Daily Digest - 13 February 2023

Headlines

▌Coinbase CEO: Coinbase’s pledge service is not a security, and is willing to defend it in court if necessary

Coinbase CEO Brian Armstrong tweeted, "Coinbase's pledge service is not a security. If necessary, we are happy to defend it in court." Earlier, Armstrong also issued a document stating that he "insistently fights for economic freedom and protects customers from excessive government interference." He said that staking is a very important innovation in the field of cryptocurrency, and staking is not a security. New technologies should be encouraged to develop in the United States, not stifled by a lack of clear rules. It was previously reported that the U.S. Securities and Exchange Commission (SEC) announced on Thursday that the encryption exchange Kraken will "immediately" terminate the provision of crypto pledge services to U.S. customers and will pay a $30 million fine to the SEC for its provision of unregistered securities.

Cryptocurrency

▌Former SEC official: Regulatory review of crypto companies is the reason PayPal stopped its stablecoin

PayPal has stopped working on its stablecoin due to partner Paxos being investigated by the New York Department of Financial Services. The payment provider was expected to release a stablecoin in the near future, but has now canceled its plans. Former SEC official John Reed Stark said regulatory scrutiny of crypto companies was the reason for PayPal's decision. Any U.S. financial firm interacting with a public blockchain is considered too risky. The former SEC official also recently tweeted that Bitcoin may be an unregistered security, citing a Twitter thread about the centralization of Bitcoin mining.

▌Expert: FTX’s Attempts to Recoup Political Donations May Target Biggest Recipients

FTX and affiliated debtors had previously sent confidential letters to politicians, political action committees and other recipients of donations, demanding the return of previously provided funds. Vanderbilt University law professor and community director Yesha Yadav said that given the sheer size of political donations and the allegations that these may be funded through FTX client funds (via Alameda), the current FTX management has good reason to seek these funds are returned as a way of covering shortfalls to creditors. But AnChain.AI’s cryptocurrency compliance officer, Michael Fasanello, said asking for the refund of donations is “an appropriate move in this situation to try to get as much of the abused customer deposits as possible.”

▌Republicans of the U.S. House of Representatives demanded that the U.S. SEC respond to the arrest of the co-founder of FTX

Members of the U.S. House of Representatives, North Carolina Republican Patrick McHenry and Michigan Republican Bill Huizenga sent a letter to Gary Gensler, chairman of the U.S. Securities and Exchange Commission (SEC), regarding FTX co-founder Sam - Bankman-Fried seeks answers on arrest ahead of House Financial Services Committee testimony. McHenry and Huizenga claim that the timing of Bankman-Fried's indictment and arrest raises "serious questions about the SEC's process and cooperation with the DOJ."

▌The author of "Rich Dad Poor Dad": Everything will collapse, plan to buy more Bitcoin

Robert Kiyosaki, the famous author of the best-selling book "Rich Dad Poor Dad", reiterated his warning of a market crash. Robert Kiyosaki said that more than 144,000 people will lose their jobs in the technology industry in 2022, and 66,000 people have lost their jobs so far this year. Everything will collapse, including gold, silver and Bitcoin. Still, he told his 2.3 million Twitter followers not to panic, adding that he would be buying more gold, silver and bitcoin using "fake" dollars, which he called real money. Kiyosaki explained that gold, silver, and BTC are real money, while the U.S. dollar is fake money because it is not pegged to real money, like gold, but to the "full trust and credit" of the United States. The famous author has repeatedly stated that he does not trust the Biden administration, the Treasury Department, the Federal Reserve or Wall Street.