Coinbase is acquiring a minority stake in Circle Internet Financial, and the companies are ending their Centre Consortium partnership that issued the USD Coin (USDC). USDC is the world's second-largest stablecoin, and as part of these changes, Circle will assume full control over its issuance and governance.

On Monday, the SEC announced charges against Titan Global Capital Management USA LLC, a New York-based FinTech investment adviser, for disseminating misleading advertisements that utilized hypothetical performance metrics. The SEC's primary concerns revolve around Titan's disclosures about the custody of clients' cryptocurrency assets and other compliance failures.

A recent "flash crash" in Bitcoin's price to $26,000 has left speculators grappling with substantial losses. Glassnode's research indicates that a staggering 88% of Bitcoin holdings held by speculators—those categorized as short-term holders (STHs)—are now underwater.

Top stories in the Crypto Roundup today:

• Coinbase Acquires a Stake in Stablecoin Operator, Circle 

• SEC Cracks Down on Titan Global for Misleading Crypto Performance Claims

• 88% of Bitcoin Speculators are Underwater

Coinbase Acquires a Stake in Stablecoin Operator, Circle

Coinbase is acquiring a minority stake in Circle Internet Financial, and the companies are ending their Centre Consortium partnership that issued the USD Coin (USDC). USDC is the world's second-largest stablecoin, and as part of these changes, Circle will assume full control over its issuance and governance.

The integration of USDC will also be expanded as it is set to be natively supported on six more blockchains, bringing its total supported platforms to 15. Although the names of these six blockchains weren't disclosed, in a prior announcement, Circle had mentioned intentions to add Polkadot, Near, Optimism, and Cosmos in 2023.

Phil McDonnell, senior director of product management at Coinbase, envisions a future for USDC that extends beyond just cryptocurrency trading. He sees potential in fields like foreign exchange, cross-border fund transfers, and financial inclusion. However, McDonnell downplayed any direct competitive tension with PayPal.

Recently, PayPal also ventured into the stablecoin domain which has historically been dominated by Tether's USDT and USDC. Its new stablecoin, PYUSD, is issued by Paxos. With PayPal's extensive reach in payments and remittances, PYUSD could emerge as formidable competition in the stablecoin market.

SEC Cracks Down on Titan Global for Misleading Crypto Performance Claims

On Monday, the SEC announced charges against Titan Global Capital Management USA LLC, a New York-based FinTech investment adviser, for disseminating misleading advertisements that utilized hypothetical performance metrics. The SEC's primary concerns revolve around Titan's disclosures about the custody of clients' cryptocurrency assets and other compliance failures.

From August 2021 to October 2022, Titan allegedly made deceptive statements on its website about hypothetical performance. This included advertising "annualized" performance results reaching up to 2,700% for its Titan Crypto strategy. The SEC claims these figures were misleading as they assumed the strategy's initial three-week performance would persist throughout the year. Furthermore, Titan reportedly violated the SEC's marketing rule, amended in December 2020, by promoting these hypothetical metrics without implementing the necessary policies and procedures.

The SEC's findings also revealed that Titan provided inconsistent information to clients about how it managed the custody of their cryptocurrency assets. Additionally, Titan's client advisory agreements contained misleading liability disclaimer language, and the firm did not have policies regarding employee personal trading in crypto assets. Titan also self-reported its failure to obtain client signatures for specific transaction types.

Osman Nawaz, Chief of Enforcement's Complex Financial Instruments Unit, emphasized the importance of accurate disclosures, especially when marketing intricate strategies. He stated that Titan's misleading advertisements are a cautionary tale for all advisers.

To settle the charges, Titan has agreed to a cease-and-desist order, a censure and will pay $192,454 in disgorgement, prejudgment interest, and an $850,000 civil penalty, which will be distributed to affected clients.

88% of Bitcoin Speculators are Underwater

A recent "flash crash" in Bitcoin's price to $26,000 has left speculators grappling with substantial losses. Glassnode's research indicates that a staggering 88% of Bitcoin holdings held by speculators—those categorized as short-term holders (STHs)—are now underwater.

Specifically, these STHs, defined by Glassnode as entities holding onto Bitcoin for 155 days or less, currently see just 11.7% (or 300k BTC out of a total 2.56M BTC) of their investments in a profitable state. This recent downturn has heightened the sensitivity of these short-term holders to Bitcoin's price movements.

In contrast, long-term holders (LTH), often referred to as the traditional "hodlers" in the crypto community, remain largely unfazed by the market's volatility. Their reactions to the significant price drop have been minimal, with little to no surge in their transactions to exchanges.

As Bitcoin's value flutters, the market sentiment between these two groups of investors—STHs and LTHs—diverges significantly. While seasoned investors maintain their unwavering stance, newer participants are feeling the pressure, with a vast majority (88.3%) of their Bitcoin investments currently at an unrealized loss.

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