Day: April 9, 2023

Celsius Network to File Disclosure Statement for Restructuring Plan

by Blockchain News

Bankrupt crypto lender Celsius Network has announced it will be moving forward on its Chapter 11 restructuring plan with a disclosure statement containing information for claim holders. The statement is set to be filed on April 12, providing adequate information for claim holders to vote on the proposed restructuring plan sponsored by NovaWulf.

Celsius first presented the plan in February, which proposed creating a public platform fully owned by Earn creditors called NewCo. The committee of unsecured creditors will appoint the majority of the firm’s board members, with no Celsius founder involvement or relationship. The goal of this plan is to ensure a fair restructuring process that prioritizes the interests of creditors and other stakeholders.

The debtors’ statement regarding the plan reveals that the April 12 filing will include details of events leading up to Celsius’ bankruptcy, projected recoveries for certain stakeholders should the restructuring plan be approved, and answers to frequently asked questions. The bankruptcy court is expected to conduct a hearing regarding approval of the disclosure statement on May 17, with a vote on the plan to follow.

Since filing for Chapter 11 in July 2022, Celsius’ bankruptcy proceedings in court have included discussions on assets from the firm’s Earn program, crypto holdings, Bitmain coupons, and personal information of its users. In March, the bankruptcy judge approved a settlement plan allowing Celsius custody account holders to get back 72.5% of their crypto.

Celsius Network is a crypto lending platform that enables users to earn interest on their crypto assets or borrow funds against them. The company was founded in 2017 by Alex Mashinsky, an entrepreneur and inventor known for his contributions to the Voice Over Internet Protocol (VoIP) industry. Celsius gained popularity among crypto investors due to its high interest rates and low fees.

However, the company faced financial difficulties in 2021 as the crypto market experienced a sharp downturn. In July 2022, Celsius filed for Chapter 11 bankruptcy protection in the United States Bankruptcy Court for the Southern District of New York. The company cited a range of factors, including market volatility, regulatory scrutiny, and liquidity issues.

As part of its bankruptcy proceedings, Celsius has been exploring various restructuring options to address its financial challenges. The proposed plan sponsored by NovaWulf is one such option that seeks to create a fair and transparent process for creditors and other stakeholders.

In summary, the disclosure statement that Celsius Network plans to file on April 12 is a significant step forward in its Chapter 11 bankruptcy proceedings. The statement will provide claim holders with vital information about the proposed restructuring plan, including projected recoveries and details of the events leading up to Celsius’ bankruptcy. The restructuring plan, which aims to create a public platform fully owned by Earn creditors, is a key part of Celsius’ efforts to emerge from bankruptcy and restore its financial health.

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Conflux to Deploy Uniswap v3 on Its Blockchain

by Blockchain News

Conflux, a regulatory-compliant public blockchain based in China, is looking to deploy Uniswap v3 on its network. This move is aimed at offering millions of potential new users access to the popular decentralized exchange, especially in China and Asian markets. According to Conflux, the network experienced a surge in traffic in the first quarter of 2023, and the deployment of Uniswap v3 would be an important milestone in the platform’s development.

The deployment of Uniswap v3 on Conflux would also provide incentives for projects building on top of the platform. Specifically, the creation of liquidity pools for CFX token trading pairs, including CFX-USDT, CFX-BTC, and CFX-ETH, with a total worth of $2 million locked for two years. The Conflux Foundation would also provide $1 million in liquidity incentives.

In addition to the potential market reach and incentives, Conflux is partnering with China Telecom to develop a blockchain SIM card. This blockchain SIM (BSIM) will provide a secure place to store digital private keys, and users can call upon the signature to transfer money to other users. The BSIM will also feature a “one-click direct check” function that enables users to check for transaction information and status progress in real-time.

Conflux is confident that the deployment of Uniswap v3 on its network would be a significant step towards expanding the platform’s reach and providing new opportunities for projects building on top of it. Additionally, the move could help to strengthen the Asian crypto market in the face of regulatory crackdowns in the United States and Europe.

According to Conflux, China is one of the most mature markets in Web3, with 84% of worldwide blockchain applications submitted in the country compared to 11% and 14% in the UK and the US, respectively. The blockchain platform believes that exposure to the Chinese market is important for all projects, and regulatory crackdowns in the US and Europe could further bolster the growth of the crypto industry in Asian markets.

Ambre Soubiran, CEO of institutional crypto market data provider Kaiko, shares a similar view, noting that Hong Kong is becoming an increasingly important center for crypto assets trading and investment due to its more favorable regulatory environment. Over 80 crypto companies are reportedly planning to establish an office in Hong Kong, which could provide a crypto bridge to mainland China.

In conclusion, Conflux’s decision to deploy Uniswap v3 on its network could bring about significant benefits for the platform, as well as for the wider Asian crypto market. The move would enable access to millions of potential new users and provide incentives for projects building on top of the platform, while the partnership with China Telecom to develop a blockchain SIM card could offer new opportunities for secure transactions and real-time tracking of transaction information.

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LooksRare NFT Marketplace Upgrades to Version 2, Reducing Fees by 75%

by Blockchain News

LooksRare, a non-fungible token (NFT) marketplace, has announced an upgrade to version 2. The company revealed that the new platform would reduce fees by 75% and implement several other features. The previous version, LooksRare v1, charged 2% per trade, but this has now been reduced to 0.5% in version 2. In addition, the new version has more gas-efficient contracts, allowing users to save approximately 30% on gas fees versus the previous version of the app.

The LooksRare team explained that in version 2, sellers receive Ether (ETH) instead of Wrapped Ether (WETH) for most sales. The smart contracts also allow for bulk buying and selling orders if a user wants to place multiple trades simultaneously. Furthermore, aggregators can now implement custom recipients, allowing users to buy an NFT with one wallet but send it to another.

Sellers can now list their NFTs for sale in token prices instead of ETH. This includes the option to list an NFT for a fixed U.S. dollar price to be paid in equivalent ETH.

LooksRare v1 will be sunsetted, according to the team’s separate April 7 post. On April 12, the app’s front end will no longer allow users to post version 1 auctions through the public API. All current v1 auctions will be removed from the website at 10:00 am UTC on April 13, and the smart contracts themselves will be disabled through an admin function at 11:00 am UTC.

The announcement of the upgrade has received mostly positive reactions, as many LooksRare users believe the new features will provide a strong challenge to competitors such as OpenSea and Blur. However, some users have expressed doubts that v2 will be enough of a change to attract users from other platforms. These users have cited the lack of good token incentives and the inability to list enough collections as potential issues.

Despite some controversy in October when the company decided to eliminate creator royalties, LooksRare has benefited from the recent boom in NFT prices. The company’s latest upgrade to version 2 shows its commitment to providing users with an efficient and cost-effective NFT marketplace.

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dYdX to Exit Canadian Market

by Blockchain News

Cryptocurrency derivatives exchange dYdX has announced that it will be exiting the Canadian market due to regulatory restrictions. In an April 7 blog post, the exchange revealed that it would be winding down services in Canada over the next seven days. The move will begin with halting the onboarding of new users located in the country.

On April 14, dYdX will shift all existing Canadian users to “close-only mode,” which will allow them to withdraw funds but not engage in any new transactions. The exchange hopes for a change in the regulatory climate that will allow it to resume services in Canada.

In the blog post, dYdX stated its commitment to providing transparency around product decisions and democratizing access to financial opportunity. The exchange expressed hope that the regulatory climate in Canada would eventually change, enabling it to resume services in the country.

This move by dYdX follows the Canadian Securities Administrators announcing additional restrictions for crypto exchanges’ registration requirements in the country. According to the rules, platforms were prohibited from permitting Canadian clients to enter into crypto contracts to buy and sell any crypto asset that is itself a security and/or a derivative.

The regulatory restrictions in Canada have become a growing concern for cryptocurrency exchanges, with many having to shut down or exit the market altogether. It remains to be seen how the regulatory landscape will evolve in the future.

Notably, dYdX faced criticism from users and those in the crypto space in September 2022. The exchange had offered a $25 deposit bonus for confirming someone’s identity using a live webcam image. The promotion was later ended, citing “overwhelming demand” rather than privacy concerns put forth.

dYdX is a popular cryptocurrency derivatives exchange that allows users to trade various cryptocurrency assets on margin. The exchange has gained popularity in recent years due to its user-friendly platform and high liquidity.

In conclusion, dYdX’s decision to exit the Canadian market highlights the increasing challenges faced by cryptocurrency exchanges in the country. The regulatory restrictions have made it difficult for exchanges to operate, and it remains to be seen how the situation will evolve in the future. Nevertheless, dYdX’s commitment to transparency and democratizing access to financial opportunity remains unwavering.

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Binance.US Struggles to Find Banking Partner in the U.S.

by Blockchain News

Binance.US, the United States arm of the global crypto exchange, has been experiencing difficulties in establishing a new bank partner to serve as a fiat on-ramp and off-ramp for its clients in the country. The exchange has been relying on middleman banks to store funds on its behalf, after the recent failures of Silvergate and Signature Bank left it without banking services.

According to a Wall Street Journal report on April 8, Binance.US needs a bank to directly hold its clients’ U.S. dollars. However, recent attempts to establish direct banking relationships with banks such as Cross River Bank and Customers Bancorp have failed. The regulatory crackdown on banks with crypto clients is another factor contributing to the exchange’s struggles. In March, the U.S. Commodity Futures Trading Commission (CFTC) sued Binance Holdings and its CEO, Changpeng “CZ” Zhao, for alleged trading violations. The cryptocurrency exchange has been the focus of a CFTC investigation since 2021.

Binance.US customers have been affected by the absence of a direct bank. In a recent status update, the exchange stated that it “was transitioning to new banking and payment service providers over the next several weeks,” adding that some U.S. dollar deposit services would be temporarily impacted during the transition. Currently, Binance.US is holding customer funds via the financial technology firm Prime Trust, and a spokesperson for Prime Trust stated that all funds received from clients are stored through its banking partners.

In response to the challenges it is facing, a spokesman for Binance.US stated that the exchange is working with multiple U.S.-based banking and payment providers and continues to onboard new partners while upgrading its internal systems to create a more stable fiat platform and offer additional services.

Binance.US is not the only crypto firm experiencing banking challenges. In the United Kingdom, banks are moving away from accepting clients from the crypto sector, and the few banks still working with crypto firms are requesting more documentation and information about how they monitor clients’ transactions.

The challenges faced by Binance.US and other crypto firms in establishing banking relationships with traditional financial institutions highlights the need for greater regulatory clarity and guidance in the crypto industry. As the industry continues to grow and mature, it is essential for regulators and financial institutions to work together to establish clear guidelines and standards that can help foster a more stable and secure financial ecosystem.

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Sphere 3D Sues Gryphon Digital Mining Over Alleged Spoofing Attack

by Blockchain News

Sphere 3D has filed a lawsuit against its partner, Gryphon Digital Mining, over an alleged spoofing attack that led to the irregular transfer of Bitcoin. The complaint, filed on April 7, accuses Gryphon’s CEO, Rob Chang, of wiring 18 BTC to a fraudster posing as Sphere 3D’s chief financial officer in January. The lawsuit also claims that another eight Bitcoin were sent to the same address a few days later.

In a spoofing attack, an attacker falsifies data, such as IP addresses, email headers, or user credentials, to trick a system or a user into believing that they are someone else. This can give the attacker access to a system, sensitive information, or enable them to launch further attacks.

Sphere 3D CEO, Patricia Trompeter, said in a statement for investors that Gryphon had materially breached the Master Services Agreement (MSA) the companies had entered into. Trompeter accused Gryphon of “willfully violating their contractual duties” and putting Sphere 3D’s assets at significant risk.

According to the statement, Gryphon manages Sphere 3D’s “crypto mining activities” and maintains “fiduciary duties of Sphere’s digital assets.” In return for this work, Gryphon receives 22.5% of Sphere’s gross profit as payment.

The relationship between the companies, which were once considering a merger, appears to have deteriorated. Trompeter’s statement suggests that the lawsuit was filed because Sphere 3D would not be “bullied or threatened by the likes of Gryphon.” She added that Gryphon had failed to act with integrity and to honor their contract, and that Sphere 3D would hold them accountable.

Gryphon has not yet responded to the complaint. A spokesperson for the company said that they could not comment on pending litigation but were confident that their response to the complaint and the evidence that would come to light in the aftermath would speak for themselves.

The incident highlights the risks associated with spoofing attacks and the importance of maintaining robust security protocols. The outcome of the lawsuit will be closely watched by those in the cryptocurrency industry as it may have implications for how partners manage and secure digital assets.

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Sushi Chef Addresses SEC Subpoena

by Blockchain News

Jared Grey, the head chef of Sushi, a Japan-based decentralized autonomous organization (DAO), recently issued a statement in response to a subpoena from the United States Securities and Exchange Commission (SEC). Grey reassured the Sushi community that, as far as he knows, no one associated with Sushi has violated U.S. federal security laws.

Grey also addressed the most frequently asked questions from the community regarding the subpoena in a FAQ format. He stated that he is cooperating with the SEC, but he has no knowledge of the SEC issuing subpoenas to anyone else associated with Sushi. However, Grey acknowledged that it is possible that the SEC may issue further subpoenas to others linked with Sushi in the future.

The SEC is responsible for regulating the securities markets and enforcing securities laws in the United States. The agency has recently taken an interest in the world of decentralized finance (DeFi) and blockchain-based financial instruments. In December 2020, the SEC filed a lawsuit against Ripple Labs, alleging that the company had sold unregistered securities in the form of its XRP cryptocurrency.

Grey’s statement comes at a time when DeFi is gaining significant traction and regulatory scrutiny. DAOs like Sushi are community-governed organizations that are collectively managed by their members. These organizations are designed to operate in a decentralized manner, with decision-making power distributed among their members.

Grey’s statement indicates that Sushi is taking the SEC’s inquiry seriously and is cooperating with the agency. The chef’s reassurance that no one associated with Sushi has violated U.S. federal security laws may ease the concerns of the Sushi community and other stakeholders.

However, the fact that Grey is cooperating with the SEC suggests that the agency is taking its investigation seriously. It is possible that the agency may uncover evidence of wrongdoing, either by individuals associated with Sushi or by the organization itself. If this were to occur, it could have significant implications for the wider DeFi ecosystem.

Overall, Grey’s statement provides some insight into the SEC’s inquiry into Sushi and the wider world of DeFi. While it is unclear at this stage whether the SEC will issue further subpoenas or take any other action, it is clear that the agency is taking a close interest in this emerging area of finance. As the DeFi ecosystem continues to evolve, it is likely that regulatory scrutiny will only increase, and DAOs like Sushi will need to ensure that they are operating within the bounds of applicable laws and regulations.

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Arkansas passes Bitcoin mining regulation bill

by Blockchain News

Arkansas has become the latest state in the United States to pass a bill seeking to regulate Bitcoin mining activity within its borders. The bill, which has been named the Arkansas Data Centers Act of 2023, will now move to the governor’s office for final approval. If passed, the legislation would create guidelines for miners and protect them from discriminatory regulations and taxes.

The bill was proposed by Senator Joshua Bryant on March 30 and quickly passed by Arkansas’ state legislators. The legislation recognizes the value of data centers to local communities and acknowledges that they create jobs and pay taxes. As such, it seeks to regulate the Bitcoin mining industry in the state.

One of the key provisions of the bill is that digital asset miners must pay applicable taxes and government fees in acceptable forms of currency. Additionally, they must operate in a manner that causes no stress on an electric public utility’s generation capabilities or transmission network.

Under the legislation, crypto miners will have the same rights as data centers. The bill outlines that Arkansas’ government should not impose different requirements for digital asset mining businesses than those that apply to data centers.

The move by Arkansas follows a similar initiative in Montana, where the state’s Senate passed a bill to protect crypto miners operating within the state. The legislation is designed to protect miners against taxes on digital assets used for payments and eliminate energy rates discriminating against home crypto miners and digital asset businesses.

In contrast, in November 2022, New York’s Governor Kathy Hochul signed the proof-of-work mining moratorium into law, banning crypto-mining activities in the state for two years. On a federal level, President Joe Biden introduced a budget proposal on March 9 that could subject crypto miners in the United States to a 30% tax on electricity costs aimed at reducing mining activity.

The regulation of Bitcoin mining in the United States is gaining momentum, with individual states proposing legislation to govern the industry. The Arkansas Data Centers Act of 2023 is just the latest in a series of bills designed to create guidelines for miners and protect them from unfair treatment.

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Texas lawmakers propose gold-backed state digital currency

by Blockchain News

Two Texas lawmakers, Senator Bryan Hughes and Representative Mark Dorazio, have introduced identical bills proposing the creation of a state-based digital currency backed by gold. Each unit of the proposed digital currency would represent a fractional equivalent amount of physical gold held in trust.

The bills, Senate Bill 2334 and House Bill 4903, outline the process for purchasing the proposed digital currency. Once a person purchases a certain amount of digital currency, the comptroller would use the money received to buy an equivalent amount of gold. The purchaser would then receive digital currency equal to the amount of gold purchased by the comptroller. The value of a unit of digital currency must be equal to the value of the appropriate fraction of a troy ounce of gold at the time of the transaction.

According to the bills, the trustee shall maintain enough gold to provide for the redemption in gold of all units of the digital currency that have been issued and are not yet redeemed for money or gold. The bills also state that a fee might be established “at any rate necessary” to cover the costs of administering this chapter.

While the bills have yet to be passed or presented for a vote, they are set to take effect on September 1, 2023. This move comes despite objections from several U.S. lawmakers who are against the introduction of a central bank digital currency (CBDC).

Florida Governor Ron DeSantis recently expressed concerns about CBDCs, stating that they would grant “more power” to the government and provide them “with a direct view of all consumer activities.” Similarly, Republican Senator Ted Cruz introduced a bill to block the Fed from launching a “direct-to-consumer” CBDC, arguing that it is “more important than ever” to ensure U.S. policy on digital currencies protects financial privacy, maintains the dollar’s dominance, and cultivates innovation.

The idea of a state-backed digital currency is not new, with countries such as China and Sweden already testing their own versions of CBDCs. However, the introduction of a gold-backed digital currency by a U.S. state is a unique move. It is unclear how the proposed digital currency would be regulated or how it would affect the current financial system in Texas.

Gold has historically been considered a safe-haven asset and a store of value during times of economic uncertainty. The proposed gold-backed digital currency could provide Texans with an alternative to traditional fiat currencies and may appeal to those who are skeptical of the government’s ability to manage the monetary system. However, it remains to be seen whether the proposed digital currency will gain widespread adoption and whether other states will follow Texas’ lead in introducing their own digital currencies backed by precious metals or other assets.

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