The Disrupt Weekend

“After receiving a recommendation from the boards of the FDIC and the Federal Reserve, and consulting with the President, Secretary Yellen approved actions enabling the FDIC to complete its resolution of Silicon Valley Bank, Santa Clara, California, in a manner that fully protects all depositors.

Today we are taking decisive actions to protect the U.S. economy by strengthening public confidence in our banking system.”

See Also: Joint Statement by Treasury, Federal Reserve, and FDIC
See Also: Bitcoin Rises on Report Government Weighing Plan to Protect All Silicon Valley Bank Depositors
See Also: U.S. Lawmakers Met With Fed, FDIC to Discuss Collapse of Silicon Valley Bank: Source

“In a statement, New York Department of Financial Services Superintendent Adrianne Harris said the Federal Depository Insurance Corporation (FDIC) had taken receivership of the bank. This marks the third bank collapse in under a week, following Silvergate Bank’s voluntary liquidation and Silicon Valley Bank’s shutdown on Wednesday and Friday, respectively.

A joint statement from the Federal Reserve, FDIC and U.S. Treasury Department said all depositors who used Signature would be made whole, in a joint statement outlining actions the federal regulators would take to protect depositors in SVB.

Signature Bank is a New York state-chartered commercial bank and is FDIC-insured, with total assets of approximately $110.36 billion and total deposits of approximately $88.59 billion as of December 31, 2022.

All depositors of this institution will be made whole. As with the resolution of Silicon Valley Bank, no losses will be borne by the taxpayer.”

Circle Scrambles to Right USDC After Signature Bank Failure

“Signature’s sudden failure leaves a key part of the crypto industry’s backend infrastructure in limbo: Signet. It’s a blockchain-based real time payments system that’s supposed to work 24/7. Circle, Coinbase and many crypto trading firms used Signet. But with the death of Signature, Signet, too, has gone kaput.

Circle CEO Jeremy Allaire acknowledged on Twitter that this meant the company could no longer mint or redeem USDC through Signature’s Signet product. Allaire said in another tweet that the company would be ‘bringing on a new transaction banking partner with automated minting and redemption potentially as soon as tomorrow.’ Circle holds no USDC reserves with Signature Bank.

The fate of Signet may prove important for Coinbase, too. In its third quarter shareholder letter, Coinbase – another key company for USDC – said it had joined Signet to allow for real-time payments and settlements.”

Circle Internet Financial said Saturday it will “cover any shortfall” in the assets backing its stablecoin USDC in the event it does not receive the entirety of a $3.3 billion cash reserve it was holding at Silicon Valley Bank.

Circle will stand behind USDC and cover any shortfall using corporate resources, involving external capital if necessary.

Circle was holding $3.3 billion of USDC’s cash backing at Silicon Valley Bank when the FDIC seized the bank’s assets on Friday. The value of the stablecoin fell as low as $0.88 in last 24 hours, before rebounding to $0.97, after the announcement.

Circle said it attempted to move its assets out before SVB’s collapse and that the transaction could settle on Monday, when U.S. banks resume normal operations.”

See Also: Circle Confirms $3.3B of USDC’s Cash Reserves Stuck at Failed Silicon Valley Bank

11 March

The future of finance will be bank-free, Bernstein said in a research report Friday. Banks will still exist, but in the background as “custodians of old wealth.”

New wealth creation and financial-services innovation will move to a new financial app universe on the Ethereum ecosystem.

A revival of decentralized finance (DeFi) is in the works, one that is far more sustainable, scalable, transparent and with improving token economics.

Bernstein estimates that by 2028, bank-free DeFi will have revenue of $40 billion and total assets will grow to $1 trillion from about $65 billion now. It forecasts $5 trillion in assets over the next decade due to rapid adoption.

The next generation of DeFi will be built on a layer 2 network that is scalable with 95% lower transaction costs and products that generate real revenue and sustainable yields rather than being driven by token incentives, the note said.”

See Also: Brave Browser Now Lets Users Sell Crypto Within the Wallet
See Also: Facebook Parent Company Meta Exploring Decentralized App: Report

Circle’s USDC, the second-largest stablecoin, with $43 billion market capitalization, held an undisclosed part of its $9.8 billion cash reserves at failed Silicon Valley Bank.

SBV was one of the six banks that the firm used for managing the approximately 25% portion of USDC reserves held in cash. While we await clarity on how the FDIC receivership of Silicon Valley Bank will impact its depositors, Circle and USDC continue to operate normally.

The full list of banks that held cash for Circle’s USDC are Bank of New York Mellon, Citizens Trust Bank, Customers Bank, New York Community Bank (a division of Flagstar Bank, N.A.), Signature Bank, Silicon Valley Bank and Silvergate Bank. Circle also keeps some part of USDC reserves in a dedicated BlackRock fund.

Circle said last week it had cut ties with Silvergate Bank, the crypto-friendly bank that halted operations and said it would “voluntarily liquidate” its assets earlier this week. Circle’s chief executive Jeremy Allaire said the firm held ‘most of their cash is in BNY Melon.’

See Also: Circle’s USDC Endured $1B of Net Redemptions Since Silicon Valley Bank’s Shutdown
See Also: USDC Stablecoin Depegs From $1; Circle Says Operations Are Normal
See Also: DeFi Protocol Curve’s $500M Stablecoin Pool Hammered as Traders Flee USDC
See Also: Crypto Wallets Withdraw $902M USDC From Centralized Exchanges in Past 24 Hours Amid SVB, Silvergate Shutdowns

The DFPI said in a statement that it had taken possession of the bank, “citing inadequate liquidity and insolvency.” The Federal Deposit Insurance Corporation has taken receivership of the bank. SVB’s collapse with $211 billion in assets is among the largest in history, second only to Washington Mutual Bank’s failure during the Great Financial Crisis in 2008.

While not perceived as “crypto-friendly” as Silvergate, the tech-forward Silicon Valley Bank did count a number of crypto entities as clients – especially hedge funds and VC firms. Blockchain Capital, Castle Island Ventures, Dragonfly and Pantera all had relationships with the bank.

Among the bank shares moving lower on the news are fellow West Coast lenders First Republic Bank (FRC), now off 15%, and Western Alliance Bancorp (WAL), now down 25%. Crypto-friendly Signature Bank (SBNY) has also added to losses, the stock now off 13%.

The broader stock market has turned from modest gains to modest losse. The S&P 500 is now lower by 0.3%. Bitcoin is little changed at just above $20,000.

All insured depositors will have full access to their insured deposits no later than Monday morning.”

See Also: A Tale of 2 Banks: Why Silvergate and Silicon Valley Bank Collapsed
See Also: Signature Bank Stock Down 12% in Volatile Action as Sell-Off Continues
See Also: Replacing Silvergate’s Network Is a Challenge for Crypto Industry: JPMorgan

“On March 10, the United States Securities and Exchange Commission ruled against a change that would allow investment manager VanEck to create a spot Bitcoin (BTC) trust. Commissioner Mark Uyeda joined his colleague Hester Peirce in releasing a statement criticizing the commission’s decision not to approve the listing.

In our view, the Commission is using a different set of goalposts from those it used—and still uses—for other types of commodity-based ETPs to keep these spot bitcoin ETPs off the exchanges we regulate.

The commissioners said the SEC had not required any connection between the spot and futures markets to be demonstrated for other commodity-based ETPs. The SEC is required by law to explain changes to its policy for approving commodity-based ETPs, they added.”

See Also: U.S. Justice Dept. Appeals New York Judge’s Decision to Approve Voyager’s Sale to Binance.US
See Also: Coinbase Updates Staking Service Following Regulatory Crackdown

“Tonya Evans, a professor at Penn State University Dickinson Law, said that if the New York Attorney General prevails, defining ether as a security could have huge ramifications for the crypto world. Whether it is deemed one is likely to depend on what approach state and federal regulators take in defining the digital asset, but she said she doesn’t see how ether could be considered a security.

Once there are ‘federal guidelines, rules, regulations and laws that may preempt state law, oftentimes you’ll see things percolate up from the states and eventually make it before the [U.S. Supreme Court] to render the ultimate determination. And this is what we often see‘ in new and emerging asset classes and industries, she said.

Nonetheless, the U.S. should be cautious about alienating the crypto industry and forcing it out of the country because it would be operating without U.S. regulatory oversight to protect investors, she said.

If we’re pushing this type of ecosystem offshore it will be more and more difficult for lawmakers and regulators to actually reach the point of keeping this ecosystem vibrant in the United States with clear and defined rules.”

The manifesto suggests reviewing existing Nigerian Security Exchange Commission (SEC) regulations on digital assets to make them more business-friendly. The manifesto’s release coincides with Nigerians’ increasing crypto adoption, which is among the highest in the world.

We will reform the policy to encourage the prudent use of blockchain technology in banking and finance, identity management, revenue collection and use of crypto assets. We will establish an advisory committee to review SEC regulation on digital assets creating a more efficient and business-friendly regulatory framework.”

Account Abstraction Explained

See Also: What is Push Protocol | LIVE at ETHDenver (Video)

10 March

New York State Attorney General Letitia James filed suit against KuCoin on Thursday, alleging the Seychelles-based crypto exchange is violating securities laws by offering tokens – including ether – that meet the definition of a security without registering with the attorney general’s office.

The suit is the first time a regulator has claimed in court that ether is a security. Though Securities and Exchange Commission (SEC) Chairman Gary Gensler has hinted that his agency might consider ether to be a security, the SEC’s sister regulatory agency – the Commodity Futures Trading Commission (CFTC) – has long maintained that both bitcoin and ether are commodity assets.

James’ suit argues that ether is considered a security under the Martin Act – a 102-year-old New York anti-fraud law – because the value of ether is dependent on the efforts of others, including co-founder Vitalik Buterin.

The petition argues that ETH, just like LUNA and UST, is a speculative asset that relies on the efforts of third-party developers in order to provide profit to the holders of ETH.

With her lawsuit, Attorney General James is seeking a court order to stop KuCoin from representing itself as an exchange, prevent the company from operating in New York and direct KuCoin to implement geo-blocking. KuCoin did not respond to subpoenas filed by the NYAG’s office served via email and in-person.”

What Happens If Ether Is a Security?

Despite the NYAG’s assertion in its suit that ether may be a security, the decision is far from final.

Should Ethereum officially be classified as a security by courts, exchanges wishing to list ether will likely need to register as securities broker-dealers with the U.S. Securities and Exchange Commission (SEC). If you’re already registered in New York, you now have a question – do you either delist ether and/or block your New York customers from being able to buy ether or do you just simply register as a broker-dealer?

Belton also pointed out that James’ stance comes as a surprise because exchanges operating legally in New York (not including KuCoin, which was not registered as an exchange) offer ether, with the approval of the state’s financial regulator.

It’s not like New York had no idea that ether was being offered. They knew for years because to get a license and to register in New York, you actually have to have the assets that you plan to offer to New Yorkers green-listed by their financial regulator. So it’s kind of insane that their attorney general was saying, ‘Oh, by the way, you guys are selling illegal securities, despite the fact that our financial regulator has been letting you operate with impunity.'”

See Also: ​​Stablecoins and Ether are ‘going to be commodities,’ reaffirms CFTC chair
See Also:

“Crypto companies are scrambling to reassure the market that they do not have any corporate cash left at Silvergate Bank. Binance, Coinbase, OKX, and Paxos have all released statements regarding their exposure to Silvergate.

Meanwhile, the Crypto Council for Innovation blamed the collapse of Silvergate on a bank being overly exposed to one sector and encouraged regulators to let more banks take crypto deposits.

Discouraging banks from providing deposit accounts only exacerbates this problem by creating fewer options for any one sector to obtain banking services. The problem is not about crypto, but concentration risks.”

See Also: 4 Potential Winners of the Silvergate Unwind

The Fed’s top regulatory official said the digital-assets specialists are needed to ‘help us learn from new developments and make sure we’re up to date on innovation in this sector.’

Barr, the Fed official with the most potential influence over how the central bank regulates and supervises crypto, echoed the comments of Fed Chairman Jerome Powell this week that the banking regulator is hoping to preserve crypto innovations as it moves forward to put up guardrails.

Despite recent events, we have not lost sight of the potential transformative effect that these technologies could have on our financial system.

While crypto assets are hyped as decentralized, there has been an emergence of new, quite centralized intermediaries that are either not subject to or not compliant with appropriate regulation and supervision, which has perpetuated harm to consumers.”

See Also: House Republicans directly criticize Biden administration for digital asset policies
See Also: Investors might have avoided FTX if the SEC had addressed Bitcoin ETFs, says BitGo CEO

“U.S. authorities transferred $1 billion worth of bitcoin (BTC) recovered from a dark web hack to new wallet addresses, including one owned by Coinbase, on Wednesday, stoking investor fears that intense sell pressures could drive down the token’s price.

Nearly 10,000 bitcoin were sent to Coinbase-controlled wallets, while roughly 41,000 tokens were directed to government-controlled wallets.

An open market sale would be a departure from authorities’ past handlings of seized digital assets. The government usually sells seized assets at auction. Although concerns about the tokens’ sale on the open market may be overblown, Bitcoin’s price may still move as the government reveals its plans for the recently transferred bitcoin.

There should be a quicker bounce back if there’s sell pressure, given the larger amount of push [in] the market today compared with the weaker hands and greater leverage [that characterized the market] a year ago.”

See Also: Vitalik Buterin Dumps Altcoins Worth 220 ETH That Have ‘No Moral Value’
See Also: MakerDAO Founder Calls for Rebranding of DAI Stablecoin

Majority Whip Rep. Tom Emmer (R-Minn.), the number 3 Republican in the U.S. House of Representatives, is pushing legislation that would block the U.S. Federal Reserve from issuing a central bank digital currency (CBDC) that could be deployed to collect information about citizens’ financial lives.

Recent actions from the Biden administration make it clear that they’re not only itching to create a digital dollar, but they’re willing to trade Americans’ right to financial privacy for surveillance-style CBDC

Emmer told an audience at the Cato Institute, a libertarian think tank in Washington Thursday that a government token could easily be ‘weaponized into a surveillance tool,’ and the U.S. government could ‘program a CBDC to choke out politically unpopular activity.’

The Treasury Department has encouraged work on a digital dollar, and the Fed is still in research mode on the project, officials have said as recently as this week.”

See Also: SWIFT moves to next phase of CBDC testing after positive results

“The U.S. Treasury Department has proposed a 30% excise tax on the cost of powering crypto mining facilities. The Republican-led House is unlikely to adopt the Democratic president’s proposal as-is.

The provision would create a phased-in excise tax based on the costs of the electricity used in crypto mining, imposed on the companies “using computing resources” to mine cryptocurrencies. These companies would also be required to report how much electricity they use and what type of power was tapped. The tax would be phased in over the next three years, increasing 10% each year.

The provision explicitly makes the case that this type of tax may lower the overall number of mining machines in the U.S.

The increase in energy consumption attributable to the growth of digital asset mining has negative environmental effects and can have environmental justice implications as well as increase energy prices for those that share an electricity grid with digital asset miners.”

The report of irregular activity has fueled speculation across social media platforms that hackers have attacked the platform. Hedera has neither confirmed nor denied those rumors.

In an abundance of caution and safety for users, [we are] turning off network proxies on mainnet, making it inaccessible.

The exploit is targeting the decompiling process in smart contracts,’ tweeted DeFi research firm Ignas. ‘Advice: Get your funds out now.'”

See Also: to Suspend Operations of Asset Management Arm: Bloomberg
See Also: Struggles to Maintain Fiat On-Ramps in the Face of Crypto Banking Crisis

“The program, still in invitation-only beta, allows members to complete activities such as quizzes and in-store purchase to earn Stamps, which can be collected or resold on Nifty Gateway. The 2,000-item “Siren Collection” features a version of the company’s iconic Siren, with the stamps priced at $100.

Members of Starbucks Odyssey were able to buy two stamps each and could pay by credit card or by connecting their MetaMask wallet. The collection sold out in 18 minutes and secondary sales quickly soared. As of this update, the floor price for a Siren Stamp has already passed $550. NFT Stamps that members have unlocked from completing Journeys are already available in the Nifty Gateway secondary market, with the floor price “Holiday Cheer Edition 1 Stamp” hitting $1,398.

Starbucks launched its Odyssey program on the Polygon blockchain and aims to make the experience friendly for noncrypto natives.Odyssey is a next-generation loyalty platform aimed at building a brand relationship between customers and Starbucks.'”

9 March

“On Tuesday a panel of judges on the D.C. Circuit Court of Appeals in Washington, D.C., seemed to agree with Grayscale’s argument. The court is expected to issue its ruling in the next three to 12 months. Should the court rule in Grayscale’s favor there are several possible things that could happen next.

The commission could approve GBTC as a spot bitcoin ETF as well as approve those spot ETFs from other companies that have been similarly rejected by the SEC.”

Coinbase is starting a “wallet as a service” business that will allow companies to customize blockchain wallets for their own customers.

The service could be used by gaming apps where tokens or non-fungible tokens (NFT) are part of the game, or by companies that might want to incorporate a wallet into an app and make that ‘almost invisible to the end user.’

Coinbase says its wallet-as-a-service could help companies ‘to bring the next hundred million customers into Web3 through a seamless wallet-onboarding experience.’

In a world where wallets are simple, companies can finally build Web3 experiences accessible to everyone regardless of technical knowledge.”

See Also: Alpha Sigma, Transform Ventures Partner on New $100M Crypto-Focused Funds

“The chairman of the Commodities and Futures Trading Commission (CFTC) has taken a firm stance against the Security and Exchange Commission (SEC)’s subtle power creep over the digital asset market. Rostin Behnam told the Senate Agriculture Committee on Wednesday that Ethereum, the second-largest cryptocurrency next to Bitcoin, is a commodity.

It’s been listed on CFTC exchanges for quite some time. We would not have allowed the Ether futures product to be listed on a CFTC exchange if we did not feel strongly that it was a commodity asset.

He elaborated, stating that his agency has “serious legal defences” to support their case.

The regulatory chiefs also disagree on stablecoins. While the SEC recently threatened to sue Paxos for issuing BUSD as an unregistered security, Behnam believes stablecoins should be considered commodities—absent any legislation to claim otherwise.”

See Also: Lido Finance Weighs Sunsetting Liquid Staking on Polkadot, Kusama

“According to United States Senator Kirsten Gillibrand, a new draft of the bipartisan crypto bill pioneered by herself and Senator Cynthia Lummis will be released to the new Congress after being deferred in 2022.

If passed in both the Senate and House and signed into law, the legislation would likely provide needed regulatory clarity among many crypto projects, including which assets would fall under the purview of the SEC and CFTC.

Our ambition is to make sure that there is a place to start a national conversation about a holistic approach to digital assets.

To make sure that digital assets have the character of securities are regulated by the SEC, to have the assets that have the [unintelligible] of commodities are regulated by the CFTC, to make sure stablecoins can be overseen by the OCC, to make sure that there are tax provisions for the entire industry.

Behnam said that Gillibrand and Lummis had ‘carefully and thoughtfully considered all components of the market.'”

See Also: Crypto Sector’s Reserve Reports Can’t Be Trusted, Says U.S. Audit Watchdog
See Also: India’s Crypto Businesses Handed Anti-Money Laundering Obligations for First Time

“Crypto-friendly Silvergate Bank will “voluntarily liquidate” its assets and wind down operations, its holding company, Silvergate Capital Corp. (SI), said Wednesday. Under the winding down all deposits will be repaid in full, the company said.

In light of recent industry and regulatory developments, Silvergate believes that an orderly wind down of Bank operations and a voluntary liquidation of the Bank is the best path forward. The Bank’s wind down and liquidation plan includes full repayment of all deposits.

Silvergate has provided banking services to crypto companies since 2013. The company revealed it had nearly 500 crypto clients when it filed to go public in November 2018. Its initial public offering (IPO) was completed in 2019, trading on the New York Stock Exchange. The bank boasted more than 750 crypto clients at the time.”

See Also: Crypto Lender Celsius Should Continue Exclusive Right to Pursue Novawulf Deal, Judge Says
See Also: Gemini’s banking relationship with JPMorgan ‘remains intact’

The exchange market share increased from 59.4% in January to 61.8% in February, according to a report from crypto market data provider CryptoCompare. Binance had a 13.7% increase in its spot volumes to $504 billion, an all-time high market share for the exchange.

This comes as regulators in the U.S. and beyond have ratcheted up their scrutiny of the exchange in recent months.

Despite the recent criticism the exchange has received, market participants continue to take shelter on Binance under the premise that the largest exchange is seen as one of the safer trading venues. It is one of the exchanges with the most trading pairs and services available.”

“Powell “stressed” that the central bank has yet to make a decision on the size of the rate hike when the Federal Open Market Committee (FOMC) meets later in March.

I stress that no decision has been made on this.

Powell said there’s a number of important economic reports to be released between now and the FOMC’s March 21-22 meeting – this Friday’s February payrolls report and next week’s inflation figures among them – and the incoming data will play an important role in guiding the rate decision.”

How Senegalese are adopting Bitcoin to escape their economy

8 March

The company went to court Tuesday to argue the SEC’s denial of its ETF application was “arbitrary,” telling the panel of judges that Grayscale is “asking to be regulated” by the SEC through its conversion of GBTC to an ETF.

The panel of appeals court judges questioned the SEC’s logic in drawing a distinction between bitcoin spot market prices and futures market prices. Chief Judge Sri Srinivasan and Judges Neomi Rao and Harry Edwards of the District of Columbia Circuit Court of Appeals in Washington, D.C., asked SEC Senior Counsel Emily Parise a number of questions about the agency’s argument that bitcoin futures prices underlying futures ETFs were more resistant to manipulation than spot bitcoin markets might be if a spot bitcoin futures ETF was approved.

It seems to me that [what] the Commission really needs to explain is how it understands the relationship between bitcoin futures and the spot price of bitcoin … it seems to me that … one is just essentially a derivative. They move together 99.9% of the time. So where’s the gap, in the Commission’s view?

The other judges also asked a number of questions ranging from the legal defense by the SEC to how it evaluated the tests it used to reject Grayscale’s bid.

The judges’ apparent skepticism of the SEC’s position is sending GBTC higher by 5% on Tuesday while the price of bitcoin is flat. That’s further narrowing the closed-end fund’s discount to net asset value (NAV), which had fallen to a one-month low of 42% on Monday.”

See Also: A Dozen Reasons Why the SEC Should Have Approved Grayscale’s Spot Bitcoin ETF
See Also: GBTC Discount Narrows to Lowest Level Since November Following Court Hearing

“The bankruptcy judge in the Voyager Digital case chose to allow the deal with Binance.US over objections from the U.S. Securities and Exchange Commission and state regulators.

Early on in the hearing, Judge Wiles took a dim view of objections from the Securities and Exchange Commission. ‘If the government wants to litigate that Voyager’s sale of VGX tokens was an offering of securities, it should have done so‘, he said, referring to an SEC attorney’s statement that the proposed sale may have securities law tie-ups.

Judge Wiles ultimately ruled that these regulators’ objections did not outweigh the need to proceed with the restructuring of Voyager.

While the judge said he would still work through the confirmation order, he indicated he was in favor of approving the deal. Binance.US may still have to clear certain regulatory hurdles before the deal can be finalized. Voyager’s VGX token surged over 8% in the minutes after the ruling.

The plan, assembled after previous bidder FTX itself filed for bankruptcy protection in November, had been supported by 97% of Voyager creditors who responded to the proposal, which could see them recovering nearly three-quarters of their holdings.”

See Also: Voyager Bankruptcy Judge Expresses Skepticism Over U.S. SEC Objection to Binance US Deal

Federal Deposit Insurance Corp (FDIC) officials have been consulting with executives of troubled crypto-focused bank Silvergate Capital (SI) on how to keep the company in business, according to a report from Bloomberg.

One option may involve recruiting crypto industry investors to help boost Silvergate’s liquidity, according to one of Bloomberg’s sources. Silvergate shares were rising 2.5% to $5.34 in after-hours trading on Tuesday.”

“MakerDAO, the decentralized autonomous organization (DAO) behind the DAI stablecoin, is reviewing a proposal that would allocate an additional $750 million to invest in U.S. Treasurys as it looks to take advantage of a favorable yield environment. If passed, the resolution would add to the $500 million approved in October, bringing the ceiling to $1.25 billion.

After review of various highly liquid money market options, we found that the simple solution of laddering U.S. Treasurys over a six-month period with biweekly maturities presents a strong, flexible and effective solution for Maker.”

See Also:

“Bitcoin dropped below $22,000 after U.S. Federal Reserve Chair Jerome Powell said in prepared remarks in his two-day semiannual monetary policy testimony before Congress that inflation had remained unexpectedly high. But the largest cryptocurrency by market capitalization quickly recovered to trade above the threshold for much of Tuesday.

The latest economic data have come in stronger than expected, which suggests that the ultimate level of interest rates is likely to be higher than previously anticipated. If the totality of the data were to indicate that faster tightening is warranted, we would be prepared to increase the pace of rate hikes.

The prospect of a 50 basis point (bps) interest rate hike instead of a more dovish 25 bps now rests at over 70%, roughly the reverse of the probability last week. Bitcoin has been largely holding over $22,000, even as a flurry of jobs and price indicators have raised inflationary concerns anew.

The S&P 500 closed down 1.5%, and the Dow Jones Industrial Average (DJIA) and tech-heavy Nasdaq Composite dropped by 1.7% and 1.2%, respectively.”

See Also: Federal Reserve’s Powell: We Don’t Want to Strangle Crypto Innovation, but Sector Is a Mess

“U.S. lawmakers are planning on reintroducing a bill that will reform the way crypto is treated for tax purposes. Lawmakers want to put this reform forward because they believe the current reporting requirements for companies are hindering innovation in the crypto sector.

The bill, called the Keep Innovation in America Act, would narrow the definition of a crypto broker. For example, miners and validators, hardware and software developers do not have reason to collect the information required under the the Infrastructure Investment and Jobs Act.

The reporting requirements under current law require digital asset market participants to adhere to standards that are incompatible with this technology’s operation.”

See Also: Thailand Offers $1B Tax Break for Firms Issuing Investment Tokens: Reuters
See Also: ‘Home’ regulator could solve crypto’s ‘fragmented supervision’ issue: Comptroller

7 March

“Market participants’ concern over the Federal Reserve’s interest rate hikes and high inflation are heavy macro headwinds facing Bitcoin. Bitcoin price is highly reactive to interest rates and the U.S. Dollar Index (DXY), which puts a strain on risk assets.

The best way for Bitcoin to withstand short-seller pressure is for new long liquidity and spot buyers to enter the market. Analyzing exchange net flows is a good way to measure new liquidity and currently this metric reflects a 34% uptick since the start of 2023, but it lags behind the yearly daily average of $1.6 billion. Currently, the general consensus among analysts is that the ability to onboard new liquidity into the crypto market has been hindered by a crackdown on banks that support crypto-oriented businesses.

Since mid-January, the weekly average of NUPL has shifted from a state of net unrealized loss to a positive condition. This indicates that the average Bitcoin holder is now holding a net unrealized profit of magnitude of approximately 15% of the market cap. This pattern resembles a market structure equivalent to transition phases in previous bear markets.

While Bitcoin’s 2023 momentum may have paused in mid-February and many headwinds remain, there are positive signs that the transition out of the deepest phase of thbear market is near.”

See Also: Crypto funding seen shifting from CeFi to DeFi after major collapses: CoinGecko
See Also: Tornado Cash Fork, Privacy Pools, Deployed on Optimism Testnet

BCB Group, a payments processor that links crypto companies to the banking system, is accelerating plans to add U.S. dollar capabilities to help fill the hole left by the recently shuttered Silvergate Exchange Network, or SEN.

I’d like to say it could be live by spring, so we’ll do whatever it takes to make sure those who are stranded by SEN get some sort of continuity given the huge overlap of BCB and Silvergate clients.

Silvergate’s troubles started when they allowed long-term bitcoin bets against short-term cash deposits, an impossible position to unwind in 2022’s crazy markets. BLINC funds are 1:1, unleveraged, un-rehypothecated, always precisely 1:1 with safeguarded funds.

London-based BCB, which was the first crypto company to receive a payments license from U.K. regulator the Financial Conduct Authority, provides fiat-to-crypto rails for currencies, including sterling, euros, Swiss francs and yen in Europe, particularly to institutional players such as crypto exchanges Bitstamp, Gemini and Kraken and financial-services firm Galaxy Digital.

New York-based Signature Bank’s (SBNY) Signet, an equivalent to SEN, has to date been the next largest network for USD instant settlement and stands to fill some of the demand. That said, a BLINC dollar component has been in the works for about a year and is getting ready to launch, Landsberg-Sadie said.”

See Also: CEO Sees ‘No Material’ Impact on Bitcoin Following Silvergate’s SEN Platform Closure
See Also: Silvergate’s Struggles Will Likely Boost Stablecoins’ Role in Crypto Trading: Kaiko
See Also: White House Is ‘Aware of’ Silvergate Situation, Spokeswoman Says
See Also: Crypto Exchange Bybit Suspends USD Deposits

“Grayscale is appealing the SEC’s decision to deny the conversion of the trust into an exchange-traded fund. The company said it’s preparing to argue that the SEC inappropriately treated its ETF bid differently than its earlier decisions to approve bitcoin futures-based ETFs.

GBTC has been trading at a mostly steadily widening discount to NAV for nearly two years, but some investors are hopeful that the discount will continue its recent narrowing should the courts be receptive to Grayscale’s ETF arguments.

There are many investors waiting for the green light from the SEC to convert GBTC into an ETF because it will narrow the current gap. There are investors buying GBTC now to play the positive scenario from the lawsuit.

While far from a certainty, it is our view that the market is underpricing the likelihood of a Grayscale victory.”

See Also: Voyager Denies SEC Claims VGX Token Is a Security as Binance.US Decision Looms
See Also: Alameda Sues Grayscale and DCG to Allow Redemptions, Reduce Fees
See Also: Singapore Police Probing Do Kwon’s Terraform Labs: Bloomberg

“Unlike Ethereum-based NFTs, buying artworks built on the premier crypto network doesn’t have an open marketplace.

Thus, the auction process requires interested TwelveFold buyers to transfer Bitcoin to a Yuga Labs deposit address to place their bids. The company then custodies users Bitcoin until the auction ends; if a bid is unsuccessful, the funds are returned.

This is a scammer’s dream. Yuga is establishing a REALLY bad precedent running an auction like this.

This controversial auction arrangement for Bitcoin-based NFTs is a result of the network’s limited ability to accommodate such operations.”

TeraWulf (WULF) has begun operations at its Nautilus Cryptomine facility – the first nuclear-powered bitcoin mining facility in the U.S. – with nearly 8,000 mining rigs online representing computing power, or hashrate, of about 1.0 exahash per seond (EH/s). The company said Monday it expects to reach 5.5 EH/s of computing power by early in the second quarter.

The Nautilus mine is the first behind-the-meter bitcoin mining facility of its kind, directly sourcing reliable, carbon free, and 24×7 baseload power from the 2.5GW Susquehanna nuclear generation station in Pennsylvania.

Nautilus will significantly lower TeraWulf’s energy costs, with the company having secured a power agreement for 2 cents per kilowatt hour (kWh) of power for five years. It is a joint venture with Texas energy producer Talen Energy, in which TeraWulf has a 25% interest.”

In the hub-and-spoke process, a cross-border transaction is broken down into two domestic payments facilitated by a foreign-exchange provider active in both countries. That gives central banks almost complete control over their CBDCs, while allowing competitive quotes for the exchange rate to be submitted to the hub so that end users can benefit from the best rate.

This competitive setup mitigates the risk of insufficient liquidity in the desired currency pair.

The Group of 20 industrialized nations has made exploring cross-border payment systems a priority, and Project Icebreaker was a response to G-20’s call to action, the report said.”

See Also: Naira redesign no more: President’s directive canned by Nigerian Supreme Court

The Disrupt Weekend

“Earlier this week, Hong Kong’s Securities and Futures Commission (SFC) published the proposed text of its upcoming crypto regulation, slated to go into effect on June 1, and opened it up for public comment. Its scope includes the licensing of crypto-asset service platforms, which were originally only going to be allowed to service accredited investors. The SFC is now seeking input on whether or not retail investors should also be allowed to participate.

So far, this seems like yet another example of a jurisdiction way ahead of the United States in terms of regulatory clarity and willingness to engage with the public on the topic. Yet, lifting the lid a little, it is so much more. It is also an example of the East-West strategy divide, the power of retail and the importance of watching the flows.

It’s about more than licensing. Hong Kong has also budgeted HK$50 million (~$6.4 million) for crypto asset development, including education efforts for individuals and businesses. And Hong Kong’s financial secretary, Paul Chan, announced the launch of a task force composed of policy and industry representatives to explore crypto asset integration. This feels much broader and longer-term than just crypto service provider oversight.

In part, it’s about laying some groundwork for the economic growth of the region. Hong Kong is obviously closely affiliated with China. Events leading up to and during the recent protests made clear to the world that China holds the reins, and that nothing happens in Hong Kong without China’s approval.

Here’s where it gets particularly interesting: China seems to approve of Hong Kong’s crypto moves.

Earlier last week, Bloomberg reported that Chinese officials had been seen at Hong Kong crypto events. They were not undercover. In January, Huang Yiping, a former member of the monetary policy committee of China’s central bank, said in a public speech the country should reconsider its crypto ban.

None of this necessarily means that mainland China will be opening up to crypto markets any time soon – but it could be that China is watching Hong Kong’s moves with a view to relaxing its stance and eventually supporting the integration of global crypto assets into its economy.

This matters, in part, because of size. What’s more, Chinese retail investors tend to be less risk-averse than their U.S. counterparts.

Also, China is one of the few regions of the world actively easing money supply. Earlier this month, the central bank ramped up liquidity injections while keeping the monetary policy rate steady, but analysts expect the committee to continue to cut rates in the second quarter. The number of new loans extended by Chinese banks more than tripled between December and January.

It also matters, in part, because of geopolitics. It is no secret that China would like to see a weakening of the dollar’s international role. China is probably watching with interest the building antagonism toward crypto from Washington, D.C. If the U.S. sees crypto markets as a threat, it could be a threat worth exploring.

So far this year, analysts have been focusing on macro factors as the main driver of crypto market performance, with evolving use cases and technical speculation also a feature of the recovery. It could be that a more significant driver is slowly building on the global strategy stage – specifically, in the geopolitical rivers of the east.”

See Also: ‘Crypto Can Save the Capitalist Narrative’: Animoca Chairman Yat Siu

“U.S. authorities last year controversially banned citizens from using the “coin mixer” Tornado Cash. But Ethereum developers have been working hard on a solution they hope Feds will stay away from: Privacy Pools.

This time round, there’s a feature that proves the user is not a North Korean bad actor or some other type of criminal. The new app works just like Tornado Cash, but when users click the option to withdraw funds, they can generate a zero-knowledge proof which publicly shows they are not using a criminal blockchain address, but without revealing who they are.

The hope is that regulators are less interested in sanctioning [Privacy Pools], because it helps them accomplish their goals.”

“HyperPlay, a Web3 gaming launcher, is now live via early access. Available for all major platforms but optimized for MetaMask users. Besides being just a game launcher, HyperPlay is also a game store aggregator, offering the Epic Games and Good Old Games stores within its interface.

HyperPlay’s launcher “paints” a MetaMask layer in-game on top of the gameplay experience so that users don’t have to minimize their game or otherwise switch windows to complete transactions. Launchers like HyperPlay’s can [also] offer an additional sense of security. HyperPlay examines and vets each game submitted to its launcher.

HyperPlay is solving the distribution problem and freeing game developers from the risk of deplatforming by these monopolies like Apple and Google, or Steam.

Unlike the Apple Store, we’re not taking a 30% cut of your developer’s in-game economy.

Instead of taking a cut of game sales or transactions, Jacob said that HyperPlay will generate revenue through offering “convenience features” within the app, similar to how MetaMask generates revenue.

HyperPlay will offer numerous games at launch, ranging from Undead Blocks to DeFi Kingdoms, The Sandbox, Voxie Tactics, and The Bornless, to name a few. The launcher will support non-crypto games as well as Web3 titles.

I think that gaming in many ways is a bridge by which people discover the larger decentralized web.”

“The idea that blockchain technology and native tokens can represent off-chain assets – financial securities such as stocks and bonds, or commercial rights such as trade receivables and fractionalized real estate or art – has been around for a while.

Time will tell whether the latest wave of tokenization – which has drawn in large Wall Street banks, the Singaporean government and asset managers such as Wisdom Tree and Hamilton Lane – moves this idea beyond the fringe into the mainstream. But there are reasons to believe it has momentum.

One is that technological advances in cryptography since 2018 have encouraged tokenization projects to migrate from those closed, permissioned projects onto public, permissionless blockchain platforms such as Polygon. And that has, in turn, allowed them to tap into the more rapid pace of innovation happening on those chains, including in areas such as zero-knowledge proofs, which enable a balance between the privacy that investors and issuers demand and the advantages of programmability, instant settlement and data transparency.

Another driver behind this advance lies in economic conditions. Inflation and higher interest rates are forcing entities to seek out new markets and trading efficiencies and to free up dormant capital. The pitch behind tokenization is that it achieves all of that.

It would be a real pity if such a regulatory mission were to kill off tokenization altogether because, if managed properly, putting the world’s stocks, bonds and commercial assets on-chain could well reduce systemic risk, not raise it. A tokenized financial system with traceable, instantly settled transactions would be a more transparent and efficient one, with lower risks of the trade failures that happen when settlement is delayed.

As former Treasury official John Rizzo argued in a recent opinion piece, policymakers need to be looking at how tokenization can help foster generational wealth in assets such as real estate by making them available to a wider group. In tokenization, Rizzo wrote, ‘public officials in Washington [D.C.] have an opportunity to come together and focus on powering a revolution in alternative assets that unlocks the storied American Dream for millions.'”

For all their rhetoric about “unbanking yourself,” crypto exchanges, lenders and stablecoin issuers need access to banks. It’s not possible for any crypto company, whether or not it has a U.S. presence, to accept or pay out fiat dollars unless it has a direct or indirect relationship with a U.S. bank.

U.S. dollars are illiquid in the crypto ecosystem, so crypto companies don’t need lending services from traditional banks. And because they might have to pay out those scarce fiat dollars at a moment’s notice, they want any funds they deposit in traditional banks to be held in custody, not used as liquidity for the bank’s other activities. So crypto companies want a type of bank we don’t currently have: a “full-reserve” bank.

In 2019, Wyoming created a charter for full-reserve banks. Its “special purpose depository institution” can receive deposits and provide asset management, custody and related services, but is not allowed to lend and must maintain unencumbered liquid assets of at least 100% of its total deposits. Custodia Bank is a Wyoming SPDI.

Custodia has all the benefits of being a bank with expertise in digital assets – plus, as a depository institution, we’re eligible to connect directly with the Federal Reserve payment system, removing middlemen and layers of fees.

A full-reserve, nonlending bank earning its profits solely from fees on payment and custody services sounds like a sensible solution to crypto’s banking needs. Indeed, many people might think it has wider application, too – after all, it’s not just crypto companies that need safe places to put their savings. If it is 100% reserved there’s no risk from bank runs, and if it is not lending it can’t become insolvent due to bad debts. Even though deposits in Custodia don’t have FDIC insurance, they are completely safe. So why has the Federal Reserve refused to accept Custodia as a member and denied it direct access to dollar clearing?

The problem is not Custodia, it’s the customers. Custodia offers banking and custody services exclusively to crypto businesses. And the Fed’s view of these is more than slightly jaundiced. It regards the entire crypto industry as a hotbed of financial crime. It’s hardly going to give the green light to a bank whose principal business is, in its view, enabling enterprises that are highly risky and at worst actually criminal.

There’s a second problem: Custodia plans to issue its own token. The token would be a liability of Custodia exchangeable at par for U.S. dollars – a “tokenized dollar.” It would be fully reserved, and Custodia has applied for FDIC insurance. A regulated bank issuing fully reserved, FDIC-insured tokenized dollars that could be used on multiple blockchains seems like a great idea. It would make U.S. dollars considerably more liquid in the crypto space and reduce reliance on the likes of Tether. The problem is not the token, it’s the network.

Custodia plans to issue the token on Blockstream’s Liquid network and possibly also on Ethereum. These are public decentralized networks. Custodia would have no control over the ownership and distribution of such tokens. It would be as if it had issued its own banknotes. The joint regulator statement cited above says that issuing tokens on such networks is “highly likely to be inconsistent with safe and sound banking practices.” While regulators perceive crypto as a vehicle for money laundering, terrorist financing and ransomware, and the headlines are dominated by crypto-related frauds, scams and rug pulls, regulated banks are not going to be allowed to issue stablecoins on public networks.”

The biggest ETHDenver ever closed out on Sunday, with finalists in the Ethereum ecosystem conference’s hackathon presenting their builds to a ragged but still energized crowd at Denver’s National Western Complex.

After two weeks of programming, hacker houses, parties and panels that spanned the city of Denver, thousands of attendees had whittled down to a couple hundred diehard developers at ETHDenver’s main stage for closing ceremonies.

ETHDenver, a community-run conference managed by token-holder members in a decentralized autonomous organization (DAO), reached new heights this year; on the first day of the main event, a staffer said there were over 16,000 tickets to be checked in – a sellout.

The conference is poised to grow in size and scope next year, Paller said. He said organizers are in discussion with “countries” over setting up satellite feeder events around the world to which ETHDenver would be the “super bowl.””

See Also: Gitcoin Co-Founder Kevin Owocki Unveils ReFi Incubator Supermodular

4 March

“The research that Flashbots details will allow blocks to be built without revealing data on users’ transactions, a step toward enhancing privacy.

The move aims to enable privacy features on Ethereum. The code was made open source in an effort to decentralize block building on the Ethereum protocol. Flashbots has not given an immediate timeline when it will move out of the testnet.

Implementing block building inside encrypted enclaves brings us one step closer toward transaction confidentiality and decentralization of the block building role.”

See Also: ETHDenver Looks Cringey to You Because Ethereum Has an Actual Community

ConsenSys, a top software firm working on the Ethereum blockchain, is rolling out a zero-knowledge Ethereum Virtual Machine (zkEVM) public testnet on March 28, intensifying the race among top crypto firms to be first to go fully live with the fast-emerging technology.

The move for ConsenSys comes after the Brooklyn, N.Y.-based software firm in December launched its private beta zkEVM testnet. Since then, the private testnet has processed over 350,000 transactions.

The race for the first ZK rollup to go live has accelerated recently. Later this month, Polygon will go live with its mainnet beta zkEVM. Scroll and Matter Labs have also announced they’re coming out with ZK rollups, but haven’t set dates.

We think that it’s important to have multiple zkEVMs, and we want to be one of them.”

See Also: Chainlink Price Feeds Go Live on Base, Coinbase’s Layer 2 Testnet
See Also: Gitcoin, a Crowdfunding Platform for Open-Source Software Votes to Seed Staked ETH Index

“Uniswap Labs, which backs the top decentralized exchange (DEX) on Ethereum, is planning to launch a mobile crypto wallet for iPhone users, but Apple (AAPL) seems to have other ideas. The unexplained delay may add to Apple’s perception as a hardline gatekeeper in regulating the crypto world’s access to iOS.

Apple won’t yet green-light our launch and we don’t know why – we’ve responded to their concerns, answered every question and reiterated that we are 100% compliant with their specifications.

Uniswap Labs said its planned mobile app is primarily a self-custodial crypto wallet, meaning users will have full ownership and control over their assets. The app will also offer the ability to “trade tokens directly with” Uniswap.

Other crypto wallet apps on iOS already support DEX token swaps; market leader Metamask even routes some trades through Uniswap. Adding to the confusion, Capuozzo said Apple is giving different answers to different companies on what is and isn’t copacetic. ‘It’s a rulebook that nobody can read.’

Rather than wait around for Apple, Uniswap Labs said it plans to release its app to 10,000 users via the TestFlight beta platform. Capuozzo said the limited release will give Uniswap an opportunity to show Apple its service is “safe.””

One River Digital, a U.S. Securities and Exchange Commission-registered subsidiary of One River Asset Management, will become Coinbase Asset Management and will “form the foundation” of Coinbase’s investment advisory service for institutional clients.

Coinbase has been looking to expand beyond its core retail trading business in response to the drop-off in transaction volume in recent months. Institutional investment management forms a part of that strategy, as does its move into the developer sector through its new layer 2 blockchain Base.

This is about wanting to bring more institutional capital into the world of crypto.

Coinbase Asset Management, which will operate as an independent unit, will be helmed by CEO and Chief Investment Officer Eric Peters, who is also CEO and CIO of One River Asset Management.”

See Also: Huobi to Join BitTorrent Chain Ecosystem, Build Blockchain ‘Super Network’

“After what had been a relatively slow week, bitcoin’s (BTC) price fell sharply late Thursday as over $62 million in BTC long positions were liquidated during the Asian overnight trading session.

Bitcoin’s descent was rapid and concentrated, occurring during the 01:00 UTC (8:00 p.m. ET) trading hour. Negative reactions to viability concerns surrounding crypto bank Silvergate (SI) appeared to be the driving force behind the decline, which saw BTC fall $1,000 in minutes to $22,500 while ETH declined to $1,570.

Both assets are now trading below their 20-day moving averages. Correlations between crypto and traditional financial assets have loosened, with the correlation coefficient involving BTC, ETH and the S&P 500 sitting at -0.15.”

See Also: Survey: 97% of payment firms believe in the power of crypto
See Also: UAE free zone to explore Bitcoin payments for services, lawyer says

Silvergate Bank, which warned this week about its ability to remain in business, discontinued its SEN platform that institutions used to move money to crypto exchanges.

Effective immediately Silvergate Bank has made a risk-based decision to discontinue the Silvergate Exchange Network (SEN). All other deposit-related services remain operational.

SEN is a 24/7 instant settlement service that the bank’s clients could use to conduct transactions between each other at any time, including nights and weekends. The bank counted a number of major crypto firms as its clients for the service, including Binance US, Kraken, Gemini and ErisX.”

See Also: The Rise and Fall of Silvergate’s Crypto Business

The Wall Street Journal reported Friday that Tether used bank accounts in the names of executives of various companies, slightly tweaking those companies’ names, to maintain its access to the global financial system in 2018.

The report pointed to Crypto Capital Corp., a “shadow bank” which held Tether funds before being shut down by authorities in 2018, and others, alleging sister company Bitfinex and Tether ‘were able to open at least nine new bank accounts for shell companies in Asia‘ in October 2018.

The report referenced the recording of a call with former Tether executive Phil Potter posted to YouTube in 2017 by Bitfinexed. ‘There’s been lots of sort of cat-and-mouse tricks that everyone in the bitcoin industry has to avail themselves of.’ Crypto companies have traditionally had difficulties securing banking access. Tether in particular has had a number of bank accounts over the past few years.

Paolo Ardoino, the chief technology officer of Tether, tweeted on Friday afternoon that the WSJ report contained a ‘ton of misinformation and inaccuracies,’ without giving specifics.”

Peek Inside My Crypto Portfolio and Trading Plan for 2023

3 March

“Speaking Thursday at the Milken Institute Future of Digital Assets Symposium, Rep. French Hill (R-Ark.) said he intends to work with the House Agriculture Committee on creating legislation for cryptocurrency. U.S. Representative French Hill is the chairman of the newly formed Financial Services Subcommittee on Digital Assets.

We’re going to do our best to work in tandem with House Ag on this process.”

See Also: Regulators Are Bringing the Multichain Era to a Close
See Also: Was Silvergate on Borrowed Time as Regulators Backed Banks Away From Crypto?

The letter to the Federal Reserve and other U.S. banking agencies criticized the SEC’s move last year – known as Staff Accounting Bulletin 121 – as a measure that could ‘deny millions of Americans access to safe and secure custodial arrangements for digital assets,’ because it would force regulated banks to reject crypto custody as something that comes with major capital demands.

A recent decision in the Celsius bankruptcy, which classified all Celsius’ customers as unsecured creditors, and therefore at the back of the line to recover their assets, highlights the legal risk of effectively forcing customer custodial assets to be placed on balance sheet.

The letter questioned the banking agencies on what interactions they’ve had with the SEC on this point, and whether the securities regulator’s position conflicts with their own policies.

Fed Chair Jerome Powell already said last year that the central bank was evaluating the SEC’s directive, which – for digital assets – changes longstanding practice that customers’ assets would be kept off a financial firm’s balance sheet.

See Also: SEC Chair Gensler Says Crypto Exchanges May Not Be ‘Qualified Custodians’

“The securities regulator said the $1.02 billion deal should be blocked because Voyager’s token could constitute an unregistered security.

Wiles, who is with the Southern District Bankruptcy Court in New York, said he was “absolutely shocked” at the SEC’s objection, saying it was asking Voyager to prove a negative with little guidance from the regulator.

I get the feeling that this objection has been made as a kind of cover, so you can say later that we’ll see we raised these issues. You haven’t really, you have done nothing.

William Uptegrove, representing the SEC, said that creditors had not been sufficiently warned of regulatory risks, but declined to take a definitive position on whether VGX was a security.

Counsel for Voyager told the court that the deal could see creditors achieving 73% recovery, a revision upward thanks to the recently bullish crypto market. Court filings show that 97% of its customers, representing 98% of total claims, had voted in favor of the deal.”

See Also: Binance a ‘Hotbed of Illegal Financial Activity,’ U.S. Senators Claim

“A coming offering from ForUsAll will allow employees to allot part of their 401(k) investments directly into the 28 constituents of the CoinDesk Market Select Index (CMIS). This is the first index-based digital asset offering available on a 401(k) platform in the U.S.

By leveraging CMIS, we can provide sophisticated self-directed investors access to a broad, diversified universe of the largest and most liquid crypto assets.”

See Also: Russian bank issues first on-chain bank guarantee in Chinese yuan

Ethereum developers are targeting March 14 for the Goerli test network (testnet) to run through the Shanghai upgrade, the much-anticipated move to enable withdrawals of staked ether (ETH) from the blockchain.

The test on Goerli is going to be highly watched, given that it is the largest public Ethereum testnet and the last chance for staking providers to make sure that staked ETH is withdrawable before Shanghai reaches the mainnet.

All that will be left after the Goerli test is for Ethereum developers to set the date for mainnet. Earlier this week, the Sepolia testnet went through Shapella, and everything ran smoothly.”

“The platform is intended to act as a common layer for browsing and discovering Web 3 products including crypto exchanges, non-fungible token (NFT) galleries and social networks. The framework will be compatible with all blockchains (currently supporting Near Protocol and Ethereum Virtual Machine chains) and Near will act as the common entry point.

We are moving away from our layer 1 focus, it’s now about the user and the experience they have. We are looking at this as the frontend for blockchains in general.

In the future we will be offering [use of] wallets from one chain to interact with another via seamless bridging. The BOS creates a single point of entry.”

See Also: Jack Dorsey’s Block Launches Service Provider to Make Lightning More Reliable

“Using the latest spot prices, $2.2 billion of total assets have been identified in the wallets of the accounts associated with, of which only $694 million constitute the most liquid “Category A Assets” that include fiat, stablecoins, bitcoin or ether.

Other assets include $385 million of customer receivables, and significant claims against FTX sister company Alameda Research and related parties. The presentation also shows a $9.3 billion net borrowing by Alameda from the wallets and accounts.

According to the presentation, FTX’s team identified $7 billion in customer payables in cash and stablecoins, offset by $580 million in identified assets as of its petition date.”

2 March

The Ethereum blockchain has deployed a feature known as “account abstraction,” seen as a key enhancement that could make it easier for users to recover crypto if they lose private keys to an online wallet.

Account Abstraction is a concept that turns users’ wallets into smart contract accounts, in order to make Ethereum wallets more user-friendly and to prevent any loss of crypto keys. Contract Accounts (CA) are accounts controlled by code – not private keys – so they cannot initiate transactions themselves.

The Ethereum Foundation, which helps to fund and steward development on the blockchain, is expected to announce the development later Wednesday at the ETHDenver conference. Once the announcement is made, several infrastructure providers will announce plans to support ERC-4337 through their services.

This upgrade was seen as a major milestone that would be years away, but the fact that it is already working on the Ethereum blockchain means that making crypto more user-friendly is here. Part of the reason why ERC-4337 was so easy to deploy is because the upgrade was made via the addition of a smart contract, so it didn’t require any changes to Ethereum’s underlying programming. The contract can be used on all EVM chains.”

See Also: Crypto Wallet Provider Safe Launches Developer Stack Enabling Account Abstraction
See Also: Upcoming Upgrades That Will Shape the Ethereum Ecosystem
See Also: Lido Community Conducting Snapshot of V2 Upgrade Design Approval

Polygon said Wednesday it launched a new Polygon ID product based on Zero-Knowledge (ZK) technology that will allow users to verify their identities or credentials without revealing sensitive information.

Under Polygon ID’s design, a person or entity known as the “identity holder” has “claims” stored in a wallet. “Verifiable credentials” are cryptographically signed and issued to the identity holders by an issuer who is a “trusted and reputable party.” Then a verifier checks the proof presented by a holder.

The Polygon ID toolset can be used by developers to unlock features such as an enhanced signup user interface, assist in regulatory compliance, help verify user identities and restrict access control to certain areas or features via token-gating.

The simplest example of a Verifier is a Bar that wants to verify if you are over 18. In the real world, the Identity Holder would need to provide an ID and show all their personal information. With Polygon ID they only need to pass a proof. Proofs can be done either off-chain or on-chain via smart contracts.

According to the Polygon website, there is a Polygon ID wallet app and wallet software development kit.”

“Chainlink has released a platform that will enable developers to connect data to smart contracts. Chainlink Functions will allow any smart contract to connect to any Web2 application programming interface (API).

Until now, Web3 developers couldn’t connect their smart contracts to existing Web2 APIs to access social-media signals, AI (artificial-intelligence) computation, messaging services and more.

The beta version of Chainlink Functions is live on the Ethereum Sepolia and Polygon Mumbai test networks.”

See Also: 0x’s Token Surges 20% on Pact to Build Relay Network With Robinhood Wallet, Polygon

“Deribit, the world’s largest crypto options exchange by volume, will soon launch bitcoin (BTC) volatility futures, offering digital asset investors a simpler way than options to hedge against market volatility.

With the new offering, traders can bypass complexities involved in setting up options strategies and directly buy and sell volatility. The product may attract more institutional and retail investor participation. Futures tied to Deribit’s forward-looking bitcoin volatility index (DVOL) will be available to Deribit under the ticker BTCDVOL from the end of March.

DVOL futures are an exciting new product that will allow traders to hedge their positions & general risk management.

DVOL, launched in early 2021, measures bitcoin’s 30-day implied volatility calculated using Deribit’s options order book. Implied volatility refers to the options market’s expectation for price turbulence over a specific period.”

See Also: Bitcoin Jumps 4% as Upbeat China Manufacturing Data Improves Risk Appetite

Participants in the pilot projects include a wide array of industry representatives, from “smaller fintechs to large financial institutions.” The projects will look at use cases ranging from offline payments to bond settlement to securities trading, among others.

Another project will look at using the dollar-pegged USDC stablecoin to streamline foreign exchange trades and remittances.

The pilot and broader research study that will be conducted in parallel will serve two ends – it will contribute to hands-on learning by industry, and it will add to policy makers’ understanding of how a CBDC could potentially benefit the Australian financial system and economy.

Australia’s central bank is looking to complete its central bank digital currency pilot – which kicked off last August – by mid-2023.”

See Also: Nigeria Picks Bola Tinubu as President Amid Cash Shortages

Reuters two weeks ago reported Binance (global) had access to Binance.US’ Silvergate bank account and moved millions to a trading firm owned by Binance (global) CEO Changpeng Zhao without the Binance.US’ CEO’s knowledge. A Binance spokesperson did not deny the story when contacted.

There are or will be important factors that could cause the Company’s actual results to differ materially from those indicated in these forward-looking statements, including, but not limited to … restrictions on the Company’s business, resulting from various litigation (including private litigation) and regulatory and other inquiries and investigations against or with respect to the Company, investigations from our banking regulators, congressional inquiries and investigations from the U.S. Department of Justice.

The impact of these events could affect the ability for the company to “continue as a going concern,” Silvergate added.”

See Also: Silvergate Uncertainties May Put TradFi Heavy Hitters’ Stakes in Jeopardy
See Also: Binance Can’t Keep Its Story Straight on Misplaced $1.8B USDC

“Twitter rival Bluesky has begun rolling out to users in private beta mode, showcasing the Jack Dorsey-backed decentralized social network for the first time.

According to an October blog post, the Authenticated Transfer Protocol, or the AT Protocol, is a federated social network. This means many sites run the network, and businesses and individuals can choose to self-host if they want. The Bluesky app is the first to be built on top of the protocol. Preview images on the app store show an interface similar to Twitter.

The launch of the Bluesky app comes just a month after another Dorsey-backed project, Nostr, went live with its first app, Damus. The app is one of several projects being built on Nostr, an open-source protocol based on cryptographic keypairs.”