Regulators Tighten Grip on Cryptocurrency, Silvergate Bank Plans Shutdown and More

The token of liquidity protocol Rook, referred to as ROOK, has recently experienced an increase of 23% due to speculation that Zhu Su and Kyle Davies, founders of Three Arrows Capital, have completed a $25 million raise for their bankruptcy claims exchange.

> Decentralized finance (DeFi) researcher Ignas fueled the rumors with a tweet about the potential investment.

> Rook is an Ethereum-based maximum extractable value (MEV) marketplace created to counter the effects of miners and predatory trading algorithms that tend to extract value from transactions.

> Its goal is to redistribute that value and make the liquidation process on Ethereum more efficient while ensuring participants receive a fair return. Details here.

During Asian trading hours on Wednesday, Bitcoin hit a three-week low, tumbling to $21,871, while Ether, the second-largest cryptocurrency, nearly tested Tuesday’s low of $1,535.

> This dip was triggered by U.S. Federal Reserve Chairman Jerome Powell’s hawkish testimony to Congress, which caused traders to price in an increased “terminal rate.”

> Powell’s comments on Tuesday indicated that the central bank is likely to raise rates more than previously expected, as the process of pushing inflation down to the 2% target is still long.

> The Fed has already raised rates by 450 basis points (bps) since last year, causing disruption in risk assets, including cryptocurrencies. More here.

The Indian government has tightened its regulatory grip on cryptocurrencies by imposing money laundering rules on the sector.

> According to a statement released by the Finance Ministry on Tuesday, anti-money laundering legislation will now apply to cryptocurrency trading, storage, and related financial services.

> This move by the Indian government follows the global trend of increased scrutiny on digital asset platforms, which must adhere to anti-money laundering standards similar to those followed by regulated entities such as banks and stock brokers.

> Jaideep Reddy, a counsel at law firm Trilegal, noted that India’s decision reflects the international regulatory trend that demands greater oversight of digital assets.

> Last year, the Indian government implemented stricter tax regulations on the cryptocurrency sector, including a levy on trading. Details here.

Alpha Sigma Capital has announced that it has partnered with Transform Ventures and its founder, Michael Terpin, to form a new holding company known as Alpha Transform Holdings.

> The holding company has been created by merging select assets from Transform Ventures and Alpha Sigma Capital’s parent company, according to a press release issued on Wednesday.

> The partnership aims to create a “one-stop shop” for digital asset companies, foundations, and projects of all sizes and orientations.

> The investment from Transform Ventures and Michael Terpin also includes funding for the Alpha Transform Holdings parent company, the new Alpha Liquid digital asset fund, and a closed-end venture capital firm called the Aegean Fund. Continue here. 

According to a source familiar with the matter, JPMorgan (JPM) has ended its banking relationship with Gemini, the cryptocurrency exchange owned by Cameron and Tyler Winklevoss.

> The banking giant had taken on Gemini and Coinbase as customers early last year. While Coinbase’s banking relationship with JPMorgan remains intact, the crypto industry is now facing increased regulatory scrutiny and difficulty in accessing banking services.

> JPMorgan declined to comment on the matter. Gemini, which is regulated by the New York State Department of Financial Services, did not respond to requests for comment.

> However, the exchange has other banking partnerships in place, including with State Street, according to its website. State Street did not provide any comment when approached for clarification. Continue here.

Silvergate Capital Corporation, the holding company for Silvergate Bank, announced on Monday its plans to shut down operations and voluntarily liquidate the Bank in an orderly manner and in accordance with regulatory processes.

> The decision was made in light of recent industry and regulatory developments, with the company believing that an orderly wind-down of the Bank operations and a voluntary liquidation of the Bank is the best path forward.

> The Bank’s wind-down and liquidation plan includes full repayment of all deposits.

> The Company is also considering how best to resolve claims and preserve the residual value of its assets, including its proprietary technology and tax assets. More here.

A total of 40,000 Bitcoin, worth more than $2 billion, had been moved from wallets associated with the United States government.

> While it’s not uncommon for government agencies to hold cryptocurrencies, the sudden transfer of such a large amount of Bitcoin has sparked speculation about the reasons behind the move.

> According to