FDIC Highlights Crypto Risk

Plus "Things Sam Is Freaking Out About"

Author

Nathaniel Whittemore
August 16, 2023

The Breakdown First Five - Tuesday, August 14 2023

Welcome back to The Breakdown First Five — the 5 most interesting and/or important stories in bitcoin, crypto, and markets to start your day.

Prompt: cryptocurrency risk in the style of a mid-20th century russian propoganda poster (not sure what this has to do with cryptocurrency but it’s rad so here we are)

5. Miner Advocacy

Bitcoin Miners will have a voice in Washington with the launch of a new lobbyist organization. The Digital Energy Council will exclusively focus on regulatory issues around mining and its relevance to broader energy policy. A former DOE staffer is heading up the efforts. The lobbyist will dispel lawmakers misconceptions about mining as well as explaining how the industry can assist the US in meeting its energy goals.

4. Binance Shutters Payment Service

Binance is closing down their regulated payments processor known as Binance Connect. The service, which was previously known as Bifinity, provided a connection point between crypto rails and the fiat financial system. It allowed merchants to accept crypto easily. Binance said they were adapting to the “changing market and user needs” and “refocusing on core products.” However, the move comes as UK regulators expressed concerns over a loan made by Bifinity.

3. Trump the Crypto Whale

Financial disclosures provided by Trump have shown the former president holds a massive stack of crypto. He disclosed up to $5M in Ethereum based assets and declared $2.8M in income related to the holdings. It’s assumed that this is in some way related to last year’s Trump NFT series. The hagiographic digital trading cards sold for $99 each and generated more than $26M in trading volume.

2. “Things Sam is Freaking Out About”

Prosecutors have notified SBF that they intend to introduce Caroline Ellison’s personal to-do lists and notes as evidence in his criminal trial. One list was entitled “Things Sam is Freaking Out About”. Also included is a recording Ellison took of a notorious all-hands meeting held two days prior to the collapse of FTX. During the meeting, Ellison responded to an employee question indicating that she was aware of the shortfall in customer funds.

1. FDIC Highlights Risk

The FDIC has included crypto in its annual banking sector risk review for the first time. The regulator will continue to closely monitor the “novel and complex” risks of crypto in the banking industry. The FDIC said they were prepared to engage in “robust supervisory discussions” with any banks that wish to deal with the crypto industry. But don’t worry, banks are “neither prohibited nor discouraged from providing banking services” to the legal crypto industry.

Thanks for reading -NLW