Crypto regulation in the world: weekly digest #34


This Friday, the price of bitcoin suddenly fell by more than 7% due to the news that Silvergate Bank is delaying the publication of annual reports. Before that shares of Silvergate Capital Corp., bank’s parent company slumped more than 50% on Wednesday closing at $6.9 with $13 in regular trade. Immediately, speculation began about the introduction of the FDIC in receivership in relation to Silvergate Bank. Wells Fargo could be a potential buyer of the world's largest crypto lender.

The crypto asset-focused bank declared a net loss of $1.05 billion in the fourth quarter of 2022. The collapse of FTX, which also was a bank’s client, caused a deterioration in the operating environment. The company also struggled with access to financing as it sought to reduce its reliance on Federal Home Loan Banks. In the last report, the bank recorded an outflow of deposits and took a number of measures to maintain liquidity.

Silvergate Bank lost more than $8 billion in deposits from its crypto customers at the end of 2022. Major cryptocurrency companies began distancing themselves from the troubled institution. Paxos, Tether and Circle, Galaxy Digital announced they no longer maintain a relationship with the bank and nothing threatens their business. Coinbase announced the termination of all operations with Silvergate, same as Bakkt. The firms are trying to protect themselves from the next wave of clients outflow from the crypto industry and mitigate their own risks.

One of the Silvergate’s key product is a Silvergate Exchange Network (SEN) that enabled instant 24/7 transfers between investors and crypto exchanges. Two days after Silvergate Bank raised doubts about its viability it stated that it made a «risk-based decision» to suspend the SEN operation.

At the same time, there were rumors that the payment giants VISA and Mastercard abandoned plans to launch new cryptocurrency products. At least until the global financial watchadogs put in place tighter controls on the industry to prevent situations like the one that happened with FTX.

Same thing happens on the other side of the Atlantic. In the UK, the Nationwide Building Society and HSBC have introduced restrictions on the purchase of cryptocurrencies through payment cards. Nationwide raised the limit to $5,900 per day for debit cards, banning similar transactions for credit cards. HSBC completely restricted the purchase of digital assets. Both companies tighten rules following the request of the FSA, which cares about the customers’ safety.

It is clear that the possible bankruptcy of Silvergate Bank will deal another hard blow to the cryptocurrency industry, and the current crypto winter will become even colder.


The Brazilian financial watchdog CVM is ready to roll out a new bill to better regulate cryptocurrency industry. The new decree will determine which tokens are securities and allow cryptocurrency to operate alongside the traditional economy.

The CVM is expected to begin regulating all crypto assets that fit the definition of security. It was also stated that the regulator is focusing on a decentralized finance (DeFi) project called Open Capital Market. This project is being developed in conjunction with the Central Bank and will be released later this year.

The main CVM’s goal is to help the development of the crypto space and to avoid making rules that could strangle the sector. In Brazil a lot of crypto companies are carrying out business and a new regulation framework is being awaited from its very announce in November, 2022.

News from other countries:

  • The EU is considering the possibility to include NFT regulation in the MiCA bill. The bill proposal itself is planned to be adopted in April this year.
  • Amin Soleimani, one of the Tornado Cash founders, has introduced a new version of the tool to maintain data privacy. A tool named Privacy Pools allows you to conduct anonymous transactions within the Ethereum network, same as Tornado Cash, but it allows to prove that user is not a criminal and does not use criminally obtained funds.

We continue to highlight the news of the world of crypto regulation worldwide. Please stay with us!

The TokenScope Team
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