Coinz.com

By Lisa Pauline Mattackal and Medha Singh

(Reuters) – As crisis stalks the traditional world of stocks and bonds, bitcoin is suddenly looking like a safe haven.

The infamously volatile cryptocurrency seems positively hale and hearty, just as a banking meltdown drives markets into the arms of a recession.

    Bitcoin has risen 21% this month, while a choppy S&P 500 has lost 1.4% and gold has gained 8%.

“If you were going to describe an environment where there were successive bank runs because central banks are trying to fight inflation with fast rate increases, that is pretty close to as spot-on a thesis for owning bitcoin as you’ve ever heard,” said Stéphane Ouellette, CEO at digital asset investment platform FRNT Financial.

The cryptocurrency has, for now, severed its ties with stocks and bonds and tagged on to a rally in gold, fulfilling at least one part of creator Satoshi Nakamoto’s dream – that bitcoin can serve as a refuge for suffering investors.

Bitcoin’s 30-day correlation with the S&P 500 has slid to negative 0.12 over the past week, where a measure of 1 indicates the two assets are moving in lock step. 

A selloff in banks has wiped out hundreds of billions of dollars in market value and forced U.S. regulators to launch emergency measures. The past couple of weeks has seen Silicon Valley Bank and crypto lender Silvergate go under, while Credit Suisse has teetered on the brink.

Graphic: Bitcoin refuge amid chaos https://www.reuters.com/graphics/FINTECH-CRYPTO/WEEKLY/egvbyjaakpq/chart.png

‘RETURN TO CORE ETHOS’

Let’s not carried away, though. This is bitcoin.

“The bearish argument would be that these dynamics are temporary, and ultimately this rally is not going to sustain,” said Ouellette.

It remains to be seen if bitcoin’s bullishness will endure as attention shifts to the Federal Reserve’s policy meeting this week where the U.S. central bank must walk a fine line as it fights inflation and bank stresses.

Furthermore, the cryptocurrency’s allure hasn’t all been about safety.

The rapid price rise has forced some short-sellers to cut their bets and buy coin back. Data from Coinglass shows traders liquidated $300 million worth of crypto positions on Monday, with most of that total – $178.5 million – short positions.

Nonetheless, bitcoin is resurgent.

It now commands nearly 43% of the total crypto market, its highest share since last June, according to CoinMarketCap data, while the total cryptocurrency market’s capitalization has jumped 23% to $1.1 billion since March 10.

“We’re seeing a return to bitcoin’s core ethos, that of a financial asset independent from the opacity and meddling of the centralized financial system,” said Henry Elder, head of decentralized finance (DeFi) at digital asset investment manager Wave Digital Assets.

The mainstream bank crisis has also fueled some interest in DeFi, with the total value of tokens linked to such platforms rising to $49 billion from $43 billion over the past week, according to DappRadar. 

BITCOIN IN A BANK CRISIS

Not all areas of the digital world have been immune to the banking fallout, though. The no. 2 stablecoin Circle USD or USDC lost its 1:1 peg to the dollar after disclosing its reserves were parked at the shuttered Silicon Valley Bank.

As worries spread over USDC’s ability to maintain its peg, its market cap slid to $36.8 billion last Friday from $43.8 billion a week earlier, even as leading stablecoin Tether gained around $4 billion.

Market participants said some USDC withdrawals were likely reinvested in bitcoin as well, helping fuel the rally.

“It’s too soon to say that bitcoin has proven the narrative that it’s an alternative in a banking crisis,” cautioned Ed Hindi, Chief Investment Officer at Tyr Capital in Geneva.

But he added: “The rally we are currently witnessing in bitcoin will be looked back at as the point in time where its main property as a decentralized non-sovereign asset was stress tested.”

(Reporting by Medha Singh and Lisa Mattackal in Bengaluru; Editing by Vidya Ranganathan and Pravin Char)

(Reuters) – Cryptocurrency exchange Coinbase Global Inc said on Monday it has stopped support for Signature Bank’s digital payments platform Signet, more than a week after U.S. regulators took control of the bank.

The exchange said it was looking for a new technology provider or for more clarity on the outcome of Signet, which allowed real-time crypto-to-fiat currency transactions.

Coinbase’s users who relied on Signet will not be able to transact outside of traditional banking hours, the exchange said.

New York-based Signature was one of two major U.S. banks that collapsed earlier this month, triggering market turmoil on a scale similar to the global financial crisis 15 years ago.

Prior to its unraveling, the bank had been looking to shrink its footprint in the crypto space after the bankruptcy of FTX and troubles at peer Silvergate Bank, which also said it was winding down operations earlier this month.

On Sunday, a unit of New York Community Bancorp entered into an agreement with U.S. regulators to buy deposits and loans from Signature Bank.

(Reporting by Niket Nishant in Bengaluru; Editing by Shounak Dasgupta)

By Dietrich Knauth

(Reuters) – Bankrupt crypto exchange FTX on Sunday sued the liquidators overseeing the wind-down of its Bahamian affiliate FTX Digital Markets, accusing them of wrongly claiming ownership of the exchange’s assets.

FTX’s U.S. based bankruptcy team, led by new CEO John Ray, said in its lawsuit that the liquidators were laying claim to FTX.com’s cryptocurrency, intellectual property, and customer relationships.

FTX called FTX DM a “fraudulent enterprise”, initially set up only to be a “local service company”, which did not own the FTX.com exchange or any of the cryptocurrency seized.

FTX has been at odds with Bahamian officials ever since filing for bankruptcy protection on Nov. 11. The Securities Commission of the Bahamas began liquidation proceedings against FTX DM a day before the U.S. bankruptcy filing of FTX Trading and more than 100 affiliates, and the two sides have sparred over ownership of FTX assets and access to company data.

FTX’s founder and former CEO Sam Bankman-Fried has been arrested on fraud charges and is expected to face trial in October.

FTX reported this month that Bankman-Fried took $2.2 billion in funds from the company during a period when the crypto exchange lost $8 billion of customer money.

(Reporting by Dietrich Knauth)

By Jonathan Stempel

NEW YORK (Reuters) – Lawyers for Sam Bankman-Fried are nearing an agreement with U.S. prosecutors on revised bail conditions for the indicted FTX cryptocurrency exchange founder, who is trying to convince a skeptical judge he should remain free.

In a letter filed on Friday night in Manhattan federal court, Bankman-Fried’s lawyer Christian Everdell said both sides believed they were “close to a resolution”, and expect to formally propose new restrictions by next week.

Bankman-Fried, 31, faces a trial set for Oct. 2 on charges of stealing billions of dollars in FTX customer funds to plug losses at his Alameda Research hedge fund, and making large illegal political donations to buy influence in Washington, D.C.

Bail talks occurred this week after U.S. District Judge Lewis Kaplan at a March 10 hearing renewed his concerns that Bankman-Fried’s electronic communications with others might exceed the bounds of his $250 million bail package.

Kaplan’s approval is needed to modify Bankman-Fried’s bail.

The former billionaire has pleaded not guilty to eight counts, and not yet been arraigned on four. He is living under house arrest with his parents in Palo Alto, California.

Prosecutors raised the specter of witness tampering in January after Bankman-Fried tried to contact John Ray, who became FTX’s chief executive when the company filed for bankruptcy in November, and an in-house lawyer.

Bankman-Fried’s lawyers have said their client was trying to help, not interfere.

At the March 10 hearing, prosecutors and defense lawyers proposed giving Bankman-Fried a flip phone with no internet capability and a basic laptop with limited functions.

That was too generous for Kaplan, who said Bankman-Fried was “inventive” and could conceivably “find a way around” the restrictions without being caught.

In Friday’s letter, Everdell also sought the judge’s permission to let Bankman-Fried in the meantime use a laptop to access some FTX materials.

Though the laptop would lack monitoring software or restrict Bankman-Fried’s internet access, a lawyer or paralegal would oversee his use and take the laptop away when Bankman-Fried finished with it, Everdell said.

The case is U.S. v. Bankman-Fried, U.S. District Court, Southern District of New York, No. 22-cr-00673.

(Reporting by Jonathan Stempel in New York; Editing by Sonali Paul)

By Georgina Lee

HONG KONG (Reuters) – Bitcoin hovered near nine-month highs on Monday, and has closed out its best week in four years as turmoil in traditional banking drives some investors to turn to digital assets.

The biggest cryptocurrency by market value fell 1.8% in Asia hours to $27,549 after hitting its highest since June 12 on Sunday at $28,474.

It rose 26% last week and is up more than 35% in ten days as turmoil in the banking sector has rippled around the globe — beginning with the collapse of Silicon Valley Bank and culminating, so far, in UBS’ takeover of Credit Suisse at a discount over the weekend.

“The momentum is all driven by liquidity, as bitcoin is an alternative liquidity vehicle,” said Markus Thielson, head of research and strategy at digital asset financial services firm Matrixport based in Singapore.

He expects bitcoin can hit $45,000 by year’s end, with liquidity from central banks finding its way into crypto assets, much as it did during 2021, when bitcoin scaled record highs.

The U.S. Federal Reserve on Sunday said it and other big central banks would deepen liquidity by increasing the frequency of dollar supply operations into financial markets.

Ether, the second-biggest cryptocurrency, rose to a seven-month high of $1,846.50 on Sunday and was last at $1,768.

(Reporting by Georgina Lee; Editing by Christian Schmollinger)

By Kevin Buckland

TOKYO (Reuters) – The safe-haven yen rebounded from early steep declines and the risk-sensitive Australian and New Zealand dollars flipped to losses as early optimism ebbed over efforts by global authorities to contain a banking crisis.

Japan’s currency, which is particularly sensitive to long-term Treasury yields, rebounded from losses as steep as 0.6% to last be flat against the dollar as the U.S. 10-year yield fell sharply heading into the start of European trading, reversing an earlier 12 basis-point rise.

The Aussie, which at one point had been up by 0.7% to a nearly two-week top of $0.6743, was last 0.2% lower at $0.6683, sliding back below the closely watched $0.67 mark. New Zealand’s kiwi was 0.3% lower at $0.6250, giving up an earlier gain of as much as 0.7%.

Over the weekend, the Federal Reserve, European Central Bank, Bank of England, Swiss National Bank, Bank of Canada and Bank of Japan announced joint action to enhance market liquidity. That followed Swiss authorities’ negotiation of a buyout of Credit Suisse by UBS, but at a huge discount and with a $17 billion debt writedown.

“The market’s driving force is risk aversion,” said Takahiro Sekido, chief Japan strategist at MUFG.

“I’m not so pessimistic, but still we have to wait and see how much we will see risk contagion from Europe,” he said. “At least within this week, I expect the yen will stay strong.”

The yen last traded at 131.79 per dollar, keeping intact a 2.5% gain from last week.

The euro was about flat at $1.0671 and sterling was little changed at $1.2189, both erasing earlier small gains.

A Fed rate decision on Wednesday adds an additional layer of uncertainty. Traders are still of the view that a quarter point rise is likely but are now positioned for a peak in rates in May at around 4.8%, followed by a steady series of cuts into the end of the year.

The U.S. dollar index – which measures the currency against six major peers, including the yen and euro – was flat at 103.80, stabilising following last week’s 0.7% slide.

“Almost regardless of Fed this week, (it’s) hard to see risk markets quickly rowing away from banking sector concerns, leaving USD not too far from a safety bid,” Ray Attrill, head of foreign-exchange strategy at National Australia Bank, wrote in a note to clients.

In cryptocurrencies, bitcoin took a breather after its surge to a nine-month high of $28,474 on Sunday, last trading 1.5% weaker at around $27,629.

Gold was flat at $1,989 an ounce, recovering from a decline of as much as 1%.

(Reporting by Kevin Buckland; Editing by Edwina Gibbs and Raju Gopalakrishnan)

(Reuters) – Bitcoin rose 5.19% to $28,380 at 20:01 GMT on Sunday, adding $1,400 to its previous close.

Bitcoin, the world’s biggest and best-known cryptocurrency, is up 72% from the year’s low of $16,496 on Jan. 1.

Ether, the coin linked to the ethereum blockchain network, rose 3.58% to $1,827.2 on Sunday, adding $63.1 to its previous close.

(Reporting by Urvi Dugar in Bengaluru; Editing by Chris Reese)

(Reuters) – Bitcoin surged 9.2% to $27,359 at 2207 GMT on Friday, adding $2,309 to its previous close.

Bitcoin, the world’s biggest and best-known cryptocurrency, is up 65.9% from the year’s low of $16,496 on Jan. 1.

Ether, the coin linked to the ethereum blockchain network, rose 5.5% to $1,768.5 on Friday, adding $91.6 to its previous close.

(Reporting by Yana Gaur in Bengaluru; Editing by Maju Samuel)

(Reuters) – Bankrupt cryptocurrency exchange FTX made transfers of about $2.2 billion to company founder Sam Bankman-Fried through related entities, the company’s new management said.

Overall more than $3.2 billion was transferred through payments and loans to company founders and key employees, FTX said in a statement on Wednesday.

These payments were made chiefly from Alameda Research hedge fund, FTX said, adding that it made these disclosures by filing schedules and statements of financial affairs with the bankruptcy court.

The crypto exchange said the transfers did not include over $240 million spent to purchase luxury property in the Bahamas, political and charitable donations made directly by the FTX debtors, and substantial transfers to non-debtor units in the Bahamas and other jurisdictions.

A lawyer for Bankman-Fried declined to comment.

FTX filed for bankruptcy protection in November, saying it was unable to completely repay customers who had deposited funds on its exchange. FTX’s new CEO, John Ray, has said his top priority was recovering assets to repay FTX customers.

Prosecutors have charged Bankman-Fried, 31, with stealing billions of dollars in FTX customer funds to plug losses at Alameda Research, and making tens of millions of dollars in illegal political donations to buy influence in Washington, D.C.

He denies wrongdoing and is fighting to stay out of jail pending his scheduled Oct. 2 fraud trial.

(Reporting by Shubhendu Deshmukh in Bengaluru; Editing by Stephen Coates)

By Dietrich Knauth

(Reuters) – A U.S. bankruptcy judge declined to delay the $1.3 billion sale of crypto lender Voyager Digital to Binance.US, saying Voyager customers should not be forced to wait out a challenge by the Department of Justice that is unlikely to succeed.

Judge Michael Wiles in Manhattan ruled on Wednesday that the department had mischaracterized the scope of legal protections he had granted to Voyager employees for actions to carry out the sale and rebalance its crypto portfolio.

Wiles, who is overseeing Voyager’s Chapter 11 process, approved its bankruptcy plan last week.

The government can “can step in at any time” if it believes illegal transactions are happening, but has not presented any evidence that Voyager’s crypto transactions are illegal, Wiles said.

The U.S. Attorney’s Office for the Southern District of New York and the Office of the U.S. Trustee, the Justice Department’s bankruptcy watchdog, both filed appeals last week. They argued that the protections could rubber stamp crypto transactions that might be illegal under U.S. securities laws.

Voyager and the DOJ did not immediately respond to requests for comment. Voyager had previously said its customers should not be forced to “stand idly” during a lengthy appeal process.

Binance.US has agreed to pay $20 million in cash to Voyager, and take on crypto assets deposited by Voyager customers. Those assets, valued at $1.3 billion in February, account for the bulk of the deal’s valuation, according to Voyager.

Voyager said earlier this month it could still pull out of the deal and make an effort to return customer funds without outside help.

Voyager filed for bankruptcy in July, months after the crash of major crypto tokens TerraUSD and Luna sent shockwaves across the digital asset industry.

(Reporting by Dietrich Knauth in New York; Editing by Alexia Garamfalvi and Richard Chang)

By Rae Wee

SINGAPORE (Reuters) – Cryptocurrency exchange Coinbase will let customers in Singapore move funds to and from accounts via local banks, smoothing one path to investing in digital assets at a time when markets are on edge over financial stability and crypto banking.

Transfers, in Singapore dollars, are facilitated by a traditional bank, Standard Chartered, and carry no fee, the company said in a statement. Previously, users could only purchase crypto via a Visa or Mastercard debit or credit card, or transfer crypto in and out of their Coinbase account.

Hassan Ahmed, Coinbase’s country director for Singapore, told Reuters in an interview the move was part of the company’s international expansion strategy. Rivals Crypto.com and Gemini already offer a similar service.

Coinbase, which last year received in-principle approval from the Monetary Authority of Singapore (MAS) to offer payment services in the city-state, is looking to ramp up its Singapore retail offerings, said Ahmed.

Singapore has generally welcomed crypto businesses but has been wary of encouraging retail involvement. In October, the MAS proposed rules that would forbid trading businesses from offering incentives or financing to retail customers.

Coinbase’s announcement also comes with confidence in crypto fragile as the fallout from the spectacular collapse of crypto exchange FTX continues to reverberate through markets.

Crypto-focused bank Silvergate Capital Corp became the latest casualty as it announced it would close down earlier in March.

(Reporting by Rae Wee; Editing by Mark Potter)

By Elizabeth Howcroft

LONDON (Reuters) – Britain’s NatWest has imposed new limits on the daily and monthly amount customers can send to cryptocurrency exchanges, seeking to protect consumers from “crypto-criminals”, the bank said on Tuesday.

From Tuesday customer transfers to cryptocurrency exchanges will be limited to 5,000 pounds ($6,088) per 30-day period, with no more than 1,000 pounds per day, NatWest said.

Regulators around the world have warned of the risks of scams and fraud in the largely unregulated world of crypto trading.

Consumers across the UK lost 329 million pounds in crypto crime last year, NatWest said, with the cost-of-living crisis contributing to the problem as criminals lure investors with the promise of high returns.

“We have seen an increase in the number of scams using cryptocurrency exchanges and we are acting to protect our customers,” said Stuart Skinner, head of fraud protection at NatWest, which is one of Britain’s domestic biggest lenders.

In June 2021 NatWest introduced some daily caps on customers’ crypto transfers to crypto exchanges, including top platform Binance, with the limits varying in size depending on the platform in question. It cited concerns over investment scams and fraud.

Santander said in November last year that it would block customers from sending real-time payments to cryptocurrency exchanges some time this year.

($1 = 0.8213 pounds)

(Reporting by Elizabeth Howcroft; Editing by David Goodman)

(Edits headline)

By Lisa Pauline Mattackal and Medha Singh

(Reuters) – Imagine digitally inscribing 3D images of objects such as multi-colored spheres onto a tiny fragment of bitcoin. Then imagine selling them for $16.5 million.

Just when you thought crypto couldn’t get any stranger, bitcoin accidentally births a new breed of NFTs.

The new entrants have materialized in 2023 following bitcoin network upgrades that enabled each satoshi – the smallest denomination of bitcoin, or one hundred millionth – to store a few megabytes of data, from text and images to audio and video.

The data storage was an unintended consequence of the upgrades. Now crypto enthusiasts have embedded a total of 385,000 “inscriptions” known as Ordinals on bitcoin since January, including more than 200,000 image files and over 150,000 text ones, according to Glassnode Market Intelligence.

“I think this is really the start of a fundamental shift in what you can do with bitcoin,” said Alex Miller, CEO at bitcoin developer network Hiro.

The colored balls form part of TwelveFold, a collection of 300 images of 3D objects rendered in a square grid, from NFT developers Yuga Labs, best known for its Bored Ape Yacht Club. It calls the set “a visual allegory” for data on blockchain. 

They became a lucrative allegory this month when the company auctioned 288 of them off for $16.5 million, according to data from research firm Delphi Digital.

Other top-selling Ordinals – named after the software protocol that facilitates inscription – include JPEGs of rocks and shadowy crowned figures which have sold for $213,845 and $273,010 respectively, according to Galaxy Digital Research. 

Although the market for bitcoin NFTs has only been going since January, Galaxy estimates it could be worth $4.5 billion by 2025, basing its bullish forecast on factors such as the growth of the more established Ethereum NFT market and the fact that bitcoin is by far the most popular cryptocurrency.

Caveat emptor, though: Little can be accurately foreseen in the highly unpredictable market for non-fungible tokens, it would appear.

Overall sales of NFTs – excluding Ordinals – stood at about $1 billion last month, according to CryptoSlam data, a recovery from the $324 million in November but still a fraction of the roughly $5 billion seen last January and $2.7 billion in May.

Nonetheless, bitcoin NFTs have built up a head of steam in a short space of time. Satoshis inscribed with NFTs are involved in about 7% of the total number of bitcoin blockchain transactions, according to Glassnode data.

Transactions aplenty, https://www.reuters.com/graphics/FINTECH-CRYPTO/WEEKLY/klvygnxeavg/chart.png

‘KIND OF FRIVOLOUS’

One of the biggest challenges for this new class of NFTs is the dearth of a user-friendly marketplaces, with early transactions taking place over-the-counter on shared online spreadsheets, according to market players.

This lack of infrastructure is a definite barrier to entry, Delphi Digital said.

Not everyone is happy about this surge of activity, especially some bitcoin purists who believe the cryptocurrency should solely be used for payments.

The average fee to make a bitcoin transaction, measured over a 7-day period, has spiked to $1.981, its highest since November, as Ordinals trading surged compared with under $1 at the start of February, according to data from Blockchain.com. 

“We want transactions to remain as inexpensive as possible so people around the world can run businesses and send money,” said Cory Klippsten, CEO of bitcoin-focused financial services firm Swan Bitcoin, who sees problems in “having it priced out through this non-monetary use case that’s kind of frivolous”.

Some critics say Ordinals are also clogging up the network; the 7-day average of time to confirm bitcoin transactions spiked to over 186 minutes in late February, its highest since November’s bitcoin selloff, according to Blockchain.com.

That’s since dropped to over 124 minutes, though that’s still significantly longer than the range of 12.8 to 35 minutes transaction time in January and February.

“Ordinals have brought some more eyes to the network,” said Brendon Sedo, a developer at the Core DAO blockchain. “But NFTs on bitcoin are a distraction from the network’s core purpose, which is to serve as a permissionless network that is globally available, 24/7, and uncensorable.”

(Reporting by Lisa Pauline Mattackal and Medha Singh in Bengaluru; Editing by Pravin Char)

By Jonathan Stempel

NEW YORK (Reuters) – Signature Bank and three former top executives were sued on Tuesday by shareholders who accused the New York bank of fraudulently proclaiming it was financially strong a mere three days before it was seized by a state regulator.

The proposed class action against Signature and its former chief executive officer Joseph DePaolo, chief financial officer Stephen Wyremski and chief operating officer Eric Howell was filed in the federal court in Brooklyn.

It seeks unspecified damages for shareholders between March 2 and 12 when New York’s Department of Financial Services took over Signature, two days after the Federal Deposit Insurance Corp seized Silicon Valley Bank.

Signature did not immediately respond to requests for comment.

Founded in 1999, Signature specialized in real estate lending and provided many services to law firms, and in recent years made a push for cryptocurrency deposits. Former U.S. President Donald Trump had been a client until 2021.

Signature ended 2022 with $110.4 billion of assets and $88.6 billion of deposits, and is the second-largest U.S. bank to fail since 2008. Silicon Valley Bank is the largest.

In Tuesday’s lawsuit, shareholders led by Matthew Schaeffer said Signature hid how it had been “susceptible to a takeover” by making false or misleading statements about its health, in part to quell fears sparked by Silicon Valley Bank’s troubles.

These statements included that Signature could meet “all client needs,” and had enough capital and liquidity to distinguish itself from rivals during “challenging times.”

Signature’s market value was about $6.5 billion before its collapse.

The lawsuit was filed by the law firm that sued Silicon Valley Bank’s parent SVB Financial Group and its CEO and CFO on Monday.

On Sunday, U.S. regulators decided to make Signature and Silicon Valley Bank depositors whole regardless of how much they held in their accounts.

Shareholders would receive no protections. Regulators said the move would protect the U.S. economy by strengthening public confidence in banking.

The case is Schaeffer v Signature Bank et al, U.S. District Court, Eastern District of New York, No. 23-01921.

(Reporting by Jonathan Stempel in New York; Editing by Nick Zieminski)

By Hannah Lang and Pete Schroeder

(Reuters) – New York’s financial regulator said its decision to close Signature Bank had “nothing to do with crypto,” citing what it called “a significant crisis of confidence in the bank’s leadership” that occurred over the weekend after regulators shuttered Silicon Valley Bank.

The comments from a New York State Department of Financial Services spokesperson were in contrast with those made by Signature Bank board member and former U.S. Rep. Barney Frank, one of the pioneers of the landmark Dodd-Frank Act, which was enacted after the 2008 financial crisis to better insulate the banking system from shocks.

“I think part of what happened was that regulators wanted to send a very strong anti-crypto message,” Frank told CNBC on Monday. “We became the poster boy because there was no insolvency based on the fundamentals.”

But NYDFS denied Frank’s claims in a statement on Tuesday, saying that its decision to close Signature Bank on Sunday and appoint the Federal Deposit Insurance Corp as receiver “was based on the current status of the bank and its ability to do business in a safe and sound manner on Monday.”

The FDIC and Signature Bank did not immediately respond to a request for comment.

“The decisions made over the weekend had nothing to do with crypto. Signature was a traditional commercial bank with a wide range of activities and customers,” an NYDFS spokesperson said.

“DFS has been facilitating well-regulated crypto activities for several years, and is a national model for regulating the space,” they said.

The spokesperson added that as withdrawal requests ballooned over the weekend, Signature Bank failed to provide reliable and consistent data.

In response to NYDFS’ statement, Frank said he was surprised the regulator said the decision to close the bank was not related to cryptocurrency.

“I think that was a factor,” he said in an interview. “I’m puzzled as to why it was closed.”

He added that to his knowledge, bank executives were working to provide data to regulators.

“What we heard from our executives is that the deposit situation had stabilized and they would be getting the capital from the discount window and I continue to be convinced that if we had opened on Monday given the announcements of those two policies, we would have been in a reasonably good shape and certainly functional,” he said.

Signature was a commercial bank with private client offices with nine national business lines including commercial real estate and digital asset banking.

As of September, almost a quarter of its deposits came from the cryptocurrency sector, but the bank announced in December that it would shrink its crypto-related deposits by $8 billion.

The FDIC established a “bridge” successor bank to Signature Bank on Sunday to enable depositors to access their funds. The U.S. Treasury Department and other bank regulators announced Sunday that all of the depositors at both Signature Bank and Silicon Valley Bank would be made whole and “no losses will be borne by the taxpayer.”

(Reporting by Hannah Lang in Washington, Editing by Nick Zieminski)

LONDON (Reuters) – Top cryptocurrency bitcoin hit a nine-month high of $26,533 on Tuesday, in its fourth consecutive day of gains, as it appeared to benefit from chaos in global markets following last week’s collapse of Silicon Valley Bank.

Bitcoin rose to $26,533 at around 1306 GMT, up around 10% on the day at its highest since June 2022. It gained 7.6% on Sunday and 9.1% on Monday.

The dollar was little changed overall after U.S. consumer price data on Tuesday showed inflation still rising, but at a slower pace than the previous month, in a widely anticipated reading that may lead the Federal Reserve to slow or even pause hiking interest rates next week.

Cryptocurrency prices fell sharply in 2022 as rising rates prompted investors to ditch risky assets. A series of collapses at high-profile crypto firms, including major exchange FTX, left customers with large losses.

(Reporting by Elizabeth Howcroft, editing by Sinead Cruise)

By Elizabeth Howcroft and Tom Wilson

LONDON (Reuters) – Binance is halting its sterling deposits and withdrawals, a company spokesperson said on Tuesday, a month after the world’s largest crypto exchange ceased dollar transfers.

Binance has been informed by its partner for sterling transfers, Paysafe, that it would halt its services from May 22, the spokesperson said, impacting all Binance customers.

Sterling transfers for new users were stopped on Monday, it said.

“Binance will ensure that affected users are still able to access their GBP balances,” the spokesperson said, adding that the change “affects less than 1% of Binance users.”

Binance, which has more than 128 million customers, did not give details on the number of clients the move would impact. The company is working to find an “alternative solution” for sterling transfers, the spokesperson said.

The cessation of sterling transfers, first reported by crypto news outlet The Block, is the latest obstacle for Binance in accessing traditional currencies. Binance last month suspended all dollar bank transfers amid a growing crackdown on crypto by U.S. authorities.

The Justice Department is also investigating Binance, run by billionaire CEO Changpeng Zhao, for suspected money laundering and sanctions violations, Reuters has previously reported. A top Binance executive told The Wall Street Journal and Bloomberg last month that Binance expected to pay penalties to resolve U.S. investigations into the company.

A further hindrance for Binance in accessing dollars came after the U.S. Securities and Exchange Commission told the company which issued its “BUSD” stablecoin it was considering taking action against it. The move sparked around $6 billion in outflows as of earlier this month.

The importance of sterling funding to Binance is unclear. The company does not make public its finances, with the core of the business – the giant Binance.com exchange – mostly hidden from public view.

Paysafe did not immediately respond to a request for comment from Reuters. The company offers the service via UK payments network Faster Payments, which also had no immediate comment.

A spokesperson for Skrill, the Paysafe unit that works with Binance, told crypto website Decrypt that “the UK regulatory environment in relation to crypto is too challenging to offer this service at this time and so this is a prudent decision on our part taken in an abundance of caution.”

Britain’s financial watchdog said last year that it lacked powers to stop Binance from accessing the Faster Payments network via Paysafe.

The UK’s Financial Conduct Authority (FCA) warned consumers in June 2021 that Binance did not hold “any form” of permission to offer services regulated by Britain.

The FCA did not immediately respond to a request for comment.

(Reporting by Tom Wilson and Elizabeth Howcroft; editing by Jason Neely)

(Reuters) – The U.S. Justice Department is investigating last year’s collapse of the TerraUSD stablecoin, the Wall Street Journal reported on Monday, citing people familiar with the matter.

The Federal Bureau of Investigation and the Southern District of New York (SDNY) have questioned former team members of the company behind the stablecoin, the report said.

Spokespeople for Terraform Labs and the U.S. Attorney’s office for the Southern District of New York did not immediately respond to Reuters’ requests for comment.

Last month, the U.S. Securities and Exchange Commission charged Terraform founder Do Kwon with defrauding investors in what the regulator deemed a multibillion-dollar scheme.

(Reporting by Niket Nishant in Bengaluru; Additional reporting by Luc Cohen and Ananya Mariam Rajesh; Editing by Maju Samuel)

(Reuters) – Meta Platforms Inc will stop supporting digital collectibles or non-fungible tokens (NFTs) on its platforms, the social media firm’s fintech head Stephane Kasriel said on Monday.

“We’re winding down digital collectibles (NFTs) for now to focus on other ways to support creators, people, and businesses,” Kasriel tweeted.

(Reporting by Eva Mathews in Bengaluru; Editing by Devika Syamnath)

By Elizabeth Howcroft

LONDON (Reuters) – U.S.-based crypto firms are trying to open Swiss bank accounts after the collapse of two U.S. crypto-focused banks made it harder for them to use lenders in the United States, but bankers said the Swiss firms may not take them.

Crypto-focused U.S. bank Silvergate Capital Corp said it planned to close last week after it was hit with losses following the dramatic collapse of crypto exchange FTX in November last year.

Its closure was followed by the collapse on Sunday of Signature Bank — seen as U.S. crypto firms’ main alternative to Silvergate — in one of the largest failures in U.S. banking history.

The global banking sector was thrown into turmoil by Friday’s collapse of Silicon Valley Bank, which sent global bank stocks plunging on Monday on concern about further contagion. The tech-focused lender also banked crypto companies and was the second-biggest U.S. bank failure.

Crypto analysts said that the U.S. bank closures, along with a regulatory crackdown in the U.S., would push firms to seek banking partnerships in Europe, Asia, and “offshore”.

“U.S. regulators have issued multiple warnings to banks about potential risks of working with crypto companies. They haven’t banned it explicitly but made it clear this would be frowned upon,” said Ivan Kachkovski, crypto and FX analyst at UBS.

“This is likely to push crypto companies to other jurisdictions in search of non-U.S. banks willing to work with the industry.”

Switzerland, long famous for its private banking sector, has also been one of the more welcoming countries in Europe for crypto firms, with the Swiss city of Zug dubbed “The Crypto Valley.”

Yves Longchamp, managing director of crypto-focused SEBA Bank in Switzerland said there had been a “pronounced uptick” in traffic to the bank’s website from the U.S., and that in a global call on Friday representatives from the Singapore, Hong Kong, Abu Dhabi, and Switzerland offices all said they’d seen increased interest from prospective clients.

“Crypto firms and other money managers have already started the onboarding process and many calls are scheduled next weeks,” he said via email.

Switzerland-based Arab Bank said it saw an increase in U.S. firms, mostly crypto funds or involved in crypto venture capital, seeking to open accounts in the last few weeks as doubts about Silvergate grew. Rani Jabban, head of treasury and financial institutions at Arab Bank, said around 80% of them had been Silvergate customers.

“We had 10-20 enquiries so far… but that doesn’t mean that we can cater and open accounts for all of them,” he said, citing regulatory difficulties of onboarding U.S.-based clients and estimating that only one or two of them would ultimately become Arab Bank customers.

Crypto firms relied on Silvergate’s crypto payments network, the Silvergate Exchange Network, which allowed round-the-clock transfers between investors and crypto exchanges, unlike traditional bank wires, which can often take days to settle.

“I don’t see any banks also offering the structure that Signature and Silvergate were offering with their internal blockchain 24/7 settlement,” Arab Bank’s Rani said.

Swiss bank Sygnum, which describes itself on its website as “the world’s first digital asset bank”, is sticking to its policy not to take on U.S. clients “due to a lack of regulatory clarity” Sygnum’s chief marketing officer Dominic Castley told Reuters via email.

(Reporting by Elizabeth Howcroft; Editing by Sharon Singleton)