Friday, 12th May. As the week comes to an end we can focus on the highlights of the crypto industry over the past few days.
PayPal reaches $1B in crypto holdings for customers
PayPal, the payment giant, revealed that it is “protecting” nearly $1 billion in customers’ digital assets despite its relatively recent entry into the market. This is stated in a report to the SEC.
According to the paper, the bulk of the company’s assets in custody consist of $499 million in BTC and $362 million in ETH.
As of March, the total amount deposited on the platform (accumulated amortization) was up $339 million from 2022.
Taking into account PayPal’s policy, the company does not hold crypto in its wallets, but rather relies on third-party service providers.
The officials said they engage “third parties to provide certain services to protect” their customers’ digital assets.
Formerly, the mobile payment service Venmo, owned by PayPal, integrated the withdrawal feature of crypto to third-party wallets.
In July 2022, the payment giant announced a similar option on its platform for Bitcoin, Ethereum, Bitcoin Cash and Litecoin.
As you may remember, in late 2022, the value of the cryptocurrency purchased by PayPal customers accounted for $604 million. Out of this amount, $291 million goes in Bitcoin, $250 million in Ethereum, and the remaining $63 million went in BCH and LTC.
Binance unveils a platform for VIP investors
Binance, a crypto exchange, has introduced the Capital Connect platform to streamline communication between its VIP customers and investment fund managers.
The platform features 9 VIP levels. Such status is granted to a user when their 30d Trade Volume exceeds $1 million with at least 25 BNB on their balance.
Capital Connect is available free of charge to all Binance VIP customers “subject to regional restrictions”. It is possible for users to apply for access to the platform as an investor or investment manager.
To participate in the program, customers are required to undergo mandatory KYC/KYB verification.
Over 20 management trusts have already joined the Binance program (at the time of this writing), and their number continues to climb.
What the platform did note in the risk warning, however, was that the platform represented itself as “a purely introductory service presented on an “as is” basis without representation or warranty of any kind.”
Recall that in May, Binance announced a metaverse reality show called Build The Block, in which Web3 developers would battle for the title of the best.
Subsequently, the bitcoin exchange announced the integration of Bitcoin Ordinals with its NFT marketplace in late May.
Robinhood’s crypto trading revenue down 30%
In Q1 2023, Robinhood’s online brokerage income generated by digital asset-related transactions slipped 30% year-over-year, to $38 million. This is what the company said in the report.
Robinhood saw less revenue from transactions only in the fourth quarter of 2020 ($12 million). Since then, the figure has fluctuated between $48 million and $233 million.
Compared to the fourth quarter, the figure fell by 1%.
Total income from operations in the first quarter dipped 5 percent, to $207 million.
Total revenue increased 16% (to $441 million). It was due to a 24.5% ($208 million) jump in net interest income.
Their net loss was $511 million versus $166 million between October and December.
Robinhood justified the drop in revenue from crypto-oriented activities by a slump in the number of executed orders (by less than 1% in the quarter) with an increase in funds in completed trades (by 6%).
As the market environment improved, the amount of digital assets in custody surged 37 percent, to $12 billion.
The online broker reported as well that Robinhood Wallet app has been downloaded more than 100,000 times by users across 130 countries through the Apple AppStore.
As of 2023, the company rolled out Robinhood Connect, a new way to top up Web3 wallets.
As you may remember, the online broker is to pay up to $10.2 million in fines for operational and technical faults that caused losses to investors.
Circle boosts its share of Treasury bills due to risks of U.S. default
Circle, the USD Coin (USDC) issuer, reconsidered the security structure of the stablecoin in favor of a T-Bill to mitigate a potential U.S. technical default. Bloomberg reports that the CEO of the company, Jeremy Allaire, made such a statement.
Things worsened amidst the lack of progress on the issue of raising the U.S. debt ceiling. In a meeting between the leaders of both parties in the House and Senate with President Joe Biden, nothing came of it.
The U.S. Treasury Department could run out of funds by June 1, 2023.
After early June, Circle got rid of the securities that matured after the beginning of June, Allaire said. The company does not want to run the risk of “potential breach of the ability of the US government to pay its debts.”
According to the latest data, the current bills on Circle’s balance sheet are due no later than May 31.
Meanwhile, over the past six months, the USDC’s total market value has plummeted 31.7 percent, from $44.1 billion to $30.1 billion, according to CoinGecko.
As you may recall, in April 2023, Allaire cited enforcement actions against cryptocurrencies as a major factor in the declining capitalization of the stablecoin in question.
Apart from tight regulatory measures, the banking crisis took its toll – Circle accounted for about 8% of the total cash reserves behind the value of the USDC in the collapsed SVB.
Amid the collapse of the institution on March 11, the stablecoin exchange rate temporarily lost its peg to the U.S. dollar. Circle later reassured that the issues surrounding the asset’s banking had been resolved.
Prior to that, Circle launched a USDC transfer solution between Ethereum and Avalanche.