Popular cryptocurrency Exchange Kraken has announced it plans to launch its own bank “very soon,” despite the current challenging regulatory environment and recent enforcement actions in the space.

The US Securities and Exchange Commission (SEC) has taken action against BKCoin and its former chief investment officer, Timothy T. Kang, following allegations of misappropriation of funds.

BinanceUSD (BUSD), the stablecoin issued by Paxos for the leading cryptocurrency exchange, has seen its market capitalization plunge over the last 30 days as investors move away from the cryptocurrency.

 Top stories in the Crypto Roundup today:

• Kraken To Launch Bank ‘Very Soon’
• SEC Files Emergency Action Against BKCoin Over ‘Ponzi-Like’ Scheme
• Binance USD’s Market Cap Plummeted 43% in 30 Days
• Chart of the Week: Bitcoin Dominance and Outperformance

Kraken To Launch Bank ‘Very Soon’

Popular cryptocurrency Exchange Kraken has announced it plans to launch its own bank “very soon,” despite the current challenging regulatory environment and recent enforcement actions in the space.

Kraken’s chief legal officer, Marco Santori, told The Block’s Frank Chaparro that the bank is on track to launch “very soon” but declined to discuss Kraken’s recent settlement with the U.S Securities and Exchange Commission (SEC) in detail. The settlement involved $30 million in fines.

Santori noted that staking, which the case was about, made up a small percentage of Kraken’s revenue. He added that the SEC’s move would push American clients who want staking services offshore too far riskier exchanges.

The Kraken executive also reassured investors that the exchange's banking relationships are secure despite the recent shutdown of the Silvergate Exchange Network. Santori stated that Kraken has a "diversified group of banks all around the world" and is not solely reliant on a single banking partner.

SEC Files Emergency Action Against BKCoin Over ‘Ponzi-Like’ Scheme

The US Securities and Exchange Commission (SEC) has taken action against BKCoin and its former chief investment officer, Timothy T. Kang, following allegations of misappropriation of funds.

Kang was fired from BKCoin in October 2021, five months after the company's core legal entity, BKCoin Management LLC, filed a lawsuit in a Florida circuit court accusing him of "improperly diverted" $12 million in cash and other assets out of the firm's multi-strategy funds.

According to the SEC, Kang stands accused of diverting a minimum of $371,000 in customer funds to pay for personal expenses, such as his New York apartment rent, tickets to sporting events, and vacations.

According to the regulator, Kang attempted to conceal his actions by providing falsified documents to investors with "inflated bank account balances" and falsely stating that BKCoin had been audited by a "top four auditor."

In response, the SEC is seeking permanent injunctions against both BKCoin and Kang, as well as disgorgement, prejudgement interest, and a civil penalty.

Binance USD’s Market Cap Plummeted 43% in 30 Days

BinanceUSD (BUSD), the stablecoin issued by Paxos for the leading cryptocurrency exchange, has seen its market capitalization plunge over the last 30 days as investors move away from the cryptocurrency.

On February 13, Paxos Trust, the operator of the Binance-branded stablecoin, announced that it would stop minting BUSD due to the SEC's intention to sue Paxos for violating investor protection laws.

The cumulative capitalization of stablecoins is above $136 billion, making it a critical sector of the crypto industry. With the recent news surrounding Paxos Trust and BUSD, investors have quickly moved their funds elsewhere.

Coinbase, one of the largest cryptocurrency exchanges, also announced that it would suspend trading for Binance USD within the month, which further fueled investors’ exodus from BUSD.

The delistings and crackdowns have caused the asset's market value to drop from roughly $16 billion on February 13 to around $9 billion today, marking a 43% loss.

Chart of the Week: Bitcoin Dominance and Outperformance

Bitcoin has been performing better than ETH and the MVDA 100 index in 2023. As of March 2nd, BTC has recorded a return of 42%, while ETH and MVDA had returns of 37.9% and 33.5%, respectively.

Furthermore, Bitcoin's dominance has risen to 41.7%, indicating that the market is worried about potential declines.

State of the Crypto by Top Tier Exchange Volume

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