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  • Writer's pictureSergio Puicon

Crypto Compliance Weekly Newsletter: March 13, 2023


Silicon Valley Bank collapse: Treasury, Fed, and FDIC announce steps to ensure deposits will be paid in full; 5 Women Making Their Mark in Web3; New York Attorney General Sues KuCoin; Elon Musk Envisions Twitter as Potential Largest Financial Institution; India Adds Crypto to Anti-Money Laundering Rules; and, Thailand's SEC Seeks Public Input on Potential Ban of Crypto Staking and Lending Services.


1. Silicon Valley Bank collapse: Treasury, Fed, and FDIC announce steps to ensure deposits will be paid in full

The Federal Reserve, Treasury Department, and Federal Deposit Insurance Corporation announced additional funding to ensure that all deposits at Silicon Valley Bank, both insured and uninsured, will be paid in full. The bank failed on Friday after a run on the bank saw customers withdrawing $42 billion of deposits by Thursday. SVB mainly served technology workers and startups, including some of Silicon Valley's biggest names. The bank was taken over by the FDIC, and the move is not considered a bailout, as the funds used to pay depositors of Silicon Valley Bank and Signature Bank will come from the FDIC's Deposit Insurance Fund. Officials stress that taxpayers are not paying for these moves as the banks' shareholders are. Regulators designated both Silicon Valley Bank and Signature Bank as "systemic risks" to the financial system, a designation that has not been used since 2008. The move is aimed at stabilizing the banking system and assuring uninsured depositors that they will be made whole.


2. Inspiring the Next Generation of Female Leaders: 5 Women Making Their Mark in Web3

To celebrate International Women’s Day, has highlighted women who are making their mark in Web3, including founders, legislators, developers, influencers, and traders. Women are still underrepresented in crypto, but there are reasons why Web3 can become more gender-equal than Web 2.0, such as its global nature and the anonymity it provides. The rise of NFTs and non-human avatars also allows people to make a name for themselves beyond their gender or physical appearance. Some examples of women who are making a name for themselves in Web3 are the following:

  • Meltem Demimors is the Chief Strategy Officer at CoinShares and an influential figure in the cryptocurrency world.

  • Elizabeth Stark is the co-founder of Lightning Labs and a fellow at Coin Center, which advocates for policy initiatives supporting crypto.

  • Cynthia Lummis is a US Senator and early adopter of cryptocurrency who advocates for digital assets.

  • Yi He is the co-founder and CMO of Binance and an advocate for women in crypto.

  • Randi Hipper, also known as Miss Teen Crypto, is a Gen Z influencer and digital artist in the crypto space.

Their success and involvement in Web3 serve as inspiring examples for girls and young women considering a career in the blockchain industry.


3. New York Attorney General Sues KuCoin, Claiming False Representation and Failure to Register as a Broker-Dealer

New York Attorney General Letitia James is suing crypto exchange KuCoin, claiming that it falsely represents itself as an exchange and has failed to register as a securities and commodities broker-dealer in New York. James alleges that the exchange is putting investors at risk by disregarding state laws. The lawsuit is one of the first in which a state regulator claims that Ether, the second-largest crypto token by value, is a security. The SEC's cases against Ripple, LBRY, and former Coinbase employee Ishan Wahi will be crucial for clarifying which types of digital-asset transactions are considered securities. KuCoin was the fourth-largest crypto exchange for spot trading, with over $500 million in digital assets changing hands in a 24-hour period as of Wednesday.


4. Elon Musk Envisions Twitter as Potential Largest Financial Institution with Bitcoin Adoption

Elon Musk recently spoke about the potential for Twitter to become the largest financial institution in the world by providing people with convenience and payment options. While he did not specifically mention integrating cryptocurrency payments, Twitter's adoption of Bitcoin could have a significant impact on the crypto market, potentially replacing traditional banking systems and offering a more secure and decentralized platform for transactions. However, there are challenges to mass adoption among Twitter's vast user base, as well as regulatory and security concerns. Nonetheless, the integration of Bitcoin on Twitter could create a major disruption in the traditional financial industry, providing greater financial freedom and control for individuals.


5. India Adds Crypto to Anti-Money Laundering Rules, Requiring Businesses to Monitor Suspicious Financial Activities

India has added crypto to its anti-money laundering rules, making crypto businesses legally responsible for monitoring suspicious financial activities. Crypto exchanges, NFT marketplaces, and custody service wallet providers will have to register with the Financial Intelligence Unit (FIU) and comply with mandatory processes under the Prevention of Money Laundering Act. Until now, crypto businesses were not legally obligated to perform verification processes such as Know Your Customer (KYC), but this has now become mandatory. They will also have to report suspicious activities to the FIU and designate a Money Laundering Reporting Officer (MLRO) to ensure compliance with the act.


6. Thailand's SEC Seeks Public Input on Potential Ban of Crypto Staking and Lending Services

The Securities and Exchange Commission (SEC) of Thailand has announced that it will hold a new public hearing on a draft regulation that would ban staking and lending services provided by virtual asset service providers (VASPs) in the country. According to the SEC, the proposed regulation aims to protect investors, reduce associated risks, and clarify the scope of supervision of digital asset businesses. The SEC has invited stakeholders and interested parties to submit feedback and suggestions via its website or email until April 7, 2023. This move follows the SEC of Thailand's recent efforts to strengthen the country's cryptocurrency rules, in response to the ongoing crisis in the crypto lending industry.


About us

Canaria Consulting LLC is a boutique consultancy specializing in developing, enhancing, and maintaining regulatory compliance programs for virtual currency firms. Canaria Consulting was founded to help virtual currency firms meet their regulatory obligations in a way tailored to the unique characteristics of virtual currency and decentralized blockchain technologies.

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