• The fall of Silicon Valley Bank had a convenient deus ex machina to fix collateral damage.
• Crypto cannot expect the same, according to legal partners Jess Cheng and Amy Caiazza.
• There are important lessons for the crypto community to consider given recent banking system instabilities.
The Fall of Silicon Valley Bank
The fall of Silicon Valley Bank had a convenient deus ex machina to fix collateral damage. Despite headlines not revolving around crypto, there are important lessons for the crypto community to consider, especially as recent instabilities in the banking system have once again prompted cries that decentralized finance can solve many of the problems raised by traditional banking and incumbent financial systems.
Crypto Cannot Expect Same Help
Wilson Sonsini Goodrich & Rosati partners Jess Cheng and Amy Caiazza write that crypto cannot expect the same help from a deus ex machina as SVB did. In “Superman: The Movie”, our eponymous hero flies so quickly around the world that he turns back time and undoes a confluence of disastrous events where a nuclear missile detonated in the San Andreas Fault, showing how convenient it would be if such solutions were available for real-world situations as well.
Measures Taken by Treasury Department, Federal Reserve & FDIC
When it came to SVB’s closure, however, real-world measures needed to be taken by Treasury Department, Federal Reserve and FDIC on March 12th in order to “strengthen confidence in the U.S. banking system” following this dramatic closure.
Important Lessons for Crypto Community
Cheng and Caiazza explain why crypto cannot expect such help from a deus ex machina: though extraordinary measures were taken in this case, they suggest there is an important lesson here for all those involved with cryptocurrency; namely that a collapse within traditional banking does not necessarily make cryptocurrency any more trustworthy or reliable than it already was before this incident occurred.
Crypto users need to remain vigilant when using digital currency services and take necessary steps such as using strong passwords and two factor authentication (where available) in order to protect their accounts from cybercriminals or other malicious actors who may seek access without authorization or permission.
• Starbucks Odyssey released its first limited edition NFT drop, The Siren Collection, which sold out in 18 minutes.
• Members of the Starbucks Odyssey rewards program were able to purchase two Stamps for $100 each.
• Despite some technical issues, secondary sales of the Stamps quickly soared past $550.
Starbucks Odyssey Launches First NFT Drop
Starbucks Odyssey, the company’s Web3 loyalty program, recently released its first limited edition non-fungible tokens (NFT), which it calls „Stamps“. The 2,000-item „Siren Collection“ features a version of the company’s iconic Siren was available to members at a price of $100 per stamp.
Odyssey Beta Program
The program is still in invitation-only beta and allows users to complete activities such as quizzes and in-store purchases to earn Stamps that can be collected or resold on Nifty Gateway. Members were able to buy two stamps each starting at 12 p.m ET and could pay by credit card or by connecting their MetaMask wallet.
Issues With Launch
Despite some initial problems with access and error messages due to an influx of traffic, the collection sold out in 18 minutes and secondary sales quickly soared beyond the original price point. As of this update, the floor price for a Siren Stamp has already passed $550.
Summary Of Results
Despite some technical difficulties during launch, Starbucks Odyssey’s first NFT drop proved highly successful with all 2,000 Stamps selling out within 18 minutes and prices continuing to climb on secondary markets after launch.
The success of this NFT drop indicates that there is high demand for rare digital assets such as these and showcases how brands can leverage blockchain technology to create unique experiences for their customers through loyalty programs like Starbucks Odyssey.
• Three U.S. senators have accused Binance, the world’s largest crypto exchange, of being a “hotbed of illegal financial activity” in a letter sent to the exchange’s CEO Changpeng Zhao.
• The group requested details from Binance about its balance sheets, internal procedures and any communications about alleged efforts by Zhao to limit compliance.
• Binance is reportedly bracing itself for significant fines for past conduct.
U.S Senators Accuse Binance of Illegal Financial Activity
Three U.S senators have written to Binance, accusing the world’s largest crypto exchange of being a „hotbed of illegal financial activity“. Sens Elizabeth Warren (D-Mass.), Chris Van Hollen (D-Md.) and Roger Marshall (R-Kansas) requested details from Binance regarding its money-laundering controls, balance sheets, internal procedures and any communications related to alleged efforts by CEO Changpeng Zhao to limit compliance.
Allegations Against Binance
The senators allege that Binance and related entities “have purposefully evaded regulators, moved assets to criminals and sanctions evaders and hidden basic financial information from its customers and the public“. They further ask for more information on how exactly Binance intends to comply with anti-money laundering laws going forward.
A spokesperson for the exchange told CoinDesk that they “always respond“ to queries from regulatory bodies accordingly. However, the spokesperson declined further comment on this particular incident due to it being an ongoing situation.
Regulatory Scrutiny in Crypto Space
This latest move against Binance highlights increased regulatory scrutiny against cryptocurrency companies in recent months amid concerns over inadequate anti-money laundering measures in the space resulting in greater risk of fraud or criminal activities taking place through these exchanges.
Outlook For Crypto Exchanges
Crypto exchanges should remain cognizant of changing regulations around money laundering control measures as more governments are likely to continue tightening their grip over this sector going forward in order ensure consumer protection as well as maintain investor confidence within this emerging industry