Before we get further into this, it’s worth defining some terms. Proof-of-stake is a consensus mechanism wherein nodes are supported by people locking up, or “staking,” their crypto. It differs from proof-of-work consensus mechanisms in that rather than putting energy and computing power into securing the blockchain, you’re putting your “money.” Source
On Feb. 9, 2023, the cryptocurrency community learned of the U.S. Securities and Exchange Commission’s (SEC) crackdown on staking services. The SEC fined Kraken, a cryptocurrency exchange, $30 million for offering an “unregistered offering” related to its U.S. staking service. Digital currency advocates are now debating what constitutes a yield product versus a noncustodial solution that is not considered a security. Fox News journalist Eleanor Terrett predicts more regulatory crackdowns on the crypto space in the coming weeks, including enforcement actions against exchanges and banks. Observers Weigh in on the…
Welcome to Finance Redefined, your weekly dose of essential decentralized finance (DeFi) insights — a newsletter crafted to bring you significant developments over the last week. In the aftermath of a deadly 7.8-magnitude earthquake in southeastern Turkey, the Web3 community has come together to raise awareness and aid for disaster victims. Stablecoins could prove to be a critical factor in larger DeFi adoption, says Aave founder Stani Kulechov. According to the Aave executive, building the “payment layer,” which involves stablecoins, can potentially hook regular people into the space, eventually introducing…
The Securities and Exchange Commission’s (SEC) shutdown of crypto exchange Kraken’s U.S. staking-as-a-service business may certainly lead to a wider industry crackdown. However, “this is not a condemnation of staking writ large,” said Zachary Fallon, a former special adviser to the regulator’s general counsel and previously senior special counsel to the director of the SEC’s Division of Corporate Finance. Original Source actioncondemnationKrakenLargeStakingWrit CryptoX Portal
Stablecoin issuer Tether Holdings is relying on the services of a major Wall Street firm to manage its Treasury portfolio, according to a Feb. 10 report by The Wall Street Journal. Citing sources familiar with the matter, the Journal reported that financial services company Cantor Fitzgerald is helping Tether oversee a $39 billion bond portfolio comprised of United States Treasury securities. The report indicates that some firms on Wall Street are willing to support crypto service providers despite ongoing regulatory concerns facing the industry. Founded in 1945, Cantor Fitzgerald specializes in…
JPMorgan Chase and consultants Oliver Wyman took a look at blockchain technology in commercial banking in a report released Feb. 9. Stablecoins and central bank digital currencies (CBDCs) have dominated in the sphere so far, but the authors point out the advantages offered by deposit coins in terms of stability and reliability. Deposit tokens are issued on a blockchain by a depository institution to represent a deposit claim. This contrasts with stablecoins, commonly issued by a non-bank private entity, and CBDCs. This difference in the issuer is a key advantage:…
Remember when Sam Bankman-Fried admitted to being a significant donor to the Democratic and Republican parties? Well, the recipients of the tainted money have been formally requested to return the funds to FTX’s creditors. So far, we know of three prominent Democratic groups — the DNC, the Democratic Senatorial Campaign Committee and the Democratic Congressional Campaign Committee — that have returned SBF-linked donations in December 2022. Will the rest follow? As FTX seeks clawbacks, the Digital Currency Group and its bankrupt subsidiary, Genesis Global Trading, have agreed to a restructuring…
Yesterday it was reported that PayPal crypto partner Paxos was being by the NYDFS Source
Other backers in the round included a mix of traditional investors, quant firms and liquidity providers, including Jane Street, Hudson River Trading, Flow Traders, Jump Crypto, Cumberland DRW, Golden Tree, CMS Holdings, AlphaLab Capital and C² Ventures. Source
Rumors of an impending crypto ban came to fruition on Feb. 9 with the Securities and Exchange Commission’s enforcement action against Kraken, which resulted in a settlement where the exchange agreed to end its staking services for American users. The action will likely extend to all companies based in the United States. Reactions were predictable depending on where you stand on crypto in general. Crypto advocates railed against regulators who are slowly asphyxiating this burgeoning industry, while skeptics celebrated crypto’s impending demise. The advocates have it right. Antagonistic regulators will…