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What the 476-page report said about failed lenders
Bitcoin’s rise, which spooked investors in January, has stabilized in recent days and crypto regulation remains high on the news agenda. A lengthy court-ordered report has revealed new details about what was going on behind the scenes at the lender.
Celsius Examiner’s Report
In summary, Celsius filed for bankruptcy last July, causing huge losses to its customers. As part of the Celsius bankruptcy proceedings, an independent examiner has been appointed to investigate allegations that Celsius operated as a Ponzi scheme and report on its handling of crypto assets.
The hundreds of pages of reports detail how Celsius used investor money and customer deposits to buy its own tokens, propping up prices and inflating its balance sheet.
Celsius founder Alex Mashinski realized at least $68.7 million from the sale of CEL, the report says. (Celsius did not immediately respond to a request for comment on the examiner’s report. Mashinski’s attorney said his client denied the allegations and looked forward to defending them vigorously in court.) mentioned earlier.)
FTX objected to the US Department of Justice’s request for a similar independent investigation as part of its own bankruptcy proceedings. FTX said it was already conducting an extensive investigation, claiming the proposed investigation would only add costs and delay the bankruptcy case.
Speaking of FTX, court filings show that financial regulators and government agencies in the United States, Japan and Switzerland are creditors of FTX, including companies such as Airbnb and cryptocurrency giant Binance. It did not say how much they owed or why. (Airbnb and Binance did not immediately respond to requests for comment.)
Meanwhile, regulators and authorities are closing in on cryptocurrencies, with some lawmakers calling for more power.
The Commissioner of the U.S. Commodity Futures Trading Commission (CFTC) said lawmakers should give the CFTC the power to conduct due diligence on unregistered companies that want to buy large amounts of stock in CFTC-registered companies. rice field. A Democratic senator has said the U.S. financial oversight agency should step up its scrutiny of companies that audit cryptocurrency companies.
In Europe, Ireland’s central bank governor has urged lawmakers to ban crypto advertising aimed at young adults. He said Irish regulators are very concerned about the impact on retail customers. The Dutch central bank fined Coinbase 33 million euros for failing to obtain proper registration in the Netherlands before providing services.
The UK Treasury has drafted rules for crypto assets, saying the collapse of FTX has highlighted risks that need to be addressed.
crypto essentials
*The Federal Reserve has rejected a crypto-focused custodian bank’s application to become a member of the Federal Reserve System. The Federal Reserve Board said it lacked an adequate risk management framework to address the growing risks associated with cryptocurrencies, including the potential for cryptocurrencies to be used for money laundering and terrorist financing. .
* The SEC is investigating whether registered investment advisers comply with the agency’s rules regarding the custody of clients’ digital assets, three sources familiar with the investigation told Reuters. Following the collapse of FTX, we stepped up our investigation. The SEC declined to comment.
* The Premier League has struck a deal with NFT company Sorare to allow them to sell NFTs of virtual trading cards representing players from Premier League clubs. The NFT market plunged last year, with football fans expressing concerns about the role of crypto assets in fan engagement.
* Digital Currency Group update: Grayscale is gearing up for a lengthy legal battle with the SEC over its application to establish a spot Bitcoin exchange-traded fund, which the SEC rejected in June. Luno is cutting his 35% headcount.
* Other FTX News: US Prosecutors Want Tighter Bail Conditions For Sam Bankman-Fried. Concerned that he might falsify witnesses or destroy evidence in a criminal case, they called for a ban on him speaking to most former employees without the presence of a lawyer.Bankman-Fried lawyers objected, and the prosecutor then asked the judge to dismiss Bankman-Fried’s objection.
* FTX also sued Voyager Digital for $445.8 million in loan repayments.
Digital asset investment products saw their biggest weekly inflow since July last week, with funds tracking Bitcoin accounting for $116 million, according to data from CoinShares. Some investors are betting that Bitcoin will benefit when the Federal Reserve reaches the end of its rate hike cycle.
what i am reading
* What happens when crypto derivatives crash? The International Swaps and Derivatives Association has released a framework that sets out the rights and obligations of both parties to trading derivatives after the market turmoil.
* Click here for the market impact of the end of central bank stimulus.
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Reuters Daily Briefing
All the news you need to start your weekday.
(Reporting by Elizabeth Howcroft; Editing by Louise Havens)
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