tl;dr
• Signature Bank's closure is linked to loss of confidence in management, according to NYS regulators, but the US DOJ their investigation is specifically over its work with crypto clients• Financial analyst Carl Aridas recommends people investigate First Republic, Western Alliance, Zions, Comerica, ...
• Signature Bank's closure is linked to loss of confidence in management, according to NYS regulators, but the US DOJ their investigation is specifically over its work with crypto clients
• Financial analyst Carl Aridas recommends people investigate First Republic, Western Alliance, Zions, Comerica, and UMB for their crypto exposure as Saudi Arabia says no more investing in Credit Suisse
• The US Treasury Department is set to release a report on the role of DeFi in illicit transactions and its risk assessment of the decentralized finance sector
• Cathie Wood highlights how stablecoins were threatened by instability in the banking system during the recent crisis, in contrast to the resilience of crypto networks
• Halborn has discovered a bug that places $25B in assets across 280 networks at risk, including DOGE and Litecoin, and warns that attackers can exploit unpatched nodes
• Coinbase is moving towards a more sustainable revenue model and eyeing the creation of a neobank, partnering with Standard Chartered to offer free bank transfers in Singapore
We are seeing the investigations and continued scrutiny of regional banks and a call for stricter crypto regulation. Here is what is on my mind today.
1. NYS regulators release a statement saying the genesis of the Signature Bank closure is a loss of confidence in management. Keep in mind Barney Frank, of Dodd-Frank fame, was on the Board of Signature Bank and was one of the people that lobbied for the relaxing of the Dodd-Frank rules for regional banks. The US DOJ says they were investigating the bank over its work with crypto clients.
2. A friend of mine that is an financial analyst and writer, Carl Aridas, says people should also investigate First Republic (FRC.N) and Western Alliance (WAL.N) as they're in the news for their crypto exposure. He says they should also add Zions (ZION.O), Comerica (CMA.N) and UMB to the list. I agree. Saudi Arabia says they will definitely not invest in Credit Suisse. I think that failure is an inevitability.
3. The US Treasury Department is about to release a report on the role of decentralized finance (DeFi) in illicit transactions. The report will also give their risk assessment on DeFi. Frankly, I agree that it is possible to use DeFi for illicit finance, such as what was used to launder funds stemming from North Korean hacks. That said, I think the same can be said traditional finance.
4. In a single tweet, Cathie Wood echoes my sentiment. "While the US banking system was seizing up in response to bank runs threatening regional banks, Bitcoin, Ethereum, and other crypto networks didn’t skip a beat. Instability in the banking system threatened stablecoins, the on-ramps to DeFi, in stark contrast to regulator rhetoric."
5. A bug has been discovered by crypto security firm Halborn that can be exploited on several networks, including DOGE, Litecoin. The bug places as much as $25B in assets across 280 networks at risk. In a release, Halborn says, "An attacker can crawl the network peers using getaddr message and attack the unpatched nodes." I think we will be hearing about this more as people become more aware.
6. Coinbase CEO Brian Armstrong says collection of fees on exchanges is volatile and the company is moving toward a more sustainable and dependable revenue model. The revelation is not really unknown to some of as we witness the kinds of moves Coinbase has been making. The company's eye is definitely on a future where they are still relevant, including looking at creating a neobank. Coinbase has also partnered with Standard Chartered to offer customers in Singapore free bank transfers. This creates a new on-ramp/off-ramp offering when the only other offerings are from Visa and Mastercard credit and debit cards.