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FSOC’s Still Worried About Stablecoins

Published

6 месяцев ago

7 декабря, 2024

The Financial Stability Oversight Council published its 2024 annual report Friday, addressing various risks and areas of concern within the U.S. and global financial system. As it has done for the past few years, the report highlighted the role of stablecoins and the digital asset sector more broadly — though it stopped short of suggesting FSOC would take any concrete steps toward curbing these concerns.

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‘Emerging risks’

The narrative

For yet another year in a row, the Financial Stability Oversight Council — a group composed of the U.S.’s financial agency heads — warned that unchecked stablecoin growth could be an issue for the U.S. and global financial systems in its annual report.

Why it matters

The Financial Stability Oversight Council is tasked with ensuring the U.S.’s financial stability, and has for years asked Congress to pass legislation addressing the crypto market. The 2024 report reiterates these concerns.

Breaking it down

For the last few years, FSOC has warned that stablecoins exist outside any sort of federal regulatory framework, and their collective size could pose risks to financial stability. <a href=»https://home.treasury.gov/system/files/261/FSOC2024AnnualReport.pdf» target=»_blank»>Friday’s report</a> once again noted that potential risk. At the same time it also urged Congress to pass legislation addressing stablecoins and market structure, much as FSOC’s previous reports have.

«Stablecoins continue to represent a potential risk to financial stability because they are acutely vulnerable to runs absent appropriate risk management standards,» the report said. «This run risk is amplified by issues related to both market concentration and market opacity.»

The report referred to Tether’s USDT composing some 70% of the total global stablecoin market as one issue regulators should watch.

The lack of any kind of federal regulatory framework is likewise an ongoing concern, the report said. Some states have frameworks for stablecoins, but this is insufficient for the concerns FSOC has.

«Although a few are subject to state-level supervision requiring regular reporting, many provide limited verifiable information about their holdings and reserve management practices,» the report said.

Though FSOC has warned for the past few years that it may have to take whatever actions it can should Congress not act, it’s unclear to what extent, if any, it may actually be able to do so. FSOC will be composed of new regulators within the coming months.

«Additionally, many crypto-asset market firms and issuers remain outside of, or in noncompliance with, the U.S. financial regulatory framework,» the report said. «As such, the crypto-asset spot market may continue to experience significant fraud and manipulation. The Council recommends that Congress pass legislation that provides federal financial regulators with explicit rulemaking authority over the spot market for crypto-assets that are not securities.»

«We have also been addressing emerging risks from significant technological changes,» Treasury Secretary Janet Yellen said in <a href=»https://home.treasury.gov/news/press-releases/jy2737″ target=»_blank»>a prepared statement</a>. «Digital assets and artificial intelligence bring potential benefits such as efficiencies, but also financial risks, cyber risks, and risks from third-party service providers. The Council continues to call for legislation to create a comprehensive federal prudential framework for stablecoin issuers and for legislation on crypto assets that addresses the risks we have identified.»

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This week

Wednesday

15:00 UTC (10:00 a.m. ET) The House Financial Services Committee held a <a href=»https://financialservices.house.gov/calendar/eventsingle.aspx?EventID=409414″ target=»_blank»>hearing about technology and finance</a>, serving as a sort of swan song for outgoing committee Chair Patrick McHenry (R-N.C.).

Elsewhere:

(<a href=»https://www.bloomberg.com/features/2024-jealousy-list/» target=»_blank»>Bloomberg</a>) Bloomberg has a list of stories its team wished they wrote, and really what it shows is there was a lot of good journalism this year.

(<a href=»https://www.theverge.com/24312920/martial-law-south-korea-yoon-suk-yeol-protest-dispatch» target=»_blank»>The Verge</a>) South Korean President Yoon Suk Yeol declared martial law earlier this week. That lasted for a few hours, after opposition party lawmakers literally <a href=»https://bsky.app/profile/adamjschwarz.bsky.social/post/3lcg46lagl22d» target=»_blank»>scaled fences</a> amid <a href=»https://x.com/christineahn/status/1863967121597985249″ target=»_blank»>mass protests</a> against the declaration to end the imposition.

If you’ve got thoughts or questions on what I should discuss next week or any other feedback you’d like to share, feel free to email me at <a href=»mailto:nik@coindesk.com» target=»_blank»>nik@coindesk.com</a> or find me on Bluesky <a href=»https://bsky.app/profile/nikhileshde.bsky.social» target=»_blank»>@nikhileshde.bsky.social</a>.

You can also join the group conversation on <a href=»https://t.me/CDstateofcrypto» target=»_blank»>Telegram</a>.

See ya’ll next week!

Uncategorized

Judge Overturns Convictions in Mango Markets Exploiter’s Crypto Fraud Case

Published

16 часов ago

24 мая, 2025

admin

A U.S. judge has overturned the fraud and market manipulation convictions of Avraham Eisenberg, the crypto trader accused of draining $110 million from the now-defunct decentralized finance protocol Mango Markets.

On Friday, U.S. District Judge Arun Subramanian ruled that prosecutors failed to prove Eisenberg made false representations to the platform.

He also moved to acquit Eisenberg of wire fraud charges. The investor manipulated the price of Mango’s native token MNGO with massive trades by more than 1,000% in 20 minutes before getting the protocol to allow him to borrow and withdraw $110 million in various cryptocurrencies, backed by the inflated collateral.

Eisenberg’s defense argued that the platform, which operated through smart contracts, allowed anyone to transact freely and that he simply exploited a vulnerability. The judge agreed, stating that Mango’s permissionless structure meant that there “was insufficient evidence of falsity” from prosecutors regarding Eisenberg’s representation to Mango Markets.

Eisenberg was arrested in December 2022, and while this case collapsed, he is still currently serving a four-year sentence handed out after he pleaded guilty to the possession of child sexual abuse material.

“From the beginning, we said this case was fatally flawed,” his attorney Brian Klein of Waymaker LLP said. “We are very pleased for Avi that the judge granted our motion and dismissed the case.”

Uncategorized

Swiss watchmaker Franck Muller Unveils Limited Edition Solana Watch

Published

16 часов ago

24 мая, 2025

admin

If you’ve ever wanted to have your Solana wallet on your wrist while flexing your wealth, Swiss watchmaker Franck Muller is making that a reality.

The watch market is stepping into the Web3 ecosystem with a Solana-inspired, limited-edition series of watches that contain an embedded unique QR code to directly link to the user’s Solana address.

The company’s Solana-inspired watch collection is limited to 1,111 units that will set buyers back 20,000 Swiss francs (around $24,300).

While the watches feature a unique design that could appeal to Solana ecosystem participants, their launch comes at a time when, unfortunately, flaunting crypto-related wealth is becoming risky.

The cryptocurrency industry has seen dozens of physical attacks just this year, with a notable case seeing the daughter and grandson of Pierre Noizat, CEO of crypto platform Paymium, being targeted in a daytime attempted kidnapping. The attack was filmed and shared on social media.

While that kidnapping attempt failed, an earlier one in the same city saw the father of a crypto millionaire get abducted. Police managed to rescue the man, but not before his finger was severed.

Earlier this year, the co-founder of hardware wallet maker Ledger, David Balland, along with his wife, was abducted from his home and saw similar treatment. The couple was later rescued by authorities, and a ransom that had been paid out was seized.

There have been many other similar attacks in recent months.

Franck Muller is pitching the collection as a «phygital» (physical-digital) symbol of identity and ownership in the crypto age. While the watch is certainly a piece of crypto mythos, it may be a collectible that investors may not want to show off.

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A Small Food Firm Buys 21 bitcoin, Jumping on BTC Treasury Trend, Shares Fall Anyways

Published

18 часов ago

24 мая, 2025

admin

DDC Enterprise (DDC), an Asian food company, has announced the acquisition of 21 BTC as part of a long-term plan to incorporate the cryptocurrency into its corporate treasury.

The company, led by founder and CEO Norma Chu, exchanged 254,333 class A ordinary shares for BTC, in a transaction valued at roughly $2.28 million, according to a press release.

The move positions DDC among a growing cohort of public companies using BTC as a treasury asset. Two more purchases totaling 79 BTC are expected in the coming days, bringing the company’s initial holdings to 100 BTC.

In a shareholder letter issued last week, Chu outlined plans to accumulate up to 500 BTC within six months and aim for 5,000 BTC in three years.

While companies adopting bitcoin as a strategic treasury asset often see major price rises, DDC saw the opposite. The company’s shares dropped more than 12% on Friday’s trading session, while the S&P 500 dropped 0.6% and the tech-heavy Nasdaq fell 1%.

DigiAsia (FAAS), for example, saw its share prices surge more than 90% in a single trading session after announcing a $100 million BTC treasury plan earlier this month.