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Bankrupt Celsius Seeks to Return $50m of Locked Crypto for Custody Holders

by Blockchain NewsSeptember 2, 2022

Celsius Network, a bankrupt crypto lending firm, on Thursday, filed to return funds to crypto custody holders who are locked out of their accounts, Bloomberg reported.

The move by the company comes ahead of a separate hearing to address ongoing questions about its efforts to restructure and resume its operations.

Celsius asked a US bankruptcy judge for permission to release about US$50 million worth of cryptocurrency stuck on the platform in so-called custody accounts, which were designed to store digital coins rather than generate returns.

A full hearing on the request is scheduled for October 6. That is according to court papers from the Bankruptcy Court for the Southern District of New York, which is overseeing the case.

The move indicates a split among the many thousands of users adversely impacted by the company’s bankruptcy.

The point is that unlike Celsius customers using its Earn or Borrow products, customers with custodial accounts still maintain ownership of their crypto assets. Celsius is just acting as the storage provider. These funds, therefore, belong to the customers, not to Celsius’ resources.

Celsius has filed for a narrow re-opening of withdrawals, stating that not every customer would be eligible.

Celsius plans to refund about US$50 million to eligible customers. That is just a fraction of the more than $200 million in locked-in custody accounts on the platform.

That is because many users shifted their holdings from interest-bearing accounts into custody arrangements shortly before the bankruptcy.

The custody accounts are also just a small group of crypto users who have not recovered from Celsius. The market value of assets in so-called earn accounts totalled about US$4.2 billion, according to court papers, as of July 10.

In July, Celsius filed for Chapter 11 bankruptcy protections after it suspended customer withdrawals, swaps, and transfers in June. Users have been unable to withdraw crypto stored in Celsius accounts.

More than 300 disgruntled customers have filed letters with the bankruptcy court to demand the return of their funds. Celsius had a total of 1.7 million customers who are collectively owed some $4.7 billion.

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Bankrupt Celsius Seeks to Return $50m of Locked Crypto

by Blockchain NewsSeptember 2, 2022

Celsius Network, a bankrupt crypto lending firm, on Thursday, filed to return funds to crypto custody holders who are locked out of their accounts.

The move by the company comes ahead of a separate hearing to address ongoing questions about its efforts to restructure and resume its operations.

A full hearing on the request is scheduled for October 6. That is according to court papers from the Bankruptcy Court for the Southern District of New York, which is overseeing the case.

The move indicates a split among the many thousands of users adversely impacted by the company’s bankruptcy.

Celsius has filed for a narrow re-opening of withdrawals, stating that not every customer would be eligible.

Celsius plans to refund about US$50 million to eligible customers. That is just a fraction of the more than $200 million in locked-in custody accounts on the platform.

That is because many users shifted their holdings from interest-bearing accounts into custody arrangements shortly before the bankruptcy.

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Tagged : Bankruptcy / Celsius Network / Custody / News

Former CFTC Commissioner Joins FTX.US Board

by Blockchain NewsSeptember 2, 2022

FTX.US, the United States subsidiary of FTX Derivatives Exchange, has announced the appointment of Jill Sommers to its Board of Directors.

Sommers served as a 2-term commissioner of the Commodity Futures Trading Commission (CFTC) as nominated by both former Presidents George W. Bush and Barack Obama and was confirmed twice by the US Senate.

As an experienced Policy Adviser in the Derivatives ecosystem, Sommers brings her years of experience to the crypto exchange, which is aiming at establishing its stance as one of the foremost regulated crypto exchanges and Clearinghouses.

“I am honored to be joining the FTX US Derivatives Board of Directors to advance the mission of reshaping market structure in the United States,” Sommers said in a statement, “The company has been at the forefront of bridging the gap between traditional and digital assets while staying true to its founding principles of transparency and leading the charge toward becoming the most regulated digital asset exchange in the world. I’m excited to join the board as we continue working closely with regulators to further establish FTX US Derivatives as the premier regulated crypto derivatives trading platform.”

Since it finalized the acquisition of LedgerX, which it has renamed FTX US Derivatives, it has been offering users crypto-related options and swaps contracts. Besides pioneering Bitcoin mini contracts, FTX US Derivatives also offers physical settlement of all contracts, block trading and algorithmic trading opportunities for institutional investors, and direct access for all traders.

According to CEO Zach Dexter, Sommers’ inclusion on its board will help guide the company as it looks to make a more ambitious plunge into the broader financial ecosystem.

Exchanges are becoming fond of onboarding government officials with deep regulatory experiences to help steer their regulatory push. In like manner, One River Digital Asset Management appointed Jay Clayton to its Advisory board after he stepped down from his role as the Chairman of the US Securities and Exchange Commission (SEC).

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Tagged : Cftc / Cryptocurrency Exchange / FTX / FTX.US / Industry Expert / JILL SOMMERS

Digital Dollar Project Floats Sandbox for Harness Potential CBDC Solutions

by Blockchain NewsSeptember 2, 2022

The Digital Dollar Project (DDP) has announced the launch of its Technical Sandbox Program launch, which will further explore the potential of the technical exploration of a U.S. Central Bank Digital Currency (CBDC) or the Digital Dollar.

According to the DDP, a nonprofit organization created to encourage research and public discussion on the potential advantages and challenges of a U.S., the Technical Sandbox Program will also involve some of the inaugural members that were drafted to explore case studies for the Digital Dollar. These include Digital Asset, EMTECH, Knox Networks, and Ripple.

The Sandbox Program is set to commence in October. The DDP will create a neutral environment where the proposed US CBDC can be evaluated regarding technology, business, and policy.

“The launch of our Technical Sandbox Program marks the next step in our effort to convene the private and public sector in the exploration of a central bank digital currency in the U.S.,” said Jennifer Lassiter, executive director of The Digital Dollar Project.

“We understand how important it is to include a diverse set of views and expertise as we look to answer key questions about how the technology could work, the problems we hope to solve, and the ultimate business and individual outcomes we want to achieve. The marriage of these sectors in our collaboration is essential and will lay the foundation for robust pilots that improve the outcomes and usability of CBDCs.”

The United States of America has been adjudged to be very slow in pushing for a Digital Dollar. With smaller economies already ahead in their research and introduction of these new legal tender, many have postulated that the U.S. may miss the current financial revolution with its slow-paced approach.

With the role of organizations like the DDP, governments, Federal Reserve, lawmakers, and policymakers will be well armed with a more robust, clearer picture of implementing a CBDC in the U.S.

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Tagged : CBDC / DDP / DIGITAL DOLLAR PROJECT

Crypto.com Pulls Out UEFA Champions League of $495m Sponsorship Deal

by Blockchain NewsSeptember 2, 2022

Cryptocurrency exchange Crypto.com has cancelled a five-year sponsorship deal worth $495 million with the UEFA Champions League, an annual club football competition organized by the Union of European Football Associations. Fortune media reported the matter on Thursday.

According to the report, Crypto.com cancelled the deal due to regulatory concerns in the U.K., France, and Italy, with legal issues surrounding the scope of its licenses to operate and trade.

In March, UEFA, Europe’s governing body for soccer, originally cancelled the Gazprom contract following Russia’s invasion of Ukraine.

The deal, which had been agreed in principle, would have seen Crypto.com take over as sponsor from Gazprom, a Russian majority state-owned multinational energy corporation.

The Singapore-based exchange has taken an enthusiastic approach to sports advertising over the previous year.

Last November, Crypto.com signed a 20-year naming deal with the Staples Center in Los Angeles for $700 million.

In June last year, the exchange invested a sponsorship deal worth $100 million into Formula One racing motorsports.

Furthermore, in last October, Crypto.com invested $100 million for an advert featuring Hollywood actor Matt Damon, a campaign that was run in more than 20 countries for several months as the exchange looked to cash in on last year’s bull market.

Market Downturn

Basically, cryptocurrency firms poured billions of dollars into sports sponsorships in 2021. This year, however, crypto prices have plunged, referring to what is known as crypto winter.

As a result, most companies have trimmed costs. Firms that splashed funds heavily on sports deals last year have cut costs recently.

In June, Crypto exchange FTX pulled out of talks to sponsor a jersey patch with the MLB’s Los Angeles Angels, an American professional baseball team based in the Los Angeles, as the crypto market tanked.

Another patch deal between FTX and the NBA’s Washington Wizards, an American professional basketball team based in Washington, D.C., was also cancelled with the market’s collapse.

It will be surprising to see if any major new crypto sponsorships are implemented during the current downturn.

The spending slump comes after major crypto exchanges embraced sponsorship deals in 2021 as part of an effort to woo sports fans. Many of them had adequate funds facilitated by the bull market over the last year.

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Tagged : Crypto.Com / News / Sponsorship / UEFA CHAMPIONS LEAGUE

Crypto.com Pulls Out UEFA Champions League of $495m Sponsorship Deal

by Blockchain NewsSeptember 2, 2022

The deal, which had been agreed in principle, would have seen Crypto.com take over as sponsor from Gazprom, a Russian majority state-owned multinational energy corporation.

In March, UEFA, Europe’s governing body for soccer, cancelled the Gazprom contract following Russia’s invasion of Ukraine.

According to the report, Crypto.com cancelled the deal due to regulatory concerns in the U.K., France, and Italy, with legal issues surrounding the scope of its licenses to operate and trade.

The Singapore-based exchange has taken an enthusiastic approach to sports advertising over the previous year.

Last November, Crypto.com signed a 20-year naming deal with the Staples Center in Los Angeles for $700 million.

In June last year, the exchange invested a sponsorship deal worth $100 million into Formula One racing motorsports.

Market Downturn

Basically, cryptocurrency firms poured billions of dollars into sports sponsorships in 2021. This year, however, crypto prices have plunged, referring to what is known as crypto winter.

As a result, most companies have trimmed costs. Firms that splashed funds heavily on sports deals last year have cut costs recently.

Another patch deal between FTX and the NBA’s Washington Wizards, an American professional basketball team based in Washington, D.C., was also cancelled with the market’s collapse.

It will be surprising to see if any major new crypto sponsorships are implemented during the current downturn.

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Tagged : Crypto.Com / News / Sponsorship / UEFA CHAMPIONS LEAGUE

Data Requested by US DOJ to Supplement Money Laundering Probe on Binance CEO: Report

by Blockchain NewsSeptember 2, 2022

A new report from Reuters revealed that regulators from the United States Department of Justice (DOJ) had, in late 2020, requested information from Binance as it concerns its internal communications concerning its Anti-Money Laundering (AML) systems.

According to the Reuters report, the request for information specifically sought to probe the role of the exchange’s Chief Executive Officer, Changpeng Zhao, regarding the likely violation of the Bank Secrecy Act. While Reuters said it was not sure how the exchange responded to requests, the regulator’s moves show how well American watchdogs are into crypto trading platforms.

“Regulators across the globe are reaching out to every major crypto exchange to better understand our industry. This is a standard process for any regulated organization, and we work with agencies regularly to address any questions they may have.” Binance Chief Communications Officer Patrick Hillmann said when contacted by Reuters for comment on the regulator’s requests for documents. He added that Binance has “an industry-leading global security and compliance team” with over 500 employees, including former regulators and law enforcement agents.”

Binance and the Reuters Reporting Tussle

Reuters can be tagged as Binance Exchange’s unwelcomed media nemesis as the reputable news agency has published quite a number of damning articles about the trading platform in the past few years.

In April of this year, Reuters alleged that the Russian subsidiary of Binance has a very close tie with the country’s financial regulator, Rosfinmonitoring. The ties alleged in the report involved an agreement by the exchange to share its users’ data with the Russian regulator.

In July, Reuters also alleged that Binance had maintained a weak check-up until mid-2021, a loophole that allowed sanctioned Iranian residents to trade on the exchange. These claims were also compounded by the allegations of fraud that the trading platform had helped, through its weak AML systems, in laundering as much as $2.35 billion worth of cash.

Binance had responded to these allegations as false, and the trading platform claims the media agency is always selective in the data it chooses to publish about the exchange.

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Tagged : Binance / Changpeng Zhao / Doj / Legal / MONEYLAUNDERING / PROBE

Wave Financial Acquires Swiss-based Criptonite Asset Management

by Blockchain NewsSeptember 2, 2022

Wave Financial LLC (Wave), a US-based regulated digital asset investment management firm, announced on Thursday that it has acquired a minority stake in FINMA-regulated Swiss-based crypto investment manager Criptonite Asset Management.

This is the first step of a planned full acquisition, expected to be completed by the end of 2022, subject to regulatory approval, Wave Financial said.

The acquisition follows the strategic partnership between the two firms back in 2021 when Criptonite launched several Actively Managed Certificates (AMCs) of Wave Financial’s flagship digital asset funds in Europe, including the Wave Bitcoin Income and Growth and NFT funds.

By acquiring Criptonite, Wave said it will be able to take advantage of the rising demand for regulated digital asset investment fund products in Europe.

Matteo Dante Perruccio, President International at Wave Financial, talked about the development: “We have seen unprecedented demand from institutional and other accredited investors for professionally managed digital asset funds in Europe. There seems to be a flight to quality taking place, so it makes sense to take our relationship with Criptonite to the next level.

This acquisition is Wave Financial’s first outside the US, but will not be our last as we are actively looking for other partners to bring our diverse set of digital asset funds and solutions to accredited investors around the world.”

Asset Managers Betting on Crypto

Big-name money management firms are stepping into digital assets, finding new ways to monetize investor interest despite the slump in trading volumes and prices for Bitcoin and other cryptocurrencies.

Wave Financial has become the latest investment house to take the plunge by buying a stake in a regulated Swiss-based crypto investment manager Criptonite Asset Management.

In early August, Abrdn, a global investment asset management firm, bought a stake in a regulated UK digital asset exchange Archax. The stake enabled the £508bn-in-assets fund manager to bet on Archax digital asset exchange for institutional investors.

Abrdn’s investment came as BlackRock, the world’s largest money manager, launched a spot Bitcoin trust for institutional investors through a partnership with Coinbase crypto exchange. The move allowed BlackRock’s 82,000 investment professionals to access Bitcoin trading.

In July, Charles Schwab, the US broker and investments group, launched an exchange-traded fund aimed at providing investors with exposure to cryptocurrency without actually buying the currencies.

Large asset managers are beginning to consider digital assets as real investments. Traditional asset management companies are embracing what for years has been ridiculed.

The new digital offerings come after cryptocurrencies endured a brutal market crash that cut digital assets’ total market capitalisation from about $3.2 trillion in November to less than $1 trillion.

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Tagged : Acquisition / CRIPTONITE ASSET MANAGEMENT / Enterprise / Wave Financial