Crypto Guides, Knowledge & Insights

According to Coinbase, BitGo, and Anchorage, they adhere to SEC custody guidelines.

On February 15, Coinbase and other cryptocurrency custody providers argued that they would be able to function under the suggested revisions to custodial standards.　　Coinbase supports the work of the SEC　　The U.S. today The SEC decided to put out a regulatory amendment that might make exchanges have to utilize licensed custodians to hold user assets. Additionally, this would change custodian rules, potentially making it challenging for current cryptocurrency companies to provide custody services.　　Paul Grewal, the chief legal officer of Coinbase, tweeted that his business is “confident” that it will continue to be a qualified custodian under the suggested regulation modification. Coinbase supports the United States, he continued. The Securities and Exchange Commission promotes the open rulemaking process and works to protect investors.　　Grewal stated in a Bloomberg interview that “we see SEC officials accept that particularly, Coinbase is functioning in a qualified manner,” but he did not elaborate on the exact nature of the regulators acknowledgement.　　Grewal was questioned about what Coinbase would do if US officials ordered the company to stop offering its custody services in a separate interview with CNBC. Grewal replied that Coinbase has “a very diversified business” in terms of the services and nations it offers, suggesting that the

2023-02-16Deep Dive

SEC Rule Change May Put Pressure on Crypto Platforms

The US Securities and Exchange Commission (SEC) has proposed new rules to regulate the custody of cryptocurrencies by investment advisers such as hedge funds and pension funds. The proposal would require such advisers to use qualified custodians to hold assets, and it would also create new requirements for qualified custodians. The rule expands the qualified-custodian requirements to include virtually any assets that an adviser might hold in a clients name, including all cryptocurrencies, and some physical assets like artwork. The proposal would limit how asset managers can handle customers crypto assets, but it wouldnt impose new requirements on individual investors who manage their own portfolios. While traditional qualified custodians have typically been banks, trust companies, and broker-dealers, the idiosyncrasies of keeping assets like bitcoin safe from theft or hacks have led Coinbase Global and similar crypto platforms to start offering the service.　　SEC Chair Gary Gensler has repeatedly expressed concerns that “crypto firms custody practices might not clear the legal hurdles necessary to keep their customers assets safe in the event of bankruptcy”. “The proposal would also limit how asset managers can handle customers crypto assets, citing features of cryptocurrencies that could make them difficult to safeguard in compliance with the

2023-02-16Deep Dive

Reasons Behind Bitcoin 12% And Ethereum Price 10% Rally Today, More Upside Ahead?

Despite regulatory uncertainty in the U.S, Bitcoins price has rebounded and is gaining momentum towards $25K. The BTC price surged by 12% in the last 24 hours, reaching a 6-month high of $24,769, and is currently hovering near $24.7K. Ethereums price also saw a significant increase of 10% in the last 24 hours, trading at $1,694 and peaking at $1,700. The broader crypto market has also rebounded, with other top altcoins like BNB, Polygon, Solana, and XRP also rallying higher.　　WikiBit had predicted the significant price increase of Bitcoin to $25K when it was trading at $21.7K, citing whale activity, cooling inflation, and decreasing U.S. Treasury yields and oil prices as the main driving factors.　　Investors in derivatives markets have also shown optimism towards Bitcoin and Ethereum, building long positions. However, there is some evidence of profit-taking as the prices continue to rise, although the overall sentiment remains bullish.　　The demand for Bitcoin is on the rise in the U.S. with the 30-day SMA Bitcoin Coinbase premium index showing the highest increase in recent days. There has also been a significant increase in the ETH Coinbase premium, which is the largest premium seen since August 2022.　　The MVRV ratio for Bitcoin is currently at

2023-02-16Deep Dive

BUSD Security Classification Could Deal a Major Blow to Crypto Industry, Binance CEO Cautions

The CEO of Binance, Changpeng Zhao (CZ), has cautioned that there could be “profound impacts” on the cryptocurrency industry if Binance USD (BUSD), a stablecoin issued by Paxos, is ruled to be a security by the US Securities and Exchange Commission (SEC). The warning follows reports of a lawsuit by the SEC against Paxos, the issuer of BUSD, over its alleged failure to register the token as a security.Binance CEO weighs in on SECs legal action against Paxos and BUSD　　CZ explained on Twitter that while BUSD is called Binance USD, it is not issued or redeemed by Binance, but instead wholly owned and managed by Paxos. Furthermore, he noted that when Paxos ceases to mint new BUSD tokens, the stablecoins market cap will only decrease over time. 　　BUSD currently has a market cap of nearly $16bn, making it the worlds seventh-largest cryptocurrency and the third-largest stablecoin. Despite the potential impact of the lawsuit, Binance will continue to support BUSD for the foreseeable future. 　　Paxos Under Fire for Alleged CZ-Related SEC Lawsuit　　CZ also addressed the alleged SEC lawsuit against Paxos, stating that “he personally agreed with the assessment of crypto analyst Miles Deutscher that it was ”scary precedent“ that the SEC

2023-02-16Deep Dive

FCA Cracks Down On Unregistered Crypto ATM Operators In Leeds

The Financial Conduct Authority (FCA) has taken action against unregistered cryptocurrency ATM operators in Leeds, utilizing its authority to access and examine multiple facilities suspected of housing unlawfully run cryptocurrency ATMs. The FCA obtained evidence from many locations around the city in collaboration with West Yorkshire Polices Digital Intelligence and Investigation Unit.　　The FCAs Executive Director of Enforcement and Market Oversight, Mark Steward, said that “unregistered crypto ATMs functioning in the UK do so unlawfully, and the FCA will continue to find and disrupt unregistered crypto firms operating in the UK.” For anti-money laundering reasons, crypto firms in the United Kingdom must be registered with the Financial Conduct Authority (FCA). However, crypto goods are still unregulated and high-risk, and investors can expect to lose their whole investment if they invest in them.　　According to Det Sgt Lindsey Brants of West Yorkshire Polices Force Cyber Team, “after conducting intelligence collecting operations throughout West Yorkshire, they swiftly determined the locations of many operating crypto ATMs.” Warning letters were sent to the operators, urging that they stop using the devices, and any violations would result in an inquiry under money-laundering laws. Following that, the results were shared with the Financial Conduct Authority.　　Customers may use crypto

2023-02-16Deep Dive

The Biggest Fear of The CryptoCurrency Community

Cryptocurrency has rapidly emerged as a revolutionary technology and an alternative to traditional forms of currency. However, like any other technology or system, it is not immune to failures, risks, or vulnerabilities. In this context, the worst nightmare in cryptocurrency would be a catastrophic event that could lead to its downfall, rendering it obsolete or losing its credibility as a viable and reliable form of currency. In this article, we will explore some of the potential worst nightmares in cryptocurrency that might happen.　　A Massive Cyber Attack: One of the significant threats to cryptocurrency is cyber-attacks, which have been on the rise in recent years. A cyber attack on a cryptocurrency exchange or a blockchain network could lead to the theft of digital assets, causing significant losses to investors and users. A successful cyber-attack on a major cryptocurrency exchange could also lead to a loss of confidence in the entire cryptocurrency ecosystem.　　Regulatory Crackdown: As cryptocurrency gains wider adoption, governments and regulatory authorities around the world are increasingly taking a closer look at it. A regulatory crackdown on cryptocurrency could make it difficult for investors and users to access digital assets, leading to a decline in its adoption and price. Additionally, a

2023-02-15Deep Dive

Sam Bankman-Fried, Family, Former Executives Receive Subpoenas

As part of FTXs bankruptcy proceedings, subpoenas have been issued to former FTX CEO Sam Bankman-Fried, his father Joseph Bankman, and other family members, as well as former FTX and Alameda Research executives including Caroline Ellison, Gary Wang, and Nishad Singh. The subpoenas require these individuals to attend court proceedings and provide all the documents requested as outlined in the subpoena, as per court filings in the U.S. Bankruptcy Court for the District of Delaware.　　On February 16, Joseph Bankman, Caroline Ellison, Gary Wang, and Nishad Singh or their representatives must submit various documents related to questionable spending by FTX insiders, such as Bankman-Frieds parents spending $16.7 million on Bahamian real estate and the purchase of a Washington, D.C., headquarters building by an advocacy organization founded by the Bankman-Fried brothers. Recently, FTX obtained court approval to issue subpoenas to former CEO Sam Bankman-Fried and all other affiliates. While Bankman-Fried has pleaded not guilty to fraud allegations, former Alameda CEO Ellison and FTX co-founder Wang have admitted to fraud and are cooperating with federal prosecutors.　　A judge has ordered former FTX CEO Sam Bankman-Fried to not use a virtual private network to access the internet, as prosecutors allege that he has been using

2023-02-15Deep Dive

Certain FTX assets, tokens, and equity shares are allowed to be sold by the court.

The sale of a few subsidiaries and financial investments by FTX has been given court approval. According to a study by The Block Research, FTX and Alameda invested 473 investments totaling almost $5.3 billion through various subsidiaries. The amount of money invested ranged from huge cheques, such $100 million into Mysten Labs, the company that created the Sui blockchain, to several smaller ones, including $1 million checks into firms Limit Break and Messari.　　In a motion submitted on January 18 by the exchanges liquidators, it was stated that several investors had indicated a strong desire to repurchase FTXs interests in order to allow obtaining more funding from other shareholders.　　On February 13, the request was granted by the U.S. bankruptcy court for the district of Delaware, approving the sale or transfer of specific assets with “relatively de minimis worth” in comparison to the total investment portfolio of FTX. According to FTXs initial motion, 185 investments totaling less than $1 million were received.　　Including shares, notes payable, future total equity, future token interests, options, tokens, and merited on tokens, as well as assets in privately or publicly held enterprises, the order allows and certifies the purchase or transfer of these types of investments. Additionally,

2023-02-15Deep Dive

$480,000 in CEL token sales from the previous CEO of Celsius's wallet

A wallet connected to former Celsius CEO Alex Mashinsky allegedly sold 90,000 Celsius tokens (CEL) for $480,000 on February 14, according to blockchain research company Peckshield. The wallet “0x4833,” which acquired the assets straight from Celsius Network Wallet four years ago, is where the sold tokens came from.　　According to data from CryptoSlate, the CEL coin has suffered as a result of the sales, falling by about 4% in the last day to $0.51774 as of press time. According to Mashinsky and other senior executives of the insolvent company, Celsius, the court-appointed independent examiner found that the sales of CEL tokens had been profitable. According to the study, Mashinsky earned $68.7 million individually from the token sales.　　According to the research, Celsius ran its business like a Ponzi scheme and used consumer funds to support its coin. Since leaving his job at the company on September 17, 2022, Alex Mashinsky has been the target of numerous accusations of malfeasance. According to reports, Mashinsky withdrew $10 million from the company a few weeks prior to the company freezing client funds and declaring bankruptcy. Additionally, the former CEO was charged with deceiving investors and clients.　　About Celsius　　The idea of Celsius was to function much like

2023-02-15Deep Dive

Under pressure from regulators, issuer Paxos burns $700 million USD on Binance in 27 hours

Blockchain data reveals that Paxos, the company responsible for the $16 billion Binance USD (BUSD) stablecoin, has destroyed more than $700 million worth of BUSD tokens after announcing on Monday that it would cease releasing the cryptocurrency due to increasing legal pressure. A Paxos Treasury cryptocurrency wallet moved $703 million worth of BUSD tokens to a burn handle over the course of 27 hours beginning on Monday morning, effectively removing the currencies from existence, according to data from blockchain intelligence company Nansen.　　Just under two hours after the introduction, at 13:47 UTC on Monday, Paxos Treasury sent the initial transaction for $144.5 million worth of BUSD, according to statistics from blockchain monitoring tool Etherscan. In the following 27 hours, eight additional trades totaling $559 million took place. BUSD is a dollar-pegged stablecoin that holders can exchange for dollars at any moment thanks to its backing by short-term treasury and other assets that resemble cash. According to rules from the New York Department of Financial Services, the states primary financial regulating body, U.S.-based fintech company Paxos releases the token.　　The action indicates that investors are quickly selling BUSD. The repurchase of $700 million in a little over a day amounted to almost 6%

2023-02-15Deep Dive

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