Cryptos: Leonteq launches 20% callable rev conv, expands pool of cryptos

The US-denominated structure listed on the SIX Swiss Exchange has a nine-month term and struck yesterday (4 October).

This is the second reverse convertible on Ether – the Swiss provider brought to market the first ever reverse convertible linked to this cryptocurrency, offering a guaranteed coupon of 10% (20% pa) and a strike level of 55% of the initial fixing level.

With the new additions, ‘investors can select between a broad range of different crypto assets and their different business models,’ according to Tino Wendisch (pictured), managing director and head crypto offering at Leonteq.

‘Our universe represents more than 90% of the total market capitalisation of all crypto assets, excluding stablecoins,’ he said.

The new reverse convertible adds to Leonteq’s range of crypto products which have seen a 15-fold increase in revenues (CHF9.2m/€8.4m), according to the firm’s H1 2021 results.

The Swiss provider has expanded its digital asset offering with the addition of four new crypto assets to its platform which now offers a total of 22 crypto assets in the DACH region.

The new delta one certificates track the performance of Solana, Compound, 0x and Yearn.Finance and are available for Swiss investors as products listed on SIX Swiss Exchange as well as products without listing, and for German and Austrian investors as listed products on Börse Frankfurt Zertifikate.

In addition, Leonteq has launched new products tracking Filecoin, EOS, Aave, Algorand and Cosmos as listed tracker certificates on BX Swiss.

With this expansion, Leonteq retains its market leading position as the most active provider of crypto assets in a securitised format.

Leonteq is a pioneer and the main provider of structured products on crypto assets via tracker certificates on the top crypto assets since 2017 in Switzerland. Leonteq launched the world’s first short tracker certificate on Bitcoin in 2017, the first exchange-traded actively managed strategy in 2018, the first ever reverse convertible on Bitcoin in 2019 and on Ethereum earlier this Summer. 

Coinbase seeks crypto futures approval

US crypto exchange Coinbase has submitted an application to become a registered Futures Commission Merchant (FCM) with the National Futures Association (NFA).

The exchange did not provide any details but confirmed on Twitter that it has filed an application with the NFA to register as an FCM. ‘This is the next step to broaden our offerings and offer futures and derivatives trading on our platforms,’ stated Coinbase, adding that the goal is to ‘further grow the cryptoeconomy’.

According to the NFA website, the pending application was submitted on 15 September under the name Coinbase Global Inc. which is listed as a ‘pending NFA member’.

The exchange was fined earlier this year by the Commodity Futures Trading Commission (CFTC) ‘for reckless false, misleading, or inaccurate reporting as well as wash trading by a former employee on Coinbase’s GDAX platform’.

The order required Coinbase to pay a civil monetary penalty of US$6.5m and to cease and desist from any further violations.

ADDX targets China investors via offshore investment scheme

Digital securities exchange ADDX has reached an agreement with Singapore wealth and fund management firm Icham to channel investments from the Icham fund in China to the platform as part of the Qualified Domestic Limited Partnership (QDLP) scheme.

The Singapore firm - formerly known as iStox - expects to grow its business in China significantly, after concluding a US$200m agreement tied to a government-granted quota for Chinese offshore investments. The QDLP allows domestic investors across China to buy into renminbi funds that focus on overseas investment opportunities.

Fund quotas are allocated through a few major cities – including Beijing, Shanghai, Shenzhen and Chongqing.

Under the agreement, ADDX will be the primary venue for investments from the Icham fund in China authorised to raise capital from Chinese institutions and individuals. ADDX will offer Chinese investors access to private market products issued in the form of digital securities covering a broad range of asset types, including pre-IPO equity, hedge funds, VC funds, real estate funds, wholesale bonds and structured products.

Fidelity: market conditions in 2020 were catalyst for crypto adoption

A new international survey from Fidelity Digital Assets how found a growing acceptance of crypto currencies and digital assets among institutional investors around the world.

According to the firm, 52% of the investors surveyed globally have an investment in digital assets.

Asia leads the pack by a wide margin, with 71% of its surveyed investors allocating some of their portfolios into crypto. This compares to 56% in Europe and only 33% in the United States.

Despite the country’s comparatively low numbers, the US did see an increase from the 27% of American respondents who said they had crypto holdings in Fidelity’s 2020 survey. According to the report, US investors appear to prefer digital asset investment products to making direct purchases of crypto.

‘This year, 18% of respondents in the US said they bought or invested in digital assets through an investment product, compared to 8% the previous year,’ reads the report. ‘This uptick in adoption via investment products is likely supported by an increase in the number of public trust-structured investment products now available in the US, in addition to an array of private fund offerings issued by managers throughout the past year. Fourteen percent of US investors surveyed shared that they invested directly in digital assets (compared to 16% in the previous year).’

The survey also indicated that 70% of all investors had a neutral-to-positive perception of digital assets.

Fidelity surveyed 1,100 respondents from the US, Europe, and Asia representing financial advisors, high-net-worth investors, family offices, crypto hedge funds, venture capital funds, traditional hedge funds, pension funds, defined-benefit plans, endowments, and foundations.

Kraken hit by CFTC US$1.25m penalty

The Commodity Futures Trading Commission (CFTC) issued an order filing and settling charges against Payward Ventures d/b/a Kraken (Kraken) for illegally offering margined retail commodity transactions in digital assets, including Bitcoin, and failing to register as a futures commission merchant (FCM).

The order requires Kraken to pay a $1.25 million civil monetary penalty and to cease and desist from further violations of the Commodity Exchange Act (CEA), as charged.

The CFTC’s order finds that from approximately June 2020 to July 2021, Kraken offered margined retail commodity transactions in digital assets to U.S. customers who were not eligible contract participants. According to the order, Kraken served as the sole margin provider and maintained physical and/or constructive custody of all assets purchased using margin for the duration of a customer’s open margined position.

These transactions were unlawful because they were required to take place on a designated contract market and did not. Additionally, by soliciting and accepting orders for, and entering into retail commodity transactions with customers and accepting money or property (or extending credit in lieu thereof) to margin these transactions, Kraken illegally operated as an unregistered FCM.

Founded in 2011, Kraken is one of the largest digital asset exchanges in the US.