An anonymous reader quotes a report from CoinDesk: Crypto ads in Belgium must be accurate and warn investors of the risks under new laws announced by the country's financial regulator Monday. Powers published in Belgium's Official Gazette on Friday mean any mass-media campaign to promote a digital currency would have to be submitted to the Financial Services and Markets Authority (FSMA) 10 days in advance, allowing the regulator to intervene if needed.

"Virtual currencies are all the rage at the moment, but they involve considerable risk," the FSMA said in a statement. "They are often subject to wild price fluctuations and are vulnerable to fraud and IT-related risks." The new rules, which will take effect on May 17, require ads to state that "the only guarantee in crypto is risk." Belgium joins European countries such as Spain and the U.K. in imposing restrictions on publicity campaigns, which often mirror those already in place for traditional finance.

On Monday, Binance said it would suspend withdrawals and deposits for anybody using UK currency. The news came after the world's largest crypto exchange's banking partner in the UK, Paysafe, said it was abandoning crypto, at least as far as Binance was concerned. Gizmodo reports: In a statement to Gizmodo, a Paysafe spokesperson said that it was "too challenging" to offer its embedded wallet cryptocurrency services to UK customers because of the regulatory atmosphere in the UK. Paysafe is based in London, and said this decision was "taken in an abundance of caution." Paysafe did not clarify whether it was abandoning crypto altogether, or just in its partnership with Binance. Paysafe called its UK portion of its crypto business "small" but clarified it was still working with Binance elsewhere in Europe and in Latin America.

Binance suspended withdrawals and deposits for any new customers using British pounds late on Monday, and according to Bloomberg the crypto exchange plans to suspend all GBP transactions for all customers starting May 22. The company is reportedly working to find "an alternative solution" to again allow customers to trade GBP for crypto.

Warren is zeroing in on national security concerns as her focus for potential crypto legislation, even as she raises red flags about a host of issues in the space, from consumer protections to environmental impact. From a report: Sen. Elizabeth Warren is branding herself as the scourge of crypto. And she's not doing it alone. The progressive Massachusetts Democrat is starting to recruit conservative Senate Republicans to her anti-crypto cause and getting some early positive vibes from bank lobbyists, who also want to rein in digital asset startups. Warren has emerged as a lead lawmaker on crypto oversight and is trying to build support behind a bill that would have sweeping implications for the industry via tougher anti-money laundering restrictions, including requirements that more crypto service providers verify customer identities.

"I want to emphasize how good her office has been to work with," said Sen. Roger Marshall, the Kansas Republican who co-sponsored Warren's legislation. Crypto advocates are resisting Warren's push, and some dismiss her as an outlier. But her budding partnership with GOP lawmakers reflects broader forces that are poised to unite progressives and conservatives, watchdog groups and bankers, who share common cause in wanting to derail the unfettered growth of crypto. That's in stark contrast to last year, before the crypto market meltdown, when digital currency lobbyists had gained serious traction with lawmakers who drafted friendlier, bipartisan legislation with the industry's input. "It's up to the crypto sector to prove at this point that they're safe, secure and superior, and I don't think they've made that case," said Paul Merski, who leads congressional relations at the Independent Community Bankers of America.

An anonymous reader quotes a report from The Guardian: Consumers could be using a new digital pound as an alternative to cash by the end of the decade under plans being drawn up by the Bank of England and the Treasury. The government is speeding up its response to the rise of privately issued cryptocurrencies and stable coins with a four-month public consultation process on a "Britcoin" starting on Tuesday. After the volatility of cryptocurrencies and the collapse of the crypto exchange FTX, the Bank and the Treasury will seek to reassure the public that a state-backed digital currency would be as safe as cash. Officials will explore the technical issues involved in creating a central bank digital currency before a final decision is taken by the middle of the decade.

Jeremy Hunt, the chancellor of the exchequer, and Andrew Bailey, the Bank of England governor, say the government could still decide against going ahead but momentum is building behind the idea. The consultation paper argues that a digital pound will be needed at some point in the future. Assuming the go-ahead is given, the earliest date cash could be held in digital wallets offered to consumers by the private sector through smartphones or smartcards would be the end of the 2020s, the Bank and the Treasury say. Bailey said: "As the world around us and the way we pay for things becomes more digitalized, the case for a digital pound in the future continues to grow. A digital pound would provide a new way to pay, help businesses, maintain trust in money and better protect financial stability. However, there are a number of implications which our technical work will need to carefully consider. This consultation and the further work the Bank will now do will be the foundation for what would be a profound decision for the country on the way we use money."

If introduced, the digital pound would be issued by the Bank of England and could be used to make payments in person or online. It would be interchangeable with cash and bank deposits, and -- as with the current system of notes -- be issued in denominations of pounds sterling. No interest would be paid on pounds held in digital form. The Bank and the Treasury say a digital pound would be subject to rigorous standards of privacy and data protection. "Like current digital payments and bank accounts, the digital pound would not be anonymous because the ability to identify and verify users is necessary to prevent financial crime," they said. "This is essential for trust and confidence in money and therefore wide use of the digital pound." Hunt added: "While cash is here to stay, a digital pound issued and backed by the Bank of England could be a new way to pay that's trusted, accessible and easy to use."

"That's why we want to investigate what is possible first, while always making sure we protect financial stability."

In 2017 the New York Times covered research co-authored by John Griffin, a finance professor at the University of Texas, into Hong Kong-based Bitfinex, "one of the largest and least regulated exchanges in the industry." Mr. Griffin looked at the flow of digital tokens going in and out of Bitfinex and identified several distinct patterns that suggest that someone or some people at the exchange successfully worked to push up prices when they sagged at other exchanges. To do that, the person or people used a secondary virtual currency, known as Tether, which was created and sold by the owners of Bitfinex, to buy up those other cryptocurrencies.
To reach this conclusion, the paper's two authors "sifted through an incredible 200 gigabytes of trading data, equal to the troves that the Smithsonian Institution collects in two years," according to a new article in Fortune, "and followed sales and purchases from 2.5 million separate wallets."

The researchers ultimately concluded that a single, still unidentified, Bitcoin "whale" triggered nearly 60% of Bitcoin's one-year rise in 2017 from under $1,000 to over $19,000. But more importantly, Fortune now reports that Griffin "suspects that a similar dynamic is operating today." Toward the end of 2022, another mystifying trend caught Griffin's eye. Despite the crypto crash and myriad other negative forces, every time Bitcoin briefly breached the $16,000 floor, it bounced above that level and kept stubbornly trading between $16,000 and $17,000. Almost unbelievably, as the crypto market has continued to unravel into 2023, Bitcoin has gone in the opposite direction, trading up 35% since Jan. 7 to $23,000.

"It's very suspicious," Griffin told Fortune. "The same mechanism we saw in 2017 could be at play now in the still unreal Bitcoin market."

For Griffin, the way normally super-volatile Bitcoin went calm and stable in the stormiest of times for crypto fits a scenario where boosters are uniting to support and juice its price. "If you're a crypto manipulator, you want to set a floor under the price of your coin," added Griffin. "In a period of highly negative sentiment, we've seen suspiciously solid floors under Bitcoin."

It's important to note that no definitive proof of chicanery has so far emerged. "The space is bigger now so it's harder to dig the data," says Griffin. "Sophisticated players may be expert at hiding their identities." We have seen credible leaks asserting that major market participants call meetings of the sector's elite when they fear a crypto leader plans to make what they consider a reckless, industry-endangering move. But no evidence has surfaced that the players are gathering to coordinate buying of Bitcoin or other cryptocurrencies.
Fortune data editor Scott DeCarlo ran a detailed analysis and found, among other things, that Bitcoin "at peak FTX-induced turmoil showed both its smallest swings ever by a wide margin, and divergence from low to high that was one-fourth to one-fifth its average over the past six years." And they're not the only ones asking questions: In a blog post on Nov. 30 titled "Bitcoin's Last Stand," European Central Bank Director General for market operations Ulrich Bindseil and ECB adviser Jürgen Schaaf dismissed Bitcoin's resurgence as "an artificially induced last gasp before the road to irrelevance." Two leading figures on Wall Street told this writer on background that Bitcoin's price action, by resisting a flood of bad news, looks phony and different from a normal free market ruled by independent buyers and sellers.
Thanks to long-time Slashdot reader wired_parrot for submitting the story.

New York's chief financial regulator is set to release new guidance on Monday dictating that companies separate customers' crypto assets from their own, after alleged co-mingling of funds at collapsed crypto exchange FTX and its affiliated trading firm Alameda Research led to hefty losses for clients. From a report: The New York State Department of Financial Services (NYDFS), which leads one of the few state agencies with a regulatory system in place for cryptocurrency companies, will also stipulate that state-regulated companies disclose to customers how they account for clients' digital currency. The guidance is the latest in a series of crypto-related directives NYDFS has issued in the past year, which saw a market collapse that wiped about $1.3 trillion off the value of crypto tokens in 2022. The meltdown triggered the bankruptcies of crypto firms such as FTX, Celsius Network and most recently, Genesis Global Capital, whose lending unit filed for U.S. bankruptcy protection on Thursday. It comes as federal regulators such as the U.S. Commodity Futures Trading Commission (CFTC) are warning about the lack of consumer protections in the crypto sector. Federal agencies like the CFTC say much of what they can do is limited without congressional legislation that would give them additional authority.

The Los Angeles Times explores an interesting exercise in prognisticating about the future. In 2018 robotics entrepreneur Rodney Brooks made a list of predictions about hot tech topics like robots, space travel, and AI, "and promised to review them every year until Jan. 1, 2050, when, if he's still alive, he will have just turned 95." His goal was to "inject some reality into what I saw as irrational exuberance." Each prediction carried a time frame — something would either have occurred by a given date, or no earlier than a given date, or "not in my lifetime." Brooks published his fifth annual scorecard on New Year's Day. The majority of his predictions have been spot-on, though this time around he confessed to thinking that he, too, had allowed hype to make him too optimistic about some developments....

People have been "trained by Moore's Law" to expect technologies to continue improving at ever-faster rates, Brooks told me.... That tempts people, even experts, to underestimate how difficult it may be to reach a chosen goal, whether self-aware robots or living on Mars. "They don't understand how hard it might have been to get there," he told me, "so they assume that it will keep getting better and better...."

This year, 14 of his original predictions are deemed accurate, whether because they happened within the time frame he projected or failed to happen before the deadline he set. Among them are driverless package delivery services in a major U.S. city, which he predicted wouldn't happen before 2023; it hasn't happened yet. On space travel and space tourism, he predicted a suborbital launch of humans by a private company would happen by 2018; Virgin Atlantic beat the deadline with such a flight on Dec. 13, 2018. He conjectured that space flights with a few handfuls of paying customers wouldn't happen before 2020; regular flights at a rate of more than once a week not before 2022 (though perhaps by 2026); and the transport of two paying customers around the moon no earlier than 2020.

All those deadlines have passed, making the predictions accurate. Only three flights with paying customers happened in 2022, showing there's "a long way to go to get to sub-weekly flights," Brooks observes.
"My current belief is that things will go, overall, even slower than I thought five years ago," Brooks writes. "That is not to say that there has not been great progress in all three fields, but it has not been as overwhelmingly inevitable as the tech zeitgeist thought on January 1st, 2018." (For example, Brooks writes that self-driving taxis are "decades away from profitability".)

And this year he's also graced us with new predictions responding to current hype:

• "The metaverse ain't going anywhere, despite the tens of billions of dollars poured in. If anything like the metaverse succeeds it will from a new small player, a small team, that is not yoked down by an existing behemoth."

• " Crypto, as in all the currencies out there now, are going to fade away and lose their remaining value. Crypto may rise again but it needs a new set of algorithms and capability for scaling. The most likely path is that existing national currencies will morph into crypto currency as contactless payment become common in more and more countries. It may lead to one of the existing national currencies becoming much more accessible world wide.

• "No car company is going to produce a humanoid robot that will change manufacturing at all. Dexterity is a long way off, and innovations in manufacturing will take very different functional and process forms, perhaps hardly seeming at all like a robot from popular imagination."

• " Large language models may find a niche, but they are not the foundation for generally intelligent systems. Their novelty will wear off as people try to build real scalable systems with them and find it very difficult to deliver on the hype."

• "There will be human drivers on our roads for decades to come."

And Brooks had this to say about ChatGPT. "People are making the same mistake that they have made again and again and again, completely misjudging some new AI demo as the sign that everything in the world has changed. It hasn't."

Genesis Global Capital is laying the groundwork for a bankruptcy filing as soon as this week, Bloomberg News reported Wednesday, citing people with knowledge of the situation. From a report: The cryptocurrency lending unit of Digital Currency Group has been in confidential negotiations with various creditor groups amid a liquidity crunch. It has warned that it may need to file for bankruptcy if it fails to raise cash, Bloomberg previously reported. Financial pressure at Barry Silbert's DCG began to emerge after the collapse of hedge fund Three Arrows Capital. Genesis suspended withdrawals in November, soon after crypto exchange FTX -- where Genesis held some of its funds -- filed for bankruptcy. The failures have had ripple effects on crypto exchange Gemini Trust, run by Cameron and Tyler Winklevoss. Gemini Earn -- a service that let Gemini's users get yield for lending out their coins through Genesis -- stopped redemptions as well.

An anonymous reader quotes a report from CoinTelegraph: Venture capital firm Digital Currency Group (DCG) has told shareholders it is halting its quarterly dividend payments until further notice as it attempts to preserve liquidity. According to the letter sent to shareholders on Jan. 17, the firm is focused on "strengthening our balance sheet by reducing operating expenses and preserving liquidity." Its financial issues are derived from the woes of its subsidiary, crypto broker Genesis Global Trading, which reportedly owes creditors more than $3 billion and DCG is also considering selling some of the assets within its portfolio.

Customers are currently unable to withdraw funds from Genesis after it halted withdrawals on Nov. 16, which has prompted Cameron Winklevoss -- on behalf of his exchange Gemini and its users with funds on Genesis -- to call for the board of DCG to remove Barry Silbert as CEO of the firm in a Jan. 10 open letter. According to Winklevoss, Genesis owes Gemini $900 million for funds that were lent to Genesis as part of Gemini's Earn program, which offers customers the ability to earn an annual yield of up to 7.4%. He also claimed DCG owed $1.675 billion to Genesis although DCG boss Barry Silbert denied this. Soon after, on Jan. 12, the United States Securities and Exchange Commission (SEC) poured fuel on the fire charging both firms with offering unregistered securities through the Earn program. DCG "owns Grayscale Investments and its series of digital asset trusts and has invested in over 200 companies within the crypto industry including recognizable names such as blockchain analysis firm Chainalysis, stablecoin issuer Circle and digital asset exchange Kraken," notes the report.

The government is considering introducing a "digital pound," the economic secretary to the Treasury has told MPs. From a report: The UK was committed to becoming a world crypto hub, Andrew Griffith said. And the government was "a long way down the road... to establish a regime for the wholesale use, for payment purposes, of stablecoins." Stablecoins are designed to have a predictable value linked to traditional currencies or assets such as gold.

The currency, for use by households and businesses, would sit alongside cash and bank deposits, rather than replacing them. A public consultation on the attributes of a digital pound would be launched in coming weeks, Mr Griffith told the Treasury Select Committee. "I want to see us establish a regime, and this is within the FSMB [Financial Services and Markets Bill, currently being debated in Parliament], for the wholesale use for payment purposes of stablecoins," he said. Central banks around the world are developing or exploring digital currencies.

China, for example, is a front-runner in this global race, and is in the process of testing a digital yuan in major cities including Beijing, Shanghai and Shenzhen. The European Central Bank in July 2021 took a first step towards launching a digital version of the euro, kicking off a 24-month investigation phase to be followed by three years of implementation. And Mr Griffith told the committee: "It is right to look to seek to embrace potentially disruptive technologies, particularly when we have such a strong fintech and financial sector."

The collapse of crypto exchange FTX sparked a run on Silvergate Capital, forcing the bank to sell assets at a steep loss to cover some $8.1 billion in withdrawals. From a report: Crypto-related deposits plunged 68% in the fourth quarter, the bank said in an early release of some quarterly results. To satisfy the withdrawals, Silvergate liquidated debt it was holding on its balance sheet. The $718 million it lost selling the debt far exceeds the bank's total profits since at least 2013. The bank has laid off 40% of its staff, or about 200 employees, and said it would pare back its businesses. It shelved a plan to launch its own digital currency, writing off $196 million it spent buying the technology that Facebook had built in its failed attempt to start a crypto-based payments network. Silvergate caters to companies in the crypto business, taking their deposits and operating a network that links investors to crypto exchanges.

FTX and other companies controlled by its founder, Sam Bankman-Fried, accounted for about $1 billion of the bank's deposits. Silvergate was able to survive such a steep decline in deposits because it isn't structured like most banks. It sold off much of its traditional banking operations and branches to focus on providing bank accounts to crypto exchanges and investors. Crypto-related deposits account for some 90% of the bank's total, and it keeps almost all of its deposits in cash or easy-to-sell securities. The bank said it remains committed to crypto and has the funding to handle a "sustained period of transformation."

Crypto entrepreneur Cameron Winklevoss is accusing fellow businessman Barry Silbert of "bad faith stall tactics" in resolving a dispute between their two companies that grew out of the collapse of FTX. From a report: Gemini, owned by Winklevoss and his twin brother, paused redemptions on a lending product called Earn. It had offered investors the potential to generate as much as 8% in interest on their digital coins -- by lending them out to Genesis Global Capital, one of the companies owned by Silbert's Digital Currency Group (DCG). Genesis owes Gemini's customers $900 million, Winklevoss said in an open letter to Silbert.

The Earn halt came in November, after Genesis revealed it had $175 million locked in an account on Sam Bankman-Fried's bankrupt FTX crypto exchange. Genesis, which suspended both redemptions and new loan originations at the lending unit, has told clients that it could take "weeks" to find a path forward. Winklevoss, facing pressure of his own from angry customers locked out of their Gemini accounts and a lawsuit alleging fraud, said he had provided Silbert with multiple proposals to resolve the issue, including most recently on Dec. 25. "Despite this, you continue to refuse to get into a room with us to hash out a resolution," Winklevoss wrote. "In addition, you continue to refuse to agree to a timeline with key milestones. Every time we ask you for tangible engagement, you hide behind lawyers, investment bankers, and process. After six weeks, your behavior is not only completely unacceptable, it is unconscionable." Silbert's response: "DCG did not borrow $1.675 billion from Genesis. DCG has never missed an interest payment to Genesis and is current on all loans outstanding; next loan maturity is May 2023. DCG delivered to Genesis and your advisors a proposal on December 29th and has not received any response."

"Cryptocurrency went through a transformation in 2022," writes CNN, noting that its peak price last year occurred on January 1 of 2022, at over $47,000: Since then, the asset — along with other cryptocurrencies — has seen a steep fall in price, remaining well below $20,000 since early November.... [Current price: $16,585]

In the wake of the FTX collapse, Emily Parker rhetorically asked, "So who will save crypto now?" Whether the currency can be saved at all is a question that divides our prognosticators. [Political commentator] Alice Stewart is the most bullish on the future of bitcoin, predicting that its peak price in 2023 will be $103,000.

[Legal analyst] Elliot Williams isn't too far behind her, guessing the asset will top out at $70,000. [Opinion contributors] Jill Filipovic and Allison Hope, however, don't anticipate a rise in price at all — speculating that its peak value next year will be just $12,000 and $13,000 respectively. "I know nothing about Bitcoin," admits Hope, "but this seems like a conservative gloom and doom figure."
In their larger collection of predictions, two CNN opinion contributors expressed mild hopes for bitcoin Raul Reyes wrote that Bitcoin "seems like the steadiest investment in the volatile crypto world," before predicting its 2023 peak price would be about $29,400.

And Frida Ghitis predicted that "Speculators will swarm in, and Bitcoin will spike up above $36,000 — before falling back to Earth again."

North Korean hackers have stolen an estimated 1.5 trillion won ($1.2 billion) in cryptocurrency and other virtual assets in the past five years, more than half of it this year alone, South Korea's spy agency said Thursday. From a report: Experts and officials say North Korea has turned to crypto hacking and other illicit cyber activities as a source of badly needed foreign currency to support its fragile economy and fund its nuclear program following harsh U.N. sanctions and the COVID-19 pandemic. South Korea's main spy agency, the National Intelligence Service, said North Korea's capacity to steal digital assets is considered among the best in the world because of the country's focus on cybercrimes since U.N. economic sanctions were toughened in 2017 in response to its nuclear and missile tests.

The U.N. sanctions imposed in 2016-17 ban key North Korean exports such as coal, textiles and seafood and also led member states to repatriate North Korean overseas workers. Its economy suffered further setbacks after it imposed some of the world's most draconian restrictions against the pandemic. The NIS said state-sponsored North Korean hackers are estimated to have stolen 1.5 trillion won ($1.2 billion) in virtual assets around the world since 2017, including about 800 billion won ($626 million) this year alone. It said more than 100 billion won ($78 million) of the total came from South Korea.

Microsoft has quietly banned cryptocurrency mining from its online services, and says it did so to protect all customers of its clouds. The Register reports: The Windows and Azure titan slipped the prohibition into an update of its Universal License Terms for Online Services that came into effect on December 1. That document covers any "Microsoft-hosted service to which Customer subscribes under a Microsoft volume licensing agreement," and on The Register's reading, mostly concerns itself with Azure. Microsoft's Summary of Changes to the license states: "Updated Acceptable Use Policy to clarify that mining cryptocurrency is prohibited without prior Microsoft approval." Within the license itself there's hardly any more info.

A section headed "Acceptable Use Policy" states: "Neither Customer, nor those that access an Online Service through Customer, may use an Online Service: to mine cryptocurrency without Microsoft's prior written approval." Microsoft appears not to have publicized this decision beyond the Summary of Changes page and, in recent hours, in an advisory to partners titled: "Important actions partners need to take to secure the partner ecosystem." That document states "the Acceptable Use Policy has been updated to explicitly prohibit mining for cryptocurrencies across all Microsoft Online Services unless written pre-approval is granted by Microsoft," and adds: "We suggest seeking written pre-approval from Microsoft before using Microsoft Online Services for mining cryptocurrencies, regardless of the term of a subscription." Microsoft told The Register it made the change because "crypto currency mining can cause disruption or even impairment to Online Services and its users and can often be linked to cyber fraud and abuse attacks such as unauthorized access to and use of customer resources."

"We made this change to further protect our customers and mitigate the risk of disrupting or impairing services in the Microsoft Cloud." Permission to mine crypto "may be considered for Testing and Research for security detections."

The New York State Department of Financial Services (NYDFS) on Thursday issued digital asset guidance to state-regulated banks laying out what information financial institutions must submit before getting approval to engage in virtual currency-related activities. From a reportL: The guidance, one of the clearest paths forward yet for banks to offer cryptocurrency services, instructs banks to submit a business plan with details of the proposed activity, detail how such a service would impact the bank's capital and liquidity and inform NYDFS of its plans at least 90 days beforehand.

In a statement, NYDFS Superintendent Adrienne Harris said the new policies are "critical to ensuring that consumers' hard-earned money is protected" and that New York-regulated banks remain competitive. The regulator will "make a comprehensive assessment" of the information presented under the guidance to determine whether a bank should be permitted to engage in a proposed crypto-related activity, according to an industry letter sent Thursday to regulated institutions.

The day before FTX filed for bankruptcy, founder Sam Bankman-Fried received an "alarmed" text message from Binance CEO Changpeng Zhao, reports the New York Times: Mr. Zhao was concerned that Mr. Bankman-Fried was orchestrating crypto trades that could send the industry into a meltdown. "Stop now, don't cause more damage," Mr. Zhao wrote in a group chat with Mr. Bankman-Fried and other crypto executives on Nov. 10. "The more damage you do now, the more jail time." FTX and its sister hedge fund, Alameda Research, had just collapsed after a run on deposits exposed an $8 billion hole in the exchange's accounts. The implosion unleashed a crypto crisis, as firms with ties to FTX teetered on the brink of bankruptcy, calling the future of the entire industry into question.

The series of about a dozen group texts between Mr. Zhao and Mr. Bankman-Fried on Nov. 10, which were obtained by The New York Times, show that key crypto leaders feared that the situation could get even worse. And their frantic communications offer a rare glimpse into the unusual way business is conducted behind the scenes in the industry, with at least three top officials from rival companies exchanging messages in a group chat on the encrypted messaging app Signal. The texts also show that industry leaders were acutely aware that the actions of a single firm or fluctuations in the value of one virtual currency could destabilize the whole industry. The exchanges became increasingly tense as Mr. Bankman-Fried and Mr. Zhao traded barbs.

Earlier that week, Mr. Zhao had agreed to buy FTX and save the exchange, before backing out of the deal. In the Nov. 10 texts, he appeared certain that FTX would not survive, and concerned that it could bring the rest of the industry down with it.... In the Nov. 10 texts, Mr. Zhao specifically accused Mr. Bankman-Fried of using his hedge fund to drive down the price of Tether, a so-called stablecoin whose price is designed to remain at $1. According to messages seen by The Times and people familiar with the matter, the group chat included several other prominent crypto executives, including Jesse Powell, a founder of the crypto exchange Kraken, and Paolo Ardoino, the chief technology officer of Tether, the company that issues the stablecoin of the same name.

Tether is a linchpin of crypto trading worldwide, commonly used by digital asset enthusiasts to conduct transactions. Industry insiders have long feared that if Tether's price fell, it would cause a domino effect that might bring the industry to its knees. (Tether ultimately did not end up losing its $1 peg.)
30-year-old Bankman-Fried told the Times that Mr. Zhao's claims were "absurd.... Trades of that size would not make a material impact on Tether's pricing, and to my knowledge neither myself nor Alameda has ever attempted to intentionally depeg Tether or any other stablecoins... I have made a number of mistakes over the past year but this is not one of them."

A spokeswoman for Tether told the Times they'd "demonstrated its resilience to attacks," adding that FTX's actions "don't reflect the ethos and commitment of an entire industry."

The Securities and Exchange Commission has released new guidance, requiring companies that issue securities to disclose to investors their exposure and risk to the cryptocurrency market. From a report: The guidance comes about a month after FTX, one of the world's largest cryptocurrency exchanges, filed for bankruptcy after loan customer funds to a risky trading company that was founded by FTX's former CEO Sam Bankman-Fried. Over 100,000 customers were affected by the exchange's failure.

On Wednesday, SEC Chair Gary Gensler fended off accusations that the agency has failed to prevent crypto firms from misusing customer funds. Gensler also said the SEC would take more enforcement actions if the firms fail to comply with existing rules. Under the new guidance, companies will have to include crypto asset holdings as well as their risk exposure to the FTX bankruptcy and other market developments in their public filings. The company's bankruptcy filings indicate the company has over 1 million creditors.

Crypto broker Genesis and its parent company Digital Currency Group (DCG) owe customers of the Winklevoss twins' crypto exchange Gemini $900 million, the Financial Times reported on Saturday. Reuters reports: Crypto exchange Gemini is trying to recover the funds after Genesis was wrongfooted by last month's failure of Sam Bankman-Fried's FTX crypto group, the newspaper said, citing people familiar with the matter. Venture capital company Digital Currency Group, which owns Genesis Trading and cryptocurrency asset manager Grayscale, owes $575 million to Genesis' crypto lending arm, Digital Currency Chief Executive Barry Silbert told shareholders last month.

Gemini, which runs a crypto lending product in partnership with Genesis, has now formed a creditors' committee to recoup the funds from Genesis and its parent DCG, the report added. Separately, Coindesk on Sunday reported that creditor groups in negotiation with Genesis currently account for $1.8 billion of loans, with that number likely to continue to grow. A second group of Genesis creditors, with loans also amounting to $900 million, is being represented by law firm Proskauer Rose, CoinDesk said citing a source. Further reading: Sam Bankman-Fried Says He Will Testify Before Congress On FTX Collapse

The company behind the tether stablecoin has increasingly been lending its own coins to customers rather than selling them for hard currency upfront. The shift adds to risks that the company may not have enough liquid assets to pay redemptions in a crisis. From a report: Tether says it lends only to eligible customers and requires that borrowers post lots of "extremely liquid" collateral, which could be sold for dollars if borrowers default. These loans have appeared for several quarters in the financial reports that Tether shows on its website. In the most recent report, they reached $6.1 billion as of Sept. 30, or 9% of the company's total assets. They were $4.1 billion, or 5% of total assets, at the end of 2021.

Tether calls them "secured loans" and discloses little about the borrowers or the collateral accepted. Alex Welch, a Tether spokeswoman, confirmed that all of the secured loans listed in the reports were issued and denominated in tether. The company said the loans were short-term and that Tether holds the collateral. Tether, which is incorporated in the British Virgin Islands, doesn't publish audited financial statements or a complete balance sheet, leaving outsiders with an incomplete picture of the company's financial health. "Tether's disclosures are limited to the information contained in the mentioned reports," Ms. Welch said. The rise in Tether's lending represents a broad risk to the crypto world. Stablecoins such as tether are anchors in the system. They are vital for trading many cryptocurrencies and are widely held by traders. The premise of tether -- and other stablecoins -- is that the issuer always will redeem one coin for $1. Issuers take pains to demonstrate they have ample funds available to do so. The company's reports show only U.S. dollar amounts for the loans and don't say the loans were made in tether tokens. The reports also say the loans were "fully collateralized by liquid assets."