Kraken’s staking down, FTX post-bankruptcy hell, Binance news…
Top Stories This Week
Kraken reaches $30M settlement with SEC over staking as IRS seeks user information
Kraken has agreed to stop offering staking services or programs to United States clients after reaching an agreement with the U.S. Securities and Exchange Commission (SEC). Along with ceasing operations, the crypto exchange will pay $30 million in disgorgement, prejudgment interest and civil penalties. The SEC claims that Kraken failed to register the program as a securities offering. The move has sparked controversy within the SEC. Commissioner Hester Peirce has publicly rebuked her own agency over the shutdown, arguing that regulation by enforcement “is not an efficient or fair way of regulating” an emerging industry.
FTX CEO testifies on ‘pure hell’ post-bankruptcy days at exchange
John Ray, who took over as CEO of crypto exchange FTX, has described in a court hearing some of the chaotic experiences at the firm following the company declaring bankruptcy. According to Ray, there was “not a single list of anything” related to bank accounts, income, insurance or personnel, causing a “massive scramble for information.” As the bankruptcy proceedings continue, the names of two guarantors who signed off on part of Bankman-Fried’s $250 million bail bond will remain withheld for now, after a last-minute appeal. In another headline, a federal judge denied a joint agreement between Bankman-Fried’s legal team and prosecutors that would allow him to use certain messaging apps, including Facebook Messenger.
Read also
Features
You Say You Want a Revolution: What Blockchain Can Learn from One Man’s Attempt to Save the World
Features
Despite the bad rap, NFTs can be a force for good
Binance to temporarily suspend bank transfers in US dollars
Binance has temporarily suspended deposits and withdrawals of United States dollars (USD) through bank accounts. The suspension was not explained, and no other trading methods will be affected. The freeze applies only to international users, as Binance.US claims that its customers will not be affected. The crypto exchange giant has been facing banking challenges in the U.S. Recently, Binance’s SWIFT transfer partner, Signature Bank, said it would only process trades by users with USD bank accounts over $100,000.
Genesis creditors to expect 80% recovery under proposed restructuring plan
Genesis Global reached an “agreement in principle” with Digital Currency Group and its creditors, aiming to return at least 80% of their funds. The agreement will eventually see Genesis’ crypto trading and market-making arm sold as part of restructuring efforts. Effects of Genesis’ bankruptcy reached Cash Cloud, an automatic teller machine operator in the United States and Brazil. Genesis is Cash Cloud’s biggest creditor, with a $108 million unsecured loan. Cash Cloud has liabilities between $100 million to $500 million.
Ethereum co-founder Joe Lubin says no chance ETH is classed as security
Ethereum co-founder and crypto entrepreneur Joseph Lubin is confident that Ether won’t be classified as a security in the United States. “I think it’s as likely, and would have the same impact, as if Uber was made illegal,” he told Cointelegaph in an interview in Tel Aviv at the Web3 event Building Blocks 23. In September 2022, U.S. SEC chair Gary Gensler suggested that Ethereum’s transition to a proof-of-stake (PoS) consensus model might have brought ETH into regulatory spotlight.
Winners and Losers
At the end of the week, Bitcoin (BTC) is at $21,707, Ether (ETH) at $1,525 and XRP at $0.38. The total market cap is at $1.01 trillion, according to CoinMarketCap.
Among the biggest 100 cryptocurrencies, the top three altcoin gainers of the week are The Graph (GRT) at 74.43%, SingularityNET (AGIX) at 65.51% and Rocket Pool (RPL) at 15.155%.
The top three altcoin losers of the week are Fantom (FTM) at -31.15%, Optimism (OP) at -23.79% and Aptos (APT) at -22.28%.
For more info on crypto prices, make sure to read Cointelegraph’s market analysis.
Read also
Features
Crypto scoring big with European football
Features
Get your money back: The weird world of crypto litigation
Most Memorable Quotations
“What we see is clients are absolutely interested in digital assets, broadly.”
Michael Demissie, head of digital assets at BNY Mellon
“The digital pound could exist alongside other forms of money, including stablecoins.”
Bank of England and HM Treasury
“Clearly if you want integrity within a metaverse, then blockchain will play a part.”
Robert Joyce, chief technology officer at Nokia Oceania
“Banks [in the U.S.] are reevaluating whether continuing to provide these [crypto] services is worth the risk.”
Aaron Kaplan, co-CEO of Prometheum and of counsel at Gusrae Kaplan Nusbaum
“MetaMask has historically been an Ethereum wallet. We need to start moving beyond that. The multichain future is very clear.”
Alex Jupiter, product manager of accounts and key management at MetaMask
“CBDC is a way to advance the sophistication of payment systems, as well as ensuring economic security through a local currency that does not depend on other countries.”
Soramitsu, Japanese financial software developer
Prediction of the Week
Ethereum price risks 20% correction amid SEC’s crackdown on crypto staking
Ethereum’s native token saw its worst daily performance of the year as the U.S. SEC stopped crypto exchange Kraken from offering crypto staking services. The news pushed down the prices of many proof-of-stake blockchain project tokens.The SEC crackdown on crypto staking begins as Ethereum’s key network upgrade, Shanghai, is set for release in March. Bitwise Asset Management’s chief investment officer, Matt Hougan, considers Shanghai a bullish event for Ether:
“Today, many investors who would like to stake ETH and earn yield are sitting on the sidelines. After all, most investment strategies can’t tolerate an indefinite lock-up,” Hougan said in a January investor letter. From a technical perspective, Ether price is positioned for a potential 20% price correction in February, according to Cointelegraph’s analysis.
FUD of the Week
SEC chair issues warning to crypto firms after action on Kraken staking
U.S. Securities and Exchange Commission chair Gary Gensler issued a warning to crypto companies to “come in and follow the law” after the agency announced a settlement with crypto exchange Kraken. This is the latest effort by the country’s authorities to crack down on crypto firms, as banks have allegedly been discouraged from dealing with crypto firms in recent weeks by U.S. officials, aiming to make crypto business “completely unbanked,” sources told Cointelegraph.
Stablecoin issuer Paxos reportedly probed by New York regulators
The New York State Department of Financial Services is reportedly investigating Paxos Trust Company, the stablecoin issuer behind Binance USD (BUSD) and Pax Dollar (USDP). The department is reportedly seeking to protect customers from the risks associated with cryptocurrency investments. On its website, Paxos claims that its BUSD and USDP token reserves are 100% backed by U.S. dollars and U.S. Treasury bonds.
3AC new exchange triggers backlash from the crypto community — ‘No, thank you’
The launch of the exchange project backed by the bankrupt hedge fund Three Arrows Capital (3AC) attracted a mob of angry community members. Open Exchange, a crypto exchange project that 3AC and CoinFLEX initially proposed, launched a website on Feb. 9. 3AC co-founder Su Zhu pointed out that the project is a way to make up for his past mistakes. 3AC went bankrupt in July, after suffering losses from Terra’s collapse two months earlier.
Best Cointelegraph Features
Justin Aversano makes a quantum leap for NFT photography
Justin Aversano’s journey into NFTs began with a personal story of loss and recovery.
China’s 180M digital yuan airdrop, Devastation in Turkey, Laos’ CBDC: Asia Express
China airdrops 180 million digital yuan to celebrate Lunar New Year, boosting consumption. APAC crypto exchanges donate to Turkey after a devastating earthquake. Laos and Soramitsu launch a proof-of-concept for a CBDC.
2023 is a make-or-break year for blockchain gaming: Play-to-own
While the thesis is compelling for crypto gaming, the way forward is unclear. Interoperability is one thorny issue, and playability still has yet to catch up to traditional games.
Subscribe
The most engaging reads in blockchain. Delivered once a
week.
