Day: July 23, 2022

FTX Proposes Joint Proposal to Bailout Bankrupt Voyager’s Customers

by Blockchain News

FTX crypto exchange announced on Friday that its plans to give Voyager Digital’s customers access to some of their funds.

According to a joint proposal between FTX and Alameda Ventures, a trading firm founded by Bankman-Fried, Voyager customers will be able to claim a part of their funds that were frozen more than three weeks ago. It is, however, unclear how much each customer will be able to receive.

As per the joint plan, Alameda Ventures will buy all of Voyager’s digital assets and digital asset loans, except Voyager’s loans to the bankrupt crypto hedge fund Three Arrows Capital.

Voyager’s clients could then get some of their funds if they open an account with FTX. Such customers could either make withdrawals of their cash balance immediately or use the funds to buy digital assets on FTX‘s platform, FTX said.

Customers are expected to participate voluntarily, the company added.

FTX expects to close the deal in early August, subject to the requirements of the Chapter 11 process and the need for court approval.

In a statement on Friday, Sam Bankman-Fried, said: “Voyager’s customers did not choose to be bankruptcy investors holding unsecured claims. The goal of our joint proposal is to help establish a better way to resolve an insolvent crypto business – a way that allows customers to obtain early liquidity and reclaim a portion of their assets without forcing them to speculate on bankruptcy outcomes and take one-sided risks.”

As per the joint proposal, FTX would not buy Voyager’s loans to Three Arrows Capital or others under litigation claims. The joint proposal expects Voyager to pursue its rights with regards to Three Arrows Capital matters and use any recoveries to supplement fund distributions to customers, whether or not such clients open accounts with FTX.

Helping Failing Crypto Firms

The joint proposal comes two weeks after Voyager filed for Chapter 11 bankruptcy less than a week after suspending trading and withdrawals due to the current crypto market crash.  

The move comes days after the company issued a default notice to the bankrupt hedge fund firm Three Arrows Capital (3AC) for failure to make required payments on a loan.

Many recent problems within the crypto industry can be traced back to the spectacular collapse of TerraUSD stablecoin in May. And contagion spread across risky crypto projects. Crypto firms like Celsius, BlockFi, Voyager capital, and Three Arrows Capital (3AC), among others, became exposed to insolvency fears

Late last month, Sam Bankman-Fried announced that they had given some crypto firms who suffered due to 3AC liquidation a line of credit worth $750 million. FTX offered a bailout worth $750 million to keep two crypto lenders solvent: $500 million for Voyager and $250 million for BlockFi.

On June 22, Voyager signed an agreement with Alameda Ventures for a revolving line of credit and gaining access to additional capital to meet its customers’ liquidity needs.

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Campaigners In California Can Now Receive Donations in Cryptocurrency

by Blockchain News

California campaigners may now receive donations through Bitcoin (BTC) and other cryptocurrencies.

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The candidates for both local and state offices in the state can now breathe a sigh of relief as the state’s campaign regulator has lifted a four-year ban on crypto donations and contributions. 

According to the regulation document, there should be plans to receive any such donations through a payment processor. This will be registered with the United States Treasury Department under the Financial Crimes Enforcement Network (FinCEN).

Unanimously, the members of the California Fair Political Practices Commission voted to revoke the ban that had been active for years. Instead, they voted to develop new regulation that will supervise the activities of crypto donations. During the July meeting held by the commission, David Bainbridge the general counsel of the legal division mentioned that this is a new and ever-changing era for the western U.S. state. 

In addition, Bainbridge explained that a need to adjust the regulation may arise soon as development comes to the industry. In the meantime, he believes the current regulation will do justice to the inflow of crypto contributions without violating any law.

Receiving Crypto Donations Via the Payment Processor

The payment processor will be used to conduct know-your-customer (KYC) verification to ascertain the identity of every donor. Functioning optimally, the payment processor must retrieve personal contributors’ data like name, address, employer, and occupation.

The regulation states that “A person may make, and a committee may solicit, a contribution of cryptocurrency as an in-kind contribution if the cryptocurrency is converted to dollars upon the making of the contribution”. 

The contributions are expected to not exceed a limit that had already been stated. Every donation, once converted to U.S. dollars, should be transferred to the beneficiary campaign bank account within 24 hours of the time the contribution was made. The conversion will be done based on the prevailing exchange rate at that time. 

When reporting the crypto contributions, the reported amount will be the fair market value of the cryptocurrency at the time the donation was made to the payment processor.

Eventually, the California commission regulation will take its full course within the next 60 days.

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Su Zhu and Kyle Davies Finally Speaks About the Collapse of 3AC

by Blockchain News

During an interview with Bloomberg, Su Zhu, and Kyle Davies, the co-founders of Three Arrows Capital (3AC), the troubled hedge fund broke silence on the happenings that they have experienced in the past few weeks. 

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This was after released court papers claimed that the duo were nowhere to be found and are refusing to cooperate with the liquidation process. No response was gotten from the founders for about five weeks. 

Not long after the court’s claim, Su Zhu resurfaced with a tweet displaying an email that his legal team had sent to the liquidators. The email signed by Christopher Anand Daniel who is the Managing Partner of Advocatus Law LLP lashed out at the liquidators suggesting that they were baiting the duo founders. The liquidators were faulting Zhu and Davies for lack of cooperation, and according to Christopher, that was not the case. 

Based on Zhu’s response, their once bubbly hedge fund downturned due to their clumsy market speculations which led to soliciting large margin call on loans. 

He attested to the fact that those loans should not have been taken in the first place. Both Zhu and Davies described the fall of the hedge fund as a regrettable one per the Bloomberg report. They rebuffed the claim that they had withdrawn huge funds from 3AC before the fall. 

3AC’s Collapse Leads to Relocation to Dubai 

Meanwhile, many crypto firms had tried to help 3AC and its counterpart who all faced liquidation and bankruptcy. 

These firms who acted as creditors to the insolvent firms ended up in debt, Blockchain.com was one of the top creditors of 3AC. Recently, America-based cryptocurrency exchange Coinbase, acknowledged it had not been financially exposed to these bankrupt crypto firms.

Several investors’ loan claims on the hedge fund round up to about $2.8 billion. According to a legal document that was released on Monday, 3AC still owes its creditors and investors up to $1 billion. Coming from Zhu, the hedge fund plans to move its operations to the United Arab Emirates (Dubai). He added that Dubai had to be surveyed before the business finally moves down there.

“Given that we had planned to move the business to Dubai, we have to go there soon to assess whether we move there as originally planned or if the future holds something different for us,”

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Crypto.com Gets the Greenlight to Operate in Cyprus Through CySEC

by Blockchain News

Crypto.com, a fast-rising exchange platform has secured regulatory approval to operate in the Cyprus crypto market, thereby expanding its European presence. 

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The exchange on July 22 says the Cyprus Securities and Exchange Commissions (CySEC) have given it the green light to operate in the space. With this nod from CySEC, crypto.com can now provide a range of services in Cyprus in accordance with the local regulations.

 

The approval marks Crypto.com’s commitment to expansion while also complying with native regulators to reach broader customers, especially in Europe. Kris Marszalek, CEO, and co-founder of Crypto.com says Europe is key to the exchange’s expansion plan. 

 

“Our registration in Cyprus is the next significant step in our continued progress as we expand our products and services to more customers,” Kris noted.

 

Famed as one of the renowned exchanges serving Web3.0 users, crypto.com has rigorously pursued its expansion campaign. The CySEC approval follows that of the Hellenic Capital Market Commission in Greece and also Organismo Agenti e Mediatori in Italy.

While it still awaits a full-scale license to operate, crypto.com has a provisional license to provide its services in Dubai. It also has an in-principle approval for a Major Payment Institution in Singapore. Established in 2016, Crypto.com allows its users to trade over 250 cryptocurrencies including Bitcoin (BTC) and Ethereum (ETH).

Crypto exchanges continue with expansion plans

Despite the bearish run in recent times, several exchanges have continued to strengthen their positions in the European market.  

FTX was approved to operate in Cyprus after it won an operational license from CySEC in March. Although Cyprus continues to see several global exchanges operate on its shores, regulations on cryptocurrencies are still not very clear.

Just last year, the Bank of Cyprus and other major financial institutions were reportedly against transactions in BTC.

The regulators are also trying to increase the oversight of digital assets including cryptocurrencies through the integration of EU anti-money-laundering rules.

 

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Taiwan Moves to Ban the use of Credit Cards to Acquire Cryptocurrency

by Blockchain News

Taiwan through its Financial Supervisory Commission (FSC) has moved to ban the use of credit cards in purchasing cryptocurrencies.

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As per reports from local media, the FSC in a letter to the local banking association earlier in the month instructed credit card operators to sever ties with crypto firms.

 

According to the FSC, credit cards are payment tools for consumer goods and services and as such should not be used as payment options for financing speculative trade. In addition to that, credit cards cannot be used for futures and options trading, online gambling, and other related transactions.

 

The regulators also gave credit card companies three months to comply with the new directive. After the expiration of their period, the regulator’s audit team will monitor the level of compliance. After the blanket ban on crypto-related activities in China, Taiwan witnessed a boom in the sector with the bigger interest in NFTs. This had many in the sector touting it as the next crypto hub but this has since seamed down.

 

The FSC has also been very vocal about the nascent sector since after the Chinese ban in 2021. The regulator has made several press releases stressing the volatility of digital assets and the associated risks involved.

Although the crypto space in Taiwan is still not fully regulated. The East Asian country also introduced rules on anti-money laundering (AML) schemes in 2021. With the Terra-Luna collapse and the market downturn that has caused the loss of billions of funds in the industry, regulators around the world have tightened crypto rules.

Many countries have heavily regulated the sector with licensing mandates while others have outrightly banned crypto payments.

 

Taiwan works on it’s CBDC

In Spite of its stiff position regarding digital assets, Taiwan is working on its own Central Bank Digital Currency (CBDC). Preparation for the launch of the pilot is in top gear with the completion of the trial for its prototype.

Taiwan’s Apex bank has been working on cases of CBDC for two years and has a few hurdles to overcome before it becomes operational.

 

Upon launching of the digital currency, its citizens will be able to complete payment transactions without a credit card.

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BlockFi Total Loan Tops $1.8B With a $600M Net Risk Exposure in Q2

by Blockchain News

BlockFi, a major crypto lending firm based in New Jersey, officially disclosed a total loan of $1.8 billion and a net unsecured exposure of $600 million by the end of the second quarter of 2022.

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The bulk of the outstanding loans belonged to institutions, up to $1.5 billion, while retail loans accounted for the remaining $300 million.

The company said it has guidelines in place to help the current operations of core businesses including institutional and retail lending and trading activities and liquidity of assets.

BlockFi will hold at least 10% of the total amount in inventory according to the customer’s demand and refund the customer under this guidance and recover and return to the customer hold at least 50% of the amount owed within 7 days.

Whether it is inventory or loans, BlockFi will recall at least 90% of the total amount owed to customers within a year.

The company has exposure to Singapore-based hedge fund Three Arrows Capital (3AC), which has filed for bankruptcy protection. BlockFi’s GBTC investment product lost about $80 million due to bad debts from Three Arrows.

Troubled digital asset firm BlockFi has secured a $250 million line of credit from the FTX derivatives exchange as it hopes to survive the current crypto downturn.

While BlockFi’s woes aren’t as evident as Celsius Network or Babel Finance, the company also announced 20% layoffs in June, or about 170 people.

BlockFi CEO Zac Prince said the crypto-lending company will cut “about 20% of its workforce, with layoffs affecting every team in the company. This decision was driven by market conditions that negatively impacted our growth rate and critical scrutiny of our strategic priorities.”

Currently, BlockFi has stopped accepting shares in the Grayscale Bitcoin Trust (GBTC) as collateral for loans.

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Zero-gas DeFi Ecosystem XODEX Launches its Testnet

by Blockchain News

The zero-fee DeFi Ecosystem XODEX has announced the launch of its XODEX testnet, which will allow developers to integrate and transition their code deployed on the XODEX mainnet to the final implementation.

XODEX stated that the launch of the testnet will be an important milestone in the development of the entire ecosystem.

In the safe and open source XODEX testnet, project community members and supporters participate in the test network to test their smart contracts, deploy code on the XODEX main network and other processes, and find and give feedback in the secondary process to the project technical team. This is constantly being revised and improved.

The team said it will regularly update the ecosystem library and feature announcements in the Github repository.

And to achieve comprehensive testing of XODEX, find bugs in XODEX, and collect feedback from the community, these three core goals, are to further enhance the platform and its applications.

XODEX expects to incorporate user feedback into the mainnet release once the testnet is officially launched.

XODEX is a completely anonymous zero-fee blockchain and multi-layered ecosystem/transaction system. Developers of NFTs and dApps revolutionize innovation by powering DeFi protocols with decentralized and high-speed transaction procedures and zero fees.

Proof-of-authority consensus also combines decentralization with efficient, scalable, and environmentally friendly transaction processing.

The live XODEX token price today is $0.000880 with a 24-hour trading volume of $25,213.77.

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Crypto Exchange ZipmexX Resumes Withdrawals for Trade Wallet

by Blockchain News

Zipmex, Asia’s leading digital asset exchange, said in an announcement on Friday that it has resumed withdrawals on Trade Wallet in Thailand, and said it will resume withdrawals in other countries shortly afterward.

Two days ago, the exchange suspended users from withdrawing cryptocurrencies on the grounds that assets could be swallowed up by the financial crisis facing Celsius Network and cryptocurrency lender Babel Finance.

But the company said it will still prohibit transfers, deposits, and transactions through Z wallets.

Z Wallet has all products and services from Zipmex such as receiving bonuses, earning new digital assets, and much more including access to exclusive products and services.

Founded in 2018 by Marcus Lim and Akalarp Yimwilai, Zipmex started operations in September 2019 and is headquartered in Singapore and Thailand. The exchange’s user base has reached 200,000 with a total trading volume of over $1 billion.

The company’s native ZMT token has fallen more than 90% from its all-time high.

The company revealed that it lent $48 million to Babel Finance and $5 million to Celsius, which has filed for bankruptcy protection.

The official statement from Zipmex reads: “Ever since the black swan events surrounding the crypto space Zipmex has retrieved the majority of our funds and assets that were historically deposited with our deployment partners and have been actively working to resolve the situation for the remaining outstanding assets. There were no materially adverse impacts to our operations.”

To address the liquidity crisis, the company is working with both companies and is actively negotiating a possible rescue package with investors.

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Bitcoin Miner Compass Mining Establishes 75 MW Hosting Partnership with Compute North

by Blockchain News

Compass Mining, a Bitcoin mining hosting and brokerage services firm based in Delaware, US, announced the completion of a partnership with colocation provider Compute North to secure at least 75 megawatts (MW) of energy capacity for its TIER 0™ data center in Granbury, Texas.

The agreement with the colocation provider also includes the ability to expand Granbury’s additional colocation capacity from 300 MW to 600 MW.

Officially released reports say that miner installations will begin in August 2022 and continue for several months.

The announcement added that the company will deploy 25,000 ASICs at the Wolf Hollow factory, including next-generation bitcoin miners such as the Antminer S19XP, Antminer S19j Pro, and Whatsminer M30S++,

According to Compass, the facility is listed as one of the cleanest in its class because it is powered by a 1.1 gigawatt (GW) combined cycle natural gas-fueled power plant and uses an advanced gas turbine design and air cooling to Reduce carbon emissions and reliance on water.

The company said it will actively respond to the Electric Reliability Commission of Texas (ERCOT) policy by shutting down equipment and bringing stable energy loads when local users need the grid on a large scale.

Compass Mining offers a marketplace service for individual people to mine Bitcoin in facilities across Canada and the U.S.

On April 25 this year, Compass Mining, an American cryptocurrency mining firm said it was looking for buyers for its gears stranded in Russia in a bid to avoid being sanctioned by the United States Department of Treasury.

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Bankman-Fried’s FTX In Advanced Talks to Acquire South Korea’s Bithumb

by Blockchain News

FTX, a global cryptocurrency exchange headquartered in the Bahamas, is in talks to acquire its rival Bithumb, South Korea’s leading cryptocurrency exchange, according to people familiar with the matter.

The deal is already in an advanced stage, said the people, who asked to remain anonymous because the discussions are private. Its financial terms are yet to be disclosed.

Amid a series of recent deals, FTX is now talking to Bithumb about a potential acquisition. According to the report, the discussions have been ongoing for several months.

Bithumb has been looking for a buyer since 2018. In October 2018, BK Global Consortium, which is led by renowned cosmetic surgeon Dr. Kim Byung Gun, was on track to acquire Bithumb for $354 million. But the deal was canceled in 2019 because BK chairman Kim Byung-Gun could not pay the whole amount.

In September 2020, Bithumb appointed accounting giant Samjong KPMG to be in charge of its sale, at a price tag of at least $430 million and up to $604 million.

In January last year, South Korean gaming giant Nexon was reportedly preparing to buy Bithumb, for around 500 billion won ($460 million). But Nexon later denied plans to acquire the exchange.

In March last year, US banking giant Morgan Stanley entered into negotiation to acquire Bithumb for up to $441 million. However, the deal never happened.

Meanwhile, FTX has been on the lookout to acquire firms that would help it get more users or regulatory licenses. it is a sign that the firm is big enough and well capitalized to splash the cash on acquisitions.

In 2020, FTX acquired the trading platform Blockfolio which helped it get more customers. In October last year, FTX.U.S acquired LedgerX, a futures exchange that had several licenses from regulators in the U.S. In May this year, FTX was looking to acquire brokerage startups to push further into stock trading.

FTX has been on a buying spree amid the ongoing market plunge. Early this month, Bankman-Fried said his firm has a few billion dollars that it is willing to use to bail out troubled crypto companies.

Earlier this month, FTX reached a deal with BlockFi, which allowed it to acquire the embattled crypto lender at a maximum price of $240 million.

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Bitcoin (BTC) $ 41,778.19 2.67%
Ethereum (ETH) $ 2,230.64 0.71%
Litecoin (LTC) $ 72.36 2.12%
Bitcoin Cash (BCH) $ 246.53 0.72%