Facebook Flips Crypto-Related Ad Ban; Bitfinex Confirms $1 Billion IEO; Binance Margin Trading 'Very Soon'

Leading today’s crypto headlines was Facebook’s announcement it will significantly relax its ad policy for a number of cryptocurrency-related products and offerings. Bitfinex was again in the news, although this time it was with respect to the publication of its whitepaper ahead of a planned $1 billion token sale. Following the $40 million hack, Binance, in an attempt to give gloomy supporters something to look forward to, revealed they will begin rolling out a margin trading system "very soon."

Bitcoin (BTC), for the first time in nearly six months, rose north of $6,000 today. At time of writing, it is trading at $6,060.33 (+2.65%). Also seeing green today was ether (ETH) and the MVIS CryptoCompare Digital Assets 10 Index, which are currently $169.79 (-0.35%) and 2,865.4 (0.75%), respectively, at time of writing.

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Facebook Flips Cryptocurrency-Related Ad Ban

In a blog post released by the social media giant, it explained it will “no longer require pre-approval for ads related to blockchain technology, industry news, education or events related to cryptocurrency.” Worth noting, certain crypto-related ads, such as those for initial coin offerings (ICOs), that Facebook will keep banning. In relation to promoting cryptocurrencies or crypto exchanges, Facebook will continue to demand prospective advertisers firstly obtain pre-approval. This is the second time Facebook has loosened its policy on crypto-related ads since January 2018, when it introduced an all-encompassing ban.

Bitfinex Confirms $1 Billion IEO Rumors

Despite allegations of commingling from an ongoing investigation by the office of the New York Attorney General (NYAG), Bitfinex confirmed it is indeed planning to raise $1 billion through an initial exchange offering (IEO). As stated in a whitepaper published by the cryptoasset exchange yesterday, Bitfinex’s management intends to sell up to 1 billion LEO tokens at a unit cost of one tether (USDT). Reportedly, Bitfinex is currently conducting a private token sale round, which is set to close on May 11th, 2019. If required, Bitfinex will initiate a public token sale in the hope that the remainder of the LEO tokens can be sold.

Binance to Roll Out Margin Trading, CEO Reveals

In a live-streamed ask-me-anything (AMA) session, Binance co-founder and chief executive, Changpeng ‘CZ’ Zhao, declared the top-tier exchange – which yesterday suffered a 7,000 BTC hack – will begin rolling out a margin trading system “very soon.” The product is currently in a testing phase with large traders, CZ shared with his audience. Another notable outtake from the AMA was the Binance leader’s admission there are “a few different proposals and plans” in motion regarding stablecoin listings. It is “likely something may happen there,” added CZ, who was not yet able to commit to any particular option.

CME Looks to Double Bitcoin Futures Limit, but Is This Wise?

The Chicago Mercantile Exchange ( CME ) has a new request for its regulator, as it looks to double open position limits on bitcoin futures contracts in the face of significant interest.

Nasdaq reports that the CME has already petitioned its regulatory body, the Commodity Futures Trading Commission (CTFC), asking for an increase from 1000 contracts per spot month to 2000 per investor. Each contract represents five BTC, so essentially, at its peak,  a single investor's total position may edge towards a monumental 10,000 BTC.

This is in direct response to the contract's recent growth which is currently depicting record levels of activity, citing $370 million being traded per day. A spokesperson for the CME noted that the idea to increase limits was proposed on the continued maturity of the market:

Based on the significant growth and acceptance of our financially-settled CME Bitcoin futures markets, as well as our analysis of the underlying bitcoin market.

However, as Nasdaq writes the increase in the upper limit of positions is somewhat superfluous. As of July, the number of open interest contracts reached an all-time high of just 6100; given this, it seems the CME may be future-proofing.

Open to Manipulation?

However, concerns remain about the limit increase, as without them, the potential for manipulation rises; often to the detriment to the underlying asset. Although, as per the CTFC website, the threat of manipulation from bitcoin futures contracts is "low":

In general, position limits are not needed for markets where the threat of market manipulation is non-existent or very low.

Instead, Nasdaq posited that this might point to a lessening on the CTFC's strict rule of bitcoin; as well as a maturing of the market in general.

Nevertheless, some believe the CME's bitcoin futures contracts do pose a significant threat to the price of BTC; with some suggesting that blatant manipulation continues unchecked within the market.

As reported , there seems to be a correlation between the expiry dates of CME bitcoin futures contracts and a lull in the price point of BTC. In several instances, a significant drop in bitcoin's price has coincided with a closure from the CME. The most recent example of this occurred on Labor Day, September 2, when bitcoin rose an extraordinary 8% shortly after the CME shut.

Crypto analyst, Alex Kruger, highlighted this, noting the large gaps which formed on the CME chart, from the price discrepancy before and after closing.

This has become a pretty accepted practice within the market. Kruger has even gone to the lengths of compiling statistics each time this phenomenon transpired:

On these occasions, bitcoin cited an average 4.6% price discrepancy following the close of the CME.

Whether this is a coincidence or the market is indeed being actively manipulated is as yet unclear. Either way, with the increase of these limits it might be only a matter of time until we know for sure.

Featured Image Credit: Photo via Pixabay.com