Binance did WHAT? Watch your stablecoins! 🚨
Binance did WHAT? Watch your stablecoins! 🚨
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GM, Hello, Namaste, good folks of web3! 🔆
This Week in Web3 reporting! We’re your go-to source for the latest updates and noteworthy conversations in the Web3 space in the chillest way possible. How’re you doin’? 👀
Here’s what we have for you this week👇
Weekly Web3 Updates
Binance in another drama?
No crypto ads at Superbowl!
Web3 Job Series & Reads
Estimated Reading Time: 4:50 minutes
Weekly Weather Report 🌤
Frens, slap on some sunblock and slide those shades on because we're basking in some sunshine here in crypto land! Good vibes around. Let's soak it up! ✨
Quick Web3 updates curated for you:
Kirthiga Reddy is building Virtualness to simplify Web3 for creators and brands.
Algorand Foundation partners with CII - Confederation of Indian Industry for a masterclass series on blockchain in supply chain.
India's central bank RBI has launched a global hackathon that targets CBDC
BUSD Drama Sets Stage for Stablecoin Market Reshuffling
TDS is to track crypto transactions says Finance Minister of India
Binance Can’t Seem to Catch a Break! 🤔
We recently covered the Binance-WazirX drama in our 49th issue. Looks like we’re doing more on Binance this week. The biggest crypto exchange by trading volume has minted $50 million worth of TrueUSD stablecoins just days after the NYDFS ordered Paxos, another stablecoin issuer, to stop issuing its BUSD stablecoin.
But first, here’s Stablecoins 101 💡
Stablecoins are a type of cryptocurrency that maintain a stable value, often pegged to a fiat currency like the US dollar.
They are widely used in the crypto industry to hedge against price volatility and provide liquidity for trading pairs.
There are different stablecoins in circulation, including USDT, TUSD, and Paxos Standard (PAX).
Paxos Ordered to Stop Issuing BUSD 🛑
Paxos Trust Company issues BUSD, a stablecoin branded by Binance and is backed by the US dollar on a 1:1 basis.
February 13, 2023: The United States Securities & Exchange Commission (SEC) issued a Wells Notice to the Paxos, alleging that its BUSD was operating as an unregistered security.
According to the SEC, BUSD should be categorized as a security.
On the same day, the NYDFS ordered Paxos to halt the issuance of BUSD which may be related to concerns about its compliance with NY's BitLicense regulations.
Paxos has announced that it will relaunch its BUSD stablecoin after working with the NYDFS to address the regulator's concerns.
That brings us to the question….
What Makes a Digital Asset a Security? 💡
To decide if a digital asset is a security, the SEC employs the Howey Test, which has four criteria:
investing money,
in a common enterprise,
with the expectation of profits,
that come entirely from the efforts of others.
When an asset satisfies all four conditions, it is deemed a security and becomes subject to regulation under securities laws.
Binance Mints $50 Million Worth of TrueUSD 🪙
Just days after the NYDFS ordered Paxos to stop issuing BUSD, Binance has minted $50 million worth of TrueUSD stablecoins.
50M #TUSD minted at #Binance and the price of $TRU increased by 200%. On-chain data shows that #Alameda and #justinsun are the two largest minters of $TUSD. #Alameda minted a total of 1.64B $TUSD in history. #justinsun minted a total of 889M $TUSD in history.
TrueUSD is issued by TrustToken, a San Francisco-based startup that also offers other stablecoins and crypto-based products.
While it's not clear why Binance chose to mint TrueUSD instead of other stablecoins, the move could be an attempt to fill the gap created by the temporary halt of BUSD issuance.
Binance CEO CZ said that “the existing circulating supply of BUSD is there and safe, and as more people want to redeem, they will be burned.”
CZ Wasn’t Bullish on BUSD in the First Place? What? 🤯
Looks like CZ wasn't exactly riding the bull of optimism when it came to the BUSD's success. 👀
“To be honest BUSD was never a big business for us, when we started I actually thought the BUSD project may fail, so we actually don’t have very good economics on that collaboration.”
Stablecoins Facing Regulatory Scrutiny 🏦
The recent actions by the NYDFS against Paxos and the sudden minting of TrueUSD by Binance highlight the increased regulatory scrutiny that stablecoins are facing.
Regulators are concerned about issues like money laundering, investor protection, and market stability.
Stablecoin issuers in the US are subject to a patchwork of state and federal regulations, with some regulators being more proactive than others.
The crypto industry is on high alert and keeping a close eye on the ever-changing regulations around stablecoins. The most recent regulatory moves are just adding more confusion to the already chaotic situation, leaving everyone scratching their heads and wondering what's going to happen next. Do you feel stable about the stabelcoins or is your faith shaking? 👀
👩🚀 If you are or know an early-stage web3 builder going from 0 to 1, holler at our creative-capital studio Spacekayak. We are a web3-native creative team of folks who love crafting creative solutions for crypto companies. Let’s be frens!
Crypto Ads Took a Backseat at the 2023 Super Bowl 🏈
The 2023 Super Bowl was noticeably devoid of cryptocurrency ads, and the reasons behind it are unsurprising.
Market Storm and Company Lay-offs 📉
The value of the cryptocurrency market has plummeted since the last Super Bowl.
Bitcoin lost 60% of its value and the entire market wiped off $2tn.
This led to many companies downsizing and laying off staff.
Crypto.com had to slash a fifth of its headcount.
Coinbase had to lay off over 2,000 employees in two separate rounds of cuts.
Cancellation of Planned Ad Spaces 🙅♀️
Although four crypto companies had been lined up to take ad spaces at the 2023 Super Bowl, they all pulled out in the end.
This decision was driven by the need for these companies to conserve funds and ride out the market storm, as they couldn't justify the high cost of a 30-second slot, which went for $6-7m.
Chatoic Crypto Scandals 🚨
Another reason for the absence of crypto ads at the Super Bowl is the spate of scandals that have hit the industry.
The collapse of FTX, which cost some users their life savings, left the market crashing again and its founder, Sam Bankman-F̶r̶a̶u̶d̶ Fried, facing fraud charges.
This has significantly damaged the reputation of the crypto industry and let to celebrities who endorsed FTX being sued, making it an unappealing option for anyone looking to get paid to star in a crypto ad.
Well, it seems like the crypto companies are saving money for their lawyers and legal fees since the crypto industry is no stranger to lawsuits and scandals now with added regulatory scrutiny.
But hey, atleast we got a Rihanna performance where she masterfully sneaked in her brands to avoid the paying for an ad slot and rightfully so, since performers are not paid for their shows. Get that bag, qween! 👑
Share this issue and let us know your thoughts on the Superbowl ads and the Stablecoin drama or if you loved Rihanna’s performance just as much as we did! 👀
Push Protocol Launches on BNB Chain!💛
The largest web3 communication platform is now available to BNB’s ecosystem of thousands of dapps and hundreds of thousands of daily users. The launch will enable Push Notifications and Push Chat.
Let’s #PUSH for web3 communication!
Your Next Steps in Web3
Put your learning to work, upskill and join discussions that will help you level up!
Web3 Job Series 👩💻
The Product House is thrilled to announce the launch of the Web3 Jobs Series, powered by the TPH Job Board, an initiative to help folks to get their first job in web3 or help the ones who are affected by the layoffs.
Join us for a special fireside chat on 23 February with Purva Gera, Head of HR at Biconomy.
Topic: How to get your first job in Web3
Opportunity for job seekers in web3 industry.
Insights and advice from a seasoned HR professional.
Q&A session.
Read away ✨
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That’s it for today, folks! 👋 We’ll see you with Posty next Monday! 🗞