ProBit Bits — ProBit Global’s Weekly Blockchain Bits Vol. 42

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BIS to Launch Project for Monitoring Stablecoins

As part of its priorities for 2023, the Innovation Hub of the Bank for International Settlements (BIS) last week announced that it is working on a program that includes a new experiment by its London Centre for the systemic monitoring of stablecoins.

Called Project Pyxtrial, the initiative seeks to ensure that stablecoin issuers maintain sufficient reserves by monitoring their balance sheets. It will be a tool for central banks to avoid asset-liability mismatches. The BIS notes that Project Pyxtrial will also investigate “various technological tools that may help supervisors and regulators to build policy frameworks based on integrated data.”

 Ex-Coinbase Manager Admits Guilt in Crypto Insider Trading Case

Nikhil Wahi, 26, was the first to admit guilt in an insider trading case involving the cryptocurrency markets (see ProBit Bits Vol. 22) and was recently sentenced to 10 months in prison for using misappropriated information about crypto asset listings on Coinbase.

Now, Ishan Wahi, his brother and a former product manager at the crypto exchange, has pleaded guilty to two counts of conspiracy to commit wire fraud despite initially pleading not guilty last year.  Ishan Wahi admitted in a Manhattan court last week that he knew that the information he provided would be used by his brother and his friend, Sameer Ramani, to make trading decisions. The third defendant, Ramani, is at large.

 Coinbase CEO Argues for Staking in US

The CEO of Coinbase, Brian Armstrong, last week argued against plans to rid the US of crypto staking for retail customers. In a Twitter thread, Armstrong voiced that the alleged plan by the US Securities and Exchange Commission (SEC) “would be a terrible path for the U.S. if that was allowed to happen.”

He maintained that staking is an important innovation in crypto that fosters users’ direct participation in running open crypto networks and ensures other positive developments like scalability, increased security, and reduced carbon footprints.

Coming up with clear rules that would see new technologies grow in the US, especially in the financial services and Web3 spaces, should be given priority, he suggests, while the national security interests in the US are preserved.

“Regulation by enforcement doesn’t work. It encourages companies to operate offshore, which is what happened with FTX,” Armstrong claimed.

 SEC’s Exams Division Lists Crypto Assets, Other Emerging Tech as 2023 Priority

Last week saw the Examinations Division of the US SEC announce its priorities for 2023. Published annually to provide insights into its risk-based approach across a diverse registrant base, the selection for 2023 includes emerging technologies and crypto assets. The Division plans the examinations of registrants to focus on the offer, sale, recommendation of, or advice regarding trading in crypto or crypto-related assets.

The aim is to determine whether a registered firm “(1) met and followed their respective standards of care when making recommendations, referrals, or providing investment advice; and (2) routinely reviewed, updated, and enhanced their compliance, disclosure, and risk management practices.”

 No Crypto Ads During 2023 NFL Super Bowl

Unlike last year’s NFL Super Bowl which was dubbed the “Crypto Bowl”, AP reported last week that the sporting event did not include any crypto advertising.

Four crypto companies—FTX, Coinbase,, and eToro—ran splashy commercials worth $54M in 2022 as part of a larger effort by crypto companies to break into the mainstream with sports sponsorships. But with the FTX exchange crash, and other crypto-related bankruptcy cases, 2023 didn’t see any crypto ads.

In a related development, Reddit collaborated with the NFL to offer minted 500,000 limited-edition Super Bowl-themed NFTs for the two finalists competing for the trophy. The Super Bowl NFT avatar, which went live on February 6, reportedly contributed to a single-day transaction volume increase of NFT on OpenSea to $11.4 million on February 8.

 Dubai Prohibits Privacy Cryptos Across Emirate

Last week, the Dubai Virtual Assets Regulatory Authority [VARA] enacted its Virtual Assets and Related Activities Regulations 2023 to set out the regulatory framework that will govern virtual assets and all related activities in the Emirate.

With Dubai thriving for its crypto-readiness—recently ranked first in the Middle East and second globally as a cryptocurrency hub—VARA’s effective regulation aims to ensure market integrity and stability, and consumer protection, amongst other things.

A key highlight of the enactment is the regulatory body’s prohibition of the issuance of anonymity-enhanced cryptocurrencies and all activities related to them in the Emirate. Top privacy cryptocurrencies include Monero (XMR) and ZCash (ZEC).

 Debtors Arrange for Recipients to Return FTX Funds Voluntarily  

Affiliated FTX debtors last week announced that they have started sending confidential messages to political figures, political action funds, and other recipients of contributions or other payments that were made by or at the direction of the FTX Debtors, Samuel Bankman-Fried or other officers or principals of the FTX Debtors.

The debtors, who had earlier announced that $5.5 billion of FTX’s liquid assets had been identified, said they established arrangements for such recipients to return funds voluntarily by making contact via email.

It could be recalled that the top crypto news platform, CoinDesk reported that one in three US lawmakers received cash contributions from FTX. The platform identified 196 US lawmakers who took money directly from Sam Bankman-Fried and other former FTX executives.

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