Category: Crypto Exchange

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Australia Binance Australia Crypto Exchange Crypto News

Aussies Transfer to Local Exchanges as Binance Suspends AUD Fiat Services 

Aussie crypto exchanges have reported a big increase in new customers following Binance Australia’s suspension of AUD fiat services.

On May 18, Binance Australia told customers that its Aussie dollar services were suspended “due to a decision made by our third-party payment provider”. Meanwhile, the Australian Financial Review reported that Westpac had stopped its customers from transacting with Binance amid concerns over the use of overseas exchanges by scammers.

National exchanges have since reported a significant increase in traffic and downloads across their platforms.

Aussie crypto users move to local exchanges

Jason Titman, chief operating officer at Australian-owned exchange Swyftx, said:

“We’ve just seen a seven-month high in the number of new customer registrations. Aussie crypto users want the peace of mind that comes from dealing with a secure, large national exchange at the moment.”

Binance Australia has told its customers that they can continue to withdraw AUD via bank transfer until June 1. In its latest update, the exchange also said it was “working hard to find an alternative provider to continue offering AUD deposits and withdrawals.”

In a media statement on May 18, Westpac Group Executive of Customer Services and Technology, Scott Collary, said: “Digital exchanges have a legitimate role to play in the financial ecosystem. But since the rise of digital currency, we’ve noticed that scammers are increasingly using overseas exchanges.”

New research reveals Aussie crypto users biggest consideration when choosing an exchange

Titman said new Swyftx customer research had shown Australian ownership was now the biggest consideration for local crypto users when choosing an exchange.

“There has been a major shift in sentiment over the last six months and especially since the collapse of FTX, with local crypto users opting for local crypto exchanges.”

“Australians want to trade on secure exchanges that are based in the country and operate to local standards.”

“Swyftx has one of the largest teams in the country and we work closely behind the scenes with banks and law enforcement to keep our customers safe, with around 15% of our team dedicated to security and scam prevention.”

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Coinbase Crypto Exchange Crypto Wallets NFTs

Apple Blocks Coinbase NFT Transfers Over In-App Purchase Dispute

Leading cryptocurrency exchange, Coinbase said it’s been forced to remove non-fungible token (NFT) transactions from the iOS version of its wallet app, following Apple’s decision to apply its ‘Apple tax’ to these transactions.

Coinbase said the NFT feature had been disabled to get around a block on its latest app release due to Apple’s transaction fees policy.

Apple’s policy doesn’t straight-up ban NFT transfers, but it does require that 30 percent of the gas fees — the blockchain network fees paid by users to process the transactions — are paid directly to Apple. 

Complying is Impossible: Coinbase Boss

Coinbase’s official Twitter account posted a thread on Thursday explaining why the NFT functionality had been removed from its iOS wallet app. Coinbase pointed out that it was not possible for it to comply with Apple’s policy as Apple’s in-app purchase system doesn’t currently support crypto.

The thread also likened Apple’s policy to “trying to take a cut of fees for every email that gets sent over open internet protocols.”

Coinbase CEO, Brian Armstrong, tweeted that conversations with Apple had recently started to become “absurd” as Coinbase struggled to navigate what they consider nonsensical policies imposed by Apple.

Cryptosphere Reacts

On Twitter, many users have expressed their frustration with what they perceive as excessive greed interfering with the growth of crypto.

Others pointed to Solana’s soon-to-be-released Saga phone as a potential way around Apple’s policies.

Apple announced in October that NFT in-app transactions would be subject to the same 30 percent fee as all other types of in-app transactions. Apple’s insistence on applying their tax to NFT transactions has meant that NFT marketplaces and other crypto-centric functionality has remained largely absent from its App Store. 

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Binance Crypto Exchange Crypto News FTX Kraken

Binance Releases Proof of Reserve System – Kraken CEO Unsatisfied

In the wake of the collapse of FTX, cryptocurrency exchanges are rushing to convince customers that they’re safe and not likely to suddenly collapse — at least not in the next few weeks. Recently large exchanges like Crypto.com and Kraken have released proof of their reserves, and now Binance is following suit. 

Last Friday, Binance announced its new proof of reserve system, which allows customers to verify that their funds have been included in the proof of reserves report by querying data in a Merkle tree. Binance claims this proves that customer funds are held on a full-reserve basis.

However, Binance’s new system has been met with criticism by the CEO of rival crypto exchange Kraken, Jesse Powell.

Powell referred to the system as “hand wavey bullshit” that provides nothing more than a cryptographic hash of an entry in a spreadsheet, which does nothing to show that Binance holds more assets than it owes.

Powell’s Criticism Explained

Powell said a meaningful proof of reserve audit must include all client liabilities with negative balances excluded, user-verifiable cryptographic proof that all accounts have been included in the audit, and cryptographic signatures verifying the exchange’s control over the wallets containing the assets.

Without this information, Powell said proofs of reserve such as those released by Binance are “worthless” and tell users nothing of value about an exchange’s financial position.

Powell’s Kraken exchange has implemented a similar Merkle tree-based proof of reserve system that he claims is more rigorous than that offered by Binance. However Kraken does acknowledge its system has some shortcomings of its own. 

Crypto Journalists Cop It

Binance wasn’t the only target in Powell’s sights: he also took aim at crypto journalists for failing to understand the flaws in Binance’s system.

Previously, Powell had criticised the Binance-owned crypto tracking website, CoinMarketCap, for its implementation of its new proof of reserves feature, which he says simply includes a list of wallets and does nothing to clarify if an exchange has more assets than liabilities. 

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Crypto Exchange Crypto News FTX Regulation

Top Crypto Data Platform CoinMarketCap Launches Proof of Reserve Tracker

A new feature released by leading crypto price-tracking site CoinMarketCap reveals more data about crypto exchanges’ reserves — the assets that enable a company to cover potential withdrawals by customers.

With the contagion of FTX’s highly damaging collapse continuing to spread, and Proof-of-Reserves being touted as a needed failsafe against future incidents, the website’s move to give people information about crypto exchanges has been welcomed by many. 

According to CoinMarketCap, its new ‘Proof of Reserves’ feature “provides transparency to cryptocurrency reserves through a verifiable auditing practice.” The data seems to be drawn from audited proof of reserves information that the exchanges themselves have made public — with these sources aggregated by CoinMarketCap for the convenience of its visitors. For instance, it lists as a source this tweet from Crypto.com:

“More and more cryptocurrency exchanges have begun revealing their proof-of-reserves in the wake of the recent industry disquiet, and we believe in the importance of giving CMC users all of the information possible about each exchange, project and token.”

CoinMarketCap statement about its Proof of Reserves data

What information can you now get?

By exploring the web pages dedicated to each exchange featured on CoinMarketCap, users can now view details including:

  • The total assets held by the exchange
  • Public wallet address ownership
  • The balance, price and value of the public wallets.

A true sense of a company’s solvency is typically derived from the difference between its total assets and its total liabilities. Obviously, CoinMarketCap doesn’t have access to every company’s full balance sheet, and this feature at least gives investors some indication of an exchange’s ability to meet its financial obligations. 

Capital Adequacy and Audits on the Agenda for Australian Regulators

Safe-keeping crypto investor funds by licensing exchanges and custody arrangements are being considered by the Australian Government, which recently hinted it would prioritise legislation in 2023 in response to the FTX collapse.

The recently finalised Senate Select Committee report into digital asset regulation recommended establishing a market licensing regime for exchanges, and stressed: “The key requirements of a new DCE Market Licence category should include, at a minimum, requirements relating to capital adequacy, auditing and responsible person tests.” 

CEO of digital asset mining company Mawson Infrastructure Group, James Manning is quoted in the report airing his concerns about the current lack of compliance standards: “There’s no audit obligation. As you pointed out, there’s no capital adequacy obligation. There’s no one verifying this, yet some of these exchanges are holding billions of dollars of assets.”

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Crypto Exchange Crypto Wallets Regulation Russia

Several Crypto Exchanges Close Russian Accounts Following EU Sanctions

cryptocurrency on a russian flag

A number of cryptocurrency exchanges, including Bitcoin.com, LocalBitcoins and Crypto.com, have reportedly opted to stop serving Russia-based customers following a raft of new sanctions enacted by the European Union against Russia on October 6th.

This news follows an earlier move by the blockchain-focussed developer Dapper Labs’ to ban Russian citizens from accessing its services. With numerous major exchanges set to follow suit, Russian residents’ access to crypto markets seems severely restricted.

New Sanctions Further Restrict Russian Access to Crypto

Previous sanctions had limited the value of crypto transfers between EU nations and Russia to €10,000, or approximately US$9,700. These new sanctions go much further, essentially banning the provision of crypto-asset wallet services to any person residing in Russia:

“Decision (CFSP) 2022/1909 removes the threshold for the existing prohibition on the provision of crypto-asset wallet, account or custody services to Russian persons and residents, thereby banning the provision of such services regardless of the total value of such crypto-assets…It shall be prohibited to provide crypto-asset wallet, account or custody services to Russian nationals or natural persons residing in Russia, or legal persons, entities or bodies established in Russia.” 

Offical Journal of the European Union, Volume 65

It’s unclear if this ban includes non-custodial wallets, such as those offered by Bitcoin.com and Crypto.com, or if it’s limited to custodial wallets held on exchanges and used by customers for trading.

Exchanges Set to Block Russian Customers Starting This Month

According to reports in the Russian media, Bitcoin.com gave Russia-based customers until October 27th to remove their assets from the exchange. After the deadline, Bitcoin.com will block customers from accessing their accounts.

Peer-to-peer crypto exchange, LocalBitcoins, blocked access to its services by Russian residents on October 7th, the day after the new sanctions were announced.

Many other exchanges will follow, with most major exchanges, including Binance and Coinbase, reportedly working towards complying with the new sanctions as quickly as possible. Having said that, it’s not currently known exactly when Russian access to most exchanges will end, as it could take some time to safely and effectively implement the restrictions.

Could Any Exchanges Defy The Sanctions?

It’s unclear whether any crypto exchanges intend to defy the new restrictions and continue offering services to Russian residents. 

Bitfinex has previously expressed opposition to EU sanctions against Russians. In March of this year, Bitfinex CTO Paulo Ardoino, expressed concern about cutting services to Russia, saying Bitfinex was prepared to safeguard customers’ access to their accounts unless ordered to do otherwise by regulatory agencies.

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Crime Crypto Exchange Illegal Stablecoins

Terra Co-founder Do Kwon Denies $39.6M Crypto Asset Freeze

Do Kwon, the CEO of Terraform Labs and the man behind the collapsed LUNA ecosystem, has denied a report from South Korean news outlet News1 claiming local prosecutors have frozen some of his crypto assets valued at 56.2 billion won (US$39.6 million).

In response to the report, Kwon tweeted that it’s a ‘falsehood’ and that he doesn’t have time to trade crypto.

Mounting Reports Matched by Kwon Denials

In his tweet Kwon also denied having accounts on the crypto exchanges KuCoin and OKX — this was a reference to his earlier denial of a September report that South Korean authorities had asked these exchanges to freeze 3,313 Bitcoin (BTC) linked to Kwon held on their platforms. 

Just a day earlier, Bloomberg had reported that South Korean prosecutors were claiming that Interpol had issued a red notice for Kwon, meaning law enforcement organisations globally had been asked to locate and apprehend him if he attempts to cross national borders.

Yet more claims against Kwon were reported back in July, when he was accused of rug pulling LUNA holders by quietly cashing out US$80 million per month in the lead-up to the blockchain’s collapse.

Despite these mounting reports against him and the fact he appears to have gone into hiding, Kwon maintains his innocence and claims to be cooperating with authorities.

Kwon Wanted in Relation to May LUNA Collapse

The legal troubles for Kwon stem from the spectacular collapse of the LUNA ecosystem in May 2022 in which the algorithmic stablecoin UST lost its peg with the US dollar, falling to virtually zero and taking down its sister token LUNA with it. 

This collapse wiped out around US$26 billion of investor value, triggered the collapse of Three Arrows Capital, contributed to the bankruptcy of crypto lenders Voyager and Celsius, and plunged the entire crypto market into a deep winter from which it is yet to emerge.

For his part in LUNA’s collapse, Kwon is now wanted by South Korean authorities for numerous crimes, including breaching the country’s capital-market laws.

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Celsius Crypto Exchange Crypto News Zipmex

Zipmex CEO Refuses to Quit Despite A$73 Million Loss

Zipmex co-founder and CEO Marcus Lim is standing firm on his intention to pilot the troubled exchange through a three-month stay of execution from creditors, which it won in the Singapore High Court last week.

Lim vows he will continue to steer the ship unless its new major shareholders tell him to resign, as he works to repay the $US50 million (A$72.8 million) lost through the collapse of crypto lenders Babel Finance and Celsius Network.

‘Key Shareholder’ Sought Lim’s Resignation

Earlier this month, a key shareholder of the exchange had sent Lim a letter requesting his resignation, citing a “loss of confidence between partners” and consequences from the Babel disclosure, according to a Bloomberg story attributed to a source claiming “specialist knowledge” of the situation.

Zipmex halted transfers and withdrawals in July when news broke of the missing millions. Since then the exchange has enabled partial withdrawals of its customers’ Bitcoin and Ether holdings, albeit in minuscule amounts.

Meanwhile, the three-month moratorium providing bankruptcy protection against creditors will hopefully enable the hamstrung exchange to complete a fresh capital raise of between $US50 million and $US80 million. Lim’s intention is to ultimately return funds to investors, all while he oversees a restructuring of the company.

New Shareholders May Seek New Leadership

“This plan includes potentially bringing in new majority shareholders who may want a greater say in management decisions,” Lim told The Australian Financial Review. “Should this happen, my co-founder Akalarp [Yimwilai] and I have made it clear that we will fully cooperate with them and their wishes in the event they may be looking for a management change.”

Zipmex, which employs around 250 people across Singapore, Thailand, Indonesia and Australia, joins two other Singapore-based firms attempting to trade their way out of financial difficulties brought on by the current market downturn. Vauld was also granted a three-month moratorium on its debts by the same court last week, while another crypto lender, Hodlnaut, announced widespread staff layoffs pending “police proceedings” after it too sought protection from creditors.

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Crypto Exchange Crypto News

Robinhood Scoops Up Exchange ‘Ziglu’ at 60% Discount

Robinhood has successfully slashed its offer to acquire London-based cryptocurrency exchange Ziglu. The price of the deal went from US$170 million to US$72.5 million, a whopping 60 percent less than the original price tag, due to market conditions.

The initial deal was made in April 2022 and the purchase marked a step in Robinhood’s plan to scale its digital assets presence in international markets. Ziglu founder and CEO Mark Hipperson reportedly accepted the offer on August 18.

Commenting on the acquisition, a Robinhood spokesperson said in a blog post:

With Ziglu, UK-based customers can buy and sell 11 cryptocurrencies, earn yield via its ‘Boost’ products, pay using a debit card, and move and spend money, even abroad, without fees.

Robinhood blog post

Robinhood is now in a position to expand its operations at a much lower cost, but crowdfunding investors who purchased shares on UK-based equity platform Seedrs have lost out on this deal. Ziglu crowdfunded on Seedrs in 2020 and 2021, raising US$15 million at the time.

Hipperson justified the downgrade, citing market conditions triggered by troubled crypto lenders Celsius, BlockFi and Voyager. Ziglu is listed as one of the top 50 unsecured creditors of Celsius, which could be locked indefinitely as it is quickly running out of money and has been operating at a multibillion-dollar deficit as it undergoes bankruptcy proceedings.

Robinhood Continues Expansion

Along with acquiring Ziglu, Robinhood announced a Web3 non-custodial wallet in May to rival MetaMask. The wallet will give its customer access to NFTs, decentralised exchanges and swap tokens through a new interface. A month earlier, Robinhood also unveiled plans to support Lightning payments for its two million users.

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Crypto Exchange Crypto News Jobs

‘Hodlnaut’ Faces Singapore Police Action and Job Losses

Troubled crypto lender Hodlnaut has announced massive layoffs and pending police proceedings in a blog post that underscores its dire financial and legal situation as it becomes the latest crypto firm to halt customer withdrawals.

The Singapore-based lender has laid off 40 employees in an effort to reduce its costs and has admitted it is subject to action being taken by the Singapore Attorney-General and the Singapore Police Force.

Hodlnaut Cuts 80% of Staff, Interest Rate to Zero

After pausing withdrawals earlier this month, Hodlnaut filed for creditor protection in Singapore seeking time to resolve its liquidity issues. In addition to cutting 80 percent of its staff, the company also slashed annual interest rates to 0 percent in an attempt to “stabilise liquidity”. The company’s founders remain in Singapore and are said to be “working hard on a recovery plan”. They added:

The current team we have retained are, in our assessment, [the] necessary headcount in order for us to carry out key functions.

Hodlnaut blog post

Hodlnaut joins fellow lender Vauld and Asia Pacific crypto exchange Zipmex in an unholy trinity of Singapore-based crypto firms facing liquidity crises. Hodlnaut also applied to be placed under judicial management earlier this month. If successful, the move will hand “ultimate decision-making power on all aspects of the company going forward” to the judicial manager – an independent third party that oversees the process.

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Crypto Exchange Crypto News Cryptocurrency Law Zipmex

Zipmex Granted Protection from Creditors for 3 Months

Embattled Asia-Pacific crypto exchange Zipmex has been granted protection from its creditors until December 2, with the Singapore High Court allowing it three months to come up with a funding and restructuring plan:

The moratorium amounts to half the period sought by Morgan Lewis Stamford, lawyers for Zipmex, who had applied for six months’ protection under Singapore’s insolvency law across the exchange’s outlets in Singapore, Thailand, Indonesia and Australia after they abruptly suspended withdrawals last month.

Court Orders Town Hall Meeting for Creditors

According to a statement this week from Zipmex, the court also directed that the exchange convene a town hall-style meeting with its creditor and customer base within one month from the date of the court’s moratorium decision:

[At this meeting], it will minimally be explained what the proceedings in Singapore mean for creditors and customers, the state of proposed investments, the likelihood for the completeness of investors’ proposals and how serious they are, and when customers will be able to access their Z Wallets.

Zipmex statement, August 16

Last week, Zipmex announced its Z Wallet customers would be able to “partially withdraw” some of their Bitcoin and Ether holdings, naming August 11 and 16 as respective dates for releasing “a specific amount” of ether and bitcoin. These amounts turned out to be 0.08 ETH and 0.0045 BTC (about US$150 and US$110, respectively).

Earlier this month, Zipmex said it was “exploring multiple avenues” to secure funding, adding that it was expediting due diligence after signing a memorandum of understanding (MOU) with two investors.

CEO Pressured to Step Down

Meanwhile, Zipmex shareholders and potential investors have reportedly urged CEO Marcus Lim to step down over management decisions they believe led to Zipmex’s liquidity crisis:

Zipmex is not the only Singapore-based firm to secure a moratorium against its creditors. Crypto lender Vauld was granted a three-month protection order by the same court earlier this month after it, too, froze withdrawals without notice in July.