Solana decentralized finance (DeFi) platform Friktion is shutting down its user interface and urging customers to withdraw their assets from the protocol, according to a statement on Jan. 26. The project's website will no longer deliver the same services, operating in withdrawal-only mode for all Volts and making deposits unavailable. Friktion's Volts are structured products for DeFi investments that allow investors to earn a share of the revenue of investment pools, according to the company's page. Friktion has made the difficult decision to sunset its user platform, a process beginning with moving all Volts into Withdrawal-Only mode on Friktion’s User …

The Federal Reserve Board has rejected Custodia Bank’s application to become a member of the Federal Reserve System. In its announcement, the Fed stated that the application was “inconsistent with the required factors under the law.” It also claimed Custodia had an “insufficient” management framework and cited an earlier joint declaration by the Fed with the Federal Deposit Insurance Corporation and Office of the Comptroller of the Currency that found crypto assets to be at odds with sound banking practices. STATEMENT FROM CUSTODIA BANK about today's Federal Reserve action on its membership application. Its master account application remains pending: pic.twitter.com/QkMjcT508J …

Controversial law firm Sullivan & Cromwell is on track to reap a fortune from its work on the bankruptcy case of the FTX cryptocurrency exchange, according to a new report. Sullivan & Cromwell’s costs in the FTX case are estimated to reach hundreds of millions of dollars before the firm’s bankruptcy investigation is over, Bloomberg Law reported on Jan. 27. As the FTX trial is scheduled for October 2023, the firm’s lawyers now have about eight months to untangle the complicated FTX case, which will cost a lot of time and money. Sullivan & Cromwell has more than 150 people …

The United States Securities and Exchange Commission (SEC) has been probing traditional Wall Street investment advisors that may be offering digital asset custody to its clients without the proper qualifications. A Jan. 26 Reuters report citing “three sources with knowledge of the inquiry” said the SEC’s investigation has been going on for several months already but accelerated after the collapse of crypto exchange FTX. The investigations by the SEC have not been known previously before as the agency’s inquiries are not public, said the sources. As per the Reuters report, much of the SEC’s efforts in this inquiry are looking …

Investors of crypto mining firm Argo Blockchain have filed a class action lawsuit accusing the miner of making untrue statements and omitting key information during its initial public offering (IPO) in 2021. A newly filed lawsuit on Jan. 26 is aimed at Argo and several of its executives and board members. It claims the firm failed to disclose how susceptible it was to capital constraints, electricity costs and network difficulties. "The Offering Documents were negligently prepared and, as a result, contained untrue statements of material fact or omitted to state other facts necessary to make the statements made not misleading," …

Canada-based Bitcoin (BTC) miner Hut 8 Mining Corporation has ramped up its ongoing fight with its power supplier for one of its mining sites, filing a lawsuit in a Canadian court. Hut 8 said on Jan. 26 it filed a Statement of Claim in the Superior Court of Justice of Ontario against Validus Power, an energy supplier for a Hut 8 mining facility in North Bay, Ontario. The firms have been in an ongoing dispute since early November 2022 due to what Hut 8 alleges is a failure by Validus to “meet its contractual obligations” for the power purchase agreement …

At least five firms placed bids on Celsius Network’s crypto assets, including Binance, Bank To The Future and Galaxy Digital, according to leaked information shared by crypto blogger Tiffany Fong. Fong, a follower of Celsius developments who shot to fame after several exclusive interviews with Sam Bankman-Fried following its collapse, has leaked information from documents she says were obtained on Dec. 20 “detailing the bids on Celsius Network’s crypto assets.” In a Substack post, Fong explained that she initially refrained from leaking the bids to avoid disrupting the bidding process but was prompted to do so after recent commentary from …

Despite the plans to turn the region into a bustling crypto hub, the United Kingdom’s financial watchdog says it has given the all-clear to only41 out of 300 crypto firm applications seeking regulatory approval to date. The U.K. Financial Conduct Authority (FCA) implemented the new cryptocurrency-focused regulations on Jan. 10, 2020, to supervise businesses operating in the sector and to ensure that they’re subject to the same anti-money laundering (AML) and counter-terrorism financing (CTF) regulations as firms in traditional financial markets. A statement from the FCA has revealed that of the 265 applications that were "determined" a mere 15% of …

The SEC has once again rejected a proposal to list the ARK 21 Shares Bitcoin ETF on equities exchange Cboe BZX, according to Jan. 26 statement from the SEC. The SEC rejected a similar proposal in April, 2022. The SEC has just now once again rejected ARK's and 21Shares spot bitcoin, $BTC ETF listing. — unusual_whales (@unusual_whales) January 26, 2023 The proposed ETF would have been managed jointly by Cathie Wood’s Ark Investment Management and 21Shares if it had been approved. The purpose of the proposed fund was to allow investors to gain exposure to Bitcoin’s price within the confines …

Credit rating firm Moody's is allegedly developing a scoring system for stablecoins, with analysis for up to 20 digital assets, Bloomberg reported on Jan. 26 citing unnamed sources. The system, which appears to be in early stages of development, will evaluate and rate stablecoins' reserves quality attestations, although it will not be considered an official credit rating. A third-party would be meant to serve as an attestation that a company's claims are accurate. In this case, it validates that stablecoin assets reserve ratio is 1:1. A stablecoin is a type of cryptocurrency whose value is pegged to a fiat currency, …

The International Swaps and Derivatives Association (ISDA) is working on two papers to address fundamental legal risks in the crypto markets, such as the insolvency of crypto exchange firms, according to a statement released on Jan. 26. The initiative was motivated by the collapse of crypto exchange FTX and previous bankruptcy cases that “prompted a cascade of liquidity and solvency concerns across the crypto ecosystem.” Along with other things, the papers will offer guidance for market participants regarding crypto ownership and the role of intermediates in the event of bankruptcy. “The prospect of insolvency of a major market participant requires …

The crypto bear market may be lasting longer than expected, but some Web3 startups see it as the perfect opportunity to build solutions and infrastructure that will welcome users and institutions when the next wave of adoption arrives. Cross-chain yield aggregator 88x Finance claims that the emergence of general message passing and true composability between blockchains is an opportunity to provide services both to retail and professional investors. Roughly six months after starting to build the platform, the protocol is now participating in the Axelar Ecosystem Startup Funding Program, a $60 million startup funding program dedicated to accelerating Web3 protocols, …