SEC Chair: Crypto Is The ‘Wild West’

Speaking in a Twitter space session hosted by the US Army late Wednesday, SEC Chair Gary Gensler said that the crypto industry is the “wild west,” reports Watcher Guru.

The SEC Chair asked traders and companies to exercise caution because most cryptos are currently “non-compliant” and aren’t adhering to the law. He commented:

Most of these, again, are not complying with the securities laws, but they should be.

Further elaborating on why most tokens will fail, Gensler said:

Most of these 10 or 15,000 tokens will fail. That’s because venture capital fails, new startups fail, but also because history tells us that there’s not much room for micro currencies, meaning, you know, we have the US dollar and Europe has the euro and the like.

Coinbase Fires 20% of its Employees

Coinbase is cutting about a fifth of its workforce as it looks to preserve cash during the crypto market downturn, CNBC reports. 

The exchange plans to cut 950 jobs, according to a blog post published Tuesday morning. Coinbase, which had roughly 4,700 employees as of the end of September, already slashed 18% of its workforce in June citing a need to manage costs and growing “too quickly” during the bull market.

“With perfect hindsight, looking back, we should have done more,” CEO Brian Armstrong told CNBC in a phone interview. “The best you can do is react quickly once information becomes available, and that’s what we’re doing in this case.”

Coinbase said the move would result in new expenses of between $149 million and $163 million for the first quarter. The layoffs, along with other restructuring measures, will bring Coinbase’s operating expenses down by 25% for the quarter ending in March, according to a new regulatory filing. The crypto firm also said it expects adjusted EBITDA losses for the full year to be within a prior $500 million “guardrail” set last year.

Investors Sue Gemini Crypto Exchange, Winkelvoss Twins

Cryptocurrency exchange Gemini and its founders Cameron and Tyler Winklevoss are reportedly being sued by investors that are accusing the company and Mark Zuckerberg’s arch nemeses of selling interest-bearing accounts while failing to register them as securities, Gizmodo reports.

The story initially broke on Bloomberg which highlights that the case—Picha et al v. Gemini Trust Company, LLC et al—was filed in the U.S. District Court of Southern New York in Manhattan on Tuesday. The suit alleges that Gemini sold high-interest accounts through a program called Gemini Earn, and investors lent Gemini crypto assets in exchange for interest payments. While Picha et al argue that Gemini failed to register these accounts as securities prior to selling them to investors, the plaintiffs also claim that these accounts were marketed with misleading statements.

Billionaire Investor Bill Miller is Still Bullish on Bitcoin

Bill Miller, a famed American investor, fund manager, and philanthropist, is still bullish on Bitcoin despite the recent crypto meltdown that has seen the price of the flagship cryptocurrency plunge by around 75% compared to its all-time high, cryptonews.com reports.

In an interview with Barron’s on Thursday, Miller said he is surprised Bitcoin has not lost more value amid the recent collapse of FTX, once the third-largest crypto exchange in the world that filed for bankruptcy in early November. He said:

I’m surprised Bitcoin isn’t at half of its current price given the FTX implosion. People have fled the space, so the fact that it’s still hanging in there at $17,000 is pretty remarkable.

He mentioned that part of Bitcoin's poor price performance could be attributed to raising rates. "I would expect that if and when the Federal Reserve begins to pivot [toward easier monetary policy], Bitcoin would do quite well," he added.

Miller further noted that he differentiates between Bitcoin, which he sees as a potential store of value like digital gold, and all the other cryptocurrencies. He said other digital assets can be categorized as venture speculation.

He stated that Bitcoin is still up by around 190% compared to its 2020 low of $5,800, arguing that Bitcoin has performed quite well overall.

Bitcoin Mining Giant Core Scientific Files for Chapter 11 Bankruptcy

Core Scientific Inc (CORZ.O), one of the biggest publicly traded cryptocurrency mining companies in the United States, said on Wednesday it filed for Chapter 11 bankruptcy protection, the latest in a string of failures to hit the sector, Reuters reports.

Austin, Texas-based Core Scientific attributed its bankruptcy to slumping bitcoin prices, rising energy costs for bitcoin mining and a $7 million unpaid debt from U.S. crypto lender Celsius Network, one of its biggest customers.

Core Scientific said in court filings that it had suffered a net loss of $434.8 million for the three months ending September 30, 2022, and had just $4 million in liquidity at the time of its bankruptcy filing.

The company engaged restructuring advisers in October and has been negotiating with creditors about a potential bankruptcy filing since that time.

More than a trillion dollars in value has been wiped out from the crypto sector this year with rising interest rates exacerbating worries of an economic downturn. The crash has eliminated key industry players such as crypto hedge fund Three Arrows Capital and Celsius.

STC Bahrain Starts Accepting Crypto Payments

The Bahrain telecom operator, STC Bahrain, has started acceoting cryptocurrencies, ostensibly making it the first in the kingdom to do so, Bitcoin.com reports.

Nezar Banabeela, the CEO of STC Bahrain, said:

Rapid digitization across the globe is transforming all aspects of our lives, and payments are the most crucial element. From online shopping and streaming videos to money transfers, almost every digital activity relies on a payment system.

Banabeela also claimed the telecom operator’s move to accept crypto payments demonstrates STC Bahrain’s “strong focus on advancing Bahrain’s fintech sector as world-class digital enablers.” In addition, the CEO said his company plans to make the acceptance of crypto “a seamless process and increase adoption as crypto is the future of payments.”