Make Kitco Your Homepage

Crypto SWOT: Crypto billionaire Sam Bankman-Fried has outlined a framework for limiting industry hacks.

Commentaries & Views

Strengths

  • Of the cryptocurrencies tracked by CoinMarketCap, the best performer for the week was Casper, rising 33.34%.

  • JPMorgan Chase & Co. has hired a new head of digital assets regulatory policy, less than a month after CEO Jamie Dimon told lawmakers that cryptocurrencies are "decentralized Ponzi schemes." Aaron Iovine joined the company this week as executive director for digital assets regulatory policy, reports Bloomberg, a newly created role. He was previously head of policy and regulatory for cryptocurrency lender Celsius Network writes Bloomberg.   

  • Crypto billionaire Sam Bankman-Fried has outlined a framework for limiting the impact of the hacks and exploits plaguing the industry, including capping the maximum bounty for attackers at $5 million. Bankman-Fried proposed in a blog post what he called a "5-5 standard," where hackers keep either 5% of the amount they've taken from a protocol or $5 million, whichever is smaller, according to a Bloomberg article.

Weaknesses

  • Of the cryptocurrencies tracked by CoinMarketCap, the worst performing for the week was TerraClassic, down 23.99%.

  • Bitcoin miners have been pummeled by low Bitcoin prices, soaring energy costs, and steep competition in the industry. These firms had rushed to the equity market to raise money during crypto's bull run, when investors expected Bitcoin prices to surge, and publicly traded miners were seen as an efficient way to invest in the sector, writes Bloomberg.

  • German cryptocurrency exchange Nuri has closed its business after struggling to find investors, reports Bloomberg. The Berlin-based exchange with over 500,000 customers filed for insolvency in August after challenging market developments and subsequent effects of financial markets. Customers have been asked to withdraw funds by December 18 and trading will be possible before November 30, the article explains.

Opportunities

  • Mastercard debuted a service that will let consumers buy and sell digital assets through their bank accounts, potentially paving the way for thousands of finance firms to offer crypto trading for the first time. The product, called Crypto Source, will start in the U.S., Israel, and Brazil early next year though a pilot program, Ajay Bhalla, Mastercard's president of cyber and intelligence, said in an interview, writes Bloomberg.

  • N26 will start offering cryptocurrency trading to its customers via a partnership with Bitpanda GmbH following similar moves by the digital bank's peers, writes Bloomberg. The product will be offered in Bitpanda's home market of Austria first and then rolled out more broadly over the next six months.

  • Fidelity Investments is hiring an additional 100 people for its digital assets unit, stepping up an expansion that started in May and taking advantage of turmoil among crypto firms to lure talent. The new round of hiring will bring Fidelity Digitals Assets' headcount to roughly 500 by the end of 2023's first quarter, writes Bloomberg.  

Threats

  • FTX trading and its billionaire founder Sam Bankman-Fried are being probed by the Texas securities regulator over whether certain lending offerings violate state law, reports Bloomberg. Texas is investigating whether the company's yield-bearing crypto accounts are illegal securities offerings being sold to U.S. residents. Until the state determines FTX is complying with the law, the agency said the company shouldn't move forward with its $1.4 billion purchase of Voyager assets announced last month, the article explains.

  • Crypto lender Voyager Digital is pursuing settlements with two top executives after an internal probe uncovered potential claims of gross negligence stemming from risky loans made to defunct hedge fund Three Arrows Capital. CEO Stephen Ehrlich, in consultation with then CFO Evan Psaropoulos, agreed to let Voyager lend nearly $1 billon of crypto to Three Arrows despite extremely limited financial disclosure from the hedge fund, writes Bloomberg.  

  • Silvergate Capital shares slumped as much as 10% in premarket trading after the crypto-focused bank reported third-quarter results that missed the average analyst estimate. Silvergate Exchange Network handled $112.6 billion of U.S. dollar transfers in the third quarter of 2022, a decrease of 30% compared to $162 billion in the second quarter, writes Bloomberg. 
Disclaimer: The views expressed in this article are those of the author and may not reflect those of Kitco Metals Inc. The author has made every effort to ensure accuracy of information provided; however, neither Kitco Metals Inc. nor the author can guarantee such accuracy. This article is strictly for informational purposes only. It is not a solicitation to make any exchange in commodities, securities or other financial instruments. Kitco Metals Inc. and the author of this article do not accept culpability for losses and/ or damages arising from the use of this publication.