Coinbase Launches Layer 2 Blockchain Base to Provide On-Ramp for Ethereum, Solana and Others (CoinDesk)
"Crypto exchange Coinbase (COIN) launched Base, a layer 2 network built using Optimism's OP Stack, to attract millions of new crypto users in the coming years. The testnet of Base was started by Coinbase on Thursday. Coinbase is joining Optimism as a core developer on the open-source OP Stack, a developer toolkit for the Optimism network, the firm said. However, Base will not be limited to Ethereum, it will also provide easy and secure access to layer 2 networks such as Optimism, as well as other blockchains ecosystems like Solana."
Agencies Issue Joint Statement on Liquidity Risks Resulting From Crypto-Asset Market Vulnerabilities (Federal Reserve)
"Federal bank regulatory agencies today issued a joint statement highlighting liquidity risks to banking organizations associated with certain sources of funding from crypto-asset-related entities and some effective practices to manage those risks. Recent events in the crypto-asset sector have underscored the potential heightened liquidity risks presented by certain sources of funding from crypto-asset-related entities. The joint statement highlights key liquidity risks and some effective practices to monitor and appropriately manage those risks. The statement reminds banking organizations to apply existing risk management principles; it does not create new risk management principles."
SEC Objects to Binance.US’ $1B Voyager Deal, Alleging Sale of Unregistered Securities (CoinDesk)
"A $1.02 billion deal by Binance.US to purchase assets of defunct crypto lender Voyager Digital has been opposed by New York and federal finance regulators, who said in Feb. 22 filings it could prove discriminatory and unlawful. The move follows increasing interventions into crypto by the Securities and Exchange Commission, whose probes into the alleged sales of unregistered securities recently caused crypto exchange Kraken to shutter crypto staking operations in the U.S. Elements of the proposed Binance.US-Voyager deal may also infringe the law, given how the plan envisages repaying Voyager’s former customers, the SEC said."
IMF Calls for Coordinated Action Over Fears Crypto Could Undermine Global Monetary System (The Block)
"The International Monetary Fund took a seemingly tough stance toward growing crypto adaptation with a set of recommendations for member countries and a call for a "coordinated response." "The widespread adoption of crypto assets could undermine the effectiveness of monetary policy, circumvent capital flow management measures, and exacerbate fiscal risks," the organization said in a statement, referencing a discussion about crypto policies its executive board had earlier this month."
Binance Australia Closes Derivative Trading Accounts of Some Wholesale Investors (The Block)
"Binance closed the derivative trading accounts of some wholesale investors in Australia after an investigation found that they didn't meet the criteria for such investors. In Australia, Binance only offers crypto derivatives trading to wholesale investors. A spokesperson for Binance told The Block that the exchange giant discovered the discrepancy during a review of its onboarding process. These incorrectly labelled accounts have since had their positions closed. The owners of these accounts will also not be able to access the derivatives market on Binance anymore."
BA Top Shot NFT Creator Must Face Lawsuit to Determine Securities Status (Bloomberg)
"The creator of the National Basketball Association’s Top Shot NFTs must face a lawsuit accusing it of selling unregistered securities, marking a new development in a broader fight over how to classify cryptoassets like nonfungible tokens. In the suit, filed in 2021, purchasers of Top Shot Moments — digital video clips of highlights from NBA games — allege that Dapper Labs violated US securities law by offering the items without registering them with regulators and that Dapper improperly used its control over the popular collectibles."
Spotify Is Testing Token-Enabled Music Playlists (CoinDesk)
"Music streaming Spotify is testing a new service called "token-enabled playlists," which allows holders of non-fungible tokens (NFT) to connect their wallets and listen to curated music. Currently, the service is available to token holders within the Fluf, Moonbirds, Kingship and Overlord communities. The curated playlists will be actively updated during the three-month testing period and can only be accessed by community members via a unique link."
NY Attorney General Sues Crypto Exchange CoinEx, Alleges AMP, LBC, LUNA and RLY Tokens Are Securities (CoinDesk)
"The New York State Attorney General's office filed suit against crypto exchange CoinEx on Wednesday, arguing it is an unregistered securities broker and commodity broker-dealer under state law. CoinEx did not register as an exchange with the U.S. Securities and Exchange Commission (SEC), as a commodities broker-dealer with the Commodity Futures Trading Commission or with New York regulators prior to offering services in the state, the complaint said. Despite this, the company said it was an exchange on its website and offered services similar to those that national securities exchanges or other similar platforms may offer."
Self-Hosted Wallet Ban Avoided in New Draft of Eu’s Anti-money Laundering Bill (The Block)
"Self-hosted addresses, formerly known as “unhosted wallets” in the European Union's policies, are back in discussion as European Parliament staff look to clarify that lawmakers do not want an outright ban on non-custodial services. Privacy-enhancing crypto assets and “anonymizing instruments," including privacy wallets or crypto mixers, may be prohibited under the current text of the anti-money laundering regulation draft bill, according to documents seen by The Block. The latest changes to the text clarify that these restrictive provisions should not apply to self-hosted wallets in most cases."
Frax Finance Votes to Fully Collateralize Its $1 Billion Stablecoin (CoinDesk)
The community of Frax Finance, a decentralized finance protocol with some $2 billion in total value locked, voted to fully collateralize the protocol’s native stablecoin frax (FRX), according to a vote concluded Wednesday. Proposal FIP-188, posted last week on Frax’s governance forum, suggested setting the target collateral ratio to 100% using protocol earnings to increase the stablecoin reserves. The result represents a significant shift for FRX, the fifth-largest stablecoin with more than $1 billion in market capitalization, as it eliminates the algorithmic element of the stablecoin’s stabilizing mechanism."
Coinbase Fourth-Quarter Revenue Beats Estimates Despite Falling 57% Year-On-Year (The Block)
"Coinbase's fourth-quarter revenue beat estimates, with the exchange reporting revenue of $604.9 million compared to the $589 million FactSet estimate. Although ahead of expectations, full year revenue came in 57% lower than levels seen in 2021, down to $3.1 billion from over $7.3 billion. Coinbase said the firm and the industry were "largely resilient" despite "major shocks to the system" during the quarter and a 64% drawdown in the price of digital assets during 2022."
Bankman-Fried Resists Testifying in Voyager Digital Bankruptcy (Bloomberg)
"Sam Bankman-Fried is resisting efforts to make him testify in the bankruptcy case of the digital asset lender Voyager Digital Ltd. Lawyers for the co-founder of FTX, the cryptocurrency exchange that collapsed causing billions of dollars in losses, asked a federal judge in California Tuesday to block a subpoena from lawyers representing unsecured creditors in the bankruptcy case underway in New York."
Layer 2 Network Arbitrum Surpasses Ethereum in Daily Transactions (CoinDesk)
"On Tuesday, Feb. 21, layer 2 scaling system Arbitrum surpassed Ethereum in daily transactions, increasing Arbitrum’s dominance as the leading layer 2 rollup. The number of daily transactions on the Arbitrum, the fourth-largest blockchain overall in terms of total value locked (TVL), jumped from 159,919 in daily transactions on Jan. 1 to over 1,103,398 at the time of press, representing a roughly 590% increase in less than two months, according to block explorer Arbiscan."
Trading Platform eToro Gains New York Bitlicense to Provide Crypto Services (CoinDesk)
"Social investing and trading platform eToro secured a license to offer crypto services in the state of New York, the company said Tuesday. The New York State Department of Financial Services (NYDFS) approved a virtual currency license – known as a BitLicense – for the platform’s eToro NY LLC subsidiary along with a money transmitter license. Together, the two will allow users in the state to access eToro’s “virtual portfolio, integrated social investing tools and be able to trade stocks, crypto and options” once the platform is operational."
Microsoft and Ankr Partner to Offer Blockchain Node Infrastructure Service (The Block)
"Microsoft partnered with web3 infrastructure provider Ankr to offer a node service for enterprises in need of blockchain data access. The two firms will work together on a new node hosting service in Microsoft's Azure cloud marketplace, with tailored memory and bandwidth specifications for blockchain nodes. The enterprise node deployment service would enable web3 projects or developers to deploy smart contracts, relay transactions and read or write blockchain data, according to a company release."
Hong Kong’s Crypto Hub Ambitions Win Quiet Backing From Beijing (Bloomberg)
"In October, Hong Kong rolled out the red carpet for crypto businesses to help revitalize the embattled financial hub. Signs are now emerging the push has under-the-radar backing from Beijing, providing impetus for mainland Chinese firms to return. Representatives from China’s Liaison Office and other officials have been frequent guests at the city’s crypto gatherings over the past months, swapping business cards and WeChat details, said people familiar with the matter, who asked not to be named discussing private information. The encounters have been friendly, with officials checking on developments, asking for reports and in some cases making follow-up calls, the people said. The Liaison Office, the top mainland body based in Hong Kong, didn’t respond to a request for comment."
Another Member of Bankman-Fried’s Inner Circle Nears a Plea Deal in FTX Probe (Bloomberg)
"Another former member of Sam Bankman-Fried’s inner circle is planning to plead guilty to US criminal charges over his role in an alleged multiyear fraud at collapsed crypto exchange FTX. Nishad Singh has been hammering out a deal with Manhattan prosecutors as they prepare to file fraud charges against him, according to people familiar with the matter. Such an agreement could involve cooperating with authorities and further isolate Bankman-Fried, who has pleaded not guilty to an eight-count indictment and is awaiting trial. The deal with Singh still has to be finalized."
Fireblocks Testing ‘Off-Exchange’ Crypto Custody Solution: Financial News (The Block)
"Fireblocks is trialing a hybrid custody solution that its clients can use to safeguard their crypto even while trading on exchanges, according to a Financial News report on Friday. The proposed platform has been conceived as an “off-exchange” service. This platform will enable clients to keep their crypto assets in custody while trading on exchanges. The funds will only move out of the custody platform when the trades need to be settled. Huobi and Deribit have been added as partners in the project."
OpenSea Makes Changes to Fees Following Tension With Blur (The Block)
"OpenSea is dropping fees, citing a shift in the NFT ecosystem and coming shortly after Blur made its case for creators to list on its platform rather than OpenSea. OpenSea, the largest NFT marketplace, tweeted on Friday that it had started “started to see meaningful volume and users move to NFT marketplaces that don’t fully enforce creator earnings.” OpenSea cited events such as NFT marketplace Blur’s decision to roll back creator earnings and the “false choice they’re forcing creators to make between liquidity on Blur or OpenSea.”"
Crypto Fugitive Do Kwon Tapped Hoard of 10,000 Bitcoin Via Swiss Bank, SEC Says (Bloomberg)
"Crypto fugitive Do Kwon and the firm he founded transferred over 10,000 Bitcoin out of their doomed project and turned some of the tokens into cash via a Swiss bank, the Securities & Exchange Commission said. The allegations are in an SEC lawsuit accusing Kwon and the company, Terraform Labs Pte, of fraud over the wipeout of digital currencies he created. The SEC said the scheme led to losses of at least $40 billion."