On Thursday, Coinbase CEO Brian Armstrong shared a Twitter post saying the US SEC had plots to do away with crypto staking. His Twitter thread sparked mixed reactions as the crypto community took it as a potential attack on the innovation.
Armstrong condemns SEC attack on crypto staking
In his Twitter thread, Armstrong said that they are hearing rumors the SEC would like to do away with crypto staking in the US. He said that the main target of such enforcement would be the retail investors and added that he hopes it’s not the case as it would be a terrible path for the US.
1/ We're hearing rumors that the SEC would like to get rid of crypto staking in the U.S. for retail customers. I hope that's not the case as I believe it would be a terrible path for the U.S. if that was allowed to happen.
Armstrong expressed how staking is an important innovation in the crypto space, meaning it would be catastrophic if it were to be overlooked. He explained that it allows users to participate directly in open crypto networks. He stated that it brings different positive improvements to the industry, like scalability, security, and a lower carbon footprint. As such, he believes staking is not a security.
2/ Staking is a really important innovation in crypto. It allows users to participate directly in running open crypto networks. Staking brings many positive improvements to the space, including scalability, increased security, and reduced carbon footprints.
He said that the crypto community needs to ensure that technologies and innovations are encouraged and welcomed in the US and not smothered by a lack of clear rules. He added that if such financial and Web 3 tools were to be built outside the country, it could be a matter of national security.
4/ We need to make sure that new technologies are encouraged to grow in the US, and not stifled by lack of clear rules. When it comes to financial services and web3, it's a matter of national security that these capabilities be built out in the U.S.
In his thread, Armstrong said there are better ways out than regulation by enforcement. He said it encourages companies to operate offshore, like in the case of FTX, which could be a danger to the finance sector as they cannot be adequately monitored.
He added that he hoped all stakeholders could work together to develop clear rules governing the industry. He said such rules should be sensible solutions to protect consumers and preserve innovation and national security interests in the US.
His comments attracted mixed reactions. Cardano Co-Founder Charles Hoskinson responded and claimed that ETH staking is problematic. He explained that temporarily giving someone else your unregulated assets to help them get a return does not look good. He said a lack of good innovation that allows for staked money to be accessed and decentralized could end up lumping all betting together.
FTX meltdown has been monumental. Now, a series of events haunt Bankman-Fried and keep him away from what was once his crypto estate.
FTX keeps haunting Bankman-Fried
Things are getting hard for Sam Bankman-Fried as regulators prepare for the October trials, and FTX is getting liquidated. He is under house arrest after being granted a $250M bail.
Since his release, Bankman-Fried has been trying to access FTX and Alameda Funds and âprove’ his innocence to no avail. All that seems to be working against him. Yesterday, a series of events happened. Here is a breakdown of what transpired.
Judge rules that SBFâs $250M guarantors be made public
In a Jan 30 ruling, two sureties of the $250M bail granted to Bankman-Fried were asked to be revealed. The New York judge ruled that the two unnamed individuals who have been hidden since the bail terms were made and signed can now be exposed.
This news shocked Bankman-Friedâs legal counsel, who had highly contested that the individualsâ identities remain hidden, citing security reasons. The Judge has given them until Feb 8 to contest the ruling.
Alameda Research sues bankrupt Voyager Digital for $446M
FTXâs sister company, Alameda Research, is suing bankrupt crypto lender Voyager Digital for $446M. The ill-fated company is seeking to claw back loan repayments that FTX had made to the crypto lender before filing for bankruptcy in November.
The lawyers managing FTX and Alameda filed the motion against Voyager in a Delaware court on Jan 30. The development twist is that both companies filed for bankruptcy in 2022, but voyagers came four months earlier. Following its bankruptcy filing, it demanded that FTX and Alameda repay all loans.
According to FTX lawyers, these loans need to be clawed back as they were made near November when the exchange filed for bankruptcy. FTX claims to have paid $248.8M in September and another 4193.9M in October. It also made a $3.2M repayment of the loanâs interest in August.
The lawyers claim that the exchange used customer deposits to make the payments, meaning the process was irregular. Voyager ought to refund it so the exchange’s users can be repaid.
Justice Dept wants SBF not to access FTX and Alameda assets
The US Department of Justice is siding with a filing that seeks to bar Bankman-Fried from accessing FTX and Alameda Assets. Prosecutors are not happy that Bankman-Fried tried to contact both FTX bankruptcy CEO John Ray and FTX US general counsel Ryne Miller. The prosecutors have even produced the text and email messages between Bankman-Fried and John Ray.
In Jan 30 filings, the Department of Justice responds to a recent move by Bankman-Friedâs lawyers to amend his bail conditions, including not contacting former or current FTX employees. Bankman allegedly wanted to meet John Ray in New York to explain how Ray could access the funds.
On Jan 12, Bankman-Fried had also claimed that law firm Sullivan & Crowell had pressured him into naming Ray as his successor. In response, Ray claimed that after filing for bankruptcy, Sam Bankman-Fried was no longer the FTX CEO, and he has no role in the company, therefore, no authority to talk on the companyâs behalf.
FTX did not convince the ASIC of its operations. New details show that the exchange had been served 3 notices in eight months. The surfaced report claims that the ASIC had warned about the exchange in March, the first month it began operations there.
FTX was a huge red flag
The ASIC has been shown to express concerns about the Australian FTX subsidiary eight months before the November collapse. Via documents accessed by Guardian Australia, the regulators were concerned about how the exchange conducted its business there after obtaining an operation license via a company acquisition.
After taking over IFS Markets in December, the exchange acquired the operational license in 2021. However, it only opened for business months later, in March 2022. The ASIC noted red flags in how the exchange operated its newest entity as soon as it began operations there.
The documents obtained by Guardian Australia show that the ASIC issued a section 912C notice to FTX in March, requiring it to provide information about its operations to assess if it was meeting the AFSL license requirements. Such a notice allows the ASIC to monitor the kind of financial services the licensee engages in and determine if the person is fit to hold it.
The report by Guardian Australia confirmed that the ASIC and FTX engaged for several months, with three notices being issued to the exchange in the process. However, the operations of the business remained the same. Reports have it that the ASIC was still concerned by the exchange’s operations till late October.
Is ignorance whatâs fanning crypto meltdown fires?
The ASIC had seen the red flags in the operations of the FTX subsidiary in the country but did not take any legal action like bans or fines. The ASIC is not the only regulatory body that has had clashes with FTX.
Recently, the CFTC expressed that it was concerned with venture capitalists (VCs) not taking charge of how their money was working in FTX. It said that it would make arrangements to question those VCs and figure out whether they ignored FTX red flags or needed to make an effort to know how their investments were fairing.
FTX is not the only meltdown that shows a great level of ignorance in the crypto space. Other organizations like Terra and crypto lenders like BlockFi and Celsius were never reported before they collapsed. That shows the lender never quite struck deals that allowed them to monitor how their investments were fairing or didnât even care.
As such, it calls for all stakeholders in the financial sector to be vigilant and more active in streamlining financial vehicles like crypto and stocks. Keep watching FintechExpress for crypto and other finance-related news.
Silvergate has suspended its dividends due to financial constraints. It claims it is taking that step to preserve a highly liquid balance sheet following a significant loss in Q4 2022.
$1B loss drives Silvergate to desperate measures
It has been a hard time for SIlvergate as it struggles to stay afloat following a $1B loss in Q4 2022. It wonât pay its investors dividends in 2023 as the economic conditions worsen.
This is not the first harsh measure the bank has taken; lately, it even laid off 200 employees to cut its expenses. The California-based bank announced on Friday that it was halting its dividends pegged at 5.375% Fixed Rate Non-Cummulative Perpetual Stock, Series A, to preserve capital.
It outlined that the decision comes amid the continuation of a strong crypto winter but did express that investors shouldnât be worried about the reserves. It said it has at least a 1:1 match of reserves and customer deposits.
âThis decision reflects the Companyâs focus on maintaining a highly liquid balance sheet with a strong capital position as it navigates recent volatility in the digital asset industry.â
The firm added that its Board of Directors would re-evaluate the payment of quarterly dividends as the market conditions evolve. This news had a harsh effect on the companyâs stock prices, with SI-PA dropping by 22.71% to $8.85 and the common SI stock price plummeting by 3.765 to $13.58.
Zooming out, the two stocks have been declining in value over the past 12 months, with SI-PA dropping by 60% and SI stocks by 87.46%.
A looming economic collapse?
Silvergate isn’t the only company affected by the ongoing financial crisis. Post COVID-19 economy was expected to be harsh and weigh down on the average investors and people. Things have worsened, with multiple companies having massive layoffs, filing for bankruptcy, and others going into debt.
Countries are also battling record-high inflation rates and recession threats. Earlier in the week, the US hit its debt ceiling and still has an inflation rate of 6.5%. Although it has managed to battle it from 10%+, the hitting of the debt ceiling means a hard time ahead for the citizens. On the other hand, the UK is expected to undergo a âsoft recessionâ in 2023.
The financial decline is cutting across the globe, with China being in a better position as it only has a 1% inflation to battle with. Citizens from other countries should brace for more challenging economic times as the markets may shrink.
The price of Polygon Matic has risen by 48% in 2023, regardless of the ongoing crypto bear run. The price surge follows an increase in its usage of blockchain, becoming the second one in the most recorded daily transactions.
Polygon Matic price defies bear run
Ethereumâs scaling solution, Polygon, has been experiencing a surge in daily usage. As a result, its native coin, MATIC, is gaining in price. It has risen by 48% in 2023, with a 12% rise in the past 24 hours.
The Polygon team has been busy developing it and making strategic partnerships. In December, it announced that it had increased DAUs, which may be a reason behind its surge in usage and price of its crypto.
It is also anticipating the mainnet launch of its zero knowledge-EVM early this year following its successful test net launch in October 2022.
Pro-crypto US senator Ted Cruz has filed a resolution to make lawmakers buy snacks around the Capitol using cryptocurrencies. His resolution includes the introduction of crypto-supporting snacks vending machines.
Anything for crypto adoption?
Texas senator Ted Cruz is determined to support crypto adoption as he continues to file pro-crypto proposals. In the latest filing, Cruz wants the Congress and House of Representatives to allow for the introduction of crypto-supporting snacks vending machines.
On Wednesday, he introduced a concurrent resolution that seeks to allow only vending machines and food service contractors that accept payments in cryptocurrencies. However, this requirement will only be for the suppliers around the US Capitol.
If this proposal is accepted, the Secretary of the Senate, the House of Representatives’ Chief Administrative Officer, and the Architect of the US Capitol will be required to source crypto-accepting food and vending service providers.
US lawmakers continue pushing for the adoption
Senator Ted Cruz has been vocal about cryptocurrencies for quite a long time. He has lauded Bitcoin and even invested in it, particularly for its decentralization. In early 2022 he even invested in the coin per a given disclosure.
He is not the only Bitcoin investor in Congress as well. Eight others are known according to reports by âBitcoin Politicians,â a crowdsourced data project. Some of the eight legislators include Wyoming Senator Cynthia Lummis and Pennsylvanian Senator Pat Toomey.
Pat has been active in the crypto space and has introduced a stablecoin Bill that seeks to create a regulatory framework for their use in digital payments. On the other hand, Senator Cruz has also expressed his will to make Texas a Bitcoin Haven. He says that cryptocurrency mining can be a great way to monetize energy from oil and gas and would be a great way to store the energy.
These developments show a growing faith in innovation, and investors should learn about the crypto space before entangling with it to reduce the possible risks.
Uniswap users, particularly UNI holders, have preferred ditching Ethereum for rival smart contracting platform BNB Chain to deploy the V3 protocol in the latest voting. BNB Chain garnered 20 million votes to win the deployment temperature check.
Uniswap vote sways BNB chain’s side over Ethereum
The Uniswap community vote favors BNB Chain against the world’s largest open-source blockchain, Ethereum, for deploying the V3 protocol. The proposal was initially raised on Jan. 17 as a ‘temperature check’ on the Uniswap community, to which 80% of participants voted in favor of BNB Chain. The remaining 20% stood against BNB Chain, opting for Ethereum as the best network for the V3 protocol.
đŚ Weâre excited to share that our @0xPlasma proposal to deploy @Uniswap v3 on @BNBCHAIN has passed the "Temperature Check" with 20M votes "YES" and 6,495 $UNI voters (the biggest number for the whole Uniswap Governance History). Moving forward to the final "Governance Proposal" pic.twitter.com/HoIJgY8mX1
Preference for BNB Chain among the Uniswap community was heavily influenced by the blockchain’s advantages over its rival counterpart Ethereum. Part of the reason for the deployment consists of the expiry of the v3 protocol’s contract with Ethereum.
Secondly, BNB Chain offers higher transaction speeds at a relatively cheaper cost than Ethereum, a feature that UNI token holders deemed handy for the V3 protocol. Additionally, BNB supports vital components such as staking and cross-chain transactions that could improve the user experience of the protocol in deployment.
The network crossover is expected to yield at least $1 billion in liquidity with an increase of 2 million new users. According to Uniswap’s official announcement and blog page, the transition is expected to last between 5 and 7 weeks. BNB Chain is also growing exponentially and increasing in popularity among DeFi devs.
BNB Chain has been recording immense progress since the year began. At the end of last year, the network registered more unique addresses than Ethereum. The BSC scanner recorded 233 million lectures, a 16 million difference from Ethereum, which had 217 million at the time the snapshot was taken.
Binance has announced that it will offer over 30K Web3 and crypto scholarships in 2023. This crypto exchange has been ramping up efforts to educate the masses and even started its Binance Academy to pass the knowledge to the world.
Binance to continue offering crypto education
Binance, the worldâs largest crypto exchange, has revealed that it will offer over 30K Web 3 scholarships in 2023. Many colleges and universities have introduced crypto courses globally since the 2021 boom. Now, Binance wants to sponsor people to pursue these courses.
Some of the institutions Binanceâs program will collaborate with include colleges in Australia, Germany, Cyprus, Ukraine, and Nigeria. It will also send some to the Women in Tech organization. Binance also revealed via an official blog that the 2023 scholarships program would be funded by its philanthropic arm, Binance Charity. It also explained its interest in spreading crypto knowledge to people via an official blog post.
An excerpt from the post reads:
âWe recognize that digital education and skills development can be out of reach for many, resulting in a blockchain industry that lacks diversity and talent. The Binance Scholar Program changes all that, covering the costs of tuition and course fees at some of the worldâs leading institutions.â
Binance
Crypto education becomes a key strategy for driving adoption
Crypto education has become a key tool to drive adoption globally, considering that the blockchain industry is relatively young. Few people have ample knowledge of how it works, making it get slower adoption as many tend to stay away from what they need help understanding.
As such, organizations like Binance have been dedicating their resources to the cause. Its blog revealed that it had over 82,000 applicants for this yearâs scholarship program but will only come through about 37% of them.
On Dec. 30, 2022, the exchange also tweeted detailing the statistics around its crypto education program. It stated that it had spent over $15M educating people with over 300K beneficiaries. It also added that it reached out to 20 regions, dedicating 293,215 hours to crypto education. It also added that 71,205 people benefited from its scholarship program that year.
Our @BinanceBCF team has travelled across the globe this year, offering help and education to those in need.
These developments show a growing interest in crypto education, which means there will be more awareness surrounding the crypto industry. Keep watching FintechExpress for cryptocurrency and other finance-related news.
Britain will endure high living costs as the Bank of England is expected to keep interest rates at painful levels. The Bank of England is expected to take this move all year as inflation pushes the economy into recession.
Bank of Britain likely to raise interest rates
There is no end in sight for Britainâs economic misery. The Bank of England (BoE) previously announced that this year would be tough as the economy is expected to fall into recession. Things have only worsened as the BoE is set to keep interest rates high.
Currently, inflation rates are spiking five times above BoEâs target levels. These developments have made Governor Andrew Bailey concerned that worker shortages could be fueling wage pressure. As such, the British market is betting on a 1-point interest rate hike this year to try and counter the inflation.
This week’s latest British economic data report showed that wage pressure was at record levels except for right after the COVID-19 pandemic. Governor Bailey noted that he hoped the inflation would turn around soon, but the scarcity of workers seems to have fueled wage pressure.
Suppose the current trend continues; some families in Britain will have to remortgage in 2023 at much higher rates. This will squeeze them further than in 2022. As such, around 4 million might be touched by the remortgaging requirements.
Inflation persists globally
The markets have almost fully priced in a half-point increase from the Bank of England in February to 4%, the highest since the 2008 collapse. Another half-point increase by Q3 might also follow that rate hike.
In the US, inflation rates were also high, recording over 10% in 2022. However, things are cooling down as the Federal Reserve is eyeing the reversal of rate hikes in the second half of 2023. Other countries are also recorded significantly high inflation rates globally.
Here are the top countries by inflation rates
Argentina – 94.8%
Turkey – 64.27%
Russia – 11.9%
Italy – 11.6%
United Kingdom – 10.5%
Keep watching FintechExpress for inflation and other finance-related news.
CFTC commissioner has revealed that FTX VCs will be included in a series of serious grilling regarding the ongoing FTX case. The commissioner said that the management at FTX was questionable and raised many eyebrows. Now, the CFTC wantâs to unearth what was going on there.
FTX officialâs grilling continues
The efforts by US regulators and prosecutors to grill the Executives at the now-bankrupt crypto exchange FTX arenât slowing down. The CFTC commissioner has revealed that they have been disturbed by several questions regarding how the exchange operated.
Now, they want to question the VCs to learn more about the exchangeâs lack of records, as John Ray III revealed in 2022. John Ray is the current FTX liquidations CEO. In a 2022 US Congress hearing, John Ray made several bold reveals surrounding the findings of his liquidations team.
I'm glad Mr. Ray is finally paying lip service to turning the exchange back on after months of squashing such efforts!
One of the major issues was that FTX did not have record-keeping whatsoever. The exchange also had an auditor not yet heard of, which raised many eyebrows. Amid the ongoing investigations against Bankman-Fried, the CFTC questions how venture capitalists (VCs) operate in crypto.
CFTC Commissioner questions the role of crypto VCs
In an interview with Bloomberg, the CFTC Commissioner Christy Goldsmith Romero said he needs help figuring out how VCs could run down their investments to near zero. Whatâs sensible is that the VCs should have done better by following up on how their million-dollar investments in the exchange were doing.
She explained that the VCs must have ignored the red flags surrounding the operations at FTX. She particularly questioned the possibility of conflicts between the VCs from paying attention to the facts they were uncovering. Since that seems highly improbable, they will need sittings with the CFTC to explain why they did not report any anomalies.
What Goldsmith Romero said sums up a growing sentiment in the crypto space that crypto stakeholders have neglected their roles. The industry is in chaos due to stakeholders failing to perform their duties as expected.
One key player who backed this sentiment is shark tank star Kevin OâLeary. OâLeary said that the fall of another exchange is imminent as long as the regulation is not in place. Keep watching FintechExpress for finance news to be updated as soon as they happen.
