Circle’s Stablecoin USDC Affected by Collapsed Bank

Circle CEO and co-founder Jeremy Allaire revealed that the stablecoin issuer had been able to access its $3.3 billion in funds held with Silicon Valley Bank since March 13. Allaire stated that he believed that almost everything was able to clear from the failed lender. However, USDC briefly de-pegged following news of the temporarily locked funds, leading to a drop in the stablecoin’s market cap by almost 10% since March 11.

USDC’s dollar peg has since recovered, but mass redemptions have affected its market cap. In contrast, USDC’s peer, Tether, has recorded a slight increase in its market cap since March 11, climbing over 1% to $73.03 billion. Although the temporarily locked funds represented less than 8% of the token’s reserves, it had a significant effect on USDC.

The January reserve report released on March 2 asserted that USDC was over 100% collateralized, with over 80% of the reserve consisting of short-dated United States Treasury Bills, which are highly liquid assets that are direct obligations of the U.S. government and considered one of the safest investments globally. Despite the impact of the collapsed bank, the reserve report provides assurance that USDC remains backed by highly liquid assets and overcollateralized.

USDC is one of the most widely used stablecoins in the cryptocurrency market, with a market cap of over $10 billion as of March 2023. Stablecoins are a type of cryptocurrency that is pegged to the value of a fiat currency, usually the U.S. dollar, and are designed to provide a stable store of value that can be used for transactions without the volatility typically associated with other cryptocurrencies like Bitcoin.

The news of the temporarily locked funds at Silicon Valley Bank highlights the potential risks associated with stablecoins, which are often seen as a safer alternative to other cryptocurrencies due to their stable value. However, the fact that these coins are backed by fiat currency reserves means that they are only as safe as the financial institutions that hold those reserves.

In recent years, there have been several high-profile cases of stablecoin issuers facing regulatory scrutiny or experiencing issues with their banking partners. For example, in 2018, Tether, the largest stablecoin issuer at the time, faced allegations that its reserves were not fully backed by U.S. dollars as it had previously claimed. Similarly, in 2021, the stablecoin issuer Centre, which is backed by Coinbase and Circle, faced a lawsuit alleging that it had violated securities laws by failing to register its USDC stablecoin with the U.S. Securities and Exchange Commission.

Despite these challenges, stablecoins have become an essential part of the cryptocurrency ecosystem, providing a way for traders and investors to move funds between exchanges and participate in decentralized finance (DeFi) applications without the risks associated with traditional fiat currencies.

In response to the risks associated with stablecoins, regulators around the world are increasingly taking steps to provide more oversight and regulation of these assets. For example, in the U.S., the SEC has signaled that it may consider stablecoins to be securities, which would subject them to greater regulatory scrutiny. Similarly, in the EU, regulators have proposed new rules for stablecoins that would require issuers to be authorized and subject to ongoing supervision.

In conclusion, the news of Circle’s temporarily locked funds at Silicon Valley Bank highlights the potential risks associated with stablecoins, but the fact that USDC remains overcollateralized with highly liquid assets provides some reassurance to investors. As stablecoins continue to play a critical role in the cryptocurrency ecosystem, it is likely that regulators will continue to scrutinize these assets and develop new rules to ensure their safety and stability.


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US DOJ and SEC launch inquiries into Silicon Valley Bank collapse

The sudden collapse of Silicon Valley Bank (SVB) has attracted the attention of the US Department of Justice (DoJ) and Securities and Exchange Commission (SEC), who have launched investigations into events leading up to the bank’s closure. According to sources, the probes will scrutinize the stock sales made by SVB financial officers in the weeks before the bank’s collapse, as well as the events that led to its failure.

Reports suggest that SVB’s CEO, Greg Becker, and chief financial officer, Daniel Beck, sold shares just two weeks before the bank’s collapse, outraging some observers. Becker reportedly sold $3.6 million worth of shares on February 27, while Beck sold $575,180 in stocks on the same day. In total, SVB executives and directors cashed out $84 million worth of stock over the past two years.

The investigations are in their early stages and may not lead to charges or allegations of wrongdoing, according to sources. However, a formal announcement from the DoJ is expected in the coming days, says another person with direct knowledge of the situation.

In addition to the investigations by the DoJ and SEC, the US Federal Reserve is also looking into how it supervised and regulated SVB before its collapse.

SVB Financial Group, SVB’s parent organization, and two executives were sued by shareholders on March 13. The lawsuit accuses them of failing to disclose how rising interest rates would leave the bank “particularly susceptible” to a bank run. The lawsuit seeks damages for SVB investors from June 16, 2021, to March 10, 2023.

The collapse of SVB has sent shockwaves through the financial industry, prompting warnings from the SEC about potential violations of US securities laws. The investigations by the DoJ and SEC are expected to shed more light on the events that led to the bank’s collapse and the stock sales made by its financial officers.


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Signature Bank Under Investigation by US Government Bodies

Signature Bank, a cryptocurrency-friendly bank, is reportedly under investigation by two United States government bodies over concerns that it did not take adequate measures to detect potential money laundering by its clients. According to a Bloomberg report on March 15, investigators with the Justice Department were examining whether Signature was taking preemptive measures to monitor transactions for “signs of criminality” and properly vetting account holders. A separate probe by the Securities and Exchange Commission was also “taking a look” at the bank, although details regarding the nature of the SEC’s probe were not reported.

The investigations may have contributed to the recent decision by New York state regulators to close the bank, although it is unclear when the investigations began and what effect, if any, they had on the closure. Signature and its staff are not accused of wrongdoing, and the investigations may be finalized without any charges or further action taken by the SEC or the Department of Justice.

The report comes after a class action lawsuit was filed by Signature shareholders on March 14, alleging that the bank and former executives claimed to be “financially strong” just three days before it was forcibly shuttered. Barney Frank, a former board member of Signature Bank, has claimed that the regulators wanted “to send a very strong anti-crypto message” and that the bank became the “poster boy” for this message, despite there being “no insolvency based on the fundamentals.”

Signature Bank was closed on March 12 as part of a series of bank closures that also included Silvergate Capital and Silicon Valley Bank. The DOJ and the SEC have reportedly since initiated separate investigations into the collapse of Silvergate Capital and SVB. The regulators will examine the events leading up to the bank’s collapse, including scrutinizing security filings that disclosed the sale of SVB shares by the firm’s CEO Greg Becker and CFO Daniel Beck that took place two weeks prior to its downfall.

The SEC has not formally commented on the matters, but SEC chair Gary Gensler said on March 12 that it “will investigate and bring enforcement actions if we find violations of the federal securities laws.” The investigations into Signature Bank and other cryptocurrency-friendly banks highlight the increasing scrutiny of the cryptocurrency industry by regulatory bodies, particularly in the United States.


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GPT-4 AI Chatbot Scores High on Tests

GPT-4, the latest version of the artificial intelligence chatbot ChatGPT, has achieved impressive scores on a range of high school and law school tests, according to its creator OpenAI. The new version of the chatbot has demonstrated improved processing capabilities, including the ability to convert image, audio, and video inputs to text, and handle more nuanced instructions creatively and reliably.

The most notable achievement of GPT-4 is its performance on the LSAT, the test that college students in the United States must pass to be admitted to law school. GPT-4 scored 163, which puts it in the 88th percentile and in a good position to be admitted to a top 20 law school. The score is only a few marks short of the reported scores needed for acceptance to prestigious schools like Harvard, Stanford, Princeton, and Yale. The prior version of ChatGPT only scored 149 on the LSAT, putting it in the bottom 40%.

GPT-4 also excelled on the Uniform Bar Exam, which is taken by recently graduated law students to practice as a lawyer in any U.S. jurisdiction. GPT-4 scored 298 out of 400, while the old version of ChatGPT scored only 213 out of 400.

In addition to law school exams, GPT-4 also achieved high scores on the SAT Evidence-Based Reading & Writing and SAT Math exams, scoring in the 93rd and 89th percentile, respectively. It also performed well on AP exams in biology, chemistry, and physics, with scores ranging from 66-100%. However, its AP Calculus score was fairly average, ranking in the 43rd to 59th percentile.

Despite its strengths, GPT-4 struggled in English literature exams, scoring in the 8th to 44th percentile across two separate tests.

Overall, the test results demonstrate that GPT-4 has made significant advancements compared to its prior version, with improved processing capabilities and the ability to pass high school and law school tests with scores ranking in the 90th percentile. These developments are significant for the field of artificial intelligence and have implications for the use of chatbots and similar technologies in various industries, including education and legal services.


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Crypto Bank Anchorage Cuts 20% of Workforce

Anchorage Digital, a crypto bank that received a national trust bank charter from the Office of the Comptroller of the Currency in January 2021, has announced that it will lay off 75 employees, or approximately 20% of its workforce. The company cited regulatory uncertainty in the United States, as well as macroeconomic challenges and crypto market volatility, as reasons for the layoffs. Despite these challenges, Anchorage expressed continued confidence in the digital asset landscape and its ability to build regulated solutions for digital asset holders.

Anchorage’s decision to cut staff comes at a time when the U.S. banking system is facing significant challenges. Three regional banks, Silicon Valley Bank, Silvergate Bank, and Signature Bank, have gone under since March 8, prompting the Federal Deposit Insurance Corporation to guarantee all customer deposits for SVB and Signature, despite its standard threshold for guarantees being $250,000. It is unclear if these developments contributed to Anchorage’s decision to lay off staff.

The crypto industry has seen a slowdown in layoffs since the beginning of the year. In January, crypto firms such as Coinbase and cut nearly 3,000 positions, while February saw a more muted 570 layoffs. Despite the challenges facing the industry, many firms remain optimistic about the future of digital assets and blockchain technology.

Anchorage Digital was founded in 2017 by Diogo Monica and Nathan McCauley. The company provides custody services for institutional investors, allowing them to securely store their digital assets. In addition to its national trust bank charter, Anchorage has also received approval from the South Dakota Division of Banking to create a digital asset bank. The company’s investors include Blockchain Capital, Lux Capital, and Visa. Anchorage has raised over $137 million in funding to date.

While the layoffs at Anchorage are unfortunate for the affected employees, they may be necessary for the company to weather the current regulatory and market challenges. As the crypto industry continues to mature and attract more institutional investors, firms like Anchorage will play a critical role in providing secure and regulated custody services for digital assets.


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US Officials Oppose Voyager Sale Provision

United States officials have expressed their desire to remove a provision from the bankruptcy plan of Voyager Digital, a defunct lender, as they believe it would hinder the government’s ability to enforce its police and regulatory powers. Voyager Digital has proposed selling its digital assets to Binance.US, a leading cryptocurrency exchange. However, the provision in question would prevent US officials from legally pursuing anyone involved in the sale.

In a motion submitted to a New York bankruptcy court on March 14, U.S. trustee William Harrington, along with other government attorneys, claimed that the court “improperly exceeded its statutory authority” when it approved the pardoning provision. They have requested a delay of two weeks for the court’s approval of the sale, allowing them time to file an appeal.

The provision aims to protect those involved in carrying out the sale from being held personally liable for its implementation. The court approved this measure on March 7, after a February 28 filing revealed that 97% of Voyager customers were in favor of the plan. While the U.S. officials have no objections to other aspects of the proposed sale, they argue that the provision would impede their ability to enforce their regulatory powers.

On March 6, the U.S. Securities and Exchange Commission (SEC) also raised objections to the plan, particularly the “extraordinary” and “highly improper” exculpation provision. The SEC argued that the repayment token would constitute an unregistered security offering and that Binance.US is operating an unregulated securities exchange.

Voyager Digital’s proposed sale comes after the company filed for bankruptcy due to financial troubles, which have been affecting the crypto lending industry. Crypto lenders, such as Voyager, provide customers with loans backed by their cryptocurrency holdings. In recent times, these lenders have faced increased scrutiny from regulatory bodies, leading to difficulties in continuing operations.

A hearing on the issue is scheduled for March 15 at 2:00 pm Eastern Time. Based on the latest estimates, the plan is expected to result in Voyager creditors recovering approximately 73% of the value of their funds. The outcome of this case will have a significant impact on the future of crypto lending and may set a precedent for similar cases involving bankruptcy sales and regulatory enforcement.

In conclusion, US officials are contesting a provision in Voyager Digital’s bankruptcy plan that would prevent legal pursuit of those involved in the sale of its assets to Binance.US. With a hearing scheduled for March 15, the outcome may have broader implications for the crypto lending industry and regulatory enforcement.


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SVC Bank Caught in SVB Collapse Confusion

The recent collapse of Silicon Valley Bank (SVB), a major banking institution based in California, has sent shockwaves throughout the global financial sector. While countless businesses have been directly affected by the bank’s downfall, a bank in India with no connection to SVB has also felt the consequences of the crisis due to a simple mix-up in acronyms.

Shamrao Vithal Co-operative Bank (SVC Bank), a 116-year-old cooperative bank based in Mumbai, India, found itself caught in the line of fire when the news of SVB’s imminent shutdown began to spread on March 10. The similarity between the short forms of the two banks, SVB and SVC Bank, led to confusion among some Indian citizens, who mistakenly associated the Indian bank with the crisis in the United States.

Silicon Valley Bank has been a significant player in the banking industry, particularly in the technology and startup sectors. Founded in 1983, SVB has been a crucial financial partner to various emerging tech companies and venture capital firms. The bank’s collapse has raised concerns over the stability of the financial sector and the impact it may have on businesses tied to the bank.

In contrast, Shamrao Vithal Co-operative Bank has a long-standing history in India, having been established in 1907. As a cooperative bank, it focuses on serving the needs of its members and promoting financial inclusion in the country. SVC Bank offers a wide range of financial products and services, including savings accounts, loans, and insurance. The bank has successfully navigated numerous financial challenges throughout its history and remains an important institution in the Indian banking sector.

Despite the clear differences between the two banks and their respective markets, the confusion caused by the similarity in their acronyms led to panic among some SVC Bank customers. As a result, the Indian bank was forced to clarify its position and reassure its customers that it was not connected to the crisis unfolding in the United States.

This incident highlights the potential for misunderstandings in an increasingly interconnected world, where news spreads rapidly across borders, and even a minor mix-up can have significant consequences. It serves as a reminder for both financial institutions and the public to be vigilant in verifying information and understanding the differences between seemingly similar entities.


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KuCoin Ventures Invests in Yuan-Pegged Stablecoin

KuCoin Ventures, the investment division of the prominent cryptocurrency exchange KuCoin, has announced its decision to support emerging stablecoin initiatives by investing in a Chinese yuan-pegged stablecoin issuer. The investment is aimed at fostering the development of stablecoin projects and strengthening their position in the market.

KuCoin Ventures has led a substantial $10 million investment round in CNHC, a stablecoin issuer focused on creating a yuan-pegged digital asset. CNHC also offers blockchain-based payment services, aiming to facilitate seamless transactions and promote the adoption of digital currencies. The funding round, announced on March 16, saw participation from some noteworthy industry investors, such as IDG Capital, an investor in KuCoin, and Circle Ventures, the investment arm of USD Coin (USDC) issuer, Circle.

The growing interest in stablecoins, which are digital currencies pegged to traditional assets like fiat currencies, has driven the need for increased investment and innovation in this sector. Stablecoins provide a sense of stability in the often volatile cryptocurrency market, enabling users to conduct transactions with minimized risk. By investing in CNHC, KuCoin Ventures is actively contributing to the growth and evolution of the stablecoin ecosystem.

The investment in CNHC is a strategic move for KuCoin Ventures, as it helps expand the company’s portfolio and influence in the blockchain and cryptocurrency industries. By supporting a stablecoin issuer like CNHC, KuCoin Ventures is demonstrating its commitment to fostering innovation and driving the adoption of digital currencies worldwide.

In recent years, the demand for stablecoins has skyrocketed, with numerous projects being launched to cater to various needs and preferences. The introduction of a Chinese yuan-pegged stablecoin is a significant development, as it has the potential to increase the adoption of digital currencies in China and beyond. It also highlights the growing recognition of stablecoins as a viable alternative to traditional financial instruments.

As more investments pour into the stablecoin sector, it is expected that innovations will continue to emerge, providing consumers and businesses with more diverse and efficient financial solutions. KuCoin Ventures’ investment in CNHC is a testament to the growing importance of stablecoins in the global financial landscape and the role they will play in shaping the future of finance.

In conclusion, KuCoin Ventures’ $10 million investment in CNHC signifies the increasing interest in and support for stablecoin initiatives. The backing of a yuan-pegged stablecoin issuer, alongside the participation of other prominent industry investors, marks a significant milestone in the growth and development of the stablecoin market. As the demand for stablecoins continues to rise, this investment represents a crucial step towards a more stable and accessible digital currency ecosystem.


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Sberbank Executive Touts Blockchain for Russia

An official at Russia’s biggest bank, Sberbank, has proposed that the use of blockchain technology is the direction in which the nation should go in order to overcome the present settlement challenges it is facing. Alexander Vedyakhin, who serves as the first deputy chairman of Sberbank, is of the opinion that blockchain technology has developed considerably over the past few years and now provides new capabilities. These new capabilities may make it possible for Russia to develop payment systems that are more effective.

At the conference, Vedyakhin stressed the significance of blockchain technology in resolving Russia’s current settlement challenges. He said that the technology offers the possibility of a road to payment systems that are more effective. In addition to this, he pointed out that the technology has advanced substantially over the last few years, which has resulted in the creation of brand new avenues for its use.

The statements made by Vedyakhin come at a time when Russia is investigating a variety of options to upgrade its financial infrastructure and lessen its dependence on conventional banking systems. The blockchain technology, which is both decentralized and transparent in nature, may play a significant part in the accomplishment of these objectives.

The Russian government has previously indicated that it is interested in the creation of blockchain technology as well as its implementation. In the year 2020, Russia passed a legislation that regulated digital financial assets. This law established a regulatory framework for the usage of cryptocurrencies and other forms of digital assets across the nation. In addition, the Russian Central Bank has been doing extensive study into the feasibility of issuing a digital ruble, also known as a central bank digital currency (CBDC), which has the potential to enhance the effectiveness as well as the safety of the country’s various payment systems.

The fact that Russia’s biggest bank, Sberbank, has signaled its support for blockchain technology lends more credence to the idea that the technology might fundamentally alter the nature of the financial system in Russia. It is probable that blockchain technology will continue to see more acceptance as more financial institutions and governments throughout the globe understand the advantages of the technology. This will result in the creation of new possibilities for innovation as well as increased financial efficiency.


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Uniswap Officially Live on BNB Chain

Decentralized exchange Uniswap has now officially launched on BNB Chain, the smart contract blockchain platform created by Binance, following a successful governance proposal. This marks a significant milestone in the growth and adoption of decentralized finance (DeFi) within the cryptocurrency ecosystem.

Back in February, more than 55 million Uniswap (UNI) token holders voted in favor of a governance proposal initiated by 0x Plasma Labs to deploy Uniswap v3 on BNB Chain. The proposal was driven by the need for Uniswap to expand its reach and potentially drive further growth and adoption of DeFi. Prior to this event, Wormhole was chosen as the protocol’s designated bridge to BNB Chain in a Temperature Check vote. This process was undertaken to gauge the level of interest in making changes to the existing status quo.

According to the official announcement, Uniswap’s expansion to BNB Chain presents several advantages, including user growth, lower fees, and tapping into new geographical markets. Furthermore, the move to BNB Chain will bolster the Uniswap Protocol’s ability to serve users within the Web3 space, marking a significant step towards increasing accessibility and liquidity for its user base.

Uniswap Protocol users can now leverage the BNB Chain ecosystem to trade and swap tokens across the network. The integration also enables Uniswap to access a pool of liquidity within BNB Chain’s decentralized finance (DeFi) developer community, which could lead to increased awareness and adoption among both retail and institutional investors.

The announcement highlights that the launch aligns with the DeFi industry’s requirement for greater accessibility and cross-blockchain compatibility. Both Uniswap and BNB Chain are expected to experience further growth as a result of this collaboration.

Uniswap is a decentralized exchange built on the Ethereum blockchain, which allows users to trade various cryptocurrencies without the need for a centralized authority. Binance is one of the largest cryptocurrency exchanges in the world, known for offering a wide range of digital assets for trading. The launch of Uniswap on BNB Chain signifies a convergence of two major players in the cryptocurrency space, potentially benefiting both platforms and their users.

As the cryptocurrency ecosystem continues to evolve, the integration of Uniswap with BNB Chain could serve as a catalyst for further innovation and growth within the DeFi space, providing users with more options and opportunities for managing their digital assets.


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Bitcoin (BTC) $ 27,401.34 1.44%
Ethereum (ETH) $ 1,657.07 0.16%
Litecoin (LTC) $ 65.77 0.13%
Bitcoin Cash (BCH) $ 231.90 6.89%