Liminal Newsletter- June Edition

Hola,

June was one hell of a month, specifically from the Institutions point-of-view as it came with a mixed bag of actions, counterbalancing and bringing an overall equilibrium to the stance of authorized digital asset operations.

From SEC's lawsuit on Coinbase and Binance to Hong Kong exchange-friendly regulations, from the de-listing saga of major bluechip tokens to Bitcoin ETF filings by leading asset management institutions, this month was full of larger narratives that bought around only a short-term panic in the markets and later on re-instated the huge adoption potential of digital assets with the influx of institutional participation.

SEC Sues Coinbase and Binance

Recently, the U.S. Securities and Exchange Commission (SEC) has filed lawsuits against both Coinbase and Binance, two prominent cryptocurrency exchanges. The SEC's actions are driven by concerns over potential violations of securities laws.

In the case of Coinbase, the SEC is investigating whether the platform's lending program, known as Coinbase Lend, qualifies as a security. The SEC argues that Coinbase should have registered the program as a security offering, which would require complying with relevant regulations and disclosure requirements. Coinbase, on the other hand, maintains that the lending program does not meet the criteria of a security and plans to fight the SEC's lawsuit.

As for Binance, the SEC has raised concerns over its operations in the United States and whether it offered securities without proper registration and compliance. Binance has been accused of allowing U.S. residents to trade securities without adhering to regulatory obligations. The SEC's lawsuit against Binance signals a significant crackdown on unregistered cryptocurrency exchanges and emphasizes the need for compliance with securities laws.

Hong Kong's Open Invitation To Crypto Exchanges

Hong Kong is taking a positive stance on the crypto industry by encouraging regulatory adoption. The government has urged HSBC and Standard Chartered to consider accepting crypto exchanges as clients. The Hong Kong Monetary Authority (HKMA) emphasized that due diligence on prospective customers should not be overly burdensome, especially for entities looking to explore opportunities in the region. This move signifies Hong Kong's commitment to embracing the crypto industry and fostering innovation.

Cardano, Polygon, and Solana Delisting Spree

Following the SEC status on declaring a bunch of crypto assets as securities, in reference to their lawsuit on Binance and Coinbase, major US-based exchanges are delisting 3 major protocol-native tokens, $SOL, $ADA & $MATIC. The delisting of tokens started with the infamous Robinhood exchange and now Bakkt is joining the group in the wake of strict regulations by US authorities.

Bitcoin ETF Surfaces Again With BlackRock, WisdomTree, Invesco and Bitwise

Anticipating the hugely overgrown interest in Bitcoin, as the primary digital asset for the last decade, the long-demanded Bitcoin Spot ETF filings came into the limelight with the likes of BlackRock, WisdomTree, Invesco and Bitwise applying for their own rendered version of Bitcoin ETF. All of these investment firms seeking their share in the trillion-dollar digital asset markets want to increase the exposure of investors towards Bitcoin, who want a safer option to trade. Now what would be interesting to see is the way the SEC handles these applications and grants them as compared to their previous denial of these same applications to protect the interest of investors from volatile markets and market manipulation tactics.

Alright now, it's time to take a break from the news around the world and give you a sneak peek into what has happened at Liminal over the past month.

A New Product Launch: Smart Consolidation

Smart Wallet Consolidation employs an algorithm to assess wallet balances, transferring funds from low-balance wallets to a highly secure Cold Wallet until needed. Institutions can establish threshold values for different wallet types (hot, cold, warm). Once these thresholds are reached, assets are automatically transferred to a central destination wallet, typically a cold wallet.

This process optimizes the institutional wallet framework, consolidates low-balances spread out in multiple wallets and ultimately enhances security by moving on-chain assets to off-chain custody.

Case Study On Institutional Staking Market Analysis and Secured Staking

As we continue our research-based analysis on topics and elements that impact most Institutions, our new case study talks about the most infamous concept in Web3; Staking.

This new case-study talks in length about how Institutional Staking has gained traction ever since the success of the Proof-Of-Stake consensus, the existing protocols pushing the envelope of stable yields through the native tokens, a few Staking dilemmas Institutions have to consider before jumping into Staking and most of all how precisely can they safeguard their treasury that needs to be allocated to Staking.

Without a doubt, this is the most unique piece of paper you'll read about Institutional Staking, especially for Exchanges to grow their liquidity sustainably and securely.

Download the Case Study to know more

Partnership With Confide For Secure and Compliant Infrastructure

In order to enhance the adoption of CCSS security standards among institutions and ensure widespread accessibility, Liminal and Confide Limited have formed a mutual referral network.

This collaboration enables both parties to refer contacts who are seeking either a CCSS-compliant secure platform for custody services or an auditing platform for implementing the CCSS standard. Together, Liminal and Confide aim to promote the importance of security and compliance in the digital asset industry.

Liminal Becomes Part Of Telangana Government's Web3 Regulatory Sandbox

Liminal has become a part of the advisory panel of the Government of Telangana ’s Web 3.0 Regulatory Sandbox to nurture viable and scalable Web3 projects in the state. Liminal will enable Web3 startups to scale and grow by providing them technical, management, and operational guidance.

Liminal has been actively collaborating with government machinery to enable mass adoption of Web3-related products and services. We recently partnered with India’s premier investigation agency to provide custody solutions and the recent partnership with the Telangana government will enable us to leverage the power of blockchain for public welfare in the remotest parts of our country.

Webinars

We recently organised two webinars on:

1. Navigating PMLA Compliance for Web3 Businesses

Delve into the intricacies of the PMLA Regulations and how they impact the rapidly evolving world of digital assets. Gain valuable insights and explore best practices to navigate the PMLA regulatory landscape. Tune in to listen to Avinash Shekhar from TaxNodes , CA Vishva Shah from ZebPay , Muthuswamy Iyer from WazirX , R Venkatesh (Venkat) from CoinSwitch , Suraj S. from BNS and Anagh Tiwari from Liminal Custody in conversation with Samarth Mehta discuss about PMLA Compliance.

2. Abu Dhabi Global Market (ADGM): A Safe Haven for Digital Assets

Understand how ADGM has established itself as a leading jurisdiction for digital asset operations, fostering a secure and conducive environment for businesses in the sector. Expand your knowledge about the ADGM regulations that are shaping the digital asset industry with this webinar. Listen to Jehanzeb Awan from j. awan & partners , Tara Namdar from MidChains and Manan Vora from Liminal Custody in conversation with Anagh Tiwari discuss about ADGM Regulations.

Stay Subscribed to get the latest updates from the world of security, compliance, regulations and of course Liminal.

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