Welcome to Token Issue! Delivered every Friday, this free newsletter breaks down the biggest stories in Asia’s crypto scene and beyond. View past issues here or sign up here to receive future newsletters.

Hello readers,

Remember how Donald Trump’s opponents called him a cartoon character?

It all came true last year when we saw Trump present himself – in all his glory – as NFTs. Superhero? Check. Astronaut? Check. Old West sheriff? You betcha.

Love him or hate him, you can’t deny the audacity of it all. He turned himself into a walking, talking cash cow using NFTs as his golden ticket.

Pixelated versions of the former president now fetch hefty prices and fuel his potential comeback in the 2024 presidential race.

Behind the scenes of all this is Singapore-based crypto veteran Andras Kristof, who launched Galaxis, a platform for creators to monetize their work, engage with their audience, and foster communities using NFTs. Bigwigs like Val Kilmer, Steve Aoki, and Mike Tyson also joined the platform.

A source has confirmed to us that Trump has been selling his NFTs using the same platform. Our big story has all the details you want to know.

Editor’s note: This will be the last edition of Token Issue. We are suspending it, as we have not seen enough traction for our crypto coverage to justify a dedicated crypto newsletter. That said, we will continue to write about the space and feature the coverage in our other newsletters. Thank you for your support over the past few months.

— Deepti

???? THE DEEP DIVE

Meet the startup behind Donald Trump’s NFTs

Image credit: Timmy Loen

Andras Kristof launched Tembasu Terminals, the first Bitcoin ATM in Singapore, in 2014, opening up a whole new world of possibilities. And as he immersed himself in the crypto space, NFTs caught his attention.

Now with Galaxis, he’s helping creators use NFTs to monetize their projects and build sustainable economies.

Imagine this: You want to create an educational course. With Galaxis, you can receive funding from interested individuals, and in return, they get a membership card in the form of an NFT. Once your course is ready, those members can use their special cards to access the content.

I know NFTs and crypto can be a bit overwhelming, but Kristof firmly believes in their future.

He sees a world where NFTs go beyond speculation and provide practical utility. Just imagine Netflix or Amazon Prime Video using membership cards in the form of NFTs instead of user accounts.

???? ALL EYES ON…

What everyone’s talking about.

1️⃣ Battle to be the first Bitcoin ETF heats up

The race to launch the first Bitcoin exchange-traded fund (ETF) has reached a fever pitch as major players vie for regulatory approval.

Notable players such as BlackRock and Cathie Woods’ ARK Invest have filed for approval of their Bitcoin ETFs, and financial services firm Fidelity is reportedly planning to do the same.

Digital asset management firm Grayscale is also believed to have a 70% chance of obtaining approval for its offering.

So, what exactly is a Bitcoin ETF? In simple terms, it allows investors to gain exposure to Bitcoin’s price movements without the need to directly purchase the digital currency or use a cryptocurrency exchange.

Investors are spared from concerns like gas fees and wallet security, making it a more cost-effective and convenient option.

The Bitcoin ETF operator acquires Bitcoin and offers fractional ownership through shares to investors.

However, the question remains: Will the Securities and Exchange Commission (SEC) approve a Bitcoin ETF?

While the participation of traditional financial institutions in the crypto market may push for mass adoption, the SEC’s historical stance against Bitcoin ETFs raises doubts.

If the SEC does grant approval, the road to the live listing of a Bitcoin ETF may still be arduous and protracted. Even with approval, the actual listing may take several years to materialize.

For instance, ARK Invest claims to be at the forefront of approval, as the SEC’s next decision date for its application is set for August 13. On the other hand, other applicants like BlackRock do not have a designated decision date as of yet.

As investors await regulatory decisions, the potential approval of a Bitcoin ETF could have a huge impact on the crypto market, opening the doors for broader participation, increased liquidity, and potentially driving the price of Bitcoin to new heights.

2️⃣ Trust deficit

Over the past year, the crypto space has seen quite a few institutional failures, with notable names like FTX, 3AC, Celsius, BlockFi, Silvergate, and Signature facing setbacks.

Adding to the list of troubled companies is Prime Trust, a Nevada-based crypto custodian that has catered to players such as BinanceUS, FTX, Celsius, Swan, and Abra.

The company has encountered a series of challenges over the past months. The latest blow came when Nevada’s Financial Institutions Division (FID) placed Prime Trust into receivership. The FID has assumed control of the custodian, halting its operations. The company no longer has the authority to conduct business independently.

This development follows closely on the heels of BitGo’s decision to withdraw from its planned acquisition of Prime Trust, further exacerbating the custodian’s challenges in finding a way forward.

How did Prime Trust find itself in this precarious situation? Primarily operating as a crypto custodian, the company’s core function revolves around securely storing funds on behalf of other crypto entities.

The troubles began in December 2021 when the company encountered a significant setback: It lost access to the wallets containing customers’ crypto holdings.

While the exact details of how that happened have not been disclosed, it is known that Prime Trust changed management in 2021, and it was during this period that the issue with the wallets occurred.

This incident triggered panic, and in an attempt to rectify the situation swiftly, the custodian supposedly used clients’ fiat deposits to meet the surge in withdrawal requests.

Such actions raised concerns that the company was operating a Ponzi scheme, casting a shadow over Prime Trust’s integrity.

The situation worsened as regulatory scrutiny revealed that the custodian owes its clients over US$85 million, while holding a mere US$3 million in fiat reserves. Additionally, Prime Trust’s liabilities extend to US$69.5 million in crypto assets, with only US$68.6 million available in reserves.

This incident serves as a reminder of the significance of self-custody in the crypto world. It reinforces the popular saying, “not your keys, not your coins.”

⭐ TO THE STARS

Impactful developments and projects in Web3.

1️⃣ Magic Eden expands to support BRC-20 tokens

Magic Eden, a multichain NFT marketplace, has expanded its offerings by announcing support for BRC-20 tokens, which use the Ordinals protocol to inscribe data onto the Bitcoin blockchain.

The integration allows users to trade these tokens on the secondary market while also enabling the creation of new ones on the Bitcoin blockchain. Through Magic Eden’s launchpad, traders can now directly mint these tokens.

Launched by developer Casey Rodarmor, the Ordinals protocol helps create NFT-like assets on the Bitcoin blockchain by “inscribing” data onto individual satoshis. Satoshis are the smallest units into which a Bitcoin can be divided.

2️⃣ Ecoterra

Ecoterra rewards users with tokens for recycling everyday items like plastic, glass, and cardboard.

Through its app, users can scan the barcode of an item, deposit the piece in a Reverse Vending Machine, and receive Ecoterra tokens based on the item’s value.

These tokens can be stored, staked for passive income, sold on exchanges, or used to support global green initiatives such as ocean clean-ups, tree planting, and carbon offset projects through the Carbon Offset Marketplace. Users can earn NFTs to track their environmental contributions as well.

Ecoterra also has a recycled materials marketplace for businesses and individuals to purchase recycled goods.

MORE TO CHEW ON

Stuff that’s good to know.

1️⃣ HSBC adds Bitcoin, Ethereum ETF support on HK exchange

HSBC will now allow its customers to buy and sell Bitcoin and Ethereum exchange-traded funds listed on the Hong Kong exchange.

The company recently listed crypto ETFs on its Easy Invest mobile app, allowing traders to access Bitcoin and Ethereum futures. These ETFs operate as securities and are based on derivative contracts that are traded on commodity exchanges.

2️⃣ Argus Labs to boost blockchain gaming scalability

Argus Labs’ flagship product, World Engine, is a software development kit that provides game developers with the tools to create their own dedicated Layer 2 blockchain networks on Ethereum.

Argus recently raised US$10 million in its seed round from investors including Gojek co-founder Kevin Aluwi, Robot Ventures, and Anagram.

3️⃣ Ledger’s offering for institutional investors

Crypto wallet firm Ledger has launched Tradelink, a trading platform for institutional investors.

Tradelink aims to mitigate third-party risk in crypto trading. The platform enables custodial trading through partnerships with exchanges, custodians, asset managers, and brokers, including Hodl Group, Etana, Bitstamp, and Huobi.

4️⃣ Are your crypto lenses rose-tinted?

If you’re thinking of getting into crypto, this challenge will put your crypto knowledge and instincts to the test. Find out if you’re simply hodling or if you truly understand how to vet cryptocurrencies.

That’s all for this issue – we hope you liked it. Do also check out previous editions of the newsletter here.