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Stablecoin Regulation to be Subcommitee’s Top Priority

Bullet Points:
• Rep. French Hill said the digital assets subcommittee plans to use its stablecoins draft as a model for how it will approach digital asset regulation moving forward.
• Stablecoin legislation will be one of the top priorities for the newly formed U.S. House of Representatives subcommittee on digital assets, financial technology and inclusion.
• The “Ugly Baby” bill, a stablecoin bill worked out by then-Chair Maxine Waters (D-Calif.) and raking Republican Rep. Patrick Henry (R-N.C.) of the House Financial Services committee.

In a recent interview with CoinDesk TV’s “First Mover”, Rep. French Hill (R-Ark.), the chairman of the newly formed U.S. House of Representatives subcommittee on digital assets, financial technology and inclusion, revealed that Stablecoin regulation will be the first on their agenda. As he explained, the subcommittee plans to use its stablecoins draft as a model for how it will approach digital asset regulation moving forward.

Hill also stated that the subcommittee will pursue a privacy statute federally, as well as oversight hearings on both the regulators and some of the actions of last year so that they can learn from them. One such action was the “Ugly Baby” bill, a stablecoin bill worked out by then-Chair Maxine Waters (D-Calif.) and raking Republican Rep. Patrick Henry (R-N.C.) of the House Financial Services committee.

This bill is aimed at providing a clear framework for the development and regulation of stablecoins, and is seen as a key step in providing a safe and secure digital asset ecosystem. The bill seeks to protect consumers and investors, as well as ensure transparency and compliance with applicable laws. It would also require issuers of stablecoins to obtain licenses and provide clear information about the asset being offered to investors.

Overall, Rep. French Hill and the subcommittee’s focus on Stablecoin regulation is a positive step forward in the development of a safe and secure digital asset ecosystem. The subcommittee’s efforts will help ensure the protection of consumers and investors, as well as provide clarity on the exact regulations that stablecoin issuers must abide by. This will ultimately provide a strong foundation for the development of a vibrant digital asset economy.

Lido Becomes Biggest DeFi App, Surpassing MakerDAO with $7.8B Locked

• Lido has become the largest decentralized finance (DeFi) app by total value locked (TVL), surpassing MakerDAO.
• Users have locked $7.8 billion on Lido, with the vast majority of that sum coming from Ethereum.
• Interest in liquid staking protocols has swelled in 2023 as governance tokens for these protocols have surged in price.

Lido, a forerunner in the liquid staking derivatives market, has become the largest decentralized finance (DeFi) app by total value locked (TVL), surpassing MakerDAO. This milestone has been achieved over the last month, as Lido’s TVL has spiked 33%, according to data from DeFiLlama.

Users have been attracted to Lido to reap rewards for the protocol’s community-led validator staking service. To date, $7.8 billion has been deposited into the protocol, with the vast majority of that sum coming from Ethereum. Smaller amounts have also come from other blockchains, such as Solana.

The surge in interest in liquid staking protocols is driven by the increasing value of their governance tokens. For example, since the end of December 2020, the price of LDO has jumped 108% to $2.01, while its average 24-hour volume rose 802%, according to CoinGecko. Holders of LDO are able to influence how the protocol is managed, from setting fees to assigning node operators.

The current attention surrounding liquid staking protocols is indicative of the growing importance of liquidity in DeFi applications. The ability to move funds quickly and safely is paramount to the success of DeFi applications, and Lido is at the forefront of this trend.

Lido’s success indicates that users are eager to partake in liquid staking protocols, and it is likely that this success will be mirrored in other DeFi applications. With the rise of the liquid staking derivatives market, it is an exciting time for DeFi, and Lido is leading the charge.

Stablecoin Holders Now Earn Yields with Ondo Finance Bond Funds

• On-chain funds are now available on DeFi platform Ondo Finance to allow stablecoin holders to invest directly in bonds and U.S. Treasurys.
• This regulated product could potentially attract more than $100 billion in stablecoins that currently may not be earning yields for their holders.
• The funds are invested in exchange-traded funds managed by BlackRock and Pimco, with Coinbase Custody and Coinbase Prime handling conversions between stablecoins and fiat.

Decentralized finance (DeFi) platform Ondo Finance has recently launched three products that allow stablecoin holders globally to invest directly in bonds and U.S. Treasurys. This is an exciting development that could potentially open the door to billions of dollars in stablecoins currently not earning yields for their holders.

The three funds available on Ondo’s site are the OUSG fund, which invests in short-term government Treasurys and yields 4.2% per annum; the OSTB fund, which invests in short-term bonds and yields 5.45% per annum; and the OYHG fund, which invests in high-yield corporate bonds and yields 8% per annum. Fees for these funds are currently listed at 0.15%.

The funds deposited on Ondo will further be invested in relevant exchange-traded funds offered by BlackRock and Pimco. Coinbase Custody will custody any stablecoins the fund holds, while Coinbase Prime will handle conversions between stablecoins and fiat.

The new Ondo Finance products could be a game-changer for the stablecoin market, allowing holders to earn yields on their coins, thus incentivizing their adoption. Furthermore, the funds are managed by two of the largest and most trusted institutions in the world, BlackRock and Pimco, giving holders even more assurance and peace of mind.

Ondo Finance is an innovative DeFi platform that is bridging the gap between traditional and decentralized finance. With its new tokenized corporate bonds, stablecoin holders can now earn yields on their coins while remaining in the crypto ecosystem. This can be a major step forward in the mainstream adoption of cryptocurrencies.

DOJ, SEC Investigate Barry Silbert’s Digital Currency Group

Bulletpoints:
– Barry Silbert’s Digital Currency Group (DCG) is reportedly being investigated by the U.S. Department of Justice’s (DOJ) Eastern District of New York and the U.S. Securities and Exchange Commission (SEC)
– The entities are examining financial transfers between DCG and its Genesis unit
– Prosecutors with the DOJ’s Eastern District of New York office have requested interviews and documents from DCG and Genesis

The crypto markets were on the move on January 9, 2023 with the CoinDesk Market Index (CMI) and Bitcoin (BTC) both up at the close. The CMI was up 3.9% and BTC was up 1.9% at the close of the day. But the news of the day was the reports that Barry Silbert’s Digital Currency Group (DCG) was being investigated by the U.S. Department of Justice’s (DOJ) Eastern District of New York and the U.S. Securities and Exchange Commission (SEC).

The reports state that the prosecutors are examining financial transfers between DCG and its Genesis unit. The DOJ’s Eastern District of New York office has also requested interviews and documents from DCG and Genesis. This news has caused quite a stir in the crypto markets, as investors and traders alike are concerned about the implications of such an investigation.

DCG is a major player in the crypto space, having invested in numerous projects and companies over the years. It is also the parent company of Grayscale Investments, which is a major player in the crypto space with its large-scale investments in Bitcoin and Ethereum.

Given the size and scope of DCG, the news of its investigation is being closely watched by the crypto markets. The potential implications of such an investigation could have far-reaching implications for the industry as a whole. It remains to be seen how this investigation will play out and what the outcome will be.

In the meantime, the crypto markets remain volatile and investors are watching to see how this news will affect the markets in the near future. With the SEC and DOJ both involved in the investigation, the markets are sure to be on edge until more details emerge.

117 Parties Express Interest in FTX Unit Sale: Crypto Revolution on the Horizon?

• Around 117 parties have expressed an interest in buying units of FTX, as the crypto company’s bankruptcy case could take years.
• The estate has prioritized the sale of LedgerX, FTX Japan, FTX Europe and stock-clearing platform Embed, arguing they are the easiest to separate and have a risk of losing value if not sold quickly.
• A legal filing posted Sunday said that a deadline for initial bids is approaching.

As the crypto world continues to develop, so do the opportunities for investment. One such opportunity is the potential sale of various units of FTX, a crypto company that recently filed for bankruptcy. On Sunday, a legal filing revealed that around 117 parties have expressed an interest in acquiring units of FTX, as the deadline for initial bids approaches.

The estate has identified LedgerX, FTX Japan, FTX Europe and stock-clearing platform Embed as the easiest to separate from the company and has prioritized the sale of these units in order to avoid the risk of losing value if they are not sold quickly. These units have already attracted many potential buyers and the deadline for initial bids is now fast approaching.

The bankruptcy case itself could take years to be finalized, but the sale of the units is expected to move much faster. Potential buyers have already begun to express their interest in acquiring FTX units and the company’s estate is currently in the process of evaluating these bids. The sale of the units could provide a significant amount of capital to the estate and could provide a much-needed lifeline to the crypto industry in the years to come.

In total, around 117 parties have expressed an interest in the sale of the FTX units, with the legal filing noting that these parties are “various financial and strategic entities.” Further details about the potential buyers have not been disclosed, although it is likely that the list includes both institutional and individual investors.

The sale of the FTX units could also have a significant impact on the crypto industry and the wider financial markets. The proceeds from the sale could be used to finance further development in the crypto space, allowing for the creation of new projects and initiatives that could revolutionize the sector.

It remains to be seen whether the FTX units will actually be sold and who the eventual buyers will be. However, with around 117 parties expressing an interest in acquiring the units, the sale is sure to be a hotly contested affair. The sale of the FTX units could have a major impact on the crypto industry and will be worth watching closely in the coming months.

Crypto Job Cuts Soar: 26,964 Jobs Lost Since April

Bullet Points
• Since April, an estimated 26,964 crypto jobs have been cut due to the bear market in the industry.
• On Jan. 5, crypto lender Genesis Global Trading laid off 30% of its staff, reducing its headcount by an estimated 62 employees.
• Crypto bank Silvergate Capital also cut 200 jobs, about 40% of its workforce, on Jan. 5.

The crypto industry has been in the midst of a bear market since April of this year, and it has had a devastating effect on the industry. CoinDesk has been keeping a running list of companies that have been forced to lay off employees in order to stay afloat. By our count, an estimated 26,964 crypto jobs have been lost since April.

The most recent news of layoffs came on Jan. 5, when Genesis Global Trading, a crypto lender owned by Digital Currency Group, laid off 30% of its staff, reducing its headcount by an estimated 62 employees and bringing its total roster to 145. Another crypto bank, Silvergate Capital, also announced the same day that it was cutting 200 jobs, about 40% of its workforce.

Earlier in December, crypto trading firm Amber Group announced that it was cutting 40% of its workforce, reducing its headcount from around 100 to 60 employees. In October, crypto exchange Coinbase laid off 30 employees, citing the need to “better align” its resources with its long-term goals.

The bear market has had a ripple effect, with companies across the industry feeling the pinch. In November, crypto analytics firm Chainalysis cut 12% of its staff, while blockchain incubator ConsenSys laid off 13% of its workforce. Blockchain security firm BitGo and crypto payments company Wyre both laid off 10% of their staff in October.

The job cuts are likely to continue as the bear market persists. It remains to be seen how long the market downturn will last, and how many more people will be affected by it. However, one thing is clear: the crypto industry is in the midst of a difficult period, and many are paying the price.

Former FTX CEO Borrows Millions to Invest in Robinhood Markets

• Cryptocurrency exchange Kraken is exiting Japan and deregistering from the Financial Services Agency as of Jan. 31.
• Bitcoin miner Argo Blockchain has sold its Helios mining facility in Texas to Galaxy Digital for $65 million and secured a $35 million loan from Mike Novogratz’s crypto-focused financial services firm.
• Former FTX CEO Sam Bankman-Fried borrowed hundreds of millions of dollars from Alameda Research, the trading firm he owns, to purchase his stake in trading app Robinhood Markets.

Cryptocurrency exchange Kraken has announced that they will be exiting Japan and deregistering from the Financial Services Agency as of the end of January, citing “current market conditions in Japan in combination with a weak crypto market globally” in a blog post. All Kraken users in the country have until the end of the month to withdraw their fiat and crypto holdings, with the option of transferring crypto to another wallet or wiring Japanese yen to a local bank.

Meanwhile, Bitcoin miner Argo Blockchain has managed to avoid a potentially disastrous bankruptcy filing after they agreed to sell their Helios mining facility in Dickens Country, Texas to Galaxy Digital for $65 million. The miner will also be getting a new $35 million loan from financier Mike Novogratz’s crypto-focused financial services firm, with the loan being secured by Argo’s mining equipment. This transaction has allowed Argo to bolster their balance sheet and avoid bankruptcy after a deal for $27 million in funding fell through in October.

Finally, former FTX CEO Sam Bankman-Fried has revealed that he borrowed hundreds of millions of dollars from Alameda Research, the trading firm he owns, to purchase his stake in trading app Robinhood Markets. Bankman-Fried disclosed this information in an affidavit provided to a Caribbean court before his arrest, stating that he and FTX co-founder Gary Wang had used the money from Alameda to purchase the shares.

Ethereum: Merging Into a New Era of Blockchain in 2022

– In 2022, Ethereum completed its radical shift to a new, vastly more energy-friendly system for powering its network – the Merge.
– The Merge marked a massive reduction to the network’s energy footprint, but has been criticized for leading to too much centralization.
– The Merge occurred amid a bear market and never spurred a long-hoped-for bump to the price of ether (ETH), Ethereum’s native currency.

In 2022, Ethereum achieved a major milestone in its mission to create a global computer and decentralized financial system. After years of work, the blockchain underwent a radical shift to a new, vastly more energy-efficient system for powering its network – the Merge. This dramatic change marked a major reduction to the network’s energy consumption, replacing the power-hungry crypto mining system with a new method for issuing and validating transactions on the blockchain.

The Merge was a long-awaited event that had been in the works for years, and the successful execution of the upgrade was a major boon for Ethereum. However, the Merge has not been without its problems. Some have criticized the new power structure for leading to too much centralization, where validators “stake” ether (ETH) with the chain for the chance to write transactions to its ledger. Furthermore, the Merge occurred amid a bear market and did not lead to the long-hoped-for bump to the price of ether (ETH), Ethereum’s native currency. As a result, the price of ETH has sunk more than 20% since the Merge.

The Merge wasn’t the only major event to occur in Ethereum’s rollercoaster year of 2022. There were also concerns around censorship and record-shattering hacks on Ethereum-linked infrastructure. In terms of censorship, Ethereum has been under fire for allowing certain transactions – such as those related to gambling and adult entertainment – to be blocked. While Ethereum has defended these decisions by saying that it is merely complying with local laws, the censorship has raised questions about the network’s commitment to decentralization.

As for the hacks, Ethereum was a target of several massive security breaches in 2022. The most notable was the exploit of the Layer 2 scaling solution bZx Protocol, which resulted in the theft of $8.1 million worth of Ethereum. While these hacks have been damaging to the network’s reputation, Ethereum has been taking steps to improve its security and has increased its bug bounty program to incentivize the reporting of vulnerabilities.

In spite of the challenges, Ethereum has made impressive progress toward its goal of building a global computer and decentralized financial system in 2022. The Merge marks a major step forward in this regard, and the network is now well-positioned to tackle the challenges that lie ahead.

SEC Increases Scrutiny of Crypto Companies to Protect Investors

• The U.S. Securities and Exchange Commission (SEC) is increasing its scrutiny of audits of cryptocurrency companies in an effort to protect investors.
• The SEC warns investors and audit firms that any troublesome “fact patterns” could result in a referral to the division of enforcement.
• Binance, the largest crypto exchange by trading volume, was looking for another audit firm after it was dropped by Mazars.

The U.S. Securities and Exchange Commission (SEC) is increasing its oversight of cryptocurrency companies by examining the audits of such businesses in order to protect investors. In the wake of the collapse of FTX, as many as nine exchanges around the world announced that they would publish transparency reports or Merkle tree proof of reserves to reassure investors.

The SEC is warning investors not to place too much confidence in the fact that a company has a proof of reserves from an audit firm. Paul Munter, the SEC’s acting chief accountant, said that such a report “is not enough information for an investor to assess whether the company has sufficient assets to cover its liabilities.” If the SEC finds any troubling “fact patterns”, they will consider referring the case to the division of enforcement.

This scrutiny comes at a time when questions have been swirling around Binance, the largest crypto exchange by trading volume, which released a report of its proof of reserves that was withdrawn two days later when the auditing firm it had hired, Mazars, announced it was no longer working with crypto firms. Binance has since been trying to find a new audit firm to work with, but the Big Four (Deloitte, EY, KPMG and PwC) are reportedly unwilling to conduct a proof of reserves for a private crypto company.

The SEC’s increased scrutiny of cryptocurrency companies is a positive development for investors, as it will help protect them from potential scams or frauds. The SEC’s warnings that investors should not too heavily rely on audit reports could help to ensure that investors have all the necessary information before making an investment. Additionally, the SEC’s enforcement efforts could help to deter any potential fraudulent activity.

Bitcoin Tranquility: Market Volatility Hits Two-Year Low Despite FTX Contagion

1. Bitcoin’s annualized seven-day implied volatility has declined to a two-year low of 38.2%.
2. Analysts are scrambling to explain the perplexing tranquility in the market.
3. Markus Thielen, head of research and strategy at Matrixport, believes the macro outlook is extremely constructive and that the FTX headlines will have less impact on the market.

The bitcoin (BTC) market has been surprisingly calm despite lingering FTX contagion fears and macroeconomic uncertainty. Many analysts are scrambling to explain the perplexing tranquility in the market. The annualized seven-day implied volatility (IV) of bitcoin, or the options market’s forecast of a likely movement in the underlying asset, has declined to a two-year low of 38.2%, according to data source Amberdata.

This metric, often equated with the degree of uncertainty or fear, peaked at 145% on Nov. 9 and has been decreasing since, even as the FTX contagion spread and experts feared a wave of miner bankruptcies.

Markus Thielen, head of research and strategy at Matrixport, believes that the macro outlook is extremely constructive, which is contributing to the lower volatility. He also believes that the FTX headlines will have less impact on the market, due to investigations doing the dirty work in the background and China’s recent decision to relax inflationary COVID-19 restrictions.

Bitcoin’s price has risen 9% to $17,700 since crypto lender BlockFi filed for bankruptcy on Nov. 28 and has managed to eke out 3% gains for the week despite Binance’s clients withdrawing large sums of their coins early this week. This indicates that traders have moved on from the FTX collapse and have bought options to hedge against future market volatility.

The current low volatility of the bitcoin market has been perplexing to many analysts. However, with the macro outlook being extremely constructive, the FTX headlines having less impact on the market, and traders buying options to hedge against future market volatility, it is not surprising that the bitcoin market is relatively calm.