Fed cites FTX in Silvergate liquidation order, CFTC calls for crypto warnings

Fed cites FTX in Silvergate liquidation order, CFTC calls for crypto warnings
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Silvergate Bank will self-liquidate amid orders from the US Federal Reserve, led by Chair Jerome Powell. Credit: Domenico Fornas/Shutterstock

Fed says Silvergate Bank failure ‘triggered in part’ by FTX collapse ahead of liquidation

Collapsed crypto-friendly Silvergate Bank will file a self-liquidation plan with California regulators, per a US Federal Reserve order announced Wednesday.

The Fed stated in the order that Silvergate had “deficiencies” in compliance with banking regulations, and also said the bank’s March failure was “triggered in part” by the collapse of crypto exchange FTX.

Silvergate was one of several banks to collapse in March, when major institutions such as Silicon Valley Bank and Signature Bank saw fatal runs on their deposits.

NOW READ: Binance loses $1.8bn in deposits in May as banks curb exposure to digital assets

CFTC Commissioner calls for mandatory crypto warnings in risk management program

The US Commodities and Futures Trading Commission proposed changes to its risk-management program on Thursday, and Commissioner Christy Goldsmith pushed for the new rules to include mandatory crypto warnings for firms.

Goldsmith also cited emerging technologies such as artificial intelligence and cloud services as carrying “significant risk.”

Rule changes are in the early stages, and the CFTC will receive public comments for 60 days before moving to a formal vote.

NOW READ: UK lawmaker rules out crypto tax breaks amid fears of race to the bottom: ‘We want to attract good actors’

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Tether’s USDT stablecoin market cap hits $83bn all-time high

Leading stablecoin Tether (USDT) reached a new all-time high on Thursday, with a market capitalisation of $83.3 billion.

The record figure surpassed its May 2022 high of $83.2 billion, which preceded the fall of Terra that set off a wave of collapses and ushered in a year-long bear market.

The stablecoin market overall is still riding a 14-month decline, with a total market cap of $129 billion compared to last year’s high of $189 billion.

Much of USDT’s recent growth has been attributed to flight from other troubled stablecoins such as USDC and BUSD.

NOW READ: Tether reaches record as jittery crypto investors flock to stability

Uniswap community eyes protocol fees for liquidity providers

In a tight poll vote, the community for decentralised exchange Uniswap rejected a proposal to begin paying transaction fees to liquidity providers — though support for a potential governance vote appears to be strong.

The proposal was brought forward in April by GFX Labs, on the basis that Uniswap stood to “generate significant revenues” from the implementation.

While 45.3% of voters rejected the proposal, the remainder of votes were divided over the proportion of fees that should be awarded.

The poll was an informal feedback post, and may precede an official governance vote.

Investors abandon DeFi bluechips for staked ETH, says data firm

Blockchain data firm Glassnode said in a Wednesday report that investors have abandoned bluechip DeFi tokens such as UNI and MKR in favor of Ether, due to what Glassnode says is less perceived risk.

Native staking on Ethereum has risen steadily following April’s Shapella upgrade, which allowed stakers to withdraw staked ETH for the first time.

While some commentators feared a mass withdrawal and consequent crash of ETH’s price, the network has instead increased to new all-time staking highs.

Conversely, the total market cap for DeFi tokens is at only 12% of November 2021 highs.

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