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RSM Chief Economist Joseph Brusueras: Warsh delivered the right hawkish signals at the press conference and attempted to reinforce the Fed’s credibility in restoring price stability, while also enhancing his own credibility.U.S. stocks continued to decline after the Walsh press conference, with the S&P 500 falling 1%, its biggest drop since July 29, the Dow Jones Industrial Average down 1.65%, and the Nasdaq Composite down 0.6%.On September 17th, Federal Reserve Chairman Warsh declined to answer questions at a press conference regarding his interactions with US President Trump. Trump has been calling for lower interest rates in recent months. Warsh stated, "I have no comment on my discussions with the president." White House Council of Economic Advisers Chairman Christopher Phelan said on Tuesday that raising interest rates would be a "mistake."On September 17th, Federal Reserve Chairman Warsh stated that he would not disclose details of future interest rate decisions by the Federal Open Market Committee (FOMC). He said, "I am not responsible for providing forward guidance. Our decision today (to raise interest rates) is a carefully considered, serious, and responsible one. We have been preparing for and thinking about this decision for the past 110 or 120 days." Warsh also stated that this decision was not market-driven. He said, "Our decision today is based on our assessment of the current situation, our judgment of the employment trend, and our assessment of the strength of the economy. Sometimes, the market tries to anticipate our decisions. I watch market prices to see what information the market is sending. But todays decision is our own."On September 17th, Warsh stated that while the Federal Reserve cannot prevent price shocks in commodities such as oil on its own, the central bank can use policy tools to prevent further spread of inflationary pressures. Warsh said, "We cannot influence the price of any single commodity, such as oil or groceries." However, he pointed out, "We can and will ensure that any changes in relative prices do not spread further, and do not have second- or third-order effects on the economy. Thats our responsibility, and thats what were doing." Warsh made these remarks as U.S. diesel prices hit a record high due to the Iran war.

California’s DFPI Investigating Multiple Crypto Lending Companies

Jul 14, 2022 14:28

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The California Department of Financial Protection and Innovation (DFPI), which regulates the activities of state-licensed financial institutions such as banks and premium finance businesses, has announced that it is investigating whether businesses that suspended customer withdrawals and transfers broke any laws.


More specifically, the government is looking at a number of cryptocurrency businesses with U.S. headquarters after some reputable lenders permanently stopped allowing transfers and withdrawals between user accounts.

Accounts for crypto assets that pay interest

In particular, the Department of Financial Protection and Innovation is concentrating on "multiple companies" that provide customers with interest-bearing crypto asset accounts, also known as crypto-interest accounts, as well as service providers who "may not have adequately disclosed risks customers face when they deposit crypto-assets onto [lenders'] platforms."


To ascertain if they are breaking any laws that fall within the purview of the Department is the main goal of the inquiry.


The DFPI previously emphasized that providers of crypto-interest accounts are not subject to the same regulations and safeguards as banks and credit unions, which is particularly concerning in light of some platforms' restrictions on customers' ability to withdraw money from and transfer funds among their accounts.


Because of this, the agency has advised customers to proceed with "great care" before answering any inquiries about investments or financial services.


Also pointing to two cease and desist orders it recently sent to BlockFi and Voyager Digital to suspend their sales in California, DFPI has shown how certain crypto-interest account providers have been promoting unregistered securities.

securing customer property

Following Voyager Digital, the second well-known cryptocurrency business to file for Chapter 11 bankruptcy in recent weeks, DFPI made its statement. The Toronto-based company calculates that it has between $1 and $10 billion in assets, over 100,000 creditors, and liabilities of the same amount.


According to Voyager Digital, the action is a part of a "Plan of Reorganization" that intends to provide customers access to their accounts once again. Customers will have the option of receiving cryptocurrency, money recovered from Three Arrows Capital, common shares in the newly reorganized business, and Voyager tokens.


Due to worries about liquidity, Celsius (CEL) has stopped withdrawals and transfers since June 12. There are rumors that the management of the firm has been discussing Chapter 11 bankruptcy with attorneys.


As it faces with the potential of bankruptcy, the business is presently seeking restructuring guidance from the advising firm Alvarez & Marsal.


Additionally, the turbulent market circumstances last week caused the Singapore-based cryptocurrency platform Vauld to stop operations. The business instantly halted all trading, deposits, and withdrawals, and said that, up until further notice, it would only accept client deposits for its collateralized loans product.


Currently, numerous platforms have had client money frozen for many weeks while the future of their depositors' assets is still unknown.


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