Cryptocurrency, Blockchain, and Fintech News Headlines Update on July 26, 2022

Saudi Chemicals Producer SABIC Launches Blockchain Pilot Project

A Saudi Arabia-based chemical manufacturer Saudi Basic Industries Corporation (SABIC) has launched a pilot aiming to “investigate the possibilities of blockchain technology in supporting end-to-end digital traceability of circular feedstock [raw materials] in customer products”. It hopes to uncover the possibilities of the technology “in supporting end-to-end digital traceability of circular feedstock in customer products.” The project, launched with technology firm Finboot, hopes that use of blockchain will bring cost and time savings and improved data integration and reduce administrative efforts related to the certification process of materials. SABIC has said the current process of tracing the journey of feedstock is made difficult by the complex petrochemical value chain. Read More: Saudi Chemicals Producer SABIC Launches Blockchain Pilot Project

Coinbase insider trading case highlights SEC, CFTC crypto turf war

A former Coinbase employee and two others have been charged in two lawsuits relating to insider trading. The ex-employee had allegedly tipped a relative and friend with advanced knowledge that tokens were to be listed on the cryptocurrency exchange, making them between $1.1 million and $1.5 million on the information. One of the lawsuits is a criminal one, but the other is a civil one brought by the SEC that includes claims that nine tokens involved in the alleged insider trading are securities. This is where this case gets contentious for the crypto industry. It’s disputed whether the CFTC or SEC should have jurisdiction over spot cryptocurrency transactions. The SEC has long said that most cryptocurrencies are securities with SEC Chair Gensler saying that crypto exchanges and lenders need to register with the SEC. If the SEC wins the case that these are securities, it then means that Coinbase (amongst others) is an unregistered securities trading venue. Hence, Coinbase is pushing back with Chief Legal Officer Paul Grewal Tweeting “Coinbase doesn’t list securities. Period.” Read More: Coinbase insider trading case highlights SEC, CFTC crypto turf war

Crypto Lending Platform Celsius Discloses A New Recovery Plan

Crypto lending platform Celsius has released a presentation on what the next potential steps towards recovery could be. A document mentions how it shall form a plan to allow users to take cash or choose for ‘long crypto’ and provides alternatives for the users to get their money back. It also mentioned negotiating the restructuring transaction with stakeholders. Mining operations to help grow its Bitcoin holdings form part of this. Celsius has reportedly received permission from the US bankruptcy judge Martin Glenn to spend close to $3.7 million to construct a Bitcoin mining facility with $1.5 million to be paid on customs and duties on the imported customs mining rigs. Read More: Crypto Lending Platform Celsius Discloses A New Recovery Plan

Crypto to reach 1 billion users in 2030: BCG Report

A joint report published by BCG, Bitget and Foresight Ventures shows that crypto adoption is still very low compared to traditional assets, with only 0.3% of individual wealth invested in crypto. The report also compared the internet’s adoption curve to 1 billion users to current cryptocurrency holders and estimates that “there is plenty of growth to come.” They predict that by 2030 crypto could hit 1 billion users if the trend line continues its course. Read More: Crypto to reach 1 billion users in 2030: BCG Report

UK stablecoin bill gives Treasury sweeping regulatory powers

The UK has published its Financial Services and Markets Bill, which repeals a number of EU laws. The new bill covers stablecoins – which it defines as digital settlement assets – and the Financial Market Infrastructure (FMI) Sandbox, which could be used for DLT security token trials. The bill aims to be ‘agile,’ giving extensive rule-making authority to regulators rather than including detailed rules. Read More: UK stablecoin bill gives Treasury sweeping regulatory powers

Barclays to back digital asset custody firm Copper

Barclays is reportedly participating in a funding round of digital asset custody provider

Copper .co, which values the startup at $2 billion. Copper last raised a $75 million Series B in 2021. This should be a big win for both companies. Read More: Barclays to back digital asset custody firm Copper – report

Blockchain.com Cuts 25% of Its Workforce

Cryptocurrency exchange Blockchain.com is cutting 25% of its workforce, about 150 people, due to the bear market. This will bring its team back to around January levels, after a rapid expansion over the last 16 months which brought the firm from 150 to over 600 employees. 44% of the affected employees are in Argentina, 26% in the US and 16% in the UK. Blockchain .com was one of the numerous companies to suffer from the fall out of crypto hedge fund Three Arrows Capital, from which it is dealing with a $270 million shortfall. Read More: Blockchain.com Cuts 25% of Its Workforce Amid Crypto Bear Market

Hacker exploits defi music platform Audius following passing of malicious proposal

On July 24, a malicious proposal at DeFi music platform Audius requesting the transfer of 18 million in-house AUDIO tokens was for some reason approved by Audius community voting. The attacker created the proposal to enable them “to call initialize() and set himself as the sole guardian of the governance contract.” It made $1.08 million for the hacker by enabling them to drain out 18 million tokens worth $5.9 million from the treasury, which soon dumped. Investors then recommended an immediate buyback to prevent existing investors from dumping and further lowering the token’s floor price. A blockchain investigator Peckshield tracked down the fault to Audius’ storage layout inconsistencies. Read More: Hacker drains $1.08M from Audius following passing of malicious proposal

Founder of My Big Coin Convicted of Fraud

A federal jury has convicted the founder of My Big Coin of cheating investors out of more than $6 million by selling them a non existent cryptocurrency. The founder and his associates had reportedly told investors that their coins were a fully functioning cryptocurrency backed by $300 million in gold, oil and other assets, and that the company had a partnership with MasterCard. About the scam, a news release says “In reality, coins were not backed by gold or other valuable assets, did not have a partnership with MasterCard and were not readily transferable”. “Over the course of the scheme, Crater misappropriated over $6 million of investor funds for his own personal gain, including spending hundreds of thousands of dollars on antiques, artwork and jewelry.” This is very similar to many other scams, but goes to show how many of these still go on. Read More: Founder of My Big Coin Convicted of Fraud

Japan’s crypto self-regulation ‘experiment’ not working

A self regulatory in Japan, the Japan Virtual Currency Exchange Association (JVCEA) has been tasked since 2018 with creating guidelines for the country’s crypto industry. The belief at the time was that such an entity could be better placed to cope with crypto regulation than a government body. However, an unnamed source “close to both industry and government” has said that the current model of crypto regulation is faltering: “When Japan decided to experiment with self-regulation of the cryptocurrency industry, many people around the world said it would not work. Unfortunately, right now it looks as though they may be correct.” Read More: Japan’s crypto self-regulation ‘experiment’ not working

Minecraft Bans NFTs and Blockchain Technologies

The game Minecraft has taken the step to ban NFTs and use of blockchain technologies within its ecosystem. Its studio said “To ensure that Minecraft players have a safe and inclusive experience, blockchain technologies are not permitted to be integrated inside our client and server applications, nor may Minecraft in-game content such as worlds, skins, persona items, or other mods, be utilized by blockchain technology to create a scarce digital asset”. Minecraft pointed out some of the drawbacks of allowing NFTs, leading to its decision. “NFTs are not inclusive of all our community and create a scenario of the haves and the have-nots,” the company said. “The speculative pricing and investment mentality around NFTs takes the focus away from playing the game and encourages profiteering, which we think is inconsistent with the long-term joy and success of our players.” Prices for its NFTs dropped 70% after the announcement. Read More: Minecraft Bans NFTs, Sending One In-Game Builder’s Token Spiraling

NFT sales could fund part of the restoration of physical monuments in Ukraine

The Ukrainian government will be using the proceeds of sales from a digital NFT museum to restore real world monuments that have been damaged by the Russian invasion. Ukraine’s Ministry of Culture and Information Policy has said the government-supported Meta History Museum of War platform, which focuses on preserving the timeline of major events in Russia’s war with Ukraine, has raised around $1.3 million, as 803.28 Ether, through NFT sales. The ministry said proceeds from the sales will go toward “the restoration of Ukrainian cultural institutions,” many of which have been damaged or destroyed by missile attacks from Russia. Read More: NFT sales will fund the restoration of physical monuments in Ukraine

Sustainable blockchain network 5ire secures $100 million Series A

5ire, a blockchain ecosystem focused around sustainability initiatives has raised $100 million in Series A funding. It is now dubbed the fastest growing blockchain unicorn in India and the only sustainable blockchain unicorn in the world, with a valuation of $1.5 billion. It aims to incentivise practices that align with the UN’s Sustainable Development Goals to move from the 4th to the 5th industrial revolution. Pratik Gauri, CEO and founder said “We are on a mission to embed sustainability into blockchain and shift the current paradigm from ‘for-profit’ to ‘for-benefit’.” Read More: Sustainable blockchain network 5ire secures $100 million Series A

Three Arrows Capital Assets Ordered Frozen By Judge

A judge has reportedly frozen the assets of troubled crypto hedge fund Three Arrows Capital. The fund can’t dispose of or transfer assets held in the United States, over which liquidators now have authority and control. A filing warns of a “heightened risk” that the founders could attempt to transfer 3AC assets to new accounts or wallets because “a substantial portion” are “cash and digital assets that are readily transferable.” The founders Su and Davies still appear to be in hiding with their whereabouts unknown. A visit to their office by court-appointed liquidators found nothing but a locked door and unopened mail. Genesis has now filed a $1.2 billion claim against them.

Read more in

• Three Arrows Assets Ordered Frozen By Judge – How Much Deeper 3AC’s Trouble Can Get?
• Three Arrows Capital Office Abandoned, Founders Missing, Say Creditors
• Genesis Files $1.2B Claim Against Three Arrows Capital

Celsius bankruptcy filings show murky picture

The chapter 11 bankruptcy filing of crypto lender Celsius Network has revealed some surprises about the state of its platform, including what appears to be a $1.2 billion deficit formed largely of user deposits. The filing reveals that Celsius holds roughly $4.3 billion in assets against $5.5 billion in liabilities. The value of these assets is questionable, given that its CEL tokens are valued at $600 million despite its current market cap hovering under $200 million, according to Coinmarketcap. CEO Alex Mashinsky has signed a document stating that Celsius could sell around 15,000 Bitcoin until 2023 from its mining operation to “generate sufficient assets” to repay at least one of its loans and provide revenue. Celsius also reportedly ‘admitted to taking customer funds, and speculating directionally in various futures instruments’. 35,000 ether also went missing because private keys were lost. The full filing document can be read here. In a press release, Celsius revealed it only holds $167 million in cash, which will be used to “support operations” which include continuing to pay staff without disruption.

Read more in

• Celsius bankruptcy filings show a company in deep trouble
• CELSIUS BANKRUPTCY SHOWS RECKLESS BEHAVIOR WITH A $1.2 BILLION HOLE IN ITS BALANCE SHEET
• Celsius officially declares bankruptcy after paying down DeFi loans

Celsius lawyers claim Earn and Borrow users gave up legal rights to their crypto

Lawyers acting for Celsius have said that its 1.7 million registered clients in 100 countries gave up title to the crypto they deposited into its Earn and Borrow accounts. They say users transferred the title of their coins to the firm as per its terms of service. As a result, they say Celsius is free to “use, sell, pledge, and rehypothecate those coins” as it wishes, in a key case of ‘not your keys, not your coins’. However, a legal question has arisen around whether holders of coins in Celsius Custody accounts retain title and ownership of their assets. Celsius terms of service claim that the firm cannot use coins in Custody accounts without user permission. It isn’t yet clear however if or how those users will get their coins back. Read More: Celsius lawyers claim users gave up legal rights to their crypto

Crypto VC Investments Drop 26% in First Half of 2022

Venture capital investment in crypto companies was down 26% in the first half of 2022, totalling $9.3 billion compared to $12.5 billion in the same period last year, but the number of deals increased. This can partly be attributed to cryptocurrency price drops, the collapse of the terraUSD stablecoin and liquidity crises faced by crypto lenders and crypto hedge fund Three Arrows Capital. This didn’t stop venture firm Andreessen Horowitz (a16z) from launching a record-breaking $4.5 billion crypto fund in May. Read More: Crypto VC Investments Drop 26% in First Half of 2022

Customers Flee Coinbase’s Fees, Pushing Exchange Out of Top 10

Crypto exchange Coinbase has dropped from fourth to 14th largest crypto exchange in 8 months, dropping from 9% of global trading to 2.9%. It seems retail customers are leaving due to its high fees. Mizuho analyst Dan Dolev says Coinbase is “suffering from a perfect storm of more competition in a declining market while take rates are perceived to be too high and unsustainable”. Its May warning that in the event of a bankruptcy, its users would face losses also raised fears. Read More: Customers Flee Coinbase’s Fees, Pushing Exchange Out of Top 10

Putin Signs Law Banning Crypto Payments In Russia, Ruble sole legal tender

Russian President Vladimir Putin has approved a legislation to immediately ban the use of digital financial assets including all cryptocurrency and digital securities as a payment method in the country. This is an extension of an earlier law that banned crypto in payments. This action maintains the ruble as the sole legal tender in the Russian Federation. This law means owners of platforms offering exchange services will have to block any transactions that facilitate the substitution of digital financial assets for the ruble. Russia’s financial authorities worry cryptocurrencies threaten the country’s stability… Russians transact about $5 billion a year in crypto. Read More: Bitcoin Gives Way To Ruble: Putin Signs Law Banning Crypto Payments In Russia

Russian Activists Turn to Crypto for Donations to Aid Ukraine Refugees

Several Russians have turned to crypto to help Ukrainian refugees. In one example, a new shelter opened in Ukraine needed funding but did not have a bank account, so those behind it started a crypto fundraiser. Since the war started with Russians cut off from the global payment systems as a result of sanctions, crypto has become the fastest way to help people across borders as it can be sent and received quickly without needing to open a new bank account abroad. It may also be safer, with Russians helping Ukrainians facing the risk of threats at home for doing so. “For Russian citizens, sending money to help Ukrainians might not be safe” through the banking system, said one volunteer. Read More: Russian Activists Turn to Crypto for Donations to Aid Ukraine Refugees

Dutch Central Bank fines Binance EUR 3.3m for operating without registration

The Dutch central bank has fined Binance EUR 3.325 million for offering it services in the Netherlands without registration. The fine comes nearly a year after De Nederlandsche Bank publicly warned the exchange that any firm wanting to offer crypto services in the country had to register under the Money Laundering and Terrorist Financing Act. The fine was increased from EUR 2 million because it has a “very large number of customers” there and the violations took place over a long period of time. Binance has now applied for registration and been “relatively transparent”, leading to a 5% reduction in the fine. Read More: Dutch Central Bank fines Binance EUR3.3m

Texas Crypto mining plants overheating, risk being shut down

Energy intensive crypto mining plants had become known for moving to set up in Texas, due to low electricity rates. They are now in at risk of shutting down. The state has struggled to keep up with energy demands, issuing pleas to residents to use less. This seems to be working, a little. Crypto mining rigs in Texas shut down this week to prevent blackouts and price hikes, and now experts aren’t sure the state’s power plants will be able to keep up with ongoing energy demands. This, as Texas plants are reportedly running nonstop and skipping out on some maintenance and repairs to keep from shutting down. As Texas has also been hit by soaring temperatures, they are pushing limits and aren’t getting the service and maintenance they need to stay safe and consistent. “Things are going to break,” executive director of Texas Competitive Power Advocates Michele Richmond said “We have an aging fleet that’s being run harder than it’s ever been run.” Crypto miners in the US are now using as much power as Houston. Read More: EXPERTS CONCERNED TEXAS POWER PLANTS WILL START TO DIE AMID HEAT WAVE

UK’s government-backed Millicent Labs demos a retail full-reserve digital currency

An Innovate UK fintech, Millicent Labs, has completed a sandbox test of a retail full-reserve digital currency (FRDC). An FRDC is a privately issued digital currency pegged to a fiat currency. Its currency is a synthetic central bank digital currency (sCBDC), a form of CBDC that it says overcomes the tendency of CBDCs to be “overly-focused on domestic policy—a strategy that risks simply replacing today’s siloed, closed-loop financial systems with new ‘digital islands.’” Millicent Labs says it is introducing a range of FRDCs that are fully collateralized by cash deposits in a central bank account safeguarded by a regulated third party. It says its FRDC is fully backed by liquid assets. Read More: UK’s government-backed Millicent Labs demos a retail full-reserve digital currency

Andorra green lights Bitcoin and Blockchain with Digital Assets Act

The Andorran government has approved a regulatory framework for digital currencies and blockchain technology. Its Digital Assets Act is split into two parts, the first regards the creation of digital money, or “programmable digital sovereign money” which can be exchanged in a closed system, which would allow the Andorran state to create its own token. The second refers to digital assets as financial instruments and intends to create an environment in which blockchain and distributed ledger technologies can be regulated. A CEO of a local Bitcoin company said “The outcome they’re trying to achieve is to actually attract new businesses to locate in the country by offering some legal clarification making it easier and more transparent. They see this as a way to attract talents and entrepreneurs to the new economy.” Read More: Andorra green lights Bitcoin and blockchain with Digital Assets Act

NFTs Are Now a Legal Way to Serve Documents in UK Courts

The High Court of England and Wales has permitted the court to serve documents of court proceedings via the transfer of an NFT on the blockchain. The novelty here is that a claimant was able to notify unknown persons by alternative methods including airdropping NFTs. In this case, D’Aloia v. Binance Holdings & Others, Fabrizio D’Aloia filed a claim against four cryptocurrency exchanges — Binance, Polo Digital Assets, Aux Cayes Fintech and Bitkub Online, after his cryptocurrency was stolen by unknown persons operating a fraudulent clone online brokerage. NFTs of documents were airdropped to two wallets known to hold his stolen crypto. This is the first time in the U.K., and second in the world that a court has been allowed to “serve” documents in a blockchain. Also important in this case, is that the court recognised that the cryptocurrency exchange defendants that hold his stolen crypto are constructive trustees, which could make them responsible for the funds stolen and deposited on the exchange. Read More: NFTs Are Now a Legal Way to Serve Documents in UK Courts

New platform to turn you into a human NFT of your favourite avatar in online meetings

A Google Chrome extension, Hologram, is now allowing users to log in with crypto wallets and become get an animated NFT avatar to use in video meetings. The aim is to give users a way to express themselves as they like. It says it doesn’t collect any user data and can also change users’ voice. For a bit of old school celebrity backing, the lead singer of band Linkin Park is investing in the platform. Read More: LINKIN PARK SINGER CREATES TECHNOLOGY TO TURN YOU INTO A HUMAN NFT IN ONLINE MEETINGS

34% of gamers want to use crypto in the Metaverse, despite the backlash

A new survey by institutional software developer Globant and conducted by YouGov has found that 34% of gamers have expressed interest in using crypto in the Metaverse. 40% said they were interested in the ‘play-to-earn’ aspect of gaming, whilst 49% said they were only interested in gaming, and 11% more interested in earning than playing. The survey only however polled 1100 adult gamers. Read More: 34% of gamers want to use crypto in the Metaverse, despite the backlash

And for fun? The new South Park movie is basically just one long crypto roast

The new South Park movie, South Park The Streaming Wars Part 2, now out on Paramount Plus, is one long piss take (literally – it contains lots of jokes about pee) of many of the celebrities who have promoted cryptocurrency projects of varying qualities. Perhaps needless to say, many of those who invested at the time the celebrities in question told them to would have lost money. The clips on the link are worth watching for a few minutes of light humour. Fortune favours the brave. Read More: The new South Park movie is basically just one long crypto roast

OpenSea lays off 20% of its staff, citing ‘crypto winter’

Leading NFT marketplace OpenSea plans to lay off around 20% of its staff, with co-founder and CEO Devin Finzer citing “an unprecedented combination of crypto winter and broad macroeconomic instability” as the reasons behind the move. He also added, “The changes we’re making today put us in a position to maintain multiple years of runway under various crypto winter scenarios (5 years at the current volume), and give us high confidence that we will only have to go through this process once.” Read more: OpenSea lays off 20% of its staff, citing ‘crypto winter’