The past week will be remembered for the impressive growth of bitcoin, another round of the struggle of American regulators with the cryptocurrency industry, as well as news related to the bankrupt FTX empire. Cryptons, as usual, joked merrily on current topics, and all the most interesting and witty got into our weekly digest.
bitcoin
The first cryptocurrency this week was as unpredictable as the weather in May. At the beginning of the week, everything was so sad that people in the know started talking about the inevitable fall of bitcoin to $12,000 – the January data on the US consumer price index (CPI) turned out to be worse than expected. But real bitcoin maximalists didn’t care about such forecasts. Especially on Valentine’s Day. After all, if you love bitcoin, you will never be alone. And you don’t care how much it costs.
By Thursday, it became clear that it was too early to bury the crypto market — bitcoin grew against the backdrop of a fall in the stock market to $25,275. The growth of the cryptocurrency occurred contrary to common sense and fresh data on the US economy.
And El Salvador, the first country in the world to accept bitcoin as legal tender, is doing well. The International Monetary Fund once again recommended that the state reconsider its plans for bitcoin. The regulator advises caution when expanding the use of bitcoin in the country. And, of course, he asks not to issue bitcoin bonds.
In response to another wave of raids from the IMF, El Salvador announced the opening of the second “Bitcoin office” in the US state of Texas. The first one was opened in the Swiss city of Lugano in October 2022.
At the end of the week, Galaxy Digital founder and CEO Mike Novogratz gave us a bullish outlook, predicting Bitcoin to rise to $30,000 by the end of the quarter. True, he spoiled his barrel of honey with a fly in the ointment – he said that if by the end of the year he managed to keep $ 30,000, then it would be generally gorgeous.
SEC continues to fight with crypto
The US Securities and Exchange Commission (SEC) seems to have decided to work hard in February. How else to explain her zeal, we do not know. Monday began with disturbing news from The Wall Street Journal – the publication reported that the SEC swung at BUSD, the signature stablecoin of the largest cryptocurrency exchange Binance.
The SEC has issued a special notice to Paxos (the issuer of BUSD). This “Wells notice” is used to scare and warn companies right before going to court. The regulator called the Binance USD stablecoin an unregistered security.
Paxos confirmed the information about the receipt of the notice from the SEC and promised sell your life dearly fight in court to prove his case. However, it was not all bad news for the company: the New York State Department of Financial Services (NYDFS), without hesitation, ordered to stop issuing BUSD. Paxos representatives had to admit that they are breaking off cooperation with Binance on issuing a stablecoin and are stopping the issuance of a stablecoin from February 21st.
The panic in the market rose such that on Wednesday, in the middle of the night, Fox reporter Eleanor Terrett tweeted that Circle, which issues the popular USDC stablecoin, also received a letter of happiness from the SEC. The cryptans were talking about instant karma (after all, according to rumors, it was Circle who snitched on Paxos in the SEC), but the news turned out to be fake. We also learned that Dante Disparte, who ran the infamous Libra crypto project, is now working for Circle.
“Well, you guessed it,” said SEC Chairman Gary Gensler, and instead of Circle, he charged Terra CEO Do Kwon and Terraform Labs with organizing a major securities fraud. But even a year has not passed since the collapse of the project! The regulator is going to check if the UST stablecoin violated securities laws. And here even the most convinced crypto-anarchists will be on the side of the regulator, because Do Kwon, perhaps, is hated by the entire cryptocurrency industry.
FTX saga
We’d love to stop writing about the FTX business, but the restless Bankman-Fried is constantly talking about himself. So this week was not without news about the former head of the crypto empire. Bankman-Fried was caught using a VPN. And since Twitter and other harmful social networks are not banned in the United States, and VPN has a criminal reputation, the prosecutor’s office asked the court to ban the use of an encrypted connection. At best, he used VPN to buy psychostimulants on the darknet, and at worst, he could do some other bad things.
The court did not hesitate for a long time and banned the VPN, threatening to return the former crypto billionaire to the bunk in case of violation.
In the meantime, the crypto community has finally found out who bailed out Bankman-Fried and brought the disgraced FTX executive back into the fold of the family (and broadband internet). His guarantors were family friends – two professors at Stanford University. Larry Kramer and Andreas Paepke, along with Bankman-Fried’s parents, contributed a cosmic $250 million and swore on their little fingers that he would not run away immediately after his release.
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