Latest news with #FTX
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Business Standard
a day ago
- Business
- Business Standard
Trump signs first US law on stablecoins, hails it a 'financial revolution'
In a major win for the digital asset industry, US President Donald Trump has signed the first federal law aimed at regulating stablecoins, Bloomberg reported. Speaking at a White House ceremony on Friday, Trump described the bill as a 'giant step to cement American dominance of global finance and crypto technology". Named the Genius Act, the new law creates a clear regulatory structure for stablecoins backed by the US dollar. It requires issuers to maintain dollar-for-dollar reserves in short-term government securities or equivalent assets, all under the oversight of either state or federal regulators. 'The Genius Act creates a clear and simple regulatory framework to establish and unleash the immense promise of dollar-backed stablecoins,' Trump said. 'This could be perhaps the greatest revolution in financial technology since the birth of the internet itself.' Boosting the dollar and supporting innovation According to senior Treasury officials, the bill will bring much-needed certainty to the digital asset space, Bloomberg reported. They said that it will foster innovation while preserving the US dollar's global dominance. The legislation is also seen as paving the way for wider use of digital dollars in the financial system. Trump stressed the importance of maintaining the dollar's international role, stating, 'Losing that position would be like losing a world war.' He added, 'With the privacy, flexibility and decentralisation of cash, this revolution has the potential to supercharge American economic growth and empower billions of people to save and transfer in US dollars.' Crypto week and industry support The bill's passage represents a shift in Trump's stance toward digital assets. Once skeptical, he has now embraced the industry, even promoting the legislative push as 'Crypto Week". The law comes after the damaging fallout from the collapse of FTX, led by Sam Bankman-Fried. Supporters of the new measure believe it will provide a stable and credible regulatory environment for the industry. Passing the bill was not without political hurdles. Conservative lawmakers delayed progress, demanding a clause to block the Federal Reserve from launching a central bank digital currency. After meeting with Trump, they agreed to drop their opposition in return for a separate provision to be included in an upcoming defence bill, Bloomberg reported. Democrats attempted to insert a ban preventing elected officials and their families from participating in stablecoin ventures. That effort failed, raising concerns due to Trump's family connections with World Liberty Financial — a firm with its own token and stablecoin. Crypto gains political clout The new law signals the growing influence of crypto investors in Washington. The industry backed friendly candidates in the 2024 elections through powerful political action committees, with Trump receiving broad support. Trump also appointed venture capitalist David Sacks as the White House's first AI and crypto czar. Earlier this year, he signed an executive order to create a Strategic Bitcoin Reserve and pushed for crypto-friendly regulators while easing investigations into firms like Coinbase and Robinhood.
Yahoo
a day ago
- Business
- Yahoo
The Node: The Mad Journey from Terra to GENIUS
Remember Terra? Do Kwon's layer 1 was designed in such a way that its native token, LUNA, worked in tandem with the network's algorithmic stablecoin, UST. When you minted new UST, you destroyed LUNA tokens (thereby constricting supply), and when you redeemed UST, you created new LUNA (expanding supply). That system worked wonderfully as long as UST experienced great demand — which it did, for a while, thanks to a 20% yearly interest on the coin supplied by Anchor Protocol. But in May 2022, huge selloffs caused UST to lose its $1 peg; market participants rushed to redeem their UST, creating a massive new amount of LUNA and pushing the token's price down, which of course led to more UST redemptions, and so on. Over $40 billion in market value was obliterated in 72 hours. Terra's collapse shook the crypto industry, which back then was levered to the gills. Crypto hedge fund Three Arrows Capital blew up, while crypto lenders such as Voyager, BlockFi and Celsius went bust. If that wasn't enough, the U.S. imposed sanctions on Ethereum's Tornado Cash, sending developers all over the world in a bit of a panic. After CoinDesk's Ian Allison reported in November 2022 that Alameda was quite possibly broke, people started yanking their funds out of FTX, which led Bankman-Fried to freeze withdrawals. It turned out that SBF had been fraudulently using FTX customer funds to palliate losses incurred by Alameda Research over the course of the years. Bankman-Fried was arrested (and subsequently sentenced to 25 years in prison) shortly after FTX filed for bankruptcy. Shortly after FTX's demise, SEC Chair Gary Gensler began an aggressive campaign against the sector, suing a huge number of crypto firms (including Coinbase and Kraken) and ushering in an era of 'regulation by enforcement' that was decried by the industry and friendly members of Congress alike. That wasn't the end of crypto's tribulations. Crypto lender Genesis and bitcoin miner Core Scientific were soon added to the list of casualties. Worse, in March 2023 three crypto-friendly banks (Signature, Silvergate and Silicon Valley Bank) suffered from bank-runs and collapsed, making it significantly more difficult for crypto firms to access the banking system. Nic Carter, a prominent crypto VC, accused the Biden administration of trying to debank the crypto industry by employing an Obama-era strategy, a theory which has since gained traction within Congress and the Trump administration. But the winds of fortune finally turned in crypto's favor. When BlackRock filed for a spot bitcoin ETF in June 2023, it felt like Larry Fink himself was shooting a flare in the dark, signaling that Wall Street was ready to embrace crypto. Two months later, Grayscale defeated the SEC in court on the matter of converting its bitcoin trust into an ETF. The agency had little choice than to greenlight a dozen spot bitcoin ETFs in January 2024, which later became the most successful new ETFs of all time. At first showing signs of reluctance about launching spot ether ETFs, the SEC suddenly scrambled to approve the products at the last minute. Some observers linked the change of heart to Trump's new friendliness towards the crypto industry, which contrasted with Joe Biden's hostility. The fact that the crypto industry donated a tremendous amount of money to the former's campaign (and to other pro-crypto politicians) certainly helped as well; we saw yesterday that the Democratic Party, once in lockstep with Elizabeth Warren's anti-crypto crusade, strongly voted in favor of both the GENIUS and Clarity bills. Trump's overwhelming victory in November sent shockwaves through Washington and the crypto industry. The new administration kept its word, though not without hiccups in the form of Trump- and Melania-themed memecoins. Ross Ulbricht is now a free man, and an executive order has been signed to constitute a bitcoin reserve (multiple states, like Texas, Arizona and New Hampshire, have followed suit). Treasury's OFAC has taken Tornado Cash off of the sanctions list, while the SEC has dropped most of its lawsuits and is gearing up to greenlight a bunch of new crypto ETFs. Debanking is no longer a concern. Congress, meanwhile, just passed the GENIUS Act (which creates a framework for regulating stablecoins (unthinkable in the wake of Terra's collapse!!) and will probably pass the Clarity Act (a more complex piece of legislation that assigns clear jurisdiction to the SEC and CFTC when it comes to crypto) before the end of the year. Not to mention that Coinbase stock is trading at record highs, Tether is now seen as one of the most successful businesses in the world, Circle has gone public, Core Scientific (back from the dead) is on track to get acquired by AI firm CoreWeave, and Michael Saylor's bitcoin evangelization has given birth to a horde of companies looking to follow in his footsteps to purchase as much BTC (or ETH or SOL or even DOGE) as they possibly can. All of these events have been reflected in bitcoin's price. The orange coin, which you could briefly buy for $16,000 after FTX collapsed, is now priced at roughly $120,000, and the total market capitalization of the crypto sector is near $4 trillion (up from $830 million in December 2022). Error in retrieving data Sign in to access your portfolio Error in retrieving data Error in retrieving data Error in retrieving data Error in retrieving data
Time of India
2 days ago
- Business
- Time of India
Clothing tech entrepreneur charged with $300 million fraud in US
Academy Empower your mind, elevate your skills A prominent entrepreneur who founded the now-bankrupt clothing technology startup CaaStle was criminally charged on Friday with defrauding investors out of more than $300 million, the U.S. Department of Justice said Christine Hunsicker, 48, of Lafayette, New Jersey, promoted CaaStle to investors as a more than $1.4 billion "Clothing-as-a-Service" business that helped companies rent apparel to consumers with an option to buy, despite knowing it was financially distressed and short of alleged fraud spanned six years starting in 2019, three years after the Princeton University alumna was named one of Inc magazine's "Most Impressive Women Entrepreneurs" and Crain's New York Business' "40 Under 40."Hunsicker was charged in a six-count indictment with wire fraud, securities fraud, money laundering, making false statements to a bank and aggravated identity turned herself in to authorities, and could face decades in prison if convicted. The Securities and Exchange Commission filed a related civil a joint statement, Hunsicker's lawyers Michael Levy and Anna Skotko said the indictment presented "an incomplete and very distorted picture," despite their client being "fully cooperative and transparent" with prosecutors."There is much more to this story, and we look forward to telling it," the lawyers said Hunsicker falsified CaaStle's financial statements and bank records to raise included alleged representations that CaaStle earned $66.3 million on revenue of $439.9 million in 2023, when it actually lost $81 million on revenue of $15.7 was also accused of falsely telling investors their money would go toward buying discounted shares from existing shareholders who needed liquidity, including after the 2022 collapse of the FTX cryptocurrency one instance, Hunsicker allegedly raised more than $20 million after forging a CaaStle director's signature authorizing the issuance of stock options to an said Hunsicker fraudulently raised more than $275 million for CaaStle and $30 million for a related venture, filed for Chapter 7 bankruptcy liquidation in Delaware on June 20."The promise of pre-IPO technology companies can be fertile ground for fraudsters who play on investor euphoria," U.S. Attorney Jay Clayton in Manhattan said in a statement.
Yahoo
4 days ago
- Business
- Yahoo
Crypto is Going Mainstream and 'You Can't Put the Genie Back in the Bottle,' Bitwise Says
The U.S. is on the verge of passing landmark crypto legislation, and if it succeeds, the impact could be profound, not only by unlocking growth, but by significantly reducing risk, asset manager Bitwise said in a report on Monday. The growth story is straightforward according to Bitwise. Regulatory clarity would empower major financial institutions, such as JPMorgan (JPM), BNY Mellon (BK), Nasdaq (NDAQ), to fully build in crypto, the report said. That means billions in new investment and a path to migrate trillions of traditional assets onto blockchain rails. The infrastructure is ready; it just needs Washington's go-ahead, according to the asset manager. This week the House of Representatives is voting on the CLARITY Act, a crypto market structure bill, and the GENIUS Act, which regulates stablecoins in the the top democrat of the Senate Agriculture committee said the market structure bill needs serious changes. If these bills pass through Congress, "you can't put the genie back in the bottle," wrote Matt Hougan, chief investment officer at Bitwise. The deeper, under appreciated shift will be in risk, wrote Hougan. Crypto's reputation has been battered by collapses including FTX, Terra/Luna, 3AC, Celsius, Mt. Gox. These weren't just failures of business models; they were failures of oversight. Without clear U.S. regulation, bad actors thrived in offshore shadows, and investors paid the price. Stronger laws wouldn't have prevented every scandal, but they would've stopped many, the report said. Bitwise notes that crypto's volatility, and previous 70%+ drawdowns, have kept institutions on the sidelines. If legislation eliminates the wildcard risk of offshore implosions, those extreme crashes may become far less frequent. And no, the political winds aren't likely to reverse, Bitwise said. The GENIUS Act passed the Senate 68–30, with bipartisan support including 18 Democrats. Wall Street wants in, and as major institutions deepen their crypto footprints, political support will only grow. When BlackRock, JPMorgan, and millions of Americans are invested, crypto becomes part of the system, too embedded to ignore, and too integral to unwind, the report in to access your portfolio
Axios
4 days ago
- Business
- Axios
How investors lose money when bitcoin rises
The whole crypto market is going up, with bitcoin setting new all-time highs almost every other day. Why it matters: Exciting times like these explain why more people who have invested in crypto report losing money, rather than making it. The big picture: Most people enter markets when the prices are going up fast. Remember Warren Buffett's famous adage: "Be fearful when others are greedy and greedy when others are fearful." In the crypto markets, people are very greedy right now. Yes, but: That doesn't necessarily mean buying now is a bad move. It just depends on what your goals are. Some people with average incomes have done very well in the crypto market by approaching it with a long-term mindset. The people who have lost money in bull runs have been those that got scared when the price started to fall fast. Catch up quick: The peak in the last cycle hit in November 2021, above $67,000, but it fell to a low of $15,742 a year later (a 77% loss), amid the FTX collapse. Bitcoin has been periodically setting new all-time highs ever since spot ETFs were approved in early 2024. It first broke $100,000 late last year. Threat level: Joseph Kelly, CEO of bitcoin finance and security firm Unchained Capital, tells Axios that he sees two ways people lose money again and again when the market perks up. "One shouldn't go looking to alternative cryptocurrencies as a way to get in on something that looks like it could be the next Bitcoin," he tells Axios. Bitcoin has a much brighter future than any of its imitators, he predicts. He also warns new entrants to "be aware of your security footing and ensure your bitcoins are safe from cyber and physical threats of theft and loss." For example, don't tell people you have it. By the numbers: So far bitcoin price has never fallen over any four-year period, even starting at a prior price peak. In fact, very few investors have lost money if they held for three years or more. And, today, the crypto market has considerably more fundamental strength than it had in past upswings. When looked at that way, the 80% downturns that have hit Bitcoin in the past have been a boon to long term buyers. What they're saying: Sharp corrections could hit before the final all-time high. Long-time Bitcoin technical analyst Willy Woo said on X, "There's a ton of profit in coins that have been selling and plenty more profit-taking to go before we are properly reset." The bottom line: Investors who have conviction about bitcoin or another cryptocurrency have a decent shot at doing well, provided they have the nerve to ride out some drops and stick around a while. But if you're looking at a crypto app right now because you think you can get rich quick, there's a decent chance that you will end up making profits for someone else.
