Is Bitcoin about to be cracked?

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US authorities say crypto is here to stay, Huobi is in trouble, and could quantum computing be a threat to Bitcoin? These stories and more this week in crypto.

IRS: Crypto is here to stay

In an interview with the Wall Street Journal, an IRS official said that cryptocurrency is here to stay and it’s getting more legit. Special Agent Thomas Fattorusso added that the US tax administration needs to work with crypto companies, not contentionally, but rather as part of a symbiotic relationship.

US Regulators Warn Banks of Crypto Risks

In a joint statement, the US Federal Reserve, the FDIC and the Office of the Comptroller of the Currency issued a warning to banks about the risks associated with the cryptocurrency market. The watchdogs said they were closely monitoring the crypto activities of banking organizations and were concerned about the risk of contagion.

Huobi Exchange encounters problems

After announcing the layoff of 20% of its staff, crypto exchange leader Huobi recorded a cash outflow of $60 million in just 24 hours. Industry rumors were that layoffs would actually be closer to 40% of total staff, and other reports claim that Huobi shut down internal communications while insolvency issues worried investors.

Coinbase reaches $100 million settlement

Crypto exchange Coinbase has reached a $100 million settlement with the New York Department of Financial Services over historic loopholes in AML and KYC standards. Coinbase will pay a $50 million fine and invest an additional $50 million in strengthening internal compliance programs. Shares jumped on the news, rising more than 12%.

Bitcoin Miner Will Shut Down Celsius Platforms

Struggling bitcoin miner Core Scientific will shut down more than 37,000 crypto mining rigs owned by bankrupt crypto lender Celsius Network as the two companies eventually reached a settlement in court. Core Scientific, which hosts platforms for Celsius, filed for Chapter 11 bankruptcy in December and had partially blamed the lender for its financial troubles.

Sam Bankman-Fried pleads not guilty

FTX founder Sam Bankman-Fried is expected to contest the criminal charges in October. Charges range from fraud to conspiracy to commit money laundering. SBF surprised many by pleading not guilty to all charges. The New York District Attorney’s Office has launched a webpage to inform alleged fraud victims of the court case against FTX, which has more than one million creditors.

Silvergate struggles after bank run

Clients of US bank Silvergate have withdrawn over $8 billion from their crypto deposits. About two-thirds of the bank’s customers have withdrawn their deposits since October, fearing lenders will rack up huge losses on bad loans and investments. The bank has already sold $5.2 billion in assets to cover its costs.

Researchers Claim to Break RSA Encryption

According to multiple reports, 24 Chinese researchers managed to crack the RSA encryption using a quantum computer, which would have significant consequences for the security of cryptocurrencies. However, many computer scientists and cryptographers outside of China do not believe the researchers have made a significant discovery and have denied the truth of the claims.

That’s what happened this week in crypto, see you next week.

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