Daily Digest - 17th May 2023

Headlines

▌Founders of Bancor Protocol accused of misleading investors into false risk-free investment

A class action lawsuit has been filed against the founders of Bancor Protocol along with the BProtocol Foundation and Bancor DAO. The plaintiffs allege that the defendants misled them with the promise of risk-free investments and caused huge financial losses. Bancor is allegedly trying to cover undisclosed losses on its online crypto asset exchange. The founders of the Bancor protocol established the BProtocol Foundation in 2017. They launched an automatic trading encrypted asset protocol "Automatic Market Maker" (AMM), which pools investors' encrypted currency assets and creates a functional exchange. In return, investors receive a portion of the fees collected from traders on the platform.

Policies

▌Chairman of the US SEC: The cryptocurrency market is generally not compliant, and business models are often based on customer funds

During a question-and-answer session at the 27^th Annual Financial Markets Conference held by the Federal Reserve Bank of Atlanta on May 15, SEC Chairman Gary Gensler said that the cryptocurrency market is generally illicit and based on a “false narrative” of decentralisation. Their business models are often based on non-compliance, and their business models are often also based on customers' funds, commingling them, and there are conflicts. The SEC will never allow the NYSE to operate as a cryptocurrency platform. Gensler also pointed out that three of the four recent bank failures in the US held large cryptocurrency books, and that the more interconnected the worlds of traditional finance and cryptocurrencies become, the more likely it is to trigger disaster in financial markets.

Cryptocurrency

▌Cryptocurrency custodian Anchorage Digital now allows its customers to participate in Snapshot voting

Anchorage Digital, an institutional-grade cryptocurrency custodian, announced that its institutional customers can now use their Anchorage Digital addresses to participate in Snapshot voting. It currently supports more than 60 ERC-20 Tokens and plans to enable support for all ERC-20 Tokens in the future.

▌Origin Protocol will issue ETH derivatives OETH

The DeFi project Origin Protocol stated that it will issue Origin Ether (OETH), an ETH derivative that allows holders to earn income by betting on ETH on other protocols. OETH holders can earn transaction fees and token rewards through DeFi protocols Curve and Convex. Origin holds CRV and CVX tokens, allowing the protocol to increase yield by sending reward tokens to liquidity providers.

▌Signature executives: Encryption-friendly banks are in good shape

Two Signature Bank executives reiterated that Signature does not need to be shut down. Signature is ready to move forward despite $16 billion in customer withdrawals following SVB's collapse, said Scott Shay, Signature co-founder and former chairman of the bank. I am confident that Signature Bank will be able to withstand the economic earthquake that occurred that day. The bank is well capitalised and solvent. Eric Howell, the former president of Signature, echoed the belief that Signature Bank can continue, saying the lender is "well-capitalised, solvent and has sufficient borrowing power to sustain these and future drawdowns." The New York Department of Financial Services (DFS) has denied that Signature’s shutdown has nothing to do with cryptocurrencies.