Sam Bankman-Fried Could Have Some Charges Dropped if Bahamas Objects (WSJ)
The Justice Department said it would drop some of the criminal charges against FTX founder Sam Bankman-Fried if the Bahamas says they violate the terms of his extradition to the U.S. Federal prosecutors said in a filing late Monday that they were waiting on the Bahamian government’s approval of three additional counts that they brought against Bankman-Fried after his arrest and extradition in December. “The government will proceed on the new charges…if The Bahamas consents to trial on these charges, and will not proceed on those counts if The Bahamas denies the Government’s request,” prosecutors said.
Tether Market Cap Climbs to All-Time High of $83.2B, Even as Stablecoin Market Sinks (CoinDesk)
Stablecoin issuer Tether’s USDT has regained its previous all-time high market capitalization despite a shrinking stablecoin market. USDT reached an $83.2 billion market capitalization on Thursday, the company reported, equaling its previous peak little more than a year ago. It has recovered all of the $18 billion it lost since the dramatic implosion of blockchain project Terra in May 2022 and following market rout. Tether’s milestone is significant as it runs counter to a 14-month stablecoin market decline. Stablecoins are a $129 billion subset of cryptocurrencies and key plumbing in blockchain-based finance, bridging government-issued fiat currencies with digital assets and facilitating trading.
Hong Kong-Based First Digital Introduces USD Stablecoin (The Block)
Hong Kong-based qualified custodian and trust company First Digital is introducing a new stablecoin that will be pegged to the U.S. dollar but regulated in Asia. Dubbed "First Digital USD," or FDUSD, the coin is intended to be backed on a one-to-one basis by one U.S. dollar or asset of equivalent fair value, the company said in a statement, adding that the reserves would be held in segregated accounts at institutions in Asia. The stablecoin is programmable and capable of enabling the execution of financial contracts, escrow services and insurance without intermediaries, First Digital said.
Coinbase, Binance and Other Crypto Firms Bolstered Their Lobbying Efforts Last Year (WSJ)
U.S. crypto firms boosted lobbying spending in the U.S. last year, following a rise in crypto asset prices and during a series of company collapses. Forex Suggest, using data from research group OpenSecrets, found that crypto companies spent $11.9 million last year on U.S. lobbying efforts, up from $7.7 million in 2021.
Treat Crypto as Securities by Default, European Parliament Study Says (CoinDesk)
Crypto assets should be treated as securities by default, and the autonomous organizations that govern decentralized finance (DeFi) should be granted legal status, according to a study commissioned by lawmakers at the European Parliament that was published Tuesday. The report comes as the European Union finalizes its Markets in Crypto Assets (MiCA) regulation, and considers whether a sequel will be needed to cover extra areas like DeFi, staking and non-fungible tokens (NFTs). All crypto assets should be deemed a transferable security – implying they would fall under the EU’s tough governance and authorization rules that apply to traditional stocks and bonds – unless and until a national regulator says otherwise, the report says.
MakerDAO Paves Way for Additional $1.28B U.S. Treasury Purchase (CoinDesk)
The community governing MakerDAO, the decentralized autonomous organization (DAO) behind stablecoin DAI, has paved the way to purchase up to an additional $1.28 billion in U.S. government bonds via crypto asset manager BlockTower Capital. Voters unanimously favored opening a new real-world asset (RWA) vault named BlockTower Andromeda, according to a vote concluded on Thursday. The vault is dedicated to investing a maximum of $1.28 billion in short-dated U.S. Treasury bonds funded by Maker’s overcollateralized DAI stablecoin, according to the proposal. Maker will pay a 0.15% arranger fee to BlockTower. Celadon Financial Group will act as a broker and Wedbush Securities will custody assets.
TradFi Giant TP ICAP Brings Crypto Spot Trading to Institutional Investors (CoinDesk)
TP ICAP, the world’s largest interdealer-broker, announced last week that its Fusion Digital Assets marketplace for spot crypto trading had gone live with its first trade. The traditional finance giant is bringing crypto to more institutional investors during a prolonged bear market and after a number of headline-grabbing scandals rocked the industry. “While the crypto-native landscape still feels a little somber, when we look at our traditional client base and we look at the relationships we’ve been developing, it actually feels reasonably optimistic," Simon Forster, global co-head of Digital Assets at TP ICAP Group, told CoinDesk. "There’s a lot of people building interesting things. And it feels like 2022 is this watershed moment where the crypto landscape has changed we think probably forever."
Investment Bank Cowen Shuts Down Crypto Digital Asset Unit (Bloomberg)
The boutique investment bank Cowen Inc. is shuttering a digital-asset unit that was launched to offer institutional clients access to cryptocurrency trading. ‘Today will be the last day for the team here at Cowen Digital,’ according to an email seen by Bloomberg News, which was addressed to clients, friends and colleagues. The note listed at least 10 employees and an intern as part of the group’s team. A Cowen spokesperson declined to comment.
Binance Taps Teng to Run All Regional Markets in Swift Ascension (Bloomberg)
Binance tapped Richard Teng to head all its regional markets outside of the US, a swift and steady ascension for the executive that joined the world’s biggest crypto exchange just under two years ago. Teng’s new position, effective Monday, is an expansion of his previous role leading Asia, Europe, Middle East and North Africa, according to a company spokesperson. He joined the firm in August 2021 as Chief Executive Officer of Singapore, and rapidly climbed the ranks amid a tumultuous time in the digital assets sector.
Binance Discloses Investigation by Canadian Securities Regulator (Bloomberg)
Crypto exchange Binance Holdings Ltd. said it has received an order from one of Canada’s securities regulators to investigate whether the platform attempted to find a way around local regulations and compliance controls while seeking approvals in the country. The Ontario Securities Commission served the world’s largest digital asset exchange with an investigation order on May 10, the platform said in a filing this month with the Capital Markets Tribunal. Two days later, Binance announced it would be withdrawing from the market, citing new regulatory guidance related to stablecoins and investor limits.
Multichain Can't Find Its CEO as Company Loses Access to Its Servers (Decrypt)
Multichain continues to run into problems, now at the protocol level. Last week, rumors surfaced that Chinese authorities had arrested several Multichain executives, including Chief Executive Officer Zhaojun. Although the arrests still haven't been denied or confirmed by authorities, Binance was forced to respond to the news and suspend certain token deposits. Law enforcement officials are rumored to have taken control of a $1.6 billion wallet belonging to the company, according to several Twitter accounts.
Binance Explores Letting Some Traders Keep Collateral at a Bank (Bloomberg)
Binance is discussing a proposal to let some of its institutional clients keep their trading collateral at a bank instead of with the crypto platform, a step that could help reduce counterparty risk. The world’s largest crypto exchange has spoken to some of its professional customers about a setup that would allow them to use bank deposits as collateral for margin trading in spot and derivatives, according to four people familiar with the matter.
U.S. CFTC Warns About Clearing Derivatives Tied to Digital Assets (CoinDesk)
U.S. Commodity Futures Trading Commission (CFTC) staff are warning companies to be wary of and actively counter risks from clearing digital asset transactions, and Commissioner Kristin Johnson said the agency should turn this advisory into a full-blown rule-writing effort. The CFTC's Division of Clearing and Risk sent out the advisory on Tuesday, saying it would put a special focus on the emerging risks in crypto in response to an upswing in its supervised entities clearing such trades. These risks include potential conflicts of interest, protections against cyber threats and how firms are managing physical delivery of digital assets in transactions requiring delivery. The agency said it expects companies “to actively identify new, evolving, or unique risks and implement risk mitigation measures tailored to the risks.”
Former Coinbase Employee Agrees to Cooperate in Future SEC Investigations (The Block)
Former Coinbase employee Ishan Wahi reached a settlement with the U.S. Securities and Exchange Commission over insider trading charges related to the front-running of token listings by Wahi and others. As part of the settlement, filed in a federal court in Seattle on Tuesday, Wahi agreed to be interviewed in connection with other SEC investigations and actions. Coinbase disclosed in late March that the SEC gave notice of an investigation into the company’s digital asset listings, staking-as-a-service, institutional trading and wallet services. Wahi’s cooperation agreement with the SEC applies to his own case “and any related judicial or administrative proceeding or investigation commenced by the Commission or to which the Commission is a party,” meaning he could cooperate in the separate investigation.
Optimism, SUI Set for Large Token Unlocks, Worth a Combined $650 Million (The Block)
Crypto networks Optimism and Sui are set for token unlocks this week that will see each of their circulating supply of tokens increase significantly. Ethereum Layer 2 network Optimism is seeing the largest unlock, according to Token Unlocks, with 387 million tokens set to be released on May 31 — worth $590 million. This represents 9% of the total supply of tokens and a 114% increase to the current circulating supply. The tokens will primarily be split between core contributors and investors. This comes a week ahead of Optimism's Bedrock upgrade, which is set to lower fees and improve performance. That said, the price of Optimism's native token OP has still dropped from $1.64 to $1.52 in the last 24 hours — ahead of the unlock — down 6%.
MoonPay CEO, Other Executives Cashed Out Before Crypto Business Dropped (The Information)
In November 2021, just as crypto prices were hitting all-time highs, MoonPay—a crypto payments startup that celebrities including Jimmy Fallon and Paris Hilton had praised for its non-fungible token “concierge” service—announced it had completed its first ever outside fundraising: an eye-popping $555 million round at a $3.4 billion valuation from investors including Tiger Global Management and Coatue Management. There was more to the deal than met the eye.
Genesis, Gemini Seek Dismissal of SEC Lawsuit Over Lending Product (The Block)
Crypto exchange Gemini and financial services firm Genesis have filed motions to dismiss a lawsuit filed earlier this year by the Securities and Exchange Commission. The SEC sued the two companies in January, arguing that the Earn program constituted an unregistered offer and sale of securities under U.S. law. In a Friday court filing, Genesis argued Earn involved the creation of loans, not securities, contending that the SEC "has not plausibly alleged facts that would transmogrify these loans into either investment contracts or security notes." Similarly, Gemini said in its filing that "the SEC seeks to turn the Earn program into something it was not: the sale of unregistered securities."
Singapore’s Temasek Cuts Staff Compensation After Failed FTX Investment (Reuters)
Singapore's Temasek Holdings (TEM.UL) said it cut compensation for the team that recommended investing in the now-bankrupt FTX cryptocurrency exchange and for senior management, as they take "collective accountability" for the failed investment. The cuts were disclosed in a statement on Monday, a rare announcement for sovereign funds whose investment decisions and compensations are not public knowledge. The move comes around six months after Temasek initiated an internal review of its investment in FTX, which resulted in a writedown of $275 million.
Russia Drops Plans for State-Run Crypto Exchange (Decrypt)
Russian lawmakers have decided to end plans for creating a state-owned cryptocurrency exchange, planning instead to set rules and regulations for already existing enterprises, a Russian news outlet reported Sunday. Colin Wu of Wu Blockchain broke the story on Twitter early Monday morning. He linked a translation of a Russian news outlet that explained that the country’s new focus would be to allow private companies to build crypto exchanges