Almost 1M Bitcoin Is Held by Darknet Markets, Scammers & Thieves; eToro to Issue Debit Cards in UK; Grayscale’s Crypto Funds Grow by $1b in 11 Days

Last week (27 July - 1 August) in the Blockchain & Crypto world was another interesting one - according to Chainalysis, almost one million Bitcoin is held by illicit actors in the space with over half being held by darknet markets; Intercontinental Exchange subsidiary, Bakkt, is reporting record numbers of trades for its monthly Bitcoin futures contracts as BTC prices made a new high for the year; crypto fund manager Grayscale Investments has managed to increase its assets under management by another $1 billion in less than two weeks, and more!

About this and more, in the newest issue of Weekly Blockchain & Crypto Digest. Enjoy!

Almost 1 Million Bitcoin Is Held by Darknet Markets, Scammers & Thieves

According to Chainalysis, almost one million Bitcoin is held by illicit actors in the space with over half being held by darknet markets.

Illicit markets currently have 585,000 BTC in their possession, scams have 99,000 BTC, stolen funds constitute another 205,000 BTC, and all others hold an additional 3,000 BTC — a grand total of 892,000 BTC. According to Chainalysis, only 0.32% of all current Bitcoin flows are tainted by illicit activity.

Regardless of origin, the top destinations for illicit Bitcoin are crypto exchanges. This coincides with the observed behavior of Twitter’s recent hackers, who were quick to move their newly acquired assets to the exchanges.

Roughly 300,000 Bitcoin is held by scammers and thieves. In recent years, crypto exchanges have begun to take their Know Your Customer and Anti-Money Laundering procedures more seriously. These policies make it harder for criminals to offload their ill-gotten loot, which also bodes well for the market as massive selloffs by the criminals could lead to a collapse in price.

Bakkt Bitcoin Futures Smashes Records Two Days Running

Intercontinental Exchange subsidiary, Bakkt, is reporting record numbers of trades for its monthly Bitcoin futures contracts as BTC prices made a new high for the year.

The institutional investing platform reported its highest ever figure for Bitcoin monthly futures on Jul. 28 with 11,506 contracts — an increase of 85% over the previous record. The move followed a surge in the underlying asset’s price to a 2020 high of $11,400.

On July 29, Bakkt topped the new record with 11,706 contracts traded.

“Talk about momentum! We beat yesterday's record with 11,706 Bakkt Bitcoin Futures traded today - that's over $125MM of bitcoin.”

Bakkt’s physically-settled contracts are paid out in BTC as opposed to cash-settled contracts that are delivered in USD. The momentum has been driven by Bitcoin prices which have finally broken out of their two and a half month range-bound trading channel.

According to data from Skew analytics, Bakkt wasn’t the only institutional exchange to break records this week. The Chicago Mercantile Exchange (CME), which has far greater volumes than Bakkt, also recorded a surge in Bitcoin futures contracts on Monday.

Daily volume topped $1.3 billion while open interest, a measure of the total number of outstanding derivative contracts that have not been settled, also soared to $724 million. According to CME data, 25,493 futures contracts were traded on Monday, and Tuesday’s preliminary count was already over 20,900 at the time of writing.

Yesterday also saw an uptick of Bitcoin options contracts on CME with over 1,100 traded, the highest number for the past thirty days.

Grayscale’s Crypto Funds Grow by $1 Billion in Just 11 Days

Crypto fund manager Grayscale Investments has managed to increase its assets under management by another $1 billion in less than two weeks.

According to an update posted to Grayscale’s Twitter account on July 28, the investment firm currently has $5.1 billion in assets under management (AUM). The funds are mostly held in Grayscale’s trusts for Bitcoin and Ethereum, along with the firm’s digital large cap fund. There are smaller allocations in Bitcoin Cash, Ethereum Classic, Horizen, Litecoin, Stellar Lumens, XRP, and Zcash.

This represents an increase of nearly $1 billion in AUM in just 11 days, according to a July 17 update from Grayscale. The firm more than doubled the AUM in its BCH trust, from $6 million to $12.8 million in that time. Grayscale added $782 million to its BTC trust, $174 million to its ETH trust, $12.7 million to its ETC trust, and $6.7 million to its LTC trust. 

The firm’s Stellar Lumens Trust was the only one with a drop in AUM, from $600,000 to $500,000.

eToro Gets Ready to Issue Debit Cards in UK

The crypto-enabled investment app eToro is set to launch its debit card in the United Kingdom as it acquired Marq Millions Ltd, a licensed e-money business holding a principal Visa membership.

As reported by TechCrunch on July 29, eToro “acqui-hired” Marq Millions Ltd., a U.K.-based e-money provider for an undisclosed sum. The company will now be doing business as eToro Money and will be the direct issuer of eToro’s planned debit card. Marq Millions’ management team will stay on in the eToro Money division. 

The debit cards, whose launch date is still unknown, will initially be available to eToro Club members living in the United Kingdom. A geographical expansion to Europe will follow, while later on the card will be available for non-eToro users as well. EToro Money inherits an EMI License permission from the U.K.’s Financial Conduct Authority, in addition to being a Visa Principal Member.

The card will reportedly provide an instant “cash-in and cash-out” functionality for the platform’s customers, which should provide an additional avenue for crypto traders on eToro to convert their profits to cash. 

The exact mechanism for this is unknown, though it will likely require closing the positions before being able to withdraw funds. Cointelegraph contacted eToro to learn more about the planned debit card, but did not immediately receive a response.

The CEO of eToro, Yoni Assia, said that the company expects a “strong take-up of the card,” with its claimed client base of 14 million registered users spearheading initial adoption.

EToro is a trading platform based on contracts for difference, or CFDs, a type of derivative contract that mimics the price swings of the underlying asset without holding it directly.

Similar to futures and perpetual swaps, it operates on margin collateral that allows traders to easily enter leveraged long or short positions. It supports a variety of cryptocurrencies including Bitcoin, Ether, Tezos, Litecoin and many others.

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About: I am a business developer, sales professional, FinTech strategist, as well as Cryptocurrency and Blockchain enthusiast. I'm highly passionate about Financial Technology and Digital Innovation, and strongly believe that it will change the world for the better. Apart from my daily job at a global payments startup where I'm leading company's expansion into Europe , I'm an active member of FinTech community and a TechFin evangelist.

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