CoinShares acquires French crypto asset manager Napoleon AM

Major European digital asset manager CoinShares is finalizing the acquisition of the French fintech firm Napoleon Group despite the ongoing market decline.CoinShares announced on July 4 that the firm has acquired Napoleon Asset Management, a digital asset management subsidiary of Napoleon Group.CoinShares previously entered into a sale and purchase agreement (SPA) to acquire the entire issued share capital in Napoleon Crypto SAS for 13.9 million euros ($14.5 million) in November 2021.The latest acquisition came shortly after the French financial regulator, Autorité des Marchés Financiers (AMF), authorized the acquisition of Napoleon AM on June 28. CoinShares subsequently proceeded with the transaction pursuant to the terms set out in the group SPA on June 2022.Paris-based Napoleon AM was launched after completing an Initial Coin Offering (ICO) in late 2018, raising over $10 million through the sale of NPX tokens. The firm has received the Alternative Investment Fund Manager (AIFM) license and became one of the first European asset managers to be financed by an ICO and incorporated under French law.In late 2019, Napoleon AM launched a regulated Bitcoin (BTC) fund, the Napoleon Bitcoin Fund.The acquisition of Napoleon AM allows CoinShares to offer AIFM-compliant products and services, in addition to being a major issuer of crypto exchange-traded products in Europe. The license enables the firm to provide market services across the European Union, expanding CoinShares’ products with algorithmic trading and artificial intelligence tools developed by Napoleon AM.The transaction is yet another piece of evidence that CoinShares continues scaling despite the ongoing market decline, CoinShares CEO Jean-Marie Mognetti told Cointelegraph, stating:“CoinShares continues to grow despite market conditions. The bear market is an opportunity to solidify positions and build new products and services.”According to the CEO, having an AIFM-regulated entity in CoinShares’ group is important because it’s “one of the most demanding licenses.”Related: BlockFi announces deal with FTX US, including ‘option to acquire’ for $240M“CoinShares has always been at the forefront of regulation, it is a strong advocate of regulation in the digital asset industry and has an extensive list of regulated products and services,” Mognetti added.

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Are expiring copyrights the next goldmine for NFTs?

Although non-fungible tokens (NFTs) are most commonly known in the form of digital art, they exist in many other forms and represent much more than just art. In the creative industry, NFTs have been used by musicians such as Kings of Leon to release their latest album. In the sports industry, NFTs are created to record the highlights of major sporting events such as the NBA. In the consumer product industry, Nike, Gucci and many others are selling their digital branded products in the form of NFTs. A lot more real-world applications of NFTs are still to be explored and one of them is the digital publishing industry. The game-changing implications of publishing and promoting books with NFTs have already been discussed extensively by many. For example, the Alliance of Independent Authors are helping indie authors to promote their latest books using NFTs. Other associated items for the fans club such as character cards are also made into NFTs. Tezos Farmation, a project built on Tezos network, even uses the complete text of George Orwell’s Animal Farm book and slices it up into 10,000 pieces to use as titles for the NFTs. NFTs created from existing books are normally bound to copyrights. However, in the case of Tezos Farmation, the copyright had already expired. The text from the book can be used by any party for free. This triggers a very interesting question – how can NFTs preserve copyrights and royalties for books with expired copyrights? The NFT application in the publishing industry is so far mostly focused on books that still have royalties and within their copyrights lifespan. But there are authors whose work lives on long past both their mortal existence and that of their copyrights; can NFTs provide their estates a means to extend the life of the book and its royalties?The journey from copyright to public domainCopyright laws are complex and vary widely throughout the world. Although few countries offer no copyright protection in line with international conventions, most jurisdictions work on the premise that copyright is protected for the author’s life plus a minimum of 25 years after their death. In the European Union, copyright is protected for 70 years after the death of the latest living author. It is the same in the U.S, with the exception that books originally published between 1927 and 1978 are protected for 95 years after the first publication. No matter how long the copyrights are protected for, given enough time, anything will end up free in the public domain.When celebrated literature enters the public domain the future value of the work is essentially reduced to zero. However, there often remains a disconnected community who intrinsically value the work. Estates holding copyrights that are about to fall into the public domain have a unique opportunity to create a tangible asset in the form of NFTs from the intangible goodwill embedded in the disconnected community.A good example would be Winnie-the-Pooh, a fictional anthropomorphic teddy bear created by English author A. A. Milne and English illustrator E. H. Shepard is loved by fans all over the world. The first collection of stories about the character was created in 1926. After almost 96 years, the copyrights had expired and the book moved into the public domain on Jan 1, 2022. The estate holding the copyright will receive no future value from Winnie-the-Pooh even though the commercial value of such a world-wide famous cartoon character will remain high for a long time.Just prior to the copyright expiring, the controlling estate has the window of opportunity where no one else is legally entitled to do anything with the works. If the estate had spent time connecting fans with an interest in NFTs, building or collaborating with a project that resonates with them, and launching the NFT collection prior to the completion of the copyright period, the outcome would have been very different. There could have been a much longer copyright lifespan for Winne-the-Pooh.Related: Experts explain how music NFTs will enhance the connection between creators and fansExtending the value of an expiring copyright Currently, publishing houses have no incentives to collaborate with the estate of copyright holders that are about to enter the public domain because the work will soon be free. A certificate of authenticity represented by a tradable NFT might provide an incentive for such collaborations. After the copyright expires and the work goes into the public domain, the NFTs will carry the royalty further into the digital world. Royalties can be generated through sales in the NFT marketplace on the blockchain, or through even more complex smart contracts created for specific use cases for first edition, limited edition or signed vintage copies. The estates holding expiring copyrights have credibility, which is a precious asset in the NFT world, and they have nothing to lose. They are in the box seat to capitalize on their current ownership, and potential for a digital community. Beloved characters and the worlds they inhabit can be a solid foundation for not only NFTs that can extend copyrights, but also extended creativity across mediums like literature, gaming, Metaverse, charity, education and many more to come.The views and opinions expressed here are solely those of the author and do not necessarily reflect the views of Cointelegraph.com. Every investment and trading move involves risk, you should conduct your own research when making a decision.

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The crypto industry needs a crypto capital market structure

The past few weeks have been interesting and have surfaced what we in the financial services industry call matters requiring attention, or MRAs. An MRA describes a practice that deviates from sound governance, internal controls and risk management principles. These matters that require attention have the potential to adversely affect the industry and increase the risk profile. I have always focused on technology and innovation-led business models — systems and interconnected elements of blockchain-powered business networks — redefining the transaction systems that power many industries, including financial services. A growing number of naysayers have become vocal about recent events, which have revealed extensive mismanagement, ill-defined and misgoverned systems, and general misrepresentation of the industry. As a result, I want to take a systemic view of the industry to understand what led to this point, dissect the failings, and be prescriptive on how we can learn from failures and build upon successes. Let’s first understand the market structure and what it means. That will help shed light on inefficiency in the current crypto market structure and allow me to make the case for a better-defined structure aimed at systemic fairness, robust information flow for risk profiles, and a convincing innovation narrative to revive the industry and instill confidence.Understanding the current financial market structureThe modern financial market structure is essentially a chain of interconnected market participants that aid in accumulating capital and forming investment resources. These market participants have specific functions, such as asset custody, central bookkeeping, liquidity provisioning, clearing and settlement. Because of function, capital constraints or regulation, many of these entities are not vertically integrated, which prevents collusion or unilateral investment decisions. So, various products may be governed by different markets, but the fundamental financial primitives remain universal. For example, products such as stocks, bonds, futures, options and currencies all need to be traded, cleared and settled, and other functions such as collateralization, lending and borrowing ensue.Financial markets work only where there is a supply of and demand for capital, and this is important. Today, the information between these interconnected participants is a function of sequential batched relay systems, and this asymmetric dissemination of information not only creates opacity but also inefficiency in terms of liquidity requirements, system trust costs in the form of fees and opportunity costs. Blockchain and distributed ledger technology systems aim to solve these issues of time and trust with the characteristics of immutability and asymmetric dissemination of consistent information, which lends itself to trust and instant transaction processing. So, where did this go wrong? And why is the problem we were trying to solve becoming exponentially more complex and prevalent in crypto capital markets?Related: Understanding the systemic shift from digitization to tokenization of financial servicesThe current state of market (un)structure — The history of the promise of cryptoThe Bitcoin (BTC) system was proposed as an experiment born out of the global financial crisis as a prescriptive approach to rethinking our financial system, a reimagined order to organize the world community and reduce dependence on a few large hegemonic economies. This system was proposed with tenets of decentralization to distribute power and trustless protocols to ensure that no single entity had absolute control of a monetary system. It relied on participation in the global creation, acceptance and recognition of a currency, where the rules of demand and supply applied to egalitarian principles. Related: A new intro to Bitcoin: The 9-minute read that could change your lifeBitcoin helped envision a few financial systems to address the inefficiencies of the current system discussed previously. Ethereum introduced programmability to a simple asset transfer that Bitcoin introduced, adding business rules and other complex financial primitives for application to otherwise simple rules for moving value. This began a reinvention of the internet, which was never designed to move value but only information. Subsequently, evolved layers of innovation, such as provisioning scalability and privacy (layer 2), were added, and the industry was humming along with the promise of a bright future. While we had naysayers, the crypto industry brought innovation with no apologies and began to shape a new wave of technological development to empower an ownership economy — very much in line with the participative and global egalitarian economic system promised by Bitcoin.Many interesting projects evolved to solve problems as they popped up, and we could see a lot of innovative energy spread through the ecosystem with new use cases, applications and solutions for many problems resulting from lack of trust, costs and the exploitive opacity of data and information only monetizable by a few. Related: Bitcoin’s Velvet Revolution: The overthrow of crony capitalismThis revolution also began to attract new talent from many industries, and many projects began to be socialized, which neither adhered to original envisioned principles nor added to technological innovation. They used the vernacular and the enthusiasm of the community, but in their structure was a centralized layer with challenges having the pitfalls of the current system but with the utility of a distributed ledger techonology-based transaction system. Some of these projects did offer financial product innovation by utilizing the same financial primitives, solving the issues of opacity, time, trust, liquidity, capital efficiency and risk, and promising egalitarian access, but they lacked the market structure and guardrails the current system provides.Devising a new crypto capital market structure and convincing innovation narrativeHistorically, crypto industry market changes have been grassroots, and then the changes are driven by entrepreneurs and the community. The industry will once again pivot and shift through these forces and emerge with a stronger foundation. For this to occur, however, the industry needs a sound market structure and systemic independence from current transactional systems. One industry imperative is not only to coexist with current market structures but also to provide a bridging vehicle to current asset classes. The following are a few imperatives I consider essential MRAs for stronger and more resilient markets.Rethinking stablecoins“Stablecoin” has many definitions and many types, so the industry should devote significant energy to rethinking stablecoins, or a truly fungible asset as a medium of exchange. Stablecoins have facilitated a large volume of digital asset trading and allowed for traditional fiat, or fungible sovereign, currency to be converted into digital assets, including crypto assets, and brought much-needed liquidity into the market. However, they also have inherited the challenges of fiat (as a reserve) and begun to provide linkages to and inherit the challenges (and opportunities) of traditional financial markets. Besides the regulatory and compliance burden of fiat in a largely unregulated crypto financial system, the complexity of value systems can often cause issues in asset valuation and the risk matrix, making it hard for an emerging asset class to flourish and reach its full potential. I think the industry needs to view native crypto assets, such as BTC, Ether (ETH) and other ubiquitous crypto assets or a currency basket as fungible assets as a store of value, unit of account and medium of exchange — the three basic characteristics of a currency.[embedded content]Provisioning robust crypto market data Market data is a broad term that describes the financial information necessary for carrying out research, analyzing, trading and accounting for financial instruments of all asset classes on world markets. Crypto adds a new vector of challenge as a 24/7, 365-day operation with a velocity and veracity of data never seen before. This velocity and data capacity have led to analytic challenges in data collection, aggregation, modeling and insights. So, data is information that goes into the price/value/risk calculus and consideration of other macro factors such as inflation, money supply and global events that impact commodities, and essentially makes a market efficient or aims to. Regulatory moats exist to prevent some participants from taking advantage of information asymmetry, such as insider trading. Crypto market data will bridge the gap between price (what you pay) and value (what you get). This should not only be an imperative for all new layer-1 projects but also for all projects providing financialization of token as a service.Related: The meaningful shift from Bitcoin maximalism to Bitcoin realismCreation of a crypto self-regulatory organizationIt is important to create a self-regulatory organization (SRO) involving dominant industry players and major layer-1 protocols, which has the power to create industry standards, professional conduct guidelines and regulations to steer the industry in the right direction. SROs are generally effective due to domain expertise and preserving the interest and reputation of the industry by providing guidelines and guardrails for new entrants and existing participants alike. Enforcement and violation can come through broader education and appeals to the community that supports a project, and this can be especially effective around robust crypto market data that provides insights into transparent data and the correlation of activities across the industry on related projects and related markets. This will also help the industry (by segments) to educate itself, work with regulators and policymakers, and forge partnerships.Decoupling cryptoDecoupling is essential for the crypto industry to provide both diversity in the investment landscape and a model for efficient and resilient asset classes, transaction systems and an effective market structure. As we have seen with stablecoins, which inherit elements of global macro strategy and increased correlation, rethinking the industry’s ability to create value on its own merits and a new fundamental model that will not only create a convincing innovation narrative but also provide the markets a new independent asset class with sound fundamentals. This also is aligned with the fundamental principle that led to the genesis of Bitcoin-led crypto innovations. Decoupling in scientific terms also refers to reducing the number of resources used to generate economic growth while decreasing environmental deterioration and ecological scarcity.Related: The decoupling manifesto: Mapping the next phase of the crypto journeyLooking forwardA modern financial market structure is essentially a chain of interconnected market participants that aid in accumulating capital and forming investment resources. The industry needs a sound market structure and systemic independence from current transactional systems. One of the industry imperatives is not only to coexist with current market structures but also to provide a bridging vehicle to current asset classes. Earlier, I discussed several MRAs that are essential for stronger and more resilient markets. The changes proposed to fix the volatile and runaway nature of the industry include (but are not limited to): a) rethinking stablecoins and liquidity, b) robust crypto market data for efficient market functioning, c) creation of a crypto self-regulated organization and enforcement via community actions, and d) decoupling crypto — essentially rethinking the industry’s ability to create value on its own merits and a new fundamental model that will not only create a convincing innovation narrative but also provide the markets a new independent asset class with sound fundamentals.This article does not contain investment advice or recommendations. Every investment and trading move involves risk, and readers should conduct their own research when making a decision.The views, thoughts and opinions expressed here are the author’s alone and do not necessarily reflect or represent the views and opinions of Cointelegraph.Nitin Gaur has recently joined State Street Digital as its managing director, where he leads digital asset and technology design, with aspirations to transition part of the company’s financial market infrastructure and its clients to the new digital economy. In a previous role, Nitin, served as the founder and director of IBM Digital Asset Labs — committed to devising industry standards, use cases and working toward making blockchain for enterprise a reality. In parallel, Nitin also served as chief technology officer of IBM World Wire — a cross-border payment solution utilizing digital assets. Nitin also founded IBM Blockchain Labs and led the effort in establishing blockchain practice for the enterprise.

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