After Silicon Valley Bank Failed, Fears Of A Financial Disaster Arose

The largest financial institution failure since the financial crisis more than a decade ago occurred on Friday as Silicon Valley Bank (SVB) had its assets seized by US regulators. SVB was the 16th largest bank in the country, catering to depositors such as technology workers and venture capital-backed companies. This week, many of its customers withdrew their money due to anxiety over the banks situation, resulting in the banks inability to manage the large withdrawals. Despite attempts to raise new funds, the bank ultimately failed. The Federal Deposit Insurance Corporation (FDIC) took control of the bank and its management, as per their responsibility to guarantee deposits. Although it may not be well-known to the public, SVB specialized in financing start-ups and was one of the largest banks in the US, with $209 billion in assets and about $175.4 billion in deposits as of the end of 2022.Tech Employees Are Becoming More Anxious  Silicon Valley Banks collapse marks the second-largest retail bank failure in the US since 2008s Washington Mutual collapse. On Friday, US Treasury Secretary Janet Yellen convened financial regulators to discuss the situation, assuring them that she trusted their ability to take appropriate action and emphasizing the banking sectors resilience.

2023-03-13Deep Dive

Binance CEO Speculates Coordinated Efforts To Destabilize Crypto; Is Bitcoin Under Attack?

The crypto market experienced a tumultuous year in 2022, and it seems that the challenges are likely to persist in the current year as well. Due to regulatory hurdles and the collapse of prominent companies, the crypto industry is facing a difficult situation that appears to be a deliberate attempt to undermine it.  Binance CEO Raises Concern On Crypto    Binance CEO, Changpeng “CZ” Zhao, shared a similar view. In a recent tweet, he suggested that the current situation in the cryptocurrency space may be a coordinated effort to shut down banks that are supportive of crypto, which could have negative consequences for the industry in the future.  Despite the impact of attempts to hinder the cryptocurrency industry, traditional financial institutions are currently struggling while blockchain technology continues to operate due to its decentralized nature. This decentralized approach prevents any central authority from taking control. As an example, Bitcoin has maintained its $20K value despite facing regulatory obstacles, negative press coverage, and media scrutiny.  Recently, several influential authorities in the United States, such as the Federal Reserve, the OCC, FDIC, SEC, NYAG, NYDFS, DOJ, and members of Congress, have been making efforts to destabilize the growing cryptocurrency industry, which has been challenging the traditional market

2023-03-13Deep Dive

Stablecoins In Trouble? USDC, DAI, USDD Depeg As SVB Crisis Deepens

Following a significant sell-off, the worldwide digital asset market experienced a widespread rebound on Saturday morning, with Bitcoin and Ethereum prices increasing by 3% and 5%, respectively. Nonetheless, the top stablecoins, namely USDC, DAI, and USDD, suffered significant de-pegging, as the crypto market remains haunted by the Silicon Valley Bank crisis.  USDC To Fall Amid Market Crash?  According to the data, USD Coin (USDC), the second-largest stablecoin, has experienced an 11% drop in its value pegged to the US dollar in the past 24 hours. At the time of writing, USDC is trading at an average price of $0.912. Its 24-hour trading volume has surged by 321% to reach $18.54 billion as it continues to deviate from its fixed $1 value.  According to a statement by Circle, the issuer of USDC, Silicon Valley Bank is one of their six banking partners. However, they only use these banks to manage 25% of the USDC reserves held in cash. The Circle is still awaiting clarity on how the Federal Deposit Insurance Corporations (FDIC) receivership of SVB will affect its users.  Besides USDC, DAI, an Ethereum-based stablecoin, is also experiencing de-pegging issues during the current crisis. DAIs dollar-pegged value dropped by 10% over the past day and

2023-03-11Deep Dive

DOJ Wants To Stop Binance.US Buying Voyager — Because SEC

Despite gaining approval for its acquisition by Binance.US two days ago, Voyager is now facing an appeal by the Department of Justice (DOJ) in New York seeking to halt the deal. On Tuesday, U.S. Bankruptcy Judge Michael Wiles approved Voyagers restructuring plan, which involves Binance.US taking over Voyager client assets for $20 million, originally valued at $1.3 billion in July last year. However, during the hearing this week, SEC officials opposed the plan, claiming that Binance.US is operating an unregistered securities exchange.  In response to concerns about creditors waiting for access to their invested property amid the uncertainty, Judge Wiles stated that action must be taken. The Department of Justice (DOJ) has filed an appeal, claiming that the SEC has the authority to intervene to ensure compliance with securities laws regarding the management of Voyagers cryptocurrency assets.  According to the appeal filing, the Confirmation Order and Plan do not grant jurisdiction to the court over any police and regulatory actions taken by the SEC. The SEC retains the power and authority to initiate and continue any such actions against any individual or entity, including the Debtors.  Even if the appeal is dismissed, Voyager still has the option to withdraw from the agreement with

2023-03-11Deep Dive

Crypto Market Loses $60 Billion; Bitcoin Crash Under $20K; What’s Happening?

On Friday, the digital asset market worldwide experienced a significant sell-off as concerns mounted about the prospects of US-based banks that support cryptocurrencies. The collective market capitalization of the crypto market has plummeted by 7%, shedding over $60 billion in the past 24 hours, bringing it down to $930 billion.  Liquidation Breaches $300 Mln  According to WikiBIT data, the crypto market has seen liquidations totaling $308 million in the last 24 hours. The largest single liquidation order, worth $9.49 million, occurred on the Bitmex exchange. Meanwhile, Binance recorded liquidations of approximately $106 million over the same period, with OKX exchange following closely behind with $74 million in liquidations.  According to data, Bitcoin, the largest cryptocurrency in the world, experienced a liquidation of $120 million in the past 24 hours. During the same time frame, the price of Bitcoin plummeted by a significant 8%, and it is currently trading at an average price of $19,988 as of the time of writing.    In the past day, the price of Ethereum also decreased by more than 7%, and it experienced a liquidation of $75 million during the same period. As of the time of writing, Ethereum is trading at an average price of $1,421.      Why Crypto Market Is

2023-03-10Deep Dive

NY Attorney General Sues KuCoin for Alleged Violations of Securities and Commodities Laws

The KuCoin cryptocurrency exchange is being sued by the New York Advocate Generals office for reportedly breaking state securities and commodities rules. Attorney General Letitia James asserts that Ethereum (ETH), is the second-largest cryptocurrency by market value, as well as Terra (LUNA) and TerraUSD (UST) stocks.  KuCoin allegedly misrepresented itself as an exchange when it is actually a broker-dealer for commodities and stocks. The complaint seeks to geo-fence KuCoins website based on IP addresses and GPS positions in order to prevent entry to the exchange in New York.  Based on the “confidence score,” Seychelles-based KuCoin is the fifth-largest cryptocurrency market globally and the 17th-largest based on 24-hour trading activity. The business once billed itself as “the most sophisticated and safe bitcoin platform,” but in 2020 it was the victim of a $150 million breach.  In this case, it is claimed that the fact that holders of ETH can profit financially qualifies it as an asset. Since Ethereum switched to a proof-of-stake network last year, owning ETH immediately correlates to receiving staking compensation. A person can possibly make more compensation the more BTC they risk.  Given the focus that marking services have gotten from authorities, the timeliness of the case is noteworthy. Popular American exchange

2023-03-10Deep Dive

KuCoin Crypto Exchange Sued By NYAG Over Selling Securities

The New York Attorney Generals office has filed a lawsuit against the KuCoin cryptocurrency exchange on Thursday, accusing the company of promoting unregistered securities and commodities. The lawsuit claims that KuCoin, headquartered in Seychelles, has been operating in New York without registering as a broker-dealer of securities and commodities.      NYAG Seeks To Block KuCoin      Although KuCoin is not registered in New York, the Office of the Attorney General (OAG) was able to engage in buying and selling cryptocurrencies on the platform while being present in the state. Through this legal action, Attorney General James seeks to prohibit KuCoin from operating in New York and to restrict access to its website until it complies with the law.  The lawsuit filed by the New York Attorney General against KuCoin also claims that the exchanges in-house lending and staking product, known as KuCoin Earn, constitutes an unregistered security offering. It is noteworthy that NYAGs previous submission classified Ethereum (ETH) as a security, but it has been modified to “commodities” according to recent reports.      Growing Crypto Crackdowns  Recent regulatory crackdowns in the United States have placed crypto exchanges at the forefront. U.S. authorities have targeted well-known companies such as Kraken, Coinbase, CoinEx, and even the largest crypto trading platform

2023-03-10Deep Dive

Coinbase Launches Wallet-as-a-Service to Help Crypto Firms Build Customizable On-chain Wallets

Coinbase Global (Nasdaq: COIN), one of the worlds largest cryptocurrency exchanges, has announced a new offering called Wallet-as-a-Service (WaaS). The new service provides crypto firms with scalable and secure wallet infrastructure APIs, allowing them to create and deploy fully customizable on-chain wallets.  In a Twitter thread, Coinbase also highlighted that its wallet infrastructure provides multi-party computation (MPC) cryptography, which removes the need to manage a complicated 24-word recovery phrase. This feature provides an additional layer of security and convenience for users.  Coinbase has already onboarded several crypto firms, including Tokenproof, Floor, Thirdweb, and Moonray, to its WaaS. The company believes that this new offering will help bring the “next hundred million consumers into Web3”, the next generation of the internet powered by blockchain technology.  According to Coinbase, more and more companies are realizing the potential of Web3, which is expected to generate a massive industry of new decentralized applications and services. With WaaS, these companies can empower their customers to access these new services more easily.  For instance, Fonz, the founder of Tokenproof, explained that when users download the Tokenproof app, they will create their first wallet powered by Coinbase, welcoming them into Web3. This, he believes, is a significant step towards making the

2023-03-09Deep Dive

Silvergate, A Cryptocurrency Lending Bank, To Liquidate Following A Fallout With FTX

Silvergate Capital, a bank that has been lending to the cryptocurrency industry for a decade, has announced that it will shut down and liquidate. The decision was attributed to recent industry and regulatory developments. The move makes Silvergate the latest victim of the so-called “crypto winter” jitters in the digital asset industry, following the implosion of its major customer, the exchange FTX, in November.Silvergates Involvement in FTX Fraud Case Raises Concerns Over Cryptocurrency Industry Viability  The recent news that Silvergate Capital has been implicated in the FTX fraud case has sent shockwaves through the crypto community. The involvement of a well-respected bank like Silvergate in such a serious case has raised concerns about the risks associated with lending to the cryptocurrency industry and has led many to question the industrys long-term viability.  Silvergate, which is based in California, has been providing services to high-profile firms like Coinbase and Galaxy Digital. However, the collapse of FTX and its sister firm Alameda Research, as well as the arrest of their founder Sam Bankman-Fried for fraud and other crimes, resulted in a run on deposits at Silvergate. Customers withdrew more than $8 billion from the platform late last year, and the bank reported a $1

2023-03-09Deep Dive

East London Unlicensed Crypto ATMs Face FCA Action

The Financial Conduct Authority (FCA) is the regulatory body that oversees financial services in the United Kingdom. One of its primary responsibilities is to ensure that all financial activities, including those related to cryptocurrency, comply with the law. Recently, the FCA took action against an unregistered crypto ATM located in East London.Unregulated Crypto ATMs: A Potential Haven for Illegal Activities  UCrypto ATMs, also known as Bitcoin ATMs, allow users to buy and sell cryptocurrencies using cash. They are becoming increasingly popular as more people invest in cryptocurrencies like Bitcoin, Ethereum, and Dogecoin. However, crypto ATMs are not regulated in the same way that traditional ATMs are. This means that they can be used for illegal activities, such as money laundering and terrorism financing.  The FCA has been closely monitoring the use of crypto ATMs in the UK. In September 2021, the regulator issued a warning to all crypto ATM operators that they must be registered with the FCA by January 2022. Failure to register could result in fines, imprisonment, or both.  Despite this warning, some crypto ATM operators have continued to operate without registering. In December 2021, the FCA took action against an unregistered crypto ATM located in East London. The regulator issued

2023-03-09Deep Dive
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