📉 Crypto bank suffers $1 billion loss

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Regulatory concerns have been mounting at Binance, with members of the team outside of the US expressing their concerns and reports that the US DOJ was considering charging Binance's CEO CZ in December. Furthermore, the market is still anxious after uncertainty around Silvergate, a bank used by many Crypto companies, surfaced last week.

Markets

Crypto Just Tracks Macro Fundamentals (5 minute read)Crypto analysis can be challenging for those with a corporate stock background. Investors accustomed to analyzing corporate stocks using metrics like discounted cash flows, earnings per share, and price-to-earnings ratios may find it difficult to apply these same methods. This is because cryptocurrencies are more akin to commodities and lack the typical analysis factors of corporate stocks. Cryptocurrencies usually track macroeconomic fundamentals. Investing in crypto is considered a "risk-on" strategy. During times of economic prosperity and high liquidity, investors tend to buy these assets in the hopes of generating significant returns. However, when interest rates and inflation rise, investors may need to allocate their money toward more essential expenses.

Binance Team Fretted Over Binance.US Ties, Tried to Recruit Gary Gensler (4 minute read)According to a recent report by the Wall Street Journal, members of the Binance team outside the United States expressed concerns about potential regulatory issues related to its American licensee, Binance.US. The team was worried that the US regulators might raise concerns about their undue influence over Binance.US due to an errant Google Forms account and an early trading launch. These concerns have emerged just weeks after reports of discussions within the company about paying monetary settlements in pending regulatory cases in the US. Additionally, in December last year, the US Department of Justice was reportedly considering criminal charges against Binance's CEO and founder, Changpeng "CZ" Zhao.

Silvergate short seller predicts crypto bank's demise within a week (3 minute read)On Friday, veteran short seller Marc Cohodes posted pictures on Twitter of an apparently empty Silvergate office, claiming victory and stating that "Silvergate is a publicly traded crime scene and Alan Lane belongs in prison." However, neither the bank nor its CEO, Alan Lane, responded to requests for comment. The California-based bank has faced significant challenges recently due to its connections with FTX and Alameda Research, with shares plummeting by around 95% over the past six months. The situation further deteriorated on Friday when Moody's downgraded the company's long-term issuer rating and warned of possible additional rating cuts. The rating agency cited the bank's poor capitalization and failure to file its annual report on time as reasons for the downgrade.

Tech

How Bitcoin mining is adapting to the energy transition (7 minute read)In developed economies, energy consumption is 12 times higher than in some developing economies, while over 900 million people still lack access to electricity. Ironically, we flare enough gas each year to power entire sub-Saharan Africa, yet we lack the necessary technology to transport this energy where it is needed most. This results in the burning of gas, emitting carbon dioxide, without creating any economic value. Bitcoin mining has the potential to capture this wasted economic potential of excess energy resources and accelerate innovative renewable development, making it a key player in solving the energy trilemma. By monetizing stranded or excess energy resources, bitcoin mining can create positive economic opportunities and drive its own growth.

Silvergate Halts Crypto Payments After Suffering $1 Billion Loss (3 minute read)Silvergate Capital, a bank specializing in digital assets, has shut down its popular Silvergate Exchange Network (SEN), which served as the bank's platform for crypto payments. Unlike traditional bank wires that can take days to clear, SEN allowed investors and crypto exchanges to make transfers at any time. However, mounting uncertainty around the bank's viability has led its clients to distance themselves from the institution and encourage customers to move their assets elsewhere, while also assuring them that their funds are safe. Silvergate Capital reported a loss of $1 billion at the end of the fourth quarter of 2021, with additional losses in January and February. In a filing on Wednesday, the bank disclosed that it may need to assess its viability.

A New Crypto Mixer Promises to Be Tornado Cash Without the Crime (5 minute read)Last August, the US government imposed sanctions on Tornado Cash, citing its alleged use in laundering $7 billion in digital currency, including $500 million linked to a hacking group backed by North Korea. The Office of Foreign Assets Control warned that any service facilitating anonymous transactions posed a threat to US national security. This characterization applies to most crypto mixers, which generally obscure the source and destination of crypto transactions by pooling funds from numerous individuals. However, Ameen Soleimani, one of the early architects of Tornado Cash, has announced a successor to the sanctioned mixer called Privacy Pools. Soleimani claims that the new mixer will still enable users to conduct private and mostly untraceable transactions, while deterring money laundering and other illicit activities.

Misc

BNB Chain hackathon winner accuses Binance of stealing AI-powered NFTs idea (4 minute read)Binance, a major cryptocurrency exchange, has been accused of copying the winner of the BNB Chain hackathon by launching an AI-based nonfungible token (NFT) creation tool called Bicasso. Chatcasso, the original tool's creator, won first prize in the hackathon held in Seoul from Dec. 17-19, 2022, and Binance allegedly copied their tool just two months after awarding them the prize. On March 1, Binance CEO Changpeng "CZ" Zhao announced the launch of Bicasso, an AI product that allows users to create NFTs from their creative visions. However, a community member named "ggoma" believes that Binance copied and promoted the Chatcasso project as its own. The accusation is that Binance blatantly ripped off Chatcasso's tool.

After Suffering Second-Largest-Ever Crypto Hack, Jump Crypto Recovers 120,000 ETH By Exploiting Smart Contracts (3 minute read)Jump Crypto, a crypto-specialized division of the Jump Trading Group, faced a difficult decision after a hacker stole around $195 million in Ethereum. The firm had to decide whether to let the hacker keep the stolen funds or compromise their own smart contracts to recover them. Ultimately, Jump Crypto decided to execute a counter-exploit to drain two Oasis vaults that held 120,000 wrapped Ethereum, which had been stolen from them in the Wormhole Exploit of February 2022. Although recovering the funds was beneficial for Jump Crypto, the fact that a DeFi platform could be programmed with a backdoor to move user funds could harm both Jump Crypto and Oasis's reputations.

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