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The House Republican Steering Committee, which determines committee leadership positions, made it official for McHenry, who currently holds the top Republican spot on the committee and was widely expected to become the next chair once Republicans won a majority in the House of Representatives after the midterm elections.

“As Chairman, I will pursue an innovation and opportunity agenda. We will focus our efforts on conducting appropriate and aggressive oversight of the Biden administration, as well as pursuing bipartisan legislation to put Americans back in control of their personal financial data, enhance capital formation opportunities, and develop a comprehensive regulatory framework for the digital asset ecosystem,” McHenry said in a statement.

The North Carolina Republican has been especially active on financial technology policy, helping craft early crowdfunding legislation, the JOBS Act. He more recently has played a lead role in negotiations to pass a comprehensive framework around stablecoins.

McHenry also has served in House leadership, as chief deputy whip, but declined to run for a leadership post in favor of maintaining his position on the committee to lead it in the next Congress, which starts in early January.

© 2022 The Block Crypto, Inc. All Rights Reserved. This article is provided for informational purposes only. It is not offered or intended to be used as legal, tax, investment, financial, or other advice.

Crypto lender Celsius Network must return around $44 million worth of crypto back to customers, even if it didn’t enter Celsius’s interest-bearing accounts. 

Chief Bankruptcy Judge Martin Glenn issued the order on Wednesday after parties involved in the case concluded that funds belong to users, not Celsius, Bloomberg reported.

Celsius moved more than $200,000 in assets into custody accounts before its bankruptcy this summer, which opened the possibility that it could claim ownership of those funds. However, Glenn ruled that Celsius doesn’t have to return crypto if the transfers were less than $7,500, equaling about $11 million in assets. 

Celsius filed for Chapter 11 bankruptcy protection in July, when the firm revealed it had between $1 billion and $10 billion in liabilities and claimed more than 100,000 creditors. 

Earlier this week, Celsius won an extension on its exclusivity period for the right to submit a Chapter 11 reorganization plan until Feb. 15.

© 2022 The Block Crypto, Inc. All Rights Reserved. This article is provided for informational purposes only. It is not offered or intended to be used as legal, tax, investment, financial, or other advice.

A federal judge dismissed a proposed class-action lawsuit against EthereumMax founders and celebrity promoters, including Kim Kardashian and boxer Floyd Mayweather Jr., CNBC reported.

Plaintiff Ryan Huegrich earlier this year brought the suit on behalf of all investors who purchased EthereumMax tokens between May 14-June 17, 2021.

Judge Michael Fitzgerald ruled that customers should have known better, even though he said he worried about “celebrities’ ability to readily persuade millions of undiscerning followers to buy snake oil with unprecedented ease and reach.”

“While the law certainly places limits on those advertisers, it also expects investors to act reasonably before basing their bets on the zeitgeist of the moment,” Fitzgerald wrote in the ruling from the U.S. District Court in Los Angeles. 

The judge said the allegations were insufficiently backed given heightened pleading standards for fraud claims, but he said lawyers could refile the suit after amending some of the claims. 

“We’re pleased with the court’s well-reasoned decision on the case,” CNBC cited Kardashian lawyer Michael Rhodes as saying.

Kardashian in October was charged with unlawfully promoting the EthereumMax token by the U.S. Securities and Exchange Commission. She didn’t admit to or deny any of the regulator’s findings and agreed to pay $1.3 million.

Last month, Tom Brady, Gisele Bundchen, Steph Curry and Larry David were named in a class action lawsuit brought against promoters of the collapsed FTX crypto exchange. 

© 2022 The Block Crypto, Inc. All Rights Reserved. This article is provided for informational purposes only. It is not offered or intended to be used as legal, tax, investment, financial, or other advice.

Almost all of the bitcoin mining stocks tracked by The Block traded lower on Wednesday, and three firms saw double-digit declines.

Bitcoin was trading at around $16,800 by market close, according to data from TradingView.

BTCUSD Chart by TradingView

SAI.TECH led the declines with shares falling 14.5%. It was followed by Cipher Mining (-12.6%), and Terawulf (-10.6%).

Marathon Digital’s price dropped 7.3% a day after it provided its November operational update after the close on Tuesday. The company said its production was “negatively impacted by curtailment at the King Mountain
site in Texas,” and that it produced 472 bitcoin in the month compared to a record 615 in October.  

Here’s how crypto mining companies performed on Wednesday, Dec. 7:

© 2022 The Block Crypto, Inc. All Rights Reserved. This article is provided for informational purposes only. It is not offered or intended to be used as legal, tax, investment, financial, or other advice.

Federal law enforcement is in touch with former FTX employees as part of a criminal investigation into the failed exchange and its sister hedge fund Alameda Research. 

Two former FTX employees have been contacted by federal authorities as part of what they believe to be a broader effort to collect information about the inner workings of the failed exchange and hedge fund, they confirmed to The Block. The contact is still at the request for information stage, rather than court-issued subpoenas for records or other information. The employees did not provide details on what information authorities sought. 

The outreach is one piece of a broader federal probe into the companies involving the Justice Department, the Securities and Exchange Commission, the Commodity Futures Trading Commission and state regulators. FTX’s bankruptcy lawyers have also said in court that new CEO John Ray III is cooperating with law enforcement and regulators. 

In bankruptcy court proceedings, Ray lamented a lack of substantial record-keeping at the company, a common red flag for prosecutors, who reportedly had an ongoing investigation into the company well-before its public collapse.

Bankman-Fried claimed statements made by Ray and company lawyers in court were false in a recent interview with The Block, but has also claimed not to remember certain details. 

The House Financial Services Committee has invited Bankman-Fried to testify next week at a hearing on FTX’s collapse. He has so far declined, saying he might appear after he has “finished learning and reviewing what happened,” at his own companies. The committee is weighing a subpoena to compel his appearance, though one remains unlikely due to complications around enforcement. 

© 2022 The Block Crypto, Inc. All Rights Reserved. This article is provided for informational purposes only. It is not offered or intended to be used as legal, tax, investment, financial, or other advice.

Grace Berkery, director of startup engagement at the payment processing firm Mastercard, thinks the collapse of FTX will ultimately be a positive for the industry. 

“I think it’s an opportunity and time to reset,” TechCrunch reported Berkery as saying at Benzinga’s Future of Crypto Event. “At Mastercard, we believe there’s a lot of promise in the underlying technology. There’s a lot happening in the space.”

She added that investors may regard NFTs and metaverse endeavors as a big opportunity, especially if these projects boost customer engagement and loyalty. New institutional investors who do join will be more cognizant about due diligence of their crypto partners going forward, she said.

Mastercard itself has built tools for better crypto compliance, rolling out Crypto Secure in October. The platform uses artificial intelligence to monitor crypto exchange-related risks in Mastercard’s pay flow, The Block reported previously. 

Other major financial players have seen silver linings following FTX’s collapse as well. Ample investment opportunities abound now that crypto assets are “priced much more sensibly,” said Goldman Sachs’s digital asset head Mathew McDermott.

© 2022 The Block Crypto, Inc. All Rights Reserved. This article is provided for informational purposes only. It is not offered or intended to be used as legal, tax, investment, financial, or other advice.

Signature Bank, long known as being friendly to crypto clients, is introducing caps to reduce the concentration of deposits from clients in the digital asset industry to below 20% of total bank deposits.

The bank, in an email to clients from group director Joseph Seibert obtained by The Block, said it would adopt a per-client deposit cap of at most 2% of total bank deposits.

“Signature Bank will continue servicing clients in the digital asset industry, including stablecoin clients,” Seibert said, citing “rapid deposit growth and the ongoing market volatility in the digital asset industry” for the change.

In a separate email to The Block in response to follow-up questions, Seibert said the cap would be $2 billion per client.

With deposits ending the third quarter at $102 billion, the measure would cap total deposits for the entire digital ecosystem at $20.4 billion, he said.

CEO Joe DePaolo first announced that it would reduce deposits from the crypto industry at a Tuesday event in New York, according to a report from CoinDesk.

The bank said it expected the strategy to impact a “minimal amount” of clients that have already been notified and that the decision would allow it to utilize capital in a more strategic manner. 

“We continue to invest resources in this space and expect growth to continue over the coming years as we continue to strive to the preeminent bank in servicing the digital asset industry,” Seibert said.

© 2022 The Block Crypto, Inc. All Rights Reserved. This article is provided for informational purposes only. It is not offered or intended to be used as legal, tax, investment, financial, or other advice.

Quick Take

• Last month, more than $1.3 billion in venture capital was allocated across 135 blockchain-related funding deals
• Q4 funding is on pace to decline for a third consecutive quarter and be the lowest quarter in dollar amount since Q1 21
• During 1H 22, there were 28 later-stage deals, with nearly 5 per month on average. On the contrary, the second half of 2022 is on pace for only 4

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Robinhood has seen market share increase in the weeks following FTX’s collapse, CEO Vlad Tenev said. The company had no exposure to the now failed exchange.

Tenev also said that the 7.6% stake of Robinhood owned by FTX founder Sam Bankman-Fried does not indicate a formal relationship.

“The reality,” he said, is that “it’s a public stock that anyone can buy.” The notion that this indicates a formal partnership is “just inaccurate.”

Tenev suggested that the events surrounding FTX’s downfall are an opportunity for the firm.

“These events weed out the weaker companies that have invested less in risk management and compliance,” Tenev said during a conference.

The comments come amid a rough time for the industry. FTX filed for Chapter 11 bankruptcy protection on Nov. 11, followed by BlockFi, and lender Genesis Global Capital is on the brink. Crypto prices are down from record highs last year and skepticism about the sector is growing.

That said, Robinhood plans to expand its crypto wallet so that it will be available worldwide users in the near future, Tenev said, showing a continued commitment to the industry.

“Crypto is here to stay,” the CEO said.

The beta for Robinhood’s self-custodial wallet was launched in September, using Polygon as its first blockchain network. 

According to a company blog post, the waitlist for Robinhood’s wallet is more than 1 million people globally.

© 2022 The Block Crypto, Inc. All Rights Reserved. This article is provided for informational purposes only. It is not offered or intended to be used as legal, tax, investment, financial, or other advice.

Canadian pension plan CPP Investments has ended an effort to study crypto investment opportunities, Reuters reported, citing sources. 

CPPI declined comment to Reuters but told the news agency it had made no direct crypto investments. It manages approximately $388 billion for 20 million Canadians and is the largest pension fund in Canada. 

The pension fund’s Alpha Generation Lab, which researches emerging investment trends, formed a team of three in 2021 to research crypto and blockchain based companies, Reuters reported. The team has since been redeployed to other areas.

The news comes as other Canadian pension funds have revealed exposure to crypto markets, with Caisse de dépôt et placement du Québec (CDPQ), which manages about $300 billion in assets, saying in August it wrote off $200 million of exposure to Celsius. The Ontario Teachers Pension Plan (OTTP) participated in crypto exchange FTX’s $400 million Series A round in January 2021 and has written off its $95 million investment to zero.

© 2022 The Block Crypto, Inc. All Rights Reserved. This article is provided for informational purposes only. It is not offered or intended to be used as legal, tax, investment, financial, or other advice.