What happened this week in the world of blockchain and cryptocurrencies? The most relevant local and international events as well as appealing background reports in a concise and compact weekly review.
Selected articles of the week:
Another attack shakes a crypto exchange in Crypto Valley. The Swiss platform Swissborg reported last week a hack of around 41 million USD in Solana from the SOL-EARN program. After the 22 million hack of the Zug-based platform Lykke, which had to file for bankruptcy in December, investors are understandably unsettled. However, the dimensions differ significantly: according to court documents, Lykke managed around 68 million USD at the time of the incident – the hole swallowed a third of customer funds and was nearly impossible to fill. Swissborg, on the other hand, holds customer assets worth around 1.84 billion USD, according to an independent proof-of-reserves audit. The loss thus amounts to about 2.2% of total assets, as officially confirmed. Swissborg is in a much stronger financial position and is likely to have several options to cover the loss. Nevertheless, such incidents reinforce the old Bitcoiner credo: “Not your keys, not your coins.”
Last week, the Swiss crypto exchange Swissborg reported a hack of its external staking provider Kiln involving 41 million USD in Solana.
Swiss banks test deposit token
Under the umbrella of the Swiss Bankers Association (SBVg), PostFinance, Sygnum Bank, and UBS conducted a feasibility study on “deposit tokens.” For the first time, banks carried out a legally binding payment across institutions via a public blockchain. The resulting report is intended to serve as the basis for a standardized infrastructure for blockchain-based financial services in Switzerland. The project is seen as a response to the boom in stablecoins, which have been declared a national priority in the US. But the differences are crucial: stablecoins are backed 1:1 by liquid assets such as government bonds, and their redemption is guaranteed by the Federal Reserve. Deposit tokens, by contrast, represent tokenized bank deposits and are not fully backed by assets at a bank. In a stress scenario such as a bank run, stablecoin holders would therefore likely have the upper hand.
Under the umbrella of the Swiss Bankers Association (SBA), PostFinance, Sygnum Bank and UBS tested a “deposit token”.
Tokenizing money market funds
DBS Bank, Franklin Templeton, and Ripple are entering a partnership to offer institutional and accredited investors new opportunities in trading and lending with tokenized money market funds. At the core of the solution are RLUSD, Ripple’s stablecoin, and sgBENJI, the token of a Franklin Templeton money market fund. Investors will be able to acquire sgBENJI tokens via DBS Digital Exchange, with RLUSD serving as the stable settlement currency. The aim is faster portfolio rebalancing, greater liquidity, and eventually the use of sgBENJI as loan collateral. The token runs on the XRP Ledger to ensure efficiency and low transaction costs.
DBS and Franklin Templeton launch trading and lending solutions with tokenized funds and Ripple’s RLUSD stablecoin.
Tokenization of all assets
BlackRock, the world’s largest asset manager, is examining how traditional exchange-traded funds (ETFs) can be converted into tokenized versions on the blockchain. The trigger was recent breakthroughs in Bitcoin ETFs, which have opened up new regulatory possibilities. Tokenized funds could become more efficient, transparent, and potentially cheaper – with benefits such as automated settlement or fractional ownership. However, BlackRock emphasizes that progress depends heavily on regulatory frameworks, for example, how securities on blockchain platforms are classified and handled. Applications from major exchanges such as Nasdaq are likely to accelerate this process.
BlackRock explores ETF tokenization after Bitcoin breakthrough to offer real asset funds via blockchain.
Regulatory easing for Binance
In addition: As part of the 4.3 billion USD settlement with the US Department of Justice (DOJ), Binance was required to accept an external compliance monitor for three years. Talks are now underway to end this obligation early. Since then, the monitor has overseen key areas of anti-money laundering and sanctions compliance worldwide, not just at the US subsidiary. Binance hopes that an end to this requirement will mean less regulatory burden and more operational flexibility. Supporters see this as relief for the company, while experts warn of increased risk of further violations if internal controls prove insufficient. The DOJ’s decision will likely show how strictly US authorities intend to deal with crypto exchanges in the future.
Binance negotiates with DOJ to end external compliance monitor from 2023 settlement – more flexibility possible.
