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Silicon Valley Bank and Silvergate Bank Implode; USDC Stablecoin Depegs From $1 | Cointime Weekly Mar.05 – Mar.11

Top stories

Silicon Valley Bank Closed by California Regulator

All insured deposits at Silicon Valley Bank, popular with start-ups and venture capitalists, were immediately transferred to DINB. Insured depositors will have access to their insured deposits by March 13, according to an FDIC announcement.

Circle Has $3.3B Stuck With SVB, USDC Depegs From $1

Circle affirmed that it would utilize its corporate resources to compensate for any shortage in case SVB fails to return the entire $3.3 billion cash reserves. "USDC will continue to be exchangeable one-to-one with the US Dollar." The firm said.

USDC stablecoin lost its peg to the U.S. dollar, dropping as low as $0.88. Other stablecoins like DAI, USDD also witnessed a heavy depegging

Silvergate Closes as Crypto Banking Concerns Spread

Silvergate Capital confirmed it was voluntarily liquidating the Silvergate Bank and winding down operations. By Thursday, the markets were plummeting, seeing Silvergate shares tumble 42.1% by market close. The crypto market followed, with bitcoin dropping to its lowest point in seven weeks, below the $20,000 level.

Meta Is Building a Decentralized, Text-Based Social Network

Meta is in the early stages of building a dedicated app for people to post text-based updates. “We’re exploring a standalone decentralized social network for sharing text updates” 

Global regulations

Biden Proposes 30% Tax on Crypto Mining Electricity Usage

Any firm using computing resources, whether owned by the firm or leased from others, to mine digital asset would be subject to an excise tax equal to 30 percent of the costs of electricity used in digital asset mining.

CFTC Chair Says Ethereum and Stablecoins Are Commodities

Rostin Behnam, the chairman of the Commodities and Futures Trading Commission (CFTC), said Ethereum, the second-largest cryptocurrency next to Bitcoin, and stablecoins, are commodities.

DAO Gets Legal Recognition in the US As the Utah DAO Act Passes

This new law provides legal recognition and limited liability to DAOs, legally framing them as "Utah LLDs." The Act was the result of combined efforts between the Digital Innovation Taskforce and the Utah Blockchain Legislature.

China’s Parliament Member To Propose NFT Regulation at ‘Two Sessions’

Feng will propose to establish a clear legal definition of digital collectibles, lay out market access rules for NFT trading platforms and enhance copyright protection for NFTs, according to a local media report on Wednesday.

Crypto weekly price action

Research and technology

Smart Contract Platforms Fully Explained

We’ll define what a smart contract platform is, examine why there are many different smart contract platforms, and provide a general framework for the comparison of smart contract platforms.

Optimistic vs. Zero-Knowledge Rollups

Blockchain rollups offload certain transaction processes to a secondary chain while storing transaction data on the main Layer 1 blockchain.

Exploring the Chinese Crypto Token Narrative

The regulatory environment for cryptocurrencies in China remains strict, and geopolitical tensions between China and other countries could impact the growth of Chinese tokens.

How AI Can Enhance Cybersecurity

In this article, we present a review of the current state-of-the-art in the application of deep learning to secure software.

Fundraising and investment

Ethereum L2 Scroll Network Raised $50 Million

Scroll declined to comment on the valuation and the structure of the round, but a source with direct knowledge of the matter said that the round brings Scroll's valuation to $1.8 billion.

Web3 App Kresus Raises $25M To Bridge Consumers to Blockchain

The Series A funding round was led by Liberty City Ventures, with additional participation from JetBlue Ventures, Craft Ventures, Franklin Templeton, Marc Benioff and Cameron and Tyler Winklevoss.

Lionel Messi Backs Web3 Soccer Game Startup Matchday in $21M Round

Matchday, a soccer-centric Web3 gaming startup, announced today that it has raised $21 million in seed funding to develop a suite of games—with legendary soccer player Lionel Messi’s venture capital firm onboard.

Hexa Raises $20.5 Million to Take Real Objects to the Metaverse

The round, which saw the participation of Point72 Ventures, Samurai Incubate, Sarona Partners, and HTC, will allow the company to extend its current workforce to tend to the growing number of customers seeking its services.

Crypto Payroll Startup Toku Raises $20 Million

Toku announced it’s raised $20 million in an initial round led by Blockchain Capital and other investors, including the law firm Orrick and the founders of Protocol Labs and infrastructure firm Alchemy.

Viral Quotes

"Banks are a risk to fiat-backed stablecoins" 

 — CZ, CEO of Binance

“Trust is a fragile thing. We have learned this the hard way in banking. I believe it contains useful lessons for crypto.”

— Michael Hsu, the acting head of the U.S. Office of the Comptroller of the Currency (OCC)

"Getting closer to money printer go brrrr.  Remember in 2008 they tried TARP first, market kept falling and FIs kept biting the dust. Then they eventually switched on the money printer. I surmise this might follow a similar trajectory.  Let’s see how big the bazooka is."

— Arthur Hayes, co-founder of BitMEX 

"The U.S. banking system is on the verge of a much bigger collapse than 2008."

— Robert Kiyosaki, author of Rich Dad Poor Dad

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