Report Confirms Only 9 Crypto Companies Ever Registered With SEC
Despite pitching its process as simple, Axios reported last week that only nine crypto companies had attained some kind of registration with the Securities and Exchange Commission (SEC). The number of companies that have tried to register and failed, or given up on the process, is unknown. The Axios report follows a Fox Business journalist’s tweet of a list of registered companies under the regime of the 33rd Chair of SEC, Gary Gensler. While the released list got INX’s Alan Silbert to urge the SEC to “make a more friendly environment” for the registration and advance pending applications, Stuart Alderoty, the chief counsel of Ripple, advised emerging crypto companies not to launch in the US.
USDC Caught Up in SVB Failure
The issuer of USDC stablecoin, Circle, last week disclosed that $3.3 billion of its $40 billion USDC reserves remain at the failed tech- and crypto-focused lender, Silicon Valley Bank (SVB).
The first to collapse in more than two years among the banks insured by the Federal Deposit Insurance Corporation (FDIC), SVB is one of Circle’s six banking partners that manage ~25% of USDC reserves in cash.
After falling as low as US$0.8774 following the disclosure, the world’s second-largest stablecoin by market capitalization, later regained parity with the U.S. dollar after FDIC said it had taken over SVB.
Circle has since joined calls for SVB’s continuity as it awaits clarity on how the FDIC receivership of the bank will impact its depositors.
Top Miner Maker Reveals 60% Q4 2022 Revenue Drop
Bitcoin mining machine manufacturer, Canaan, last week released its Q4 and full-year financial reports for 2022. Its Q4 revenue was $56.8m, a 60% drop from Q3. Its CEO, Nangeng Zhang, attributes the “tough fourth quarter” to “the further sinking Bitcoin price” which led to lackluster market demand for mining machines. The soft market demand and low selling price also added to the gross loss, as it partially contributed to the depreciation in the company’s Bitcoin mining fleet. While already making preparation “for the approaching cyclical upswing in the Bitcoin price”, Canaan expects total net revenues of $65m in Q1 2023 based on a forecast that reflects its views on the market and operational conditions.
Mt Gox Claim Repayment Deadline Postponed By a Month
A Mt. Gox statement on March 9 shows that the deadline for claim application registration was changed from March 10, 2023, to April 6 while the repayment deadline moved from September 30 to October 31.
The Rehabilitation Trustee says it considered various circumstances such as the progress by creditors in respect of the selection and registration, as well as obtained the permission of the court before making the changes.
As the now-defunct crypto firm edges closer to disbursing assets, its largest creditor—Mt. Gox Investment Fund— says it plans to hold rather than sell Bitcoin that will be paid off later this year. Mt. Gox Investment Fund and Bitcoinica both account for a fifth of the total amount of 30,000 Bitcoin to be disbursed.
German Financial Regulator Looks to Class NFT Under AML Laws
The German Financial Supervisory Authority (BaFin) last week explained how it currently classifies non-fungible tokens (NFT) under supervisory law. In its regulatory audit of NFTs, BaFin says it is proceeding in the same way it categorizes fungible tokens. It adds that while NFTs would have to embody securities-like rights and be transferable and tradable on the financial market to be classified as securities, it is unaware of any NFTs that can be classified as securities in the regulatory sense. It could be classified as an investment, though, and can be misused for money laundering.
Since NFTs are based on the same systems as other crypto assets and may be subject to price manipulation, BaFin considers NFTs as potential vehicles for money laundering and will hence fall under BaFin's anti money laundering (AML) supervision.
US Fed Creating a Specialized Team to Learn from Crypto Sector
In an article on cryptocurrencies published last week, the US Federal Reserve Vice Chairman, Michael S. Barr, hinted that the central banking system is creating a team of experts to help them learn from new developments in the crypto sector. The move is part of efforts to create guardrails while allowing innovation to benefit consumers and the financial system more broadly.
Barr stressed the need to balance innovation with safeguards. He added that the Federal Reserve has been working with other bank regulatory agencies to consider whether and how certain crypto-asset activity can be conducted in a manner consistent with safe and sound banking.
US State Governor vetoes Bill Excluding Cryptocurrencies as Money
For leaving out cryptocurrencies like Bitcoin, as well as other digital assets, from its definition of "money", the Governor of South Dakota last week vetoed House Bill 1193 saying it would put citizens at a business disadvantage.
Kristi Noem says House Bill 1193 would change provisions in the Uniform Commercial Code, a uniformly-adopted comprehensive set of state laws governing all commercial transactions. By excluding cryptocurrencies as money, she said it would become more difficult for South Dakota citizens to use cryptocurrency. The governor added that the bill, as proposed, opens the door to the risk of a federal government-backed central bank digital currency which could become the only viable digital currency.
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