U.S.

Ripple, Coinbase, a16z invest $78M in pro-crypto PAC ahead of US elections

Prominent cryptocurrency companies and investors intend to support pro-cryptocurrency candidates during the 2024 U.S. election cycle.

Ripple CEO Brad Garlinghouse has publicly announced the company’s intent to support “pro-crypto” candidates during the 2024 United States election season. The company is among a group to have pledged a total of $78 million to support the Fairshake political action committee (PAC).

Fairshake announced that prominent industry firms and players had contributed to a significant “war chest” to back candidates who support American crypto and blockchain innovation and responsible regulation in the upcoming 2024 elections.

The list of contributors includes Coinbase CEO Brian Armstrong, Tyler and Cameron Winklevoss, Circle, Coinbase, Kraken, Messari and Andreessen Horowitz (a16z).

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Yellen defends government intervention to avoid another SVB

The U.S. Treasury Secretary Janet Yellen said the federal government would intervene if necessary to protect other small lenders.

Nearly two weeks after three United States banks collapsed — Silicon Valley Bank (SVB), Silvergate Bank and Signature Bank — U.S. Treasury Secretary Janet Yellen said the federal government is ready to take action if needed. 

According to a Bloomberg report of excerpts from a speech Yellen will give on Tuesday at the American Bankers Association in Washington D.C., the Treasury Secretary said:

“Our intervention was necessary to protect the broader US banking system, and similar actions could be warranted if smaller institutions suffer deposit runs that pose the risk of contagion.”

Yellen is set to defend recent measures taken by the government to defend the banks and the greater economic impact of the situation, calling the government actions “decisive and forceful actions.” 

Additionally, Yellen said the government intervention helped to maintain the “important role” of small and mid-size lenders in the U.S. economy. 

“The Treasury is committed to ensuring the ongoing health and competitiveness of our vibrant community and regional banking institutions.”

U.S. regulators began swiftly working on a plan following the banking crisis, during which Yellen initially said no bailout would be necessary. Instead, the regulators guaranteed insured and uninsured deposits at both SVB and Signature. The U.S. Federal Reserve also launched a new way to help lenders cover withdrawals. 

A meeting has been announced by Congress, scheduled for March 29, which will delve into the failures of SVB and Signature Bank.

Related: Breaking: SVB Financial Group files for Chapter 11 bankruptcy

U.S. President Joe Biden said he is “firmly committed” to holding whoever was responsible for the recent collapses accountable. Biden also stated that shielding depositors involved with SBV and Signature will be at “no cost to the taxpayer.“

The Department of Justice and the Securities and Exchange Commission have both reportedly opened inquiries into the incident. Meanwhile, economists have analyzed that over 186 banks in the U.S. are well-positioned for collapse.

Developed markets lagging behind in digital payments: BlackRock CEO

In a letter to investors, BlackRock CEO Larry Fink highlighted the benefits of digital assets and said developing nations like the U.S. are lagging behind in innovation.

The CEO of American investment company BlackRock, Larry Fink, highlighted the potential of digital assets and tokenization for the asset management industry in his annual chairman’s letter to the company. 

The letter was published on March 15 and addressed various topics of interest to the firm over the last year, including digital assets. Fink highlighted the rising and sustained interest in these types of assets despite the FTX catastrophe.

He said beyond the hype, “interesting developments” are happening in the space. He especially noted the “dramatic advances” in the digital payment solutions that help forward financial inclusion in many emerging markets like India, Brazil and Africa.

However, according to Fink, developing markets are not at the same pace innovation-wise:

“By contrast, many developed markets, including the U.S., are lagging behind in innovation, leaving the cost of payments much higher.”

BlackRock currently manages around $8 trillion in assets and is one of the largest asset managers in the world. Fink said the asset management industry could have some “exciting applications” of the technology underlying these digital asset innovations.

Specifically, he praised the tokenization of asset classes with their potential in “driving efficiencies in capital markets, shortening value chains, and improving cost and access for investors.”

His statement ended not leaving out the risks and need for regulation of the crypto space but still pointing out that the company will be further exploring digital assets going forward.

Related: It’s not the end of crypto: EU asset manager gives 5 reasons why

This is not the first time Fink has made commentary on decentralized finance. After the fall of FTX, he commented that the FTX Token (FTT) caused the exchange’s downfall because it goes against “the whole foundation of what crypto is.

However, in the same conversation, he openly called the underlying technology of crypto and the blockchain revolutionary.

Back in September 2022, BlackRock released a new exchange-traded fund that invests in 35 blockchain-related companies.

US trustee appeals NY Judge’s approval of Voyager deal with Binance.US

The United States Department of Justice filed an appeal against the approval by a New York judge allowing a billion-dollar sale of assets from Voyager Digital to Binance.US.

The United States Department of Justice (DOJ) has filed an appeal against the latest decision in the case for the selling of assets between Voyager Digital and Binance.US.

On March 8, the U.S. Trustee for Region 2 made the appeal to the U.S. District Court for the Southern District of New York against the approval of Voyager Digital’s Chapter 11 bankruptcy plan.

The Chapter 11 plan was confirmed only a day prior, on March 7, by U.S. bankruptcy judge Michael Wiles. This plan would have allowed the former crypto brokerage company to sell billions of dollars in assets to Binance.US in an effort to regain liquidity to pay back customers. 

After Wiles told Bloomberg that he could not put the case into an “indeterminate deep freeze while regulators figure out whether they believe there are problems with the transaction and plan.“

He also reportedly said that through the current plan, “Voyager’s customers would see an estimated 73% recovery.” Moreover, a poll released in a court filing on Feb. 28 revealed that 97% of Voyager customers favor the Binance.US deal. 

Related: US lawmakers argue SEC accounting policy places crypto customers at risk

Nonetheless, the U.S. Securities and Exchange Commission (SEC) has been outspokenly against this deal. The financial regulator said the asset restructuring plan and Binance.US’ acquisition could breach securities law.

In a court filing from Feb. 24, the Texas State Securities Board and the Department of Banking objected to the deal with Binance.US.

If U.S. regulators successfully block this deal, Voyager can liquidate. The initial bankruptcy was filed on July 5, 2022, as the brokers attempted to restructure and “return value” to more than 100,000 customers.

SEC files objection to Binance.US bid for Voyager assets

The SEC has moved to bar final approval of Binance.US’ $1 billion bid for assets belonging to bankrupt crypto lending firm Voyager Digital.

The United States Securities and Exchange Commission (SEC) has objected to Binance.US’ move to acquire over $1 billion of assets belonging to the defunct cryptocurrency lending firm Voyager Digital.

According to a Feb. 22 filing submitted to the U.S. Bankruptcy Court for the Southern District of New York, the SEC believes that some aspects of the asset restructuring plan of Binance.US’ acquisition could breach securities law.

The SEC is formally investigating whether Binance.US and related debtors violated anti-fraud, registration and other provisions of the federal securities laws. The SEC noted particular concern around the security of assets through the planned acquisition.

The SEC argues information provided in the planned purchase of Voyager assets fails to adequately outline whether Binance.US or affiliated third parties will have access to customer wallet keys or control over anyone with access to such wallets.

Related: CZ denies report Binance is considering major breakup with US business partners

Furthermore, the filing notes insufficient provision of safeguards to ensure that customer assets are not transferred off the Binance.US platform. The SEC also argues that Binance.US has not declared internal controls and practices ensuring the safety of customer assets.

The SEC is calling for Binance.US to address these issues by providing information regarding who has access to customer assets and the necessary controls after the deal is finalized.

The SEC is mainly focused on part of Binance.US’ initial plan and disclosure statement for its Voyager bid. The company will retain the right to sell cryptocurrencies belonging to Voyager to distribute to account holders, which is the main point of concern for the U.S. regulator.

“However, the Debtors (Binance.US) have yet to demonstrate that they would be able to conduct such sales in compliance with the federal securities laws.”

According to the filing, various cryptocurrency transactions will need to take place to rebalance funds for redistribution to account holders, which the SEC believes may violate sections of the Securities Act.

The regulator argues that the disclosure statement provided by Binance.US and other debtors does not address the possibility of these transactions being unlawful. It’s believed that this possibility could impact the estimated 51% recovery of funds paid out to Voyager account holders and claimants.

A footnote of the filing highlights the potential of Voyager buying and selling certain digital assets to rebalance asset holdings. The SEC flags the potential sale of Voyager Token (VGX), issued by Voyager, which “may constitute the unregistered offer or sale of securities under federal law.“

The SEC also notes that Binance.US could be acting as an exchange under existing Exchange Act laws, which it is prohibited to do without the necessary registration as a national securities exchange or exemption from doing so.

The filing highlights concerns over the lawfulness and overall ability to carry out planned asset restructuring through the acquisition and questions whether Voyager debtors will be able to recoup some of their assets following the bankruptcy of the firm:

“Creditors and stakeholders are entitled to know whether this transaction provides them a meaningful economic benefit, or whether this is just a $20 million sale of Voyager’s customer list to Binance.US.”

As Cointelegraph reported, Binance is looking to remedy previous regulatory and law-enforcement investigations in the U.S. The firm is facing the possibility of fines relating to previous compliance issues.

Binance is also dealing with regulatory action toward Paxos, which is responsible for issuing Binance’s U.S. dollar backed Binance USD (BUSD) stablecoin. The New York Department of Financial Services ordered the firm to stop minting BUSD tokens from Feb. 21. Paxos has countered claims from the SEC that BUSD is a security after receiving a Wells notice from the regulator for failing to register the token as a security in the U.S.

Trouble brewing for the US: Two-thirds of TradFi expects a 2023 recession

According to recent research, major financial institutions tied to the Federal Reserve see the U.S. facing a “shallow” or “mild” recession in 2023.

The United States economy could be in for an upset. Data from a Wall Street Journal survey revealed financial experts expect the country to face an economic downturn this year.

Over two-thirds of economists at 23 major financial institutions that do business with the Federal Reserve believe the U.S. will have a “shallow” or “mild” recession in 2023. Two of the surveyed institutions predict a recession for the following year.

The research included big names in the financial services sector, such as Barclays, Bank of America, TD Securities and UBS.

Collectively, the Federal Reserve was named as the primary reason for the recession due to it raising interest rates to fight inflation. At the time of writing, the inflation rate in the U.S. is 7%, compared with the Fed’s target desired rate of 2%.

Additional factors contributing toward a potentially impending recession include pandemic savings being spent, a decline in the housing market and banks having more rigid lending standards.

The survey also found that many economists expect unemployment in the country to rise from 3.7% in November 2022 to above 5%, along with general economic contraction.

Related: 5 tips for investing during a global recession

However, Credit Suisse, Goldman Sachs, HSBC, JPMorgan Chase and Morgan Stanley all gave a rosier outlook on the situation, saying a recession will be avoided in both 2023 and 2024.

The state of the U.S. economy and the global economy have generally not seen the most positive predictions for the upcoming years. In October, Tesla and Twitter CEO Elon Musk said the global recession could last until the end of the year, near 2024.

Recurring global issues account for these bleak outlooks, such as widespread energy shortages and inflation.

Some experts in the decentralized finance space have spoken publicly on cryptocurrencies, particularly Bitcoin (BTC), as a hedge against monetary inflation.

SBF ‘willing’ to testify at House hearing on the FTX collapse

Despite missing a response deadline, Sam Bankman-Fried says he’s willing to testify at a U.S. House hearing into the collapse of FTX.

Former FTX CEO Sam Bankman-Fried has indicated that he’s willing to testify at a United States House hearing into the collapse of cryptocurrency exchange FTX.

Bankman-Fried controversially missed the deadline to respond to a Senate Banking Committee request to appear and testify during a hearing focused on FTX’s bankruptcy earlier this week. While the possibility of a congressional subpoena was on the table, the beleaguered former CEO has offered himself up in a series of tweets published Dec. 9.

Bankman-Fried was replying to a thread of tweets from congresswoman Maxine Waters, chairwoman of the Financial Services Committee, who contended that his recent interviews with a number of media houses provided evidence that he had enough information “sufficient for testimony.”

Related: Crypto community baffled by SBF dictating terms over congressional hearing

Highlighting the fact that FTX had affected more than one million people, Waters implored Bankman-Fried to testify given that his knowledge would be “meaningful” to members of Congress and “critical” to the American people.

Bankman-Fried’s belated response on Twitter came four days after Waters’ request. The former head of FTX and Alameda Research said he would be limited in his ability to provide answers, citing a lack of access to professional and personal data.

He added that he would look to provide information and insights on FTX.US’s solvency and American customers, potential avenues to “return value to users internationally,” what led to the collapse of the exchange and his “own failings.”

Bankman-Fried and mainstream media outlets have copped criticism from the wider cryptocurrency community for a perceived slant presenting the former CEO as a victim in the debacle.

Bankman-Fried tried to assuage users on Twitter by highlighting shortcomings in his running of the now-defunct business, which has left investors out of pocket and short of answers:

“I had thought of myself as a model CEO who wouldn’t become lazy or disconnected. Which made it that much more destructive when I did.”

Bankman-Fried said he hoped people could learn from the difference between “who I was and who I could have been,” in what looks to be an effort to curry more sympathy as pressure from the U.S. government begins to mount

Editor’s Note: The headline was updated to reflect the upcoming House Financial Services Committee hearing on Dec. 13.

SBF ‘willing’ to testify at Senate hearing on the FTX collapse

Despite missing a response deadline, Sam Bankman-Fried says he’s willing to testify at a U.S. Senate hearing into the collapse of FTX.

Former FTX CEO Sam Bankman-Fried has indicated that he’s willing to testify at a United States Senate hearing into the collapse of cryptocurrency exchange FTX.

Bankman-Fried controversially missed the deadline to respond to a Senate Banking Committee request to appear and testify during a hearing focused on FTX’s bankruptcy earlier this week. While the possibility of a congressional subpoena was on the table, the beleaguered former CEO has offered himself up in a series of Tweets published Dec. 9.

Bankman-Fried was replying to a thread of tweets from congresswoman Maxine Waters, chairwoman of the Financial Services Committee, who contended that his recent interviews with a number of media houses provided evidence that he had enough information ‘sufficient for testimony’.

Related: Crypto community baffled by SBF dictating terms over congressional hearing

Highlighting the fact that FTX had affected more than one million people, Waters implored Bankman-Fried to testify given that his knowledge would be ‘meaningful’ to members of congress and ‘critical’ to the American people.

Bankman-Fried’s belated response on Twitter came four days after Waters’ request. The former head of FTX and Alameda Research said he would be limited in his ability to provide answers, citing a lack of access to professional and personal data.

He added that he would look to provide information and insights on FTX US’s solvency and American customers, potential avenues to ‘return value to users internationally,’ what led to the collapse of the exchange and his ‘own failings’.

Bankman-Fried and mainstream media outlets have copped criticism from the wider cryptocurrency community for a perceived slant presenting the former CEO as a victim in the debacle.

Bankman-Fried tried to assuage users on Twitter by highlighting shortcomings in his running of the now-defunct business, which has left investors out of pocket and short of answers:

“I had thought of myself as a model CEO who wouldn’t become lazy or disconnected. Which made it that much more destructive when I did.”

Bankman-Fried said he hoped people could learn from the difference between “who I was and who I could have been,” in what looks to be an effort to curry more sympathy as pressure from the U.S. government begins to mount

SBF ‘willing’ to testify at House hearing on the FTX collapse

Despite missing a response deadline, Sam Bankman-Fried says he’s willing to testify at a U.S. House hearing into the collapse of FTX.

Former FTX CEO Sam Bankman-Fried has indicated that he’s willing to testify at a United States House hearing into the collapse of cryptocurrency exchange FTX.

Bankman-Fried controversially missed the deadline to respond to a Senate Banking Committee request to appear and testify during a hearing focused on FTX’s bankruptcy earlier this week. While the possibility of a congressional subpoena was on the table, the beleaguered former CEO has offered himself up in a series of Tweets published Dec. 9.

Bankman-Fried was replying to a thread of tweets from congresswoman Maxine Waters, chairwoman of the Financial Services Committee, who contended that his recent interviews with a number of media houses provided evidence that he had enough information ‘sufficient for testimony’.

Related: Crypto community baffled by SBF dictating terms over congressional hearing

Highlighting the fact that FTX had affected more than one million people, Waters implored Bankman-Fried to testify given that his knowledge would be ‘meaningful’ to members of congress and ‘critical’ to the American people.

Bankman-Fried’s belated response on Twitter came four days after Waters’ request. The former head of FTX and Alameda Research said he would be limited in his ability to provide answers, citing a lack of access to professional and personal data.

He added that he would look to provide information and insights on FTX US’s solvency and American customers, potential avenues to ‘return value to users internationally,’ what led to the collapse of the exchange and his ‘own failings’.

Bankman-Fried and mainstream media outlets have copped criticism from the wider cryptocurrency community for a perceived slant presenting the former CEO as a victim in the debacle.

Bankman-Fried tried to assuage users on Twitter by highlighting shortcomings in his running of the now-defunct business, which has left investors out of pocket and short of answers:

“I had thought of myself as a model CEO who wouldn’t become lazy or disconnected. Which made it that much more destructive when I did.”

Bankman-Fried said he hoped people could learn from the difference between “who I was and who I could have been,” in what looks to be an effort to curry more sympathy as pressure from the U.S. government begins to mount

Editor’s Note: The headline was updated to reflect the upcoming House Financial Services Committee hearing on Dec. 13.

White House publishes ‘first-ever’ comprehensive framework for crypto

The fact sheet sums up the efforts of nine federal agencies’ research over the past six months.

Following President Joe Biden’s executive order on Ensuring Responsible Development of Digital Assets, federal agencies came up with a joint fact sheet on six principal directions for crypto regulation in the United States. It sums up the content of nine separate reports, which have been submitted to the president to “articulate a clear framework for responsible digital asset development and pave the way for further action at home and abroad.”

The fact sheet was published on the White House official website on Sept. 16, and consists of 7 sections: (1) Protecting Consumers, Investors, and Businesses; (2) Promoting Access to Safe, Affordable Financial Services; (3) Fostering Financial Stability; (4) Advancing Responsible Innovation; (5) Reinforcing Our Global Financial Leadership and Competitiveness; (6) Fighting Illicit Finance and (7) Exploring a U.S. Central Bank Digital Currency (CBDC).

Some of the sections don’t contain any particularly new information, emphasizing one more time the principles and policies to which the present administration has been sticking. For example, to protect consumers and investors, the reports urge regulators — the Securities and Exchange Commission and Commodity Futures Trading Commission — to “aggressively pursue investigations and enforcement actions against unlawful practices in the digital assets space.” At the same time, they don’t say anything about the segregation of regulators’ duties, which remains one of the country’s main regulatory problems.

To promote access to financial services, federal agencies recommend creating a federal framework for nonbank payment providers and encouraging the adoption of instant payment systems like FedNow, the launch of which is planned by the Federal Reserve in 2023.

As a part of advancing responsible innovation efforts, the Office of Science and Technology Policy (OSTP), which has recently published a critical report on the climate impacts of crypto mining, will develop a Digital Assets Research and Development Agenda to help mitigate the negative climate impacts. With the same goal, the Department of Energy, the Environmental Protection Agency, and other agencies will consider further tracking digital assets’ environmental impacts.

Related: Chamber of Digital Commerce says ‘the time has come for the SEC to approve a Bitcoin ETF

While the fact sheet claims that the U.S. agencies will “leverage U.S. positions in international organizations to message U.S. values” related to digital assets, it doesn’t specify how exactly these values differ from the swiftly emerging European regulatory approach.

The security strategy implicates the amendments to the Bank Secrecy Act, anti-tip-off statutes and laws against unlicensed money transmitting to apply explicitly to digital asset service providers, including exchanges and nonfungible token platforms.

The last, but perhaps the most important section of the fact sheet is dedicated to the U.S. CBDC. It reveals that the administration has already developed policy objectives for a U.S. CBDC system, but further research on the possible technological foundation of that system is needed. Still, the intent seems pretty serious as the Treasury will lead an interagency working group with the participation of the Federal Reserve, the National Economic Council, the National Security Council and the OSTP.