Chamber of Commerce Backs Coinbase in Federal Court Case

By Chaka Ferguon

Coinbase just picked up a major ally in its fight against the Securities and Exchange Commission (SEC)…

Coinbase is the largest U.S.-based crypto exchange, with over 100 million customers and $80 billion in assets under management.

In March, the SEC accused the exchange of offering and selling unregistered securities in violation of federal law.

The SEC has used unregistered offering and sale violations to force other crypto exchanges to close services in the U.S., including crypto exchange Kraken.

Last month, Coinbase sued the SEC, asking a federal judge to force the regulator to share its answer on Coinbase’s July 2022 petition on whether existing securities rule-making processes could be extended to the crypto industry.

On Friday, Coinbase added a powerful ally: the U.S. Chamber of Commerce.

This Economic Indicator Says to Tread Carefully

By Joel Litman

Editor's note: Today, we're breaking from our usual fare to cover one critical reason why it's time to be selective as an investor. In this piece, Joel Litman – founder of our corporate affiliate Altimetry – highlights an indicator you should be watching right now... And he reveals why it means many industries are already vulnerable.

The outlook isn't great for a lot of industries right now...

This week, the Institute for Supply Management ("ISM") announced its Purchasing Managers' Index ("PMI") rating for April. The index measures how strong manufacturing activity is in the U.S.

A PMI rating below 50 indicates economic activity is shrinking. April's rating was 47.1... And while that was better than expectations, it marked the fifth consecutive month of contraction.

Mastercard Launches Crypto Credential Service for Cross-Border Transfers

The set of verification standards uses technology from CipherTrace, the well-known blockchain analytics platform Mastercard agreed to acquire in late 2021.

By Ian Allison

AUSTIN, Texas — The executive in charge of crypto products and blockchain at Mastercard (MA) said the payment processing company is bringing out a service designed to ensure transactions between users’ wallets are verifiable and compliant, beginning with transfers of digital assets between countries.

In this first cross-border use case, the Mastercard Crypto Credential service, announced Friday by Raj Dhamodharan from the stage at Consensus 2023, allows wallets to be identified in transactions that are compliant with requirements such as the Financial Action Task Force's (FATF) "travel rule."

First Republic Bank, Without the $30 Billion in “Rescue” Funds, Lost $102 Billion in Deposits in One Quarter or 58 Percent

By Pam Martens and Russ Martens: April 24, 2023

Give First Republic Bank an A+ for arrogance and an F for its ability to hold on to its customers’ deposits, despite all that incessant talk about how loyal they are.

The A+ for arrogance comes from the bank’s refusal to take even one question from reporters or bank analysts on today’s first quarter earnings call. The call began at 4:30 p.m. ET and lasted approximately 12 minutes. It was heavy on spin.

For example, a big effort was made to dress up the amount of deposits the bank still had on hand at the end of the first quarter, which is necessary if anyone is to believe the narrative that it has “retained 97 percent of client relationships” over the quarter. (The relationships may, indeed, still be there in some fashion but deposits have flown the coop.)

Second PE-Firm-Owned Subprime Auto Dealer & Lender Suddenly Shuts Down after its Subprime Auto-Loan Bonds Make a Huge Mess

“Net losses and gross charge-offs were understated” – Oopsie?

By Wolf Richter for WOLF STREET.

U.S. Auto Sales, a dealer chain owned by a private equity firm and focused on selling and financing lower-end older used vehicles to subprime-rated customers, suddenly “temporarily” shut its 39 dealerships in six southern states today, with a terse announcement on its website:

Attention U.S. Auto Customers. We have temporarily closed our dealerships and are working on a solution to re-open them as soon as possible. But don’t worry, we aren’t going anywhere! U.S. Auto’s affiliated loan servicing company (USASF Servicing LLC) is still open to accept your payments and assist in servicing your account. Please continue to make your payments as scheduled and reach out to us with any account questions.

Sincerely, -The U.S. Auto Team