SEC hammer comes down on Kraken, Paxos probed, 3AC launch a comeback, Tether finally proves reserves

Kraken fined and staking nixed

US exchange Kraken has agreed to pay $30 million in fines to the Securities and Exchange Commission. Chaired by firebrand crypto cop Gary Gensler, the SEC is now moving forward with its widespread designation of many digital assets as securities. Kraken, whose staking program is the main target of the enforcement action, will automatically unstake US users and relegate non-US stakers to a foreign subsidiary. Vocal SEC Commissioner Hester Pierce — dubbed “Crypto Mom” for her support of crypto and criticism of regulation of digital assets — voiced dissent in an open letter.

“A paternalistic and lazy regulator settles on a solution like the one in this settlement: do not initiate a public process to develop a workable registration process that provides valuable information to investors, just shut it down,” Pierce wrote.

Paxos Investigated

Stablecoin issuer Paxos has come under investigation by authorities, though the extent of the probe is unclear, Coindesk reported Thursday. Paxos, which holds around 20% of Binance’s BUSD reserves, is rumoured to be on the verge of being rejected for its bank charter application. Given the recent mysterious suspension of USD deposits to Binance in the US, it’s this Llama’s opinion that the fireworks have only just begun.

3AC founders launch exchange for trading 3AC bankruptcy claims

After losing billions in investor funds in 2022, the founders of Three Arrows Capital (3AC) are back with a new crypto product. Partnering with the co-founders of CoinFlex, 3AC founders Kyle Davies and Su Zhu unveiled Open Exchange, a “market place for crypto claims trading and derivatives.” The exchange will allow claimants of companies, such as 3AC, affected by last year’s downturn to monetise claims and trade them.

Binance shopping for EU lobbyists

A job ad has popped up on the Binance website indicating the company has its sights set on navigating the EU’s crypto landscape. The lobby position appears ahead of the EU’s upcoming Markets in Crypto Assets (MiCA) legislation, which will see the EU implement significant regulatory laws across the bloc. The EU is set to vote on the proposal in April.

Braavos PSA: get funds out now or lose them

Crypto wallet Braavos has tweeted a stark warning to its old users which essentially told them to get their money or lose them. The wallet is built on the Ethereum scaling blockchain StarkNet. Braavos said that as it has moved into alpha, some of the older “StarkNet APIs will be deprecated soon.” Users who fail “to upgrade to the latest contract” could end up losing money to their funds, the company warned. Braavos raised a $10 million seed round in October last year.

Umami Finance team resigns as CEO dumps tokens

Umami finance is racked by turmoil as a CEO Alex O’Donnell liquidated his holdings onto retail users, causing a major price drop. Several team members have resigned, and those who remain have pledged to transfer the protocol’s power structure to a decentralised autonomous organisation (DAO). In the meantime, some users are reporting their funds as being trapped within the UI, unable to be withdrawn.

O.G. P2P platform LocalBitcoins shuts down, urges investors to exit

Peer-to-peer crypto platform LocalBitcoins is closing its doors due to the market slump. The Finland-based network had been in operation for over 10 years, making it one of the earliest venues where crypto users could exchange assets. In an announcement, LocalBitcoins urged users to withdraw funds immediately, despite having a 12-month window to do so.

Tether may actually be solvent, gets reserve attestation

In perhaps the only good piece of crypto macro news of the past day, stablecoin giant Tether released a reserve attestation verifying its solvency. The attestation was performed by major accounting firm BDO, and shows Tether’s assets to be around $960 million in the black as of December 31. Worries of Tether’s solvency have been a common thread for years, especially in mid-to-late 2022, when the company set out to clear commercial paper from its reserves. Tether is the world’s number one stable asset by market cap.

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