Silicon Valley Bank down, USDC depegged, FTX billed $34M in Jan

Top Stories This Week

Silicon Valley Bank shut down by California regulator, holding over $5 billion for prominent crypto VCs

Silicon Valley Bank (SVB) was shut down by California’s financial watchdog on March 10 after announcing a significant sale of assets and stocks aimed at raising additional capital. The California watchdog appointed the Federal Deposit Insurance Corporation (FDIC) as the receiver to protect insured deposits. However, the FDIC only insures up to $250,000 per depositor, per institution and per ownership category. The bank held over $5 billion in funds from major venture capital firms. Silicon Valley Bank is one of the top 20 largest banks in the United States, providing banking services to crypto-friendly venture companies, such as Sequoia Capital and Andreessen Horowitz.

USDC depegs as Circle confirms $3.3B stuck with Silicon Valley Bank

USD Coin (USDC) issuer Circle confirmed that $3.3 billion of its $40 billion USDC reserves remain at Silicon Valley Bank, triggering a sell-off that resulted in the stablecoin falling below $1. The stablecoin ecosystem felt an immediate impact as USDC depegged from the U.S. dollar, with major stablecoin depegging from the U.S. dollar as a consequence, including DAI, USDD and FRAX. The USDC price was slowly re-pegging on late Saturday after turbulent trading hours. Circle plans to cover missing liquidity in SVB with corporate funds.

Silvergate Capital Corporation to ‘voluntarily liquidate’ Silvergate Bank

Silvergate Capital Corporation announced this week plans to “wind down operations” and liquidate its crypto arm, Silvergate Bank. The decision was made “in light of recent industry and regulatory developments,” said the company. Silvergate was one of the major banking partners for many crypto firms, but drew concerns about its solvency after delaying the filing of an annual financial report. Although its closure does not appear to be a systematic risk for the United States banking system, crypto firms are bracing for the potential effects of its exit, such as an increase in banking concentration and challenges for crypto venture capital firms in the U.S..

SBF’s lawyers signal need to push back October criminal trial

Lawyers representing FTX founder Sam Bankman-Fried have flagged that it may be necessary to delay his criminal trial, since the defense is still waiting for a “substantial portion” of evidence and more charges have been brought against Bankman-Fried in late February. Meanwhile, law firms, investment banks and consulting companies working with FTX on its bankruptcy case billed the crypto exchange a combined $34.18 million in January, court documents revealed. FTX’s chief restructuring officer and new CEO, John J. Ray III, also received a hefty pay package, charging $1,300 an hour, amounting to a total of $305,000 in February.

Biden budget proposes 30% tax on crypto mining energy use, double capital gains tax, and a ban on crypto wash sales

United States crypto miners could be subject to a 30% tax on electricity costs under a budget proposal by President Joe Biden aimed to “reduce mining activity.” According to the White House, any firm using resources — whether they be owned or rented — would be liable for a 30% taxation of the electricity cost used to mine digital assets. Another point affecting the crypto industry in the budget proposal includes ending tax-loss harvesting and nearly doubling tax rates on capital gains for some investors to 39.6% on long-term investments, up from the current 20% tax rate.

Winners and Losers

At the end of the week, Bitcoin (BTC) is at $19,920, Ether (ETH) at $0,000 and XRP at $0.35. The total market cap is at $928.9 billion, according to CoinMarketCap.

Among the biggest 100 cryptocurrencies, the top three altcoin gainers of the week are Kava (KAVA) at 12.40%, Bone ShibaSwap (BONE) at 1.22% and UNUS SED LEO (LEO) at 1.05%.

The top three altcoin losers of the week are Stacks (STX) at -31.05%, Mina (MINA) at -29.40% and SingularityNET (AGIX) at -29.14%.

For more info on crypto prices, make sure to read Cointelegraph’s market analysis.