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FSC chairman confirms that the island’s top financial watchdog will regulate crypto.

ALSO: Bitcoin’s surge over the past week reflects a “flight to quality,” but liquidity remains an issue.

The 40 former branches of Signature Bank will operate under New York Community Bancorp’s Flagstar Bank, N.A., as of Monday.

Bitcoin bulls are back, as the biggest crypto token by market capitalization surged past $28,000 for the first time since June. 

The coin was trading at $28,399 at 3:09 p.m. EDT on Sunday, up 5.2% over the past 24 hours, according to TradingView data. It’s surged a staggering 37.8% over the week and is up 20.8% over the past month. 

The rally comes amid speculation that the Federal Reserve could slow, or even pause, the pace of interest rate increases this week as contagion from the collapses of Silicon Valley Bank and Signature Bank continue to reverberate around the world. Credit Suisse is the latest financial institution to fall victim. CME’s FedWatch tool shows a 62% chance that rates will be hiked by 25 basis points, with the chance that rates are unchanged coming in at 38%.

Risk profile

Bernstein analysts Gautam Chhugani and Manas Agrawal said Saturday that the crypto rally was due to a reset in the risk profile of assets. They said uninsured deposits of cash are no longer seen as the safe haven they once were.  

Interest in central bank digital currencies is rising, but these so-called CBDCs are “far from ready except some academic pilots,” they wrote. 

They concluded: “But then what is the closest that comes with no-counter-party risk, decentralized and with complete self-custody – Bitcoin!”

They said that cryptocurrencies are volatile, but have outperformed the U.S. dollar, gold and stocks over long periods.

Twitter bulls

 Twitter users and commentators were quick to jump back on the bitcoin bull bandwagon on Sunday. Many referenced the banking crisis and ongoing money printing by the Fed.

“You can’t be bearish on scarcity assets once the FED is printing!,” one user wrote.

“People would rather hold their wealth in #Bitcoin than in a bank…,” said another. “Next week if we see another bank bailout, #Bitcoin will break $30,000.”

(With additional reporting assistance from Adam McCarthy.)

© 2023 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.

As the NCAA’s March Madness gripped the U.S. this week, market madness took hold in the crypto world. Bitcoin and ether surged 35% and 25% respectively even as turmoil persisted in the banking industry. Some regional banks witnessed double-digit declines in their share prices toward the end of this week and the chaos looks set to continue with regulators and key banking players debating how to stem contagion, which is all happening alongside a key macroeconomic event, the Fed’s decision on rates.

(And yes, let’s not talk about how my alma mater Northwestern failed to advance to the NCAA’s Sweet 16 bracket last night). 

Expect more turmoil

Turmoil is set to persist in the banking sector despite regulators confirming last week that depositors of both Silicon Valley Bank and Signature Bank will be made whole. Attention has now turned to other regional banks that may face similar challenges.

One of those banks is First Republic, whose shares fell more than 30% on Friday after an announcement that several big banks would come together to orchestrate a rescue deal for the regional player. The announcement did not succeed in shoring up confidence. Meanwhile, a coalition of midsize banks in the U.S. has approached regulators about extending FDIC insurance to all depositors for the next two years as another measure to increase confidence, according to a report from Bloomberg. 

The KBW Nasdaq bank index ended the week down about 11%. Investors are likely to experience more turbulence heading into the open on Monday unless regulators can restore confidence. 

Across the pond, Switzerland is preparing to use emergency measures to fast-track the takeover of Credit Suisse by UBS, so banks and regulators can seal the merger deal before markets open on Monday, according to a report from the Financial Times. All eyes will be on Credit Suisse and the knock-on effect the news has on markets. 

Fed watchers stand guard

Speaking of markets, as banking stocks tumbled, bitcoin and ether surged. Analysts and investors will be watching closely to see whether the crypto assets maintain this rally with the Federal Reserve expected to hike interest rates on Wednesday. 

On Tuesday, the Federal Reserve will kick off its two-day Federal Open Markets Committee meeting for March. The meeting will close out with a news conference and interest rate decision on Wednesday. The Fed is expected to hike rates by 25 basis points despite the turmoil in the banking industry, according to economists surveyed by Bloomberg. 

“We expect that the [Bank Term Funding Program] will be enough to stem further bank runs, and at least quell market volatility until next week’s FOMC, allowing them to hike 25 basis points,” said crypto trading firm QCP Capital in a market update this week. 

Drop it likes its hot

A day after the Federal Reserve’s interest rate decision, a highly anticipated airdrop will take place. 

Layer 2 scaling solution Arbitrum will airdrop its token on Thursday. About 12.75% of its total token supply will be airdropped to the community. The tokens will be given to those who have used the network over the last year. Offchain Labs, the developer of Arbitrum, worked with crypto data provider Nansen to design the criteria designating who should receive the airdrop, The Block reported. 

The airdrop was announced to give recipients time to nominate themselves as delegates and give the Arbitrum Foundation time to handle approvals. Offchain Labs hasn’t communicated with any centralized exchanges to list the Arbitrum token, The Block reported. 

Crypto VCs recently told The Block that at least half of their portfolio companies were holding back token launches amid headwinds around exchange fees and regulatory concerns. In recent weeks, several high-profile projects such as Arbtitrum and Blur have announced airdrops. 

© 2023 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.

Tron founder Justin Sun has an idea for the struggling financial giant Credit Suisse should UBS fail to acquire it — he wants to buy it and turn it into a “crypto-friendly” bank.

“I would like to propose my own offer of $1.5 billion to acquire Credit Suisse and integrate it into the Web3.0 world,” he wrote Sunday in a thread on Twitter, praising Switzerland’s crypto-friendly regulation. “We can leverage the country’s progressive policies and position ourselves as a leader in financial innovation.”

The Financial Times reported that UBS had agreed to buy Credit Suisse for more than $2 billion, one of the latest financial institutions to tread water after the collapses of Silicon Valley Bank and Signature Bank in the U.S. earlier in the month. The bank’s market capitalization was over $7 billion at the close of trading on Friday, according to TradingView data. 

While it wasn’t clear on Twitter just how serious Sun was in his offer, or if Swiss regulators would even entertain it, he has a history of floating offers for deals that don’t materialize. In January, he told Reuters that he was willing to spend up to $1 billion for assets belonging to Digital Currency Group. 

Sun said last year that he was ready to spend up to $5 billion on struggling crypto firms. 

Spokespersons for Credit Suisse and the Swiss Financial Market Supervisory Authority FINMA did not immediately respond to emailed requests for comment. 

“By acquiring Credit Suisse and transforming it into a crypto-friendly financial institution, we can create a new standard for financial innovation that benefits everyone,” Sun wrote. 

© 2023 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.

0xngmi, a pseudonymous employee of DefiLlama, is attempting to fork the blockchain data platform after accusing the company’s founders of launching a token without support. 

“There is an ongoing attempt to launch a token that does not represent us,” 0xngmi said on Twitter while verifying on-chain that their account had not been hacked. “We don’t want to be associated with it.” 

In a Twitter thread yesterday, the data firm hinted at a token airdrop.

The company, Llama Corp., has rebutted that a hostile takeover is underway suggesting that 0xngmi’s actions are independent.

“Llama Corp. will continue operating DefiLlama as it has done for the past three years,” said the company in a statement. “The actions of 0xngmi are regrettable. We are hoping to resolve things privately and amicably.”

0xngmi’s forked platform is currently hosted as Llama.fi. DefiLlama was co-founded by Charlie Watkins and Ben Hauser.

“0xngmi and a few team members have gone rogue, they are actively looking to seize DefiLlama IP and community while inaccurately claiming the rightful owner to be doing a hostile takeover,” according to a post on the DefiLlama Round Up Telegram account. 

© 2023 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.

FTX will auction its derivatives exchange LedgerX to bidders on April 4.

The counsel for FTX filed the notice of revised dates on March 18 in U.S. Bankruptcy Court for the District of Delaware.

The auction will now be held on April 4 at the offices of Sullivan & Cromwell and a sale hearing will take place April 12, the filing said. Notice of the successful bidder should occur within one business day of the conclusion of the auction.

The auction had previously been scheduled for March 7 and then was revised to March 22, according to court filings. A reason for the most recent date revision was not provided.

FTX secured approval early this year to sell business units to raise money for creditors. It is also looking to sell Embed Financial Technologies, FTX Japan and FTX Europe. About 117 parties have shown interest in buying entities of FTX, according to a legal filing at the start of this year.

The exchange’s U.S. operation acquired LedgerX in Oct. 2021 and rebranded it as FTX.US Derivatives.

 

 

© 2023 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.

U.S policymakers seem to be doing their best to suffocate dollar on-ramps into crypto, leaving the door open for other mature markets to gain a competitive edge.