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☆ New York’s financial regulator takes aim at firms co-mingling crypto funds
▼ + stars: | 2023-01-23 | by ( Hannah Lang | ) www.reuters.com time to read: +5 min

Concerns about the crossover between the two firms helped fuel a flurry of customer withdrawals in November, forcing the exchange to file for bankruptcy. New York requires firms to undergo examinations making sure they are in-line with state requirements and comply with know-your-customer, anti-money laundering and capital requirements. Most other states do not subject crypto firms to examinations. Crypto firms' compliance with anti-money laundering rules has also been "a big issue," she said, one she expects her office will continue focusing on in 2023. Earlier in the month, NYDFS announced a $100 million settlement with Coinbase Inc (COIN.O) over the firm's compliance with rules to prevent money laundering.

☆ Crypto comeback is just a 'mean-reversion' rally, Bernstein says
▼ + stars: | 2023-01-23 | by ( Tanaya Macheel | ) www.cnbc.com time to read: +2 min

That's one observation about the current crypto bounce Bernstein analysts made in a note to investors Monday. They called it a mean-reversion rally, meaning that they see bitcoin prices reverting to their long-term mean or average level. "We reckon, the mean reversion of crypto still has some headroom," analyst Gautam Chhugani said in the note. BTC.CM= 6M mountain Bitcoin Nevertheless, Chhugani attributed the recent bounce to capital already within the crypto industry, namely "sidelined stablecoins" being deployed. As the crypto asset class becomes "more regulated," Chhugani expects to see institutions take crypto positions this year, he said.

☆ Explainer: What Brazil and Argentina's 'currency union' really means
▼ + stars: | 2023-01-23 | by ( Marcela Ayres | ) www.reuters.com time to read: +3 min

BRASILIA, Jan 23 (Reuters) - Brazil and Argentina sparked some excitement on Sunday over the possibility of a potential "currency union", though the two countries are unlikely to ditch the real or peso any time soon. That sparked off chatter about a European Union-style zonal currency for South America, though officials have since played that down and analysts say a full-on currency union is a distant prospect. Under the plan, the Brazilian real and Argentine peso would continue to exist, with the new tender targeted narrowly at trade. That is key for Argentina, which is grappling with low foreign currency reserves after years of debt crises. In 2019, former Brazilian President Jair Bolsonaro touted plans for a currency union, which also never materialized.

☆ FTX recruited customers in Africa by signaling that crypto would protect them from soaring inflation, report says
▼ + stars: | 2023-01-20 | by ( George Glover | ) www.businessinsider.com time to read: +2 min

FTX promoted itself in Africa by signaling crypto would shield people's money from inflation, according to the Wall Street Journal. Many African currencies plummeted last year as the Federal Reserve's interest-rate hikes pushed the dollar higher. FTX also ran glamorous events for young Nigerians and offered all new customers a $5 sign-up bonus, the WSJ reported. African currencies like the Nigerian naira, the Ghanaian cedi, and the Malawian kwacha plunged against the dollar last year as the Federal Reserve's aggressive monetary tightening fueled capital outflows from developing markets. Before 2022, crypto bulls had long pitched digital currencies as a potential hedge against inflation in the developing world.

☆ A stablecoin collapse could spill into the U.S. bond market and economy, professor warns
▼ + stars: | 2023-01-13 | by ( Arjun Kharpal | ) www.cnbc.com time to read: +2 min

The near $1.4 trillion collapse of the crypto market in 2022 didn't make a dent to traditional assets like stocks or to the real economy. Stablecoins are a type of digital currency that is supposed to be pegged one-to-one with a fiat currency such as the U.S. dollar or the euro. Tether says that more than 58% of its reserves are held in U.S. Treasury Bills, accounting for around $39.7 billion. "And a large volume of redemptions even in a fairly liquid market can create turmoil in the underlying securities market. And given how important the Treasury securities market is to the broader financial system in the U.S. ...

☆ A crypto crash for big stablecoins is likely to send shudders through other financial markets too, a Cornell professor warns
▼ + stars: | 2023-01-12 | by ( George Glover | ) www.businessinsider.com time to read: +3 min

A crashed stablecoin could pose a threat to the wider financial system, a Cornell professor warned. The companies that issue stablecoins would have to redeem their government bond holdings if the digital tokens fail, Eswar Prasad said Thursday. "A large volume of redemptions, even in a fairly liquid market, can create turmoil in the underlying securities market," Prasad said. The turmoil hasn't yet spilt over into traditional financial markets, but financial watchdogs are worried that stablecoin issuers' government bond holdings pose that risk, according to Prasad. "The fact that we haven't had spillovers from this part of the financial ecosystem into traditional financial markets or into the real economy certainly seems to be suggestive of the fact that there is a firewall," he added.

☆ U.S. judge says Celsius Network owns most customer crypto deposits
▼ + stars: | 2023-01-05 | by ( Dietrich Knauth | ) www.reuters.com time to read: +3 min

Jan 4 (Reuters) - A U.S. bankruptcy judge ruled on Wednesday that Celsius Network owns most of the cryptocurrency that customers deposited into its online platform, meaning most Celsius customers will be last in line for repayment in the crypto lender's bankruptcy. The ruling means that most Celsius customers will be lower priority than customers who held non-interest bearing accounts and other secured creditors. Celsius' terms of service made clear that the crypto lender took ownership of customer deposits into its interest-bearing Earn accounts, according to Glenn. That means that Earn customers will be treated as unsecured creditors in Celsius' bankruptcy, and they will be last in line for repayment after Celsius repays higher-priority debts. The ruling authorizes Celsius to sell approximately $18 million stablecoins that had been held in customers' Earn accounts.

☆ How 2022 shocked, rocked and rolled global markets
▼ + stars: | 2022-12-30 | by ( Marc Jones | ) www.reuters.com time to read: +6 min

The main drivers have been the war in Ukraine, combined with rampant inflation as global economies broke out of the pandemic, but China remained shackled by it. U.S. Treasuries and German bonds, the benchmarks of global borrowing markets and traditional go-to assets in troubled times, lost 17% and 25% respectively in dollar terms. Ten-year Treasury yields jumped to 1.8% from less than 1.5%, knocking 5% off MSCI's world stocks index (.MIWD00000PUS) in January alone. The Fed has delivered an eye-watering 400bps of rate hikes and the European Central Bank, a record 250bps, despite saying this time last year it was unlikely to budge. "What has gone in global markets this year has been traumatic," said EFG Bank Chief Economist and ex-Deputy Governor of Ireland's central bank, Stefan Gerlach.

☆ Bitcoin still has a big opportunity in payments despite 60% drop this year and choppy waters ahead
▼ + stars: | 2022-12-30 | by ( Tanaya Macheel | ) www.cnbc.com time to read: +9 min

Investors are constantly reminded that despite the myriad coins, projects and innovations in crypto, bitcoin may be the only "safe" crypto asset to buy. And while Tesla didn't credit the volatility for its reversal, many observers saw it as evidence that the belief in bitcoin's payments capabilities were misguided. "Bitcoin's price on any given day — as a remittance vehicle — has no effect on us," he said. The group that runs the Lightning Network, a payment protocol built on the Bitcoin network, is committed to making Bitcoin network payments even faster, less costly and more readily confirmed than transactions made directly on the Bitcoin blockchain. Crypto investors, on the other hand, were "disproportionately high-income, almost always had a traditional banking relationship, and typically had other retirement savings."

☆ The 5 biggest market losers in 2022: Elon Musk and Sam Bankman-Fried lead turbulent year
▼ + stars: | 2022-12-29 | by ( Brian Evans | ) www.businessinsider.com time to read: +4 min

Elon Musk saw a massive chunk of his wealth disappear in 2022, while Sam Bankman-Fried faces federal fraud charges. But other sectors of the market suffered major setbacks amid a turbulent year, such as housing. Here are the five biggest market losers of 2022. But other sectors of the market suffered major setbacks amid a turbulent macro environment that included red-hot inflation, 425 basis points in Fed rate hikes, and Russia's war on Ukraine. Here's a list of the five biggest market losers in 2022.

☆ Crypto exchange Kraken to stop operations in Japan
▼ + stars: | 2022-12-28 | by ( ) www.reuters.com time to read: +1 min

Dec 28 (Reuters) - U.S.-based crypto exchange Kraken said on Wednesday it would cease its operations in Japan next month, citing the current market conditions in the country and a weak crypto market globally. Kraken will deregister from the Financial Services Agency (JFSA) as of Jan. 31, by which time clients would have to withdraw their fiat and crypto holdings, it said in a statement. Kraken said it is fully funded to ensure that all affected clients could withdraw their assets in a timely manner. Last month, Kraken said it would reduce its workforce by 30%, or about 1,100 employees, as tough market conditions had crippled demand for digital assets. Bitcoin, the pre-eminent cryptocurrency, has lost 60% of its value this year, while the wider crypto market has shrunk by $1.4 trillion, squashed by the collapse of Sam Bankman-Fried's FTX empire, Celsius and supposed 'stablecoins' terraUSD and Luna.

☆ Hagerty, Manchin propose $10,000 threshold for Venmo, PayPal tax reporting change — up from $600
▼ + stars: | 2022-12-20 | by ( Kate Dore | Cfp | ) www.cnbc.com time to read: +1 min

Sen. Bill Hagerty, R-Tenn., will file an amendment to the $1.7 trillion spending package, to increase the threshold for Form 1099-K, according to Sen. Joe Manchin, D-W.Va., the proposal's lead co-sponsor. The tax reporting threshold applies to transfers using third-party payment networks including Venmo and PayPal . In an exclusive interview with CNBC, Manchin said the amendment would increase the payment threshold to $10,000 from $600 for the 2022 tax season. "This is the best relief we can get for people," said Manchin, referencing the $10,000 threshold as "the best way to approach it." He believes that raising the threshold to $10,000 has broader support than delaying implementation of the new rule.

The article was one of a series of reports this year by the news agency on Binance's financial compliance and relationship with regulators across the world. Reuters also asked representatives of the local Binance units and affiliates about their relationship with the main Binance exchange. In Italy, Binance's public corporate filings detail just the unit's capital base and its ownership by a separate Binance company in Ireland. The Italian company, Binance Italy S.R.L., has its listed address in a block of shops and apartments in the southern city of Lecce. Just two of the Binance units analysed by Reuters offer more substantial details in their filings.

☆ FASB Lays Out Disclosure Requirements for Companies’ Crypto Holdings Ahead of Potential Proposal
▼ + stars: | 2022-12-14 | by ( Mark Maurer | ) www.wsj.com time to read: +5 min

There are currently no specific accounting or disclosure rules for crypto assets in the U.S. Businesses classify them as indefinite-lived intangible assets, similar to intellectual property such as trademarks. Then, in October, it said companies should use fair-value accounting to measure bitcoin and other crypto assets. For example, companies could receive payment from customers in the form of crypto assets that are prohibited from sale for three months. These companies disclose information about large crypto holdings, but potentially not the full picture.

☆ Elizabeth Warren unveils bipartisan bill to crack down on crypto money laundering
▼ + stars: | 2022-12-14 | by ( Matt Egan | ) edition.cnn.com time to read: +6 min

New York CNN —As federal prosecutors seek to imprison former crypto darling Sam Bankman-Fried, Sen. Elizabeth Warren is attempting to push through Congress a bipartisan crackdown on money laundering in the crypto industry. Due to time constraints, the Warren-Marshall crypto legislation has little chance of getting through this Congress. The new bill, called the Digital Asset Anti-Money Laundering Act, would attack money laundering by attempting to bring the digital asset ecosystem into compliance with the existing system of anti-money laundering in the worldwide financial system. The Treasury Department warned earlier this year that ransomware hackers, drug traffickers and fraudsters are using digital assets to launder illicit proceeds. - Cracking down on digital asset ATMs by making sure operators and administrators submit and update the physical addresses of their kiosks.

☆ Binance temporarily halted withdrawals of stablecoin USDC as investor concerns mount after FTX collapse
▼ + stars: | 2022-12-13 | by ( Arjun Kharpal | ) www.cnbc.com time to read: +2 min

Binance, the world's largest cryptocurrency exchange, paused withdrawals of the stablecoin USDC on Tuesday while it carried out a "token swap." USDC withdrawals were resumed about 8 hours after Binance first announced the pausing of withdrawals. Binance said earlier on Tuesday it had "temporarily paused" USDC withdrawals while it does a "token swap." Changpeng Zhao, CEO of Binance, tweeted that the exchange is seeing an increase in withdrawals of USDC, a cryptocurrency known as a stablecoin because it is pegged one-to-one with the U.S. dollar . If traders are withdrawing USDC from Binance, it could be to move it onto another platform.

☆ Under fire for weak regulation, dLocal CEO says seeking UK license
▼ + stars: | 2022-12-07 | by ( Isabel Woodford | ) www.reuters.com time to read: +3 min

Speaking in a closed-door call hosted by Goldman Sachs, dLocal CEO Sebastian Kanovich said that a full license with the UK regulator (FCA) was pending, citing the UK's exit from the European Union. "We have been advised not to engage in a tit for tat," he responded, adding dLocal was only engaging privately with stake holders. Neither dLocal nor Goldman Sachs responded to a request for comment. Muddy Waters told Reuters that Kanovich's explanations for the multi-million deficit in merchants' accounts "were so implausible, we literally laughed out loud." The company's CEO was also asked why dLocal had nearly $6 million in funds trapped in disgraced crypto exchange FTX, which dLocal failed to withdraw before the exchange's collapse.

☆ ECB seeks urgent regulation after multiple crypto bubbles burst
▼ + stars: | 2022-12-07 | by ( ) www.reuters.com time to read: +2 min

Crypto investors suffered a series of blows this year from the collapse of the FTX exchange, to the crash of stablecoin TerraUSD and the decline of Bitcoin. It is like froth: multiple bubbles are bursting one after another," Panetta said in a speech in London. Unbacked crypto assets are a form of financial gambling without any socially or economically useful function, so the task is to thwart criminal activity, protect unassuming investors and save a financial system that may become increasingly intertwined with crypto assets, Panetta said. The links between the crypto market and the financial system could strengthen, especially if major tech companies enter the sector, meaning regulation is urgently required, Panetta said. Regulatory efforts should be directed primarily at preventing the use of crypto-assets to circumvent financial regulation and in shielding the mainstream financial system from crypto risks, Panetta said.

☆ Crypto winners and losers from the FTX fallout, according to Bernstein
▼ + stars: | 2022-12-07 | by ( Tanaya Macheel | ) www.cnbc.com time to read: +2 min

Bernstein has sifted through the various sectors of the crypto industry and identified winners and losers for 2022. Crypto suffered the added handicap of the financial contagion from the collapse of Terra in the first half of the year and FTX currently. Binance, which operates in a regulatory gray zone, will eventually become the "global consolidator" of smaller off-shore exchanges, Bernstein said. While FTX taught investors about the risks of storing crypto holdings with centralized entities, revelations in the stablecoin sector went the other way around. Solana, on the other hand, took a hit, stained by the fallout of FTX, a big and early backer of Solana.

☆ I am concerned about unstable stablecoins, says former SEC Chair Jay Clayton
▼ + stars: | 2022-12-05 | by ( ) www.cnbc.com time to read: 1 min

Share Share Article via Facebook Share Article via Twitter Share Article via LinkedIn Share Article via EmailI am concerned about unstable stablecoins, says former SEC Chair Jay ClaytonFormer SEC Chair Jay Clayton joins CNBC's 'Squawk Box' to discuss his new op-ed in The Wall Street Journal about potential crypto regulation following the collapse of FTX.

☆ Fintech Circle terminates $9 bln deal with Bob Diamond-backed SPAC
▼ + stars: | 2022-12-05 | by ( ) www.reuters.com time to read: +2 min

Dec 5 (Reuters) - Cryptocurrency operator Circle Internet Financial said on Monday it has decided to end a $9 billion deal with blank-check firm Concord Acquisition Corp (CND.N), nearly ten months after an earlier agreement was amended. Circle is the principal operator of stablecoin USDC and reported a net income of $43 million and nearly $400 million in cash in the third quarter. Earlier valued at $4.5 billion, Boston-based Circle had amended its agreement with Concord, which is backed by former Barclays (BARC.L) boss Bob Diamond, in February and doubled its valuation. Blank-check vehicle 10X Capital Venture Acquisition Corp II (VCXA.O) said in August it mutually ended its $1.25 billion merger deal with crypto mining and infrastructure company Prime Blockchain. loadingReporting by Mehnaz Yasmin in Bengaluru; Editing by Krishna Chandra EluriOur Standards: The Thomson Reuters Trust Principles.

☆ Circle’s SPAC flop does the public market a favor
▼ + stars: | 2022-12-05 | by ( John Foley | ) www.reuters.com time to read: +4 min

The firm run by Jeremy Allaire planned to go public through a marriage with a special-purpose acquisition company, valuing it at $9 billion. USD Coin is regulated by a New York financial watchdog, unlike rival Tether, but lacks the secure trust-company structure of peers Gemini and Paxos. Concord, a listed special-purpose acquisition company chaired by former Barclays chief Bob Diamond, agreed to buy Circle in July 2021. The circulating supply of USD Coin was $43 billion on Dec. 5, according to CoinMarketCap, compared with $53 billion in February. At that time, Circle estimated there would be $110 billion of USD Coin in circulation by the end of 2022.

BlockFi users must still account for gains and/or losses on their 2022 taxes, but there are ways to reduce your tax bill. The crypto lender says it's requesting approval from the Court to restore withdrawal activities for those with BlockFi Wallet accounts. BlockFi also asked users not to submit any deposits to the BlockFi Wallet or its interest accounts. Georgia Quinn, General Counsel of Anchorage Digital, believes coverage for crypto users could be stronger. In addition, users are typically last to receive payouts in the event of crypto bankruptcy, since companies settle debts with creditors first.

☆ Sen. Sherrod Brown calls on Treasury Secretary Janet Yellen to help rein in cryptocurrency firms after FTX collapse
▼ + stars: | 2022-11-30 | by ( Chelsey Cox | ) www.cnbc.com time to read: +3 min

Bahamas-based crypto exchange FTX filed for bankruptcy in the U.S. on Nov. 11, 2022, seeking court protection as it looks for a way to return money to users. Senate Banking Committee Chairman Sherrod Brown urged Treasury Secretary Janet Yellen on Wednesday to work with lawmakers and financial regulators to help write legislation to rein in the cryptocurrency market in the wake of the collapse of crypto exchange FTX. Brown sent the letter the day before Congress holds its first hearing on FTX's collapse. Brown encouraged partnership between Congress, Treasury and the White House, even referencing Treasury's coordination with the President's Working Group on Financial Markets. "Congress and the financial regulators must work to get all of this right.

☆ UPDATE1 ECB says Bitcoin is artificially propped up, shouldn't be legitimised
▼ + stars: | 2022-11-30 | by ( ) www.reuters.com time to read: +3 min

REUTERS/Dado Ruvic/Illustration/File PhotoFRANKFURT, Nov 30 (Reuters) - Bitcoin is being artificially propped up and should not be legitimised by regulators or financial companies as it is more akin to gambling, the European Central Bank said on Wednesday. In a blog post using unusually scathing language, the ECB said bitcoin's recent stabilisation was "an artificially induced last gasp before the road to irrelevance". "Big bitcoin investors have the strongest incentives to keep the euphoria going," authors Ulrich Bindseil and Juergen Schaaf wrote. The ECB blog said regulation could be "misunderstood for approval". "The financial industry should be wary of the long-term damage of promoting bitcoin investments - despite short-term profits they could make," the authors of the blog said.

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