Top Stories This Week
Sam Bankman-Fried petitions court to prioritize reimbursing his legal fees
Sam Bankman-Fried (SBF) is seeking to use FTX’s corporate insurance policies to cover his legal expenses, according to a court filing on March 15. As per the filing, the policies provide “priority of payment” to insured individuals such as Bankman-Fried. The move would put the former CEO on top of the FTX payout list. Another headline shows that Bankman-Fried’s inner circle received $3.2 billion in payments and loans from FTX-linked entities. The amounts exclude over $240 million used for the purchases of luxury properties in the Bahamas, political and charity donations, as well as “substantial transfers” to non-FTX subsidiaries. In another headline, FTX debtors reported $11.6 billion in claims and $4.8 billion in assets, meaning there’s a $6.8 billion hole in the exchange’s balance sheet.
Signature Bank closed by New York regulators for not providing data
Crypto-friendly Signature Bank was officially closed down and taken over by the New York Department of Financial Services on March 12 for “failing to provide consistent and reliable data.” The bank has been investigated by two United States government bodies over whether it took adequate measures to monitor and detect potential money laundering by its clients. Former member of the U.S. House of Representatives Barney Frank suggested that New York regulators closed Signature as part of a seeming show of force against the crypto market.
USDC bounces back toward $1 peg after Fed announcement
Circle’s stablecoin, USD Coin (USDC), climbed back to its $1 peg following positive developments concerning Circle’s $3.3 billion worth of reserves held at Silicon Valley Bank and its new banking partners: redemptions of USDC will now be processed by Cross River Bank and BNY Mellon. The stablecoin depegged from the U.S. dollar on March 10 following SVB’s sudden collapse, triggering the depeg of many other stablecoins. The stablecoins’ depegging prompted a growth in loan repayments over the weekend, allowing debtors to save more than $100 million on loans.
US Fed announces $25B in funding to backstop banks
United States federal regulators announced “decisive actions” that would “fully protect depositors” at both Silicon Valley Bank and the now-shuttered Signature Bank, including $25 billion worth of funding aimed at backstopping banks and other depository firms. The Federal Reserve is investigating the failure of Silicon Valley Bank — including an internal probe as to how the Fed supervised and regulated the financial institution. Amid the sudden collapse, SVB’s U.K. arm was acquired by HSBC for 1 British pound ($1.21), with loans of 5.5 billion pounds ($6.7 billion) and deposits of 6.7 billion pounds ($8.1 billion).
Bitcoin market cap flips tech giant Meta, widens gap on Visa
Despite a turbulent week for crypto following the downfall of Silicon Valley Bank and Signature Bank, Bitcoin’s market cap has managed to flip that of tech giant Meta. On March 14, Bitcoin’s market cap reached $471.86 billion, surpassing Meta’s $469 billion, according to data from Companies Market Cap. The leading cryptocurrency climbed to the 11th spot among top assets by market cap, sitting behind electric vehicle maker Tesla. The market capitalization of Bitcoin has added over $190 billion in 2023, outperforming top Wall Street bank stocks, particularly as fears of a global banking crisis are rising.