The past week will be remembered for the bitcoin spill, the Silvergate cryptobank troubles, and the ongoing war between US regulators and the digital currency industry. Cryptons, despite the sad news, joked and posted memes, and all the funniest, most relevant and interesting got into our weekly digest.
bitcoin
At the beginning of the week, analysts were optimistic: they were angling a bullish end to the last month of winter, citing good news from China. The first cryptocurrency was firmly fixed at a level well above $23,000 and looked promisingly at the level of $25,000.
However, the miracle did not happen and bitcoin ended the month at the same level as it was in early February – about $23,000. a month, failing to fix above $23,500. As a consolation to the cryptos, we can say that digital gold turned out to be more stable than most major assets, including stocks, commodities, and major world currencies.
Lol I won’t buy it now
By the end of the week, bad news about the Silvergate crypto bank was delivered, so Bitcoin could not stay above $23,000 and collapsed by more than 5% in one hour. By Sunday, the situation has not improved and the first cryptocurrency continues to hang around $22,300, unnerving its fans.
Consequences of crypto winter
What phase of the market we are currently in, even the most astute cryptanalysts find it difficult to say. But the consequences of 2022 are still being raked by crypto companies. US payment giants Visa and Mastercard have delayed launching new partnership programs with cryptocurrency firms due to high-profile bankruptcies in the industry. They were frightened by the scrutiny of regulators and a series of tragic bankruptcies.
Singapore-based cryptocurrency lending platform Hodlnaut, which is going through a restructuring process, wants to sell the business. The interim managers argue that this will have the best effect on the well-being of creditors, as it will return most of the money. Moreover, at the moment, negotiations have already been held with several interested investors, so the hope to shake off the failed business is still glimmering.
But the good news is that the massive layoffs that rocked the industry are slowing down. In February, the number of layoffs in the industry decreased to 570 people. A month earlier, 2,800 employees asked to leave. And if in January the staff was fired, mainly crypto-exchanges, then in February, the reductions affected firms involved in analytical research and software development.
And the Binance exchange not only does not fire, but also expands its staff. Since January, the platform has already hired 600 people. And is going to hire another 500 employees by the end of the first half of the year.
Collapse of Silvergate
The popular cryptobank Silvergate notably ruffled the nerves of the cryptans this week. The company did not file a Form 10-K with the Securities and Exchange Commission (SEC) for the previous fiscal year. And this is the most important document for confirming financial stability. The document was to be sent to the regulator on March 2. The firm’s shares plummeted, losing more than half their value.
Cryptocurrency companies reacted to this news promptly, as last year taught them a lot: the largest American exchange Coinbase was the first to refuse cooperation with the bank.
Coinbase’s example was followed by its colleagues from Crypto.com, Bitstamp and Gemini. A little later, issuers of popular stablecoins, Circle and Tether, got involved. All the mentioned crypto giants have chosen Signature Bank as an alternative option. And one can only sympathize with Silvergate, as it is likely to have a loud and hopeless bankruptcy ahead of it.
US continues its war on crypto
Dapper Labs, which issued a collection of unique tokens dedicated to basketball Top Shot NFT Moments in 2021, is accused of issuing and promoting unregistered securities. The firm tried to back out, but the judge refused to dismiss the lawsuit. It’s a fairly common thing these days. But there is a nuance.
In addition to the fact that the NFT collection fits the definition of a security according to the Howey test, the American judge separately emphasized that Dapper Labs tweets further whetted the appetites of investors, promising quick profits. The fact is that emoji depicting a stock chart, a rocket and bags of money were used in the NBATopShot Twitter account. Now the whole crypto-Twitter is posting criminal emojis, promising mountains of gold to investors. As they say, the meme turned out to be funny, and the situation is terrible.
And SEC Chairman Gary Gensler once again repeated his favorite thesis that absolutely all cryptocurrencies are securities. He is ready to make an exception only for bitcoin. Cryptons took this news with hostility. They believe that the SEC has no right to control digital currencies.
Meanwhile, the head of Ripple, Brad Garlinghouse, even threatened that cryptocurrency companies would leave the United States due to pressure from regulators. He explained that even backward countries such as Australia, Japan, Singapore, the United Kingdom and Switzerland have already introduced clear rules regarding the cryptocurrency sector. This attracted entrepreneurs and brought a lot of money to the treasury. The United States should do the same, and as soon as possible.
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