Morgan Stanley Acquires 10.9% Stake in Microstrategy, Massively Increasing Bitcoin Exposure

Photo by Bermix Studio on Unsplash

January 11, 2021

  1. Morgan Stanley Acquires 10.9% Stake in Microstrategy, Massively Increasing Bitcoin Exposure
  2. South Korean Gaming Firm, Nexon, Allegedly Plans to Acquire Crypto Exchange, Bithumb
  3. Israeli Regulator Designates Company-issued Utility Tokens as Securities
  4. Major South Korean Bank Shinhan to Offer Crypto Custody-Related Services

Morgan Stanley Acquires 10.9% Stake in Microstrategy, Massively Increasing Bitcoin Exposure

Photo by Floriane Vita on Unsplash

Global financial services firm Morgan Stanley has just increased its Bitcoin (BTC) exposure by folds by acquiring a 10.9% stake (792,627 shares) in Microstrategy, a NASDAQ listed company, and now holds an estimate of 70,470 BTC. 

Microstrategy currently has about 70,470 bitcoins (estimated $2.9 billion) in its treasury, accumulated over the past 6 months. Earlier in the third quarter of 2020, Morgan Stanley held only 142,908 shares. Kevin Rooke, a digital asset analyst, tweeted last Friday, 

“That’s actually a 455% increase, up from 142,908 shares in Q3 … Even the banks want bitcoin.”

Citigroup, an American multinational investment bank, downgraded its stock to a sell rating due to Microstrategy’s bold move to BTC. However, its share price has surged nearly 86%, and it is up 25% year-to-date.

Further, most other institutional investors have also announced that they have either invested in BTC or plans to do so in the foreseeable future since Microstrategy’s big bitcoin purchases. With this move, we look forward to more institutional adoption in this new year and beyond.

Source | Bitcoin.com

South Korean Gaming Firm, Nexon, Allegedly Plans to Acquire Crypto Exchange, Bithumb

Photo by Erik Mclean on Unsplash

Nexon, a South Korean multi-billion dollar gaming conglomerate, is reportedly preparing to acquire a 65 percent stake in Bithumb’s troubled crypto exchange in an agreement worth some 500 billion won ($460 million).

According to local media sources, Nexon is to acquire all of the shares held by Bithumb Chairman Lee Jung Hoon, plus many others, totaling up to 65 percent of the outstanding shares of the exchange. Besides, the Tokyo Stock Exchange-listed video gaming giant has also reportedly signed a Memorandum of Understanding (MOU) beginning of this month with the sellers to facilitate the trade since then. 

Although Nexon denied the allegations, the possibility of the crypto exchange acquisition remains high. At present, Nexon operates two other crypto exchanges – Korbit, Korea’s third-largest exchange, and the European Bitstamp exchange, which it purchased for between $80 million and $400 million three years, respectively. Bithumb, Korea’s biggest bitcoin exchange, has been rocked by fraud involving top company workers. Authorities in the Asian country are reportedly investigating the $25 million financial fraud site. 

Source | Bitcoin.com

Israeli Regulator Designates Company-issued Utility Tokens as Securities

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The Israel Securities Authority (ISA) has recently ruled that utility tokens issued by corporations are securities and cannot be listed as properties. The ISA’s decision comes after the Israeli tech startup Kirobo tried to persuade the regulator that the expected issue of the token did not amount to a security offering.

Even so, in response to Kirobo’s arguments, the ISA published a position paper explaining why the proposed token offering should be “subject to Israeli securities regulations.” By brushing aside Kirobo’s objections, the ISA maintains that “tokens should be regarded as securities, whether due to the risk of holding them or to the expectations of buyers to receive a short or long-term return.”

Further, the regulator highlighted a significant element of Kirobo’s plan, which seems to undercut the utility token’s arguments. In the position paper, the ISA reveals that “Kirobo’s plans to hold 0.8% of the tokens indicate that it is planning to increase the value of the tokens.” 

The regulator stated:

“There is a probability that there will be investors who will purchase the token for financial purposes and out of the expectation that the value will rise, which characterizes investments in securities.” 

Source | Bitcoin.com

Major South Korean Bank Shinhan to Offer Crypto Custody-Related Services

Photo by Cait Ellis on Unsplash

Shinhan Bank, the largest commercial bank in South Korea, is entering the crypto market by investing in the Korea Digital Asset Trust (KDAC) and plans to provide digital asset custody services.

Shinhan Bank reported investment in KDAC, a joint venture custody company created by the local crypto exchange, Korbit, Blockchain Block and crypto researcher Fair Square Lab, according to inews24. Also, a Shinhan Bank rep stated that their upcoming crypto-related services are suitable for an area that “can make good use of banks’ compliance capabilities and custody experience.”.

Shinhan Bank also wants the technological tools used in the project to be used in the Decentralized Finance (Defi) sectors that have been aggressively targeted by hacking incidents over 2020. Chairman of the Shinhan Financial Group, Cho Yong-byeong, stated:

In a situation where all companies, regardless of business, are digitally active, the fate of Shinhan will also depend on digital transformation. Based on the driving system, all Shinhan people should accelerate digital innovation with one heart. “

Source | Bitcoin.com

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