Kraken’s staking down, FTX post-bankruptcy hell, Binance news…

This Week’s Top Stories

Kraken reached a $30M settlement with the SEC over staking as the IRS sought user information

Kraken has agreed to stop offering staking services or programs to United States clients after reaching an agreement with the US Securities and Exchange Commission (SEC). Along with ceasing operations, the crypto exchange will pay $30 million in disgorgement, prejudgment interest and civil fines. The SEC claimed that Kraken failed to register the program as a securities offering. The move sparked controversy at the SEC. Commissioner Hester Peirce publicly criticized her own agency for the shutdown, saying regulation with enforcement “is not an efficient or fair way to regulate” the growing industry.

FTX CEO testifies to ‘pure hell’ after exchange’s bankruptcy day

John Ray, who took over as CEO of the crypto exchange FTX, has described in a court hearing some of the chaotic experience at the firm after the company declared bankruptcy. According to Ray, “there is no list of anything” related to bank accounts, income, insurance or personnel, causing “a huge scramble for information.” As bankruptcy proceedings continue, the names of the two guarantors who signed on to part of Bankman-Fried’s $250 million bailout will remain withheld for now, following a last-minute appeal. In another headline, a federal judge rejected a joint agreement between Bankman-Fried’s legal team and prosecutors that allowed her to use certain messaging apps, including Facebook Messenger.

Binance temporarily suspends bank transfers in US dollars

Binance has temporarily suspended United States dollar (USD) deposits and withdrawals via bank accounts. The suspension is not explained, and no other trading methods will be affected. The freeze only applies to international users, as Binance.US states that its customers will not be affected. The crypto exchange giant has faced banking challenges in the U.S. Recently, Binance’s SWIFT transfer partner, Signature Bank, said it would only process trades by users with more than $100,000 in USD bank accounts.

Genesis’ creditors expect an 80% recovery under the proposed restructuring plan

Genesis Global reached an “agreement in principle” with Digital Currency Group and its creditors, with the goal of recouping at least 80% of the funds. The deal will ultimately see Genesis’ crypto trading and market-making arm sold as part of a restructuring effort. Genesis’ bankruptcy affects Cash Cloud, an operator of automated teller machines in the United States and Brazil. Genesis is Cash Cloud’s largest lender, with $108 million in unsecured loans. Cash Cloud has liabilities between $100 million and $500 million.

Ethereum founder Joe Lubin says there is no chance of ETH being classified as a security

Ethereum founder and crypto entrepreneur Joseph Lubin believes that Ether will not be classified as a security in the United States. “I think, and it will have the same effect, as Uber was made illegal,” he told Cointelegaph in an interview in Tel Aviv at the Web3 Building Blocks 23 event. In September 2022, the chairman of the US SEC Gary Gensler suggested that Ethereum transition to a consensus model proof-of-stake (PoS) may bring ETH into the regulatory spotlight.

Winners and Losers

At the end of the week, Bitcoin (BTC) that’s it $21,707Ether (ETH) at $1,525 and XRP at $0.38. The total market capitalization is at $1.01 trillion, according to CoinMarketCap.

Among the top 100 cryptocurrencies, the top three altcoins of the week were The Graph (GRT) at 74.43%, SingularityNET (AGIX) at 65.51% and Rocket Pool (RPL) at 15.155%.

The top three altcoin losers of the week were Fantom (FTM) at -31.15%, Optimism (OP) at -23.79% and Aptos (APT) at -22.28%.

For more information on crypto prices, be sure to read Cointelegraph’s market analysis.

Most Memorable Quotes

“What we’re seeing is that clients are really interested in digital assets, in general.”

Michael Demissiehead of digital assets at BNY Mellon

“The digital pound may coexist with other forms of money, including stablecoins.”

Bank of England and HM Treasury

“Obviously if you want integrity in the metaverse, then blockchain is going to be a part of it.”

Robert Joycechief technology officer at Nokia Oceania

“Bank [in the U.S.] they are reevaluating whether to continue to provide this [crypto] service worth the risk. “

Aaron Kaplanco-CEO of Prometheum and advisor at Gusrae Kaplan Nusbaum

“MetaMask has historically been an Ethereum wallet. We need to start moving beyond that. The future of multichain is very clear.

Alex Jupiteraccount product manager and key management at MetaMask

“CBDC is a way to improve the sophistication of the payment system, as well as ensure economic security through a local currency that does not depend on other countries.”

Soramitsua Japanese financial software developer

Sunday Predictions

Ethereum price risks a 20% correction amid SEC crackdown on crypto staking

Ethereum’s native token suffered its worst daily performance of the year as the US SEC stopped crypto exchange Kraken from offering crypto staking services. The news reduced the price of many proof-of-concept blockchain project tokens.

At The SEC’s crackdown on crypto staking begins when an upgrade to Ethereum’s main network, Shanghai, is set to be released in March. Bitwise Asset Management’s chief investment officer, Matt Hougan, considers Shanghai a bullish event for Ether:

“Today, many investors want to share ETH and get results sitting on the sidelines. After all, most investment strategies cannot tolerate an infinite lock,” Hougan said in a January investor letter. From a technical perspective, the price of Ether is positioned for a potential price correction of 20% in February, according to Cointelegraph analysis.

FUD from Sunday

The SEC chair issued a warning to crypto companies after taking action on Kraken staking

US Securities and Exchange Commission Chairman Gary Gensler issued a warning to crypto companies to “go in and follow the law” after the agency announced a settlement with crypto exchange Kraken. This is the latest attempt by the country’s authorities to crack down on crypto companies, as banks have been accused of failing to take care of crypto companies in recent weeks by US officials, with the aim of making crypto businesses “totally unbanked,” a source told Cointelegraph.

Stablecoin issuer Paxos is reportedly under investigation by New York regulators

The New York State Department of Financial Services is reportedly investigating Paxos Trust Company, the stablecoin issuer behind Binance USD (BUSD) and Pax Dollar (USDP). The department is reportedly working to protect customers from the risks associated with cryptocurrency investments. On its website, Paxos states that its BUSD and USDP token reserves are 100% backed by US dollars and US Treasury bonds.

3AC new exchange causes reaction from the crypto community – ‘No thanks’

The launch of the exchange project backed by the bankrupt hedge fund Three Arrows Capital (3AC) attracted many angry members of the community. Open Exchange, a crypto exchange project proposed by 3AC and CoinFLEX, launched its website on February 9. The founder of 3AC, Su Zhu, stated that the project is a way to make up for the mistakes of the past. 3AC went bankrupt in July, after suffering losses from the collapse of Terra two months earlier.

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