Crypto News Headlines (24-Mar-2023)

News of the U.S. Securities and Exchange Commission’s action against Coinbase, the number one cryptocurrency exchange in the United States, spread like wildfire through the crypto community, prompting an existential debate over what it could mean for cryptocurrency in the United States.

“It should be crystal clear by now that the Biden Administration wants all crypto—even the legit parts of it—run out of the U.S.,” tweeted Custodia Bank founder and CEO Caitlin Long. “See also yesterday’s White House economic report, which dunked on all financial innovation while espousing the “stability” of traditional banks.”

A number of fintech payment companies and offshore banks are trying to fill the void left by the collapse of Silvergate Bank, Silicon Valley Bank and Signature Bank in the U.S., but it will likely take time before new banking networks are established, JPMorgan (JPM) said in a research report Wednesday.

“In the meantime, crypto market participants and investors appear to have become more reliant on stablecoins to move money around,” analysts led by Nikolaos Panigirtzoglou wrote. A stablecoin is a type of cryptocurrency whose value is pegged to another asset, usually the U.S. dollar.

The bank says stablecoin trading volumes spiked higher after March 8, when crypto-friendly bank Silvergate said it would voluntarily liquidate and wind down operations. It notes that tether (USDT) has captured a larger share.

Thailand’s Securities and Exchange Commission (SEC) is preparing to hold a new public Cryptocurrency firm Tether — the issuer of stablecoin, Tether USDT $1.00  — expects to make a $700 million profit in the first quarter of 2023, matching the profits of the last quarter of 2022, Tether chief technology officer Paolo Ardoino told Cointelegraph at Paris Blockchain Week 2023.

“I don’t have the final figures yet, but the profit of this quarter will probably match the last quarter of 2022,” Ardoino said, adding that in Q4 2022, Tether generated $700 million of profits. He added that Tether also has an “addition to that $950 million” on Dec. 31, 2022, noting:

“So it means that our company equity will grow to $1.5 billion or $1.7 billion that are on top of the reserves that we have that are backing 100% of the assets.”

In his weekly commentary published by New York-based asset manager Wisdomtree on Monday, Professor Jeremy Siegel shared his views on the U.S. economy, bank failures, and bitcoin’s price outlook. Siegel is a professor emeritus of finance at the Wharton School of the University of Pennsylvania who currently serves as a senior investment strategy advisor to Wisdomtree.

Following the collapse of several major banks, including Silicon Valley Bank and Signature Bank, many people have urged the government to guarantee all deposits temporarily to restore confidence in the banking system and avoid runs on smaller banks. Professor Siegel stressed:

I reiterate we need to have temporary insurance of all deposits everywhere until we can reform the entire deposit system.

Litecoin (LTC) creator Charlie Lee highlighted the advantages of Bitcoin (CRYPTO: BTC) on Twitter in relation to the problem posed by fake bullion bars.

What Happened: Lee reacted to a post by a Twitter user who shared a photo of a “gold” bar filled with tungsten, saying this was one of the reasons why “no one accepts gold as payment.” The user suggested that such fake gold bars go undetected as tungsten has the same density as the precious yellow metal.

The Litecoin founder said, “The reason why #Bitcoin fixes this is because everyone can easily and cheaply run their own node.”

“With your own node, it will verify whether or not you actually received BTC. Without it, you will need to rely on a third party. That’s why decentralization is of utmost importance.”

Venture capitalist firms are always on the hunt for the next big thing—especially when the current hype cycle starts to cool. Already well established in crypto initiatives, Andreessen Horowitz announced on Thursday an investment in software development company Character AI, developers of the Character AI chatbot.

The series A funding round totaled $150 million, was led by a16z, and includes investment from Nat Friedman, Elad Gil, SV Angel, and A Capital.

The United Arab Emirates expects to complete the first phase of its central bank digital currency strategy around mid-2024, its central bank announced on Thursday. This includes proof-of-concept work for a wholesale and retail CBDC.

The Central Bank of UAE (CBUAE) also revealed an engagement with G42 Cloud, a cloud platform from the region, and New York-based blockchain firm R3 as the infrastructure and technology providers respectively.

The first phase of the CBUAE’s CBDC (The Digital Dirham) is expected to be completed over the next 12 to 15 months and will include three major pillars, the announcement said.

Zurich-based digital asset bank Sygnum is seeing an influx in inquiries from international crypto firms looking for new banking partners following the recent collapses of crypto-friendly banks in the United States.

Dominic Castley, the chief marketing officer at Sygnum, told Cointelegraph in an email that they are receiving more onboarding inquiries from crypto firms based in various jurisdictions looking to bank with them. He explained:

“Over the past weeks, as the current banking industry events have unfolded, we have seen a significant increase in onboarding inquiries from various international locations, including a number from the UAE and the Middle East.”

The SEC’s ongoing legal battle with Ripple Labs is a high-stakes gamble with serious consequences that may soon come to an end. The case is being heard in the Southern District of New York, and if the judge decides to rule in favor of Ripple – even partially – by determining that the company did not violate securities laws, the SEC will suffer a major setback.

A ruling in Ripple’s favor would not only damage the SEC’s credibility but also set a precedent for future cryptocurrency cases. It could embolden other cryptocurrency companies to challenge the SEC’s authority, undermining its ability to regulate the industry effectively. With so much at stake, the Ripple case is undoubtedly causing some sleepless nights for the SEC. Kudos to Ripple for hiring Mary Jo White (ex-SEC Chairwoman).

The U.S. Securities and Exchange Commission’s pending enforcement action against crypto exchange Coinbase (COIN) may lead to more defined rules for the crypto industry, Brett Quick, head of government affairs at Crypto Council for Innovation, told CoinDesk TV’s “First Mover” on Thursday.

The danger, however, is that crypto companies may simply move outside the U.S., she said.

“There are other jurisdictions around the world that are looking at ways to embrace the technology, to embrace the innovation and the developers that are working on it and they’re establishing regulatory clarity,” Quick said.

On Wednesday, the SEC issued a Wells notice to Coinbase for allegedly selling unregistered securities on its exchange and through its staking service.