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Silicon Valley Bank Parent Company Files for Bankruptcy

• SVB Financial Group (SIVB), the former parent company of Silicon Valley Bank, has filed for Chapter 11 bankruptcy protection in the U.S.
• The bank had some crypto customers, including Circle Internet Financial and Ripple.
• SVB Financial stressed that it is no longer affiliated with Silicon Valley Bank, which was shut down by regulators last week.

Background

Silicon Valley Bank (SVB) was shut down by regulators last week, sending shock waves through the banking world. SVB Financial Group (SIVB), the former parent company of SVB, has now filed for Chapter 11 bankruptcy protection in the U.S. Bankruptcy Court for the Southern District of New York. The bank’s collapse was sandwiched between the implosions of crypto-focused Silvergate Bank and Signature Bank (SBNY).

Crypto Customers

While not as focused on crypto as those two firms, Silicon Valley Bank had some high-profile crypto customers such as stablecoin issuer Circle Internet Financial and blockchain-based digital settlement provider Ripple.

Financial Details

SVB Financial reported that it has around $2.2 billion in liquidity, about $3.3 billion in bond debt and $3.7 billion of preferred equity outstanding. The company also specified that its venture capital arm SVB Capital and broker-dealer arm SVB Securities are not included in this bankruptcy filing.

Experts‘ Opinion

CoinDesk Global Policy and Regulation Managing Editor Nikhilesh De discussed this news with experts who said that while there will be short term impacts due to banking crisis on crypto markets, they believe that things will likely strengthen long term in terms of more freedom from centralized systems like banks and governments.

• Silvergate Bank is winding down its operations after announcing it would delay filing its annual 10-K.
• Jim Bianco, President of Bianco Research LLC, believes the crypto-friendly bank „had to be perfect“ in order to succeed in the industry and has now paid a heavy price for not meeting that standard.
• Silvergate’s holding company’s stock had already dropped 98% since November 2021 before their announcement and is expected to continue dropping.

Crypto-Friendly Bank Silvergate Forced To Liquidate Assets

Silvergate Bank announced this week that it would be winding down its operations due to “recent industry and regulatory developments”, roughly a week after it said it would have to delay filing its annual 10-K report due to questions from auditors.

Jim Bianco Believes Perfection Was Necessary For Success In The Crypto Industry

Jim Bianco, President of Bianco Research LLC., believes the crypto-friendly bank „had to be perfect“ in order to succeed in the industry and has now paid a heavy price for not meeting that standard. “Silvergate had to be perfect because of the industry they were in,“ he stated. „They weren’t and they’ve paid a heavy price for it.“ This sentiment was seen when Silvergate’s holding company’s stock had already dropped 98% since November 2021 before their announcement and is expected to continue dropping.

Pressure On TradFi Companies To Adopt Crypto Increases After Silvergate Announcement

Bianco also pointed out that with this news, crypto adoption by traditional financial companies (TradFi) just got harder. He noted that while these firms may have been hesitant before, they will now have even more reservations about joining the cryptocurrency space due to Silvergate’s failure despite its reputation as one of the most successful banks operating within cryptocurrency markets.

Liquidation Plan Announced By Silvergate Capital Corp.

Silvergate Capital Corp., parent company of SilverGate Bank, announced Wednesday afternoon that it would be „voluntarily liquidating“ assets as part of their shutdown plan. The exact details of how this process will take place are yet unclear but given recent events many believe this could spell trouble for other crypto focused businesses which may face increased scrutiny from regulators if similar issues arise in the future.

Conclusion

The news surrounding SilverGate’s liquidation is an unfortunate development for those looking towards furthering mainstream adoption of cryptocurrencies but also serves as a reminder that regardless whether you are working in traditional or alternative financial markets there are risks associated with any business venture and measures must always taken into account when planning accordingly.

• Swing, a cross-chain liquidity protocol, released a new “no-code” product that reduces the time needed for deploying and updating decentralized applications across multiple blockchains.
• The product enables developers to update configurations and deploy updates without changing the code.
• It is hoped that this product can help to speed up responses to critical security incidents involving cross-chain bridges.

Swing Cross-Chain Protocol Releases ‚No Code‘ Product

Swing, a cross-chain liquidity protocol, has released a new „no-code“ product which it believes will reduce the time needed to deploy and update decentralized applications across multiple blockchains. The new product, Swing Platform, will be provided to developers during ETHDenver – a major conference for Ethereum developers.

Benefits of Using Swing Platform

The key benefit of using the Swing Platform is that developers can update configurations and deploy updates without having to change the code. This could be particularly useful in situations where fast updates are necessary; such as when it is necessary to disable a particular token or bridge due to security flaws.

Cross Chain Applications Becoming More Common

Decentralized applications straddling multiple blockchains are becoming more common, although the use of cross chain bridges often used to move digital assets between networks can make them vulnerable to hackers. According to Chainalysis – a blockchain security firm – hacking costs and other thefts from cross chain bridges totalled an estimated $2 billion during just the first eight months of 2022 alone.

Potential Security Benefits

The potential security benefits offered by the Swing Platform include being able to respond quickly in critical scenarios when it’s necessary to disable tokens or bridges due to security flaws. It also means that nontechnical team members could act quickly if something happened outside of normal working hours as well.

Conclusion

The release of this „no code“ product by Swing should make it much easier for developers and other team members alike when responding quickly in order protect against any potential security threats posed by cross chain bridges – while also reducing the amount of time needed for deploying and updating decentralized applications across multiple blockchains

• The International Monetary Fund’s (IMF) Executive Board has stated that cryptocurrency should generally not be granted legal tender status.
• Banco do Brasil (BB), Brazil’s largest public bank, has enabled the payment of taxes with cryptocurrencies.
• The IMF leadership noted that outright crypto bans are not ideal but should not be ruled out either.

IMF ‚Generally Agreed‘ Crypto Shouldn’t Be Legal Tender

The International Monetary Fund’s (IMF) Executive Board has released a statement expressing its opinion that cryptocurrency should generally not be granted legal tender status. The board – consisting of 24 directors elected by the IMF’s member countries – was presented with a staff paper warning of the risks crypto poses to monetary policy, tax collection, financial stability and consumer protection. They agreed that while outright crypto bans are not ideal, they should not be ruled out either and recommended countries clarify their tax treatment and align with global standards.

Banco do Brasil Enables Payment of Taxes with Cryptocurrency

Banco do Brasil (BB), Brazil’s largest public bank, has enabled the payment of taxes with cryptocurrencies. This service is only available to customers who have deposited their crypto holdings with Bitfy, a blockchain solutions startup in which BB’s corporate venture capital arm has invested. Bitfy CEO and Founder Lucas Schoch shared his insights into the initiative as well as the current state of crypto adoption in Brazil.

Crypto Regulation Recommendations from IMF Leadership

The IMF leadership suggested targeted restrictions on certain types of activities related to cryptocurrencies instead of an overall ban since such a ban could lead to people turning to other channels or jurisdictions for transactions involving digital assets. They also advised countries to consider adopting global standards for anti-money laundering and countering terrorist financing regulations when it comes to digital asset activities. Finally, they emphasized the need for clear rules regarding taxation around these kinds of activities in order to ensure revenue collection remains consistent across all jurisdictions.

Bitfy CEO & Founder Shares Insights Into Crypto Adoption in Brazil

Bitfy CEO and Founder Lucas Schoch discussed his experience developing this new banking infrastructure in Brazil which allows customers to pay taxes using cryptocurrency via BB’s platform. He believes this is just one way that blockchain technology can help bring more financial inclusion in Latin America by providing access to basic banking services for people who previously didn’t have them or were underserved by traditional banks. He further mentioned how he sees potential for similar initiatives across other industries such as real estate and healthcare where blockchain solutions could offer faster transaction speeds at lower costs compared to traditional methods today.

Conclusion

The IMF Executive Board expressed its opinion that cryptocurrency should generally not be granted legal tender status due its associated risks including those related to monetary policy, tax collection, financial stability and consumer protection among others. At the same time there are opportunities like those offered by Banco do Brasil enabling citizens in Brazil use cryptocurrency for paying taxes through their partner Bitfy as well as potential applications across other industries due low transaction costs offered by blockchain technology compared traditional methods today .

• Short trades on Bitcoin, Ether and other cryptocurrencies resulted in $200 million in losses.
• Bitcoin-backed futures saw the most liquidations, at over $85 million.
• The market capitalization of cryptocurrencies rose 8.8%, with Okb and BNB Chain’s bnb seeing the biggest gains.

$200M in Losses from Short Trades

Traders betting against a market-wide decline were caught off guard as a broader market recovery in the past 24 hours saw $185 million in shorts, or bets against price rises, getting liquidated. This contributed to over $200 million in overall liquidation losses due to leveraged positions being forcefully closed by exchanges when traders failed to meet margin requirements.

Biggest Losers

Bitcoin futures recorded the highest liquidations among all cryptocurrencies at $85 million, followed by Ether futures at $58 million, aptos at $3-$4 million, solana at $3-$4 million and solana at $3-$4 million respectively. Crypto exchange Binance suffered the highest losses with over $68 million liquidated while OKX followed suit with an additional loss of around $51 million.

Market Recovery

Crypto market capitalization increased 8.8% to reach its highest level since November due to Bitcoin and Ether rising up to over $24,500 and $1,600 respectively. Tokens such as Okb (native token of crypto exchange OKX) surged 20%, BNB Chain’s bnb (BNB) rose to $323 while tokens of layer 1 blockchains such as Solana (SOL) and Polygon’s MATIC added 10%. AI-focused tokens like Fetch (FET) and AGIX also saw a 12% increase since earlier this week.

FTX Collapse Contagion Effects

The uptick in cryptocurrency prices erased losses that stemmed from FTX’s collapse and troubles at crypto lender Genesis – both of which caused a contagion effect on the markets initially but have now been reversed by bullish sentiment across multiple coins/tokens mentioned above.

Conclusion

Large liquidations can signal either a local top or bottom for steep price moves which allows traders to position themselves accordingly based on their investment strategy/risk appetite – especially when it comes to leveraged positions where failure to meet margin requirements could result in significant losses such as seen during this week’s short trades fiasco across multiple digital assets including Bitcoin and Ether futures markets resulting in over 200m worth of losses for many traders involved before recovering back up again soon after due to strong buying pressure from large investors/institutions active within the industry today driving prices further upwards once more towards new all time highs once again not seen before until now..

• Robinhood reported $39 million in crypto trading revenue in Q4, down 24% from Q3.
• The company also announced its intention to purchase 55 million shares from a holding company for former FTX execs and cancelled nearly $500 million of its share-based compensation.
• Robinhood posted an adjusted loss of 19 cents a share on revenue of $380 million, below the analyst estimate.

Robinhood’s Crypto Revenue Declines

Robinhood Markets (HOOD) reported $39 million in crypto trading revenue in the fourth quarter, down 24% from $51 million in the third quarter. The online trading broker overall missed both earnings and revenues estimates for the quarter.

Share Purchases and Cancelled Compensation

The company also said its board had authorized it to pursue purchasing all or most of the 55 million shares that a holding company for former FTX execs Sam Bankman-Fried and Gary Wang bought in May 2022, and canceled nearly $500 million of its share-based compensation.

Rollout Of Web3 Wallet

The company noted that its Robinhood crypto wallet was rolled out to more than one million waitlisted users in 2022 after a beta version of its Polygon-based Web3 wallet was released in September.

Overall Performance In Q4

Overall for the fourth quarter, Robinhood posted an adjusted loss of 19 cents a share, ahead of the consensus analyst estimate of a loss of 15 cents a share, according to FactSet, on revenue of $380 million, below the analyst estimate of $396 million. Shares were up about 3% to $10.80 in after-hours trading on Wednesday.

Future Plans

Robinhood is scheduled to hold a call with analysts at 5 p.m. ET to discuss their future plans going forward.

• Bitcoin (BTC) recently traded at around $22,700 after a 4% drop in the past 24 hours.
• Equities closed lower as traders awaited the Federal Reserve’s decision on interest rates Wednesday.
• Arca Director of Trading and Operations Wes Hansen joined „All About Bitcoin“ to discuss the sustainability of bitcoin’s recent rally.

Bitcoin Price Drops Below $23K

Bitcoin (BTC) was recently trading at about $22,700, down more than 4% over the past 24 hours and well off its high Sunday near $24,000. Bitcoin-related funds dominated last week’s digital-asset investment products inflows, accounting for almost all of the $117 million coming in.

Equities Close Lower Ahead of Fed Meeting

Equities closed lower as traders awaited the Federal Reserve’s decision on interest rates Wednesday and studied a flurry of fourth-quarter earnings reports from big techs including Apple and Meta. The tech-heavy Nasdaq Composite closed down 1.9%, while the S&P 500 and the Dow Jones Industrial Average (DJIA) fell 1.3% and 0.7%, respectively.

Arca Director Discusses Bitcoin Rally

Arca Director of Trading and Operations Wes Hansen joined „All About Bitcoin“ to discuss the sustainability of bitcoin’s recent rally, his outlook on how the upcoming Federal Open Market Committee (FOMC) decision will impact the crypto market, insights on bitcoin’s funding rates and its comparison to ether.

Sand Token Surges Before Unlock

The Sandbox’s SAND token surged ahead of its token unlock as investors anticipate potential gains from it being listed on exchanges.

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• Vela Exchange’s DXP utility token has surged in the past 24 hours with its price more than doubling since Wednesday morning.
• The rally is ahead of the widely anticipated release of Vela’s beta version on Arbitrum, which is set to launch on Jan. 31 for registered testers and will be available for the broader public on Feb. 7.
• Vela is an Arbitrum-based decentralized trading platform which allows for spot and perpetual futures trading, as well as peer-to-peer over-the-counter (OTC) trading.

The cryptocurrency industry has been abuzz in recent days with traders betting that Vela Exchange’s DXP utility token can take a share of the growing decentralized exchange (DEX) activity on Arbitrum. The DXP token has surged in the past 24 hours, with its price more than doubling since Wednesday morning. This rally is due to the upcoming release of Vela’s widely anticipated beta version on Arbitrum, which is set to launch on Jan. 31 for registered testers and will be available for the broader public on Feb. 7.

Vela is an Arbitrum-based decentralized trading platform which allows for spot and perpetual futures trading, as well as peer-to-peer over-the-counter (OTC) trading. This means that traders can avoid slippage and frontrunning when executing orders on the platform. The project was originally known as Dexpools on Ethereum before migrating development to Arbitrum, an Ethereum layer 2 blockchain.

The platform will also feature a low latency matching engine, which enables traders to maximize their profits by taking advantage of market movements. This is due to the fact that the platform is powered by a hybrid architecture which combines the power of on-chain and off-chain matching engines. Additionally, Vela will offer an extensive range of order types and trading tools to help traders make informed trading decisions.

Moreover, Vela is committed to providing a secure trading environment by leveraging cutting-edge security protocols and an advanced KYC/AML system. This means that users will have peace of mind when trading on the platform, as it is designed to protect users from malicious actors.

All in all, Vela Exchange is set to become a key player in the DEX space due to its innovative features, low latency matching engine, and robust security protocols. With the launch of its beta version next week, the project is poised to revolutionize the trading experience for users around the world.

• Timothy Stranex, the co-founder and chief technology officer of cryptocurrency exchange Luno, left in December to pursue personal projects.
• Simon Ince has taken over as the company’s new CTO.
• Luno has offices in London, Singapore, Cape Town, Johannesburg, Lagos and Sydney, and claims to have over 10 million customers worldwide.

Cryptocurrency exchange Luno announced the departure of its co-founder and chief technology officer (CTO), Timothy Stranex, in December. After founding the company with Carel van Wyk, Pieter Heyns and current CEO Marcus Swanepoel nearly 10 years ago, Stranex decided to move on to personal projects. His successor as CTO is Simon Ince, who joined Luno just under two years ago as its vice president of engineering.

Luno is a global cryptocurrency exchange with a presence in various countries such as London, Singapore, Cape Town, Johannesburg, Lagos and Sydney. As of December 2020, the company claims to have over 10 million customers worldwide. It is also a subsidiary of Digital Currency Group (DCG), the parent company of CoinDesk.

Under Stranex’s leadership, Luno established itself as one of the most popular cryptocurrency exchanges in Europe and other parts of the world. After his departure, Ince has taken over the reins as the company’s CTO. Ince brings a wealth of experience from his previous roles as a software engineering manager at Microsoft and as the chief architect of the Fintech industry.

Luno’s CEO, Marcus Swanepoel, has expressed his utmost confidence in Ince’s capabilities and believes that he will help Luno to continue its growth and innovation. In a statement, Swanepoel said: “Simon is a great asset to the team and I’m confident that his experience and enthusiasm will help us continue to build the best experience for our customers and partners.”

Ince is looking forward to the challenge and has big plans for Luno. He said: “I’m excited to join Luno at this stage in its evolution and help shape the future of the company. We have an opportunity to continue driving progress and innovation in the industry, and I look forward to leading the team to success in the months and years ahead.”

Luno’s new CTO is sure to bring the company to new heights, as the firm continues to expand its reach and influence in the cryptocurrency space. It remains to be seen what Ince will bring to the table and how it will benefit Luno and its customers.

Bullet Points:

• FTX claims are being sold on the bankruptcy marketplace Xclaim with buyers offering around 13 cents on the dollar.
• This is in contrast to other failed companies such as Voyager Digital, BlockFi and Celsius Network, which are getting much higher prices.
• Xclaim’s chief strategy officer, Andrew Glantz, attributes the discount to the lack of public information available about the claims.

Article Rewrite:

The claims trading platform Xclaim has seen an influx of interest from FTX, and with it comes an opportunity for creditors to recoup a portion of their losses. The $91.7 million in FTX creditor claims are currently being offered on the bankruptcy marketplace Xclaim, with buyers offering around 13 cents on the dollar. This is in stark contrast to the much higher prices that other failed companies, such as Voyager Digital, BlockFi and Celsius Network, are getting, with their claims trading at 41 cents, 28.5 cents and 18.5 cents, respectively.

Xclaim’s chief strategy officer, Andrew Glantz, believes this discount is due to the lack of public information available about the claims. With 117 parties expressing interest in buying units of FTX, the deadline for initial bids is quickly approaching. This sale could potentially lead to big changes for the bankruptcy case, especially when it comes to the stock-clearing platform Embed, FTX Japan, FTX Europe and LedgerX.

For FTX creditors, this is a chance to potentially recoup some of their losses and get back on their feet financially. However, at only 13 cents on the dollar, it means they will not be able to get back the full amount they are owed. Still, this is an opportunity to invest in a company with a lot of potential and, hopefully, get a return on the investment.

The sale of FTX creditor claims is an example of how the bankruptcy process can be used to help investors recoup some of their losses. It is also an example of how the market can be utilized to make sure creditors are fairly compensated for their losses. With the opportunity to purchase units of FTX at a discounted rate, this could be an attractive option for potential buyers.