Day: February 17, 2023

Bankrupt crypto lender Celsius Network has chosen NovaWulf Digital Management as sponsor

by Blockchain News

The insolvent cryptocurrency lender Celsius Network has selected NovaWulf Digital Management as the sponsor for its proposed Chapter 11 restructuring plan. If the plan is successful, the investment advisory firm will assume operations of a new company, and the majority of customers are expected to recover up to 70 percent of their funds.

Celsius presented the proposal to the United States Bankruptcy Court for the Southern District of New York on February 15 as part of a filing. The Celsius Official Committee of Unsecured Creditors (UCC), which is an organization that represents the interests of Celsius account holders, has given its approval to the proposal that has been submitted.

The proposal calls for the establishment of a new public platform known as NewCo, which would be held in its entirety by Earn’s creditors. The UCC will be responsible for the appointment of the majority of NewCo’s board members. According to the idea, the reconstituted board will not have any “Celsius founding engagement or affiliation.”

In addition, NovaWulf will provide a direct financial contribution to the newly formed company in the range of $45 million to $55 million.

Celsius stated in the document that “the NovaWulf plan provides the best method to distribute the Debtors’ liquid crypto assets and maximize the value of the Debtors’ illiquid assets through a new company run by experienced asset managers.” This was in reference to the NovaWulf plan’s ability to distribute liquid assets and maximize the value of illiquid assets.

The illiquid assets, mining activity, and current loan portfolio of Celsius will all be moved into the new firm, which also has intentions to offer crypto-oriented services in the near future.

According to the proposal, creditors whose claims had a value of $5,000 or less as of the date of the petition will be placed in a “Convenience Class” and will be eligible to receive “a one-time distribution of liquid crypto.” This distribution will be paid in the form of Bitcoin (BTC), Ether (ETH), and USD Coin (USDC).

It is anticipated that the option will allow over 85% of Celsius’s clients to reclaim over 70% of the cryptocurrency that they have invested. It is possible for any Earn creditor with a debt more than $5,000 to choose to lower a claim to $5,000 in order to take part in the class.

Those who have claims worth more than $5,000, or those who have claims worth over $1,000 but choose not to participate in the Convenience Class shares, will be eligible to receive a payout of the cryptocurrency that is left over after smaller accounts have been compensated.

In addition to this, they will get ownership in NewCo in the form of equity and management share tokens, which will entitle its holders to collect dividends.

Earn users who hold Celsius (CEL) tokens, a native token used for user rewards that currently trades around $0.50, will have their tokens valued and purchased at the initial coin offering (ICO) price of $0.20. Earn users who do not hold Celsius (CEL) tokens will not have their tokens valued or purchased.

According to the proposal, “insider CEL token claims,” also known as the customers who were provided early access to the ICO, “would get no reimbursement.”

In addition, the proposal calls for the establishment of a “well-funded litigation trust” in order to take legal action against officials at Celsius, including the company’s previous CEO Alex Mashinsky.

Before the proposed strategy can be put into action, it must first have the blessing of the United States Bankruptcy Judge Martin Glenn.

Following a process in which Celsius contacted “over 130 parties,” a total of six companies, including Binance, Bank To The Future, Cumberland DRW, and Galaxy Digital, submitted offers for the company’s crypto assets.

After ceasing withdrawals in July 2022 and claiming “severe market circumstances” as the reason, the business ultimately decided to file for Chapter 11 bankruptcy protection the same month.

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Alabama Senator Tommy Tuberville reintroduces legislation allowing United States 401k

by Blockchain News

Tommy Tuberville, a senator from Alabama, has presented legislation that would make it possible for 401(k) retirement plans in the United States to incorporate exposure to cryptocurrency investments.

In an announcement made on February 15, Tuberville stated that the Financial Freedom Act, which he had initially presented to the United States Senate in May 2022, aimed to reverse policy from the Department of Labor directing what type of investments were allowed in 401(k) plans, including cryptocurrency investments. Tuberville had initially introduced the bill. The senator claims that the proposed legislation would prevent the Department of Labor from initiating enforcement proceedings against those who “use brokerage windows to invest in bitcoin.”

According to Tuberville, the federal government should stay out of the business of picking winners and losers in the investment game. “By passing my legislation, I will assure that everyone who receives a wage will have the monetary freedom to invest in their futures in whichever manner they see appropriate.”

Tuberville shared the news that Senators Cynthia Lummis, Rick Scott, and Mike Braun had come forward to support the legislation and became co-sponsors. Following the collapse of the cryptocurrency market and the failure of major companies such as FTX, Voyager Digital, and Celsius Network, Lummis stated in an interview that she was “very comfortable” with the idea of U.S. investors including Bitcoin (BTC) in their retirement accounts. The interview took place in December 2022.

On the 14th of February, Politico published an article stating that Florida Representative Byron Donalds intended to propose a measure with the same name in the House of Representatives on the 17th of February. Donalds and Tuberville, both of whom are members of the Republican party, might run into resistance from the Democratic side of the aisle. Democratic Senator Elizabeth Warren has in the past voiced reservations over Fidelity Investments’ ambitions to integrate bitcoin in 401(k) accounts.

The notification issued by the DOL in March 2022 cautioned individuals who had 401(k) accounts that they should “exercise extreme care” when dealing with investments in cryptocurrencies. The letter cited the possibility of fraud, theft, and loss of assets. On February 7, a notice was issued by the Office of Investor Education and Advocacy of the United States Securities and Exchange Commission (SEC), the North American Securities Administrators Association (NASAA), and the Financial Industry Regulatory Authority (FINRA), all of which issued a warning that self-directed individual retirement accounts may include cryptocurrencies as potentially risky investments.

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The identities of the guarantors who signed on as sureties

by Blockchain News

Following a request made by multiple news outlets, a federal judge agreed to allow the identities of the guarantors who signed on as sureties for former FTX CEO Sam Bankman-$250 Fried’s million bond to be made public. This decision was made in response to the judge’s ruling that the identities of the guarantors could be made public.

Andreas Paepcke, a senior research scientist at Stanford University, and Larry Kramer, a former dean of Stanford Law School, have been revealed to be the two persons who had not been previously named, according to court records that were made public on February 15th. On January 25, each of these individuals put up $200,000 and $500,000, respectively, as sureties in order to secure Bankman-release Fried’s on bail.

SBF’s parents, Joseph Bankman and Barbara Fried, were the other two people that signed off on their son’s bail in December 2022, after his arraignment. This occurred after SBF had been charged with a crime. Prior to the arrest of their son, the two were law professors at Stanford. Bankman seems to be becoming more of a target in FTX’s bankruptcy case, as corporate creditors sent subpoenas to him, his son, and other “insiders” on February 14.

According to a story published by Business Insider on February 15, Kramer said that he had known Bankman and Fried since the 1990s, and that the reason for his gift of half a million dollars was because of their friendship. At the time of publishing, it is unknown what kind of relationship, if any, Paepcke may have had with Bankman-Fried or his parents.

The terms of Bankman-bail Fried’s required that he be placed under house arrest at his parents’ home in California; however, he is free to leave the residence for court appearances and other authorized activities. The terms of SBF’s release on bail have been modified by Judge Lewis Kaplan to include prohibitions on accessing specific messaging applications, utilizing virtual private networks, and communicating with current and former employees of FTX and Alameda Research.

In a letter dated January 12, eight major news sites petitioned Judge Kaplan, asking the court to divulge the identities of the two persons “who supplied financial support to Mr. Bankman-Fried.” Initially, the petition was granted, but the court halted the revealing of the guarantors’ names until February 7 so that SBF’s legal team might have time to appeal the decision.

In a letter dated January 3, attorneys for Bankman-Fried argued against the publishing of Paepcke’s and Kramer’s names, noting that their clients had been the subject of “extreme media attention, harassment, and threats.” Paepcke and Kramer had not been identified at the time the letter was sent. As a result of the legal team’s announcement that they want to appeal Kaplan’s judgment, the distribution of the material has been postponed until February 14th.

The criminal prosecution against SBF is expected to commence in October, while the lawsuit against FTX’s bankruptcy is still active. Gary Wang, who was a co-founder of FTX, and Caroline Ellison, who was a former CEO of Alameda Research, have both pled guilty to specific offenses and are apparently collaborating with the police.

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The European Commission Announces the Launch of the European Blockchain Regulatory Sandbox

by Blockchain News

On February 15, the European Commission made the announcement that it will be launching the European Blockchain Regulatory Sandbox. The regulatory sandbox will serve as a forum for discussion around 20 new projects each year until the year 2026.

The sandbox was first announced in the year 2020, and it is now being managed by a number of private companies who were successful in winning bids in the year 2022. The Digital Europe Program will be responsible for providing the funding. Use cases from the public and commercial sectors that include “Blockchain and other Distributed Ledger Technologies” will be considered for the selection of projects, which will be done on a competitive basis by an impartial panel of academic experts.

Applicants from the public sector that have initiatives relating to the European Blockchain Services Infrastructure (EBSI) will be taken into consideration. The European Blockchain Standard Initiative (EBSI) is a pan-European blockchain that is managed by a coalition of EU nations, together with Norway and Lichtenstein.

Participants in the yearly sandbox cohort will be paired with national and European Union regulators in order to get private legal counsel and regulatory assistance. At the same time, regulators will have the chance to become familiar with cutting-edge blockchain technology.

The deadline for applications to participate in the first round of projects is April 14. The projects need to have a proof of concept that has been verified according to the standards, and they need to have a dimension that crosses borders.

The projects that have already been selected for deployment by public authorities will be given precedence. The European Economic Area is where a company’s headquarters should be located (EEA). As long as the EEA-based firm is the one to ultimately benefit from the initiative, these companies are allowed to work in partnership with enterprises headquartered outside of the EEA. Participants should not expect to have any of their costs repaid.

The chosen projects will each be provided with a written legal evaluation, which will be followed by two virtual meetings with the involved regulators. Additionally, applications are being accepted for the EBSI Early Adopters incubator program, which is now in its third cohort.

In the Financial Services Innovation bill that was being introduced in the United States House of Representatives by Patrick McHenry, a comparable sandbox program was suggested. In the next iteration of the United Kingdom’s changes to its financial services industry, a sandbox program of a similar kind may also be included.

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Former Tmon CEO faces arrest for taking bribes to promote Terra Classic

by Blockchain News

After the former CEO of Tmon, a Korean e-commerce platform, was accused of taking billions of won worth of Terra (LUNA), which is now known as Terra Classic (LUNC), in exchange for promoting Terra as a straightforward payment gateway, prosecutors in South Korea have asked for an arrest warrant to be issued for the individual.

According to a report by the Dong-A Ilbo media outlet, the head of the financial and securities joint investigation team at the Seoul Southern District Prosecutor’s Office requested an arrest warrant for bribery charges to be brought against the former CEO of Tmon, referred to as “Mr. A,” as well as a person referred to as “broker B,” who worked on lobbying in the financial sector in favor of Terra.

According to the allegations, Mr. A was given LUNC tokens by Shin Hyun-Seong, who is also known as Daniel Shin, the co-founder of Terra. Shin urged Mr. A to actively promote Terra as a straightforward method of payment. Following this event, Tmon began promoting LUNC and spreading the word that the token is a reliable investment. The investigators believe that the advertising were responsible for the price growth of the token since they raised the expectations of investors.

It is speculated that the former CEO of Tmon has profited billions of won from the sale of the LUNC tokens that were obtained in return for the marketing. In addition, the investigation emphasized that in spite of warnings from financial regulators, Shin has apparently contributed money to other businesses such as Tmon to promote LUNC as a secure payment mechanism. This was one of the points that was underlined in the research.

On November 14, prosecutors in South Korea made an official request for Shin to assist with the investigation into the collapse of the Terra. The police said that Shin had been in possession of LUNC tokens without the knowledge of the investors and had made illicit transactions totaling more than 105 million dollars prior to the collapse of the firm.

The prosecutors who are in charge of the case have been continually broadening the scope of their investigations and focusing their attention on additional individuals implicated. On the 30th of November in the year 2022, the authorities in South Korea issued an arrest order for Shin, along with three investors in Terra and four engineers responsible for the project.

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El Salvador is Opening a Bitcoin Embassy in the United States

by Blockchain News

The nation of El Salvador is creating a “Bitcoin Embassy” in the United States, making it the first government in the world to do so. Bitcoin (BTC) is the most popular cryptocurrency in the world.

In 2021, El Salvador became the first nation in the world to recognize bitcoin as a form of legal cash. Now, the country is extending its Bitcoin strategy via a new cooperation with the government of Texas. The intergovernmental partnership intends to establish a Bitcoin Embassy, also known as El Salvador’s representative office, in Texas in order to collaborate on the development of new initiatives that seek to increase Bitcoin use.

Milena Mayorga, the Salvadoran Ambassador to the United States, broke the news in a message on Twitter on Feb. 14.

“During my meeting with the assistant secretary of the government of Texas, Joe Esparza, we discussed the opening of the second Bitcoin Embassy as well as the expansion of commercial and economic exchange projects,” Mayorga said. “We also discussed the expansion of commercial and economic exchange projects.”

The most recent Bitcoin project was launched only a few months after El Salvador established the world’s first Bitcoin Embassy in the city of Lugano, which is located in the southern region of Switzerland, in October 2022. As a part of these efforts, the two pro-crypto jurisdictions have begun working toward the establishment of a physical governmental presence in order to foster collaboration in education and research institutes relevant to Bitcoin.

Samson Mow, who formerly served as the chief strategy officer at Blockstream, believes that the phenomenon of Bitcoin embassies is the next phase in the process of countries and cities embracing Bitcoin. According to what he mentioned, such projects need collaboration across nations in order to launch new initiatives such as forming alliances amongst locations that have accepted Bitcoin.

The announcement comes at a time when it is being claimed that state legislators in Texas are exploring a new measure that would require “a master plan for the growth of the blockchain business.” The legislative initiative’s overarching goal is to make Texas the cryptocurrency capital of the United States by, among other things, making purchases using Bitcoin exempt from sales tax.

As was previously reported, Texas has emerged as one of the crypto-friendly states in the United States. This is due to the state’s passage of crypto-friendly legislation, which seek to better adapt commercial laws to the innovation brought about by blockchain and to digital asset regulations. Major mining businesses like Riot Blockchain, Core Scientific, and Genesis Digital Assets all have operations in the state of Texas. As a result, Texas is home to some of the most powerful Bitcoin miners in all of North America.

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How Cryptocurrencies Can Help You Find Love This Valentine’s Day

by Blockchain News

According to the findings of a poll done by Binance for Valentine’s Day, demonstrating an interest in cryptocurrency might be the secret to successfully enticing a potential love partner.

The global cryptocurrency exchange conducted a study in the days leading up to the annual holiday celebrating love, and 2,600 people took part in the poll to share their opinions on how important it is for prospective partners to have an interest in cryptocurrencies. If we are to accept the facts, having a strong interest in the space might be a significant component in a connection with other people who have similar values and perspectives.

Between the dates of February 6 and February 9, 2019, an open poll asked participants nine questions on their perspectives on cryptocurrency, dating, and romantic relationships. There were 2,600 people who took part, and their ages ranged anywhere from 18 to 46.

The fact that 83 percent of respondents felt that having a partner in a relationship who enjoyed cryptocurrencies was a desirable quality was a noteworthy lesson from this research.

Seventy percent of those who took part in the study said that they would be more interested in dating someone who is also interested in cryptocurrency.

Sixty percent of respondents said that an interest in cryptocurrencies makes prospective partners more desirable since it suggests that the individual is “tech-savvy” and receptive to innovation and technological improvement.

38% of those polled persons said that their spouses had the same enthusiasm and love for cryptocurrencies, and 27% of those individuals disclosed that they had introduced their partners to web3, cryptocurrencies, and blockchain.

It would seem that getting bitcoins as a present on Valentine’s Day was more desirable than receiving flowers or chocolates, as 83% of respondents said that they would like to receive a crypto gift card rather than a traditional gift card.

Paris Hilton, an American socialite and serial entrepreneur, combined cryptocurrency, blockchain technology, and Valentine’s Day in 2023 by organizing a virtual reality dating experience event in The Sandbox.

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The amount of ETH burned will continue to increase as transaction fees are burned

by Blockchain News

Since the completion of the Merge network upgrade six months ago, the quantity of ether (ETH), the second-largest cryptocurrency in terms of market value, has been steadily decreasing across exchanges. In September 2022, the Ethereum network went through a significant upgrade that consisted of switching from a proof-of-work (PoW) network to a proof-of-stake (PoS) network during an event that was referred to as the Merge.

The quantity of accessible ETH that is now languishing on exchanges continues to decrease, as shown by on-chain data that was published by the cryptocurrency analytics company Santiment. Since the Merge, the amount of ETH available on exchanges has decreased by 37%. It is a positive indicator when there is a consistent decrease in supply on exchanges. This is because there is less ETH accessible on the market for buying and selling.

Before the Merge, there were a total of 19.12 million ETH worth $31.3 billion trading hands on exchanges in the month of September. As of the second week of February, the number had dropped to 13.36 million ETH, which corresponds to a value of $19.7 billion.

A significant portion of the Ethereum supply is now being shifted into self-custody, while the Shanghai upgrade is drawing near and many traders choose staking as an investment strategy instead. The next version for Ethereum, known as Shanghai, is expected to release in the month of March. Stakeholders and validators will be able to remove their holdings from the Beacon Chain after the Shanghai hard fork, which will combine more upgrade suggestions for network advancements and enable for this functionality.

At the now, 14% of the entire supply, or 16 million ETH, is staked on the Beacon Chain. This amounts to nearly $25 billion at the prices that are currently in effect, and it is a significant quantity that will gradually become liquid following the Shanghai hard fork.

Since it became deflationary after the London upgrade, the total quantity of ETH on the market as a whole has also decreased, in addition to the ongoing decrease in the amount of ETH stored on exchanges. The fee-burning mechanism that was first implemented as part of Ethereum Improvement Proposal (EIP)-1559 is where the deflationary model can be found.

Since the London upgrade in August 2021, a total of 2.9 million ETH has been burnt, which would have had an equivalent value of around $4.5 billion in today’s currency.

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Silvergate Bank as defendants in a proposed class-action lawsuit from an FTX user

by Blockchain News

In a newly proposed class-action lawsuit, Silvergate Bank and its CEO Alan Lane have been accused of “aiding and abetting” a “multibillion-dollar fraudulent scheme orchestrated by Sam Bankman-Fried (SBF)” and two of Sam Bankman-entities, Fried’s FTX and Alameda Research. This accusation comes in the context of a “multibillion-dollar fraudulent scheme orchestrated by Sam Bankman-Fried (SBF).”

On February 14, 2019, a proposed class-action lawsuit was submitted to the United States District Court for the Northern District of California by attorneys representing a San Francisco-based FTX user who had approximately $20,000 worth of cryptocurrency frozen after the exchange went out of business the previous year.

Plaintiff Soham Bhatia claims that Silvergate Bank, its parent company Silvergate Capital Corporation, and CEO Alan Lane were aware of the use of FTX customer funds by Alameda Research, and she has accused them of concealing “the true nature of FTX” from its customers. Bhatia is suing Silvergate Bank, Silvergate Capital Corporation, and CEO Alan Lane.

According to the lawsuit, “At all relevant times, Silvergate, Bankman-Fried, and Lane were each a co-conspirator of the other,” with the following addition: “The lawsuit alleges Silvergate and Lane aided, abetted, encouraged, and substantially assisted Bankman-Fried in jointly perpetrating a fraudulent scheme upon Plaintiff and the class.”

“By aiding, abetting, encouraging, and substantially assisting the wrongful acts, omissions, and other misconduct alleged above, Defendants acted with an awareness of their wrongdoing and realized that their conduct would substantially aid the accomplishment of their illegal design,” the complaint states. “In addition, Defendants acted with the knowledge that their actions would substantially assist the accomplishment of their unlawful design.”

The lawsuit asks for a variety of remedies, including damages, restitution, and a proportionate share of the defendant’s earnings, with the precise amount being decided during the trial.

However, the complaint has not yet been certified as a class action by the district court, which is an essential step that must be completed before the case can go forward.

The most recent potential legal action against Silvergate is yet another class-action complaint that has been filed against the company during the last two months.

Plaintiff Joewy Gonzalez filed a similar class-action suit against Silvergate on December 14 in the United States District Court for the Southern District of California, accusing Silvergate of its alleged role in “furthering FTX’s investment fraud” by aiding and abetting the cryptocurrency exchange when it placed FTX user deposits into the bank accounts of Alameda. Gonzalez’s suit alleges that Silvergate played a role in “furthering FTX’s investment fraud” by placing FT

A class action lawsuit against Silvergate Capital Corporation was submitted to the United States District Court for the Southern District of California on January 10, alleging that Silvergate’s platform failed to detect instances of money laundering “in amounts exceeding $425 million” involving South American money launderers. The lawsuit was brought against Silvergate Capital Corporation.

There have been allegations leveled against other businesses that are similar in nature.

The algorithmic trading business Statistica Capital has filed a putative class-action lawsuit against the New York-based bank Signature Bank, saying that Signature Bank “really knew of and materially supported the now-infamous FTX scam.” The case was filed on February 6 of this past week.

The report said in its writing that “in particular, Signature knew of and enabled the commingling of FTX client money inside its proprietary blockchain-based payments network, Signet.”

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Bitcoin (BTC) $ 27,437.35 0.46%
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