SEC - Page 312

The United States Treasury may soon release its risk assessment for decentralised finance (DeFi), Assistant Secretary for Terrorist Financing and Financial Crimes Elizabeth Rosenberg has revealed.

In an event in Sydney, she told the audience: “Illicit actors are constantly looking for effective ways to hide criminal activity and the laundering of their proceeds. This is a threat to DeFi services or other elements of the virtual asset ecosystem.”

She added that her team was “actively” working on the assessment and would soon release the findings.

She added that the regulatory industry treated “regulations and financial crimes compliance as an afterthought,” citing an “astounding” surge in virtual assets.

Speaking further, she cited North Korean cybersecurity attacks, stating,

“Some of the illicit finance risks pertaining to virtual assets are best illustrated in the North Korea context. North Korea-affiliated actors have conducted ransomware attacks, stolen hundreds of millions of dollars’ worth of virtual assets, and laundered their ill-gotten funds through mixers and other virtual asset service providers to fund North Korea’s illegal nuclear and ballistic missiles programs.”

The news comes after cryptocurrency experts criticised the US Securities and Exchange Commission (SEC) at a Futures Industry Association (FIA) event. An executive from Andreessen Horowitz slammed the SEC as ‘rogue’ and added the ‘clock is ticking’ on the development of clear regulations.

Shareholders of Silicon Valley Bank Financial Group have sued the now-defunct bank and two of its top executives.

The class action lawsuit involves SVB, chief executive Greg Becker, and chief financial officer Daniel Beck. The group launched the lawsuit in a federal court based in San Jose, California, reports show.

Chandra Vanipenta has led the litigation for shareholders of the bank. In it, the lawsuit alleges the three entities withheld information about the knock-on effects of interest rates on the bank, leading to subsequent bank runs.

SVB Collapse amid Liquidity Scramble

The news comes after the collapse of the 16th-largest bank in the United States. US government authorities seized the company’s assets on Saturday after liquidity issues triggered a massive bank run.

SVB shocked its clients and market watchers after revealing a $1.8 billion USD loss of revenues after taxes due to investment sales. The bank later failed to raise sufficient capital to close the fiscal hole.

Just ahead of its collapse, SVB posted just $209 billion in assets and $175.4 billion in deposits. The bank’s failure is the largest since the 2008 financial crisis.

Fears over subsequent collapses have surfaced across the industry, with many tech startups, venture capitalists, and affiliated regional banks mulling potential such possibilities.

In the United Kingdom, HSBC purchased SVB’s British operations for one pound — the same fee Sir Philip Green charged for the remaining shares of defunct retailer British Home Stores (BHS) in 2015.

The news comes just under a week after Silvergate Capital shuttered its banking division over its alleged ties to FTX. The now-defunct crypto trading platform used Silvergate Banking to facilitate transactions just days before filing for bankruptcy.

State authorities have targeted Signature Bank, closing down the cryptocurrency-friendly bank on Sunday.

In a joint statement between the United States Federal Reserve, Treasury, and Federal Deposit Insurance Corporation (FDIC), the three institutions closed Signature Bank to protect the national economy and boost banking system sentiment.

It said in its statement: “All depositors of this institution will be made whole. As with the resolution of Silicon Valley Bank, no losses will be borne by the taxpayer.”

It added it would not protect “shareholders and uncertain unsecured debtholders” and that senior management had “also been removed.”

The statement continued: “Any losses to the Deposit Insurance Fund to support uninsured depositors will be recovered by a special assessment on banks, as required by law.”

According to reports, Signature Bank held $88.6 billion in deposits.

The news comes amid the collapse of Silicon Valley Bank on Saturday after it failed to secure additional capital to resolve a liquidity crisis. Further troubles took place on Thursday last week after Silvergate Bank shut down and liquidated due to ongoing “industry and regulatory developments.”

USD Coin (USDC), one of the most trusted stablecoins in the cryptocurrency market, has lost its peg to the US dollar, falling to record lows on Saturday.

Circle, the firm that created the USDC stablecoin, attempted to calm investor and holder fears it could restore the cryptocurrency’s peg.

Despite this, the coin remains exposed to Silicon Valley Bank, which collapsed on Saturday. Roughly $3.3 billion out of $40 billion in Silicon Valley Bank’s USDC reserves are Circle reserves.

According to Circle, it will resume USDC liquidity operation on Monday after banks reopen in the United States.

It said in a blog post: “As a regulated payment token, USDC will remain redeemable 1 for 1 with the U.S. Dollar.”

The coin lost its 1:1 peg to the USD, nosediving up to $0.88 on Saturday around 07:50 UT, Trading View data revealed.

It explained further, stating,

“As of Thursday, we had initiated transfers of these funds to other banking partners. Though these transfers had not yet been settled as of close of business Friday, we remain confident in the FDIC’s management of the SVB situation and stand ready to receive these funds.”

It concluded that USDC had “zero exposure to Silvergate,” referring to Silvergate Bank, which also collapsed last week after ceasing operations. The bank had facilitated payments for now-defunct cryptocurrency platform FTX in November, despite the latter collapsing days later.

Circle also noted it does not return 100 percent of customer deposits, but would use its corporate resources and external capital to cover shortfalls.

Jeremy Allaire, Co-founder & CEO of Circle, said in a series of tweets on Sunday,

“We were heartened to see the US government and financial regulators take crucial steps to mitigate risks extending from the fractional banking system. 100% of deposits from SVB are secure and will be available at banking open tomorrow.”

He added that he would publish a longer thread with “reflections on all of the past [week’s] events.” Allaire continued that Circle had “long advocated for full-reserve digital currency banking” to insulate the firm’s “base lay of internet money and payment systems from fractional reserve banking risk.”

The bank’s collapse is the largest US Bank since the financial crisis of 2008, news reports revealed.

The Bank of London has proposed to buy Silicon Valley Bank’s British subsidiary.

The Bank of London is a clearing bank in the United Kingdom and had proposed the deal to the UK Treasury and Bank of England.

A consortium of investors that includes private equity firms leads the Bank of London.

Bank of London co-founder and chief executive Anthony Watson said in a statement: “Silicon Valley Bank cannot be allowed to fail given the vital community it serves.”

He added: “This is a unique opportunity to ensure the UK has a more diversified banking sector, whilst allowing continuity of service to SVB’s UK client base.”

UK authorities also drafted a rescue plan for startups and tech firms hit by the SVB collapse, including cash bailouts for numerous tech firms.

UK Government Response to SVB Crisis

According to a statement from UK Chancellor Jeremy Hunt, the Bank of England had confirmed that SVB had a “limited presence in the UK” and did not “perform functions critical to the financial system.”

It added it understood the “level of concern” the collapse raised for SVB UK customers, namely impacts on “cashflow positions in the short term.”

Hunt stated: “The UK has a world leading tech sector, with a dynamic start-up and scale-up ecosystem. The government recognises that, given the importance of Silicon Valley Bank to its customers, its failure could have a significant impact on the liquidity of the tech ecosystem.”

Downing Street would treat the issue as a “high priority” and launch talks between the Bank of England Governor, British Prime Minister, and Chancellor at the weekend.

Hunt concluded: “The government is working at pace on a solution to avoid or minimise damage to some of our most promising companies in the UK and we will bring forward immediate plans to ensure the short term operational and cashflow needs of Silicon Valley Bank UK customers are able to be met.”

Coadec Statement on SVB Collapse

A further statement from Coadec, a coalition representing British tech firms and startups, work with HM Treasury “remains ongoing.”

The organisation said discussions were “ongoing with potential buyers for SVB UK.” There were numerous potential measures to address “the immediate liquidity and banking problems” under consideration, the statement read.

It aimed to release an announcement “before the market opens on Monday,” Coadec added.

It continued: “The Government has worked incredibly hard over the past several days and we have to give them great credit. At the same time, we have made clear in no uncertain terms the risks that are posed to the UK startup ecosystem and innovation economy if the deal does not do what it needs to in helping companies at risk.”

Coadec concluded that the United States Federal Reserve aimed to resolve the crisis in a way that “fully protects all depositors.”

Silicon Valley Bank has long supported tech startups and Web3 firms, and its recent collapse is the world’s biggest since the 2008 financial crisis.

Singapore-registered cryptocurrency company MinePlex is refuting recent allegations of illegal activities in Vietnam. The company denies all claims made in a report by Vietnamese TV channel VTV, which accused MinePlex of illegal activities.

MinePlex clarifies that it is registered in Singapore as MINEPLEX PTE. LTD. Thus it operates as a legal entity in accordance with the Singapore law. Operating since 2020, MinePlex has brought to market working Blockchain-based products such as Explorer, Wallet, Payments, Finance, Marketplace and more. “Already 2.5 years ago, the MinePlex technology was recognized as unique in the world media.

The MinePlex blockchain is based on the work of two tokens. One mines the other. This is written in a mathematical algorithm and the company cannot interrupt this process in any way.”

The company also partners with a major Brazil-based bank when offering finance-related services, such as payment cards and accounts, and its services can’t be qualified as illegal.

MinePlex notes that VTV journalists took out of context the phrase of MinePlex CFO, Fyodor Bogorodsky, who was discussing the potential growth of the PLEX token to $1,500 in the future. Bogorodsky’s words were not a guarantee or promise and were taken out of the context. 

In addition, MinePlex’s products and employees were verified by the well-known international cybersecurity firm CertiK. The MinePlex team underwent a KYC check from CertiK in July 2022. All team members were verified, interviewed by independent experts of the company, and passed a financial audit.

MinePlex was recognized as a top blockchain project in 2021 by International Business Times, named Top Digital Finance Company 2021 by Seeking Alpha, and ranked first among top crypto projects of 2023 by Nasdaq.

MinePlex is disappointed that VTV did not verify and clarify the content before publishing subsequent articles that caused confusion, affecting the company’s reputation. The company is seeking a rebuttal from VTV to clear its name and restore its reputation.

MinePlex is committed to providing reliable and trustworthy services to its customers. The company is making every effort to contact the TV company to clarify the situation. However, the TV team does not respond to letters from the company and the company’s lawyer in Vietnam. MinePlex is confident in its legal bases and operating conditions and will continue to defend its reputation and honor.

MinePlex is a new generation digital ecosystem that creates advanced and modern payment solutions based on traditional financial, blockchain, and digital application technologies. The company has always been transparent about its operations and is committed to delivering high-quality services to its customers.

Ethereum founder Vitalik Buterin announced on Thursday that he had dumped a large number of altcoin holdings this week, stating they had “no cultural or moral value.”

The cryptocurrency expert sold off 9.9 billion CULTDAO native tokens (CULT) for roughly 58 Ether (ETH), along with MOPS and BITE holdings.

PeckShield revealed the news, adding that the sale totalled up to 220 Ether, or $331,705 USD at the time of writing.

In a statement on Reddit, Buterin said: “$BITE and most other coins being discussed on this forum are shitcoins, have no redeeming cultural or moral value, and will probably lose you most of the money you put into them. I anti-endorse these projects to the greatest extent.”

The news comes after Buterin burned Shibu Inu (SHIB) holdings valued at $6 billion USD after receiving half of the total supply in circulation.

In November last year, Buterin added Scourge to Ethereum’s roadmap to tackle censorship and boost network decentralisation. This aimed to expand the number of transactions per second to roughly 100,000 by using rollups as an upscaling technique.

He added the update aimed to boost the network’s proof-of-stake capabilities, providing “reliable and credibly neutral transaction inclusion” and avoiding protocol risks. This would block exploitative mining transactions on the network as well as investors leveraging tools to create censorship.