Blockchain This Week – Silvergate Collapse, SVB Contagion, BIS’ New CBDC Report, Hedera, Getty NFTs

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Silvergate Shuts Shop

Silvergate Capital Corporation is winding down operations and voluntarily liquidating one of the leading crypto banks, the Silvergate Bank. Its liquidation plan includes full repayment of all deposits. Silvergate is also figuring out the best ways to settle all claims and preserve the residual value of its assets.

Marathon Severs Ties with Silvergate

Bitcoin miner Marathon Digital Holdings revealed that it had repaid its term loan to Silvergate Bank and reduced its debt by $50 million. It has also ended its credit facilities with Silvergate Bank. Marathon’s CFO said the company has been building a more robust balance sheet and determined it was in the company’s best interest to prepay the loan and eliminate both the term loan and revolving line of credit.

Bitcoin and Ether Slump

Bitcoin fell 8% following the Silvergate shutdown, slumped 8% more, and briefly dropped below $20,000. Ether, too, dropped similarly and traded below $1,400 for a short duration. At the time of writing, one bitcoin was worth $20,680.09, and ether was trading at $1,469.79.

Crypto Firms Exposed to SVB

One of the prominent US banks, Silicon Valley Bank, stunningly collapsed this week after it jolted the investors, saying it needed to raise $2.25 billion to shore up its balance sheet. After a bank run that resulted in customers withdrawing $42 billion of deposits, the California Department of Financial Protection shuttered the bank. Shortly after, it came to light that several crypto firms, including BlockFi, Circle, Avalanche, Yuga Labs, and Proof, have varied levels of exposure to the bank.

Circle’s $3.3B USDC in SVB

Crypto payments firm Circle disclosed that $3.3 billion of its USDC stablecoin reserves are held in Silicon Valley Bank. Following this news, USDC de-pegged from $1 and dropped over 7% in 24 hours. At the time of writing, USDC was at $0.92. Consequently, crypto exchanges Binance and Coinbase both announced that they would temporarily suspend USDC conversions.

BIS Concludes Project Icebreaker

The Bank for International Settlements (BIS) has wrapped up its “Project Icebreaker” prototype CDBC system together with the central banks of Israel, Norway, and Sweden. It has released a report that proposes a “hub and spoke” model to bridge retail CBDC systems through foreign exchange providers.

Hedera’s Unusual Week

On March 9, the DLT platform Hedera announced that the number of mainnet transactions on its network had crossed five billion. But the jubilation was short lived, as soon it came to light that the network was being attacked. An attacker exploited a vulnerability in precompiled smart contract to transfer HTS tokens held by certain DEXs’, including Pangolin, SaucerSwap, and HeliSwap accounts, to the attacker’s own account. DAI, USDT, USDC, and WHBAR worth nearly $600K were reportedly stolen. The Hedera team acted swiftly to identify and fix the vulnerability, and they also provided a transparent report of the incident, including the steps taken to remediate it. The team is also implementing additional measures to prevent similar attacks in the future. They include implementing stricter rules for precompiled contracts. 

Getty Images NFTs

Getty Images, the world renowned photography company, is partnering with NFT platform Candy Digital to offer a collection of rare photos from its 1970s music and culture archives as NFTs. The NFTs will be available for purchase on Candy’s website starting March 21. Prices range from $25 to $200.

Thailand Waives Crypto Taxes

The cabinet of Thailand has approved tax waivers for crypto companies that offer investment tokens, applicable to both primary and secondary offerings. This exemption also extends to investors who participate in these token sales, as they will be exempted from paying value added tax. Although the government could potentially lose up to $1 billion in revenue over the next two years due to this policy, it is a bold move that could spur growth in the crypto industry. It is important to note that utility tokens are not covered under this exemption.

Forkast’s Index Trackers 

Forkast Labs, a media and web3 infra company backed by Animoca Brands launched a suite of index trackers for digital assets, including the Forkast 500 NFT, Forkast SOL NFT Composite, and Forkast ETH NFT Composite. These trackers aim to restore trust in crypto data. The Forkast 500 NFT is the flagship index, which will act as a proxy for the entire NFT market. 

Wallet as a Service

Coinbase launched a product called Wallet as a Service (WaaS). It aims to easily create customizable web3 wallets within their own apps and make user onboarding as simple as in web2 applications. Prominent companies like Floor, Moonray, Thirdweb, and Tokenproof have already started using this product to onboard web3 users on their platforms.

Web3 Shorts

Blockchain data platform Nansen has officially launched Query, a product that gives users access to blockchain datasets for analytics. Nansen Query is built on Google Cloud (GCP).’s parent Gate Group plans to launch a Gate Visa crypto debit card and has opened up registration processes for users in the European Economic Area.

FTX’s debtors are suing Grayscale Investment, its owners, and its CEO, accusing them of imposing exorbitant management fees for Grayscale Bitcoin and Ethereum Trusts. FTX is seeking injunctive relief to unlock close to $9 billion of shareholder value.

FTX wants to initiate a $4 million bonus program, which includes bonuses of as much as 94% of salary, to stop skilled employees from leaving the embattled firm.

US banking giant JPMorgan is ending its banking relationship with crypto exchange Gemini.

Bankrupt crypto lender Celsius has allocated $25 million to facilitate withdrawals for its custody account holders.

Jack Dorsey’s Block, Inc. is planning to build a “Mining Development Kit,” a DIY kit that it hopes will spur innovation in Bitcoin mining hardware.

Cathie Wood’s Ark Invest added $3.44 million and $9.97 million worth of Coinbase and Robinhood shares, respectively.

After four days of deliberation, a US federal judge permitted Binance US to buy the assets of failed crypto lender Voyager Digital

Web3 Investments

Serial entrepreneur Trevor Traina raised $25 million in a Series A round led by Liberty City Ventures to build a web3 super app, Kresus.

Solana based NFT marketplace Tensor closed a $3 million seed funding round led by Placeholder VC.

Bitcoin investment platform focussing on Europe, Relai, secured $4.5 million in a funding round led by Ego Death Capital, and consequently reached a $20 million valuation.

Scroll, Ethereum Layer 2 network raised $50 million in a new funding round participated by Polychain Capital, Sequoia China, Bain Capital Crypto, and others. As a result, Scroll is now valued at $1.8 billion.

Web3 email solution EtherMail obtained $4 million in a pre-Series A round led by investor Tim Draper who also joined its advisory board.

Token based payroll startup Toku raised $20 million in a funding round led by Blockchain Capital and will deploy the capital for global expansion.

Former executives of Riot Games raised $55 million in a Series A round led by Lightspeed Ventures for a new game studio, “The Believer Company,” that will not focus on NFTs.

Matric Partners led the $7 million seed funding round of the web3 art platform Wild, which also saw participation by actress Gwyneth Paltrow.

Violet raised $15 million in a funding round led by Coinbase Ventures and Brevan Howard to launch a compliance focused decentralized exchange, Mauve.

Brazil based stablecoin issuer ECSA closed a $3 million pre-seed round participated by Y Combinator and Arca.

Crypto startup Gyroscope raised $4.5 million in a seed round co-led by Placeholder VC and Galaxy Ventures to build what it claims to be an “all-weather” stablecoin.

ZKP tech company Proven secured $15.8 million in a round led by Framework Ventures.Web3 developer tools provider Cubist raised $7 million in a seed round led by Polychain Capital.

Image Source: iStock


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