Cryptocurrency exchange Kraken is set to pay $30 million to the U.S. Securities and Exchange Commission (SEC) to settle allegations it broke the agency’s rules with its staking products and will shut down its staking service in the country.

The New York Department of Financial Services (NYDFS) is reportedly investigating stablecoin issuer Paxos, the company behind Pax dollar (USDP) and Binance USD (BUSD), a Binance-branded stablecoin that’s offered through a white-label service.

Leading stablecoin issuer Tether has published its latest quarterly financials, revealing it made a $700 million “net profit” in the last quarter of 2022, marking the first time the firm generated a profit.

 Top stories in the Crypto Roundup today:

• Kraken to Shut Crypto Staking Service in $30 Million SEC Settlement
• New York Regulator Investigating Stablecoin Issuer Paxos
• Tether Reports $700 Million Profit in Q4
• Crypto Market Movers – RNDR, APT, FET

Kraken to Shut Crypto Staking Service in $30 Million SEC Settlement

Cryptocurrency exchange Kraken is set to pay $30 million to the U.S. Securities and Exchange Commission (SEC) to settle allegations it broke the agency’s rules with its staking products and will shut down its staking service in the country.

The SEC has alleged that the firm’s staking service was an illegal sale of securities. The settlement with Kraken could impact other cryptocurrency industry players, including Nasdaq-listed exchange Coinbase and leading exchange Binance, which offer staking services.

A Kraken representative has clarified that the firm will only end its staking service for US clients. Those affected will see their assets “unstaked,” while  Staked Ether will be unstaked after the Shanghai upgrade, which allows the move on-chain.

Staking is a way for cryptocurrency token holders to generate income on their holdings by locking the assets to help validate transactions on their underlying Proof-of-Stake networks.

New York Regulator Investigating Stablecoin Issuer Paxos

The New York Department of Financial Services (NYDFS) is reportedly investigating stablecoin issuer Paxos, the company behind Pax dollar (USDP) and Binance USD (BUSD), a Binance-branded stablecoin that’s offered through a white-label service.

The potential ongoing investigation by the NYDFS may suggest the company is under closer scrutiny than its peers may be, with previous reports suggesting Paxos may be asked to withdraw its application for a full banking charter by the U.S. Office of the Comptroller of the Currency.

The company also holds a virtual currency license – commonly known as a BitLicense – issued by the NYDFS. The regulator published stablecoin guidance in June, directing issuers to ensure their stablecoins are fully backed with assets segregated from their own funds and attested to regularly.

Tether Reports $700 Million Profit in Q4

Leading stablecoin issuer Tether has published its latest quarterly financials, in which it revealed it made a $700 million “net profit” in the last quarter of 2022, marking the first time the firm generated a profit.

Tether, which is owned by Hong-Kong headquartered firm Ifinex, said its latest quarterly results were boosted by interest rate hikes by the U.S. Federal Reserve, which led to higher yields on government debt the firm holds in its reserve.

The stablecoin issuer makes money from fees, including a $1,000 withdrawal fee it charges, with the minimum withdrawable amount being $100,000. It also has investments in digital assets and precious metals, and issues loans to other institutions.

The firm also collects interest on the funds it holds as reserves for its stablecoins. USDT, its leading stablecoin, has a market capitalization of over $68 billion and is backed by a variety of assets.

Tether was in the past under fire for holding a large portion of its reserves in commercial paper, a form of unsecured, short-term corporate debt. It has since gotten rid of its commercial paper holdings, replacing them with U.S. Treasury bills, which the firm says now make up more than 58% of its reserve.

It also said it reduced secured loans on its balance sheet by $300 million, and revealed that in the September-December period, it had $67 billion in assets against $66 billion in liabilities.

Crypto Market Movers – RNDR, APT, FET

Several tokens are leading the charge in the last 7-day period. Some of these are well-known cryptocurrencies with more liquid trading pairs, so we’ll be focusing on these over low-cap cryptos that may have higher percentage changes.

Aptos (APT) - Aptos is a Layer 1 Proof-of-Stake (PoS) blockchain that employs a novel smart contract programming language called Move, a Rust-based programming language that was independently developed by Meta (formerly Facebook)’s Diem blockchain engineers, envisioning a blockchain that brings mainstream adoption to web3 and empowers an ecosystem of DApps to solve real-world user problems.

Fetch.AI (FET) - Fetch.ai deliversartificial intelligence (AI) to the crypto economy. Autonomous Economic Agents, powered by AI, can provide automation to decentralised finance that can serve the needs of a single user or aggregate millions of data points for on-chain oracles.

Render token (RNDR) - Render Token is an Ethereum-based distributed GPU rendering network and marketplace. RNDR is a utility token that powers and serves as currency on Render Token's ecosystem.

State of the Crypto by Top Tier Exchange Volume

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