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| 1 | | U.S. lawmakers from Texas have voted to add a provision involving crypto to the state's Bill of Rights. If passed, the amendment would recognize Texas residents' right to possess, retain, and use digital currencies. More: - In addition to digital currencies, the provision also includes the use of cash, coin, bullion, and scrip for trading goods and services.
- The legislators voted 139 in favor of the proposed document, with only two against.
- The bill will be voted on in the Texas House of Representatives one more time before going to the Senate and the public vote.
- If it passes all the stages, the proposed bill will become law, officially entering the state's Bill of Rights.
Zoom Out: - Just like the U.S. Bill of Rights, the Texas Bill of Rights also protects the liberties of the citizens in the state, including freedom of speech, religion, and press.
- However, the Texas version includes several exceptions valid for Texans, such as the right to possess and carry weapons for self-defense and a prompt trial.
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| 2 | | 
What the numbers say: Bitcoin (BTC) retreated to two-month lows on May 12, returning to the $26,000 level for the first time since March 18. The largest cryptocurrency by market cap has failed to react to the latest banking turmoil triggered by the collapse of First Republic Bank with an upward trend. The second-largest cryptocurrency, Ether (ETH), also showed a similar downward trend by retreating to the six-week lows after touching $1,741 within the day. The popular cryptocurrency surpassed the $2,000 level following the Shanghai upgrade on April 13 for the first time since August 2022. Relevance: Bitcoin and Ether initially reacted to the U.S. banking crisis, which led investors to lose confidence in the traditional financial system, with a price increase. The turmoil started in March after the consecutive collapses of crypto-friendly Silvergate Bank, Silicon Valley Bank (SVB), and Signature Bank within just a week. In early April, Bitcoin surpassed the $30,000 barrier for the first time since June 2022 after a steady increase triggered by the banking crisis. However, rising concerns about the multi-sectoral contagion effect of the crisis have prevented the largest cryptocurrency from showing the same reaction to the ongoing collapses. Brands that should care: When the U.S. banking crisis first broke out in March, many crypto-related firms, including Paxos, Coinbase, Circle, Crypto.com, and Kraken, experienced minimal to significant effects since they used certain services of collapsed banking giants. Some of these firms had to cut ties with the related banks to minimize their exposure to the collapse. | | | |
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| 3 | | Montenegrin court has accepted a $436,000 bail proposal for Do Kwon, the co-founder of the collapsed Terra ecosystem, one day after the 31-year-old founder's lawyers filed the request. Following the payment, Kwon will be released from prison pending trial and put under house arrest at an address determined by the court on condition that he regularly responds to court summons and does not hide until the end of the criminal proceedings. More: - The proposal included Han Chang-Joon, the chief financial officer of Terraform Labs, alongside Kwon.
- The bail payment will be made separately for the two former Terra executives by their wives for $436,000 each.
- Do Kwon and Han Chang-Joon were arrested at the Podgorica Airport in Montenegro in March while trying to fly to Dubai carrying falsified traveling documents.
- In April, the pair also became the subject of an indictment proposal submitted by prosecutors in Montenegro with the charges of forging personal documents and faced a request for an extension of their detention.
- Along with the bail proposal, the lawyers for two former executives also denied the charges of carrying falsified travel documents.
- The court ordered both sides to verify the authenticity of travel documents and identity cards allegedly issued by Belgian authorities.
- The prosecution has three days to file an objection to the decision.
Zoom Out: - Meanwhile, both the U.S. and Kwon's native South Korea seek Terra founder's extradition, though they do not have a direct extradition treaty with Montenegro.
- The 31-year-old founder also faces many lawsuits and investigations in several countries, including South Korea and the U.S., with allegations such as tax fraud, deceiving investors, racket collecting, and building a Ponzi scheme.
- Multibillion-dollar Terra ecosystem collapsed last year after its native token Luna's price plummeted nearly to zero in May 2022 and lost all its value against the U.S. dollar (USD), triggering a prolonged crypto winter.
- The collapse caused over $60B of money to be wiped off the crypto market.
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| 4 | | Crypto exchange Binance's CEO Changpeng Zhao (CZ) has been seeking to reduce his majority stake in the exchange's U.S. arm, Binance.US, since last summer, according to a recent report from The Information citing people familiar with the issue. The effort aims to enhance the company's reputation in the eyes of U.S. regulators amid the increased scrutiny against it in the country. More: - The company executives believe that the bad reputation and CZ's majority stake could prevent the platform from obtaining certain regulatory licenses.
- Binance came under intense scrutiny by U.S. regulators over the last years.
- The firm and its CEO hit the headlines in March when the U.S. Commodity Futures Trading Commission (CFTC) filed a lawsuit against them with allegations of regulatory violations in seven counts.
- At the time, the CFTC further alleged that Binance engaged in proprietary trading activity with at least 300 house accounts connected directly or indirectly to CZ, arguing that those accounts were exempt from certain safeguards.
- Binance, the largest crypto exchange by trading volume, is also under scrutiny by the Internal Revenue Service (IRS), the Securities and Exchange Commission (SEC), and federal prosecutors in the U.S.
- The regulators expressed their concerns about a potential relationship of Binance.US with Binance.com many times, especially while opposing the $1.3B Voyager Digital acquisition deal before the subsidiary terminated the agreement.
- In March, a Financial Times report citing internal company documents similarly pointed out that Binance hid its substantial ties with China for several years.
Zoom Out: - Zhao is currently a Canadian citizen, even though he was born in China.
- Many regulatory agencies worldwide are concerned about his potential hidden ties with his country of birth for national security reasons.
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| 5 | | U.S. bankruptcy Judge Michael Kaplan in New Jersey has approved the bankrupt crypto lender BlockFi to repay $297M to Wallet customers with non-interest-bearing accounts. The decision does not include clients who had attempted to transfer money into those accounts at the last minute. More: - BlockFi's Wallet program did not pay interest to customers and kept customer deposits separate from other funds on the platform.
- Citing these details, Kaplan ruled that the deposits in the Wallet program belong to the customers themselves.
- However, the deposits in the interest-bearing accounts were able to be used by BlockFi for practices in its lending business.
- That's why the U.S. judge said the funds in these accounts are not solely owned by the customers.
Zoom Out: - BlockFi filed for Chapter 11 bankruptcy protection in November last year due to the volatility in the crypto market and its exposure to the collapsed crypto exchange FTX.
- The move made the firm one of the several crypto-related firms, including Celsius Network, Voyager Digital, and FTX, that went bankrupt after a prolonged crypto winter.
- In the bankruptcies of Voyager and Celsius, the judges similarly ruled that the funds in the interest-bearing accounts are the property of the bankrupt company, would be combined with other assets, and would be used to repay all creditors in the future.
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| 6 | | Crypto lending giant Nexo has announced that it would shut down its two entities in the U.K., Nexo Financial Services Ltd. and Nexo Clearing and Custody Ltd. The company's co-founder Antoni Trenchev cited the restructuring plans while explaining the decision. More: - The company has requested these two entities to be removed from the U.K. companies register this month.
- Trenchev underlined that the decision does not mean they plan to exit the U.K.
- The move came several months after Bulgarian prosecutors charged four people as part of an investigation into Nexo with allegations of forming an organized crime group involved in money laundering, conducting unlicensed banking activities, and committing tax and computer crimes.
- The firm also recently agreed to pay $45M in penalties to settle the U.S. Securities and Exchange Commission's (SEC) charges of securities laws violations.
- Following the penalty, Nexo announced that it would halt its operations in the U.S., exiting the country.
Zoom Out: - Nexo, founded in 2018, offers crypto trading services, custody services, loans, interest-earning products, and debit cards.
- The company has more than 5 million users worldwide and 600 employees across Bulgaria, the United Arab Emirates (UAE), and the U.K.
- The platform has around $2B in assets under management.
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- Florida Gov. Ron DeSantis has officially banned the use of a central bank digital currency (CBDC) issued by the Federal Reserve (Fed), the central banking system of the U.S., as money in the state.
- South Korean tech giant LG has filed a patent application for a television that allows users to trade NFTs.
- The Internal Revenue Service's (IRS) criminal investigation division has collaborated with the Ukrainian investigators and the blockchain analytics firm Chainalysis to track Russians evading sanctions on Russia related to its invasion of Ukraine by using crypto to hide their assets.
- The U.S. Chamber of Commerce has filed an amicus brief in support of Coinbase in the popular crypto exchange's legal conflict with the U.S. Securities and Exchange Commission (SEC).
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 | Staff Writer | | Doga is a tech and science editor who has been writing news for nearly 10 years. She worked for leading tech platforms and mainstrem media channels as an editor and presenter throughout his career. Then, she carried her know-how to more than one platform. She is a part-time cat lover and binge-watcher, and also fond of science, space, and emerging tech. She always has a story to tell. She is a bit addict to the laughter and -unfortunately- the '90s culture. | | This newsletter was edited by Aaron Crutchfield | |
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