Author: Lauren Claxton

Lauren is currently a freelance writer with experience in finance writing. She has a growing interest in the metaverse and all things NFTs and expects to graduate in 2022 with bachelors degrees in creative writing and public relations.

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CBDCs Crypto News

Sri Lanka Reiterates Crypto Warning as President Flees Amid Civil Uprising

Sri Lanka is in the throes of mass protests over an economic crisis that this week saw its President, Gotabaya Rajapaksa, flee the country on a military jet.

Simultaneously,  the Central Bank of Sri Lanka (CBSL) has warned the public against crypto purchases due to the industry’s regulation drought.

The CBSL issued a short media release to remind the public that, amid the country’s economic collapse, virtual currencies (VCs) remain “largely unregulated digital representations of value that are issued by private entities and can be electronically traded”.

Inflation Hits 54%, Interest Rates 15.5%

With Sri Lanka’s inflation level topping 54 percent last month, the CBSL raised interest rates to 15.5 percent with an immense knock-on effect on the cost of living for the country’s 22 million population.

[Digital currencies] are considered unregulated financial instruments and have no regulatory oversight or safeguards relating to their usage in Sri Lanka … The public is therefore warned of the possible exposure to significant financial, operational, legal and security-related risks as well as customer protection concerns posed to the users by investments in VCs.

Central Bank of Sri Lanka

On July 9, hundreds of protesters breached the president’s Colombo residence, reportedly seizing 17.8 million rupees (approximately US$50,000) in cash and fully utilising all facilities in the residence.

As the situation in Sri Lanka continues to spiral, CBSL’s media release also warned the public to be wary of various VC schemes and scams offered through all forms of media.

Crypto Opposition Around the Globe

Several other nations around the world also remain anti-crypto, notably Russia and Zambia. The Central Bank of the Russian Federation (CBR) was seeking to ban crypto investments in late 2021, according to a report by Reuters. The CBR also barred mutual funds from investing in digital currency during this same period.

More recently, Zambia’s central bank was revealed to be in the process of researching central bank digital currencies, with aspirations to implement a CBDC by the end of the fourth quarter. This followed government-issued warnings about crypto earlier in the year. Despite wanting to explore CBDCs, the Zambian government maintains an anti-crypto stance.

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Crypto News Regulation

California Regulator Investigates ‘Multiple’ Crypto Lenders for Inadequate Disclosures

California’s Department of Financial Protection and Innovation (DFPI) has announced it is “actively investigating” crypto lenders offering crypto interest accounts.

Multiple US-based lenders face investigation after indefinitely halting transfers and withdrawals between user accounts.

Targeted Companies Fail to Disclose Deposit-Related Risks

While none of these lending companies has been named, the regulator has hinted that those offering interest-bearing crypto-asset accounts, and service providers that have failed to adequately disclose deposit-related risks, will be a focus:

The Department warns California consumers and investors that many crypto-interest account providers may not have adequately disclosed risks customers face when they deposit crypto assets onto these platforms.

California Department of Financial Protection and Innovation

In the months leading up to the regulator’s decision, several prominent crypto lenders – notably Celsius – have frozen withdrawals and transfers. Behind these freezes is the liquidity crisis kickstarted by the recent and intense market downturn, which saw bitcoin fall below US$20,000 multiple times in June alone.

The California regulator’s decision to mount its investigation also comes after public comments from politicians and other regulators cautioning consumers over the risks of crypto lending.

Crypto Lenders a Hot Topic

Crypto lenders have been the talk of the town in recent times. Last month, crypto services business Nexo sought to purchase “qualifying” assets from rival crypto lender Celsius. This followed perceptions of Celsius’ impending insolvency as it froze user withdrawals and transfers over “extreme market conditions”.

Earlier this month, crypto lender BlockFi signed a contract with FTX US, a division of Sam Bankman-Fried’s crypto exchange. The partnership would see FTX increase its credit facility with BlockFi and provide an opportunity for FTX to potentially acquire the struggling lender. BlockFi co-founder Zac Prince stated that the deal was valued at up to US$680 million, with an additional US$400 million revolving credit facility.

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Crypto News Crypto Wallets Gaming NFTs

GameStop Goes Live with its Much-Anticipated NFT Marketplace

American video game retail chain GameStop has officially launched its long-awaited Ethereum-based NFT marketplace.

The marketplace is running on both the Ethereum mainnet and layer-2 scaling solution Loopring and is hosting various artwork projects, with plans to branch into video games.

Another Start for GameStop

GameStop entered a partnership with Immutable X in February to guarantee future funding (in the form of IMX tokens) for its marketplace. A potential US$150 million in IMX has been negotiated but can only be accessed by GameStop once it reaches certain milestones.

For now, artworks are the only products on the marketplace; however, GameStop is set on the NFT gaming space and plans to bring NFTs to video games. The partnership with Immutable X has created a US$100 million token ‘grant’ fund in hopes of attracting game developers to the marketplace.

GameStop Now a Fully Fledged Crypto Player

In May 2021, GameStop announced development plans for an NFT platform on Ethereum and a new token ($GME). This move accelerated its evolution from a simple retail chain into the crypto industry proper.

Almost exactly a year later, GameStop launched its crypto and NFT wallet, branching further into the digital assets sector. It came in the form of an Ethereum-based browser extension, downloadable from the Chrome Web Store. The wallet is self-custodial and designed with the most recent marketplace addition in mind:

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Crypto News Social media

Elon Musk Wants Out of $44 Billion Twitter Deal, Twitter Likely to Sue

Elon Musk, CEO of SpaceX and Tesla, has retracted his US$44 billion offer to buy Twitter. A notice of termination was filed through the US Securities and Exchange Commission (SEC) alleging that Twitter had breached multiple provisions of its initial agreement with Musk:

‘Misrepresentations’ Made by Twitter

Just three months after Musk’s April announcement that he would purchase Twitter, the billionaire has declined to finalise the deal citing various breaches of the initial agreement, according to an SEC filing from his attorneys:

Twitter … appears to have made false and misleading representations upon which Mr Musk relied when entering into the merger agreement, and is likely to suffer a company material adverse effect.

Skadden, Arps, Slate, Meagher & Flom LLP

The SEC filing also suggests Musk had sought the necessary data to independently assess the prevalence of fake or spam accounts on Twitter’s platform. Twitter had reportedly failed or refused to provide this information:

Despite Musk’s change of heart, Twitter has no intentions to go down quietly. Bret Taylor, one of its chairmen, has shared that the company’s board seeks to close the transaction as per the original agreements. The social media giant says it will be pursuing legal action.

Initial Promise All About ‘Free Speech’

Musk initially purchased Twitter with the intention of privatising the social media giant. The billionaire touted the notion that freedom of speech would reign supreme, tweeting that he hoped that “even [his] worst critics remain on Twitter because that is what free speech means”. However, the decision was met with a sizeable backlash suggesting the move would be “dangerous for democracy”.

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Crypto News DAO DeFi

DeFi Lender ‘Porter Finance’ Shuts Down Bond Issuance Platform Within a Month of Launch

With recession concerns and dipping crypto prices reducing borrowing demand from the decentralised finance ecosystem, DeFi lender Porter Finance has announced the closure of its bond issuance platform:

Twin Forces Drive Lack of Demand for BI

The Ethereum-based lender allowed decentralised autonomous organisations (DAOs), such as Porter’s Ribbon DAO, to issue convertible bonds to raise funds in return for paying yields to users. However, the lack of demand for fixed-income DeFi products has meant that the Porter Finance bond issuance platform was in operation for only a month.

Porter Finance founder Jordan Meyer cited the competitive rates of traditional finance and the lack of institutional fixed-income DeFi adoption as the twin forces driving low demand for bond issuance. Meyer has also stated that his company is “no longer willing to take on the legal risk associated with bond offerings”:

Ribbon DAO, the protocol that helps users access crypto-structured products for DeFi, which was using Porter Finance to issue its bonds, is still bound by its promise to repay yields to users. The closure of Porter Finance’s first-of-its-kind service follows the implosion of other DeFi companies such as Celsius.

Other DeFi Movements

Last month’s hot topic was the DeFi sector with DeFi Yield Protocol (DYP) up by a notable 107 percent in a week. At the time, DYP was trading at US$0.43. According to Coinbase, DYP will phase in alongside five other Ethereum-based altcoins – PARSIQ, Elastos (ELA), HOPR, MATH and ALEPH – in trading pairs with Tether once liquidity conditions are met. The six altcoins will be grouped under the exchange’s new ‘Experimental’ title.

At the same time, the combined CeFi and DeFi crypto lending platform Alkemi Network announced a partnership with hardware wallet maker Ledger. The collaboration will mean that Ledger’s 1.5 million users can earn yields with their ETH, USDC or wBTC via their wallets’ interfaces. The combination of CeFi and DeFi allows users to maintain full control of their assets.

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Crypto News NFTs

Lamborghini-Backed Racing Team Adopts NFT Authentication for Car Parts

GT racing team Vincenzo Sospiri Racing (VSR) is partnering with NFT platform Go2NFT for a project that certifies racing car parts. The NFTs will aid in monitoring and ensuring car part quality, with the collaboration offering room to extend this technology to merchandising:

Sospiri Personally Endorses Pilot Scheme

Go2NFT’s pilot scheme will utilise NFT tech to authenticate factory parts, with racing champion Vincenzo Sospiri himself stating that VSR, Go2NFT, and the blockchain platform Skey Network will be building cars with verified provenance:

https://www.gettyimages.com.au/detail/news-photo/italian-driver-vincenzo-sospiri-sits-on-his-car-in-pit-row-news-photo/51659371

This also brings great responsibility to ensure that we can securely authenticate and audit every part of our racing fleet to monitor performance and ensure provenance.

Vincenzo Sospiri, VSR

Boris Ejsymont, chief business officer of Go2NFT, understands the challenges brands face in protecting their intellectual property, and says that NFTs offer a solution. For more information on the tech behind this project, check out Go2NFT’s video below:

NFTs Rev Up the Auto World

This isn’t Lamborghini’s first dip into NFTs. In August 2021, the company celebrated its founder, Ferruccio Lamborghini, with the launch of an NFT collection, a collaboration between the Ferruccio Lamborghini Museum and crypto art platform Elysium Bridge. Touted as a “one-time event”, the collection offered investors the chance to “own unique pieces of supercar history in an unprecedented NFT drop”.

But it’s not just performance cars that are experimenting with NFTs. Alfa Romeo’s latest SUV, the Tonale, enables customers to track and store its maintenance records. This, more practical, approach to documenting vehicle data will add much-needed transparency and efficiency to record-keeping.

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Crypto News Crypto Wallets Metaverse

Meta Calls It Quits on Crypto Wallet ‘Novi’ After Just 10 Months

Meta Platforms has issued a notice to the users of its crypto project, Novi, recommending they withdraw their funds without delay. This follows the announcement that Meta will cease the Novi project after the introduction of a digital wallet for the metaverse.

Deposits Close July 21

Novi, a digital wallet that offers fee-free instant money transfers using crypto, will be ‘ending soon’ according to Meta. The current form of the Novi project has been available for barely 10 months. However, its first phase – Calibra, the wallet for Meta’s Libra stablecoin – became available in 2019.

September 1 will mark the end for the wallet, with users no longer able to add money to their Novi accounts from July 21. The project’s end will also mean that Novi for Whatsapp will no longer function.

Funds remaining in accounts after September 1 will be transferred to the debit cards/bank attached to users’ Novi accounts.

In place of the Novi project, Meta is introducing the Metaverse digital wallet. This wallet will allow metaverse players to securely manage their identity, possessions, and payments. Meta seems to be placing the emphasis, yet again, on the potential of the metaverse:

You can expect to see more from us in the Web3 space because we are very optimistic about the value these technologies can bring to people and businesses in the metaverse.

Meta statement

In October 2021, the Novi wallet began trials across a select group in the US. Meta touted the ease of sending and receiving money – a process that could take place instantly, securely, and with no fees. Meta’s head of crypto and fintech at Novi, Stephane Kasriel, announced the rollout on December 9.

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Australia Bitcoin Mining Crypto News

‘Black Mountain Energy’ Looks Set to Enter Bitcoin Mining in Australia

Black Mountain Energy, a US-owned resource company headquartered in Australia, has received a “non-binding” letter of intent from Highwire Energy Partners regarding collaboration for potential entry into the bitcoin mining industry.

The proposed location for the crypto mining project is a fracking site in the Kimberly region of northwest Western Australia; however, despite BME’s charter of “responsibly developed and environmentally conscious natural gas supply”, environmentalists claim the project will not benefit from emission reductions.

https://www.naturalfocusaustralia.com.au/western-australia/broome-and-the-kimberley/
BME is exploring project Valhalla in the Kimberley region of northwest Western Australia.

Flared Methane to be Diverted to Crypto Servers

Highwire Energy Partners will likely work with BME to divert flared methane gas from well-testing to power mobile cryptocurrency servers. This well-testing, and eventual project roll-out, is taking place at BME’s Valhalla Project fracking site in the Kimberley’s Canning Basin.

Rhett Bennett, BME’s chief executive officer, has stated that the process would likely aid in a reduction in emissions by avoiding flaring off the excess gas, allegedly reducing CO2-equivalent emissions by around 63 percent.

https://bm-resources.com/team/rhett-bennett/

Flaring natural gas certainly is not [Environment, Social and Governance]-friendly … so the ability to utilise that gas for power and ultimately create a product, in this form, is a much better solution.

Rhett Bennett, CEO, Black Mountain Energy

BME’s current negotiations involve the use of 5 terajoules of gas per day, which can supply up to 25 megawatts of power for the crypto servers. This translates into approximately A$100,000 worth of Bitcoin daily, providing BME uses the best available mining equipment.

However, anti-fracking organisations are retaliating against the plan, suggesting that bitcoin miners should have to use a renewable energy source rather than environmentally damaging fracked gas. As noted by Dr David Glance, director of the University of Western Australia’s Centre for Software Practice, mining operation computers established in hot and remote areas require more energy to cool.

https://theconversation.com/profiles/david-glance-148

From an environmental perspective, it makes absolutely no difference whatsoever if they burn the gas or they use it to mine cryptocurrency … It will still produce carbon dioxide.

Dr David Glance, UWA Centre for Software Practice

As it stands, the Valhalla project is yet to receive approval from the Environmental Protection Agency (EPA), which does not expect to have a report finalised until early 2023.

Other Energy Giants Mining Crypto

Black Mountain Energy is not the first company to utilise natural resources for crypto mining. In March, ExxonMobil diverted some of its unused natural gas to power mining operations in North Dakota, US. This was managed via a partnership with solutions specialist Crusoe Energy Systems, which converted the gas into mobile generators that then powered the mining operations.

Meanwhile, back in Australia, Canadian oil and gas miner Bengal Energy has commenced an assessment of the profitability of mining bitcoin from stranded gas assets in the Australian outback. The project has already led to the reassembly of previously out-of-operation gas wells in South Australia’s Cooper Basin.

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Banking Celsius Crypto News

Ailing Crypto Lender ‘Celsius’ Found to Have Double the Traditional Banking Risk

With an alleged assets-to-equity ratio near double that of the average US bank in late 2021, crypto lender Celsius had taken on far more risk than it had previously publicly stated and is now seeking to file for bankruptcy.

CEO Plays Fast and Loose with the Truth

Celsius CEO Alex Mashinsky seems to have been omitting the truth from multiple past statements that his company was not “taking a tremendous risk”. This comes as The Wall Street Journal uncovers evidence illustrating that Celsius had effectively doubled the risk profile of the average American bank.

All North American banks in the S&P 1500 Composite index have a median assets-to-equity ratio of close to 9:1. Information uncovered by the WSJ found that Celsius had US$19 billion of assets and approximately US$1 billion of equity just before October 2021.

This wasn’t the only discovery. Investor documents detailed that Celsius had sold undercollateralised loans in the past, which required business borrowers to post approximately 50 percent collateral for their loans. It is alleged that Celsius then used the collateral from these loans to borrow more:

With industry regulators typically looking at the assets-to-equity ratio as an indicator of risk, economist Eric Budish from the University of Chicago has described the Celsius ratio as “a risky structure”. Budish also stated that “it strikes [me] as diversified in the same way that portfolios of mortgages were diversified in 2006 … it was all housing – here, it’s all crypto.”

In October 2021, Celsius had been offering retail investors the chance to earn yields of up to 18.6 percent on deposited crypto assets. The lender had initially projected that deposits would exceed US$108 billion in 2023. However, this year’s industry lows have hit Celsius hard, with the company now considering filing for bankruptcy.

Celsius’ Recent Raft of Troubles

June was a disappointing month for Celsius with its native token (CEL) falling nearly 70 percent following the June 13 announcement that it would pause all withdrawals to “stabilise liquidity”. However, prior to this declaration, it is rumoured that Celsius had quickly transferred US$320 million in crypto to the Bahamian exchange FTX.

This presumed one-way ticket to insolvency also encouraged crypto services business Nexo to come forward and offer to buy Celsius’ “qualifying” assets. Nexo was believed to be interested in Celsius’ collateralised loan portfolio, yet it has since been reported that no prices were disclosed.

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Australia Blockchain New Zealand Real Estate VeChain Western Australia

Australian Real Estate Body: Blockchain Will Revolutionise the Industry

A new report from the Real Estate Institute of Australia (REIA) confirms it is firmly in favour of blockchain adoption by the industry. The report outlines the various uses for blockchain in the sector as implementation methods become a hot topic.

Web3 Will Revolutionise Real Estate

The Blockchain: Opportunities and Disruptions for Real Estate report, released this week, details how the Aussie real estate industry can utilise blockchain tech to stay ahead of the game in an unstable market. The report is the result of a collaboration between REIA, REINZ (its New Zealand counterpart), and the RMIT (Royal Melbourne University of Technology) Innovation Hub.

REIA president Hayden Groves predicts that “fully integrated Web3 technology” will allow the industry to cope with rising interest rates, and housing affordability and supply issues. And according to Professor Jason Potts, co-director of RMIT University’s Blockchain Innovation Hub, blockchain has the potential to reshape customers’ experience into something far more positive:

https://rmitblockchain.io/jasonpotts

The time is right for Australia and New Zealand to become early adopters and in doing so provide more options for their customers such as tokenisation of real estate assets, which can lead to lower costs, increased liquidity, and therefore faster settlement times.

Professor Jason Potts, RMIT

However, Groves stresses that the research is only as good as the adoption, and that an implementation strategy is yet to be decided on. He wants “agents and agencies to be trusted members of their communities” with property transactions and blockchain offering the potential to “completely improve and grow trust in a real way”.

To learn more about how blockchain can function in the real estate industry, the video below is a useful starting point:

Sustainability and Training Also to the Fore

This is only the latest chapter of real estate’s exploration of blockchain in the industry. In September 2021 Jones Lang LaSalle Incorporated (JLL), a multinational commercial real estate company, made a deal with blockchain platform VeChain to promote more sustainable practices in the sector.

More recently, REIA Western Australia introduced ‘mandatory blockchain training’ for its real estate agencies. The May 2022 initiative sought to aid the industry’s adoption and evolution as crypto and blockchain progressed into the mainstream.