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Silvergate suspends dividends to preserve ‘highly liquid balance sheet’.
January has been a rough month for Silvergate, with the dividend halts coming just a few weeks after it announced a Q4 2022 loss of $1 billion and laid off 200 employees.
California-based crypto bank Silvergate has suspended dividend payouts to preserve its “highly liquid balance sheet.”
In a Jan. 27 announcement, the firm stated that it is halting “the payment of dividends on its 5.375% Fixed Rate Non-Cumulative Perpetual Preferred Stock, Series A, in order to preserve capital.”
The company outlined that it made the decision to weather the storm of crypto winter but stressed that it still maintains a “cash position in excess of its digital asset customer-related deposits.”
“This decision reflects the Company’s focus on maintaining a highly liquid balance sheet with a strong capital position as it navigates recent volatility in the digital asset industry.”
“The Company’s Board of Directors will re-evaluate the payment of quarterly dividends as market conditions evolve,” the firm added.
The announcement comes just 11 days after the company posted a hefty $1 billion net loss in its Q4 2022 report on Jan. 17. Silvergate attributed its poor performance to the overall sour market sentiment, which has seen investors opt for a “risk-off” approach over the past year.
In the Q4 report, Silvegate CEO Alan Lane also used similar language to the latest announcement, noting that the company is still bullish on the crypto sector but is working to maintain “a highly liquid balance sheet with a strong capital position.”
The news of suspended dividends on Friday was met with notable losses in both its preferred (SI-PA) and common (SI) stock prices.
According to data from Yahoo Finance, the price of SI-PA dropped by 22.71% to $8.85, while SI declined by 3.76% to sit at $13.58 by market close.
Zooming out also paints a grim picture for SI-PA and SI, with the share prices declining by 60% and 87.46% over the past 12 months.
This is not the only action the firm has taken to shore up its coffers this month, after it announced on Jan. 5 that it had laid off 200 employees — representing 40% of its headcount — in a bid to keep afloat.
SBF to forfeit $700M worth of assets if found guilty of fraud.
While most of SBF’s assets have been seized, Federal prosecutor Damian Williams outlined that the government is also looking to take control of three of his affiliated Binance accounts.
According to new court filings, disgraced FTX founder Sam Bankman-Fried (SBF) will be subject to the forfeiture of roughly $700 million worth of assets if he were to be found guilty of fraud.
In a court document filed on Jan 20, U.S. federal prosecutor Damian Williams outlined that the “government respectfully gives notice that the property subject to forfeiture” covers a long list of assets across fiat, shares and crypto.
The filings state that most of the assets were seized by the government between Jan.4 and Jan. 19, while it is also looking to lay claim to “all monies and assets” belonging to three separate Binance accounts.
Looking at the list of seized assets, the biggest allocations include 55,273,469 Robinhood (HOOD) shares worth roughly $525.5 million at the time of writing, $94.5 million held at Silvergate Bank, $49.9 million held at Farmington State Bank and $20.7 million at ED&F Man Capital Markets, Inc.
The government has submitted a forfeiture order in this instance as it alleges that these assets have been obtained unlawfully via the use of customer deposits.
While members of SBF’s inner circle such as Caroline Ellison and Gary Wang have fessed up and cooperated with prosecutors over their roles in FTX’s collapse, the man himself has pleaded not guilty to all eight criminal charges laid against him.
In other FTX-related news, a Jan. 18 report from the Wall Street Journal (WSJ) highlighted poorly aged marketing that the exchange released in Africa not too long before it went bankrupt in November.
The campaign in question touted USD-pegged stablecoins as safer investments than local currencies concerning inflation, while also promoting the potential to earn 8% yearly via staking rewards programs.
While those inflation sentiments may generally be true given that African currencies such as the Nigerian naira and Ghanaian cedi have plummeted against the USD, any African FTX customer persuaded by the marketing of course went on lost funds when the firm went bankrupt.
Iran and Russia want to issue new stablecoin backed by gold.
The potential stablecoin aims to enable cross-border transactions instead of fiat currencies like the U.S. dollar, the Russian ruble or the Iranian rial.
The Central Bank of Iran is reportedly cooperating with the Russian government to jointly issue a new cryptocurrency backed by gold.
According to the Russian news agency Vedomosti, Iran is working with Russia to create a “token of the Persian Gulf region” that would serve as a payment method in foreign trade.
The token is projected to be issued in the form of a stablecoin backed by gold, according to Alexander Brazhnikov, executive director of the Russian Association of Crypto Industry and Blockchain.
The stablecoin aims to enable cross-border transactions instead of fiat currencies like the United States dollar, the Russian ruble or the Iranian rial. The report notes that the potential cryptocurrency would operate in a special economic zone in Astrakhan, where Russia started to accept Iranian cargo shipments.
Russian lawmaker Anton Tkachev, a member of the Committee on Information Policy, Information Technology and Communications, stressed that a joint stablecoin project would only be possible once the digital asset market is fully regulated in Russia. After multiple delays, the Russian lower house of parliament once again promised to start regulating crypto transactions in 2023.
Iran and Russia are among the countries that banned their residents from using cryptocurrencies like Bitcoin and stablecoins like Tether (USDT) for payments. At the same time, Iran and Russia have been actively working to adopt crypto as a tool of foreign trade.
In August 2022, Iran’s Industry, Mines and Trade Ministry approved the use of cryptocurrency for imports into the country amid ongoing international trade sanctions. The local government said the new measures would help Iran mitigate global trade sanctions. Iran subsequently placed its first international import order using $10 million worth of crypto.
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Crypto Whale Invests $18k in Move-to-Earn Coin Fight Out – Here's What's Attracting the Big Money.
The Move-to-Earn (M2E) movement has proved that it is not just a hype but a worthy course aiming to change how people live. Ecosystems like STEPN, Sweat Coin and Step App are gradually becoming competitive by incorporating new tech solutions in Web3.
Still, fitness enthusiasts do not feel quite at home, mainly because of the high costs associated with personal trainers and fitness boutiques. On the bright side, FightOut (FGHT), the newest kid on the block, is here to change the narrative.
The team behind the new M2E ecosystem is removing all barriers to entry to provide an opportunity for everyone to benefit from living a healthy lifestyle. At FightOut, a healthy lifestyle means more than just weights and machines.
Every workout is personalized according to the user's needs, goals, and abilities. Bringing down the current prohibitive costs associated with the fitness industry is FightOut's biggest goal. In reality, community members would be rewarded for their effort, progress, and the value that such a lifestyle brings to the wider society.
Investors interested in this niche M2E sector of the crypto economy are looking no further than FightOut. It's barely a day since an Ethereum whale spent over $18,000 to buy FGHT, the native token powering FightOut's ecosystem.
FightOut's presale has been selling fast as investors reorganize the constituents of their crypto portfolios, with the disastrous 2022 behind us. Slightly over $2.67 million has been raised by selling 1 FGHT for $0.0166.
Investors are taking advantage of a 50% presale bonus to maximize their holdings. The presale is valid until $5 million has been raised. FightOut's presale will close on March 31, with the first centralized exchange scheduled for April 5. FGHT will debut on the CEX at $0.0333.
US lawmakers under pressure following FTX collapse.
In response to FTX's fall, United States lawmakers are reevaluating the crypto industry's regulatory needs for 2023.
Legislators in the United States seem to be reevaluating the crypto industry and its regulatory needs in light of FTX's collapse. According to the Wall Street Journal, since the crypto exchange filed for bankruptcy in November, lawmakers have been under pressure to set a new regulatory framework for cryptocurrencies.
Several proposals are in the works that would apply existing banking, securities, and tax rules to cryptocurrencies, and lawmakers are calling on the Securities and Exchange Commission (SEC) to adopt an aggressive approach to the crypto market.
In a December House hearing, Rep. Jake Auchincloss, who is also a member of the bipartisan Congressional Blockchain Caucus, reportedly noted that "it’s time for the blockchain investors and entrepreneurs to build things that matter or to lose more credibility,” adding that in 14 years crypto has only delivered "white papers and podcasts".
Senator Roger Marshall, an advocate for blockchain technology's potential to stop fraud, is also pushing for tighter regulation in the United States. "Someone needs to convince me that it's not all just a Ponzi game," he claimed.
Among the few legislators willing to stand up for the crypto industry, Rep. Patrick McHenry stated that it is necessary "to separate out the bad actions of an individual from the good created by an industry and an innovation.” The House Financial Services Committee will be led by McHenry in the new Congress.
FTX former CEO Sam Bankman-Fried's lobby in Washington was focused on a bill that would give the Commodity Futures Trading Commission (CFTC) authority to regulate cryptocurrencies. The bill was expected to be included in the budget spending package for 2023, but now it's unlikely to advance due to the past weeks' developments.
As reported by Cointelegraph, Bankman-Fried was a significant donor to Republicans and Democrats in Washington. Earlier this year, he considered spending up to one billion dollars to help influence 2024 presidential election campaigns.
MAPay and its crypto subsidiary MPayz, a global healthcare technology firm with a focus on decentralized payment networks, unveiled its partnership with the Ministry of Public Health and Family Welfare in the Government of Maharashtra, India, to provide NFT technology that will store personal health data on the blockchain for the first time. Built on Algorand, the first deployment will introduce upwards of 100 million NFTs for this purpose.
MAPay will use its proprietary NFT technology to enable secure, decentralized storage. This application for NFTs will help eliminate intermediaries in the healthcare system that routinely cause bottlenecks, introduce risk, and drive up costs for all parties – including patients; public, private, and government health providers; insurance companies; and banks. See the full press release here:
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Stay up to date on the project's launch date to get in before institutional money moves in. Click the link to join the telegram group!
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Crypto Twitter confused by SBF’s $250M bail and a return to luxury.
The crypto community raised many questions about how FTX’s former CEO was able to secure bail and the conditions it will come with.
Crypto Twitter has seemingly taken issue with Sam Bankman-Fried’s $250 million bail bond, which allows him to spend Christmas in his parent’s Palo Alto home without paying a single dime upfront.
The former FTX CEO arrived in New York from the Bahamas on Dec. 21 and appeared in court on Dec. 22, where he was released on bail via a “personal recognizance bond” — essentially a written promise from the defendant that they will show up for future court appearances and not engage in any illegal activity while out on bail.
According to the release agreement filed on Dec. 22, no cash was required to be deposited with the court, but the bond conditions see to it that Bankman-Fried’s parent’s five-bedroom home in Palo Alto will be used as collateral for the $250 million bond.
Some of the crypto community on Twitter were initially confused by the $250 million no-upfront-cost bail conditions, questioning how Sam Bankman-Fried was able to post the $250 million bail figure after he previously claimed he had less than $100,000 in his bank account.
Under the bail agreement, the bond is only paid up if Bankman-Fried doesn’t appear for future court appearances or violates other bail conditions, such as a requirement to surrender to serve a court sentence.
Meanwhile, those who reviewed the court documents instead shared concerns over Bankman-Fried’s guarantors — including his father, Allan Joseph Bankman, and mother, Barbara Fried — who would be on the hook should SBF violate his bail conditions.
Host of the Wolf of All Streets podcast, Scott Melker, tweeted on Dec. 23 that while SBF didn’t have to pay $250 million to stay out of jail, if he “skips bail,” his parents will have to work “17 extra jobs” to come up with the money.
Vocal Crypto Twitter user Autism Capital elaborated on the matter, explaining that while Bankman-Fried has not had to pay any money upfront, he has put his parents, relatives and non-relatives in a difficult situation.
US Financial Stability Oversight Council urges congressional action on crypto.
According to the FSOC, issues at FTX had “precipitated price decreases in Bitcoin and other crypto-assets” but “had a limited impact on the broader U.S. financial system.”
Officials with the United States Financial Stability Oversight Council, or FSOC, have recommended U.S. lawmakers pass legislation aimed at addressing regulatory gaps for crypto-related activities.
In its annual report released on Dec. 16, the FSOC recommended members of Congress pass legislation granting “explicit rulemaking authority for federal financial regulators over the spot market for crypto-assets,” noting that tokens previously identified as securities would be exempt. The council also noted the lack of a comprehensive regulatory framework — specifically addressing stablecoins and visibility and supervision of crypto firms — in the United States.
The FSOC cited the recent downfall of crypto exchange FTX as part of its background information in recommending actions on digital assets. According to the council, issues at FTX had “precipitated price decreases in Bitcoin and other crypto-assets” but “had a limited impact on the broader U.S. financial system.”
“Risks from this speculative, volatile, and what I believe is a largely non-compliant market put investors at risk,” said Securities and Exchange Commission chair Gary Gensler in the FSOC report. “This is why bringing intermediaries and issuers of crypto securities tokens into compliance is so important. While the risks from the crypto markets generally do not appear to date to have spread to the traditional financial sector, we must remain vigilant to guard against that possibility.”
The annual report reiterated calls for legislation as one from the FSOC in October, which the council released in accordance with U.S. President Joe Biden’s executive order on crypto. At the time of publication, both the SEC and the Commodity Futures Trading Commission have argued in favor of their respective agencies taking a leading role in regulating digital assets in the United States — the report did not seem to suggest which body should assume responsibility upon instructions from Congress.
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Get in on the Ground Floor: Presale for the New Metaverse is Open.
RobotEra is one of the highest-potential projects of 2022 and investors are still able to get in on the ground floor with TARO tokens on sale for just $0.02 in the first stage of the presale.
The new play-to-earn (P2E) and metaverse gaming project has excited investors and analysts because of the variety of ways players can earn rewards and monetize their experience.
RobotEra is a new GameFi project that we've dubbed the best play-to-earn game of the year as it allows players to rebuild a metaverse world and create active and passive revenue in a number of ways.
Players must rebuild the destroyed planet Taro after a cataclysmic event, purchasing metaverse plots of land and improving them with infrastructure and buildings.
On their metaverse plots, players are free to build what they want, from roads and houses to concert venues, museums and more. Players can charge an entry fee for events, or sell buildings to other players for their worlds - billboard space can also be sold to advertisers.
No coding knowledge is needed to build, with RobotEra utilizing custom building tools - furthermore, players can add 3D scenes, sounds, user interaction and physics with few limitations on what can be developed.
RobotEra's founders believe more utility and revenue drivers will emerge in time with players able to build their worlds how they see fit.
Players need to build robot companions to play the game and rebuild Taro and they can also be upgraded and customized and then sold to other players as NFTs.
TARO tokens can be staked for three benefits - helping to rebuild Taro, earning a passive income and granting voting rights on future project developments in a community DAO.
Breaking: 127K Bitcoin (BTC) Worth Over $2 Billion On The Move
Bitcoin (BTC) price fell suddenly on Monday, breaking the $16.5k support level. Analysts expect Bitcoin to see a pullback to $14,500 to confirm a bottom.
However, some believe the BTC price can rise from current levels based on the historical bear markets data. Meanwhile, whales moved massive amounts of Bitcoin this month.
https://coingape.com/127k-bitcoin-btc-worth-over-2-billion-move/?gh
Smart contracts to power day-to-day Web3 company operations.
The project aims to help decentralized autonomous companies by providing an operating system that integrates various tools for governance and management.
Web3 firm MetisDAO Foundation launched Koris, a smart contract-based platform that allows decentralized organizations to operate and manage communities through an end-to-end operational infrastructure.
In an announcement sent to Cointelegraph, the company said that Koris aims to turn decentralized autonomous organizations (DAOs) into DACs or “decentralized autonomous companies” by providing an operating system consisting of various governance and management tools.
The team believes that while DAO platforms have collective decision-making and operational functions, they can be taken further by providing tools to help grow Web3 businesses.
Chelsea Kubo, the co-founder and COO of Koris, said that there is a growing demand for DAOs with increased management transparency. She added:
“These infrastructures and management models are reflected within a DAC, and KORIS works as a platform to help businesses excel in a web3 space. Having said that, it is only time until large enterprises and web2 companies begin to make this move.”
The project is currently in its closed beta phase. However, the company said that in the future, anyone will be able to create their own DAC on Koris. This includes established Web3 firms and people who want to start their own community.
DAOs have gained a lot of support to develop recently. Apart from Koris, the World Economic Forum (WEF) has also voiced its support for DAOs by releasing a toolkit on Jan. 17. The document contains the work of more than 100 contributors and aims to give a starting point for DAOs in developing effective strategies in governance, operations and legal matters.
In an episode of The Agenda podcast, co-founders of DAOs like TheLaborDAO and theCaféDAO sat down with Cointelegraph's Jonathan DeYoung and Ray Salmond to discuss the state of workers’ rights in the United States. The group explored how DAOs can strengthen the rights of workers and how blockchain can play a part.
Why Crypto Prices Are Lower Today But A Rebound is On the Cards.
Crypto prices have fallen a little today after over a week of consistently bullish news, but investors need not be worried as there are several opportunities left to capitalise on in the market.
Although the retracement has only been in single digits, there are some who are lamenting the recent price decline in the crypto markets after the recent bullish streak over the course of the last few weeks.
The lower crypto prices are nothing unusual considering the broader market; retracements are normal and to be expected.
Some speculators believe that the markets will rebound strongly in the coming weeks and months, and as such they are bullish on a variety of different projects moving forward.
In particular, speculators who have a high risk tolerance are considering investing in early stage projects where they believe that they will be able to find the highest possible returns on their investment. Meta Masters Guild is a gaming guild that creates its own games, and thus far has been welcomed by its community who are hugely bullish on the project forward, particularly thanks to the kart racing game that is exciting the world of play to earn racing games.
Calvaria is a brand new play to earn gaming ecosystem whose presale for their native token RIA has been selling out extremely quickly over the course of the last few weeks.
The RIA presale has now entered its final stage, and there are fewer than $300k worth of RIA tokens left to be sold before the presale concludes in 12 days.
This means that anyone who wants to secure RIA tokens at a significantly discounted price ought to head over to the Calvaria website as soon as possible, before the token begins listing on a range of centralised exchanges.
Huobi and Solaris crypto-to-fiat debit card launches in the EU.
The Visa-backed debit card will allow Huobi users in the European Economic Area to pay from their crypto accounts at point-of-sale stations globally.
As the crypto space continues to expand into the mainstream, bridging the gap between digital and fiat currencies is a priority for many legacy financial institutions.
Cryptocurrency exchange Huobi announced its partnership with Solaris, a European financial services provider, to launch a crypto-to-fiat debit card.
The program, approved by Visa, allows Huobi users to use their digital assets globally at the point of sale. Users residing in the European Economic Area (EEA) will have access to the card beginning in the second quarter of 2023.
The EEA comprises all 27 European Union (E.U.) member states, as well as Iceland, Liechtenstein and Norway.
Commenting on the partnership, Andrea Ramoino, the chief strategy officer at Solaris, hinted at future developments in its collaboration with Huobi.
“This is just the first step in our partnership as we look ahead to delivering more payment options to users in the EEA region and beyond.“
This is not the first crypto-to-fiat card available to residents of the E.U. In 2020, Binance launched its own Visa-accredited crypto-to-fiat card, which allows Europeans to pull funds straight from their Binance accounts.
Outside of the E.U., Visa has been an active proponent in bridging the crypto-fiat gap. In October 2022, Blockchaincom announced its partnership with Visa to offer a crypto debit card, which is only available to residents of the United States.
Prior to its collapse, FTX had also partnered with Visa to offer a debit card in 40 countries.
Most recently, the financial service provider worked with the fintech company, ZELF, to launch an anonymous debit card with a crypto recharge. This allows users to open a checking account based on the U.S. dollar with only their name, email and phone number.
Before the start of 2023, Visa also hinted at a feature allowing users to auto-pay bills from their crypto wallet.
Ripple exec expects more crypto acquisitions by TradFi in 2023.
Crypto acquisitions in 2023 will further strengthen the industry in the aftermath of casualties like the FTX collapse, a Ripple exec predicted.
The cryptocurrency industry will see increased consolidation in 2023 as healthier companies acquire more crypto and blockchain companies, according to a senior executive at Ripple.
Sendi Young, Ripple’s managing director for Europe, took to Twitter on Jan. 9 to share a set of industry predictions for 2023, expressing confidence about crypto in the near future.
According to Young’s forecast, the coming year will bring many acquisitions in the blockchain and crypto industry, which will help such companies and startups fill the gaps in their capabilities. The acquisitions will further strengthen the industry in the aftermath of casualties like the FTX collapse as well as other issues experienced by firms like Celcius, Voyager, Three Arrows Capital and others, the Ripple exec noted.
Young also predicted that cryptocurrency and blockchain firms will be increasingly acquired by traditional financial (TradFi) companies and other established companies in 2023.
Young’s predictions about the state of crypto acquisitions in 2023 come amid the increasing interest by traditional finance giants in buying subsidiaries of the now-defunct crypto exchange FTX. As many as 117 financial and strategic counterparties have expressed willingness to purchase one or more of FTX’s branches like FTX Japan, FTX Europe, LedgerX and Embed, according to a court filing from Jan. 8.
The cryptocurrency industry has seen some major acquisitions recently, with Mike Novogratz’s Galaxy Digital acquiring Argo Blockchain’s flagship mining facility Helios for $65 million in late December. According to Novogratz, the Helios mining deal was a transformative acquisition for Galaxy as the firm works to increase its exposure to the Bitcoin mining sector.
Among other predictions, Young also forecasted that 2023 will see greater adoption of fiat-backed stablecoins as institutions realize the benefits of blockchain for real-time merchant settlement.
DeFi auditor nets $40,000 for identifying Uniswap vulnerability.
A security firm flagged a now-fixed vulnerability to Uniswap, highlighting the potential for reentrancy attacks on the protocol’s Universal Router smart contract.
Uniswap’s recently launched bug bounty program has led to the discovery of a now-fixed vulnerability of the protocol’s Universal Router smart contract.
The automated market maker released two new smart contracts to its platform in November 2022. Permit2 allows token approvals to be shared and managed across different applications, while Universal Router unifies ERC-20 and nonfungible tokens (NFTs) swapping into a single swap router.
Uniswap also advertised a lucrative bug bounty program to identify potential vulnerabilities in its smart contracts toward the end of 2022 as it looked to assure the safety and efficacy of its protocol.
Smart contract security and auditing firm Dedaub announced that it had received a bug bounty after flagging a vulnerability in the Universal Router smart contract that would have allowed reentrancy to drain user funds mid-transaction.
According to Dedaub’s breakdown, the Universal Router allows users to perform diverse actions including swapping multiple tokens and NFTs in one transaction.
The router embeds a scripting language for a wide variety of token actions, which could include transfers to third party recipients. If correctly implemented, transfers would go to the recipient within specified parameters.
However, Dedaub identified a vulnerability in which a third-party code was invoked during the transfer, allowing the code to re-enter the Universal Router and claim any tokens that were temporarily in the contract.
Dedaub then suggested a straightforward remedy, advising the Uniswap team to add a reentrancy lock to the core execution of the new router. Uniswap awarded the auditing firm a total of $40,000 for flagging the vulnerability. The amount included a 33% bonus for reporting the issue during Uniswap’s bonus period in November 2022.
Fiji elects pro-Bitcoin prime minister Sitiveni Rabuka.
Fiji elects a pro-Bitcoin prime minister, signaling a positive future for Bitcoin adoption in the pacific island nation.
A newly elected pro-Bitcoin Prime Minister has taken office in the Pacific Islands of Fiji. The new leader, Sitiveni Rabuka, took the Fijian office on Dec. 24.
Lord Fusitu’a, a Tongan noble and a former member of the Tongan parliament, took to Twitter to share the news from his neighboring nation. Fusitu’a stated that he had explained to Rabuka step by step “how Fiji can do Bitcoin legal tender like Tonga,” and there could be two “Legal Tender Bills for the Pacific in 2023.”
Lord Fusitu’a explained to Cointelegraph in Twitter messages that “The new PM is definitely pro-Bitcoin”
“He asked to meet with me which we did via zooms since last year to walk him through step by step, how he could adopt bitcoin legal tender.”
Tonga’s timeline for introducing Bitcoin as a legal tender is public and could pass as early as February 2023. Fiji faces similar economic and developmental challenges to Tonga due to its location and history. However, with almost 900,000 people, Fiji’s population is more than nine times the size of Tonga.
The potential for Bitcoin to improve financial inclusion in Fiji is particularly significant given the country’s geography and economic situation. Located in the Pacific Ocean, Fiji is made up of over 330 islands. It is classified as a middle-income country but still faces significant development challenges, including high poverty rates, limited access to financial services and energy dependence on fossil fuels.
Indeed, the World Bank reports that remittance into Fiji is over 11% of its GDP. Plus, while Fiji’s National Financial Inclusion Strategy reports strong growth in financial inclusion in recent years, just half of the female population has access to a bank account. Bitcoin could act as a tool to improve remittances and bank the unbanked, following El Salvador’s example.
FTX collapse calls for ‘prudent regulation’ in the UK.
The United Kingdom is taking cautionary lessons from the collapse of FTX as calls for greater regulation come from public and private sector institutions.
The collapse of FTX is being viewed as a cautionary tale and a precursor for more prudent regulation by public and private sector players in the United Kingdom.
Bank of England deputy governor Sir Jon Cunliffe made headlines ahead of the Christmas weekend in an interview with Sky News, outlining his belief that greater protection needs to be afforded to investors in the U.K. looking to gain exposure to cryptocurrency markets.
Cunliffe stressed that prospective cryptocurrency users and investors should have a structure to invest in the asset class that ensures similar consumer protection and integrity to conventional financial markets.
The deputy governor highlighted increased interest in cryptocurrency markets from financial institutions and retail users as a driving force behind the need for greater regulatory oversight in the country:
“We had banks and investment funds and others who wanted to invest in it and I think we should think about regulation before it becomes integrated with the financial system and before it becomes a systemic problem.”
Cunliffe also used the collapse of FTX as an example where existing regulatory parameters guiding the traditional finance sector may have provided protection to users that have been left out of pocket:
“We saw things like clients’ money appears to have gone missing, conflicts of interest between different operations, transparency, audit and accounting.”
Drawing parallels to the gambling sector in the United Kingdom, Cunliffe said that investors should have access to a regulated environment that prevents losing access to funds as was the case in the collapse of FTX.
Cointelegraph reached out to Mitch Mechigian, partner at investment firm Blockchain Coinvestors, for more insight into the current regulatory environment for the cryptocurrency and blockchain ecosystem in the United Kingdom.
South Korean court freezes $92M in assets related to Terra tokens.
The CEO of Terraform Labs’ affiliate firm Kernel Labs reportedly held the largest amount in illegal proceeds from Terra.
More than six months after the collapse of the Terra ecosystem, South Korean authorities continue to investigate and freeze the funds of persons involved in Terra.
After seizing 140 billion won ($108 million) from Terra co-founder Shin Hyun-Seong in November, the Seoul Southern District Court has recently ruled to confiscate more assets related to Terra.
The South Korean court has ordered to freeze of 120 billion won ($92 million) in assets of former and incumbent CEOs of Terraform Labs’ affiliate firm Kernel Labs, The Korea Economic Daily reported on Dec. 20.
Founded in 2018, Kernel Labs is a blockchain consultancy firm focused on decentralized applications and blockchain payment systems. Kernel Labs is believed to have close ties with Terraform Labs, as CEO Kim Hyun-joong once reportedly served as vice president of engineering at Terraform Labs. According to some sources, Kernel Labs employees also worked at the South Korean office of Terraform Labs.
According to the new report, the Seoul Southern District Court has accepted the prosecution's request to seize the property of seven people involved in selling pre-issued Terra tokens to make astronomical profits.
Kernel Labs CEO Kim is one of the persons involved in the case, reportedly holding the largest amount in illegal proceeds from Terra. Prosecutors estimated Kim’s illegal gains to amount to at least 79 billion won ($61 million). Prosecutors also found that another Kernel Labs executive, a former CEO, received about 41 billion won ($31 million) in illegal proceeds from Terra.
Kim reportedly made some major real estate purchases in South Korea in 2021. In November, he bought a building in Gangnam-gu, the most expensive area in Seoul, for 35 billion won ($27 million). In June, he also purchased an apartment in Seongdong-gu for about 9 billion won ($7 million).
The news comes amid global authorities continuing to search for Terraform Labs' controversial founder and CEO Do Kwon.
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White House silent on whether it will return $5.2M in donations from SBF.
A White House spokesperson dodged point-blank questioning on whether President Joe Biden is planning to return the political donations from Sam Bankman-Fried.
White House press secretary Karine Jean-Pierre has declined to answer questions from a reporter on whether United States President Joe Biden will return the $5.2 million in campaign donations previously given by FTX founder Sam Bankman-Fried.
“Will the president return that donation?” Associated Press reporter Zeke Miller asked in a Dec. 13 press briefing. “Does he call on all politicians who got campaign donations that may have come from customer money to return those funds?”
“I'm covered here by the Hatch Act,” Jean-Pierre responded, adding she was “limited on what I can say.”
”Anything that's connected to political contributions, from here I would have to refer you to the DNC,” she said, referring to the Democratic National Committee, the governing body of the U.S. Democratic Party,.
The Hatch Act is a federal law prohibiting those employed in the executive branch of government from being involved in political campaign activities.
“I’m asking the president’s opinion though,” Miller pressed. Jean-Pierre repeated that she was “covered by the Hatch Act,” adding:
“I just can't talk to political contributions or anything related to that I cannot speak about it from here.”
Miller again pushed for Jean-Pierre’s response on Biden’s opinion, bushe said she couldn’t speak about “even his opinion, even his thoughts about the contributions, donations — I cannot speak about that from here.”
Bankman-Fried was charged with violations of campaign finance laws on Dec. 13, including contribution violations and obstructing the Federal Election Commission’s functions, along with making contributions in the name of others.
He was the second-largest “CEO-contributor” to Biden’s 2020 presidential campaign, with his $5.2 million in donations behind only the $56 million of contributions from media mogul Michael Bloomberg.
The FTX founder was also a top individual donor in the 2022 mid-term elections, again the second-largest Democratic Party contributor in the cycle,with $36.8 million funneled to its candidates.
Why is Crypto Going Up – DXY Down, Time to Buy Coins For Altcoin Season?
On Friday, a weaker dollar may have helped propel crypto prices upward as stock market investors remained cautious after U.S. inflation numbers came in at historically high levels despite a slight easing, and uncertainty around the upcoming FOMC meeting next week.
Meanwhile, the cryptocurrency market made a significant recovery yesterday as it bounced 2.30% off the 0.382 Fibonacci retracement level of support. Today markets are continuing to rally so far, with Bitcoin up 1.49% and Ethereum up 2.02% as of writing. As the market cap tries to find its way back above the $860 billion range, is the market once again attempting to break this key resistance area?
EMA
In the long run, prices remain bearish as the market continues to trade below both EMA 50 and 100. But for now, a bit of optimism may be setting in as the market stays steady above the EMA 20 for the last couple of days.
RSI
Yesterday, the Relative Strength Index (RSI) broke past the RSI 50 mark at RSI 50.03 and is now hovering around RSI 50.44. It's essential to maintain this level over the next few days in order for us to see a potential market uptick.
MACD
The MACD's bullish crossover with the climbing moving averages is a sign of potential upward movement, however, the shrinking gap between them may be cause for concern. To sustain this promising trend we need to experience further growth in market momentum.
Supports and Resistances
Fib 0.236 and Fib 0.382 has been proven significant for the past couple of weeks. Therefore, the levels of $789 billion to $804 billion are the immediate supports for the Crypto Total Market Cap. If the price successfully breaks out from the range of $800 billion to $830 billion, it may be time to think about taking some positions, but only with proper risk management in place since market volatility remains high. The next potential targets are the daily EMA50 at $837 billion and the previous support area, now turned resistance, of $850 billion to $860 billion.
NFTs minted on FTX break, highlighting Web2 hosting flaws.
NFTs hosted on FTX platform were affected by the firm’s collapse, showing blank images instead of the original art.
The FTX collapse highlighted many flaws in the crypto industry. Now, the effects of the FTX debacle have broken into the nonfungible token (NFT) space with users unable to view their FTX-hosted NFTs.
In a tweet, Solana engineer jac0xb.sol pointed out how the metadata of FTX-hosted NFTs now points to a restructuring website that gives out information about bankruptcy proceedings. According to jac0xb.sol, the NFTs minted on FTX were hosted using a Web2 application programming interface (API), resulting in images not showing.
After the FTX exchange filed for bankruptcy, the FTXus domain was entirely redirected to the bankruptcy proceeding page. Because of this, NFT owners are still able to see that their NFTs exist. However, images cannot be seen anymore, even when viewing them within wallets or listing them on NFT trading platforms.
With this, jac0xb.sol also called out to collections that are still hosting metadata on Amazon Web Services, suggesting that there is a “lesson to be learned” with how FTX hosted their NFTs using a Web2 API service. In addition, some users even commented that this highlights problems with Web3 companies relying on centralized services like AWS or the Google Cloud Platform.
On Aug. 5, NFT executives brought up the topic of NFTs not living on the blockchain. In a Cointelegraph interview, Jonathan Victor, the Web3 storage lead at Protocol Labs and Alex Salnikov, the co-founder of Rarible, explained that technically, the tokens are stored somewhere else. The duo highlighted that main chains often are very limited in size and that it costs more to store data on the blockchain.
Despite the troubles brought about by the FTX collapse, the NFT industry remains confident in the future of the space. On Nov. 22, various players within the NFT space spoke with Cointelegraph and expressed their confidence that the space will eventually recover. The executives highlighted that it's important for the NFT community to focus on bringing more utility to their collections.
Pakistan launches new laws to expedite CBDC launch by 2025.
The State Bank of Pakistan signed in new laws for Electronic Money Institutions — non-bank entities offering digital payment instruments — to ensure the timely issuance of a CBDC in the next three years.
Regulators worldwide see central bank digital currencies (CBDCs) as a way to enhance fiat capabilities by inheriting the financial prowess of technologies that power cryptocurrencies. Pakistan joined this list by announcing new regulations to ensure the launch of an in-house CBDC by 2025.
The State Bank of Pakistan (SBP) signed in new laws for Electronic Money Institutions (EMIs) — non-bank entities offering digital payment instruments — to ensure the timely issuance of a CBDC in the next three years. The World Bank helped Pakistan design the new regulations, according to local media Arab News.
In addition to timeline adherence for the CBDC launch, the regulations warrant preventive measures against money laundering and terror financing while considering consumer protection and reporting requirements.
The state bank, SBP, will issue licenses to EMIs for CBDC issuance. During the announcement, Finance Minister Asad Umar stated that using EMIs in promoting the digital economy will safeguard financial institutions from cybersecurity threats. Deputy Governor of SBP Jameel Ahmad envisions curbing fiat-induced corruption and inefficiency through CBDCs. He said:
“These landmark regulations are a testament of the SBP’s commitment toward openness, adoption of technology and digitization of our financial system.”
The commencement of a speedy regulatory environment places Pakistan among the nearly 100 countries that are actively involved in researching and launching CBDC initiatives.
Neighboring country India also recently joined the race to launch a home-grown CBDC. On Nov. 22, The Reserve Bank of India (RBI) announced an ambitious plan to launch a retail CBDC pilot by the end of 2022.
Indian central bank, RBI, is reportedly in the final stage of preparing the retail digital rupee pilot rollout, which will be initially tested among 10,000 to 50,000 users of participating banks.
AAX exec leaves the crypto exchange amid ongoing operational halt.
Former AAX executive Ben Caselin said that his role in the firm became hollow and that the trust in the brand is broken.
Weeks after the AAX exchange started halting its withdrawals, its vice president for global marketing and communications announced that he has resigned from his role at the cryptocurrency exchange.
In a Twitter thread, Ben Caselin confirmed that he has left the firm and highlighted reasons as to why he decided to leave his post at the crypto exchange. According to Caselin, despite his efforts in fighting for the community, the initiatives that they came up with were not accepted. The executive described that his role in communications became “hollow.”
The former AAX executive also expressed his disagreement with the way that AAX is handling the issue. Caselin described the actions of the exchange as “without empathy” and “overly opaque.”
In the midst of the withdrawal halt, the former executive also highlighted that many people, including some of his family members, have asked him for help. However, Caselin wrote that there was nothing he could do at the moment and that everyone is waiting for actions from the exchange.
Despite the current situation, the former AAX executive believes that things will be handled without evil intentions, but noted that the damage is already done. “The brand is no more and trust is broken,” he wrote.
On Nov. 14, the AAX exchange started the halt for withdrawals, citing a need to fix a glitch on its system upgrade. The exchange assured its community that the halt in withdrawals had nothing to the with the ongoing FTX collapse and said that they have no financial exposure to the embattled FTX exchange.
After the announcement, the AAX team highlighted that it needs additional capital because its investors have decided to withdraw their funds from AAX because of the FTX collapse. The exchange explained that this puts them at risk of a capital deficit, which they have to fix before resuming normal operations.
Recent FTX hacks prove it was right to ‘secure’ its assets: Bahamian regulator.
The Securities Commission of The Bahamas said the continued hacking attempts on FTX prove it made the right call to “secure” FTX’s digital assets.
The Securities Commission of The Bahamas says the continued “hacking attempts” on FTX’s digital assets prove they made the right call to take control of the exchange’s assets on Nov. 12.
In a statement on Nov. 23, the commission said the fact that FTX’s “systems were compromised, and that they continue to face new hacking attempts – reinforces the wisdom of the commission’s prompt action to secure these digital assets.”
On the same day that FTX filed for bankruptcy on Nov. 11, the crypto community began flagging roughly $266.3 million worth of outflows on wallets associated with FTX. By Nov. 12, the outflows had ballooned to more than $650 million.
Blockchain analysts have suggested that $477 million is suspected to have been stolen, while the remainder was moved to secure storage by FTX themselves.
In its latest statement, the commission said while it suspended FTX Digital Markets (FDM) license to conduct business and stripped its directors of their power on Nov. 10, this was not sufficient in protecting customers and creditors of FDM.
The commission further explained that due to the “nature of digital assets” and “the risks associated with hacking and compromise,” it sought an order from the Supreme Court to transfer all digital assets from FTX to the commission for “safekeeping.”
The latest statement reinforces recent analysis from blockchain analytics firm Chainalysis, and Twitter crypto sleuth ZachXBT, who said that on-chain evidence suggests that the actions of the Bahamian regulator is not related to the alleged “FTX hacker.”
The commission has also lashed out at the Nov. 17 emergency motion by FTX Trading Limited, which called out the “Bahamian government” for “directing unauthorized access to the Debtors’ systems” after the commencement of Chapter 11 bankruptcy filings.
“It is unfortunate that in Chapter 11 filings, the new CEO of FTX Trading Ltd. misrepresented this timely action through the intemperate and inaccurate allegations lodged in the Transfer Motion,” the Commission said.
