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Deposits at non-bank entities, including crypto firms, are not insured — FDIC

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Deposits at non-bank entities, including crypto firms, are not insured — FDIC

The government agency said that while deposits at insured banks were covered for up to $250,000, no such protections applied to those at crypto companies.

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Deposits at non-bank entities, including crypto firms, are not insured — FDIC

The United States Federal Deposit Insurance Corporation, or FDIC, has issued an advisory informing the public it “does not insure assets issued by non-bank entities, such as crypto companies.”

In a Friday notice, the FDIC advised banks in the U.S. that they needed to assess and manage risks in third-party relationships with crypto firms. The government agency said that while deposits at insured banks were covered for up to $250,000, no such protections applied “against the default, insolvency, or bankruptcy of any non-bank entity, including crypto custodians, exchanges, brokers, wallet providers, or other entities that appear to mimic banks.”

“Some crypto companies have misrepresented to consumers that crypto products are eligible for FDIC deposit insurance coverage or that customers are FDIC-insured if the crypto company fails,” said the FDIC. “These sorts of statements are inaccurate and can cause consumer confusion about deposit insurance and harm consumers under certain circumstances.”

Today, we issued an advisory to FDIC-insured financial institutions on FDIC deposit insurance and the risks of dealing with #crypto-asset companies. Read more ➡️https://t.co/rXHAoR9197. pic.twitter.com/KSAf2nmh9J

— FDIC (@FDICgov) July 29, 2022

The advisory followed a Thursday letter from the FDIC’s enforcement division, in which assistant general counsels Jason Gonzalez and Seth Rosebrock claimed crypto lender Voyager Digital had made “false and misleading” statements concerning insured deposits. The legal team suggested the FDIC would insure neither Voyager customers nor funds deposited to the platform against the firm’s failure.

“Customer confusion can lead to legal risks for banks if a crypto company, or other third-party partner of an insured bank with whom they are dealing, makes misrepresentations about the nature and scope of deposit insurance. Moreover, misrepresentations and customer confusion could cause concerned consumers with insured-bank relationships to move funds, which could result in liquidity risk to banks and in turn, could potentially result in earnings and capital risks.”

Related: FDIC wants US banks to report on current and intended crypto-related activities

The FDIC began insuring deposits in 1934, first starting with up to $2,500 in coverage. Since that time, the government agency reported no depositor “lost a penny” in an FDIC-insured bank, despite more than 9,000 such institutions failing before 1940. The FDIC reported that 561 insured banks failed between 2001 and 2022, reaching a peak of 157 in 2010.

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Bitcoin (BTC) Nearly Taps $25,000 Level For the First Time Since June

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Bitcoin (BTC) Nearly Taps $25,000 Level For the First Time Since June

Bitcoin (BTC) is showing several bullish signs in the daily time frame but has yet to break out from a short-term corrective pattern.

Bitcoin has been moving upwards since reaching a long-term low of $17,622 on June 18. On July 19, it broke out from a long-term descending resistance line, which had been in place since the end of March. 

On Aug. 11, BTC reached a local high of $24,918, which was the highest since June 12. However, it failed to sustain this increase and created a long upper wick in its daily candlestick (red icon).

If the upward movement continues, the closest resistance area would be found at $29,370. This target is the 0.382 Fib retracement resistance level.

An interesting reading comes from the daily RSI, which moved above 50 at the same time which the price broke out from the descending resistance line. 

Since then, the RSI has created an ascending triangle (dashed), which is often considered a bullish pattern. The indicator is currently at 61, right at the resistance line of this pattern. 

Therefore, a breakout above it would likely also cause the price to accelerate upwards.

Short-term BTC pattern

Despite the relative bullishness from the daily time frame, the six-hour chart shows that BTC has been trading inside an ascending parallel channel since the June 18 bottom. Such channels usually contain corrective patterns, meaning that an eventual breakdown from it would be expected. 

Moreover, the price has created what resembles an even shorter-term double top (red icons), which is considered a bearish pattern made at the resistance line of the channel.

On Aug. 9 (green circle), the price rebounded from the midline of this channel and at a short-term ascending support line. 

So, whether BTC breaks out from the channel or breaks down from the support line will likely determine the direction of the future trend.

Wave count analysis

The main wave count indicates that BTC is likely in wave three of a five-wave upward move (black). The sub-wave count is shown in yellow, and also suggests that the price is in wave three. So, this seems to be a 1-2/1-2 wave formation. If correct, it would mean that the upward move will accelerate in the near future. 

In order for the count to remain correct, Bitcoin has to hold on above the slope of the original 1-2 (black).

The most likely long-term wave count is also bullish, aligning with the proposed short-term count.

For Be[in]Crypto’s previous Bitcoin (BTC) analysis, click here

Disclaimer

All the information contained on our website is published in good faith and for general information purposes only. Any action the reader takes upon the information found on our website is strictly at their own risk.

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Binance recovers the majority of funds stolen from Curve Finance

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Binance recovers the majority of funds stolen from Curve Finance

Binance recovered and froze around $450,000 worth of the stolen assets, which is around 80 percent of the stolen funds.

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Binance recovers the majority of funds stolen from Curve Finance

Crypto exchange Binance has recovered a big part of the funds from the recent hack that targeted the decentralized finance (DeFi) protocol Curve Finance. 

In a tweet, Binance CEO Changpeng Zhao announced that the exchange has frozen and recovered $450,000 of the stolen assets, which is more than 80 percent of the stolen funds. According to Zhao, the hacker tried to send the funds to the exchange in various ways but was detected by Binance. The exchange is currently working to return the funds to their rightful owners.

The Curve Finance team detected the hack on Tuesday and alerted their users to refrain from using their website. An hour after the warning, the team announced that it was able to find and resolve the issue. However, the attackers were still able to hijack around $537,000 worth of USD Coin (USDC) before the issue was resolved.

According to experts from the blockchain analytics firm Elliptic, a hacker compromised the domain name system (DNS) of Curve Finance, which ended with malicious transactions getting signed. The experts told Cointelegraph that the funds were then sent to various exchanges and crypto mixers in an attempt to hide the trail. In the end, the funds were sent to Binance and were caught by its team.

Related: Cross-chains in the crosshairs: Hacks call for better defense mechanisms

This is not the first time this week that the good actors in the crypto community have worked to return stolen funds. On Monday, whitehat hackers and researchers returned an estimated $32.6 million worth of USDC, Tether (USDT) and other altcoins to Nomad, following the recent $190 million exploit.

The Curve Finance exploit is only one of the many attacks that happened in 2022. According to analytics firm Chainalysis, $2 billion worth of funds were drained because of cross-chain bridge hacks. This is 69% of the overall stolen amount in the year.

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Institutional staking won’t take off unless asset lock-up solved: Coinbase CFO

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Institutional staking won’t take off unless asset lock-up solved: Coinbase CFO

Coinbase’s new institutional-focused staking product won’t be a “near-term phenomenon” while liquid staking is still being worked out.

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Institutional staking won’t take off unless asset lock-up solved: Coinbase CFO

Institutional staking of crypto assets, including the post-Merge Ethereum, could become a “phenomenon” in the future, but not while their assets still need to be “locked up.”

Speaking during a Q2 earnings call on Tuesday, chief financial officer Alesia Haas noted that she didn’t expect their new exclusive institutional staking service, rolled out in Q2, to be a “near-term phenomenon” until a “truly liquid staking option” is available:

“This is the first time we had the products available. Previously, the way that institutions could have access to staking is via Coinbase Cloud […] But offering it as the delegated staking service similar to what we have for retail customers.”

However, Haas said it was still “early days” for their new staking service, adding they’ll likely only see a “real material impact” when they have created a liquid staking option for post-Merge Ethereum, also known as Eth2.

Liquid staking is the process of locking up funds to earn staking rewards, while still having access to the funds. 

Haas explained that many financial institutions “don’t want their assets held indefinitely:”

“So when you stake ETH2 you are locking in your assets into Ethereum until the Merge and then some period after. For some institutions, that liquidity lock-up is not palatable to them. And so, while they may be interested in staking, they want to have staking on a liquid asset.”

Haas reaffirmed this issue is “something we are looking to solve,” and added that once this liquid staking is available for financial institutions that can pool in funds at higher proportions, “we’ll see the real material impact of institutional revenue.”

Related: Coinbase partners with BlackRock to create new access points for institutional crypto investing

Investors and institutions have been able to access Coinbase’s delegated staking service through Coinbase Prime, which was first launched in Sep. 2021. The platform also offers other integrated services, such as access to a custody wallet with enhanced security, real-time crypto market data and analytics, and other crypto-native features like decentralized governance.

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