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

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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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  • Xinjiang launches special campaign to combat illegal fundraising, with key areas including virtual currency, blockchain, etc.

    According to Chang'an Xinjiang Public Account, Xinjiang Autonomous Region and Corps have launched a joint special action to crack down on illegal fund-raising, with key areas including third-party wealth management, fake private equity, fake gold exchange and other traditional fields, as well as emerging fields such as virtual currency, blockchain, cultural tourism, film and television investment, and debt resolution services. It is reported that key cases include cases involving more than 100 million yuan and cases that have been criminally filed for more than five years.

  • A British court has postponed the final sentencing of Wen Jian, a British-Chinese national involved in the country's largest Bitcoin money laundering case, until May 24.

    On May 11th, it was reported that Jian Wen, a 42-year-old British Chinese citizen, was found guilty of "participating in arranging money laundering" in the UK's largest Bitcoin money laundering case. He could be sentenced to up to 14 years in prison. Jian Wen's defense lawyer, Mark Harries, stated that due to the judge's busy schedule, the UK court has postponed Jian Wen's final sentencing, which was originally scheduled for May 10th, to May 24th.

  • Web3 startup Star Nest completes $6 million in Pre-A round of financing

    Hong Kong Web3 music startup Star Nest announced that it has completed a $6 million Pre-A round of financing, led by Chuangqi International Limited, a wholly-owned subsidiary of Hong Kong Stock Exchange-listed company Guofu Innovation. Star Nest will collaborate with Armonia Meta Chain to develop the Star Nest SpaceStar metaverse game, which includes music, role-playing, and social features.In addition, Star Nest plans to launch its NEST project in the third quarter of 2024. Nest will receive 2.1 billion NEST tokens tailored for the project, and Star Nest will use the NEST token to build a more complete music industry token economic system. The NEST token will be widely used for purchasing performance tickets, chain game cooperation, metaverse consumption, governance voting, and other activities.

  • Over $594 million worth of PYTH is staked

    According to Dune data,  there are currently 1,201,167,362 PYTH tokens in the staked state, with a total staked value exceeding $594 million. The number of PYTH stakers has reached 151,211.

  • US Department of Justice: Tornado Cash indictment has nothing to do with "free speech"

    On May 11th, the US Department of Justice explained why the motion to dismiss the criminal case against Tornado Cash founder Roman Storm was invalid. The Department of Justice reiterated that their indictment was not related to whether the Tornado Cash computer code had freedom of speech or was protected by the First Amendment of the Constitution. The defendant was not charged for publishing computer code, but for using it to facilitate profitable illegal activities.

  • USDC circulation decreased by $100 million in the past week, with a total circulation of $33 billion

    According to official data，as of May 9th, Circle has issued approximately $2 billion USDC and redeemed approximately $2 billion USDC in the past 7 days, with a decrease in circulation of approximately $100 million. The total circulation of USDC is $33 billion, with a reserve of $33.1 billion, including approximately $3.3 billion in cash and Circle Reserve Fund holding approximately $29.8 billion.

  • SEC rejects Coinbase's request for appeals court ruling on cryptocurrency rules

    The US SEC has rejected Coinbase's request to appeal to the court to review whether traditional securities rules are applicable to cryptocurrencies. In its application, Coinbase stated that it hoped the appeals court would consider whether the Howey test, which has long been used for securities evaluation, should be applied to digital assets. However, the SEC pointed out that Coinbase has not successfully demonstrated the need for such an evaluation. The SEC stated that Coinbase is attempting to create a "new legal test," but this attempt was rejected by the court. The court found that Coinbase's arguments lacked consistency and did not successfully demonstrate the existence of decisive issues. Currently, the judge responsible for hearing the SEC's case against Coinbase will make a ruling on Coinbase's intermediate appeal motion.

  • Colombian President Suspected of Accepting $500,000 in Illegal Crypto Donations

    Colombian President Gustavo Petro is suspected of accepting over $500,000 in digital token donations from a fraudulent cryptocurrency project during his 2022 election campaign. A former contractor revealed that the illegal donation occurred during a meeting in February 2022 that discussed the advantages of cryptocurrency and the possibility of working with the government. This allegation is one of the latest charges faced by President Petro during his election campaign, with the Colombian Prosecutor's Office investigating his campaign last year.

  • The 133rd Ethereum ACDC meeting: The goal is to complete the devnet within 7-10 days

    The Ethereum developers held their 133rd ACDC conference call. First, they outlined the latest research on Ethereum protocol confirmation rules. Then, they discussed Pectra updates related to EIP-7547 and CFI states, and decided to put them on hold temporarily. They also updated the v1.5.0-alpha.1 specification. Regarding the implementation updates for devnet-0, most teams are making progress, but there are also some unexpected complexities. The goal is to complete devnet within 7-10 days.

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