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Majority of American Adults Believe Financial System Favors Powerful Interests, 20% Own Cryptocurrency

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A recent survey conducted by Morning Consult and commissioned by Coinbase has revealed that the majority of American adults believe that the global financial system unfairly favors powerful interests. The online survey, which was conducted in February 2023 and included responses from over 2,000 American adults, found that 80% of respondents felt that the financial system is not fair to all, and that it favors those with powerful interests.

The survey also found that 67% of respondents called for a major overhaul or major changes to the current financial system. The findings suggest that many Americans are dissatisfied with the current system, and believe that it needs to be reformed in order to better serve the needs of ordinary citizens.

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Interestingly, despite recent negative news about cryptocurrency and the crypto market, the survey found that 20% of respondents own cryptocurrency, and nearly a third plan to buy, sell or trade cryptocurrency in the next year. These numbers have remained consistent over the past year, indicating that recent market turmoil may not have shaken retail investor confidence in crypto in America.

The survey provides important insights into the perception of the global financial system and how it is viewed by United States adults and crypto investors. It highlights the need for major changes to the financial system in order to address concerns about fairness and equality, and suggests that the crypto market is still viewed as a viable investment option by many Americans.

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It is worth noting that the survey was commissioned by Coinbase, a leading crypto exchange, which may have influenced the results. However, the findings are consistent with other surveys and studies that have shown a growing dissatisfaction with the current financial system and a growing interest in cryptocurrency as an alternative investment option.

Overall, the survey provides valuable insights into the current state of the financial system and the crypto market, and suggests that major changes are needed in order to address the concerns of ordinary citizens and ensure a more equitable and fair system for all.



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Chinese Banks Support Hong Kong Crypto Firms

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Hong Kong-based crypto firms preparing for the new licensing regime for crypto exchanges in June have found unexpected allies in the region. Chinese state-owned banks, including Shanghai Pudong Development Bank, the Bank of Communications Co., and Bank of China Ltd., have reportedly started offering banking services to crypto firms in Hong Kong or have made inquiries with them, according to “people with knowledge of the matter” cited in a Bloomberg report published on March 27.

The Chinese banks’ support for Hong Kong’s crypto industry is noteworthy given the Chinese government’s ongoing ban on crypto-related activities. One source even claimed that a Chinese bank sales representative visited a crypto firm’s main office to pitch banking services.

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“This development is encouraging for both the industry and the broader ecosystem, as it demonstrates a maturing understanding of the crypto sector by traditional financial institutions,” said a representative from a Hong Kong-based crypto firm.

It is unclear which crypto firms have been approached by the state-owned Chinese banks, as a spokesperson for a firm declined to comment. However, this move is seen as a positive step towards legitimizing crypto-related activities in Hong Kong.

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In October 2022, the Hong Kong government proposed introducing its own bill to regulate crypto-related activities in the region. The Securities and Futures Commission of Hong Kong released a proposal for a regime for cryptocurrency exchanges on February 20, which is set to take effect in June. The new licensing regime will require crypto exchanges to obtain licenses from the Securities and Futures Commission and comply with regulations on KYC (know-your-customer), AML (anti-money laundering), and other areas.

Despite China’s ban on crypto-related activities, representatives from the China Liaison Office have reportedly been attending Hong Kong crypto gatherings. This could signal a shift in China’s approach to cryptocurrencies, as the country looks to tap into the growing market for digital assets.

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The move by Chinese banks to offer banking services to crypto firms in Hong Kong also reflects a growing trend among traditional financial institutions to embrace cryptocurrencies. As more countries introduce regulations for crypto-related activities, financial institutions are starting to recognize the potential of digital assets and the need to integrate them into their existing systems. This move could help bridge the gap between the crypto industry and traditional finance, paving the way for greater adoption of cryptocurrencies.



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Kokomo Finance Accused of $4M Exit Scam

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Kokomo Finance, an open-source and noncustodial lending protocol on Optimism, has been accused of an exit scam worth $4 million. The protocol allegedly plucked user funds via a smart contract loophole, causing the Kokomo Finance token to plummet 95% in value in a matter of minutes. Blockchain security firm CertiK alerted its followers to the situation in a tweet on March 26.

According to CertiK, the deployer of the KOKO token attacked the smart contract code of a wrapped Bitcoin token, cBTC, by resetting the reward speed and pausing the borrow function. An address beginning with “0x5a2d..” then approved the new cBTC smart contract to spend over 7000 Sonne Wrapped Bitcoin (So-WBTC). The attacker then called another command to swap the So-WBTC to the 0x5a2d address, which produced a $4 million profit, according to the security firm.

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CertiK also noted that Kokomo Finance removed all social media accounts immediately following the alleged rug pull. The protocol rose up the ranks quickly in recent days, with blockchain data platforms like CoinGecko and DefiLlama officially tracking it shortly after Kokomo Finance went live on Optimism on March 25. Recent screenshots reveal that more than $2 million was locked into Kokomo Finance prior to it falling more than 97%.

Over 72% of the total value locked in the Kokomo Finance protocol came in the form of wrapped Bitcoin, according to data from DefiLlama. While most aspects of the audit were passed, “typographical errors” were found, and the owner of the KOKO token was also found to have a one-time ability to mint 45% of the maximum supply to an arbitrary address.

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Kokomo Finance is a lending protocol that enables users to trade for wBTC, Ether (ETH), Tether (USDT), USD Coin (USDC), and Dai (DAI). It operates on the Optimism layer 2 scaling solution, which allows for faster and cheaper transactions on the Ethereum network.

The exit scam allegations against Kokomo Finance have raised concerns about the security of decentralized finance (DeFi) protocols. While DeFi has enabled greater financial freedom and accessibility for users, it has also brought with it new risks and challenges. Smart contract vulnerabilities and security loopholes can be exploited by bad actors, as in the case of Kokomo Finance.

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Despite this incident, the DeFi space continues to grow and evolve, with new protocols and platforms emerging all the time. As the industry matures, it is likely that greater attention will be paid to security and risk management, in order to protect users and prevent similar incidents from occurring in the future.



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First Citizens Bank to Acquire Silicon Valley Bank Deposits and Loans

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First Citizens Bank, a North Carolina-based bank, is set to acquire Silicon Valley Bank’s deposits and loans following the latter’s collapse in March 2023. The Federal Deposit and Insurance Corporation (FDIC) approved the purchase and assumption agreement, which includes the acquisition of $72 billion of Silicon Valley Bridge Bank, National Association’s assets at a discount of $16.5 billion. The agreement also stipulates that 17 former branches of Silicon Valley Bank will operate as First Citizens Bank and Trust Company starting on March 27.

As part of the agreement, all Silicon Valley Bank depositors will automatically become depositors of First Citizens Bank. The FDIC will keep approximately $90 billion in securities and other assets in receivership for disposition. In addition, the FDIC will receive equity appreciation rights in First Citizens BancShares, Inc. common stock worth up to $500 million.

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First Citizens Bank is now the 30th largest commercial bank in the US, with $167 billion in total assets and $119 billion in deposits as of March 10. The acquisition of Silicon Valley Bank’s deposits and loans is expected to boost the bank’s assets and expand its operations in California’s tech hub.

Silicon Valley Bank collapsed on March 10 after rumors of a severe liquidity crisis sparked a bank run. The FDIC was then appointed as the receiver of the failed bank and attempted to auction off the fallen bank’s assets. The process included two separate auctions for Silicon Valley Bank’s assets: one for its traditional deposits unit and the other for its private bank, which catered to high-net-worth individuals and was housed within its retail operations.

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Several firms were reportedly planning or had submitted bids for Silicon Valley Bank. First Citizens Bank was one of them, with reports suggesting it had been planning a bid as early as March 18. Three days later, the bank reportedly submitted a bid for all of Silicon Valley Bank. A First Citizens spokesperson declined to comment on “market rumors or speculation” at the time. Valley National Bancorp was also understood to have submitted a bid for the collapsed bank.

Meanwhile, Citizens Financial Group, another US regional bank, was reportedly preparing to submit an offer for Silicon Valley Bank’s private banking arm. The bank’s collapse highlights the challenges faced by banks in the tech industry and the importance of maintaining adequate liquidity. The acquisition by First Citizens Bank underscores the bank’s confidence in the US banking system and its ability to weather crises.



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