Voyager Digital Sells Assets via Coinbase Amid Bankruptcy

Voyager Digital, the New York-based centralized finance (CeFi) platform, filed for Chapter 11 bankruptcy in July 2022 after it failed to secure a new line of credit. The company, which provides cryptocurrency trading services for retail and institutional investors, had been struggling with mounting debt and declining user growth.

Since then, Voyager has been seeking ways to raise capital and pay off its creditors. According to recent reports, the company has turned to Coinbase, one of the largest cryptocurrency exchanges in the world, to sell off some of its assets and raise cash.

On-chain data from Lookonchain, an independent analytics firm, suggest that Voyager has sent at least $100 million in USDC to Coinbase in the last three days. The transfers, which started on February 24, included a mix of cryptocurrency tokens, such as Ether, Shiba Inu, and Chainlink.

Despite the sell-off, Voyager still holds a substantial amount of crypto assets, with a total value of nearly $530 million. The majority of its holdings are in Ether, which is currently worth around $1,500 per coin, and Shiba Inu, a meme-inspired token that has gained a cult following among retail investors.

However, the fate of Voyager’s remaining assets is uncertain. The United States Securities and Exchange Commission (SEC) has raised concerns about the company’s financial stability and recently objected to Binance.US’ proposed acquisition of over $1 billion in assets belonging to Voyager.

The SEC argued that Binance.US, which is a subsidiary of the world’s largest cryptocurrency exchange, had failed to demonstrate that it could adequately safeguard the assets and protect the interests of Voyager’s creditors.

The move by Voyager to sell its assets through Coinbase has sparked speculation among industry analysts about the future of centralized finance and the role of crypto exchanges in providing liquidity for struggling platforms.

While the crypto market has seen a resurgence in investor interest and rising valuations for major tokens, such as Bitcoin and Ethereum, the fate of smaller players like Voyager remains uncertain. The company’s bankruptcy filing and subsequent asset sales highlight the risks and challenges of operating in the rapidly evolving and volatile world of cryptocurrency trading.


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G20 Announces Standards for Global Crypto Regulation

The Financial Stability Board (FSB), the International Monetary Fund (IMF), and the Bank for International Settlements (BIS) have been tasked with establishing standards for a global cryptocurrency regulatory framework, according to an announcement by the Group of 20 (G20) on February 25th, 2023. The G20, comprised of the world’s 20 largest economies, has recognized the need for a coordinated international effort to address the risks associated with cryptocurrencies and establish clear regulatory guidelines for their use.

The announcement comes in response to the rapid growth of cryptocurrencies and their increasing use in global financial transactions. The FSB, IMF, and BIS will deliver papers and recommendations on the regulation, supervision, and oversight of stablecoins, crypto asset activities, and markets by July of this year. The recommendations are expected to establish clear guidelines for the use of cryptocurrencies and help prevent their misuse for criminal activities, such as money laundering and terrorist financing.

The G20 has also recognized the potential benefits of cryptocurrencies and the underlying blockchain technology. The use of cryptocurrencies could offer advantages such as increased efficiency, faster and cheaper transactions, and greater financial inclusion, particularly for the unbanked population. However, the G20 also acknowledges the risks associated with cryptocurrencies, including volatility, market manipulation, and cyber threats.

The regulatory framework is expected to strike a balance between the risks and benefits of cryptocurrencies, ensuring their safe and responsible use. The recommendations are likely to address issues such as licensing requirements, anti-money laundering and counter-terrorism financing (AML/CFT) measures, consumer protection, and market integrity. The G20 recognizes the need for a coordinated international effort to establish these standards and promote global financial stability.

In conclusion, the G20’s announcement marks a significant step towards establishing a global regulatory framework for cryptocurrencies. The recommendations from the FSB, IMF, and BIS will provide clear guidelines for the use of cryptocurrencies, ensuring their safe and responsible use while promoting financial stability. As cryptocurrencies continue to gain in popularity, it is essential to establish clear regulatory guidelines to prevent their misuse and ensure their potential benefits are fully realized.


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Texas Objects to Binance.US and Voyager Digital Deal

The State Securities Board and Department of Banking of Texas have filed an objection to the proposed deal between Binance.US and crypto lender Voyager Digital, which filed for bankruptcy in the US in December 2021. The objection, filed on February 24, cites “inadequate” disclosures in Binance.US’s terms of service and restructuring plan, including the failure to inform unsecured creditors that they may only receive a recovery rate of 24-26% under the plan, compared to the 51% they would receive under Chapter 7.

Binance.US had disclosed its agreement to purchase Voyager Digital’s assets for $1.022 billion in December, a move that was expected to significantly expand its presence in the US crypto market. However, the objection by the Texas regulatory bodies could pose a major obstacle to the deal.

The objection raises concerns that the proposed transaction may not be in the best interest of Voyager Digital’s creditors, who may receive significantly less than they would under the Chapter 7 process. In addition, the objection points out that the disclosures provided by Binance.US may not be sufficient to enable creditors to make an informed decision about whether to support the proposed deal.

Binance.US has not yet commented on the objection, but the company is likely to face additional regulatory hurdles in the US as it seeks to expand its operations. The objection by the Texas regulatory bodies highlights the challenges that crypto firms may face in navigating the complex and evolving regulatory landscape in the US, where different states may have different rules and requirements.

Overall, the objection by the Texas State Securities Board and Department of Banking to the Binance.US and Voyager Digital deal underscores the importance of thorough disclosures and transparency in the crypto industry. As regulators continue to scrutinize the sector, it will be important for companies to provide clear and comprehensive information to all stakeholders in order to build trust and confidence in the market.


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Mantle Core Proposes $200M Fund for Web3 Startups

Mantle Core, a subsidiary of BitDAO, has recently proposed the creation of a $200 million fund dedicated to early-stage Web3 startups. The proposal aims to accelerate the adoption of Mantle, an Ethereum layer-2 network, among developers and Dapps. The Mantle EcoFund will be deployed within the Mantle ecosystem over the next three years, with BitDAO’s treasury providing $100 million in USD Coin (USDC), and another $100 million coming from external matching capital from strategic venture partners.

Several funds have expressed interest in participating in the Mantle EcoFund, including Dragonfly Capital, Pantera, Folius Ventures, Play Ventures Future Fund, Spartan, Lemniscap, Selini Capital, Cadenza Ventures, and QCP Capital, according to Mantle’s proposal. If approved, the EcoFund and venture partners will participate in projects with a 1:1 co-investment ratio. The ecosystem fund will target Web3 startups raising pre-seed, seed, and series A rounds.

The Mantle spokesperson has stated that “the fund targets to invest in more than 100 projects deployed on Mantle and have a multiple on invested capital (MOIC) of 1.5x of cumulative performance through the fund’s lifecycle.” Management fees for the EcoFund team, including sourcing, due diligence, legal, portfolio support, and fund administration, will be “industry standard,” with a 2% fee to support operational expenses.

The proposed Mantle EcoFund is part of a broader trend across the crypto industry, with similar initiatives seeking to drive adoption and innovation. For instance, in 2021, Polygon, an Ethereum scaling solution, launched a $100 million fund aimed at improving access to decentralized finance, onboarding users, and accelerating adoption.

In summary, the proposed Mantle EcoFund has the potential to significantly boost the development and adoption of Web3 startups by providing early-stage funding for promising projects. With the backing of BitDAO’s treasury and external venture partners, the Mantle EcoFund could become a significant player in the Web3 ecosystem, fueling innovation and growth in the years to come.


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Ukraine receives over $70M in crypto donations

Since the start of the Russian-Ukrainian conflict, Ukraine has received over $70 million in cryptocurrency donations, according to a report by blockchain data platform Chainalysis. The funds, which have primarily come in the form of Ether and Bitcoin, have provided the nation with much-needed resources for military equipment and humanitarian aid efforts.

The conflict between Ukraine and Russia began in 2014, when Russia annexed Crimea from Ukraine. The conflict has since escalated, with fighting in the eastern regions of Ukraine resulting in the deaths of over 13,000 people. The conflict has also displaced millions of people and caused significant damage to infrastructure.

Despite the challenges, the people of Ukraine have received support from the international community, including through cryptocurrency donations. The Chainalysis report found that donors have contributed to Ukraine’s efforts in a variety of ways, with the majority of funds going towards military equipment and humanitarian aid. The report also noted that donors have contributed through non-fungible tokens, such as UkraineDAO’s auction of a Ukrainian flag NFT that sold for $6.1 million.

The use of cryptocurrency in conflict zones has become increasingly common, as it provides a means of bypassing traditional financial systems and allows for anonymity. In some cases, it has been used to fund illicit activities, such as terrorism or money laundering. However, in the case of Ukraine, the cryptocurrency donations have been used for legitimate purposes and have made a significant impact on the country’s ability to provide for its people during a time of crisis.

While the conflict in Ukraine remains ongoing, the cryptocurrency donations provide a glimmer of hope for the people of the country. As the use of cryptocurrency continues to grow, it is possible that it will play an increasingly important role in humanitarian efforts and conflict resolution around the world.


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NanoLabs sues Coinbase over Nano trademark infringement

NanoLabs, the company behind digital currency Nano, has filed a legal complaint against Coinbase, a leading crypto exchange, for alleged trademark infringement. According to the complaint filed on February 24, 2023, in the California Northern District Court, NanoLabs has accused Coinbase’s Nano Bitcoin futures contract and Nano Ether futures contract products of infringing on its trademark rights.

NanoLabs claims that Coinbase’s offerings are “derivative products” based on Bitcoin (BTC) and Ether (ETH), which are “identical or highly similar” to Nano. It also alleges that Coinbase targets the same type of consumers as NanoLabs, and the trademarks for Coinbase’s products are “identical, and confusingly similar,” to NanoLabs. Additionally, NanoLabs claims that Coinbase had full knowledge of the Nano digital currency before launching its products, as evidenced by correspondence between the two companies in 2018.

NanoLabs argues that Coinbase should have known that offering Nano Bitcoin on the Coinbase Derivates Exchange would further consumer confusion, especially since the Nano Digital Currency is not listed on the Coinbase Exchange, and Coinbase provides no disclaimer, distinction, or education to consumers to this point.

The complaint states that Coinbase’s infringement has caused NanoLabs economic detriment and weakened its brand identity, resulting in “actual damage and irreparable harm.” NanoLabs is seeking at least $5 million in damages, corrective advertising from Coinbase, destruction of all materials infringing on the Nano trademark, and forfeiture of all profits Coinbase made using Nano trademarks. NanoLabs has requested a jury trial.

Colin LeMahieu founded the Nano digital currency in 2014 under the name RaiBlocks, and it was later rebranded to Nano on Jan. 31, 2018. Coinbase launched its Nano-branded offerings years later, introducing the Nano Bitcoin futures contract in June and the Nano Ether futures contract in August.

This lawsuit could have significant implications for Coinbase and the broader cryptocurrency industry, as it raises questions about the use of similar or identical trademarks for different digital currencies. It also highlights the importance of intellectual property rights in the rapidly evolving and highly competitive crypto industry.


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Crypto Lawyers Dispute SEC Chief’s Jurisdiction Claims

The Chairman of the SEC, Gary Gensler, recently claimed in an interview that all cryptocurrencies, except Bitcoin, fall under the agency’s jurisdiction. However, his comments have been disputed by lawyers for the cryptocurrency industry who argue that the SEC must prove its case in court for each token individually before it can claim jurisdiction over them.

Jake Chervinsky, a lawyer and policy lead at the crypto advocacy group the Blockchain Association, argued in a tweet that Gensler’s opinion is not the law, despite his claimed command over the crypto sector. He further stated that until the SEC proves its case in court for each individual token, it lacks authority to regulate any of them.

Another lawyer, Logan Bolinger, also pointed out that Gensler’s opinions on what is or isn’t a security are not legally dispositive, meaning that it’s not the final legal determination. He added that judges, not SEC chairs, ultimately determine what the law means and how it applies.

The policy lead at the Bitcoin Policy Institute, Jason Brett, said that Gensler’s comments should be feared rather than celebrated. He stated that there are ways to win other than via a regulatory moat.

Gabriel Shapiro, the general counsel at investment firm Delphi Labs, outlined in a series of tweets the enforcement difficulties the SEC would have to carry out on the industry to cement its rule. Shapiro pointed out that according to Gensler, over 12,300 tokens worth around $663 billion are unregistered securities that are illegal in the U.S. The SEC would have to file a lawsuit against each token creator, which would be seemingly impossible to enforce.

Shapiro also noted that the SEC has handled crypto in two ways: either fining token creators and requiring the issuer to register, or fining them and ordering the created tokens to be destroyed and delisted from exchanges.

The comments made by Gensler have sparked concern in the cryptocurrency industry. Lawyers have highlighted the need for the SEC to prove its case in court for each token individually before it can claim jurisdiction over them. Meanwhile, the SEC faces the seemingly impossible task of enforcing its rule against over 12,300 tokens. The situation remains unresolved, and the crypto industry will be closely watching to see how it develops in the coming weeks and months.


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IMF Prioritizes Regulation over Ban on Crypto

The International Monetary Fund (IMF) has expressed its preference for regulating crypto assets, including stablecoins, rather than imposing an outright ban. IMF’s Managing Director, Kristalina Georgieva, stated during the G20 finance ministers meetings in Bengaluru, India that differentiating and regulating digital assets are the agency’s top priorities. However, the IMF has not ruled out the option of banning cryptocurrencies entirely if they pose a significant risk to financial stability.

In a recent interview with Bloomberg, Georgieva said that much confusion still exists around the classification of digital money. The IMF’s first objective is to differentiate between central bank digital currencies (CBDCs) that are backed by the state and publicly issued crypto assets and stablecoins. Fully-backed stablecoins can create a “reasonably good space for the economy,” while non-backed crypto assets are speculative, high risk, and not money.

Georgieva cited a recent paper recommending global regulatory standards for crypto assets, which stated that they cannot be legal tender because they are not backed. However, if crypto assets begin to pose a greater risk to financial stability, the IMF would not rule out the option of banning them. Nevertheless, Georgieva emphasized that good regulations, predictability, and consumer protection would be the better approach, and banning would not need to be considered.

Georgieva explained that an inability to protect consumers from the rapidly evolving world of crypto assets would be the primary catalyst for banning cryptocurrencies. The IMF, the Financial Stability Board, and the Bank for International Settlements are jointly preparing to release regulatory framework guidelines in the second half of this year.

The IMF’s stance on regulating crypto assets aligns with other global regulators, such as the G20, which also support establishing a regulatory framework for digital currencies. Some countries, including China and India, have taken a more aggressive approach and banned cryptocurrency trading altogether. In contrast, countries such as the United States and Switzerland have implemented a regulatory framework for digital assets, aiming to balance innovation and investor protection.

The cryptocurrency market has experienced significant growth in the last decade, with the emergence of Bitcoin and the subsequent proliferation of other cryptocurrencies. The total market capitalization of cryptocurrencies has surpassed $2 trillion, attracting the attention of investors and regulators worldwide. However, the market’s volatility and the lack of regulatory clarity have raised concerns about the potential risks associated with investing in digital assets.

In conclusion, the IMF supports regulating the world of digital money and aims to differentiate between CBDCs and crypto assets to establish a regulatory framework for digital currencies. While the agency has not ruled out banning cryptocurrencies entirely, it would prefer to pursue good regulations, predictability, and consumer protection. The upcoming regulatory framework guidelines, jointly prepared by the IMF, the Financial Stability Board, and the Bank for International Settlements, are expected to provide a comprehensive regulatory framework for crypto assets.


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Suspected Hackers Move Stolen Funds to Sanctioned Crypto Mixer

Blockchain security firms PeckShield and Beosin have reported that suspected hackers who exploited Lendhub, a decentralized finance lending protocol, have moved more than half of their ill-gotten gains to Tornado Cash, a crypto mixer service. According to Beosin, around 2,415 Ether (ETH), worth about $3.85 million, was sent to Tornado Cash from a wallet connected to the Jan. 12 exploit. Beosin also reported that a total of 3,515.4 ETH, currently worth over $5.7 million, has been sent to Tornado Cash by the exploiter since Jan. 13.

Tornado Cash is a crypto mixing service that attempts to anonymize Ethereum transactions by combining vast amounts of Ether prior to depositing sums to other addresses. However, the service was sanctioned on Aug. 8 by the United States Office of Foreign Assets Control (OFAC) for its alleged role in the laundering of crime proceeds. Despite the sanctions and the website for the service being taken down, Tornado Cash is still able to run and be used, as it’s a smart contract housed on a decentralized blockchain.

A January report by blockchain analytics firm Chainalysis said that hacks and scams once contributed to around 34% of all inflows to the mixer and were at times inflows reached around $25 million per day, but that dropped by 68% in the 30 days following the sanctions. However, bad actors in the space continue to frequent the service. Most recently, on Feb. 20, the exploiter behind an Arbitrum-based DeFi project transferred over $1.86 million in ill-gotten crypto to Tornado Cash.

The notorious North Korean hacker outfit Lazarus Group is also known to send significant sums to mixers such as Tornado Cash and Sinbad. An early February Chainalysis report claimed that exploited funds from North Korean hackers “move to mixers at a much higher rate than funds stolen by other individuals or groups.”

The use of crypto mixers by hackers and other bad actors has long been a concern for authorities and regulators, who are attempting to clamp down on the use of such services for money laundering and other illicit activities. The continued use of Tornado Cash by suspected hackers and other bad actors suggests that more needs to be done to curb the use of such services.


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bitFlyer Co-Founder Seeks to Reinstate as CEO

Yuzo Kano, co-founder of bitFlyer, a prominent cryptocurrency exchange in Japan, plans to reintroduce himself as CEO in an attempt to reinvigorate the company. Kano left the company in 2019 amidst a series of management disputes, but he aims to lead the company towards an Initial Public Offering (IPO) in the coming months, according to a report by Bloomberg. He also hopes to put Japan back on the map in the world of cryptocurrency by making bitFlyer capable of competing on the international stage.

Kano intends to introduce stablecoins to the trading platform, build a token-issuance operation, and open-source bitFlyer’s “miyabi” blockchain to the public if he is reinstated. He believes that the company has become stagnant in his absence, with no new products or services launched, which he aims to change. He claims that bitFlyer is “a company that produces nothing new.”

Regulatory pressures imposed by Japan’s Financial Services Agency in 2018 led to management issues at bitFlyer, with the need to adopt more stringent money laundering policies. Despite this, bitFlyer remains one of the larger cryptocurrency exchanges in Japan, with over 2.5 million accounts. The departure of international competitors such as Kraken and Coinbase has left bitFlyer with a stronger position in the Japanese market.

Kano retained a 40% stake in the company despite stepping down as CEO, and he believes that he can help bitFlyer reclaim its former status as an innovative and dynamic company. He plans to introduce new products and services, including stablecoins and token-issuance operations, and he hopes to take the company public in the near future.

If Kano is reinstated as CEO, his plans for bitFlyer could help to solidify the company’s position in the Japanese and international cryptocurrency markets. By introducing stablecoins and other innovations, he could attract new users and investors to the platform. Additionally, opening up bitFlyer’s blockchain to the public could foster collaboration and innovation in the broader cryptocurrency community.

In summary, Yuzo Kano, co-founder of bitFlyer, aims to return as CEO in an attempt to revitalize the company and lead it towards an IPO. He plans to introduce new products and services, including stablecoins and token-issuance operations, and he hopes to make bitFlyer capable of competing on the international stage. By doing so, he believes that he can put Japan back on the map in the world of cryptocurrency.


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