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3/14 News Review: Banking crisis, Euler Finance, NBX, Amazon, Ethereum

The banking crisis in the United States has also impacted the crypto sector. Euler Finance suffered a $200 million hack. NBX launches a credit card that pays cashback in bitcoins. Amazon is rumored to be launching an NFT marketplace. The New York Attorney General’s Office labels Ethereum as a security.

The US banking crisis had an impact on the stablecoin market

The banking crisis in the United States has been all over the news lately. Events escalated quickly last Friday when Silicon Valley Bank (SVB) was taken over by the FDIC, the authority that protects bank deposits. SVB became the target of a classic bank run.

The bank’s doors had to be closed because it no longer had the funds to pay out customer deposits. It was the most significant bank failure since the 2008 financial crisis. SVB was no less than the 16th largest bank in the United States. It mainly served companies in the technology sector.

SVB had invested its customers’ deposits in US government bonds in an environment of low interest rates. When interest rates started to rise sharply in 2022, the value of the bonds collapsed. This depreciation was only theoretical as long as the bond could be held until the maturity of the loan. In that case, the creditor always gets the entire loan amount back.

The deposit flight forced SVB to sell its investments at huge losses. This process would have soon led to the bankruptcy of the entire bank, so the situation was stopped before the bank became completely unfunded.

The event also had an impact on the crypto market. Circle, the company which manages the USDC stablecoin, announced on Friday that it has $3.3 billion in reserves in SVB. In percentage terms, this corresponded to slightly more than 8 percent of the USDC’s collateral.

The news made investors nervous, and the USDC quickly lost its peg to the dollar. The panic was at its worst on Saturday morning. At the time, USD Coin had crashed to just 0,89 dollars.

In addition to USD Coin, DAI stablecoin fell by almost the same amount. This is because USDC plays a significant role in DAI’s reserves. Practically all other stablecoins excluding USDT and BUSD lost their dollar pegs over the weekend.

Investors were nervous about the fact that more banks could be in trouble. The situation was resolved on Sunday evening when the US government announced a bailout and saved all depositors. This meant that Circle would get its 3.3 billion dollars back as well, which helped USD Coin to return to peg.

The US administration made another move on Sunday evening that harms the crypto industry. It closed Signature Bank, citing systemic risk.

new york times

Signature Bank was a bank preferred by many companies in the industry. It seems that Signature became the latest victim of the anti-crypto campaign. The image above is from a New York Times article.

“I think part of what happened was that Regulators wanted to send a very strong anti-crypto message,” board member Barney Frank says in an interview with CNBC.

Silvergate Bank had already been brought down a couple of weeks ago. Signature and Silvergate were crypto-friendly banks used by many US crypto firms. Their shutdown may have significant effects on crypto companies in the future.

Euler Finance was hacked

The years 2021 and 2022 were grim for DeFi investors due to dozens of hacks. They piled up losses worth billions of dollars. We have witnessed numerous hacks in the hundreds of millions of dollars. The year 2023 has been quiet so far, but yesterday the situation changed.

DeFi lending protocol Euler Finance was hacked. Investor losses were around $200 million, which makes the hack quite significant. Most of the funds lost in the attack were stETH tokens.

The Twitter thread below contains Euler Finance’s latest comments on the subject.

Hackers made the attack using several flash loan attacks.

Flash loan is a feature of smart contract platforms. It allows you to chain several transactions together and make a huge loan without collateral because the loan is paid back in the same blockchain block.

The attack was made possible by a bug in Euler Finance’s smart contract. It is interesting that Euler Finance’s code has been reviewed in 2022 by several different auditing firms. How has such a vulnerability remained in the production version anyway?

DeFi lending protocols are often linked to each other, so the Euler Finance hack has also impacted other DeFi apps. A dozen DeFi protocols have suffered losses in the order of a million dollars.

The TVL (Total Value Locked) number, which describes Euler Finance’s total liquidity, was slightly more than 310 million dollars before the hack. Euler was ranked 27th on the list of DeFi protocols. Now its TVL has collapsed to zero. The price of Euler Finance’s EUL token also collapsed by 50 percent after the hack.

NBX introduces a Bitcoin credit card

NBX is one of the popular Norwegian crypto exchanges. The company published an interesting piece of news at the beginning of March. The exchange introduces a Visa credit card, which pays cashback to its users in bitcoins! Cashback starts at 0.5 percent and goes up to four percent at best.

“We believe that this product will attract thousands of new customers and help transform the way people think about traditional credit cards”, says the company’s CEO Stig Kjøs-Mathisen.

nbx credit card

The card has two significant differences compared to traditional crypto cards. All the best-known crypto cards on the market are debit cards, which means that funds must first be deposited into the account in order to use the card. Many of our readers might be familiar with the crypto debit cards of Binance and

The card that NBX will introduce is a credit card. It comes with an initial credit of 20.000 kroner with 45 days of no-cost payment period.

NBX’s card also pays cashback in bitcoins, which is exceptional. Norwegian Block Exchange issues this card to residents of Norway, Sweden, Finland, and Denmark. The last tests are currently starting. The card will be available on the market in the coming months.

We have recently published a comprehensive review of the NBX exchange. It’s worth checking out if you are interested in the card. NBX is a great exchange that offers low costs and Cardano staking. The upcoming credit card makes NBX even more interesting.

Amazon launches an NFT Marketplace

Amazon has become one of the largest companies in the world, both in terms of market value and operating profits. Amazon Web Services, or AWS, is also strongly linked to the world of cryptocurrencies because it runs the nodes of many different networks.

According to the latest rumors, Amazon plans to launch its own NFT marketplace on March 24th. It will be called Amazon Digital Marketplace, and it would first be opened to US customers. The Twitter thread below reviews the potential of this platform.

We wrote in the previous news review that the competition between NFT marketplaces has intensified due to the Blur platform. However, Amazon Digital Marketplace is not a competitor to OpenSea or Blur, where you can buy for example Bored Apes images. At least this is how it seems.

Amazon is rumored to release 15 different NFT collections on its marketplace that are connected to physical products. You can buy clothes and other products from Amazon and get the digital representation of that product as an NFT.

Amazon NFTs can be paid with traditional payment methods, i.e. by card or PayPal. Most likely, NFTs can also be stored in the Amazon Digital Marketplace wallet. This way, the average Amazon user does not need to install a Web 3 wallet or acquire cryptocurrency.

Amazon’s entry into the NFT sector above all brings legitimacy to NFT technology. The timing is interesting to say the least, as another tech giant, Meta, announced this week that it will abandon NFT integration on Instagram and other company platforms.

If you are not familiar with NFT technology, read more from our NFT beginner’s guide.

New York Attorney General’s Office: Ethereum is a security

There is a war on cryptocurrencies in the US, as we have reported in recent weeks. Several government institutions have set their sights on crypto industry players in 2023. Crypto-friendly banks have also fallen victim, as we wrote earlier in this article.

There has been a battle raging in the United States for years over the definition of securities. The country’s regulation is very strict when it comes to securities trading, which includes, for example, stocks. The question is whether cryptocurrencies are securities or not.

If a cryptocurrency is labeled as a security, it cannot be traded on US crypto exchanges. The coin in question would practically be banned in the United States. This is the topic of the Ripple vs SEC court battle as well that has lasted for two and a half years now.

The SEC, which oversees the securities market, has made several strikes in recent months and accused companies of illegal securities trading. In this context, it has also labeled several cryptocurrencies as securities. So far none of the major coins have had this label.

Last week the New York Attorney’s Office also joined in and, to the surprise of many, named Ethereum as security!

NYAG has sued KuCoin, which is one of the world’s largest crypto exchanges. According to the NYAG’s office, KuCoin has enabled people living in New York to buy cryptocurrencies without getting a NY crypto license first. In the same context, NYAG specifically labels Ethereum as a security.

“This action is one of the first times a regulator is claiming in court that ETH, one of the largest cryptocurrencies available, is a security”, commented NYAG’s Letitia James.

The news dropped Ethereum’s price momentarily, but it has not had a major impact. It’s just the opinion of one government agency. At the end of the day, the U.S. Congress makes laws regarding cryptocurrencies.

SEC boss Gary Gensler has stated that only Bitcoin is not a security. Other cryptocurrencies are possibly all securities, according to Gensler. However, the SEC has not been able to provide any precise list or definition so that crypto projects and companies could comply with regulations.

There is a lot of arguing about which government institution regulates cryptocurrencies. CFTC, which supervises the gold and silver market, wants cryptos under its umbrella too. CFTC boss Rostin Behnam stated last week that Ethereum, like Bitcoin, is a commodity.

AboutBitcoin Team

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