😡 Ledger's Extremely Controversial Update

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In the US, a Senate Banking Committee hearing saw a former chairman of Signature Bank facing criticism for blaming crypto for his bank's collapse, despite receiving millions in bonuses and stock options. And over in the UK, a parliamentary report was released which recommends crypto be regulated as gambling.

In tech news, there is big controversy surrounding Ledger's latest firmware update, which offers a seed phrase recovery service. There’s also bad news for those with FTX claims, in the ongoing fallout from FTX's bankruptcy, the IRS has filed claims totalling $44 billion against the company, which could take priority over individuals.

Markets

Senators slam bank execs for blaming collapses on crypto, pocketing millions (2 minute read)
During a Senate Banking Committee hearing on May 16, former Signature Bank chairman, Scott Shay, faced criticism from Senator Cynthia Lummis for appearing to shift blame for the bank's collapse onto cryptocurrency, despite receiving millions in bonuses and stock options. Lummis accused Shay of deflecting responsibility onto digital asset depositors and regulators, while failing to acknowledge his own role in the bank's failure. While the hearing was serious in nature, Lummis' strong words for Shay added a touch of lightheartedness to the proceedings.

Crypto should be regulated as gambling, UK lawmakers say (2 minute read)
A UK parliamentary report recently released recommended that Bitcoin, Ether, and other cryptocurrencies be regulated as gambling due to their potential risks to consumers. As Britain seeks to establish itself as a leader in crypto and blockchain technology, the report suggests that new regulations for cryptoassets are necessary. Retail trading and investment in unbacked cryptocurrencies could mislead consumers into thinking that the activity is safer than it actually is, the report warns. Therefore, the report recommends that the government classify retail trading and investment activity in unbacked cryptoassets as gambling, in line with the principle of "same risk, same regulatory outcome."

Tech

Ledger Crypto Wallet Under Fire Over Seed Phrase Recovery Service (3 minute read)
Hardware wallet provider Ledger has stirred up discussion online with the release of its latest firmware update that includes the Ledger Recover service. The service provides an ID-based key recovery solution that backs up users' seed phrases and requires identity verification through a passport or national ID. Though the service requires opt-in and a monthly fee, some users worry about trusting the security of Ledger, Coincover, and a third provider with their encrypted fragments. However, a Ledger spokesperson reassured users that the seed phrase initiation process requires direct approval on their Ledger, similar to any other transaction. The move from Ledger has drawn intense criticism on Twitter and Reddit.

Axie Infinity Game Launches on Apple App Store In Key Markets (3 minute read)
Sky Mavis, the creator of the popular NFT project Axie Infinity, is expanding its offerings by launching its Axie Infinity: Origins card game on the Apple App Store in key markets where the game is most popular. Previously only available in limited regions on the Google Play store and Mavis Hub, the card-based strategy game offers free non-NFT "starter" characters and will first launch in the Apple store across Latin America and Asia, including countries such as Argentina, Colombia, Peru, Mexico, Venezuela, Indonesia, Malaysia, and Vietnam. With 1.5 million installs across all platforms, Axie Infinity plans to continue its global expansion by reaching Google and Apple mobile users worldwide.

Misc

Ripple acquires crypto custody startup Metaco for $250 million (2 minute read)
Ripple, the company behind the Ripple payment protocol, has acquired Swiss-based cryptocurrency custody company Metaco for $250 million in cash and Ripple equity. This acquisition will allow Ripple to expand its offerings by providing the ability to custody, issue, and settle any type of tokenized asset. Ripple CEO Brad Garlinghouse praised Metaco's leadership and track record, stating that "bringing on Metaco is monumental for our growing product suite and expanding global footprint." Ripple has been working with traditional finance companies to integrate crypto and blockchain into their infrastructure and this acquisition is seen as a significant step forward in their mission to revolutionize the financial industry.

The IRS Is Changing Crypto Bankruptcy With $44 Billion Of Claims Against FTX (4 minute read)
The fallout from FTX's bankruptcy continues, with the IRS adding to the pain by seeking to prioritize billions in claims. The process of unraveling the over 130 entities connected to FTX via the bankruptcy courts is expected to take years. The IRS has filed 45 claims totaling $44 billion against FTX and its affiliated entities, including a pair of claims - $20.7 billion and $7.9 billion – against Alameda Research for unpaid partnership taxes. These claims have been labeled as administrative priorities, allowing them to supersede those of unsecured creditors. As of April 2023, $7.3 billion in liquid assets have been recovered, and FTX CEO John Ray is considering a potential relaunch.

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