Tag: Cryptocurrency

QuadrigaCX Bankruptcy Trustee Announces Interim Distribution of Funds

by Blockchain News

QuadrigaCX’s bankruptcy trustee, Ernst & Young, has announced an interim distribution of funds to creditors of the now-defunct Canadian cryptocurrency exchange. The announcement was made in consultation with estate inspectors, and a Notice to Affected Users will be posted soon with further details about the distribution process.

QuadrigaCX became insolvent in February 2019, following the death of its co-founder, Gerald Cotten. Cotten had taken the private keys to QuadrigaCX’s offline storage systems to his grave, leaving the exchange unable to access its funds. According to the Ontario Securities Commission (OSC), QuadrigaCX owes its affected clients an estimated $160 million.

Since then, Ernst & Young has been working as the bankruptcy trustee for QuadrigaCX and has been attempting to recover any assets it can for the exchange’s creditors. So far, the trustee has recovered $34.3 million worth of assets.

The interim distribution of funds provides some relief to QuadrigaCX’s creditors, who have been waiting for over two years to receive any compensation for their losses. However, the trustee has also stated that a small number of affected users may receive a Notice of Disallowance of Claim, meaning that their creditor’s claim has been revised or disallowed in the bankruptcy process.

If users receive a Notice of Disallowance, they have the right to appeal the decision. Miller Thomson, the law firm representing QuadrigaCX users, has advised affected users to review the reasons for the revision or disallowance and gather any necessary evidence to support their claim.

The collapse of QuadrigaCX was a major blow to the Canadian cryptocurrency market, raising concerns about investor protection and regulatory oversight. The QuadrigaCX case highlighted the need for proper safeguards and measures to protect investors and prevent similar incidents from happening in the future.

Ernst & Young’s announcement of the interim distribution of funds is a significant step in the bankruptcy proceedings of QuadrigaCX. However, it remains to be seen how much creditors will actually receive and how long the proceedings will continue. The bankruptcy trustee continues to work towards recovering any additional assets for the exchange’s creditors.

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Grayscale Launches New Entity to Manage Growing Funds

by Blockchain News

Grayscale Investments, the cryptocurrency asset manager, has announced the launch of a new entity, the Grayscale Funds Trust, to manage its publicly traded financial products in-house. The move indicates the company’s growing confidence in its ability to manage its funds internally.

In addition to the launch of the new trust, Grayscale has filed a registration statement with the United States Securities and Exchange Commission (SEC) for three new cryptocurrency-focused exchange-traded funds (ETFs). The new funds include a Bitcoin Composite ETF, an Ethereum Futures ETF, and a Privacy ETF.

Grayscale’s Bitcoin Composite ETF will invest in exchange-traded products related to or backed by Bitcoin, including Bitcoin mining firms. The Ethereum Futures ETF will offer indirect exposure to the potential future value of Ether through shares that track ETH’s price. The Grayscale Privacy ETF will invest in companies working on blockchain-based privacy technology.

However, until the registration statement is approved by the SEC, the funds will not be available for public purchase. This move comes as Grayscale continues to navigate a conflict with the SEC over converting its $17 billion Grayscale Bitcoin Trust (GBTC) into a spot Bitcoin ETF product.

In January 2021, Grayscale sued the SEC for denying its application, arguing that the SEC acted unfairly in treating crypto spot traded exchange-traded products differently from futures products. Grayscale claims that there is a 99.9% correlation between prices in the Bitcoin futures market and the spot Bitcoin market. Despite the SEC’s approval of several Bitcoin Futures ETFs, it has so far rejected every application for a spot Bitcoin investment product due to concerns about exposing investors to potential fraud and market manipulation.

Despite these challenges, Grayscale’s move to launch new crypto ETFs and manage its publicly traded financial products in-house demonstrates the company’s commitment to the cryptocurrency market and its belief in the long-term potential of digital assets.

In conclusion, Grayscale Investments’ launch of the Grayscale Funds Trust and its filing of three new cryptocurrency-focused ETFs is a significant development for the company and the cryptocurrency market as a whole. While the SEC’s approval of these new ETFs is still pending, Grayscale’s continued efforts to introduce crypto-focused investment products is a positive sign for the industry’s growth and adoption.

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QuadrigaCX Users to Receive Interim Distribution

by Blockchain News

Users of the now-defunct Canadian cryptocurrency exchange QuadrigaCX are expected to receive interim distribution of funds tied to bankruptcy proceedings in the coming weeks. Law firm Miller Thomson, which represents QuadrigaCX users, announced the news on May 8. Bankruptcy trustee Ernst & Young has consulted with estate inspectors to announce the interim distribution. In the near future, the trustee will post a Notice to Affected Users providing details about the manner and procedure of the distribution.

However, a small number of affected users are expected to receive a Notice of Disallowance of Claim, which means that the creditor’s claim has been revised or disallowed in the bankruptcy process. If users receive such a notice, they have the right to appeal the decision. Miller Thomson explained that users should review the reasons for the revision or disallowance and gather any necessary evidence to support their claim. The Trustee is likely to have issued a Notice of Disallowance if there was a discrepancy in the user’s proof of claim.

QuadrigaCX was once the largest cryptocurrency exchange in Canada before it became insolvent in February 2019. The exchange’s co-founder, Gerald Cotten, died in India, taking the private keys to QuadrigaCX’s offline storage systems to his grave. According to the Ontario Securities Commission (OSC), QuadrigaCX owes its affected clients an estimated $160 million.

In addition to losing access to cold storage, the OSC alleges that Cotten realized $86 million in crypto trading losses on the QuadrigaCX platform, which was then covered with users’ funds. Since then, bankruptcy trustee Ernst & Young has recovered $34.3 million worth of assets. The OSC stated that they did not identify any other assets beyond those identified by Ernst & Young.

The collapse of QuadrigaCX was a major blow to the Canadian cryptocurrency market, raising concerns about investor protection and regulatory oversight. The QuadrigaCX case highlighted the need for proper safeguards and measures to protect investors and prevent similar incidents from happening in the future.

The interim distribution of funds provides some relief to QuadrigaCX users, who have been waiting for over two years to receive any compensation for their losses. However, it remains to be seen how much users will actually receive and how long the bankruptcy proceedings will continue. The QuadrigaCX case serves as a cautionary tale for investors, highlighting the importance of conducting due diligence and being cautious when investing in cryptocurrencies.

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Grayscale Files for Three New Crypto ETFs

by Blockchain News

Grayscale Investments, the cryptocurrency asset manager, is seeking approval from the United States Securities and Exchange Commission (SEC) for three new cryptocurrency-focused exchange-traded funds (ETFs). The new funds include a Bitcoin Composite ETF, an Ethereum Futures ETF, and a Privacy ETF.

Grayscale’s Bitcoin Composite ETF will invest in exchange-traded products related to or backed by Bitcoin, including Bitcoin mining firms. The Ethereum Futures ETF, on the other hand, will offer indirect exposure to the potential future value of Ether through shares that track ETH’s price. The Grayscale Privacy ETF will invest in companies working on blockchain-based privacy technology.

Despite previous roadblocks from the SEC over crypto-related ETFs, Grayscale has filed a registration statement for the new ETFs. However, until the registration statement is approved, the funds will not be available for public purchase.

Grayscale also announced the launch of the Grayscale Funds Trust, a new arm of its business that allows it to manage many of its publicly traded financial products in-house. This move indicates the company’s growing confidence in its ability to manage its funds internally.

While Grayscale continues to navigate a conflict with the SEC over converting its $17 billion Grayscale Bitcoin Trust (GBTC) into a spot Bitcoin ETF product, the company remains optimistic about the future of crypto ETFs. In January 2021, Grayscale sued the SEC for denying its application, arguing that the SEC acted unfairly in treating crypto spot traded exchange-traded products differently from futures products. Grayscale claims that there is a 99.9% correlation between prices in the Bitcoin futures market and the spot Bitcoin market.

Despite the SEC’s approval of several Bitcoin Futures ETFs, it has so far rejected every application for a spot Bitcoin investment product due to concerns about exposing investors to potential fraud and market manipulation. However, Grayscale’s move to launch new crypto ETFs and manage its publicly traded financial products in-house demonstrates the company’s commitment to the cryptocurrency market and its belief in the long-term potential of digital assets.

In conclusion, Grayscale Investments’ filing of three new cryptocurrency-focused ETFs and the launch of its Grayscale Funds Trust is a significant step forward for the company and the cryptocurrency market as a whole. While the SEC’s approval of these new ETFs is still pending, Grayscale’s continued efforts to introduce crypto-focused investment products is a positive sign for the industry’s growth and adoption.

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Coinbase vs SEC: Legal Battle Heats Up

by Blockchain News

Coinbase, the largest US-based cryptocurrency exchange, has been embroiled in a legal battle with the US Securities and Exchange Commission (SEC) over regulatory clarity for trading digital assets. On May 4th, Coinbase’s chief legal officer Paul Grewal announced that the US Court of Appeals for the Third Circuit has responded to the complaint against the SEC, marking a significant development in the ongoing legal battle.

The court’s response was a text-only order, instructing the SEC to respond to Coinbase’s writ of mandamus within ten days. A writ of mandamus is a court order that compels an inferior government official to fulfill their official duties properly. The court also granted Coinbase the right to file a reply to the SEC’s response within seven days of the filing.

Coinbase filed a lawsuit in April, requesting that the court compel the SEC to publicly disclose its stance on a petition submitted several months prior. The petition posed 50 specific questions about the regulatory treatment of certain digital assets, covering topics such as how tokens are classified as securities and seeking clarification on various other matters.

Despite the lack of public response to the petition, the SEC has increased enforcement and issued warnings to crypto exchanges. The commission has even issued a Wells notice to Coinbase in the past, warning the company that the SEC may follow with an enforcement action.

Due to the ongoing regulatory issues faced by the company, US investment bank Citigroup has downgraded the shares of the crypto exchange from “buy” to “neutral,” and has also lowered its price target. The bank has cited “too many unknowns” as the reason for this downgrade. According to Citi analyst Peter Christiansen, the downgrade will remain in place until the regulatory “rules of the road” are better established in the United States.

The legal battle between Coinbase and the SEC highlights the need for greater regulatory clarity in the cryptocurrency industry. While the industry has seen rapid growth in recent years, the lack of clear guidelines from regulatory bodies has led to confusion and uncertainty for businesses and investors alike. As the battle between Coinbase and the SEC continues, it remains to be seen how the regulatory landscape for digital assets will evolve in the United States and beyond.

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Coinbase executive discovers ChatGPT jailbreak

by Blockchain News

An Executive from Coinbase Has Discovered a “Jailbreak” for the ChatGPT AI Tool, Which Predicts Bizarre Cryptocurrency Price Scenarios

Coinbase’s chief of business operations, Conor Grogan, recently made a statement in which he claimed to have found a “jailbreak” for the artificial intelligence application ChatGPT. Grogan published a snapshot of the findings from ChatGPT in a tweet on the 30th of April. The results revealed that the tool had given a 15% likelihood that Bitcoin will “fade to irrelevancy” by the year 2035, with values plummeting over 99.99%. Grogan’s tweet was sent on April 30. Additionally, ChatGPT predicted that there is a 20% chance that Ether will become irrelevant and approach price levels close to zero by the year 2035. Even less self-assured was the tool about Litecoin and Dogecoin, assigning odds of 35% and 45%, respectively, for each currency to fall to a value close to zero.

The artificial intelligence tool known as ChatGPT generates replies to prompts by using natural language processing. Grogan used the program to assign probability to a variety of political forecasts and other situations, including as the influence of AI on humans, the presence of aliens, and religion. A crazy forecast was made on ChatGPT that “aliens have visited Earth and are being covered up by the government.” This prediction was given a chance of 10%.

Grogan is a dedicated user of ChatGPT, and he provided others with a script that replicates the prompt that he used to build the tables. He came to the conclusion that the tool is “generally” a “big fan” of Bitcoin but is “more skeptical” when it comes to other cryptocurrencies.

As a tool for anticipating price movements and other trends in the cryptocurrency field, ChatGPT has gained a significant amount of popularity in recent months. The forecasts that it makes, however, should be taken with a grain of salt since they are based on probabilities and are not a guarantee of the future performance of the asset. Grogan’s discovery of a “jailbreak” also raises the possibility of a security breach since it enables the tool to make more accurate and possibly sensitive predictions.

In general, the use of artificial intelligence technologies inside the cryptocurrency market, such as ChatGPT, sheds insight on the expanding function of technology within the sector. As more traders and investors look to these tools for insights and forecasts, it will be crucial to keep in mind the limits of these tools as well as the possible hazards that they pose.

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Temasek invests in algorithmic currency system

by Blockchain News

Temasek, the government-owned investment firm of Singapore, has recently invested $10 million in Array, a developer of an algorithmic currency system based on smart contracts and artificial intelligence. Array has announced that the funding round marks its second, raising its valuation to over $100 million.

The new Temasek-backed algorithmic currency system is aimed at providing a more stable, efficient, and scalable asset than traditional cryptocurrencies like Bitcoin. The system is expected to have a variety of use cases, including payments, remittances, and investments.

Array’s smart contract platform, ArrayFi, is designed to enable decentralized applications built on top of its network and driven by its proprietary AI algorithm ArrayGo. ArrayGo operates independently, without any human or institutional control, and is triggered solely by market actions. According to a Medium blog post by the Array team, a traditional bonding curve is implemented manually to ensure the value of the token remains stable and predictable for investors and traders indefinitely. The bonding curve is implemented into a smart contract that governs the issuance and trading of the native token Ara (ARA). The smart contract platform also aims to protect Array users against “pump and dump” schemes.

Temasek’s investment in Array comes several months after the Singapore government admitted that the company suffered reputational damage due to investing in the collapsed crypto exchange FTX. In November 2022, Singapore’s Deputy Prime Minister Lawrence Wong argued that Temasek suffered more than just financial losses due to investing in FTX.

Despite suffering significant losses, Temasek continues to invest in cryptocurrency projects. In April, Temasek also participated in a $10 million series A round for the United States-based impact-verification and intelligence firm BlueMark.

Temasek is fully owned by the Ministry of Finance but operates independently. The company was forced to write down its entire $275 million FTX investment, which accounted for just 0.09% of Temasek’s $403 billion portfolio as of March 2022. Despite this loss, Temasek continues to be a major investor in various industries, including technology, healthcare, and financial services.

In conclusion, Temasek’s investment in Array highlights the company’s continued interest in cryptocurrency projects despite significant losses in the past. The new algorithmic currency system developed by Array aims to provide a more stable and efficient asset than traditional cryptocurrencies, with a variety of use cases such as payments, remittances, and investments. With the backing of Temasek, Array’s valuation is set to exceed $100 million, indicating significant potential for growth and development in the future.

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US Crypto Tax Law Study

by Blockchain News

Researchers from Indiana University and the University of Maine recently collaborated on a study that investigated the present condition of tax legislation in the United States regarding cryptocurrencies. The findings of the research are summarized in a series of recommendations that are directed for the Internal Revenue Service (IRS). If these suggestions were carried out, it would be impossible for taxpayers to deduct losses from bitcoin investments against profits from other types of investments.

The purpose of this study paper, which is named “Crypto Losses,” is to shed light on the myriad of different types of losses that may be incurred by firms and people who have invested in cryptocurrencies. In addition to this, it suggests a new tax structure to be applied to such losses.

At this time, the IRS has not issued definitive instructions on cryptocurrencies; nonetheless, bitcoin losses normally adhere to the same taxes regulations as other types of capital assets. In most cases, they may be deducted against profits from the sale of a capital asset, but not against gains from other sources, such as income. However, there are some restrictions regarding the times and ways in which deductions can take place.

For example, the amount of a loss that may be deducted for bitcoin transactions that are classified as a “sale” or “exchange” will be limited. On the other hand, taxpayers are eligible to deduct the full amount of their losses if their cryptocurrency was lost, stolen, or destroyed in any other manner (such as by burning it or through some other destructive method).

According to the findings of the research, the existing tax system does not adequately account for bitcoin losses, and it suggests adopting a different strategy in order to solve this problem. The tax system that is being suggested would make a difference between losses that are incurred as a consequence of transactions and those that are the result of the irreversible loss of assets.

According to the framework that has been presented, the only way for taxpayers to deduct losses related to cryptocurrencies that emerge from transactions is to do so against other types of capital gains. On the other hand, losses incurred as a consequence of the irretrievable destruction of assets would be totally deductable against other types of income.

In general, the findings of the research underscore the need for more clarity in the regulations governing the taxation of cryptocurrencies, as well as a more nuanced approach to the problem of how to handle bitcoin losses. Because of the widespread use of cryptocurrencies, it is imperative that the Internal Revenue Service (IRS) remain current with the rapidly evolving world of digital assets and provide transparent direction to taxpayers about their respective tax responsibilities.

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Hong Kong Central Bank Urges Crypto-Friendly Banking

by Blockchain News

The Hong Kong Monetary Authority (HKMA) has issued a circular on April 27th instructing authorized institutions, also known as “AIs,” to provide banking services to cryptocurrency firms while adopting a risk-based approach to Anti-Money Laundering (AML) measures. This circular comes as a significant move towards legitimizing cryptocurrencies in the region and bridging the gap between traditional banking and the rapidly growing digital assets industry.

The HKMA’s directive is part of its broader efforts to regulate the cryptocurrency market in Hong Kong, a region that has been grappling with the lack of clarity surrounding cryptocurrencies and their legal status. This directive requires authorized institutions to assess the risks associated with each corporate customer, including cryptocurrency firms, and implement appropriate measures to mitigate those risks.

This move is a critical step towards the integration of cryptocurrencies into the mainstream financial system in Hong Kong, where digital assets have long struggled to gain legitimacy. Cryptocurrency firms in Hong Kong have often faced significant challenges in accessing banking services, leading to operational difficulties, stifling innovation, and impeding growth. With this new directive, the HKMA aims to ensure that cryptocurrency firms can access necessary banking services, enabling them to operate efficiently and safely within the existing regulatory framework.

The HKMA has been actively working towards regulating the cryptocurrency market in the region, with plans to launch its own central bank digital currency (CBDC) in the coming years. The HKMA’s efforts to regulate the cryptocurrency market, coupled with its CBDC initiative, highlight the region’s increasing interest in the digital assets industry and its potential to transform the traditional financial system.

In conclusion, the HKMA’s directive to authorized institutions to provide banking services to cryptocurrency firms is a significant move towards legitimizing cryptocurrencies in Hong Kong. This directive will not only help bridge the gap between traditional banking and the digital assets industry but will also enable cryptocurrency firms to access necessary banking services, leading to operational efficiencies and growth. With the HKMA’s increasing interest in the digital assets industry, we can expect to see further developments in the coming years, ultimately leading to the integration of cryptocurrencies into the mainstream financial system.

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Revolut Integrates Crypto Tax Service

by Blockchain News

An automatic tax reporting solution for bitcoin transactions has been incorporated by Revolut, a digital financial services firm that has more than 28 million customers throughout the globe. The financial technology company has formed a partnership with the cryptocurrency tax solution provider Koinly in order to simplify the tax filing process for its customers. Users of Revolut who have their accounts integrated with Koinly will have the ability to produce cryptocurrency tax reports, which will make it possible for them to assess profits and losses based on their bitcoin transactions. This will make the often complicated process of filing taxes easier, particularly for those who have more than one cryptocurrency exchange and wallet.

As a result of the increased attention that tax authorities all over the globe are paying to the cryptocurrency industry, more and more people are turning to the usage of bitcoin tax software. Danny Talwar, the head of tax at Koinly, pointed out that many cryptocurrency traders have many exchanges and wallets, which makes it very difficult to maintain accurate records. Crypto tax software helps save time and automates tax reporting, which is especially helpful given the stringent and burdensome record-keeping rules that apply internationally.

Since December of 2017, Revolut has been providing bitcoin custody services, and the most recent addition to its cryptocurrency offerings is the inclusion of an automated tax reporting service. The regulatory permission for the digital bank has been obtained in a number of countries, including a banking license in Lithuania in late 2018. In September 2022, the United Kingdom’s Financial Conduct Authority granted the fintech company permission to sell bitcoin goods and services inside the nation after reviewing the company’s proposed plans.

The incorporation of the automated tax reporting service is a component of Revolut’s overall plan to grow its services all over the globe while adhering to the regulatory standards imposed by a variety of nations. Users of Revolut will find it much simpler and more convenient to comply with tax legislation and keep up with the rapidly shifting regulatory environment if they utilize tax reporting software.

In conclusion, the integration of Revolut with Koinly’s automated tax reporting service is a big step in simplifying the process of tax reporting for the cryptocurrency users of Revolut’s platform. Because of the continued expansion of the bitcoin industry and the accompanying rise in regulatory scrutiny, automated tax reporting solutions are quickly becoming an absolute must. This is a strong evidence of Revolut’s dedication to provide creative solutions that suit the increasing demands of its consumers, and the decision to offer this service to Revolut’s users is a clear indicator of that commitment.

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Bitcoin (BTC) $ 27,201.29 1.50%
Ethereum (ETH) $ 1,905.86 2.17%
Litecoin (LTC) $ 94.70 0.24%
Bitcoin Cash (BCH) $ 114.59 0.96%