Cryptonia Exchange Reactivates Refunds to Users Affected by Hack in 2019

Audy Castañeda
-
0
<strong>Cryptonia Exchange Reactivates Refunds to Users Affected by Hack in 2019</strong>

Cryptopia announced that customers who have signed up to the platform will now be asked to check their balances.

New Zealand crypto exchange Cryptopia has announced the third phase of its payback plan, after a 2019 hack in which customers lost more than $15 million.

In the third phase, account holders whose identities have been previously verified can log into a claims portal, to confirm that their balances are correct. Subsequently, in stage 4, clients will receive their outstanding asset balances.

The Cryptopia Hack 2019

Cryptopia filed for bankruptcy and went into liquidation in May 2019 after a hack in January 2019, in which 15% of customer funds were stolen.

Since 2020, Liquidator Grant Thornton has asked account holders to register and identify themselves. This is because Cryptopia stored client funds in a pooled wallet, instead of individual wallets.

The exchange executed transactions on an internal ledger and recorded them in a database. Consequently, the trustee had to reconcile both to find out the customers’ balances before the hack.

Grant Thornton said it would take some time to get the invitations out to customers. The liquidator offered customers the option to contact Cryptopia’s customer support portal for inquiries.

FTX Clients Begin the Long Journey to Wholeness

Even as Cryptopia clients can begin to breathe a little easier after a liquidation process that has taken almost two years, clients of a certain Bahamian exchange are only beginning their journey to wholeness.

On November 10, 2022, FTX CEO Sam Bankman-Fried (SBF) announced that his crumbling cryptocurrency business was looking to raise around $8 billion in liquidity to help pay customers.

The number surprised some, as the number of cryptocurrency companies with substantial assets has dropped substantially after the collapse of the Terra stablecoin in May 2022.

On November 11, 2022, FTX filed for Chapter 11 bankruptcy, after failing to raise the required capital. This means that the courts will decide how clients and other interested parties will be paid.

SBF explained the situation via Twitter, as follows:

“1) Hi all: Today, I filed FTX, FTX US, and Alameda for voluntary Chapter 11 proceedings in the US.”

“2) I’m really sorry, again, that we ended up here. Hopefully, things can find a way to recover.  Hopefully, this can bring some amount of transparency, trust, and governance to them. Ultimately hopefully it can be better for customers.”

FTX has 120 days to submit a reorganization plan for creditor review. Ultimately, the Delaware Court of Chancery must approve the plan. A bankruptcy filing also allows FTX to continue to operate.

In the short term, FTX announced that holders of specific tokens on the Tron Blockchain would be able to withdraw their assets. Speaking on Bloomberg TV, crypto attorney Timothy Spangler said it could take months, if not years, for the rest of FTX’s clients to recover.

By Audy Castaneda

Japanese, American and European Regulators of All Stripes Take Strong Action against FTX

Alexander Salazar
-
0
<strong>Japanese, American and European Regulators of All Stripes Take Strong Action against FTX</strong>

The collapse of FTX has caused regulators to start working on extreme regulatory measures against the cryptocurrency exchange worldwide. The case of the cryptocurrency exchange, which has shaken confidence in the ecosystem, might lead to further actions.

The cryptocurrency ecosystem has fallen into a stupor due to the collapse of FTX. The declined acquisition by Binance and the offer of Justin Sun to help have been among the initiatives to save the company.

However, regulators are unwilling to wait and have started to work on extreme actions against the cryptocurrency exchange. The Japanese Financial Services Agency (FSA) ordered FTX Japan to stop its operations. The measure forces it to stop offering all its services and keep its funds inaccessible in Japan.

The SEC Launches an Investigation into the CEO of FTX

The US Securities and Exchange Commission (SEC) has also looked into the case of FTX. They recently explained that they were launching an investigation into Sam Bankman-Fried, the CEO of FTX. The financial regulator reportedly wanted to know if the entrepreneur had violated the financial securities law.

The SEC had already looked into FTX.US but has extended the scope of its investigation over the last few days.

Since the SEC has always expressed hostility toward the sector, its arrival does not take anyone by surprise. Gary Gensler, the chairman of the SEC, recently stated that the cryptocurrency industry needed more regulation. It is relevant to remember that the regulatory agency of the Bahamas also froze the assets of the local branch of FTX.

The Californian Regulatory Agency Also Investigates the FTX Case

The first US state to react to the case was California, where the Department of Financial Protection and Innovation (DFPI) launched an investigation. They have invited local people affected by the collapse of the company to contact them to make their complaints.

Showing its determination to pursue the case, the DFPI said it took its oversight responsibility seriously. They pointed out they expected those companies offering financial securities in California to comply with their laws.

According to the White House, Joe Biden, the US president, also received information on the situation. Maxine Waters, the chairwoman of the Financial Services Committee, has also encouraged consumer protection measures within the ecosystem.

The Situation Worries the European Regulatory Agency

The Financial Stability Board (FSB), an independent group monitoring financial stability, recently issued an alert in Europe. After a meeting in Lisbon, they stated, without naming FTX directly, that the overall crypto industry requires urgent regulatory measures.

Representatives of the UK Treasury, the Central Bank of Sweden, or French and German financial institutions comprise the FSB. Therefore, the above is a warning that precedes more concrete measures in the European Union, which has not reacted officially.

The FTX Case to Trigger Further Regulatory Measures in the Sector

Since regulators are just arriving, the FTX case should trigger further regulatory measures worldwide. That crisis has weakened the confidence in the ecosystem among prominent figures like Jessy Powell, the CEO of Kraken.

Powell recently commented that the sociopathic behavior of a person seeking personal gains had risked the progress achieved by the sector over a decade. It will be hard for the crypto industry to prove its reliability to regulators due to the dramatic fall of FTX.

By Alexander Salazar

Grayscale Bitcoin Trust Premium Plunges to a New Low of -40%

Audy Castañeda
-
0
<strong>Grayscale Bitcoin Trust Premium Plunges to a New Low of -40%</strong>

Grayscale Bitcoin Trust GBTC shares are selling at a massive discount. The SEC’s approval of the conversion of funds now seems like a pipe dream.

The world’s largest institutional Bitcoin fund, Grayscale Bitcoin Trust (GBTC), is in bad shape. Your premium is currently at an all-time low.

The Grayscale Bitcoin Trust closed at a record -41% discount as the underlying asset continued to slide. The metric is a premium or discount to the net asset value (NAV) of the GBTC fund.

At -40%, investors can buy shares of the fund at this discount to the price of the underlying asset. However, at the moment, the bears are attacking the markets, and everything related to cryptocurrencies is unloading.

Bloomberg Intelligence analyst James Seyffart also took note of the drop, tweeting as follows:

“Of secondary importance here to the broader crypto market but $GBTC closed at a new record discount — just over 41%. Saw it get as deep as 42% in the last 30 minutes of trading. How deep can it go?”

Trading BTC Funds on Grayscale at a Massive Discount

The assets under management (AUM) figure at Grayscale has also plunged along with the broader markets. Total holdings in Bitcoin Trust just fell below $10 billion, according to Coinglass.

Furthermore, holdings per share equal $14.83, while the market price per share is $8.79, hence the 40% discount.

Grayscale’s second-largest fund, Ethereum Trust, is in no better shape. There is about $3.4 billion in AUM and a holdings-per-share figure of $11.44. Additionally, the market price per share is 7.71 dollars, which is equivalent to a discount of -32.6% for said fund.

Roundhill CEO Will Hershey commented that, “Thinking about this further, I think today’s widening may be explained in part by a lower probability assigned to potential post-FTX ETF conversion.”

Regulators are likely to be tough on cryptocurrencies now. This could end any ray of hope that the SEC will approve the conversion of the GBTC fund to a cash ETF.

Investors, both retail and institutional, are getting very nervous now, and a final capitulation event is unfolding.

Bitcoin Plummets to New Cycle Low

Bitcoin prices have tumbled to a new low for this bear market cycle, widening the discount on Grayscale as well. BTC fell to $15,700 a few hours ago on Thursday morning; being thus, the lowest value the asset has had since November 2020.

Bitcoin has now lost 18.5% over the last week and is down 76.3% from its all-time high around this time last year. At press time, the asset was trading at $16,441, according to CoinGecko.

The crypto “great purge” seems to have bottomed out in the last few hours. However, the pain may not be over yet.

By Audy Castaneda

BlackRock, Sequoia Capital, and Tiger Global are among those Affected by FTX Fall

Audy Castañeda
-
0
BlackRock, Sequoia Capital, and Tiger Global are among those Affected by FTX Fall

BlackRock and the Ontario Teachers’ Pension Plan Board have been affected by the collapse of FTX. Other investors in the $420 million funding round include Temasek, Sequoia Capital, and Tiger Global.

The world’s largest asset manager, BlackRock, and the Ontario Teachers’ Pension Plan Board are among those who have suffered from the fall of FTX. Both participated in a Series B-1 funding round for FTX. Other notable investors include Temasek, Sequoia Capital, and Tiger Global.

The Ontario Teachers’ Pension Plan Board is the third largest pension fund in Canada and participated in a Series B-1 funding round in October 2021. Even as the market was experiencing significant volatility, it was kept on FTX.

Naturally, all private investors in FTX have suffered greatly, and there is not much public comment from private investors available yet. Even NFL star Tom Brady, as well as ex-wife and model Gisele Bündchen have suffered losses as they have been listed as angel investors.

It is quite a steep drop for FTX and a concern for new investors in the crypto market. 2022 has been a rough year for cryptocurrencies, with the fall of the Terra ecosystem still fresh on everyone’s mind.

World’s Largest Asset Manager Takes a Hit

BlackRock and Tiger Global led the Series B-1 funding round last year, in which FTX raised $420 million. The former is the largest asset manager in the world, and its involvement in the crypto space is always taken seriously. However, it has not been disclosed how much it invested during the funding round.

BlackRock’s share value is down 2.43% today. While a massive impact from the FTX incident is unlikely to be seen, it’s still a notable casualty. The asset manager has made several forays into the crypto space, launching a Blockchain ETF in Europe, and partnering with Coinbase to offer crypto to institutional clients.

Fallout from the FTX Collapse Contained Temporarily

Among the private investors that have released a statement or update following the fall of FTX is Sequoia. The venture capital firm is reducing its investment in FTX to zero. It claimed that the funds in which FTX was held suffered marginal damage, with a loss of $150 million being offset by $7.5 billion in realized and unrealized gains.

Meanwhile, FTX is suffering considerably and says it could go bankrupt if it isn’t bailed out. There could be a shortfall as large as $8 billion. Binance was supposed to acquire FTX, but withdrew, citing mismanaged funds and investigations.

FTX CEO Sam Bankman-Fried also deleted a tweet that said FTX customer funds are safe. The websites of FTX Ventures and Alameda Research are also down.

By Audy Castaneda

How Satoshi Nakamoto Sought to Solve the Global Problem with Fiat Money

Alexander Salazar
-
0
<strong>How Satoshi Nakamoto Sought to Solve the Global Problem with Fiat Money</strong>

In order to eliminate the pioneering cryptocurrency, it is necessary to eliminate each of the thousands of nodes distributed worldwide. Attackers trying to modify one block must find a valid hash to invalidate its hash before attempting to alter the next one.

People must return to free market money that no central bank or government can manipulate or destroy. Although it must also be digital to allow cross-border value transfers, it has to be scarce to prevent excessive issuance.

Since gold is a physical asset, its international expansion has made peer-to-peer exchange increasingly impractical. The initial solution was to centralize it through banknotes and digital contracts, allowing banks to become intermediaries of non-P2P money transfers.

The physical nature of gold led to the introduction of gold-backed money and government-issued fiat money. Besides costing nothing to produce, it is not scarce and allows governments to avoid market forces.

Bitcoin Emerges as the Solution to the Centralization of Money

Satoshi Nakamoto created a currency with no central authority by using a distributed ledger and disappearing from the public. In order to eliminate Bitcoin, it is necessary to eradicate each of the thousands of nodes scattered worldwide.

Creating the blockchain solved the double-spending problem due to the lack of a central authority in part. Transactions are in blocks grouped like the pages of a book, each including the hash of the previous one.

The blockchain prevents changing the order of transactions without anyone noticing, as it would affect the hash in the following blocks. In other words, the data in block 750,000 would be invalid if those in block two were wrong.

The Ledger Becomes Inalterable Thanks to the Blockchain

The proof-of-work (PoW) protocol is the second part of the solution to double-spending due to decentralization. Since reordering blocks is easy and almost costless, Satoshi Nakamoto used PoW to make those hashes costly to produce.

To add that costliness, Nakamoto added a rule to the Bitcoin protocol, placing restrictions on which hash results were valid. Random brute force attempts by a computer, which require spending money on electricity, is how it works.

Attackers trying to modify block one must also find a valid hash and enter it into block two to invalidate its hash. They must change the second block correctly before attempting to modify block three. Rewriting Bitcoin from block one would require repeating the cumulative energy expended on Bitcoin worldwide.

The Proof-of-Work Protocol Makes the Blockchain Inalterable

The PoW protocol also aims to solve the problems when a distributed computer network needs to know the current state of affairs. Since they cannot trust any message to report it, the chain of Bitcoin blocks with the most cumulative work is the valid one.

That eliminates any requirement to trust an authority regarding which version is valid in case of discrepancy. Therefore, it relies on everyone agreeing that most work is equivalent to the correct chain.

When creating Bitcoin, Nakamoto also considered the problem of fair issuance and how to maximize adoption with it. To make it possible, he staggered the release of new coins, allowing later adopters to access newly issued coins.

Worldwide coordinated authoritarianism would be the only way to keep the pioneering cryptocurrency from growing. Of course, bitcoin emerged as the solution to global financial totalitarianism.

By Alexander Salazar

Justin Sun Announces He Will Help FTX after Changpeng Zhao Declines to Acquire It

Alexander Salazar
-
0

The initiative by Binance to save FTX failed, but the founder of the Tron ecosystem thanked Changpeng for trying. Sun announced he wants to support those investors who bought tokens like TRX, BTT, JST, SUN, and HT.

Due to the collapse of the cryptocurrency exchange FTX, there are more initiatives to help affected investors. After Changpeng Zhao declined to buy the company, Justin Sun, founder of Tron (TRX), said he would help FTX save its investors.

Justin Sun Comes to the Rescue of FTX

Changpeng Zhao, the CEO of Binance, had initially offered to acquire the rival platform FTX. However, it recently withdrew from the transaction, causing many investors to lose their last hopes.

Although the initiative by Binance failed, many prominent players in the ecosystem hailed it. Justin Sun, the founder of the Tron ecosystem, thanked Changpeng for trying to save FTX, as it requires much courage.

Sun also announced he was working alongside FTX to support those investors who had bought tokens from the Tron ecosystem. The tech entrepreneur mentioned TRX, BitTorrent (BTT), Just (JST), Sun Token (SUN), and Huobi Token (HT).

Despite his usual ironic tweets, extravagant announcements, and publicity stunts, Justin Sun seems serious this time. None other than Sam Bankman-Fried, the CEO of FTX, shared the post after remaining silent for several hours.

Justin Sun Proposes a Solution for Tron Investors

That initiative echoes a previous announcement made by the Huobi platform alongside TronDAO. Both entities explain that they seek to help those investors holding one of the above tokens on FTX.

Although nobody knows the details, Huobi users must fill out a form to declare their coins blocked on FTX.

Huobi and TronDAO stated they would do their best to support those users wishing to withdraw their Tron tokens from FTX. Since it is impossible to determine whom this initiative might affect, they must work cautiously.

The Collapse of the FTT Token Was Predictable

FTX, the fourth largest cryptocurrency exchange regarding trading volume, became too dependent on its native token. The house of cards collapsed after the public learned the hedge fund Alameda Research, belonging to FTX, uses FTT.

The price chart allowed the prediction that the FTT token would suffer a catastrophic drop. According to market experts Stefan Lübeck and Peter Büscher, if the value of FTT falls below USD 22, it will reach USD 4.

The price of FTT rose without suffering any significant pullback between November 2021 and March 2022. That should be an obstacle, as no bottom serves as support to absorb the course due to the lack of countermovement.

That occurred at a price of around USD 22, but no support points between the support and resistance levels could prevent the collapse. The spread of rumors about the imminent bankruptcy of FTX led investors to sell their FTT tokens, causing bearish momentum.

FTT is now in the USD 3 resistance formed during the sideways trend in the 2021 summer. The prediction about the drop in the price occurred thanks to the experience in recognizing crash scenarios in advance.

By Alexander Salazar

1...620621622...1,654Page 621 of 1,654