CoinEx sued by New York Attorney General

https://cryptoslate.com/coinex-sued-by-new-york-attorney-general/

New York Attorney General Letitia James has sued CoinEx for failing to register with the state, according to a press release from the office on Feb. 22.

The Attorney General’s office said it could buy and sell cryptocurrency on CoinEx in New York — despite the fact that the platform was not registered in-state.

It also alleged that CoinEx falsely claimed to be an exchange. Though CoinEx provides cryptocurrency trading services, it has not registered as a national securities exchange with the U.S. Securities and Exchange Commission (SEC) nor gained the relevant designation from the Commodity Futures Trading Commission (CFTC).

The office additionally said that after it issued a subpoena to determine more information about CoinEx’s activities in New York, the company did not comply.

The Attorney General’s lawsuit aims to have CoinEx stop providing services in New York by geoblocking potential users through IP addresses and GPS technology. It also seeks to have the company no longer misrepresent its status as an exchange.

CoinEx is a moderately large cryptocurrency exchange. It experienced approximately $35 million in trading volume over the past 24 hours.

The company’s CoinEx Token (CET) has been minimally affected. At the time of writing, CET was up 0.3% over the past hour. Bitcoin was up 1.4% in the same time frame.

The post CoinEx sued by New York Attorney General appeared first on CryptoSlate.

CryptoSlate Wrapped Daily: Cardano social network enters beta; FTC investigates Voyager

https://cryptoslate.com/cryptoslate-wrapped-daily-cardano-social-network-enters-beta-ftc-investigates-voyager/

The biggest news in the cryptoverse for Feb. 22 saw EMURGO launch a social network for the Cardano community. Meanwhile, the FTC said that it is investigating Voyager Digital and objected to the company’s pending deal with Binance.US. Elsewhere, Sam Bankman-Fried could hire a tech expert to consult on his bail conditions. 

CryptoSlate Top Stories

EMURGO launches Cardano Spot social network

Blockchain company EMURGO has announced the beta launch of Cardano Spot – a social network for enthusiasts to discuss the ecosystem.

The Managing Director of EMURGO Media Sebastian Zilliacus said the closed beta was released at the end of 2022. Project development has since moved on to the open beta stage, taking into account community feedback, and is now ready for onboarding projects.

FTC objects to Binance.US-Voyager deal; reveals investigation into bankrupt firm

The US Federal Trade Commission (FTC) said it was investigating bankrupt lender Voyager Digital and its executives, according to a Feb. 22 court filing.

The FTC said it was investigating “certain acts and practices” of Voyager that constituted “deceptive and unfair marketing of cryptocurrency to the public.”

Due to this reason, the regulator has objected to Binance.US’ planned acquisition of Voyager’s asset, arguing that the sale could “interfere with causes of action by a governmental unit like the FTC.”

FTC argued that the proposed plan would “discharge” Voyager and its employees from claims linked to possible fraud.

SBF to hire tech expert to consult on trial after breaching bail conditions – private citizens urge arrest

Sam Bankman-Fried’s lawyers said Feb. 21 that the defense has acquiesced to the court’s request to hire an independent technical expert to consult on bail conditions and is currently looking for a suitable candidate, according to a court filing.

The move comes after the FTX founder breached his bail conditions by using encrypted messaging apps and a VPN during January and February. Prosecutors filed a written complaint on the matter, while the defense argued that VPN usage was benign.

Binance to burn $2B idle BUSD on Feb. 22

Binance announced that it would burn $2 billion worth of idle Binance USD (BUSD) on BNB Chain “later today” on Feb. 22 at 12:07 UTC.

The same amount of BUSD held as a collateral on the Ethereum (ETH) chain will be released after the burn.

The BUSD marketcap recorded a 15% drop and saw its 14-month low at $13.7 billion on Feb. 17. Binance CEO Changpeng Zhao (CZ) noticed the drop and stated that the “landscape is shifting.”

Blur reveals additional 300M token airdrop to loyal users

Non-fungible token (NFT) marketplace Blur said it would distribute additional 300 million tokens to loyal users during the second season of its airdrop.

Blur previously airdropped 300 million tokens to its early users on Feb. 14.

The marketplace said the “Season 2” of its airdrop would incentivize loyalty amongst its users.

Immutable reportedly lays off 11% of staff after $56M loss

The Sydney Morning Herald reported that Australia’s crypto gaming firm, Immutable, will lay off 11% of its staff on Feb. 22.

Immutable’s CEO, James Ferguson, reportedly blamed the decision on the company’s need to maximize its reserves and prioritize essential projects.

Impacted workers would be offered an average of 10 weeks’ redundancy pay, the ability to keep more shares in the company, laptops, counseling, coaching, and outplacement services. The report added that impacted staff in the United States would have their company-provided healthcare extended.

BIS chief says past events ‘cast doubt’ on stablecoins’ ability to function as money

The general manager of the Bank for International Settlement, Agustin Carstens, said events in the past year “have cast serious doubts on the ability of stablecoins to function as money.”

In a Feb. 22 speech, the bank chief argued that what sustains fiat currency is not novel technologies but “the institutional arrangements and social conventions behind it.”

According to Carstens, stablecoins do not enjoy the credibility of sovereign fiat currencies, and the lack of regulatory clarity impacts them.

Deutsche Bank completes trial of Project DAMA tokenization platform

Deutsche Bank and Memento Blockchain have completed a proof of concept tokenization platform called Project DAMA (Digital Asset Management Access), which aims to simplify launching and accessing digital funds.

The project will initially be tested in Singapore due to its crypto-friendly disposition, as well as its status as a globally leading hub for fund and asset managers. Additionally, the bank said the country is proactive approach to regulating new technology and financial services.

Esports org RRQ to embrace NFT membership for fans with Zilliqa partnership

Indonesian esports organization Rex Regum Qeon (RRQ) is partnering with Zilliqa to create an NFT membership program for fans, according to a Zilliqa statement.

The organization has had impressive results over multiple different games in the past years, with success in PUBG championships such as PUBG Mobile League, Dunia Games WIB, PUBG Mobile Star, and Fighting League.

Research Highlight

The on-chain metric that could signal a bear market reversal

Realized price is a metric often used to determine market movements in bear and bull markets. Defined as the value of all Bitcoins at the price they were bought divided by the number of circulating coins, realized price effectively shows the cost-basis of the network.

Dividing the network into cohorts can help us reflect the aggregate cost basis for each major group owning Bitcoin. Long-term holders (LTHs) and short-term holders (STHs) are the two primary cohorts driving the market — LTHs are all addresses that held BTC for longer than 155 days, while STHs are addresses that held onto BTC for less than 155 days.

The LTH-STH cost basis ratio is the ratio between the realized price for long-term and short-term holders. Given the historically different behaviors LTHs and STHs exhibit, the ratio between their realized prices can illustrate how the market dynamic is shifting.

For example, an uptrend in the LTH-STH cost basis ratio is seen when STHs realize more losses than LTHs. This shows that short-term holders are selling their BTC to LTHs, indicating a bear market accumulation phase led by LTHs.

A downtrend in the ratio shows that LTHs are spending their coins faster than STHs. This indicates a bull market distribution phase, where LTHs sell their BTC for profit, which STHs buy up.

An LTH-STH cost basis ratio higher than 1 indicates that the cost basis for LTHs is higher than the cost basis for STHs. This has historically correlated with late-stage bear market capitulations that turned into bull runs.

Crypto Market

In the last 24 hours, Bitcoin (BTC) fell -1.96% to trade at $23,828.98, while Ethereum (ETH) was down -1.81% at $1,617.79.

Biggest Gainers (24h)

  • FLOKI (FLOKI): 30.48%
  • RSK Infrastructure Framework (RIF): 25.88%
  • Synapse (SYN): 20.55%

Biggest Losers (24h)

  • BinaryX (BNX): -43.82%
  • Conflux Network (CFX): -12.18%
  • Flare (FLR): -11.97%

The post CryptoSlate Wrapped Daily: Cardano social network enters beta; FTC investigates Voyager appeared first on CryptoSlate.

Rep. Tom Emmer introduces anti-CBDC bill

https://cryptoslate.com/rep-tom-emmer-introduces-anti-cbdc-bill/

Congress member Tom Emmer (R-Minn.) introduced a bill on Feb. 22 that aims to prevent the U.S. Federal Reserve from providing a CBDC to individual retail users.

Emmer wrote on Twitter:

“Any digital version of the dollar must uphold our American values of privacy, individual sovereignty, and free market competitiveness. Anything less opens the door to the development of a dangerous surveillance tool.”

Though the bill nominally is meant to protect privacy, it will likely prevent the U.S. Federal Reserve from issuing a central bank digital currency (CBDC) in a broader sense.

Emmer said that the bill “prohibits the Fed from issuing a CBDC directly to anyone.” On Jan. 12, a statement regarding a shorter version of the bill more explicitly declared that the text aims to stop Federal Reserve from issuing a CBDC “to individuals.”

Today’s bill also expands on the January version in two ways. It now aims to prevent the Federal Reserve from using a CBDC to implement monetary policy and control the economy. It also aims to require the Federal Reserve to make its CBDC projects transparent through consultations with reserve banks and quarterly reports.

Emmer said that the bill is supported by at least nine other Republican lawmakers.
The partisan nature of the bill appears to be linked to public sentiment: blanket objections toward CBDCs have recently become a right-wing talking point.

Privacy issues are nevertheless a concern for crypto users of all political leanings. Because CBDCs are issued and circulated on a centralized and permissioned system, any CBDC would necessarily give the U.S. government greater control over user funds and greater surveillance capabilities than a public blockchain like Bitcoin.

The U.S. Federal Reserve has no definite plans to create a CBDC. The government body published a report in January 2022 suggesting that research is needed. Individual reserve banks, including those in Boston and New York are now involved in said research.

The post Rep. Tom Emmer introduces anti-CBDC bill appeared first on CryptoSlate.

Paxos asserts that Binance USD is not a security under two separate tests

https://cryptoslate.com/paxos-asserts-that-binance-usd-is-not-a-security-under-two-separate-tests/

Paxos published a letter from its CEO, Charles Cascarilla, on Feb. 21 in which the executive discussed the company’s ill-fated BUSD stablecoin.

On Feb. 13, action from New York regulators led Paxos to stop issuing its Binance USD (BUSD) stablecoin. Though Paxos did so, the U.S. Securities and Exchange Commission separately issued a Wells Notice prospectively alleging that BUSD is a security.

The company has contested the latter assertion. Cascarilla wrote today:

“Under [the Howey and Reves tests], BUSD does not meet the criteria to be a security. Our stablecoins are always backed by cash and equivalents–dollars and US Treasury bills, but never securities.”

While the Howey Test defines many investment contracts as a security, the Reves test uses a “family resemblance” test to determine whether an asset is a security. As such, Paxos aims to disprove that BUSD is a security in a very broad sense.

Cascarilla said that Paxos is involved in “constructive discussions” with the U.S. Securities and Exchange Commission (SEC) on the matter and that these discussions occur privately. He said that the firm will share more information when it is possible to do.

He also said that Paxos may “defend [its] position in litigation,” echoing earlier statements in which the company said it will “vigorously litigate if necessary.” If Paxos follows through and defends itself in court, it will become one of just a few other high-profile crypto projects — including Ripple, LBRY, Telegram, and Kin — to challenge the SEC.

Cascarilla added that Paxos has facilitated more than $2.8 billion in Binance USD redemptions without disruption in the cryptocurrency market. Those redemptions continue from the $300 million of redemptions reported by Crypto Slate on Feb. 14.

Cascarilla additionally noted that Paxos is engaging with regulators on other matters. The company is pursuing an application with the Office of the Comptroller of the Currency (OCC) through which it aims to obtain a bank charter as well as an application with the SEC through which it intends to act as a clearing agency.

Today’s letter from Paxos is a public version of a letter that the firm sent to internal employees on Saturday. Various news publications quoted the letter in part today.

The post Paxos asserts that Binance USD is not a security under two separate tests appeared first on CryptoSlate.

Coinbase saw 66% decline in transaction revenue in 2022 but remained “resilient”

https://cryptoslate.com/coinbase-saw-66-decline-in-transaction-revenue-in-2022-but-remained-resilient/

Coinbase published its end-of-year shareholder letter today, Feb. 21, in which it described its financial standing for the previous quarter and for the entirety of 2022.

Coinbase publishes revenue, shareholder data

Coinbase said that it saw its total trading volume for 2022 decline by 50% year-over-year. It also saw its transaction revenue for 2022 fall by 66% by the same metric.

The company said that it nevertheless remained “resilient … despite major shocks to the system.” Coinbase attributed its decline in performance to two high-profile collapses: that of Luna and Terra in May 2022 and that of FTX in November 2022. These events caused the crypto market to lose 64% of its value, in turn affecting Coinbase’s own revenue.

The company’s net full-year revenue (which includes more than just its transaction revenue) fell from $7.4 billion in 2021 to $3.1 billion in 2022.

Coinbase also noted that it has diversified its revenues into subscriptions and services, allowing it to experience increased quarterly revenue. The company’s fourth-quarter net revenue in 2022 was $605 million. Though that number is down significantly from $2.49 billion in Q4 2021, it is up 5% from $576 million in the third quarter.

The firm’s net loss per share was $2.46 for the fourth quarter of 2022 and $11.81 for the entire year of 2022.

Other data points of interest

Coinbase noted that its operating expenses were $1.2 billion and up 3% quarter-over-quarter, as it expected. The company said that, during 2022’s market crises, it “became clear that [Coinbase] had hired too many people too quickly.” It alluded to two layoffs in mid-2022 and early 2023 and said these and other efforts should reduce expenses by over 30%.

The company said that it ended the fourth quarter of 2022 with $5.5 billion of U.S. dollar resources, a decline of 3% or $148 million from the previous quarter.

Coinbase closed the shareholder letter by asserting that it believes it is in a strong position to perform well even as regulation affects the crypto industry. It noted its past engagements and settlements with the New York Department of Financial Service (NYDFS) and the U.S. Securities and Exchange Commission (SEC).

It also noted that early 2023 has seen an improvement in the crypto market, with a total market capitalization up 40% year to date. The firm saw $120 million of transaction revenue in January 2023 but warned investors “not to extrapolate these results forward.”

Coinbase is one of the largest cryptocurrency exchanges. It saw $1.7 billion of trading volume today. Its stock (COIN) is valued at $62.07, down 4.8% today.

The post Coinbase saw 66% decline in transaction revenue in 2022 but remained “resilient” appeared first on CryptoSlate.

CryptoSlate Wrapped Daily: Polygon lays off 20% of staff; Helium sets Solana migration date

https://cryptoslate.com/cryptoslate-wrapped-daily-polygon-lays-off-20-of-staff-helium-sets-solana-migration-date/

The biggest news in the cryptoverse for Feb. 21 saw Polygon announce a mass layoff. Meanwhile, the wireless hotspot project Helium set a date for its migration to Solana. Plus, news on Web3 gaming, a British NFT charity project, and Friendsies NFTs .

CryptoSlate Top Stories

Polygon sacks 20% of staff, says it remains financially healthy

Ethereum (ETH) layer 2 protocol Polygon (MATIC) revealed it has laid off about 20% of its staff, according to a Feb. 21 statement.

Polygon added that the job cut affected about 100 positions in the firm. The affected employees would receive three months of severance pay regardless of their positions.

“Earlier this year, we consolidated multiple business units under Polygon Labs. As part of this process,  we’re sharing the difficult news that we’ve reduced our team by 20% impacting multiple teams and about 100 positions.”

Polygon said it remains financially healthy, stating that it has a balance of over $250 million and holds 1.9 billion MATIC tokens — worth roughly $2.7 billion according to current value.

Helium announces migration date to Solana, 1M hotspots worldwide

Solana (SOL) experienced a surge in price following an announcement that Helium (HNT) would be migrating towards the platform beginning Mar. 27.

In a blog post from Feb., Helium announced the move.

“The Network migration to the Solana blockchain and deployment of Oracles represents the most significant upgrade to Helium Network scalability and reliability.”

Helium’s decentralized network of hotspots totals almost one million as of Feb. 2023.

News of the migration date sent the price of both tokens up last week. Following the news, Solana’s value has seen an over 21% surge — to a high of $27.11 on Feb. 17, from $22.34 on Feb. 16.

Web3 gaming sees strong start to 2023 with on-chain surge

A new report released by DappRadar has outlined that the web3 gaming industry has had a strong start in 2023, with $156 million raised across ten investments in January.

Among the notable developments, TreasureDAO emerged as a platform for building metaverse projects, Square Enix launched its first NFT game, and Courtside Ventures invested $100 million for its third venture capital fund focused on sports, collectibles, wellness, and gaming. The total value of investments in web3 games and metaverse projects totaled $156M.

The crypto gaming sector has also seen a rise in on-chain activity, with daily active wallet (dUAW) increasing by 1.31% to 858,621 and making up 48% of dApp activity in January. On average, the market cap for top gaming tokens has risen by 122%, with GALA leading the charge at 218%.

British MP Matt Hancock launches NFT charity project for Ukraine

British MP Matt Hancock is continuing his mission to support blockchain technology through a new NFT collection called “From Ukrain with Love,” according to a statement given to CryptoSlate.

The NFT collection comprises works painted by Ukranian artist Oleg Mischenko before the war and will be sold at The NFT Gallery in London’s Mayfair on Monday, 27th February. Funds from sales will go toward CARE International UK’s Ukraine Humanitarian Appeal. The collection, “From Ukraine with Love,” was curated by Irina Korobkina, who fled Kyiv with her 5-year-old daughter following Russia’s invasion of Ukraine.

Friendsies NFT collection rug pulls, deactivates Twitter

Popular NFT collection Friendsies tweeted Feb. 15 that it would pause its development, citing “challenging” market conditions as the primary reason for its hiatus.

“We had the best intentions to create a genuine digital companion for the future,” the company tweeted. “However, the market’s volatility and difficulties have made it increasingly challenging to advance this project in a manner that meets our standards.”

Former Binance executive aims to raise $100M to start crypto adoption focused VC

Bill Qian, the former head of venture capital investments and acquisitions at Binance Holdings Ltd., says he aims to raise over $100 million through a new crypto venture capital fund.

Qian told Bloomberg he sees a need for significant user growth as one of the crypto industry’s most critical challenges, a key factor in founding Cypher Capital.

As the chairman of Dubai-based Cypher Capital since leaving Binance in June, Qian told Bloomberg that he plans to back startups focused on web3 and the decentralized internet powered by blockchain technology.

Digital asset investments recorded over $30M outflows in a week

Digital-asset-based investment products recorded $32 million of outflows between Feb. 13 and Feb. 19, according to a recent CoinShares report.

Bitcoin (BTC) investment products saw $24.8 million in outflows in the same timeframe, according to the CoinShares report, which accounts for 77.5% of the total amount. On the other hand, Short-Bitcoin investment products recorded $3.7 million in inflows.

Ethereum (ETH) and Polygon (MATIC) based investment products also saw $7.2 million and $800,000 of outflows, respectively. Binance and Ripple (XRP) investments, on the other hand, recorded $300,000 inflows each.

Crypto Market

In the last 24 hours, Bitcoin (BTC) fell 1.2% to trade $24,494.65, while Ethereum (ETH) was down 1.96% at $1,669.88.

Biggest Gainers (24h)

  • Ankr (ANKR): 35.8%
  • Conflux Network (CFX): 15.46%
  • UMA (UMA): 15.45%

Biggest Losers (24h)

  • IOStoken (IOST): -14.62%
  • FLOKI (FLOKI): -12.99%
  • Keep Network (KEEP): -11.11%

The post CryptoSlate Wrapped Daily: Polygon lays off 20% of staff; Helium sets Solana migration date appeared first on CryptoSlate.

Huobi Token gains 24% as the exchange says it will operate in Hong Kong

https://cryptoslate.com/huobi-token-gains-18-as-the-exchange-says-it-will-operate-in-hong-kong/

Huobi’s exchange token experienced significant gains on Feb. 21.

Huobi Token (HT) saw a 23.7% increase in value over 24 hours. At 1:20 a.m. UTC, the cryptocurrency was priced at $6.33, its highest value since mid-December.

Those gains in value are likely due to Huobi’s plans to begin operating in Hong Kong. In a tweet on Feb. 20, Huobi said it is “stoked” about the Chinese region’s upcoming crypto exchange policies. Huobi said it aims to secure a license and be among the first exchanges to operate in the region in compliance with local regulations.

Earlier today, Hong Kong regulators opened a consultation that will likely see the region legalize cryptocurrency trading this summer.

Huobi plans to grow its business even though it downsized its workforce significantly this year. Around Jan. 6, the exchange laid off 20% of its staff. That news caused HT to lose about 6% of its value in the following hours.

Huobi serves users in the Asia-Pacific market and is among the largest cryptocurrency exchanges. Its 24-hour trading volume was $459 million today.

The post Huobi Token gains 24% as the exchange says it will operate in Hong Kong appeared first on CryptoSlate.

Binance CEO weighs in on the notion of “offshore” crypto businesses

https://cryptoslate.com/binance-ceo-weighs-in-on-the-notion-of-offshore-crypto-businesses/

Binance CEO Changpeng Zhao took to Twitter on Feb. 19 to suggest that differentiating between on-shore and off-shore businesses constitutes a false distinction.

Zhao posted his comments in response to Kraken CEO Jesse Powell, writing:

“[Powell] uses the word ‘offshore’ quite often…The term ‘offshore’ appears overly narrow-minded, self-centered, misses the broader picture and [is] unhelpful to the development of our industry.”

Zhao argued that all companies operate on-shore in relation to their own countries. He said that to distinguish in this way is “arrogant” and added that believing in the superiority of companies in one’s own country is not a cure-all for the crypto industry.

He also noted that such thinking has apparently failed to prevent on-shore fraud. Zhao observed that FTX.US failed alongside FTX despite the fact that, relative to the United States, it was an on-shore company with many American executives.

Zhao explicitly denied that this sort of sentiment is only seen in the U.S. He said that it can be seen in Asia as well, as there are Chinese and Japanese words that are used to disparagingly refer to foreign businesses (“lao wai” and “gaijin” respectively).

Zhao’s comments specifically criticized statements made by departing Kraken CEO Jesse Powell on Feb. 17. Powell had lamented that U.S. regulators did not listen to his complaints about off-shore companies and provided excuses for those companies — even as those regulators took action against Kraken’s staking program this month.

Zhao seemed to recognize the severity of Powell’s situation, as he wrote in one tweet: “I apologize for saying [this] so directly. No harm meant.”

Despite Zhao’s sentiments around on- and off-shore business, his company must now navigate international regulations. Binance’s U.S. stablecoin partner, Paxos, announced on Feb. 13 that it would stop issuing Binance USD (BUSD) for regulatory reasons.

Reports from the Wall Street Journal on Feb. 15 additionally suggested that Binance will pay penalties to American regulators to resolve regulatory probes. Zhao added on Feb. 17 that though Binance does not plan to delist U.S.-based cryptocurrencies, the company will likely reduce U.S. investments and bids and will instead “seek permission first.”

Binance.US also faces scrutiny over its connection to trading firm Merit Peak.

The post Binance CEO weighs in on the notion of “offshore” crypto businesses appeared first on CryptoSlate.

U.S. Congress may hold inquiry into Binance.US

https://cryptoslate.com/u-s-congress-may-hold-inquiry-into-binance-us/

U.S. Congress should hold an inquiry into Binance.US over its connection to Merit Peak, according to statements from a senator quoted by Reuters on Feb. 17.

Senator Roger Marshall told the publication:

“Something fishy is going on here that clearly doesn’t pass the smell test…Congress needs answers, and Binance.US and Silvergate are obligated to give them to us.”

On Feb. 16 it was reported that Binance.US sent $400 million from an account at Silvergate Bank to the trading firm Merit Peak in 2021. Merit Peak listed Binance CEO Changpeng Zhao as a manager — and combined with the fact that Binance and Binance.US are supposed to operate separately, that relationship represents a likely conflict of interest.

Since that report, Binance.US has publicly stated on Twitter that Merit Peak operated on its platform but “stopped all activity on [Binance.US] in 2021.”

Though Binance.US made a similar statement privately to Reuters yesterday, it also expanded on that statement in today’s public tweet. It asserted that only Binance.US employees have access to company bank accounts. It also said that external market makers like Merit Peak must compete fairly and transparently for rebates.

Binance.US additionally said that it does not and will not trade or lend out customer funds. The company distanced itself from high-profile company collapses caused by co-mingling of funds — presumably an allusion to the failure of FTX and Alameda Research.

Binance’s global arm has dealt with numerous regulatory intrusions and in fact expects to pay fines to U.S. regulators, according to a Feb. 15 report from the Wall Street Journal. However, Binance.US has rarely been the target of such scrutiny apart from an earlier and ongoing SEC investigation into the matter of Merit Peak.

Binance.US could soon face broader scrutiny if today’s recommendation from Senator Marshall is taken up in Congress and becomes more than a private statement.

Marshall was previously involved in a congressional inquiry into the relationship between FTX and Silvergate as well as an anti-money laundering crypto bill.

The post U.S. Congress may hold inquiry into Binance.US appeared first on CryptoSlate.

FTX’s Nishad Singh reportedly approaches plea deal

https://cryptoslate.com/ftxs-nishad-singh-reportedly-approaches-plea-deal/

A former top employee of FTX is preparing to reach a plea deal with U.S. prosecutors, Bloomberg News reported Feb. 17.

The publication reported that Nishad Singh, who served as FTX’s director of engineering, plans to plead guilty as Manhattan prosecutors prepare to file charges.

Based on previous developments, the U.S. Attorney’s Office for the Southern District of New York is responsible for the investigation. The CFTC and SEC reportedly plan to file charges as well.

Similar reports from Bloomberg on Jan. 10 suggested that Singh had discussed a cooperation deal that was likely to lead to a plea deal. Singh was supposedly not accused of wrongdoing at the time, whereas he is now said to face charges.

None of the above agencies have publicly confirmed Bloomberg’s statements. However, reports from the same source suggest that authorities have been investigating Singh since at least Jan. 5. Singh played a key role in developing software that was used to transfer funds between FTX and Alameda. He also was involved in campaign financing.

Information about those and other activities could provide assistance in the criminal case against Sam Bankman-Fried, the co-founder and former CEO of FTX.

If Singh reaches a plea deal, he will be the third FTX associate to do so after former Alameda Research CEO Caroline Ellison and FTX co-founder Gary Wang. Both individuals pled guilty in December and are cooperating against Bankman-Fried, who awaits trial.

The post FTX’s Nishad Singh reportedly approaches plea deal appeared first on CryptoSlate.

CryptoSlate Wrapped Daily: Terra tokens declared securities; BUSD market cap down 15%

https://cryptoslate.com/cryptoslate-wrapped-daily-terra-tokens-declared-securities-busd-market-cap-down-15/

The biggest news in the cryptoverse for Feb. 17 saw Terra-related tokens lose part of their value as the U.S. SEC declared them to be securities. Meanwhile, Binance saw the market cap of its BUSD stablecoin decline and denied rumors that it would delist assets other assets, such as USDC. 

CryptoSlate Top Stories

Terra-related tokens dump as SEC labels them securities

Terra-related tokens lost an average of 5% in the last 24 hours following the U.S. Securities and Exchange Commission’s (SEC) charges against Terraform Labs and Do Kwon, according to CryptoSlate’s data.

In the Feb. 16 complaint, the SEC alleged that Terra’s failed algorithmic stablecoin TerrraUSD (USTC), LUNC — formerly Terra Luna — and Wrapped LUNA Classic (WLUNC) were securities under U.S. securities laws.

The financial regulator further argued that Terraform Labs breached securities law with the Mirror Protocol (MIR) launch. MIR allowed users to create mAssets, constituting a security-based swap, according to the SEC.

The SEC added that the wrapped version of Luna was also security: “wLUNA is also a security because it is a receipt for a security.”

Do Kwon allegedly cashed out 100M worth of BTC via Swiss Bank

The U.S. Securities and Exchange Commission (SEC) alleged that Terraform Labs and its founder Do Kwon transferred over 10,000 BTC to a cold wallet and cashed out about $100 million via a Swiss Bank.

The regulator filed a complaint on Feb. 16 alleging that the accused offered unregistered securities and operated a fraudulent scheme.

Further analysis of the SEC filing revealed that Do Kwon and Terraform Labs transferred over 10,000 BTC into a cold wallet, and subsequently converted some of the assets to cash.

CZ: ‘Landscape is shifting,’ following 15% drop in BUSD market cap

Binance CEO Changpeng Zhao (CZ) said the “landscape is shifting,’ concerning stablecoin movements triggered by recent regulatory pressures.

The Binance CEO tweeted details of changes in the valuations of the top three stablecoins. He said BUSD’s market cap had fallen by almost $2.5 billion to $13.7 billion — a 15% decrease, sinking to a 14-month low.

USDC’s market cap also declined — albeit to a lesser extent — falling 1.7% to $41.5 billion.

Tether is the winner in all this, recording a 3.5% increase in market cap to $70.1 billion — posting a 15-month high in the process.

CZ denies claims that Binance will delist US-based projects

Binance CEO Changpeng “CZ” Zhao, on Feb. 17, described reports that his firm was considering delisting U.S-based crypto projects as “false.”

Bloomberg reported Feb. 17 that Binance was reconsidering its relationships with its US business partners, citing a person familiar with the matter, because of the current issues with its partners in the country.

The report added that the CZ-led exchange could delist Circle’s USD Coin (USDC) stablecoin, and the firm was reassessing its venture-capital investments in the US.

Meanwhile, CZ said:“We pulled back on some potential investments, or bids on bankrupt companies in the US for now. Seek permission first.”

Two traders made over $200k from Binance’s Gain Network listing

Blockchain investigator Lookonchain identified two crypto addresses that cumulatively made over $200,000 from Gains Network’s GNS token sales after it was listed on Binance.

Lookonchain said the first address bought 26,881 GNS tokens on 1Inch swap for $208,335 and sold it for a profit of $106,747 within a few hours after it was listed on Binance.

Another wallet accumulated $500,000 worth of GNS at an average price of $7.38. The wallet had started buying on Feb. 8 and had purchased more tokens 20 minutes before Binance’s announcement.

Gemini will be qualified custodian under proposed SEC rules

Crypto exchange Gemini would be considered a qualified custodian if the Securities and Exchange Commission’s (SEC) proposed expansion becomes official, according to Gemini co-founder Tyler Winklevoss.

Winklevoss published a thread on his Twitter account and said: “Gemini Trust Company, LLC, is a New York trust company and has been a fiduciary and qualified custodian under the New York Banking Law since 2015. This will continue to be the case under any new SEC rule that comes into effect.”

FTX warns against Justin Sun-backed FUD tokens

Bankrupt crypto exchange FTX has warned its creditors against patronizing unauthorized debt tokens, including the Justin Sun-backed FTX User Debt Token (FUD).

FUD is a debt token issued by Debt DAO with a claim of issuing FTX users’ debt as a bond token. At launch, about 20 million FUD was minted, with plans underway to mint additional tokens as soon as FTX confirmed the debt amount.

FTX tweeted on Feb. 17 to disassociate itself from the project and warned creditors against dealing with such unauthorized schemes.

BlockFi files to dismiss SBF’s Emergent company bankruptcy case

Bankrupt crypto lender BlockFi has asked the court to dismiss a bankruptcy case filed by Sam Bankman-Fried’s (SBF) Emergent Technology company over a tussle to control 55 million Robinhood shares.

Disgraced FTX founder SBF owned 90% of shares in Emergent Technology — a company he co-founded with Gary Wang solely to purchase Robinhood shares.

NBA hall of famer Paul Pierce to pay SEC $1.4M for undisclosed promotion of EMAX

Former NBA player Paul Pierce agreed to pay $1.409 million to the U.S. Securities and Exchange Commission (SEC) as penalties for his undisclosed promotion of the unregistered securities token EthereumMax (EMAX), according to a Feb. 17 statement.

The SEC said the NBA star received over $244,000 worth of EMAX tokens to promote the tokens on Twitter. The financial regulator added that the NBA star made false and misleading promotional statements about the crypto asset.

‘Communist Bitcoiners’ exposed by Ordinals as control freaks

Peter McCormack was frank in calling out the “Communist Bitcoiners” for their adverse reaction to Ordinals.

The What Bitcoin Did Podcast host said the best thing about Ordinals is how it “p*sses off” the Bitcoin zealots. He said the fallout uncovered those who seek absolute control and hate anyone making money.

Research Highlight

Research: Public Bitcoin Miners in better financial health despite 12.1% YoY drop in BTC holdings

Glassnode data analyzed by CryptoSlate shows that Bitcoin miners are beginning to enjoy some respite in the current year after struggling in 2022.

As of Jan. 2022, Bitcoin miners held 36,003 BTC, with mining firms like Core Scientific, Riot, Hut8, Marathon, and Bitfarms holding over 30,000 coins.

However, the landscape appears to have changed in the current year as Hut 8, Marathon, and Riot are now the dominant miners, holding 87% — 27,760 BTC — of the miners’ BTC holdings, according to CryptoSlate’s research.

Bitfarms and Core Scientific fell off as they struggled in 2022 — the latter filed for bankruptcy while the former dealt with debt obligations.

Crypto Market

In the last 24 hours, Bitcoin (BTC) rose 0.76% to trade at $24,902.40, while Ethereum (ETH) was up 0.88% at $1,715.85.

Biggest Gainers (24h)

  • Filecoin (FIL): 30.5%
  • Internet Computer (ICP): 25.04%
  • Klaytn (KLAY): 22.16%

Biggest Losers (24h)

  • FLOKI (FLOKI): -20.06%
  • Onyxcoin (XCN): -12.94%
  • Immutable X (IMX): -12.41%

The post CryptoSlate Wrapped Daily: Terra tokens declared securities; BUSD market cap down 15% appeared first on CryptoSlate.

Binance.US sent $400M to a partner firm managed by CZ

https://cryptoslate.com/binance-us-sent-400m-to-a-partner-firm-managed-by-changpeng-zhao/

Binance.US sent approximately $404 million to a firm managed by Binance CEO Changpeng Zhao, according to a Feb. 16 report from Reuters.

That report alleges that Binance.US, under the name BAM Trading, sent millions of dollars from an account at Silvergate Bank to a trading firm called Merit Peak Ltd.

Merit Peak names Binance CEO Changpeng Zhao as its manager. Binance and Binance.US have been required to operate separately since 2019. As such, the above transactions imply that Zhao has a possibly inappropriate financial connection to Binance.US.

Reuters went as far as to suggest that the transactions imply that Binance controls the finances of Binance.US. It also said that Merit Peak was a dealer on Binance.US and, citing regulators, said that lack of public disclosure on the matter created a conflict of interest. Reuters was, however, unable to find the reason behind the transfers and was unable to determine whether the transferred funds belonged to exchange customers.

The transfers took place in late 2020 and the first quarter of 2021. Around that time, Catherine Coley, who formerly served as Binance.US’ CEO, suddenly left the company and went dark on social media. Reuters said today that Coley noticed the unusual transactions and questioned other Binance.US staff on the matter before leaving the firm.

Reuters obtained its information from Binance.US’s private bank records and messages. Binance.US did not comment on the transactions but told Reuters that it had accessed “outdated information.” Binance.US told Reuters that Merit Peak is not using its trading services. Reuters said Merit Peak’s activities ceased at an unknown date.

The connection between Binance.US and Merit Peak has attracted attention since February 2022, when it was reported that the U.S. SEC was investigating the exchange’s various partners. That report says that the SEC first subpoenaed Binance.US in 2020.

The post Binance.US sent $400M to a partner firm managed by CZ appeared first on CryptoSlate.

SEC files complaint against Terraform Labs, Do Kwon

https://cryptoslate.com/sec-file-lawsuit-against-terraform-labs-do-kwon/

The Securities and Exchange Commission (SEC) has filed a complaint on Feb. 16 against Terraform Labs PTE Ltd. and its founder Do Hyeong Kwon.

The SEC alleged that the defendants offered and sold crypto asset securities in unregistered transactions and perpetrated a fraudulent scheme.

“Defendants’ crypto asset securities offerings involved an array of interrelated tokens that were created, developed, promoted, offered, and sold by Defendants as profit-seeking investments.”

The defendants violated the securities offering registration provisions of the federal securities law, according to the SEC filing.

The post SEC files complaint against Terraform Labs, Do Kwon appeared first on CryptoSlate.

FDIC tells CEX.IO to redact insurance promises

https://cryptoslate.com/fdic-tells-cex-io-to-redact-insurance-promises/

Cryptocurrency exchange CEX.IO has received a cease-and-desist order from the FDIC, as seen in a letter published by the U.S. regulator on Feb. 15.

The Federal Deposit Insurance Corporation’s legal division said that CEX.IO has made false or misleading statements suggesting that the FDIC insures it.

CEX.IO’s official website claims that “U.S. dollars held in your CEX.IO fiat currency wallet are FDIC-insured up to $250,000 per account” without qualification.

The FDIC, however, says that CEX.IO is itself not insured. It called the above statement misleading because it does not identify any insured deposit institutions (IDIs) with which CEX.IO has a direct or indirect relationship. Though CEX.IO may deposit funds with such an institution, its users’ holdings are not necessarily insured in that way. As such, the FDIC has demanded that CEX.IO remove all statements to that effect.

The regulator also directed two independent websites — Captain Altcoin and Bankless Times — to correct statements suggesting CEX.IO is FDIC-insured.

The FDIC also said that one of those claims incorrectly implies that crypto assets can be federally insured. This complaint does not seem to apply to CEX.IO’s own website, which has stated since at least 2021 that federal insurance does not apply to virtual assets.

CEX.IO is a relatively minor exchange, with a 24-hour volume of just $4.3 million.

The FDIC has sent similar notices to other crypto companies. Last year, it sent cease and desist letters to FTX.US and Voyager Digital over their insurance guarantees.

The post FDIC tells CEX.IO to redact insurance promises appeared first on CryptoSlate.

Coinbase, BitGo, and Anchorage assert that they comply with SEC custody rules

https://cryptoslate.com/coinbase-bitgo-and-anchorage-assert-that-they-comply-with-sec-custody-rules/

Coinbase and other crypto custody providers asserted on Feb. 15 that they will be able to operate under proposed changes to custodial rules.

Coinbase endorses SEC’s efforts

Today, the U.S. SEC voted to propose a regulatory change that could require exchanges to store user assets with qualified custodians. This would also update rules for custodians, possibly making it difficult for existing crypto companies to offer custody services.

Coinbase chief legal officer Paul Grewal stated on Twitter that his company is “confident” that it will remain a qualified custodian under the proposed rule change. He added that Coinbase endorses the U.S. Securities and Exchange Commission’s efforts to provide investor protections and supports the public rulemaking process.

In a Bloomberg interview, Grewal said: “we see SEC officials recognize that specifically, Coinbase is operating in a qualified manner.” However, he did not state what sort of acknowledgment this amounts to on the part of the regulator.

In a separate interview with CNBC, Grewal was asked what Coinbase would do if U.S. regulators forced the company to shut down its custody services. Grewal answered that Coinbase has “a very diversified business” in services and countries served, implying that the company could shift its focus elsewhere.

Other companies comment on proposal

Coinbase’s stance on the matter is notable as it is likely the largest crypto custody provider. It has $90 billion of assets under custody, based on numbers from BlockData.

Only a few other crypto custody providers have made statements on the matter. BitGo — the next largest provider, with $64 billion of assets under custody — similarly reassured its clients that it will remain a qualified custodian via Twitter.

Anchorage, in a statement to Coindesk today, also said that it is “unequivocally” a qualified custodian and stated that it should be able to operate under the proposed rules.

Despite apparent support from custody providers, the proposed regulatory change would raise requirements for companies that wish to provide custody. The Blockchain Association has gone as far as to say that the proposed change is “bad policy” that could “restrict or prohibit” investors from engaging with the crypto industry.

The proposed change would affect investment advisors and crypto firms, and the SEC will accept comments from all concerned parties in the coming months. As such, there will certainly be more discussion before any changes are made.

The post Coinbase, BitGo, and Anchorage assert that they comply with SEC custody rules appeared first on CryptoSlate.

Bitcoin passes $24k for 2nd time in February

https://cryptoslate.com/bitcoin-passes-24k-for-2nd-time-in-february/

Bitcoin (BTC) has surpassed $24,100 for the second time this month.

As of 10:00 p.m. UTC on Feb. 15, Bitcoin was valued at $24,103. That price means that the cryptocurrency now has a market cap above $465 billion.

The asset’s price briefly reached this level during another rally earlier this month. On Feb. 1 and on the following morning, it was valued close to its current price.

Apart from those brief gains, Bitcoin has not seen its current market value since August 2022. As such, prices this month represent a six-month high.

Though there has been little positive news today, a lack of bad news may have helped Bitcoin gain value. Specifically, an absence of regulatory crackdowns today may be to credit for the asset’s gains. Though regulators took action against Kraken and Paxos over the past week, there were no high-profile actions against the crypto sector today.

In terms of percent-based gains, Bitcoin’s price rose 8.4% over the past 24 hours. Its main competitor, Ethereum (ETH), saw slightly smaller gains of 6.9% today.

Other cryptocurrencies in the “Top 10” category performed similarly. Binance’s BNB token (BNB) was up 5.9%, Ripple’s XRP token (XRP) was up 5.3%, Cardano (ADA) was up 4.1%, Dogecoin (DOGE) was up 5.6%, and Polygon (MATIC) was up 4.5%.

The post Bitcoin passes $24k for 2nd time in February appeared first on CryptoSlate.

SBF bond signers revealed to be former Stanford faculty; FTX bankruptcy judge rules against probe

https://cryptoslate.com/sbf-bond-signers-revealed-to-be-former-stanford-faculty-ftx-bankruptcy-judge-rules-against-probe/

Two notable developments concerning the bankrupt crypto firm FTX and its former CEO, Sam Bankman-Fried, occurred in court on Feb. 15.

Stanford members signed SBF bail bond

Previously, Judge Lewis Kaplan allowed two individuals who signed Sam Bankman-Fried’s bail bonds to be publicly identified during his criminal trial.

Court documents today revealed that those bond signers (or sureties) were a Stanford University senior research scientist and a former Stanford Law dean who signed a $200,000 bond and a $500,000 bond, respectively.

Bankman-Fried’s parents are professors at Stanford University. In comments to Coinbase, the former dean said that his friendship with the family was the reason he posted bail.

Bankman-Fried asked for the two bond signatories to remain private on Jan. 3. The judge approved the reveal of their identities on Jan. 30, but Bankman-Fried was given time to file an appeal. As a result, the identities of the signers were not disclosed until today.

FTX needs no further probe

In FTX’s separate bankruptcy proceedings, a judge ruled that an additional independent probe is not necessary and denied a motion to appoint an independent examiner.

Judge John Dorsey said that appointing an independent examiner would cost tens of millions of dollars and would likely surpass $100 million. This, he said, would impose indirect costs on creditors (or former customers) by reducing their eventual compensation.

The judge noted that FTX’s replacement CEO, John Ray III, has appointed independent directors and experts with very little connection to FTX to look into the company’s past actions. He said that those parties are competent to take on the task.

Judge Dorsey decided that the established law does not require an examiner to be appointed and that the court can deny the appointment of an examiner.

The U.S. Department of Justice was behind initial calls for an examiner. The judge was undecided on whether to appoint an examiner as recently as Feb. 6.

The post SBF bond signers revealed to be former Stanford faculty; FTX bankruptcy judge rules against probe appeared first on CryptoSlate.

Binance snags former Gemini compliance officer amidst scrutiny over BUSD

https://cryptoslate.com/binance-snags-former-gemini-compliance-officer-amidst-scrutiny-over-busd/

Binance has hired and promoted a compliance executive who formerly worked for its competitor, Gemini, according to a Feb. 14 report from the Wall Street Journal.

The report indicated that Noah Perlman would serve as Binance’s chief compliance officer after joining the company’s compliance team in January.

Perlman previously worked at Gemini between October 2019 and January 2023, apparently leaving the company around the time it faced securities charges over its failed Earn program. Gemini replaced Perlman by promoting Christopher Mariadason to chief compliance officer in August 2022 — suggesting a brief overlap in that position.

Previously, Perlman and Mariadason both worked at the multinational investment firm Morgan Stanley in roles related to financial crime with some overlap in tenure. They worked for Morgan Stanley for more than 13 years and 8 years respectively.

Though it is common for firms to hire executives from their competitors, the hire is notable due to the fact Binance USD (BUSD) is under regulatory scrutiny.

Ongoing BUSD scrutiny

Binance’s partner Paxos faced action from the New York Department of Financial Services (NYDFS) this week. That development forced Paxos to stop issuing BUSD, and it may face securities charges as well. Binance could also face scrutiny even though it has attempted to distance itself from the matter — making any compliance hire a valuable asset.

Binance additionally hired a former Kraken compliance executive September 2022. At that time, it said that it planned to make hundreds of compliance hires.

Cryptocurrency firms are undoubtedly looking to strengthen their compliance teams with similarly experienced executives — that is, those that have worked in both traditional finance and the crypto sector — as the threat of regulatory action looms.

The post Binance snags former Gemini compliance officer amidst scrutiny over BUSD appeared first on CryptoSlate.

Senate Banking Committee holds Valentine’s Day hearing on 2022 crypto crash

https://cryptoslate.com/senate-banking-committee-holds-valentines-day-hearing-on-2022-crypto-crash/

The U.S. Senate Banking Committee discussed last year’s cryptocurrency market crash and assorted company collapses during a hearing on Tuesday, Feb. 14.

Chairman Brown calls for regulations

Several individuals commented on the state of the cryptocurrency industry. Chairman Sherrod Brown took a harsh stance on the matter, stating:

“These crypto catastrophes have exposed what many of us already knew: digital assets … are speculative products run by reckless companies that put Americans’ hard-earned money at risk. Not surprising from an industry thatwas created to skirt the rules.”

Brown said in his opening statement that the crypto market lost $1.46 trillion in 2022, while cybercriminals stole $3 billion and companies cut 1,600 jobs (a number that other estimates place as high as 23,600). He also remarked on the crypto industry’s absence from the Super Bowl this year and discussed the extent of FTX’s collapse.

Brown noted that although the crisis didn’t spread to the broader financial system, that possibility was “glimpsed” when several crypto banks needed loans after bank runs.

He suggested that “basic, commonsense principles” applied elsewhere should be imposed on the crypto industry. His recommendations included consumer protection, prevention of conflict of interest, and transparency requirements.

Scott calls for SEC enforcement

Ranking Member Tim Scott suggested that there is room for safe financial innovation but acknowledged Brown’s concerns over the current state of regulation.

Specifically, Scott criticized the U.S. Securities and Exchange Commission’s attempts at regulatory enforcement during 2022’s market crash. He said:

“The SEC has failed to take any meaningful, preemptive action to ensure this type of catastrophic failure does not happen again.”

Scott said investors need to know why the SEC did not take action before FTX collapsed and why millions of dollars of cryptocurrency investments can no longer be recovered. He added that this concern applies to other companies and projects, such as Terra, Celsius, Voyager Digital, and BlockFi — all of which failed in 2022.

Though the SEC has taken action against many crypto companies, it has often done so after the collapse of said companies. Several notable companies remain engaged in bankruptcy proceedings and have not returned funds to their customers.

Scott also observed that SEC chair Gary Gensler was absent during today’s Senate hearing despite making other public appearances. He said that Gensler “should be here testifying with us this morning” and said that Congress “needs to hear from him very soon.”

Witnesses comment on industry

Three witnesses also gave statements during the hearing.

Lee Reiners, a policy director at the Duke Financial Economics Center, noted that some cryptocurrencies are commodities rather than securities. The CFTC regulates commodity derivatives, not commodity spot markets such as crypto exchanges. As such, Reiners urged Congress to close that regulatory gap and laid out options for doing so.

Yesha Yadav, a Vanderbilt University Law School professor, suggested that a public regulatory framework could allow crypto exchanges to partially self-regulate. This would see companies fund their regulatory efforts and save costs for taxpayers.

Linda Jeng, a Georgetown Institute of International Economic Law professor, suggested that the supposed “crypto collapse” should be put in context. She said that the entire industry should not be declared a failure due to the collapse of certain companies. She added that the cryptocurrency market cap is still larger than $1 trillion and observed that full-time crypto developers grew 8% year-over-year in 2022.

The prepared remarks from each speaker did not focus on high-profile actions in recent days, such as those against Kraken’s staking service or Paxos’s BUSD stablecoin. Those developments will undoubtedly be a topic of future discussions.

The post Senate Banking Committee holds Valentine’s Day hearing on 2022 crypto crash appeared first on CryptoSlate.

Circle denies that SEC sent any Wells notice

https://cryptoslate.com/circle-denies-that-sec-sent-any-wells-notice/

Circle, which issues the USDC stablecoin, has denied that it has received a Wells notice. That denial was recorded in a tweet by CSO Dante Disparte on Feb. 14.

Disparte wrote:

“Circle has not received a Wells notice.”

Unsubstantiated rumors emerged earlier today suggesting that U.S. Securities and Exchange Commission had sent a Wells notice to Circle. The serving of such a notice would mean that the regulator plans to begin enforcement against the company.

Those rumors were primarily spread by FOX Business reporter Eleanor Terret, whose account has since been removed from Twitter. Terret said:

I went with the word of several trusted sources on this. I apologize for the mistake.

Another Twitter account operating as AP_Abacus was also tagged in Terret’s original tweet. Though AP_Abacus previously suggested that Circle faced regulatory action from the SEC based on his own private sources, it is unclear whether Terret tagged AP_Abacus to cite him as a source or to provide further backing to his statements.

Circle’s denial does not necessarily mean that the SEC will not begin enforcement against the firm — but it seems to make that possibility less imminent.

The rumors appear to have been prompted by recent SEC action against Paxos, which forced the company to halt the issuance of its Binance USD (BUSD) stablecoin.

The post Circle denies that SEC sent any Wells notice appeared first on CryptoSlate.

Terra’s classic stablecoin surges on BUSD failure, but is still only worth $0.03

https://cryptoslate.com/terras-classic-stablecoin-surges-on-busd-failure-but-is-still-only-worth-0-03/

The depegged stablecoin Terra Classic USD (USTC) regained a small amount of value today alongside news that issuance of Binance USD (BUSD) will be halted.

The price of USTC rose 19.14% to 3.1 cents over 24 hours on Feb. 13. For the past several months (until Feb. 3) it has been worth 2.7 cents or less.

USTC’s earlier gains may be due to a planned protocol upgrade set for Feb. 14 or due to hype around Cardano’s competing algorithmic stablecoin.

However, today’s gains seem to be partially due to Binance USD’s failure, which has caused a loss of confidence in centrally backed stablecoins among some investors. As such, confident investors may be motivated to invest in decentralized stablecoins — specifically those that have lost their peg and therefore have a chance of partial recovery.

That trend is supported by gains seen in other decentralized stablecoins, which can be algorithmic or overcollateralized by crypto. Neutrino USD is up 13.11% to $0.20, USDX [Kava] is up 0.78% to $0.84, and VAI is up 1.96% to $0.97.

Though USTC’s gains today are the highest in that category, its minor growth is insufficient to allow it to reclaim its former $1.00 price peg — a level it has not seen since the Terra project collapsed in May 2022. Furthermore, USTC is no longer associated with the revived Terra project, which does not use a stablecoin as a core feature.

Still, today’s gains may provide enough room for holders to earn on their investments.

The post Terra’s classic stablecoin surges on BUSD failure, but is still only worth $0.03 appeared first on CryptoSlate.

Circle reportedly informed NYDFS about Binance’s BUSD

https://cryptoslate.com/circle-informed-on-binances-busd/

Stablecoin issuer Circle filed a regulatory complaint last fall regarding Binance’s stablecoin reserves, according to a Bloomberg report on Feb. 13.

Circle reported BUSD to NY regulator

Bloomberg’s report says that Circle informed the New York Department of Financial Services (NYDFS) about Binance’s stablecoin, Binance USD (BUSD).

Circle, which monitors blockchain data, reportedly observed discrepancies in Binance’s on-chain stablecoin reserves. Those discrepancies indicated that Binance did not store sufficient crypto to back the full number of stablecoins it had issued.

Circle has not publicly confirmed that it took the above actions. Bloomberg instead attributed its information to an anonymous inside source.

Other companies have also publicized issues around Binance’s BUSD reserve in the past. However, Circle’s alleged decision to report on Binance is significant due to its status as a direct competitor. Whereas Binance provides the Binance USD (BUSD) stablecoin, Circle issues the USD Coin (USDC) stablecoin. In fact, industry-wide rivalry led Binance to partially end support for USDC and other top stablecoins last September.

Circle also is regulated by the NYDFS alongside Paxos — the company that is responsible for issuing BUSD and which was targeted by regulators today.

NYDFS killed BUSD via Paxos

The NYDFS ordered Paxos to halt the production of Binance USD today. Paxos has said that it will comply with those demands by ceasing to issue BUSD and by ending its relationship with Binance as far as the BUSD stablecoin is concerned.

The U.S. Securities and Exchange Commission (SEC) is seemingly preparing to take action on the matter as well, as it has sent a Wells Notice to Paxos. Paxos says that it “categorically disagrees” with the SEC and insists that BUSD is not a security.

Currently, $15.9 billion worth of BUSD are in circulation. Binance CEO Changpeng Zhao said that the exchange would continue to support BUSD while reducing reliance on it. Paxos has said that BUSD will be redeemable through Paxos Trust until 2024.

Paxos will continue to issue its other stablecoin, the Pax Dollar (USDP). That stablecoin remains in circulation with a total supply of $870 million.

The post Circle reportedly informed NYDFS about Binance’s BUSD appeared first on CryptoSlate.