dropped 8% to $658 million as interest rates fell, and its 17% revenue gain relied on $182 million of token presales for its Arc blockchain. USDC supply was little changed from a year earlier at $73.9 billion. Analysts are split: Barclays cut its Coinbase price target to $120 from $149, while Oppenheimer raised its to $207.
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