Experts at Europe’s top regulator are recommending a reduction in the number of stablecoins because they could have a negative impact on financial stability.
The European Central Bank (ECB) has published a report analyzing the growth of digital currencies over the past decade and listed the risks that the young industry poses to the existing financial system.
A separate section of the report focused on stablecoins and their important role in the established ecosystem. Stablecoins are increasingly being used to link various blockchain networks and play a crucial role in providing liquidity to the Decentralized Finance Ecosystem (DeFi), the report said.
ECB analysts believe that the lack of regulatory oversight of stablecoins could have a negative impact on the entire financial system. As an example, experts cited the recent collapse of the cryptocurrency Terra (LUNA) and the stablecoin TerraUSD tied to it:
“Major stablecoins serve an important function in the liquidity of cryptocurrency markets, which could have widespread consequences for those very markets if any stable coin collapses or temporarily fails.”
The ECB rejects the idea of using Stablecoins as a means of payment because their speed, value and terms have proven “inadequate for use in real market conditions.”
The regulator recommends developing supervisory and regulatory legislation measures to make sure that stablecoins do not pose a risk to financial stability in European countries.
Last week, the ECB demanded that EU countries follow uniform standards when drafting national laws to regulate the cryptocurrency industry.
US Judge Approves Binance’s $4.3 Billion Settlement Deal: Reuters
A U.S. federal judge has approved Binance’s guilty plea and a hefty $4.3 billion settlement deal for violating anti-money laundering (AML) and sanctions laws through its cryptocurrency exchange.
According to a Reuters report, the plea and the settlement were accepted on Friday, February 23.
The Settlement Deal
The U.S. Department of Justice (DOJ) had announced the plea deal and settlement in November, alleging that Binance had violated the Bank Secrecy Act (BSA), the International Emergency Economic Powers Act (IEEPA), and failed to register as a money transmitting business.
Additionally, the agency alleged that Binance’s founder and now-former CEO, Changpeng “CZ” Zhao, failed to maintain an effective anti-money laundering program on the platform, violating the BSA.
The guilty plea and settlement comes after a years-long investigation by the DOJ into the leading crypto exchange.
Prosecutors stated that CZ’s failure to maintain an AML program on Binance “allowed money to flow to terrorists, cybercriminals, and child abusers through its platform.”
As part of the settlement deal, which prosecutors described as the largest corporate resolution, Binance agreed to forfeit $2.5 billion and pay a criminal fine of $1.8 billion, bringing the total to $4.3 billion. The exchange also agreed to retain an independent compliance monitor for three years and upgrade its AML program.
On the other hand, CZ pleaded guilty to money laundering violations and was released on a $175 million bail bond. As part of his settlement, he paid a fine of $50 million and gave up his CEO role at the exchange. CZ has remained in the U.S. ever since, as he was not allowed to travel back to his residence, Dubai.
Prosecutors Seek to Modify CZ’s Bond
In the latest court hearing on Friday, federal prosecutors sought to modify CZ’s bail bond. These modifications include the executive giving a three-day notice before any travel plans, surrendering his passports, and maintaining his current residence in the U.S. “unless he gets approval for a change.”
In addition, pretrial services officers asked that CZ be subjected to location monitoring.
CZ’s sentencing hearing is scheduled for April 30. While the assigned judge would determine his sentencing, prosecutors believe he could spend 18 months behind bars for his crimes.
Ethereum (ETH) Reclaims $3K Level as Bitcoin (BTC) Eyes $52K (Weekend Watch)
Bitcoin’s price went on the offensive once again after yesterday’s retracements and came inches away from tapping $52,000.
Most altcoins are also slightly in the green, with ETH surging past $3,000 and SOL maintaining above $100.
BTC to Challenge $52K?
After a few consecutive weeks of price increases, the primary cryptocurrency had a quieter seven-day period this time. The only notable price surge came on Tuesday when the bulls drove the asset to a new multi-year peak of precisely $53,000.
However, a sharp rejection followed that pushed the cryptocurrency south by more than two grand. It tried to recover most of the losses but ultimately fell below $51,000 on a few occasions.
The next couple of days were calmer, but BTC still struggled to post any substantial gains. Just the opposite, the cryptocurrency fell to a multi-day low of $50,600 yesterday.
The landscape has changed since then, though. Bitcoin began another leg-up that resulted in gaining over a grand in hours and jumping to nearly $52,000. As of now, BTC has been unable to conquer that line even though it is more than 1% up on the day.
Its market capitalization has gone above $1 trillion once again, but its dominance over the altcoins is down to 48.6%.
ETH Reclaims $3K
Perhaps driven by the hype around the potential approval of spot Ethereum ETFs, the second-largest digital currency, has been on the rise in the past few weeks. This led to the inevitable challenge of the $3,000 level. The asset jumped above it a few times lately but was always pushed back down. The past 24 hours saw another increase that has driven ETH to just over $3,000, following a 2.5% increase.
Solana has remained above a round-numbered milestone, as it stands at north of $100 now. BNB, XRP, ADA, AVAX, and LINK are also slightly in the green.
UNI has dumped the most on a daily scale (-16%), but it is still up by double digits since Friday after this proposition.
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ChatGPT Analyzes if the Ripple v. SEC Lawsuit Will be Over in 2024
- The lawsuit between Ripple and the SEC is approaching a crucial trial in April 2023, with potential long-term impacts on the cryptocurrency sector and possibilities of extended legal battles through appeals.
- Ripple has gained key partial legal victories, but the final outcome and its implications are still uncertain.
Could We See the Conclusion This Year?
The lawsuit between Ripple and the United States Securities and Exchange Commission has been among the trendiest topics in the cryptocurrency industry for years. It dates back to December 2020, when the agency accused the company of illegally raising more than $1.3 billion in an unregistered securities offering by selling XRP.
For its part, Ripple argues that its native token is a currency rather than a security and thus does not fall under the SEC’s jurisdiction.
The case is reaching its last chapter – a grand trial scheduled for April 2023, whose outcome might significantly impact the entire cryptocurrency sector. However, the beginning of the courtroom battle does not necessarily mean that the end of the dispute is around the corner. As such, we decided to ask ChatGPT if a resolution is likely to be observed before the end of the year.
The AI-powered chatbot estimated that a final judgment is expected in the summer of 2024. On the other hand, it is important to note that appeals could delay the outcome potentially until 2026:
“This means that while a decision might be reached this year, the overall legal battle could extend further due to the appeals process.”
In addition, the case has been adjourned “sine die,” which translated from Latin means “without a date.” Another factor hinting that the battle might be nowhere near its end is the SEC’s determination to win at all costs and appeal each unfavorable (for its part) ruling. Earlier this week, the popular X (Twitter) user Mr. Huber presented a flippant scenario in which the Commission drags the lawsuit for an additional decade.
ChatGPT claimed that a resolution is still possible this year, assuming both parties shake hands on a mutual agreement:
“Like many legal disputes, there’s always a possibility of settlement before a final verdict, which could be seen as a victory for Ripple if the terms are favorable.”
Who has the Better Chance?
Ripple seemingly enters the upcoming trial as the top dog, securing three vital (yet partial) court wins last year. The first occurred in July when Judge Analisa Torres ruled that the firm’s programmatic sales to secondary trading platforms did not constitute offers of investment contracts.
The magistrates later dismissed the SEC’s wish to appeal and cleared Ripple’s CEO – Brad Garlinghouse – and Executive Chairman – Chris Larsen – of all charges brought by the watchdog.
The regulator achieved a small victory earlier this year when Judge Sarah Netburn ruled that Ripple should disclose important financial records for 2022 and 2023 (as insisted by the Commission).
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