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| Here is a quick look at the hits from the week's first Inside Cryptocurrency newsletter: - 💸 FTX's decision to sell its European arm back to the unit's founders for $32.7M,
- 👨🏻💻 A cybersecurity incident on MicroStrategy's X account aimed at promoting a fake crypto airdrop,
- 🆕 OANDA's new crypto trading service in the U.K., and more.
Enjoy your reading! Doğa
p/dogayurduneri | |
| 1 | | Bankrupt crypto exchange FTX has agreed to sell its Switzerland-based European arm, FTX Europe, back to the entity's founders for $32.7M. The exchange purchased the unit, whose original name is Digital Assets DA AG, for $323M and rebranded it as FTX Europe in 2021. More: - The settlement has resolved a lawsuit between FTX and its European arm's co-founders, Patrick Gruhn and Robin Matzke.
- FTX sued the founders in July 2023, stating that the former management overpaid to purchase the unit using FTX customer funds.
- The firm also claimed that Digital Assets DA AG was not operating yet at the time of acquisition, seeking to claw back the $323M it spent for the purchase.
- In response, Gruhn and Matzke filed their own claims seeking $256.6M from FTX, denying the allegations against them.
- In the settlement deal, FTX said litigations related to competing claims would be expensive and time-consuming since key witnesses, including former CEO Sam Bankman-Fried (SBF), have been convicted of criminal charges and would not be able to testify.
- The bankrupt firm also underlined that no other bidder would agree to purchase FTX Europe, adding that the settlement is the best outcome for FTX creditors.
- Previous reports pointed out that Coinbase, Crypto.com, and Trek Labs also showed interest in acquiring FTX Europe in the past, though the acquisition talks never reached a late stage.
Zoom Out: - FTX, previously the third-largest crypto exchange, filed for Chapter 11 bankruptcy in November 2022, with all the 130 entities under the roof of FTX Group.
- The downfall followed the claims that SBF used customer funds in FTX to compensate for losses at the sister company Alameda Research.
- FTX's new management has recently made many similar attempts to claw back funds or sell its holdings purchased before the collapse as part of its wider efforts to recover more funds, increase its cash, and fully repay its creditors.
- In late January, FTX attorneys announced that they aim to fully reimburse customers and creditors who can prove their losses, underlining that the bankrupt firm abandoned its plans to relaunch its crypto exchange.
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What the numbers say: A recent survey conducted by PricewaterhouseCoopers (PwC) with 3,798 respondents across seven countries revealed the top five cryptocurrencies and digital assets in 2023 by the rate of ownership. The survey results show that Bitcoin (BTC), the largest cryptocurrency by market cap, is still the most popular digital asset among retail investors, with a 77% ownership rate. On the ranking, the popular cryptocurrency was followed by Ether (ETH), Dogecoin (DOGE), Litecoin (LTC), and NFTs, respectively. The poll also found that Ether experienced a significant decline in popularity last year as its ownership rate dropped from 58% in 2022 to 44% in 2023. Relevance: Another research report from the Dubai-headquartered crypto exchange Bybit also pointed to a similar trend among institutional investors in December last year. The report revealed that institutional traders allocate a significant portion of their investment portfolio to Bitcoin and Ether. Notably, the research also showed that the only digital asset type the institutional investors rely on more than BTC and ETH was stablecoins, whose value is pegged to another reference asset like a fiat currency. Brands that should care: Some of the most well-known corporate investors in crypto include Tesla, MicroStrategy, Coinbase, Marathon Digital, and Galaxy Digital. | | | |
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| 3 | | A U.S. Judge has recently granted a ruling in favor of The Texas Blockchain Council, an industry association for Bitcoin (BTC) miners, and crypto mining firm Riot Platforms in a lawsuit against the U.S. energy agencies. The ruling has brought a temporary restraining order until March 25 for the U.S. Energy Information Administration's (EIA) survey related to the Bitcoin mining firms' energy use. More: - The order will prevent the EIA from requiring crypto-mining firms to respond to the survey and from sharing any data that has already been collected.
- The ruling came shortly after The Texas Blockchain Council convinced the court that further data collection would cause irreversible harm, including non-recoverable costs of compliance with the survey, a threat of prosecution the firms face if they do not comply, and the disclosure of proprietary information.
- As part of the latest ruling, the court stated that The Blockchain Association and Riot Platforms are likely to win the lawsuit, adding that the EIA misused its authority to receive approval for the emergency survey.
- Earlier in February, the EIA launched a survey requiring select Bitcoin mining firms to respond in detail to the questions related to their energy use.
- At the time, the agency said the move was part of an emergency data collection request issued by the Office of Management and Budget (OMB), which runs directly under the executive office of the U.S. President.
- In response, The Texas Blockchain Council and Riot Platforms sued the U.S. Department of Energy, the EIA, the OMB, and their leadership, describing the move as an unprecedented and illegal data collection demand.
- In an official statement, the industry association also said they see the survey as a direct assault on private businesses under the guise of an emergency, which has clear political bias and lacks legitimate grounds.
Zoom Out: - Crypto miners have come under fire many times in recent years for their high electricity usage, burden on power grids, and adverse impacts on the environment due to the carbon emissions arising from their operations.
- A recent report from the EIA estimated that Bitcoin miners accounted for as much as 2.3% of total power demand in the U.S. in 2023.
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| 4 | | The U.S.-based business intelligence firm MicroStrategy, the largest corporate Bitcoin (BTC) holder, has experienced a hack on its official account on X, formerly known as Twitter. Blockchain analyst ZachXBT and anti-scam platform Scam Sniffer said the cybersecurity incident has already caused at least $440,000 of crypto to be stolen from some followers. More: - Shortly after seizing control of the account, the attacker shared a post involving a malicious link to promote the airdrop of a fake MSTR token posing as MicroStrategy's official Ethereum-based token.
- MicroStrategy's shares are also traded on the stock exchange Nasdaq under the ticker "MSTR."
- Users clicking on the link were directed to a fake MicroStrategy webpage under the domain "microstralegy" and asked to connect their crypto wallets to claim their tokens as part of the airdrop.
- Then, the attacker automatically drained the tokens in the wallets of users who accepted a series of permissions.
- One user alone lost over $424,786 of altcoins to the scam only several minutes after the attacker posted the malicious link on MicroStrategy's X account.
- The post was later deleted.
Zoom Out: - MicroStrategy is most famous for its Bitcoin-friendly approach and made its first foray into crypto by starting its Bitcoin purchases in 2020.
- The firm recently brought its total Bitcoin reserves to 193,000 BTC worth around $10B under current prices.
- Earlier in February, the company's crypto advocate co-founder and executive chairman, Michael Saylor, said they do not plan to sell any of the firm's Bitcoin holdings and intend to continue to buy Bitcoin on top of the existing tokens.
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| 5 | | The U.S.-based foreign exchange corporation and brokerage firm OANDA has announced that it will start offering crypto trading services in the U.K. in compliance with regulations through its local subsidiary, OANDA Crypto. The new platform will allow users to purchase and sell cryptocurrencies, including Bitcoin (BTC), Ether (ETH), and Ripple (XRP), in over 63 crypto pairs. More: - OANDA Crypto was established last year after OANDA acquired a majority stake in crypto firm Coinpass, registered with the Financial Conduct Authority (FCA), the U.K.'s financial market regulator.
- The firm plans to add more tokens and features to its new crypto trading service in the U.K. in the future.
- OANDA's head of digital assets, Lucian Lauerman, said regions requiring crypto firms to comply with strict regulations, like the U.S. and the U.K., are more attractive for them as opposed to other companies deliberately staying away from these countries.
- Lauerman also defined the U.K. as a very well-educated and active market with a high level of participation, adding that the country is getting more and more aligned with the markets where they offer traditional financial services.
- OANDA has already been offering crypto trading services in the U.S. in partnership with crypto firm Paxos, which holds a charter from the New York State Department of Financial Services (NYSDF), the U.S. state's financial regulator.
- The firm also recently moved the base of its European operations away from Malta to Poland, acquiring the Polish broker Dom Maklerski TMS Brokers SA and rebranding it as OANDA TMS.
Zoom Out: - The FCA introduced new rules on crypto promotions last year, mandating stricter regulatory requirements for crypto firms.
- The move forced many crypto-related platforms, including Bybit, PayPal, Luno, CoinCorner, Binance, and Revolut, to restrict or halt their crypto trading services in the U.K.
- However, some crypto exchanges, such as OKX and Coinbase, have adopted additional measures to meet the new regulatory requirements in the country.
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| 6 | | Hong Kong-based crypto exchange BitForex has gone offline after around $56.5M was withdrawn from the platform's hot wallets on Feb. 23. The exchange has also halted processing withdrawals and has not responded to any user request since the massive outflow. More: - BitForex's official website started displaying a warning that visitors had been blocked and were unable to access the site.
- In addition, the platform's X account has not shared a new post since Feb. 21.
- Some users said they could not enter their BitForex accounts, while some reported that the platform's dashboard does not show their assets.
- In late January, BitForex's CEO, Jason Luo, stepped down from his role after spending six years at the firm.
- In September 2023, BitForex was among the top 20 global crypto exchanges, with its $2.6B daily crypto trading volume.
Zoom Out: - In 2019, blockchain data analysis platform Chainalysis claimed that BitForex could have been releasing fake trading volumes.
- Last year, the platform also became one of the crypto exchanges accused by the Japan Financial Services Agency (JFSA) of operating in the country without proper registration.
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| 7 | | Quick Hits: - Discover the trends shaping 2024 and learn how trust will be the key to business success. Shape your strategy and get ahead with this latest report.*
- U.S. Judge Richard Jones has approved a $4.3B penalty, which Binance, the largest crypto exchange by trading volume, agreed to pay to settle U.S. regulators' money laundering, unlicensed money-transmitting business operations, and sanction violation charges.
- U.S. prosecutors have requested a federal judge to order the former Binance CEO, Changpeng Zhao (CZ), to deliver all his current and expired passports and travel documents to his legal team until his sentencing hearing on April 30.
- Overdare, a joint venture founded by South Korean game publisher KRAFTON and metaverse firm Naver Z Corporation, has partnered with stablecoin issuer Circle to use its crypto wallet infrastructure and USD Coin (USDC) stablecoin as a payment option in its upcoming metaverse platform.
- Visa and Mastercard have come to a historic $5B settlement, marking a pivotal moment for small business owners. If your business accepts Visa/MC, claim your share today.*
*This is a sponsored post. | | | |
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 | Staff Writer | | Doga is a tech and science editor who has been writing news for nearly 10 years. She worked for leading tech platforms and mainstrem media channels as an editor and presenter throughout his career. Then, she carried her know-how to more than one platform. She is a part-time cat lover and binge-watcher, and also fond of science, space, and emerging tech. She always has a story to tell. She is a bit addict to the laughter and -unfortunately- the '90s culture. | | This newsletter was edited by Aaron Crutchfield | |
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