Hong Kong’s OSL and US-Based Abra Become the Latest Crypto Firms to Announce Layoffs

Abra, a California-based crypto trading and lending platform, and OSL, a licensed crypto exchange based in Hong Kong, are the latest in a string of crypto start-ups that have announced layoffs following the ongoing market turbulence.

Abra laid off 12 of its employees this week, and two sources familiar with the knowledge disclosed the matter.

Bill Barhydt, Abra CEO, confirmed the job cuts, stating that the company has cut 12 jobs purely as part of its cost-saving measures. The executive stated that layoffs translated to 5% of the workforce.

Barhydt said although Abra has trimmed certain jobs, the firm is still planning to hire more talents to fill various roles. While he did not mention specific job functions, he stated that an estimated 10 positions are currently open.

Meanwhile, Hong Kong-based digital asset trading platform, OSL, has slashed between 40 and 60 jobs, which is about 15% of its workforce, two individuals familiar with the source disclosed the development. The crypto exchange announced the job cuts on Wednesdays.

An OSL spokesperson confirmed the incident and said: “OSL has made the difficult decision to reduce headcount. This decision was not made lightly, and we understand the impact that this may have on employees.”

The OSL spokesperson further said the firm has adjusted its business model to renew its focus on SaaS and professional and institutional counterparts.

The spokesperson clarified that OSL made the layoffs not because it had any exposure to troubled crypto firms or tokens, including TerraUSD (UST) and staked ether (stETH).

“It is important to note that OSL has not had any exposure to stETH, luna or UST. Nor have we had exposure to any of the firms reportedly facing solvency issues,” the spokesperson said.

Abra and OSL have therefore joined several crypto firms that recently announced massive layoffs. Many crypto companies have laid off thousands of employees and frozen hiring amid challenging times for crypto and equity markets.

Last month saw more than 1,700 crypto job cuts in the crypto industry. Major crypto companies such as Gemini, Coinbase, Crypto.com, BlockFi, Mexico-based Bitso, Argentina’s Buenbit, and others, trimmed their workforces in June.

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New York State Denies Air Permit to Greenidge Crypto Mining Facility on Seneca Lake

Greenidge Generation LLC has been denied a renewal of its air permit to continue operating its Bitcoin mining on the shores of Seneca Lake in New York. The New York State Department of Environmental Conservation (NYSDEC) made the decision on Thursday that Greenidge’s Bitcoin mining operation does not meet the requirements of state climate laws.

Greenidge Generation applied for the renewal of its air permit in March 2021.

In a statement, NYSDEC said that Greenidge’s application was inconsistent with the climate goals highlighted by the state’s Climate Leadership and Community Protection Act (CLCPA), which focuses on reducing New York’s greenhouse gas emission by at least 85% by 2050.

The regulator stated that a significant rise in greenhouse gas emissions from Greenidge’s Dresden-based power generation facility has been noticed since the previous permit was issued to the crypto mining company in 2016 and after the Climate Act (CLCPA) was enacted in 2019.

However, Greenidge stated that the decision by the regulator would not “have any impact on our current operations in Dresden.” The firm said it will continue operating its mining business under its current air permit while it challenges the NYSDEC ruling in court.

Greenidge said its “facility represents a remarkably insignificant 0.2% of New York’s target GHG [greenhouse gas] emissions level for 2030” and that the level of its emissions is down by 70% compared to the reference date of 1990 under the law.

Meanwhile, the Governor of New York state, Kathy Hochul, congratulated NYSDEC’s move to nullify Greenidge’s license. “I applaud NYSEC’s decision, which will stop future increases in greenhouse gas emissions at Seneca Lake,” the Governor tweeted.

On the other hand, workers and union members who are employed at Greenidge’s Dresden facility have expressed their disappointment by the NYSDEC’s decision as well as the proposed mining moratorium passed at the beginning of this month.

Early this month, emotions were high after the New York State Senate passed a bill that barred fossil fuel power plants from creating new projects to provide energy to proof-of-work (PoW) cryptocurrency mines for two years.

On 4th June, state assemblywoman Anna Kelles, who sponsored the bill, as well as environmentalists, called on New York Governor Kathy Hochul not just to sign the bill into law, but also to deny air permits for Greenidge Bitcoin mining firm.

The environmental groups thanked the elected New York lawmakers who passed the bill through the state’s two houses.

The bill effectively prohibited the establishment of new Bitcoin mines that utilize behind-the-meter fossil fuel power by denying air permits to the power plants that provide them with electricity. Greenidge Generation is one of two Bitcoin mining firms that use this model in New York state.

Hochul has still not signed the bill that would impose a two-year moratorium on the specified crypto mining operations.

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EU Partially Agrees to Establishes Anti-Money Laundering Authority

The European Union through the Council of the EU has agreed on partial terms to establish an Anti-Money Laundering (AML) body that will be named the Anti-Money Laundering Authority (AMLA).

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The establishment of this new body will be to boost the efficient functioning of the Anti-Money Laundering and Countering the Financing of Terrorism (AML/CTF) framework of the Union. The challenge of money laundering is a prevalent menace in all countries today. Despite the proactive role being played by regulators across the board, cybercriminals are notably advancing in their approach by the way.

While it may be hard to curb the activities of these cybercriminals individually, safeguards can be put in place amongst financial services providers to block all possible loopholes being exploited by money launderers and terrorist financiers. The emergence of the AMLA will be targeting creating avenues by which institutions it oversees are AML-proof in all regards.

“Given the cross-border nature of crime, the new Authority is expected to make a strong and useful contribution in fighting anti-money laundering and the financing of terrorism. Among other tasks, it will contribute to the harmonisation and coordination of supervisory practices in the financial and non-financial sectors, the direct supervision of high-risk and cross-border financial entities and the coordination of financial intelligence units,” the press release from the Council reads.

AMLA will be given supervisory authority over a wide range of financial institutions and startups in the digital currency ecosystem, provided they are considered to be risky.

“It also entrusts the Authority to supervise up to 40 groups and entities – at least in the first selection process – and to ensure a complete coverage of the internal market under its supervision. More powers are also given to the general board in the governance of AMLA,” the Council detailed.

The initial definitions of the responsibilities of the AMLA is partial and the seat of governance has not been fully agreed upon. The AMLA will help in enforcing the AML aspects of Markets in crypto Assets (MiCA) when the bill is finally passed.

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MAS Faults Three Arrows Capital for Sharing False Information

Despite its current woes as a liquidated company, the Monetary Authority of Singapore (MAS) has come out openly to accuse Three Arrows Capital (TAC), also popularly called 3AC, of providing it with false information about key aspects of its business. 

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As a Registered Fund Management Company (RFMC) operating on its shores, the MAS said Three Arrows Capital exceeded the legal limits with respect to its Asset Under Management (AUM) which is pegged at S$250 million. Despite being licensed in Singapore, Three Arrows Capital informed the MAS that it plans to novate its operations to an entity in the British Virgin Islands as of September last year.


With investigations, the MAS discovered that the company did not do as informed as the two companies in the two regions shared the same shareholder in the person of co-founder Su Zhu.


“TAC had represented to MAS that it had novated the management of its fund to an unrelated offshore entity with effect from 1 September 2021. However, this representation was misleading as TAC and the offshore entity shared a common shareholder, Mr. Su Zhu, who is also a director of TAC,” the MAS detailed.


The MAS is known to be very strict before dishing out licenses to crypto entities, a characteristic that has sent Binance and Coinbase Global Inc from dropping out of the race to obtain the regulator’s licenses.

Without the next course of action revealed, the MAS said it will continue to investigate how 3AC has violated all applicable laws that guided its operations in Singapore. Earlier this week, a court in the British Virgin Islands ordered that Three Arrows Capital should be liquidated, a move that shows an end to the company known to be a major backer of a wide range of digital currency protocols including Woo Network, and Mina amongst others.

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FTX Abandoned Discussions to Celsius Network Acquisition – Report

The latest report on Thursday 30th June showed that Bahamian cryptocurrency exchange FTX Derivatives Exchange passed on a deal to acquire New Jersey-based crypto lending firm Celsius Network.

FTX had begun discussions with Celsius about bailing out the troubled company or acquiring the firm. However, after examining Celsius’ finances, the trading platform walked away and decided to abandon the negotiation talks.

FTX made the move after it assessed that Celsius’ balance sheet added up to a “$2 billion hole,” According to the report, FTX also found out Celsius’ situation is difficult to deal with.

In May last month, Celsius was reported to have $11.8 billion in assets, which is a huge decline from the $25 billion it had in October last year.

On 12th June, Celsius suspended all withdrawals, swaps, and transfers between accounts because of “extreme” market conditions that appeared to have hit the crypto industry.

In recent months, the market for digital assets has been shaken by extreme volatility as investors dump risky assets on fears that aggressive actions on interest rate hikes to taper down persistent inflation could plunge the economy into recession.

Earlier this month, Celsius contacted the law firm Akin Gump Strauss Hauer & Feld LLP to advise on possible solutions for its growing financial woes. The firm also hired consultants from the advisory firm Alvarez & Marsal to oversee its restructuring.

After facing a liquidity crisis for weeks, Celsius has been resisting guidance from its own lawyers to file for Chapter 11 bankruptcy.

Last Friday, reports indicated that Wall Street bank Goldman Sachs was seeking to raise $2 billion from investors to buy the distressed crypto lender.

The proposed deal would allow investors to purchase the firm at a potentially big discount if the crypto lender files for bankruptcy.

However, filing for bankruptcy is not the route that Celsius would prefer. Celsius executives believe most users would prefer the troubled cryptocurrency lending firm to continue operations and avoid the uphill task of bankruptcy.

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OneCoin Founder Ruja Ignatova Added to FBI’s Most Wanted List

Ruja Ignatova, the fraudulent ‘CryptoQueen’ as she is known has been placed on the Federal Bureau of Investigation (FBI) list of the ten most wanted criminals. The addition of Ruja was based on her use of her OneCoin crypto company to defraud millions of investors around the globe in a scheme valued at about $4 billion.

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While OneCoin was marketed as a Bitcoin-killer when it was founded back in 2014, the project was marketed without a blockchain of its own like other digital currencies. Rather, subscribers were sold educational cryptocurrency trading packages and were tasked with the responsibility of onboarding family and friends in a complicated Ponzi scheme.

“OneCoin claimed to have a private blockchain,” said Special Agent Ronald Shimko, who is investigating the case out of the FBI’s New York Field Office. “This is in contrast to other virtual currencies, which have a decentralized and public blockchain. In this case, investors were just asked to trust OneCoin.”


The Eventual Collapse of OneCoin


The entire system collapsed as holders of the OneCoin token were unable to convert their holdings and only benefitted from the multilevel marketing aspect of the project. Ruja has been on the run since October 25, 2017, when she was last seen in Greece.


With investigations into OneCoin a multi-agency affair, the FBI had apprehended Ruja’s accomplices who joined hands to run the project, with one of those awaiting sentencing being her brother, Konstantin Ignatov. Despite his plea, Konstantin risks being sentenced to 98 years in prison.


The FBI said Ruja is ranked the 11th woman to be added to its 10 most wanted list since it was established 72 years ago. The law enforcement body said it has a massive bounty of $100,000 for anyone who can provide information that will lead to the arrest of Ruja Ignatova. The FBI said she might have changed her appearances, traveling on a false passport and has ties to her two countries, Bulgaria and Germany as well as Greece and the United Arab Emirates.


“There are so many victims all over the world who were financially devastated by this,” Shimko said. “We want to bring her to justice.”

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Grayscale Goes to Court After SEC Rejects its Proposed ETF Bid

The United States Securities and Exchange Commission (SEC) dashed the hopes of Grayscale Investments with a rejection of its application to convert the Grayscale Bitcoin Trust product to a full-spot Exchange Traded Fund (ETF). 

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In response, the investment asset manager has filed an appeal with the United States Court of Appeals for the District of Columbia Circuit where it will argue that the regulator violated the Administrative Procedure Act (APA) and Securities Exchange Act of 1934.

The SEC’s rejection is predicated on the fact that there is no trusted system with which to prevent fraud, the same position it has hinged its past rejection decisions on. The swift appeal filed by Grayscale is because it was prepared for this sort of action as Chief Executive Officer, Michael Sonnenshein had promised lawsuit months prior to when this final decision was expected.

“Grayscale supports and believes in the SEC’s mandate to protect investors, maintain fair, orderly, and efficient markets and facilitate capital formation — and we are deeply disappointed by and vehemently disagree with the SEC’s decision to continue to deny spot Bitcoin ETFs from coming to the U.S. market,” Sonnenshein said.

The company tapped Donald Verrilli, a top Solicitor under the Obama Administration as a part of its legal team back in June. Verrilli will now be leading the charge against the SEC, arguing that the fact that there are Bitcoin Futures ETFs running on US exchanges invalidates the lack of trust in the safety of the ecosystem that the SEC hinged its decisions on.

“This is a place where common sense has a really important role to play. You’ve got a situation now in which you have certain kinds of exchange traded funds, one that is focused on bitcoin futures, and the SEC has approved that, the SEC is given it the seal of approval,” he said to reporters back in June. “In order to do so it had to make a determination that that giving this approval was consistent with the securities laws, and in particular, that that there wasn’t a sufficient underlying risk of fraud and manipulation.”

The timeline of the appeal is yet to be unveiled, but this may be yet another long-drawn legal battle between a crypto-native firm, and the US SEC after Ripple Labs Inc.

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Deutsche Bank Sees Bitcoin Touch $28,000 By 2022 End, But Warns of Risks Ahead

The price of Bitcoin is now at $20,108.16, a change of -0.59% over the past 24 hours, as of 2:38 AM, 30th June East African time. Currently, the crypto market is experiencing bad days with prices trading lowest since December 2020.

In connection with these events, Deutsche Bank (DB) issued its report on Wednesday that said the free fall in the crypto market could continue due to the complexity of its system.

First, Deutsche Bank said the stability of crypto prices is difficult not only because of the high fragmentation within the market but also because there are no common valuation models like those used in investment banking and public equity systems.

Furthermore, the bank said speculative trades are likely to use multiple coins simultaneously, which increases spillover effects.

Liquidity might exist in such markets, but could quickly evaporate, further erode confidence in prices and increase contagion impacts, the bank said.

Macro Effects

Speculative, high-risk assets like cryptocurrencies have been “disproportionately affected by central bank tightening, the report stated.

Deutsche Bank said the U.S. Federal Reserve and other central banks including the European Central Bank (ECB), the Bank of Japan (BOJ), among others, are nowhere near finished with their tightening cycle.

Such macro factors are amplified by a looming recession in the U.S., and investor pessimism, which are harmful to speculative assets. The bank said any macro shock would render cryptocurrencies trade lower and reignite contagion risks in the DeFi ecosystem.

The bank’s economists predict a U.S. recession in 2023 and peak inflation to hit 9.1% in September – the highest rate in 40 years amid the soaring cost of food and energy prices continue to deepen the nation’s cost of living crisis.

Unless Bitcoin is becoming “digital oil” its performance would be low during a period of high inflation, the bank mentioned.

The bank further noted that cryptocurrencies have been increasingly correlated with the Nasdaq and the S&P 500 stock indexes in recent months.

Based on the past correlation with the S&P 500 and using a baseline S&P 500 price of 4,750, Deutsche Bank said Bitcoin could reach $28,000 by the end of this year. While this would be a 32% rally from current levels, it is still less than half of its all-time high seen last November.

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British Virgin Island Court Orders the Liquidation of Three Arrows Capital

Earlier this week, a court from the British Virgin Islands ordered the liquidation of embattled crypto hedge fund Three Arrows Capital (3AC), as the firm proved beyond doubt that it cannot fulfil its debt obligations.


As reported by Sky News, Teneo, a British Virgin Islands-based firm has been tapped to handle the liquidations. Sources close to the liquidations say Teneo is in the earliest stages of the entire process and is trying to determine what assets 3AC has.


The sources who pleaded anonymity as the matters have not yet been made public said over the next couple of days, Teneo will set up a website with instructions on how creditors can file claims for a refund. There is no idea of how long the refund process will last or whether every creditor will be paid in full.


Prior to the public knowledge of the liquidation, Three Arrows Capital was issued a default notification by Voyager Digital for $350 million in the US dollar-pegged stablecoin, USDC, and 15,250 Bitcoin, worth about $306 million based on the price of Bitcoin pegged at $20,066.55 as at the time of writing according to data from CoinMarketCap.


While the liquidation of Three Arrows Capital has lent its own distress to the broader digital currency ecosystem, a handful of other crypto-focused platforms also record a very worrisome liquidity crisis. With BlockFi almost escaping insolvency with a recent $250 million capital injection from FTX Derivatives Exchange, Celsius lawyers are advising the firm to file for Chapter 11 bankruptcy.


This series of events is a reverberation from the collapse of Luna Classic (LUNC) and the Terraform Labs-backed algorithmic stablecoin, USTC. 3AC was reported to have deep exposure to these two tokens, and their collapse might have contributed to the speedy downfall of the hedge fund.

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MicroStrategy Buys Additional $10M Worth of Bitcoin

Not minding the losses accrued thus far, MicroStrategy Incorporated has continued to buy the dip, the latest of which is 480 units of Bitcoin (BTC) worth approximately $10 million.


According to a Form 8-K filing lodged with the United States Securities and Exchange Commission (SEC), MicroStrategy said it “acquired approximately 480 bitcoins for approximately $10.0 million in cash, at an average price of approximately $20,817 per bitcoin, inclusive of fees and expenses.”

The company, led by Bitcoin bull, Michael Saylor said as “of June 28, 2022, MicroStrategy, together with its subsidiaries, held an aggregate of approximately 129,699 bitcoins, which were acquired at an aggregate purchase price of approximately $3.98 billion and an average purchase price of approximately $30,664 per bitcoin, inclusive of fees and expenses.”


MicroStrategy is not a stranger to betting on Bitcoin especially when prices are generally low. With a multi-year hold in view, the business intelligence, software, and cloud company is hoping it will make a tremendous cashout with an inevitable increase in price when its demand will outshine supply over the next decade.


The publicly-traded company, whose board approved Bitcoin as its primary reserve asset does not just believe BTC is a viable alternative to fiat notes, it has been making targeted and ambitious purchases to prove this point. Prior to this time, the firm secured over $1 billion in senior convertible debt all of which were used in acquiring Bitcoin.


Additionally, the firm recently took a $205 million Bitcoin-collateralized loan, and the proceeds from this credit facility were injected into the premier nascent asset class.


MicroStrategy is unrelenting in believing in the potential of Bitcoin as sound money, and despite its apparent loss of close to $10,000 per BTC on its total holdings, the firm is optimistic that the technological superiority of Bitcoin will pave way for a bullish run in the near term.

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Bitcoin (BTC) $ 44,017.79 1.21%
Ethereum (ETH) $ 2,369.45 4.70%
Litecoin (LTC) $ 76.16 4.38%
Bitcoin Cash (BCH) $ 249.49 2.04%