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The U.S. Securities and Exchange Commission plans to sue Paxos for listing the Binance USD coin, alleging it is an unregistered security, according to the Wall Street Journal.

The SEC sent Paxos, a blockchain and trust company, a letter informing it of “a possible enforcement action,” the WSJ reported, citing anonymous sources. The suit is reportedly for “violating investor protection laws.”

The move comes as U.S. regulators step up efforts to regulate cryptocurrency companies in the aftermath of exchange FTX’s well-publicized collapse. Another exchange, Kraken, recently settled with the SEC after being charged for its “staking-as-a-service program.”

Binance USD, or BUSD, is a stablecoin pegged to the dollar. Binance and Paxos launched it in 2019, according to the Wall Street Journal.

In a statement, Binance said it will continue to monitor the situation and that Paxos issues and owns BUSD.

© 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.

Not-for-profit U.S. government partner Mitre is seeking a new economist to help analyze and evaluate the web3 ecosystem, according to a job advertisement posted to LinkedIn.

The job advert calls for applicants with experience with “digital assets, cryptocurrencies, NFTs, DAOs, DeFi protocols, and/or blockchain applications” plus knowledge “of smart contracts.” The new economist will work out of Mitre’s Cost & Business Analytics Department.

Mitre, according to its LinkedIn page, operates federally funded research and development centers and works to solve the “nation’s biggest challenges in defense, cybersecurity, healthcare, homeland security, the judiciary and transportation.”

© 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.

Coinbase CEO Brian Armstrong has stepped up what looks like a preemptive defense of his cryptocurrency exchange’s staking services.

“Coinbase’s staking services are not securities. We will happily defend this in court if needed,” Armstrong posted to Twitter on Sunday.

Armstrong’s weekend comments come after rival exchange Kraken settled a dispute with the U.S. Securities and Exchange Commission earlier in the week. Kraken agreed to pay a $30 million fine for failing to register the offer and sale of its “crypto asset staking-as-a-service program.” The Coinbase CEO has also said it would be a “terrible path” for the U.S. if it decided to restrict crypto staking.

Although Coinbase has said its staking services are “fundamentally different” than Kraken’s, its shares fell by more than 20%.

Armstrong has said crypto companies should be encouraged to grow in the U.S. and unnecessarily restricted from doing business.

© 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.

Coinbase, Crypto.com, eToro, and FTX advertised at Super Bowl LVI as last year crypto markets were firmly part of the zeitgeist. This year, declining prices amid a turbulent macroeconomic backdrop and several high-profile collapses have pushed crypto to the sidelines.

Still, there will be some representation during one of the most-watched events on television — one that brings in an audience of about 100 million people annually.

A first appearance for NFTs

NFT and gaming company Limit Break spent $6.5 million to advertise during Super Bowl LVII. The firm will be pushing its “free-to-own” digital collectibles this evening. 

Limit Break, which received investment from collapsed crypto exchange FTX last year, spent the money on a 30-second spot.

“This marks the first time an NFT developer has purchased a Super Bowl ad,” the company said.

Zero representation on Fox

Two crypto advertisers had commercials booked with Fox, with two more almost completed, Mark Evans, executive vice president of ad sales for Fox Sports, told AP. Still, the deals were never finalized following the collapse of FTX. “There’s zero representation in that category on the day at all,” Evans said.

Disclaimer: Beginning in 2021, Michael McCaffrey, the former CEO and majority owner of The Block, took a series of loans from founder and former FTX and Alameda CEO Sam Bankman-Fried. McCaffrey resigned from the company in December 2022 after failing to disclose those transactions.

© 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.

Crypto firms are busy hiring executive talent, especially in the venture space. 

Layoffs have been in the headlines since last June, yet some firms have continued to add talent where needed. Here are some of the latest hires across the industry:

Surojit Chatterjee, former chief product officer at Coinbase, joined Andreessen Horowitz’s crypto arm, A16z, as an executive in residence last week. Chatterjee shared the news on Twitter, saying he was “looking forward to helping out founders and builders scale their businesses.”

The former VP of product at Google joined Coinbase in 2020. He had been working in an advisory role since October before departing the firm on Feb. 3. The product team was split into four divisions, according to a filing with the Securities and Exchange Commission, after his departure.

Another investment firm, Paradigm, also added executive talent — Charlie Noyes and Dan Robinson were promoted to general partners. The firm, which listed the changes on its website, had not previously featured the title. Co-founders of Paradigm, Fred Ehrsam and Matt Huang, hold the titles of managing partner, while the rest of the investing team were either investment partners or associates.

“We couldn’t be more pleased to promote Charlie Noyes and Dan Robinson to general partner,” Huang said in a statement sent to The Block. 

Seven Seven Six-backed digital fashion brand Syky bolstered its ranks with former Meta and Snap product lead David Kang, who will join the firm as director of product.

Kang shared the news in a LinkedIn post, adding that one of the areas he is “most excited about in the future of the internet is the evolution of the creator economy — specifically the democratization of creative industries and how this will empower creatives globally.”

Syky recently completed a $9.5 million Series A round led by Seven Seven Six, Brevan Howard Digital, Leadout Capital, First Light Capital Group and Polygon Ventures, according to a release.

© 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.

Inflation data on Tuesday will shed light on the health of the U.S. economy, while regulators may also remain in the spotlight this week. Here’s what to watch out for:

U.S. inflation data

After a week dominated by regulatory actions, markets will now look to Tuesday’s U.S. CPI data.

January inflation data is scheduled to be released at 8:30 a.m. EST on Tuesday. Analysts’ estimates see the headline figure increasing to 6.2% year-on-year, down from 6.5% in December. Crypto and traditional stock markets were buoyed by December’s data.

Still, month-on-month inflation is expected to have climbed by 0.4%, and the Federal Reserve will no doubt be watching the release closely.

Higher-than-expected inflation figures could lead to the Fed continuing to increase interest rates. Higher interest rates can have a negative effect on crypto as the asset class behaves like a risk asset — which are sensitive to increases in the rate. 

On Friday, annual revisions from the Bureau of Labor Statistics revealed inflation over the past few months was slightly higher than previously reported. Inflation was revised for December to 0.1% from -0.1%. November was changed to a 0.2% increase rather than the 0.1% previously reported.

Regulatory clampdown?

The U.S. Securities and Exchange Commission put crypto firms “on notice” last week with its action against Kraken.

The regulator said Thursday that crypto intermediaries ought to provide “proper disclosures and safeguards required by our securities laws” when offering services such as lending or staking. Kraken subsequently agreed to end its on-chain staking services for U.S. clients and will pay $30 million.

“Those other platforms should take note of this and seek to come into compliance,” said chief Gary Gensler on Friday.

Coinbase, through Chief Legal Officer Paul Grewal, said the firm’s staking product should not be restricted. Grewal outlined why in a blog post on Friday. The SEC’s next move may have wide-reaching implications for crypto firms and markets, as it did last week. 

© 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.

Following a settlement with the U.S. Securities and Exchange Commission announced last month, crypto lending platform Nexo will stop its Earn Interest Product for all U.S. clients, which include both citizens and residents, on April 1.

“We ask that you begin planning the withdrawal of your funds at a convenient time by this date,” the company said in a blog post, adding that no other Nexo services will be affected. Clients with outstanding credit will be given “ample time and notice” to repay loans and withdraw collateralized assets.

Non-U.S. clients who believe their accounts have been wrongfully flagged must update verification details by providing documents such as bank statements or utility bills. 

Nexo agreed to pay $45 million after being charged by the SEC for failing to register the offer and sale of the retail crypto asset lending product, which was first offered in the U.S. in 2020. Without admitting or denying the charges, Nexo agreed to an order to block it from violating registration provisions under the Securities Act of 1933.

The course of action “reflects our belief that the development of clear regulatory frameworks is the best way to protect the crypto industry and usher it into the mainstream safely and compliantly,” the company said.

© 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.

Banco do Brasil, the South American country’s oldest bank, says it’s now possible to do what many blockchain enthusiasts have long wanted — the ability to pay the taxman in crypto.

Through a partnership with Bitfy, a startup that was funded by the bank’s VC arm, clients can use the app to instantly convert crypto in their account into the local currency to pay and settle a tax bill.

“This partnership makes it possible to expand the use and access to the ecosystem of digital assets with national coverage,” Bitfy CEO Lucas Schoch said Friday in a statement from Banco do Brasil, which is partially owned by the state. 

Brazil has been a leader in digital payment innovations with its PIX system and passed new crypto-friendly legislation last year. The central bank is currently testing a digital currency it plans to issue next year.

© 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.

Both bitcoin and ether were flat on Saturday in a calm start to the weekend after several days of declines. The two cryptocurrencies fell over the past week amid the U.S. Securities and Exchange Commission’s Kraken crackdown, with bitcoin down 7.6% as ether plunged 9%.

Bitcoin was trading at $21,630 on Saturday afternoon, basically unchanged over the past 24 hours. Ether was also flat at $1,514, according to TradingView.

TradingView chart of Bitcoin price over past week.

Altcoins also had a tough week, with XRP falling 8%, Cardano declining 10.5% and Solana falling 17.5%. Memecoins didn’t fare any better, with Dogecoin declining 16.3% and Shiba Inu down 15.7%.

The biggest winner was The Graph’s GRT token that indexes blockchain data across dozens of ecosystems with an API, rising a whopping 50% over the past week. SingularityNET, an AI-focused, also continued to rally over the period, rising 26%.

It’s not all bad news, though, with bitcoin still up almost 21% over the past month. El Salvador’s president Nayib Bukele appeared to celebrate the International Monetary Fund’s acknowledgment that some of the worst-case scenarios feared when the Central American adopted bitcoin as legal tender had not emerged. 

“#Bitcoin risks have not materialized,” he tweeted, referencing the report.

Crypto stocks

Crypto stocks also had a tough week, as the SEC’s settlement with Kraken caused fears about the future of staking revenue. Coinbase shares were down 22.6% over the week, while Block fell 11.4% and Microstrategy declined 12.8%. Silvergate had another hard week, with shares falling 14.8%.

Ark Invest bought the dip, saying it added 162,325 Coinbase shares to its portfolio on Friday, alongside a substantial purchase of 263,504 Robinhood shares, which had declined 7.3% over the week. The trading platform reported Wednesday a net loss of $166 million for the fourth quarter, which was wider than the estimate for a $131 million loss.

Switzerland-based Backed Finance, meanwhile, said on Monday it was launching its first product, a tokenized version of the iShares iShares Core S&P 500 UCITS ETF.

“We believe tokenization will unlock trillions of dollars worth of value and power a new wave of economic activity,” it wrote, noting that the tokens are not available for U.S. individuals.

‍Macro matters

Federal Reserve Chair Jerome Powell spoke at The Economic Club of Washington on Tuesday with billionaire investor and philanthropist David Rubenstein.

“We expect 2023 to be a year of significant declines in inflation,” Powell said, reaffirming earlier statements. “My guess is it will take certainly into not just this year but next year” to get to the Fed’s 2% inflation target.

The market will next get a chance to evaluate those statements on Tuesday, when January inflation data is scheduled to be released. Analysts are expecting an increase of 6.2%, which would mark a slowdown from December, when year-over-year prices were reported to have risen 6.5%.

© 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.

Binance, the leading crypto exchange by trading volume, said Saturday that it had reverted withdrawal levels on the Tron network to previous levels after feedback from the community.

“Binance has worked with the Tron project team to arrive at a solution for reducing withdrawal fees on Tron network,” the exchange said in a statement.

The exchange said Friday that it was increasing fees after the Tron community voted to change the energy charging mechanism on the network to a dynamic energy model designed to more reasonably energy resources on the chain and prevent “excessive concentration of network resources on a few contracts.” After the change, the withdrawal fee for USDT and USDC more than doubled, while the fee to withdraw TRX increased 15 times.

Tron founder Justin Sun said earlier Saturday that he was working with Binance to reduce the fees.

“We remain committed to making crypto trading more affordable for everyone,” he tweeted.

© 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.