News Updates December 09, 2022

1. Bitcoin trades above $17,000 as Coinbase leads sell-off in crypto stocks. Crypto prices were up on Friday, while most related equities sank. Block bucked the downward trend, adding 2.4%.

Bitcoin was changing hands for $17,154 at noon EST on Friday, according to TradingView data. That's an increase of 1.4% over the past 24 hours. It had been trading above $17,200 before hotter-than-expected data for November's producer price index (PPI), which rose by 7.4% year-on-year in November. A Refinitiv poll of economists expected it to increase by 7.2%.

PPI measures the wholesale price of goods and services paid by businesses before they reach consumers. The hotter-than-expected reading raises concerns surrounding the Fed's next interest rate decision. 

Meanwhile, ether was trading up 2% at $1,275. Binance's BNB rose 0.6%, and Polygon's MATIC jumped 1.4%. 

The Fed's Federal Open Market Committee (FOMC) is expected to announce an interest rate increase of 50 basis points, with a Fed fund target rate range of 4.25% to 4.5%. The CME's group's FedWatch tool — which analyzes Fed funds futures pricing data — sees a 77% probability of a 50 basis point increase. 

Looking ahead to next week's inflation data (CPI) in the U.S. for November — dropping at 8:30 a.m. EST on Tuesday — could also dominate moves in crypto. October inflation came in below estimates at 7.7%. QCP Capital said these events are the "last remaining hurdles for the rally into year-end."

The crypto trading firm noted the inflation figure will "yet again be 'the most important CPI release ever,' this time because the market has set it up to be with its epic 2-month short squeeze rally." A disinflationary print could see the rally continue through the end of the year, its latest market update added. 

Crypto and structured products

The S&P 500 and the Nasdaq 100 were trading down marginally on Friday, falling 0.3% and 0.5%, respectively.  

Coinbase was trading down 2.5% on Friday at $41.76. Silvergate shares sank to $22.95, down 0.5%. MicroStrategy shares were lower by 1.4%, trading around $200.

Block bucked the downward trend in crypto-related stocks on Friday. Shares in Jack Dorsey's firm jumped 2.6% by midday on Friday to trade at $65. 

The discount on Grayscale's GBTC to net asset value (NAV) continued to widen, reaching 47.9% on Thursday. Its previous low was 47.3% on Wednesday. 

2. SEC internal investigator leaves a month after raising staff retention issues.

The Securities and Exchange Commission has lost its acting inspector general, a month after he raised problems with the agency's staff retention under Chair Gary Gensler.

Nicholas Padilla has left as inspector general, where he led investigations, Bloomberg Law reported. Though his page on the SEC's site has not been updated, representatives for the agency confirmed that he left in November. 

According to the SEC's representative, he had reached the statutory maximum of his service, which his page notes as entailing more than 38 years in various federal and military positions. Padilla could not be reached for comment. 

In October, Padilla reported to Gensler on the SEC's loss of staff. "The SEC seems to be facing challenges to its retention efforts," the report reads, noting in particular the pace of the SEC's rulemaking and lack of policy communication under Gensler as a source of strife. 

"His departure had absolutely nothing to do with any of the substantive work of the Office of the Inspector General," a representative for the SEC said. 

3. India Looks to Coordinate Global Crypto Rulemaking as It Assumes G-20 Presidency

India took over the G-20 presidency at the start of the month and now has a year to coordinate international guidelines around crypto.

India, a country that has at times sought to ban and severely limit crypto usage within its borders, has as of Dec. 1 assumed the presidency of the Group of 20 – the intergovernmental forum of some of the world’s largest economies – just as much of the world is pondering whether stricter regulation of the industry is needed.

As India takes over the group, which includes 19 nations and the European Union as a bloc, for the next year, the country will bear the responsibility of shaping the group’s agenda.

Prime Minister Narendra Modi is no stranger to crypto. He has previously called for global cooperation to tackle challenges posed by cryptocurrencies as the technology “makes decisions taken by one country inadequate to meet the challenges.” India and its prime minister will host the 18th G-20 summit in New Delhi next year, Sept. 9-10.

The prioritizing of framing globally coordinated crypto rules reflects a renewed urgency for tighter regulations amid another chapter of crypto contagions triggered by the collapse of FTX.

The Indian finance ministry’s role

The G-20’s work is divided into the Finance Track and the Sherpa Track. The Finance Track consists of finance ministers and central bank governors from all G-20 members. With India assuming the presidency, Indian Finance Minister Nirmala Sitharaman and her team, led by Finance Secretary Ajay Seth, will be setting the agenda.

4. Researchers find $500M scam targeting French speakers via fake crypto websites.

A crypto scam network stole as much as $500 million through impersonating mainstream banks and crypto companies in order to convince their victims to purchase fake stocks, NFTs and crypto.

The scam ring, named CryptoLabs, has been targeting French speakers through a network of over 300 fake domains, ranging from crypto and fintech organisations to banking and asset management industries. One victim alone lost over $1.6 million to the scam.

A report published by security analysts Group-IB says: “CryptosLabs is a well-organized illicit business that has a hierarchy of kingpins, sales agents, developers, and call-center operators that collectively could have earned as much as €480 million since its launch.”

In order to steal from their victims, CryptoLabs created a sense of legitimacy with their well developed software interfaces, genuine looking advertisements, and dedicated “investment managers” offering tailored customer service.

It’s estimated that the gang has been operating since 2018, being “one of the few scam-as-a-service operations” with a geographical focus on France, Belgium, and Luxembourg, according to Anton Ushakov, head of Group-IB’s Euro.

5. Cryptocurrency Exchange Coinbase Asks Users To Convert USDT To USDC.

American cryptocurrency exchange Coinbase encourages its customers to convert Tether (USDT) into the stablecoin USD Coin (USDC). To create a special incentive, the company is waiving transaction fees when exchanging USDT for USDC.

Representatives of the exchange emphasized that stability and trust are of paramount importance for customers at the current time. They are achieved through confidence in securing reserves of stablecoins. USDC is 100% backed by cash and short-term U.S. Treasury bonds held by U.S. regulated financial institutions, the release said.

A few days after the FTX crash, Tether (USDT) lost its peg and traded at just 93 cents. Most trading pairs on exchanges have returned to $1, although data from CoinGecko shows that some pairs on Binance continue to trade at 99 cents.