1. Central Bank’s weekly summary
a. Fed raises interest rates by 25 bps as scheduled link
Fed raises interest rate by 25 bps. The U.S. will also release the April unemployment rate this week. CME shows that the probability of the next FOMC raising interest rates by 25 bps on June 14 is 68%, and the probability of stopping the rate hike is 31%.
b. European Central Bank slows pace of rate increases link
On May 4, the European Central Bank raised interest rates by 25 basis points, in line with market expectations. The decision marked the ECB’s seventh consecutive rate hike and put its policy rate at a nearly 15-year high, the highest since October 2008. Investors expect the ECB to keep raising rates in the coming months, even as they expect the US Fed to cut rates.
2. US banking industry’s weekly summary
a. Regulators seize First Republic Bank, sell assets to JPMorgan link
On May 1, United States regulators said First Republic Bank has been seized and a deal agreed to sell the bank to JPMorgan Chase & Co, in what is the third major U.S. institution to fail in two months. The banking giant will take $173 billion of loans and about $30 billion of securities of First Republic Bank including $92 billion of deposits. The FDIC estimated that the cost to the Deposit Insurance Fund would be about $13 billion.
b. Shares of two U.S. banks, Pacwest and Western Alliance, plummeted after opening on May 2 link
On May 2, the stock price of Pacwest Bancorp fell by about 28% after opening, and has since fallen by about 65% as of May 5. The bank’s total assets are $40.36 billion. The stock price of Western Alliance Bancorp also fell by about 15% after opening on the same day, and has since fallen by about 50%. The bank’s total assets are $67.73 billion, ranking among the largest banks in the United States and ranking 13th on Forbes’ list of America’s Best Banks.
3. US crypto tax’s weekly summary
a. Crypto tax guidance could come in ‘12-ish’ months, says IRS official link
The U.S. Internal Revenue Service hopes to issue crypto tax guidance ready in “12-ish” months, Julie Foerster said from the stage at Consensus 2023 on Friday. The digital assets project director also said the IRS is planning to change how it looks at cryptocurrency and wants to work more with the industry. While not considered to be fiat currency, for federal tax purposes cryptocurrencies are considered property, and as such users are required to report their digital assets activity on their tax returns. In particular she urged people to comment on a March proposal to tax non-fungible tokens (NFTs) like other collectibles. The comment period closes June 9.
b. White House pushes for punitive tax on crypto mining link
U.S. President Joe Biden is looking to impose a punitive tax of 30% on crypto mining operations for the “harms they impose on society,” the White House’s Council of Economic Advisers (CEA) said Tuesday in an online post. The CEA argues that crypto mining companies have not paid for all the costs they impose on others, including local environmental pollution, higher energy prices, and increased greenhouse gas emissions. However, the Republican-controlled House of Representatives may not be likely to embrace taxes that punish the industry.
c. NBER paper: US crypto traders avoiding billions in tax by ‘loss harvesting’ link
Crypto traders are avoiding billions of dollars in tax by taking advantage of wild price swings to “harvest” losses so they can be offset against other profits, according to a paper published by the National Bureau of Economic Research. The analysis, based on a dataset of 500 large retail traders and billions of transactions on 34 crypto exchanges, found that the largely unregulated asset class is becoming a mainstay for tax avoidance.
4. Binance’s weekly summary
a. While Binance battles regulators, its $9 billion VC arm keeps growing link
As of the first quarter, Binance Labs had amassed $9 billion in assets, up from $7.5 billion in August of last year. Its money is invested in over 200 projects from more than 25 countries in six continents. Of those, 50 have been incubated by Binance Labs. On paper, the venture business has generated significant returns. Binance’s spokesperson said the outfit has delivered a theoretical return of more than 10 times what it has invested. Yet Binance seemingly has no plans to sell.
b. ChatGPT mistakenly claimed that CZ was a former employee of PetroChina link
On May 2, Binance said it was being attacked by ChatGPT false information, Default (GPT-3.5) used a fake Forbes report link and Linkedin links to refer to CZ as an employee of the Chinese state-owned company PetroChina in the 1990s. But the other two models of ChatGPT gave the correct answer. The company told Fortune it has received numerous requests in recent weeks asking if Binance’s founder, Changpeng Zhao, was an official in the Chinese Communist Party. This included a flurry of inquiries from congressional offices on Thursday.
c. Binance shares capacity management and automatic load testing strategies link
On May 4, Binance published an article describing how it leverages capacity management for unplanned traffic surges caused by high volatility, which is peak-driven and embedded in every service lifecycle stage, preventing overload with activities like measurement, setting up priority, alerting and capacity reports, etc.
d. CZ on Meme Coins: Binance will list popular coins with active trading communities link
CZ: I personally never really understood meme coins. But if a coin has a lot of users trading it, wanting it, playing with it, etc., then we’ll most likely list it. If the coin only lasts for two weeks, then we probably won’t.
5. FTX’s weekly summary
a. FTX paid $36.4 million to five law firms and consulting firms in March link
According to court documents, FTX paid $36.4 million to five law firms and consulting firms in March, and $34.2 million and $32.5 million in January and February. legal documents show that FTX has about $2 billion in cash and about $100 million in asset sales.
b. FTX seeks to retrieve nearly $4 billion from Genesis Global Capital link
On May 4, FTX creditors demanded that the approximately US$4 billion obtained and withdrawn by Genesis from FTX within 90 days before FTX Group’s bankruptcy be recovered and redistributed to creditors in accordance with the bankruptcy law.
6. Coinbase’s weekly summary
a. Coinbase officially launched the Coinbase International exchange link
On May 2, Coinbase officially launched the Coinbase International exchange, which has listed BTC and ETH perpetual futures contracts. All transactions are settled in USDC, initially providing leverage of up to 5x, and eligible institutional clients in non-US jurisdictions can directly access it through the API Deals, products are not currently available to retail customers.
b. Coinbase to stop issuing new loans via Coinbase Borrow link
On May 3, Customers received an email on Wednesday informing them that the last day to take out new loans would be May 10. A person familiar with the matter said the closure of Coinbase Borrow had nothing to do with either pending or past troubles with the SEC. A spokesperson for the exchange attributed the decision to reduced demand. The program allowed customers to borrow fiat loans up to $1 million against as much as 30% of their bitcoin holdings, with interest.
c. Coinbase Global Inc. released its Q1 2023 earnings report link
On May 5, Coinbase Global Inc. released its Q1 2023 earnings report. Coinbase Q1 loss narrowed to about $79 million, from $430 million, in the year-earlier period. It was the fifth consecutive quarterly loss. Revenue fell by about 34% to $772.5 million. Armstrong said the company remains “100% committed to the US”.
7. Reserve Proof’s weekly summary
a. OKEx completes zk-STARK upgrade for proof of reserves link
On April 28, OKX announced the completion of its zk-STARK upgrade for its Proof of Reserve mechanism, which added 18 new cryptocurrencies for verification in addition to BTC, ETH, and USDT, bringing the total to 21. However, compared to the assets disclosed in March, the amount of bitcoin held by OKX users decreased by approximately 7,051 BTC, while USDT increased by 1.1 billion.
b. KuCoin announced the latest Proof of Reserves link
On May 4, KuCoin announced the latest Proof of Reserves. User assets include 19,495 BTC; 165,986 ETH; 1.26 billion USDT; 111 million USDC; about one-sixth of the user assets just announced by OKX. It also decreased when it was first published in Nov last year.
8. AI+Crypto’s weekly summary
a. FalconX is developing a trading bot named “Satoshi” powered by ChatGPT link
FalconX, a digital asset platform, is developing a robot named “Satoshi” powered by ChatGPT, which can provide relevant investment advice based on the historical trading activity, investment portfolio, and interests of crypto users. FalconX uses OpenAI’s API stack and infrastructure to test and build Satoshi, and regularly interacts with the company’s customer management and engineering teams. Currently, Satoshi is still in the testing phase.
b. Circle CEO: On-chain AI robots have already appeared in large numbers link
Circle Founder Jeremy Allaire: With the ability for GPT4 to spin out very good smart contract code, and GPT APIs to stack activities including code pipelines and deployments, there must already be a proliferation of on-chain AI bots with operating on-chain treasury accounts.
c. Binance’s AI+Crypto report reveals the use of AI in DeFi, NFTs, and DAOs link
On May 2, Binance released its AI+Crypto report, stating that artificial intelligence has been used in DeFi to augment the smart contract audit process, facilitate trade automation, and be paired with predictive analytics for more accurate forecasts. In the NFT space, AI has enabled generative art creation, allowed for intelligent and interactive NFTs, and provided tools to streamline the data analytics process. DAOs have also integrated AI to improve manual DAO operations.
d. Crypto.com launches an AI-powered user assistant named Amy link
On May 3, cryptocurrency exchange Crypto.com announced the launch of an AI-powered user assistant named Amy, based on ChatGPT. They claim that Amy can help users to access real-time information on specific tokens and projects in the cryptocurrency industry, as well as detailed information on price listings and historical events. The project is currently in beta.
9. Nigeria’s weekly summary
a. Nigeria’s SEC plans to allow asset-backed tokens but not crypto link
The Nigerian SEC plans to support the issuance of tokens, which include assets such as equity, debt, and real estate, but “excluding cryptocurrencies,” and the company will undergo a one-year “regulatory incubation” by the SEC. SEC will not register cryptocurrency exchanges until a standard agreement is reached with the central bank.
b. Nigeria approves national policy to create ‘blockchain-powered’ economy link
On May 3, Nigeria’s government approved a national blockchain policy on Wednesday as part of the country’s effort to transition to a digital economy. The Federal Ministry of Communications and Digital Economy developed the policy, according to a statement tweeted by the ministry. The tweet did not mention cryptocurrencies.
10. DCG’s weekly summary
a. Genesis, DCG, Creditors Committee and Gemini agreed to start a 30-day mediation process link
This week, Genesis, DCG, Creditors Committee and Gemini agreed to start a 30-day mediation process to drive to a final resolution as soon as possible. If DCG is unable to pay and/or restructure its debt of $630m on May 9th — 11th, DCG risks defaulting on its obligations.
b. DCG CFO Michael Kraines stepped down in April link
On May 2, DCG announced that its Chief Financial Officer, Michael Kraines, stepped down in April, and the company is currently searching for a new CFO. DCG President Mark Murphy and Chief Strategy Officer Simon Koster will jointly lead the finance department on a temporary basis. Michael Kraines became the CFO of DCG Group two years ago.
Fundraising
- Crypto firm FARE Protocol has raised $6.2 million in a seed round led by C Squared Ventures and Goat Capital link
- ZkLink, an infrastructure layer, raised $10 million in a strategic funding round from a lineup of investors that included Coinbase Ventures link
- OpenTrade announced $1.5 million fundraising with investors including Sino Global Capital and Circle Ventures link
- AlienSwap NFT marketplace closed a $12 million strategic funding round led by NEXT Leader Capital and C² Ventures link
- Fedi, Inc., a developer of financial and data technology, announced today that it has raised $17 million in a Series A round led by Ego Death Capital link
Learn more, check out crypto-fundraising.info.
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