This week has seen some abrupt changes in the crypto industry. The respective events have been dissuading for the community. They take into account the Indian crackdown on digital assets, seizure of operations by the crypto-supporting bank Silvergate, and funds exploit at Hedera. Along with this, just recently, Tether accused Wall Street Journal of spreading false information. Additionally, Circle confirmed that its $3.3B is still kept by Silicon Valley Bank in USDC reserves. This, as a result, ignited a de-pegging crisis.
Indian Authorities Clamp Imposes Anti-Money Laundering Laws on Digital Assets to Crackdown on Crypto
Indian authorities have frequently been voicing concerns over crypto’s likely risks related to its use in terrorism financing, money laundering, and fraud. Keeping this in view, the government of the country has recently declared implementing Anti-Money Laundering (AML) provisions within the crypto space.
Irrespective of the initial skepticism, the authorities have been making efforts to offer regulatory clarity over crypto. The Ministry of Finance has issued a notification that NFT and crypto businesses will have reporting requirements in India. Along with this, the crypto entities will require fulfilling the analogous reporting standards as well as Know-Your-Customer requirements.
Silvergate Announces Ceasing Operations due to FTX Fiasco
Silvergate Capital Corp, a crypto-centred bank, has declared a strategy to stop its operations as well as go through voluntary liquidation. The decision was taken after witnessing huge losses because of the now-bankrupt crypto exchange named FTX. This declaration paved the way for a 35% drop in the shares of the banking platform at the time of after-hour trading.
In its statement, the bank labelled the move as the best decision to move ahead in line with the recent incidents in the regulatory space and the crypto industry. As per the platform, the strategy for its liquidation takes into account the total compensation to the depositors. This week, several business partners of Silvergate, including Galaxy Digital and Coinbase Global Inc., terminated their ties with the bank.
Hedera Says Its Mainnet Breach Led to the Exploit of Millions of Digital Tokens
Hedera Hashgraph, a prominent decentralized network, confirmed that it witnessed an infringement of its mainnet. This incident played a significant role in the exploitation of its service tokens. Numerous service tokens got stolen from the platform in the attack. The attack’s target was the liquidity pool-based tokens that were utilized in DEXs. The attacker effectively exploited the system’s vulnerability and took away the tokens. Additionally, no information is available about the exact number of stolen tokens.
Tether Claims WSJ Spreads Misleading Information
Tether, the top stablecoin issuer across the globe and USDC rival, has alleged that The Wall Street Journal has been spreading wrong information regarding the platform as well as its activities. As per the firm, the recent story of the WSJ about its compliance activities implies that the company neglects the regulations. Nonetheless, it added, the platform pays considerable attention to the financial standards set by law enforcement organizations operating around the world.
Circle Confirms Its $3.3B Kept at Silicon Valley Bank Ignites USDC Depegging
Circle, the issuer of USDC stablecoin, revealed that the platform was unable to take redeem its $3.3B from Silicon Valley Bank (SVB). This amount denotes a significant proportion of SVB’s cumulative deposits. As a consequence of this withdrawal blockage, the stablecoin got depegged from its $1 mark.
To deal with the situation, Circle attempted to remove its funds via wire transactions as the banking institution was on the verge of stopping its activities. But it remained unsuccessful in doing that. After that, the prices of the USDC token plunged by up to 8% and touched the trading level of $0.9126.