Crypto Quarterly 2Q 2023

On balance, the news regarding cryptocurrency is still fairly skewed to the negative. But crypto remains alive, although widely a mystery to most of the population (including yours truly). Reporting on crypto is thus difficult – but even a small amount of information can be worthwhile.

One of the key events of the tragic crypto downturn remains the November 2022 fall of FTX and arrest of its founder. Interest rate increases also gradually revealed weaknesses in various cryptocurrency exchanges and functionality.

Recent news and developments consist of mostly significant failures:

  • “Crypto Custodian Prime Trust Teeters on the Brink of Collapse”*
  • “Courts Put Privacy Over Transparency in FTX, Other Crypto Bankruptcies”*
  • “Senior Attorney Helped FTX Founder Misuse Customer Funds, Report Says”*
  • “How North Korea’s Hacker Army Stole $3 Billion in Crypto”*
  • Binance, the largest crypto exchange, and its controlling shareholder are being sued by the SEC (Securities and Exchange Commission) for enriching themselves at investors’ expense among other charges.
  • Plus, Coinbase, another crypto exchange, has a civil lawsuit pending with the SEC.
  • The Chair of the SEC is cracking down on cryptocurrency overall citing widespread regulatory noncompliance.

On the forward-looking side, both Binance and Coinbase are requesting clearer and updated regulation on cryptocurrencies and the crypto industry, and both refute a fair amount of the charges against them.

There are also positive developments:

  • “Crypto Exchange EDX Markets Starts Operations”*
  • “Bitcoin Trades Above $30,000 as Traditional Firms Tap Crypto”*
  • Stablecoin market capitalization is over double that of March 2021.**

Prices of Bitcoin and other cryptocurrencies have rebounded so far in 2023. Although a number of “stablecoins” have NOT followed suit and are not the same as Bitcoin. Stablecoins are a unique kind of cryptocurrency. Three well-known stablecoins are TetherUSD Coin and Binance USD. Stablecoins are meant to maintain a value of $1 and be used to store value on crypto trading platforms.**

The bad news is that several stablecoins have simply collapsed (but NOT the three mentioned above). The failure of Silicon Valley Bank led to USD Coin, which is issued by Circle Internet Financial, to fall below its $1 “steady value” but it resumed its $1 value shortly thereafter.

What is a stablecoin? A stablecoin is “issued” by a company and then can be used to invest in crypto companies. Stablecoins are also said to “store capital” and can be backed by US Treasuries among other real securities. Stablecoins are not regulated by the US Treasury or the SEC because technically they are not securities or banking products. (Although purchasers may consider stablecoins to be a banking-like product.) The US Federal Reserve has also called for stablecoin regulation. The overall estimated market capitalization of stablecoins is $130 billion. The largest stablecoin, Tether, has increased in market capitalization in 2023.

Cryptocurrencies are complex but they are not going away. More to come.



* headline search.

**Vicky Ge Huang,, June 11, 2023.

Leave a Reply

%d bloggers like this: