Illustration by Mitchell Preffer for Decrypt
Crypto prices rallied sharply this week on news that the US government will step in to ensure depositors at failed industrial services firms Silicon Valley Bank (SVB) and Signature recover.
As you would expect, Crypto Twitter was what it was last week; But Monday’s news brought about the much-needed shutdown of the industry.
Prices had already suffered earlier in the month when another bank called Silvergate – which actually traded crypto – delayed filing its annual 10-K SEC filing, leading to speculation about the state of his finances.
On Monday, a day after the New York state chartering authority shut down Signature, popular exchange Coinbase revealed the extent of its involvement with the bank and vowed that its operations would continue as normal.
Over in the UK, UK Treasury Secretary Jeremy Hunt announced that day that his ministry had negotiated a bailout whereby HSBC would acquire SVB’s UK arm for £1 to complete UK companies with exposure to the bank.
Crypto journalist and podcaster Jason Yanowitz tweeted a list of alternatives to the two defunct banks.
The news of the banking crisis had the self-proclaimed cypherpunk @dystopiabreaker settle the debt solely on the authorities and their aversion to crypto.
Crypto venture capitalist Nic Carter, general partner at Castle Island Ventures, said the same thing, using the words of Barney Frank, a former American politician, Wall Street reformer and board member of Signature Bank.
Jumping on a tweet from Forbes crypto analyst Jason Brett, Caitlin Long, founder of crypto bank Custodia, joined the chorus of disgruntled crypto fans who accused the Fed of hypocrisy and shady practices in its attempts to register her own institution with them, repeatedly rejected.
Jessica Lessin, founder of the tech publication The informationHe was outraged by this coverage of the SVB crisis by the Wall Street Journal. She is right. It’s inferior.
On Thursday, it looked like general anger at US regulators had spread to Europe.
In other news
With Silicon Valley bank revealed to be in hot water, consumer sentiment toward USD coin issuer Circle quickly plummeted before word of top-down intervention. Last weekend, the dollar-pegged stablecoin was actually depegged by 13 cents. At least one savvy trader took advantage of the situation.
On Monday, Stephane Kasriel, a head of FinTech at Facebook and Instagram parent company Meta, announced the end of NFT integration across the company. What next? Will Meta give up the Metaverse pivot she’s been so extravagantly preparing for?
Avalanche Founder and CEO Emin Gün Sirer announced his new position as Advisor to DC Regulators.
Jim Cramer’s financial advice made the rounds Tuesday, largely for its comedic value.
Coinbase’s Conor Grogan processed a smart contract via ChatGPT-4 and found several vulnerabilities. Grogan is not the first and he will certainly not be the last.
Republican House Majority Whip Tom Emmer (R-MN) on Wednesday shared a letter he sent to the Federal Deposit Insurance Corporation, accusing the regulator of using the banking crisis to launch a purge of crypto-friendly institutions.
On Friday, Senator Elizabeth Warren tweeted some shameless and overblown anti-crypto propaganda.
At the other end of the spectrum, pseudonymous Twitter economic commentator James Medlock and former Coinbase CTO and former partner of Andreessen Horowitz Balaji Srinivasen are walking a $1 million public bet on the prospect of hyperinflation in the US and the possibility that this would cause the value of Bitcoin to skyrocket.
