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On Monday, American Banker continued its look into the troubles for fiat/crypto rails provider Silvergate Capital Corporation and something called “brokered deposits,” a.k.a. “hot money.” Dennis McFadden of Better Markets, a DC-based organization with interests in financial markets, offers his opinion to AB’s Claire Williams: “Like water seeping into the cracks of a foundation, crypto companies have been relentless in attempting to penetrate the core of the banking business for years and this appears to be one of the cracks.” Read more (subscription). And visit the FDIC to read more on brokered deposits.
McFadden’s LinkedIn profile says that he was part of the Biden-Harris Transition Federal Reserve, Banking and Securities Agency Review Team in addition to past senior staff roles with three Democratic Senators.
Also, in early January, he penned an op-ed for the Financial Times which offered support for the work of the SEC in 2022 while simultaneously delivering a scathing indictment of the CFTC due to the FTX implosion. Read it.
need banking partner
Cryptocurrency exchange Binance is suspending US Dollar bank transfers beginning February 8 according to notices sent to customers and reported by The Wall Street Journal. A spokesperson says the suspension was expected to last a “couple weeks” until a new banking partner could be established. No other reason was given as to why they lost their current unnamed partner. Last month, The Washington Post reported that Binance was “part of a long-running investigation into potential violations of money-laundering rules.” The U.S. attorney’s office for the Western District of Washington in Seattle is involved. Read more.
speaking of crypto
Senator Cynthia Lummis (R, WY) will appear on March 13 at the popular creative, media and technology conference, SXSW, in Austin, Texas. Her “Responsible Financial Innovation Act” (RFIA) was introduced last June with co-sponsor Sen. Kirsten Gillibrand (D, NY). It’s still very early in the 118th Congress, but RFIA will be likely reintroduced soon. Maybe by March 13? Among those joining her are executives from Coinbase and Circle as well as Peter Kerstens, an advisor at the European Commission who helped create Market in Crypto-assets Regulation (MiCA), the European regulatory regime focused on crypto. See the SXSW schedule.
And, here’s a recent video by Fried Frank Regulatory Intelligence with Karstens explaining what MiCA is.
loans for JPEGs
“NFTfi, a DeFi (decentralized finance) protocol which allows users to list their NFTs as collateral in order to solicit loans from would-be lenders, hit a record high of 4,399 loans disbursed in January,” writes The Defiant’s Owen Fernau. But, he adds that in dollar terms, it doesn’t eclipse the all time high from April 2022 when it hit $47.8 million. See the graphs.
Entrepreneur and author Matthew Ball offers up research yesterday with some impressive graphs showing how the word “metaverse” has catapulted from non-existence in 2020 to today’s hyped, new catchphrase using data from filings with the SEC and the US Patent and Trademark Office. Example: 16 mentions in 2020 SEC filings; 2934 mentions in 2022. See them.
what about a commission?
Congressional Research Service (CRS) has produced a new document titled “Congressional Commissions: Overview and Considerations for Congress.” The purpose of the latest research is not ascribed to digital assets or any issue in particular for that matter. But, it does beg the question whether the complexities of blockchain technology legislation or decentralized finance, in particular, may invite the Commission format.
From the research: “Commissions can allow for the examination of complex policy issues over a longer period and in greater depth than may be practical for legislators. (…) the nonpartisan or bipartisan character of most congressional commissions may make their findings and recommendations more politically acceptable, both in Congress and among the public.” Read the research.
digital stores of value
“While the digital asset ecosystem is still only a decade old, I believe we’re in the midst of a fundamental, once-in-human-history transition from physical stores of value to digital stores of value,” says Derek Edwards Schloss, venture capitalist and digital art collector, in a Medium piece focused on the transformation which Web3 is inspiring. Read it. If you’re wondering why crypto and NFTs are popular, this might help. Digital life is expanding.
Sound crazy? Not in Japan. According to Politico yesterday, Japan’s Prime Minister Fumio Kishida suggested that his country could take cues from the digital world and “organize its population using DAOs (Decentralized Autonomous Organizations).”
events – inside the beltway
- February 8, 10am- House e Financial Services Subcommittee on Financial Institutions and Monetary Policy hearing: “Revamping and Revitalizing Banking in the 21st Century“
- February 13 – Global Markets Advisory Committee – CFTC
- February 14 – Senate Banking hearing: “Crypto Crash: Why Financial System Safeguards are Needed for Digital Assets”
- March 21 – DC Blockchain Summit 2023 – Chamber of Digital Commerce
events – outside the beltway
- February 8 – Cryptocurrency Regulation Virtual Conference – UC Berkeley – CFTC Commissioner Kristin Johnson to participate
- February 8-9 – Big Techs in Finance – Bank for International Settlements (BIS) – CFTC Commissioner Caroline Pham to participate on Day 2
- February 24 – March 5 – ETH Denver – Denver, CO
- February 27-28 – INTEROP Summit – Denver CO
- For all events, visit blockchaintipsheet.com/events
You want more
- Digital pound likely this decade, Treasury says – BBC
- FTX Bankruptcy Lawyers Say Independent Examiner Would Put Assets at Risk – Decrypt
- Cryptocurrency in Africa: Alternative Opportunities for Advancing the Sustainable Development Goals? – United Nations Development Programme
- “Can the pioneer of blockchain gaming survive the crypto winter?” (subscription) – Financial Times
- BAYC creator Yuga Labs settles trademark infringement lawsuit – The Block
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