Also today, a new token that's attempting to capitalize on the momentum of ChatGPT is causing a huge splash on Twitter.
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Bitcoin fell below $20,000 on Friday as yet another U.S. bank showed signs of distress. Silicon Valley Bank spooked investors after dumping assets at a $1.8 billion loss, and then announcing a $2.25 billion share sale. The institution plays a significant role in lending money to tech startups, but there are now fears of a bank run. SVB's stock plunged 60% on Thursday — and by another 22% in after-hours trading. And this comes days after crypto-friendly Silvergate Bank announced it was winding down. BTC has also fallen to its lowest level in two months — and barring stablecoins, the 50 biggest altcoins are all in the red. The crypto markets aren't alone in suffering a nasty correction, with Wall Street taking a battering too.
ETH has even bigger headaches right now. New York's attorney general has announced that she's suing KuCoin for failing to register with the state and the SEC. She has accused the company of falsely representing itself as an exchange — and wants its website and app to be blocked from the state. Letitia James' lawsuit also explicitly calls Ether a security — in one of the first times this has been claimed in court. She has compared ETH to UST and LUNA — arguing that it "is a speculative asset that relies on the efforts of third-party developers in order to provide profit to the holders." James claims that KuCoin is "brazenly disregarding our laws and putting investors at risk" — and went on to call the company "shadowy."
Earlier this week, we talked about how Vitalik Buterin had dumped $700,000 worth of memecoins that had been airdropped to his wallet without permission. And now, Ethereum's co-founder has broken his silence on Reddit. The tokens he had offloaded included SHIKOKU, CULT, MOPS and BITE. Explaining his epic selling spree, he wrote: "$BITE and most other coins being discussed on this forum are shitcoins, have no redeeming cultural or moral value, and will probably lose you most of the money you put into them. I anti-endorse these projects to the greatest extent." Buterin's warning appears to have fallen on deaf ears. One Twitter account that appears to be affiliated with BITE called his post "bullish."
A new token that's attempting to capitalize on the momentum of ChatGPT is causing a huge splash on Twitter. CryptoGPT says that it allows users to monetize their data — and "turn every task of daily life into a source of income." It claims that personal information relating to how we use health and fitness apps, games, music and dating sites can all be used to turn a profit. But it's unclear whether there's any substance to match CryptoGPT's bold claims — or whether it's simply yet another project that's trying to drive up token prices by using the "AI" buzzword. The issue of preserving privacy isn't raised on its homepage either, and some on Crypto Twitter are openly warning that the project is a scam.
Leo Jakobson has a deep dive on why Silvergate Bank is winding down — and why it's a huge blow to the crypto ecosystem. Many major firms in the space used its infrastructure as a fiat on-ramp, and to move dollars around. Now it's gone, no mainstream banks want to take its place. A number of crypto exchanges — Crypto.com among them — are struggling to figure out how to allow customers to move dollars into their trading accounts and transfer them back into their bank accounts.