Media Outlets Object to Withholding Identities in FTX Bankruptcy Proceedings

Several major media outlets, including Bloomberg, the Financial Times, The New York Times, and The Wall Street Journal’s parent company, Dow Jones & Company, have jointly objected to attempts to withhold the identities of non-US customers of cryptocurrency exchange FTX during its bankruptcy proceedings.

In a filing to a Delaware Bankruptcy Court on April 4, the media outlets argued that the press and the public have “a presumptive right of access to bankruptcy filings,” and that FTX and its customers have failed to justify the need for secrecy.

While FTX’s debtors are able to argue for the names of creditors to be redacted in bankruptcy filings, the media outlets believe that the names of FTX’s customers should not be sealed permanently.

The Ad Hoc Committee of Non-US Customers of, which represents the interests of FTX’s non-US customers, had claimed in a filing on December 28 that publicly revealing the names and private information of non-US customers would leave them vulnerable to identity theft, targeted attacks, and “other injury.”

In response, the media outlets argued that if the permanent sealing of customer identities were permissible on the grounds claimed by FTX and the ad hoc committee, then such sealing would become routine in virtually every bankruptcy proceeding.

FTX, which is one of the largest cryptocurrency exchanges in the world, filed for bankruptcy in December 2021, citing a liquidity crisis. The exchange had been struggling to meet customer demands for withdrawals in the wake of a crackdown on cryptocurrency trading in China, where it is based.

Since then, FTX has been engaged in a legal battle with its customers over the release of their identities. The exchange has argued that the identities should be kept secret to protect its customers’ privacy, while its customers have argued that the identities should be made public to ensure transparency in the bankruptcy proceedings.

The media outlets’ objection to the withholding of customer identities is likely to increase pressure on FTX and its debtors to release the names. However, it remains to be seen how the bankruptcy court will rule on the matter.

Cryptocurrency exchanges have come under increasing regulatory scrutiny in recent months, as governments around the world seek to crack down on money laundering and other illegal activities. The case of FTX is likely to be closely watched by regulators, as it could set a precedent for how cryptocurrency exchanges are regulated in the future.


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Trading firms identified as Binance VIP clients in CFTC lawsuit

Binance, one of the world’s largest cryptocurrency exchanges, is facing a lawsuit filed by the United States Commodities Futures Trading Commission (CFTC) for allegedly violating US law by allowing US clients to trade on its platform without complying with Know Your Customer (KYC) standards. In the lawsuit, the CFTC identified three trading firms – Jane Street Group, Tower Research Capital, and Radix Trading – as Binance’s VIP clients, who allegedly received preferential treatment from the exchange.

According to Bloomberg, which cited “people familiar with the matter,” Radix Trading was identified as “Trading Firm A” in the CFTC’s suit, while Jane Street was “Trading Firm B” and Tower Research was “Trading Firm C.” The firms on the CFTC’s list were examples of US clients allegedly able to access Binance, despite not complying with KYC standards.

The alleged “VIP” treatment from Binance included lower transaction fees and faster trading services, according to the CFTC’s filing. The firms provided Binance with liquidity on the exchange, and Binance gained the corresponding trading fee revenues. This was part of a strategy that “actively facilitated violations of US law” by helping US trading firms evade KYC compliance standards, among other things, the CFTC alleged.

In a report by The Wall Street Journal, Radix Trading’s co-founder Benjamin Blander stated that he believed the firm acted legally even when trading with Binance’s offshore entity. He also claimed that Binance enabled Radix to sidestep compliance controls by providing them information on accessing through a virtual private network to obscure its IP address.

The CFTC claimed that Binance prioritized “commercial success over compliance with US law,” enabling US trading firms to violate US regulations. However, Binance’s CEO Changpeng “CZ” Zhao vehemently denied the allegations of compliance and market manipulation violations in a follow-up post on March 28.

Binance has faced several regulatory challenges in recent months, including regulatory warnings and investigations from countries such as Japan, the UK, and Canada. The exchange has also been banned in countries such as China and India. Despite these challenges, Binance remains one of the world’s largest cryptocurrency exchanges, with a daily trading volume of over $40 billion.


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Sentiment Recovers Stolen Funds with Bounty

Lending protocol A recent hacking incident using Sentiment resulted in the perpetrator stealing close to one million dollars. However, because to a reward of $95,000 that was offered to the hacker, the protocol was successful in recovering the stolen cash. Through the use of the Arbitrum blockchain, Sentiment spoke with the hacker, imploring them to “do the right thing” and restore the cash by April 6 at the latest. In addition, the policy guaranteed the same payment to anybody who was able to assist in determining who was responsible for the crime and bringing them to justice.

After monitoring the situation, the creator of MetaMask, Taylor Monahan, made the announcement that the hacker had returned 414 ether, which is equivalent to around $771,000 at the current exchange rate. After some time had passed, the hacker sent a further 51.75 ETH to the recovery address provided by Sentiment. The protocol said unequivocally that it had been successful in acquiring the monies and that the problem had been fixed.

On April 4, a hack was carried out, and it is thought that it was carried out as a consequence of a re-entry assault or a flaw. As was stated by a few members of the community, this episode underscores how critically important it is for businesses to take bug bounties seriously. Even one of the members gave the hacker kudos for “taking it by force” with their efforts. On the other hand, a different user of Twitter voiced their disapproval of the event, labeling it as “a bug bounty with a criminal step,” and asking businesses to provide greater and more open bug bounties.

Comparisons have been made between this attack and the recent one that occurred at Euler Finance, in which the Ethereum protocol awarded a reward to a hacker who returned almost 90% of the assets that had been taken. The hacker returned over 176.4 million dollars in digital assets while keeping roughly $20 million for themselves. Because of this occurrence, the significance of bug bounties as a method for resolving vulnerabilities in protocols for decentralized financial transactions has been further highlighted.

It is very necessary for businesses to take bug bounties seriously and provide awards that encourage ethical conduct in their employees. The usefulness of this strategy was recently shown by the fact that Sentiment was successful in regaining its data. Moving ahead, it is probable that other organizations will adopt similar tactics to manage possible security breaches in their systems. This will increase the likelihood that these breaches will occur.


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Binance Australia Derivatives License Canceled by ASIC

The Australian Securities and Investments Commission (ASIC) has canceled the license of Binance Australia Derivatives following a targeted review of Binance’s operations in the country. Oztures Trading Pty Ltd, trading as Binance Australia Derivatives, held the Australian financial services license that has now been canceled.

The cancellation of the license means that clients of Binance Australia Derivatives will not be able to open new positions or increase derivatives positions on the platform from April 14. Furthermore, Binance is expected to close any remaining open positions on April 21, so clients are required to close any existing derivatives positions before that date.

ASIC’s statement on the cancellation of the license also clarified that the cancellation does not affect Binance’s obligation to continue as a member of the Australian Financial Complaints Authority until April 8, 2024.

Binance is a major cryptocurrency exchange platform that provides a wide range of services, including cryptocurrency trading, derivatives trading, and lending. The exchange has faced regulatory scrutiny from several countries, including the United States and the United Kingdom, for operating without proper licenses and complying with regulations.

The cancellation of Binance Australia Derivatives’ license by ASIC comes amid increased regulatory scrutiny of cryptocurrency exchanges and their compliance with financial regulations. In recent months, several countries have tightened their regulations on cryptocurrency exchanges, including China, India, and Turkey, among others.

Moreover, Binance is not the only cryptocurrency exchange platform to face regulatory action in Australia. In 2020, the Australian Transaction Reports and Analysis Centre (AUSTRAC) initiated legal proceedings against the country’s largest cryptocurrency exchange, BTC Markets, for alleged breaches of anti-money laundering laws.

In conclusion, the cancellation of Binance Australia Derivatives’ license by ASIC is a significant development in the regulatory landscape of cryptocurrency exchanges in Australia. It highlights the importance of compliance with financial regulations and the need for cryptocurrency exchanges to operate within the legal framework of the countries they operate in. As the cryptocurrency market continues to grow, it is likely that more regulatory actions will be taken against cryptocurrency exchanges that do not comply with financial regulations.


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Singapore Regulators and Banks Develop Crypto Customer Screening Standards

Singapore regulators are taking proactive steps to address the challenges posed by the fast-evolving crypto industry. According to a report by Bloomberg on April 6, the Monetary Authority of Singapore (MAS) has been working closely with traditional banks to develop uniform standards for screening potential customers from the crypto industry.

The collaboration has been ongoing for the past six months and has involved the police forces as well. The aim is to help local banks optimize their procedures for opening accounts of digital asset service providers while mitigating risks associated with money laundering and terrorist financing. After six months of cooperation, the results and conclusions for risk management and due diligence will be published within the next two months.

The guidelines will not only address the screening of potential customers, but also cover other pertinent topics in the crypto industry. These include stablecoins, nonfungible tokens (NFTs), and transferable gaming or streaming credits. By setting standards for these issues, regulators hope to create a safer and more transparent environment for the use of cryptocurrencies.

However, it is important to note that the banks will still reserve the right to make decisions based on their own risk assessment, even after the guidelines are published. This flexibility will allow the banks to cater to their own specific circumstances while adhering to the general principles of the guidelines.

The move by Singapore regulators is not surprising, given the increasing prevalence of cryptocurrencies and the need for regulatory oversight. As cryptocurrencies become more mainstream, it is important to have a clear framework that can ensure their safe use while still fostering innovation and growth in the industry.

Singapore has been one of the more progressive countries in Asia when it comes to crypto regulation. In 2019, MAS issued guidelines on the regulation of digital token offerings, which helped to clarify the regulatory framework for initial coin offerings (ICOs) and security token offerings (STOs). This move helped to encourage the growth of the blockchain and crypto industry in Singapore.

Overall, the collaboration between Singapore regulators and traditional banks is a positive step towards establishing a more secure and trustworthy environment for the use of cryptocurrencies. With the guidelines set to be published in the coming months, it will be interesting to see how they shape the landscape of the crypto industry in Singapore and beyond.


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Reddit Avatars on Polygon Blockchain

Reddit, the online discussion platform, has launched the third generation of its blockchain-based digital collectibles, Reddit Avatars, on the Polygon blockchain. The new avatars were released on April 5, 2023, and have generated a lot of buzz within the community.

The non-fungible token (NFT) avatars were first introduced in July 2022 as a way to empower artists to create and sell their work. These avatars were made available in August 2022 and generated thousands of dollars in sales for the artists. Users who purchased a collectible were also able to set it as their avatar on Reddit’s website.

Now, with the release of Gen 3 avatars on the Polygon blockchain, community members and collectors are expressing their thoughts on the much-anticipated drop. Some users predict that the avatars will sell out in minutes, while others are praising Reddit for its marketing and branding prowess.

One collector who participated in collecting the first and second generation of avatars expressed their excitement, stating that the new drop has the potential to be sold out “within minutes.” Meanwhile, other users have praised Reddit’s marketing efforts to successfully change the narrative on NFTs, converting anti-NFT users to neutral and pro-NFT.

However, not everyone is convinced that the release will sell as fast as expected. Some users have criticized the payment process as “cumbersome,” which could deter potential buyers.

Despite the mixed reactions, Reddit’s NFTs have witnessed a surge in trading volume. On October 24, 2022, the collection reached a new all-time high in trade volume as wallet holders closed in on $3 million. In just 24 hours, the volume reached $1.5 million, almost one-third of the overall volume of $4.1 million. On October 26, the collection also made its way to the top 10 collections on OpenSea for the most sales in the week.

This latest release on the Polygon blockchain is another milestone for Reddit Avatars, which have quickly become a popular way for artists to sell their work and for collectors to own unique digital assets. With the latest release generating both excitement and criticism, it remains to be seen how successful the Gen 3 avatars will be on the Polygon blockchain. Nonetheless, Reddit’s NFTs have proven to be a lucrative market for both creators and buyers alike, and it’s likely that the platform will continue to innovate in this space.


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Nigeria’s Foreign Investment and Crypto Adoption Dilemma

Nigeria, the largest economy in Africa, has been facing a severe shortage of dollars, leading to a decline in foreign direct investment (FDI). The National Bureau of Statistics (NBS) reported that FDI dropped by 33% in 2021, decreasing from $698 million in the previous year to $468 million. The situation is worrying as FDI has decreased by 90% since its peak in 2008, reaching a new low in 2021. The scarcity of foreign investment in the country has led to a significant setback for the growth of the economy.

Despite the decline in FDI, the adoption of cryptocurrencies in Nigeria has grown exponentially. Many Nigerians prefer to store their money in digital currencies rather than the national currency, the naira, due to its constant devaluation. In fact, Nigeria ranked eighth in the world in terms of crypto adoption and usage rate in Chainalysis’ 2020 Cryptocurrency Geography Report. This exponential growth in crypto adoption rate in Nigeria was expected to encourage more foreign investment in the country. However, the shortage of dollars has discouraged foreign crypto companies from investing in Nigeria.

The Central Bank of Nigeria (CBN) banned cryptocurrency transactions in February 2021, directing all commercial banks to close accounts belonging to crypto exchanges and other businesses that deal with cryptocurrencies. The ban has further discouraged foreign investors from entering the market.

Despite the challenges, Olumide Adesina, a certified investment trader, tweeted that no state in Nigeria has taken the initiative to attract foreign investors in the fintech, entertainment, and crypto industries, despite the fact that Nigerians “love” these sectors. In another tweet, Adesina highlighted that building a real tech and crypto community like Silicon Valley in Lagos state would create thousands of direct jobs.

In response, Lagos State Governor, Babajide Sanwo-Olu, announced proposals for crypto adoption in the state, according to local media reports. The initiatives proposed by Sanwo-Olu include establishing a dedicated sandbox regulatory framework for cryptocurrencies, creating a crypto-focused innovation hub, and providing incentives for businesses that accept crypto payments. These initiatives are expected to encourage foreign investors to enter the Nigerian market and to boost the growth of the economy.

In conclusion, Nigeria’s dilemma is that while the adoption of cryptocurrencies has grown exponentially, the country is facing a severe shortage of foreign direct investment. The shortage of dollars has discouraged foreign investors, including crypto companies, from investing in the country. Therefore, it is essential for the government to take the necessary measures to attract foreign investors, particularly in the fintech, entertainment, and crypto industries. By doing so, Nigeria will not only stimulate its economy but will also establish itself as a hub for innovation and technology in Africa.


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FTX Future Fund Shut Down Following Exchange’s Collapse

In November 2022, FTX exchange and its subsidiaries collapsed, leading to the shutdown of its philanthropic arm, FTX Future Fund. The fund was sponsored by former CEO Sam Bankman-Fried and had pledged $1 billion in donations towards research academics across prestigious universities. The grants were focused on research projects for the safe development of artificial intelligence, reducing catastrophic bio-risk, improving institutions, economic growth, great power relations, and effective altruism.

However, following FTX’s bankruptcy filing, the team behind the FTX Future Fund resigned, leaving many scholars and researchers who were early recipients of the grant in limbo over the payment of further grants for their programs. According to a Reuters report, many students studying on the FTX grant were forced to drop out of their courses due to the fear of repayment.

Twenty academics from prestigious colleges, including Cornell, Princeton, and Brown universities in the United States, as well as Cambridge in Britain, received grants from the FTX philanthropy arm, totaling more than $100,000 each. Based on these announcements, further calculations suggest university-affiliated research initiatives received a total of more than $13 million.

Many of these academics who received the first grant have now found themselves in a tricky situation, with the next due date for fee submission already passed. As a result, many students were forced to drop out of the program after the first year. Others who did receive a full grant have found themselves in an ethical battle over whether to use the grant or return the funds, which might be part of stolen customers’ funds, as per the lawsuit against the crypto exchange and its founders.

While FTX asked recipients of payments from the debtors in the FTX bankruptcy filing to return their funds in an announcement, it didn’t mention the FTX Future Fund. However, a U.S.-based lawyer suggested that it will depend on the FTX trustees and their willingness to claw back small amounts, including philanthropic ones.

The collapse of FTX exchange has caused significant harm to its philanthropic arm, FTX Future Fund, and its beneficiaries. The shutdown of the fund has left many scholars and researchers stranded without the support they were promised, forcing some to drop out of their programs. The ethical implications of using or returning the funds have also caused concern among grant recipients, with some unsure of what to do next. It remains to be seen whether the FTX trustees will take action to claw back the philanthropic funds or whether the affected researchers and scholars will receive the support they were promised.


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Chinese state company launches crypto funds

It has been claimed that a large state-owned corporation in China would be creating new cryptocurrency funds, which indicates the company has a more optimistic position on the sector than was previously believed. According to a local news outlet that focuses on technology, 36Kr, CPIC Investment Management, which is a subsidiary of China Pacific Insurance (CPI), is teaming up with investment company Waterdrip Capital to develop two cryptocurrency investment funds.

CPI is the second-largest property insurance firm on the Chinese mainland, and it is owned by the Chinese central government, the government of the Shanghai city government, and China Securities Finance. Both of the new crypto funds, known as the Pacific Waterdrip Digital Asset Fund I and the Pacific Waterdrip Digital Asset Fund II, are venture capital funds that will handle proof-of-stake digital assets. These funds were created by the same company. Investors from institutions as well as rich individuals will be sought for by both funds.

Blockchain-related initiatives and cryptocurrency firms might get financial backing from the international investment firm known as Waterdrip Capital. It was established in 2017, and it is well-known for its support of the Chinese cryptocurrency mining business as well as its investments in initiatives such as Peaq, a decentralized Web3 network built on Polkadot.

According to a tweet posted by Waterdrip Capital on Monday, the launching of two joint cryptocurrency funds by CPIC Investment Management and Waterdrip Capital is tied to the adoption of incentive policies relating to virtual assets by the Hong Kong government. The statement was sent in response to Waterdrip’s announcement that it will be partnering with CPIC Investment Management to create the funds.

This revelation comes at a time when the government of Hong Kong is becoming more dedicated to establishing local cryptocurrency infrastructure. In doing so, the government hopes to differentiate its approach to cryptocurrency regulation from China’s prohibition on cryptocurrencies, which will be imposed in 2021. At the end of March, there were rumors circulating online that Chinese state-owned banks were showing interest in several cryptocurrency companies based in Hong Kong.

In recent years, the government of China has taken a harsh position against cryptocurrencies, with prohibitions placed on initial coin offerings, cryptocurrency trading platforms, and mining operations, among other cryptocurrency-related activities. The fact that a state-owned corporation has decided to offer cryptocurrency funds, on the other hand, points to a more bullish picture for the sector.

China has been hard at work developing its very own kind of digital money, which it refers to as the digital yuan, and it is now undergoing testing in a number of different places. China’s bigger objective is to become a leader in the digital economy and to minimize its dependency on the US currency. One step toward achieving this goal is the creation of the digital yuan.

In spite of China’s past position on cryptocurrencies, this action by a state-owned corporation implies that China’s views about the sector may be shifting. It is not yet clear if other corporations in China will follow this example and form their own cryptocurrency funds or whether this action is an isolated incident.


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Japan’s Web3 Project Team Releases White Paper to Boost Crypto Industry

The Web3 project team of Japan’s ruling Liberal Democratic Party has released a white paper containing suggestions for expanding the country’s cryptocurrency industry. The white paper has been incorporated into the national strategy by Prime Minister Fumio Kishida’s administration.

The Web3 project team aims to bypass the usual bureaucratic processes to formulate regulatory proposals for everything from nonfungible tokens to decentralized autonomous organizations (DAOs). In contrast to other governments seeking to implement consumer protection regulations, Japan is striving to establish a more welcoming atmosphere for cryptocurrency, as many companies have relocated to other countries due to high tax obligations.

The white paper recommends that Japan exhibit leadership during this year’s G7 summit, which will address cryptocurrency issues. The document recommends that the nation focus on the potential benefits of Web3 and establish a prominent stance on technology-agnostic and ethical innovation.

The white paper also recommends additional modifications to tax regulations, acknowledging that a notable exception for token issuers has already been granted. These include tax exemptions for companies that possess tokens issued by other firms that are not meant to be traded in the short term. It suggests enabling self-assessments and allowing investors to carry forward their losses for up to three years and proposes that cryptocurrency should only be taxed when it is converted into fiat currency.

Furthermore, the white paper identifies a pressing concern regarding the absence of accounting standards, which has made it challenging for Web3 enterprises to locate auditors. The document recommends that ministries and agencies assist the Japanese Institute of Certified Public Accountants in creating guidelines. Additionally, it suggests that a DAO law be established, modeled after Japan’s godo kaisha, which is comparable to a limited liability company. It also suggests modifications to the Companies Act and the Financial Instruments and Exchange Act.

The white paper highlights that while the screening process for tokens already in circulation is becoming shorter, the assessment of new tokens issued by foreign entities is still sluggish. It suggests that procedures should be made more transparent, enabling issuers to provide essential information for evaluation.

In 2022, Japan adopted a framework for regulating stablecoins. The new white paper emphasizes the significance of preparing the environment for stablecoin registration and creating a self-regulatory organization. It also suggests developing proposals for yen-backed stablecoins.

Japan’s Web3 project team’s white paper aims to address the challenges faced by the country’s cryptocurrency industry. While Japan has been comparatively more welcoming to cryptocurrencies than other countries, it still faces issues such as high tax obligations and the absence of accounting standards. The white paper recommends several modifications to tax regulations to ease the burden on companies, including tax exemptions for non-traded tokens and carrying forward losses.

The paper also suggests establishing guidelines for accounting standards and creating a DAO law modeled after Japan’s godo kaisha. Furthermore, it highlights the need for more transparent procedures for assessing new tokens issued by foreign entities.

The white paper also emphasizes the significance of preparing the environment for stablecoin registration and developing proposals for yen-backed stablecoins.

Japan’s cryptocurrency industry has the potential to grow further, and the Web3 project team’s white paper is a step towards achieving that goal. The government’s efforts to establish a welcoming atmosphere for cryptocurrencies could encourage more companies to operate in Japan, boosting the country’s economy in the long run.


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