London-based fintech company Revolut has unveiled a new integration with MetaMask, a prominent cryptocurrency wallet. This integration will enable customers in the United Kingdom and the European Economic Area (EEA) to make direct cryptocurrency purchases through MetaMask. Users can utilize their fiat currency balances, as well as debit and credit cards, to purchase various tokens directly into their MetaMask wallets. With over 40 million users across 18 fiat currencies, Revolut aims to enhance its crypto services and meet the increasing demand for crypto transactions among its user base.
As part of this integration, Revolut customers will have access to more than 20 different tokens, including popular cryptocurrencies like Ether (ETH), USD Coin (USDC), Tether (USDT), and Shiba Inu (SHIB). This move by Revolut may also be a response to recent regulatory challenges. In August 2023, the neobank suspended all crypto services for users in the United States, followed by a suspension of crypto purchases for users in the United Kingdom in January, due to new rules from the Financial Conduct Authority.
One of the key features of this integration is the simplified Know Your Customer (KYC) process. Users adding funds to MetaMask through the Revolut app will skip verification checks, as Revolut relies on existing verification processes. This partnership aims to give users more control over their crypto assets in a user-friendly and accessible manner, thereby fostering broader adoption of cryptocurrencies.
The Commodity Futures Trading Commission (CFTC) chairman, Rostin Behnam, has cautioned about potential conflicts between the Securities and Exchange Commission (SEC) and CFTC regulations regarding Ether (ETH). This concern arises following a decision by an SEC-registered broker, Prometheum, to offer custody services for Ether, a move that could categorize Ether as a security and create regulatory discrepancies.
Behnam emphasized during a hearing before the House Committee on Agriculture that both Bitcoin and Ether are considered commodities by the CFTC. He clarified that Prometheum's decision to provide ETH custody services was independent and not mandated by the SEC. Behnam expressed apprehension that if the SEC were to validate Prometheum's decision, labeling Ether as a security, it could lead to compliance issues for CFTC-regulated exchanges that list Ether as a futures contract.
Despite SEC Chair Gary Gensler not definitively classifying ETH as a security or commodity, Behnam underscored the importance of regulatory clarity to maintain market integrity. He highlighted the evolving nature of the crypto market and technology, stating that the current regulatory framework has been challenged. Behnam called on Congress to address the regulatory gap in the digital asset market, noting that the lack of legislation has not dampened public enthusiasm for digital assets.
FTX and Alameda have reached an "in principle" settlement with BlockFi, resolving their disputes for nearly $1 billion. This agreement, achieved through early mediation, could lead to full recovery for BlockFi's customers. The bankruptcy administrators for BlockFi expressed that the settlement has helped reduce litigation costs and ensures that funds reserved for litigation with FTX are instead directed towards customer distributions.
BlockFi filed for Chapter 11 bankruptcy protection in November 2022, citing exposure to the collapse of FTX earlier that month. The dispute between BlockFi and FTX stemmed from FTX's alleged debt of over $1 billion to BlockFi, which included a $400 million line of credit and nearly $900 million lent to Alameda Research. The loan was mainly collateralized by FTX's token, FTT, which significantly depreciated following FTX's collapse. Additionally, BlockFi had sued a holding company for Sam Bankman-Fried to recover 56 million Robinhood shares allegedly pledged as collateral for loans to Alameda Research. However, BlockFi also owed FTX.US up to $275 million under a 2022 rescue loan deal.
Following the settlement, BlockFi emerged from bankruptcy in October 2023 and opened a wallet to facilitate customer withdrawals. Estimates suggest that BlockFi owes up to $10 billion to over 100,000 creditors, including $1 billion to its three largest creditors and $220 million to bankrupt crypto hedge fund Three Arrows Capital. Customers who used an interest-bearing BlockFi account are expected to be able to withdraw some assets in 2024, though the exact payout remains unclear.
