• European Parliament member Johan Van Overtveldt called for a crypto ban to address banking sector issues.
• US Federal Deposit Insurance Corporation (FDIC) denied reports of Signature Bank prohibiting any activity related to cryptocurrencies.
• SVB Financial Group filed for Chapter 11 bankruptcy protection and Silicon Valley Bank is no longer affiliated with it.
Regulation News
Johan Van Overtveldt, a member of the European Parliament and former Belgian finance minister, called for a crypto ban amid the issues faced by the banking sector. “Another lesson to be learned from the current banking commotion,” Van Overtveldt wrote. “Enforce a strict ban on cryptocurrencies. Speculative poison and no economic or social value added. If a government bans drugs, it should also ban cryptos.” The US Federal Deposit Insurance Corporation (FDIC) has denied reports that prospective purchasers of Signature Bank would have to stop doing business with crypto as part of any sale, Reuters reported. An FDIC spokesperson pointed to prior comments from FDIC Chairman Martin Gruenberg that the agency is not looking to prohibit any particular activity by banks.
Legal News
Silicon Valley Bank’s parent company SVB Financial Group (SIVB) has filed for Chapter 11 bankruptcy protection, adding that it is no longer affiliated with Silicon Valley Bank. It said it filed a voluntary petition for a court-supervised reorganization in the US Bankruptcy Court for the Southern District of New York to preserve value. “SVB Securities and SVB Capital’s funds and general partner entities are not included in the Chapter 11 filing and continue to operate in the ordinary course as SVB Financial Group proceeds with its previously announced exploration of strategic alternatives for these valuable businesses,” it said.
Security News
BlockSec, a smart contract audit firm, prevented a hacker from stealing ETH 2,900 from the NFT lending project Paraspace, they said on Twitter. “There is a flawed logic in borrow() of the ParaProxy contract (0x638a)” of Paraspace, said the firm, explaining the vulnerability that was nearly exploited by the hacker before BlockSec took control of the funds.
Banking News
Cryptocurrency firms in Hong Kong are finding it even harder to open local accounts given that banks in the city are not keen to serve them after the closure of crypto-friendly Silvergate Bank and Signature Bank, according to industry insiders cited by South China Morning Post report Firms are looking elsewhere for solutions including Singapore and Japan as well as countries that provide licensing such as Estonia and Switzerland.
Conclusion
The cryptocurrency space continues facing regulatory headwinds across different jurisdictions while security measures prove effective against malicious actors attempting theft through smart contracts vulnerabilities . At same time financial institutions appear increasingly reluctant when it comes offering services related digital assets which leads companies look at alternative solutions outside traditional banking systems