Coinbase issued a warning in its SEC filing on Tuesday that its custodial services could be subject to bankruptcy proceedings in a "black swan" event. More: - Coinbase issued a warning in its quarterly SEC filing that reads: “Crypto assets we hold in custody on behalf of our customers could be subject to bankruptcy proceedings.”
- In response to the filing, Coinbase CEO Brian Armstrong said that the company's Prime and Custody customers (which are institutional customers) are protected by their terms of service and that it would take steps to offer similar protections to retail customers.
Zoom out: - SEC Chair Gary Gensler leveled sharp criticism at the crypto sector and stablecoins in an interview on Tuesday.
- Gensler took issue that many of the largest cryptocurrency exchanges run custody, market-making, and trading services without keeping them separate from traditional businesses.
- The lack of regulation around stablecoins, digital currencies pegged to a fiat currency or other asset, is part of the issue.
- Gensler calls for greater transparency and oversight in the cryptocurrency space to protect investors and the markets. He adds: "There's a lot of concern about cryptocurrencies and plenty of speculation ... We need to get the regular guardrails in place."
- Crypto regulations will protect investors, consumers, and the overall market.
- Last week, the commission issued subpoenas to several significant exchanges to investigate potential price manipulation. The SEC has also warned investors about investing in digital currencies.
Decrypt 
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LUNA, a top crypto project by market capitalization, has fallen by 98% to $0.84 from a high of $120 in early April. Sister coin UST, an algorithmic stablecoin pegged to the U.S. dollar, lost its peg and also came crashing down to a low of $0.30, a fall of more than 70%. More: - Terraform Labs co-founder Do Kwon shared his plan to recover from the loss, including burning $1M of his personal UST and LUNA tokens.
- In his Twitter thread, Kwon said that while he would no longer have a personal financial stake in the project, he remained "100% committed" to its success.
- He added that Terraform Labs would refund any losses incurred by investors during the UST crash and launch a bug bounty program to prevent similar issues.
- The Bitcoin dump sent a domino effect of panic in the crypto space, which is also affecting Terra's ecosystem as crashes are likely to happen.
- A market correction is due at some point in the future, but as of now, investors will be cautious when investing in crypto.
Cointelegraph
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Cryptocurrencies and blockchain-based tokens will not be taxed in Germany, according to the country’s first guidance document on these technologies. More: - Berlin's Federal Ministry of Finance (BMF) released a 24-page summary on crypto guidance and regulations.
- It covers technical details relating to cryptocurrencies and other Blockchain-based technology as it pertains to German tax law.
- As of now, the sale of cryptocurrency is tax-free for individuals after one year of holding the asset. If the time between buying the asset and selling exceeds one year, then the gains are tax-free.
- Under the old rules, assets had to be held for 10 years before receiving a tax exemption.
- This new guidance also applies to digital assets used in staking or lending protocols.
Decrypt
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Stablecoins and equities are among the potential causes behind the crypto crash, in particular TerraUSD (UST), which is backed by LUNA. U.S. inflation is leading to selling pressure in the stock market, and the Fed's measure to counter it by raising interest rates is dragging down the crypto industry with it. More: - The two popular stablecoins, UST and LUNA, were down by 44% and 92% in the last 24 hours at midday Wednesday.
- The consumer index price (CPI) spiked by 8.3% in April as part of the highest inflation since 1981.
- In June, the Feds will allow $30.8B in Treasurys and $17.5B in mortgage backed securities to roll off its balance sheet.
- Brian Price, Senior VP at Commonwealth, said, "the overwhelming focus continues on inflation, rising interest rates, and the war in Ukraine," and investors are being cautious of negative economic impact.
- Cryptocurrency is deemed a risky and volatile asset, which is causing investors to pull back during uncertainty in market conditions.
Forbes
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The state securities boards in Texas, Wisconsin, Kentucky, New Jersey, and Alabama have filed an emergency order outlining that Metaverse Flamingo Casino Club is making false claims and have requested to halt the sale of its NFT tokens. The order reads, "The offering is a high-tech scam," and calls for investors to be aware of these findings. Regulators say the casino has ties to Russia. More: - On Wednesday, a multistate emergency cease-and-desist order was put out against the metaverse casino for failing to provide any evidence that it is licensed in Texas.
- The director of enforcement from the state’s securities board says this virtual gambling site's promise to donate part of its profits toward war victims in Ukraine cannot be true because there are no official channels through which such donations can occur.
- The company promised its investors 50% of the profits generated from the earnings. The founders also promised Teslas and iPhones.
CNBC
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NFT sales generated over $28B over the past 12 months, though weekly sales in NFTs have been cut in half since its January peak of $1B. More: - This week, the sales of NFTs decreased by 64% to $505M, which is lower than the previous week, which generated $1.3B in sales.
- The long-sell-off period in cryptocurrency and the implosion of TerraUSD are two reasons for the drop in sales volumes.
- Despite the low sales volumes, some NFT projects are still performing well, and the five best-selling NFTs over the past week include Art Blocks, Doodles, Bored Ape Yacht Club, Otherside, and Azuki.
Business insider
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 |  | Gia Mattu is based in Calgary, Alberta. She is an entrepreneur with experience in climate technology, drones, AI, machine learning, and blockchain technology. When she's not working, she loves to hike the Canadian Rockies, try new cuisine, and travel. | | | | Editor | Aaron Crutchfield is based in the high desert of California. Over the last two decades, he has spent time writing and editing at various local newspapers and defense contractors in California. When he's not working, he can often be found looking at the latest memes with his kids or working on his 1962 Ford. | |
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