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Banks want to reduce exposure to crypto businesses, just as crypto businesses are seeking to reduce exposure to the ongoing banking crisis. Tether\u2019s latest audit report shows that the stablecoin issuer withdrew over $4.5 billion from banks in the first quarter to reduce counterparty risk following Circle\u2019s troubles during the collapse of Silicon Valley Bank.<\/p>\n
The past few days also brought a change in the winds to Ripple\u2019s battle with the United States Securities and Exchange Commission (SEC), with a motion from the securities regulator to seal some records rejected by a U.S. judge. The move has been viewed as a victory for Ripple, which considers the documents key evidence in its costly dispute with the regulatory agency.<\/p>\n
This week\u2019s Crypto Biz explores Tether\u2019s first quarter audit, Ripple\u2019s partial victory against the SEC, Worldcoin fundraising and Ledger\u2019s controversial recovery service. <\/p>\n
A motion from the U.S. securities regulator to seal records of internal deliberations has been denied in a move seen as a win for Ripple and the crypto community. The SEC filed the motion on Dec. 22, 2022, to seal internal emails, text messages and expert reports after a speech from its former director William Hinman claimed Ether (ETH) \u2014 the native token of the Ethereum blockchain \u2014 is not a security. Ripple considers the speech a key piece of evidence in its ongoing legal battle with the SEC, which alleges that sales of Ripple\u2019s XRP (XRP) token violated U.S. securities laws. Ripple has spent over $200 million defending itself against SEC allegations.<\/p>\n
\nAnother win for transparency! Unredacted Hinman emails to be publicly available soon – stay tuned as the lawyers work through the mechanics to make that happen. https:\/\/t.co\/o6puPypRHd https:\/\/t.co\/qmaLVeQaP8<\/p>\n
\u2014 Brad Garlinghouse (@bgarlinghouse) May 16, 2023<\/p><\/blockquote>\n
Tether boasts of its financial stability after strong profits, money moved out of banks<\/h2>\n
Stablecoin operator Tether pulled over $4.5 billion out of banks in the first quarter of 2023, leading to a \u201csubstantial reduction\u201d in counterparty risk, the company said in its latest audit report. The market capitalization of its Tether (USDT) stablecoin grew from $66 billion to over $82 billion in the same period. The company boosted its U.S. Treasury bills to a new high of over $53 billion, or 64% of its reserves. Combined with other assets, USDT is now backed by 85% cash, cash equivalents and short-term deposits. Owned by Hong Kong-based iFinex, Tether has fought negative allegations about its finances. The company was fined $18.5 million by the New York Attorney General\u2019s Office for misrepresenting the fiat backing for its reserves in 2021.\u00a0<\/p>\n
Crypto community reacts to Ledger wallet\u2019s secret recovery phrase service<\/h2>\n
Ledger\u2019s latest feature has sparked discontent among the crypto community. Known as Ledger Recover, the company\u2019s retrieval solution for hardware crypto wallets offers a safeguard in case users lose their seed phrase. However, the concept has enraged many in the crypto community, including security specialists. The service employs a technique where the user\u2019s seed phrase is divided into three encrypted fragments, each sent to different external entities. These entities will be able to reconstruct the encrypted keys. The community brought up Ledger\u2019s data leak in 2020, which exposed users\u2019 email and mailing addresses, and phone numbers. Some believe the recovery service put a backdoor into seed phrases.\u00a0<\/p>\n
\nFirst they exposed mailing address, phone numbers, and email addresses of their customers\u2026 <\/p>\n
And now they\u2019ve put a back door into seed phrases. <\/p>\n
It\u2019s time to say goodbye to @Ledger ✌️ https:\/\/t.co\/FsZw1jUt6h<\/p>\n
\u2014 Chris Dunn (@ChrisDunnTV) May 16, 2023<\/p><\/blockquote>\n
OpenAI CEO in \u2018advanced talks\u2019 for $100M Worldcoin funding<\/h2>\n
The bear market is not holding back Worldcoin funding. The company co-founded by OpenAI CEO Sam Altman is reportedly in \u201cadvanced talks\u201d to secure $100 million in funding for Worldcoin \u2014 a project to create a global, collectively owned cryptocurrency. Worldcoin is preparing to launch its blockchain protocol and commence recording transactions within \u201cthe next six weeks\u201d after operating in beta. Recently, it launched its own gas-free crypto wallet for verified humans.<\/p>\n
Before you go: How will lower interest rates benefit Bitcoin?<\/h2>\n
Cointelegraph analyst and writer Marcel Pechman explains how lower interest rates in the U.S. will ultimately benefit Bitcoin (BTC) and the cryptocurrency market. Pechman also dives into Argentina\u2019s economic crisis: Along with hyperinflation, the Latin American country saw its local currency, the peso, decline by 70% in the past few years, boosting the demand for U.S. dollars, gold and Bitcoin.<\/p>\n
Crypto Biz is your weekly pulse of the business behind blockchain and crypto, delivered directly to your inbox every Thursday.<\/p>\n<\/div>\n