The Central Bank of the UAE has given preliminary approval to AED Stablecoin, positioning it to be the first regulated stablecoin pegged to the dirham in the country. The move follows the bank’s recent licensing framework, which restricts crypto payments to licensed dirham-pegged tokens, easing previous concerns over potential restrictions on crypto use.
If fully licensed, AED Stablecoin’s AE Coin could become a local trading pair for cryptocurrencies and be used by merchants for payments. Issuers of the stablecoin must back it with cash reserves held in UAE banks or a combination of cash and government bonds.
The UAE’s favourable regulatory environment has been attracting major players in the crypto space. While AED Stablecoin faces competition from Tether, OKX has launched a new trading platform, and M2 has introduced a system allowing direct dirham conversions to Bitcoin and Ether.
A 25-year-old man from Alabama has been arrested for hacking the US Securities and Exchange Commission’s X account in a scheme to manipulate Bitcoin prices. The incident, which occurred in January, involved a false post on the SEC’s account claiming the approval of Bitcoin exchange-traded funds, briefly causing Bitcoin’s price to rise by $1,000. The SEC swiftly deleted the post and denied the message, but the hack sparked criticism over security vulnerabilities on X.
The suspect, Eric Council Jr., used a SIM-swapping technique to access the account and later received Bitcoin as payment for his involvement in the hack. Following the incident, he reportedly searched online for information on how to avoid FBI detection. Council now faces charges of conspiracy to commit aggravated identity theft and access device fraud.
The SEC expressed its gratitude to law enforcement for their prompt action in the case, while the incident reignited concerns over the security of social media platforms, particularly since X’s acquisition by Elon Musk.
Grayscale, a prominent crypto asset manager, has officially filed with the United States Securities and Exchange Commission (SEC) to convert its $520 million Digital Large Cap Fund into an exchange-traded fund (ETF). The New York Stock Exchange (NYSE) submitted the request on Grayscale’s behalf in a 14 October filing. This move aims to simplify the buying and selling of shares for investors by creating a spot ETF that holds the underlying assets rather than relying on futures contracts.
Currently managing over $524 million in assets, the fund is heavily weighted in Bitcoin, accounting for 76% of its portfolio, with Ether making up 18%. The conversion comes on the heels of the SEC’s changing stance on crypto ETFs, following a favourable court ruling for Grayscale earlier this year. Previously, the SEC had rejected all applications for spot crypto ETFs, but the new developments indicate a shift in regulatory approach.
Investors have been offloading shares following the ETF conversions of Grayscale’s Bitcoin Trust and Ethereum Trust, with notable outflows recorded. Since the conversion to ETFs, Grayscale’s Bitcoin fund has seen $21 billion in outflows, while its Ethereum ETF has recorded $3 billion. Meanwhile, Grayscale continues to expand its offerings, recently adding 35 altcoins to its consideration list for future investment products.
Cryptocurrency investment products saw a surge in inflows during 5–11 October, totalling $407 million, with Bitcoin leading the charge. Bitcoin investment products attracted $419 million, while short-Bitcoin investments saw outflows of $6.3 million. This significant uptick comes as political developments in the US, particularly polls favouring Republicans in the upcoming elections, appear to have boosted market confidence in Bitcoin.
CoinShares’ head of research, James Butterfill, highlighted the political shift as the main driver behind the increase in crypto inflows, noting that economic data had little impact on stemming outflows from the previous week. Investors seem to view Republicans as more supportive of digital assets, leading to a rise in Bitcoin’s price, which climbed by more than 2%.
Meanwhile, blockchain ETFs saw their largest weekly inflows of 2024, totalling $34 million. However, Ethereum continued its trend of outflows, with $9.8 million withdrawn from Ether products last week, indicating a contrast in investor sentiment between Bitcoin and Ethereum.
Bitcoin’s bullish trajectory remains strong, with the cryptocurrency expected to reach $100,000 soon, regardless of the upcoming US election, according to Dan Tapiero of 10T Holdings. Speaking at a conference in Salt Lake City, Tapiero explained that Bitcoin’s rise is inevitable, driven by global trends and growing institutional interest.
The presidential race between Donald Trump and Kamala Harris highlights different attitudes towards crypto, with Trump promising to make the US a crypto hub and remove SEC Chair Gary Gensler. Harris, though quieter on the issue, recently emphasised blockchain’s importance. Despite these political shifts, industry experts believe Bitcoin will benefit from the election either way, citing concerns over US debts and deficits as a potential driver.
With the April Bitcoin halving boosting prices historically, the fourth quarter looks promising. The election may pass, but blockchain technology’s role in reshaping finance remains far more significant than any political outcome, Tapiero noted.
Crypto.com has filed a lawsuit against the US Securities and Exchange Commission (SEC), accusing the agency of overreaching its legal authority by classifying most crypto transactions as securities. The lawsuit follows a Wells Notice issued by the SEC in August, signalling potential enforcement action. Crypto.com argues that the SEC’s inconsistent regulatory approach, exempting Bitcoin and Ether, undermines the crypto sector’s future in the US.
In its legal filing, Crypto.com claims the SEC bypassed essential procedural steps, including the notice and comment rulemaking process. The exchange aims to halt what it views as the agency’s ‘unlawful’ crackdown on cryptocurrency. Alongside the lawsuit, Crypto.com has petitioned the SEC and Commodity Futures Trading Commission (CFTC) for clearer regulation of cryptocurrency derivatives.
Several crypto firms, including blockchain technology company Consensys, have also sued the SEC this year after receiving Wells Notices.
David Kagel, an 86-year-old former California attorney, has been sentenced to five years probation and ordered to pay nearly $14 million after admitting to his role in a crypto Ponzi scheme. Kagel, who is currently in hospice care, pleaded guilty to conspiracy to commit commodity fraud, according to a ruling by Las Vegas Federal Court Judge Gloria Navarro.
Prosecutors revealed that Kagel, along with two accomplices, ran the fraudulent scheme from December 2017 to June 2022, luring investors with promises of high returns through a crypto bot trading programme. Victims were convinced their investments were secure, with claims of guaranteed profits and no risk. Kagel even drafted letters on his law firm’s official letterhead to build trust among investors, falsely claiming to hold significant amounts of Bitcoin in escrow.
Kagel’s law license had been revoked by the California Supreme Court in 2023 after misappropriating client funds, with previous suspensions in 1997 and 2012. His co-conspirators, David Saffron and Vincent Mazzotta, have pleaded not guilty and await trial next year.
Bitcoin briefly surpassed the $62,000 mark earlier in October before seeing a slight correction, with the price settling around $61,950. Despite the dip, data shows that large holders, known as whales, didn’t participate in the recent sell-off. Whale transaction volumes also dropped by nearly half, suggesting the possibility of price consolidation and reduced volatility.
Over the past week, Bitcoin has seen a net outflow from centralised exchanges, with around $153 million withdrawn. This could indicate growing accumulation as investors maintain bullish expectations for the cryptocurrency this October.
However, the broader crypto market remains susceptible to external influences, with geopolitical tensions and macroeconomic events likely to affect price movements in the near term.
The International Monetary Fund (IMF) has urged El Salvador to limit its exposure to Bitcoin and to narrow the scope of its Bitcoin law. Julie Kozack, the IMF’s director of communications, stated that recommendations include strengthening the regulatory framework and enhancing oversight of the Bitcoin ecosystem. The IMF has consistently raised concerns about the financial risks associated with Bitcoin, particularly regarding transparency and its potential impact on the country’s financial stability.
Despite projecting a 3% growth for El Salvador’s economy this year, the IMF remains critical of the current Bitcoin programme, which has been linked to risks that could undermine fiscal stability. The organisation has called for further efforts to improve transparency and address potential risks related to Bitcoin, highlighting the need for ongoing discussions in key areas.
El Salvador is currently negotiating a new loan with the IMF, owing the organisation approximately 107.7 million in special drawing rights. This loan aims to stabilise the country’s macroeconomic situation while the government is willing to implement economic reforms. The IMF is working with El Salvador to enhance liquidity reserves, improve public finances, and ensure good governance amid concerns about Bitcoin risks. The government currently holds over $360 million in Bitcoin.
El Salvador’s President Nayib Bukele has met with Argentina’s President Javier Milei in Buenos Aires to discuss shared economic and security challenges. Their discussions included Milei’s zero-deficit budget strategy and Bukele’s experiences with debt management. Both leaders found common ground in their political journeys, particularly Bukele’s struggle with parliamentary opposition when he first took office.
During the visit, Bukele also met with Argentine senators and Vice President Victoria Villarruel to advise on cryptocurrency matters. Villarruel expressed significant interest in Bitcoin and El Salvador’s innovative use of Volcano Bonds for financing. These discussions signal Argentina’s growing interest in digital assets as part of its financial future.
Meanwhile, Uruguay has taken a major step in regulating cryptocurrency, passing a law that creates a clear framework for digital asset use. The law grants the central bank oversight of virtual asset service providers, ensuring compliance with anti-money laundering regulations whilst paving the way for new opportunities in the crypto sector.
