10 May

More than 200,000 ether have been deposited to the network since the start of the week, data from the on-chain analytics tool Nansen show, marking the first time deposits have outpaced withdrawals since Shapella went live last month. The additions bring the number of ether locked for staking purposes to over 19 million tokens – about 15% of the total circulating supply.

The influx comes as traders flock to meme coins such as pepecoin (PEPE), which has strained the Ethereum network and sent transaction fees to a 12-month high.

[The deposit queue stands at 17 days, relative to the 5 day withdrawal queue, at the time of writing].”

Claiming a combined total of $943 million in cryptocurrency assets as of March 31, 2023, the filing shows a 56% increase over the company’s previous quarter where PayPal disclosed $604 million. The lion’s share of the fintech’s held cryptocurrency assets lies in BTC and ETH with $499 million and $362 million, respectively.

PayPal’s reported total financial liabilities for this quarter were $1.2 billion, with crypto assets making up 77.9% — up more than 10% from 2022’s reported fourth quarter liabilities.”

See Also: 32% of home offices invest in digital assets — Goldman Sachs

“The ink still hasn’t dried on the passing of the EU’s new Markets in Crypto Assets (MiCA) bill, a landmark in comprehensive crypto legislation for the bloc’s 27 states, and already the furnaces of invention are fired up for at least one European crypto company.

Berlin-based fintech startup Unstoppable Finance announced today it will be rolling out Europe’s first compliant “DeFi-native bank” alongside a fiat-backed Euro-pegged stablecoin following MiCA’s guidance. The DeFI banking arm will ensure that the stablecoin is fully backed by reserves, as outlined by the new legislation from Brussels.

Grosskopg highlighted the recent liquidity crises that depegged Circle’s native stablecoin USDC ‘because [Circle holds] parts of its reserves in different bank accounts.’

With [Unstoppable’s DeFi bank] we are able at any time to deposit money to an European Central Bank (ECB) account. It’s guaranteed money and that’s what we try to maximize.”

See Also: DeFi Broker Prime Protocol Introduces Bridgeless Cross-Chain Token Transfers
See Also: MakerDAO launches Spark Protocol, a new DeFi lending solution for DAI users

The U.S. Securities and Exchange Commission (SEC) went too far when it proposed a new rule demanding investment firms safeguard all of their clients’ assets – including crypto – with approved custodians, according to an array of critics not often in alignment.

From Wall Street, executives at JPMorgan accused the SEC of taking an “overly broad approach” that ‘would disrupt a significant portion of the operations in the financial markets which have been well-functioning for many years.’

The U.S. securities industry’s chief lobbying group, the Securities Industry and Financial Markets Association, called it ‘jurisdictional overreach, resulting in indirect and inappropriate regulation.’

As the two-month public comment period expired this week, the Small Business Administration (SBA) argued the SEC ‘drastically underestimates potential impacts‘ from its proposal, according to a letter from senior SBA lawyers who said the cost of the “sweeping changes” could threaten smaller investment advisers and force them to merge with others or get out of the business.

And from the crypto sector, investment firm a16z said, ‘We believe this proposed prohibition to be illegal, infeasible, and dangerous.’ The letter signed by several executives suggested investment advisers would find the rule almost impossible to comply with, because it ‘largely failed to consider the logistics of how custody works for many crypto assets, the economics underpinning crypto asset markets, and even the basic statistics and other data that should inform a considered regulatory approach.‘”

See Also: Market Makers Jane Street, Jump Retreating From U.S. Crypto Trading: Bloomberg

Financial technology company Digital Asset will start a privacy-enabled interoperable blockchain network designed to provide a decentralized infrastructure for institutional clients, the firm announced on Tuesday. The network connects applications built with Daml, Digital Asset’s smart-contract language, allowing various systems in financial markets to interoperate and synchronize.

Participants of the network, which is called the Canton Network, include BNP Paribas (BNP), Deloitte, Cboe Global Markets (CBOE), Goldman Sachs (GS), Broadridge (BR), S&P Global, and Microsoft (MSFT), among many others.

The Canton Network is a powerful answer to industry calls for a solution that harnesses the potential of blockchain while preserving fundamental privacy requirements for institutional finance. This unique approach, coupled with the ability to execute an atomic transaction across multiple smart contracts, is the building block needed to bring these workflows on chain.

While Digital Asset provides and owns the technology behind the infrastructure, the Daml smart contracts and the Canton protocol which enables the applications, it does not own the network itself as it is owned by its participants, which include Digital Asset.”

“Digital Currency Group (DCG) is looking to refinance outstanding obligations with its bankrupt lending division Genesis and raise growth capital, the crypto conglomerate said on Tuesday. The lending platform’s bankruptcy filings from January revealed DCG’s total debt to Genesis includes $575 million due this month, and a $1.1 billion promissory note due June 2032.

Parties to Genesis’ bankruptcy proceedings have agreed to a 30-day mediation period to iron out the terms and conditions of DCG’s contribution to the reorganization plan. The move is meant to provide “further financial flexibility” as DCG engages with stakeholders in Genesis Capital’s bankruptcy proceedings, DCG said.

We are committed to reaching a fair outcome for all and look forward to a productive resolution during this mediation period.”

See Also: Bitcoin Trades at Nearly $650 Premium on Binance.US as Liquidity Providers Flee Exchange
See Also: Bankrupt Crypto Exchange QuadrigaCX Will Start Interim Distribution for Some Users, EY Says

“Bankman-Fried, who is set to go on trial this fall, faces over a dozen different charges ranging from wire, securities and commodities fraud allegations to bribery claims.

In his pretrial motions, Bankman-Fried’s attorneys moved to dismiss charges of conspiring to commit wire fraud on FTX customers; of wire fraud on FTX customers; of conspiracy to commit wire fraud on Alameda Research lenders; of wire fraud on Alameda Research lenders; and of conspiracy to commit bank fraud, on the grounds that prosecutors did not “state an offense for failure to allege a valid property right.”

They also moved to dismiss the bank fraud conspiracy, unlicensed money transmitter operation, unlawful political contribution and bribery charges on discovery grounds. A final motion seeks to dismiss the bribery and political contribution charges.

Bankman-Fried’s attorneys did not seek to dismiss charges alleging conspiracy to commit securities fraud, securities fraud and conspiracy to commit money laundering.

Part of the argument is that under the terms of the extradition treaty between the Bahamas and the U.S., the Bahamas needs to “consent” to the charges brought after the extradition, and the Bahamas – where Bankman-Fried resided at the time of his arrest – could not consent without additional information that has not been provided.

Other memoranda of law lay out additional arguments for Bankman-Fried’s motions for dismissal, which include claims that FTX did not need to register as a money transmitter and that some of the laws Bankman-Fried is being charged under don’t apply as FTX is based outside the U.S.”