Category: Crypto Exchange

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Crypto Exchange Crypto News Kraken

Kraken Under Fire for Alleged Iran Sanctions Violations

The New York Times reports that the Kraken exchange is under investigation by the US Treasury Department’s Office of Foreign Assets Control for allegedly violating economic sanctions against Iran:

Kraken Allows Iranian Users Access

According to the NYT report, Treasury has outlined its suspicions that Kraken permits Iranian users to access its services, thereby violating US federal sanctions:

It is alleged that five people, either associated with the company or possessing knowledge of the inquiry, came forward to share information with the newspaper. These sources requested anonymity for their own safety but discussed how Kraken allegedly allows customers from both Iran and other sanctioned countries to use its exchange despite the illegalities.

Marco Santori, Kraken’s chief legal officer, stated that his company would not comment on regulator discussions, other than saying:

https://www.linkedin.com/in/marco-santori-7ab37b28/overlay/photo/

Kraken has robust compliance measures in place and continues to grow its compliance team to match its business growth. Kraken closely monitors compliance with sanctions laws and, as a general matter, reports to regulators even potential issues.

Marco Santori, chief legal officer, Kraken

However, it is known that Kraken’s CEO and co-founder, Jesse Powell, has in the past stated his willingness to challenge what he deems to be “unfair regulations”. International sanctions are one such regulation.

While there is no current timeline for enforcement action, it is understood that Kraken will receive a fine.

OpenSea and Economic Sanctions

The debate surrounding crypto operations in various countries has kicked into gear this year, with leading NFT marketplace OpenSea at the centre of controversy. On March 5, both OpenSea and MetaMask users from Iran and Venezuela were blocked from making Ethereum transactions.

Both platforms cited compliance issues behind the blockage; however, it was confirmed soon after that Ethereum’s Infura cut off users to separatist areas in Ukraine, and Venezuelan users were accidentally cut off. However, the block was intentional for Iranian users.

Three days later, on March 8, OpenSea updated its list of banned countries to align with the US sanctions list, blocking North Korea, Syria and Russia, along with Iran. The decision reignited the conversation on decentralisation and sparked outrage from NFT collectors.

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Banking Crypto Exchange Crypto News Surveys

One Billion Crypto Users Predicted by 2030: Global Research Report

A joint report published by Boston Consulting Group, Bitget and Foresight Ventures predicts global crypto adoption could surge to 1 billion by 2030, with the US leading the adoption wave:

‘Plenty of Growth to Come’

Only 0.3 percent of US individual wealth is held in crypto, which is significantly lower compared to 25 percent held in equities. This suggests there’s still room to drive substantial crypto adoption and cryptocurrency exchanges will play a key role in that growth, according to the report:

Crypto exchanges play a key role in the Web3 ecosystem by providing access, liquidity, and infrastructure. With competition intensifying, crypto exchanges must adapt to the dynamic market situation and transform their strategy to beat the competition.

Crypto adoption report

One of the main drivers of crypto adoption was institutional companies hoarding massive amounts of crypto assets and offering crypto-related products between mid-2020 and early 2021. Since then, investment banks such as Morgan Stanley and JPMorgan have offered clients some form of crypto product/service, such as exposure to BTC funds and blockchain-based assets.

LatAm and APAC Offer High Market Potential

The report also outlines that Latin America and APAC are the two most attractive regions for crypto exchanges to expand on, given their high market potential and regulatory laws.

Australia ranked fifth in a recently published list of countries with the most crypto-friendly economies, while Germany and the US topped the table. Australia made the top five due to its proliferation of ICOs, exchanges and transaction volumes, and universities offering crypto and blockchain education courses.

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Coinbase Crime Crypto Exchange Cryptocurrency Law

Former Coinbase Employee Charged in First Crypto Insider Trading Case

Three people, including a former Coinbase employee, have been charged with wire fraud conspiracy and wire fraud over an insider trading tip-off scheme that ran from June 2021 until April 2022, netting the accused over US$1.5 million in realised and unrealised profits. 

These charges are the first to be brought against defendants in a cryptocurrency insider trading case and act as a reminder that crypto markets are subject to many of the same laws that govern traditional financial markets.

Employee Tips Off Brother and Friend to Coinbase Listings

The three individuals charged by the US Attorney’s Office are former Coinbase product manager Ishan Wahi, his brother Nikhil, and his friend Sameer Ramani. 

It’s alleged that Ishan Wahi used his detailed knowledge of upcoming Coinbase asset listings to tip off Nikhil Wahi and Ramani, who then purchased large quantities of the assets just prior to the announcements of their listings and sold them for a profit shortly after the announcements. 

It’s alleged the trio used this method on at least 14 separate occasions, trading at least 25 different cryptocurrencies. In an attempt to cover their tracks, Nikhil Wahi and Ramani created accounts at centralised exchanges in other people’s names and transferred their assets through multiple anonymous Ethereum accounts.

Speaking about the charges against the trio, Damian Williams, Attorney General for the Southern District of New York, said:

Today’s charges are a further reminder that Web3 is not a law-free zone.  Just last month, I announced the first ever insider trading case involving NFTs, and today I announce the first ever insider trading case involving cryptocurrency markets.  Our message with these charges is clear: fraud is fraud is fraud, whether it occurs on the blockchain or on Wall Street. And the Southern District of New York will continue to be relentless in bringing fraudsters to justice, wherever we may find them. 

Damian Williams, US Attorney General, Southern District, New York

Twitter Post Helps Uncover Scheme

The beginning of the end for the insider trading scheme came on April 12 of this year when a Twitter user noted that an Ethereum wallet had bought hundreds of thousands of dollars’ worth of digital assets just 24 hours before their Coinbase listings were announced. 

The wallet was subsequently found to be under the control of Ramani. Following this tweet, Coinbase opened an investigation into the matter and on May 11, Coinbase’s director of security operations emailed Ishan Wahi to tell him to appear for an in-person meeting at Coinbase’s headquarters in Seattle, Washington, on May 16.

On the evening of May 15, Ishan Wahi bought a one-way ticket to India, which was scheduled to depart the following morning, just before the meeting with Coinbase security. However, before he could board his flight Wahi was intercepted by law enforcement and prevented from leaving the country.

Each of the defendants has been charged with one count of wire fraud conspiracy and one count of wire fraud – each charge carries a maximum sentence of 20 years in prison.

Insider trading is an ongoing issue that undermines confidence in both regulators and markets. Last September, the head of product development for the NFT marketplace OpenSea resigned following allegations of insider trading, and questions were raised about the integrity of the US Federal Reserve following the resignation of two regional Fed presidents over insider trading allegations.

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Crypto Exchange Crypto News Zipmex

Zipmex Resumes Trade Withdrawals Amid Rescue Talks

Singapore-based crypto exchange Zipmex has resumed withdrawals from its trade wallet but transfers and deposits from its Z-Wallet will continue to be disabled pending the outcome of discussions with two of its partners.

One Party Offers Bailout Terms

In a July 24 Twitter post, Zipmex also revealed that it had received an offer regarding a potential rescue deal. One party had offered bailout terms in a confidential memorandum of understanding (MOU), though Zipmex neither identified the party nor specified whether the offer might be an investment or a buyout proposal:

On July 21, Zipmex halted all customer withdrawals on its platform, citing “financial difficulties” relating to two of its partners. The exchange disclosed a US$48 million exposure to Babel Finance and US$5 million to Celsius, two lenders that have defaulted on loans after accruing crippling losses in the crypto market.

In an official statement, Zipmex said it had already been “in discussion” with Babel Finance when news broke regarding the exchange pausing withdrawals last week.

Zipmex to ‘Write Off’ Celsius Loss

“These discussions are ongoing, and we are evaluating our options based on the outcomes of these negotiations. Our loan to Celsius Network was minimal and we intend to write off this loss against our own balance sheet.”

The statement concluded:

Zipmex is exploring all available channels. This includes capital raises and internal restructuring. For the moment, Zipmex continues to operate the Trade Wallet, NFT platform, and other products as normal.

Zipmex official statement

Native Token Down 40%

Zipmex operates in four countries – Singapore, Australia, Indonesia and Thailand – and offers both spot trading for cryptocurrencies and interest on deposits. The platform’s native token, ZMT, has declined by nearly 40 percent to US$0.343 from US$0.5637 on July 20, according to data from CoinMarketCap.

At the time of writing the exchange had seen nearly US$4 million in trading volume over the previous 24 hours, with almost 60 percent of all trades coming from ZMT.

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Crypto Exchange Crypto News Zipmex

Zipmex Exchange Halts User Withdrawals Citing ‘Circumstances Beyond Our Control’

Southeast Asian digital assets exchange Zipmex has paused customer withdrawals due to “circumstances beyond our control and the resulting financial difficulties of our key business partners”:

Withdrawals ‘Expected to Resume’

With offices in Australia, Indonesia and Thailand, Zipmex describes itself as Asia’s leading cryptocurrency exchange, offering users a long list of crypto products and services. It has extended its maintenance period for Trade Wallet until July 22, the exchange tweeted. Withdrawals are expected to resume afterwards.

Marcus Lim, founder of Zipmex, denied rumours of the firm facing financial turbulence as a result of the crypto market crash and after Coinbase pulled out from its acquisition plan on June 9. He subsequently penned a letter to customers to apprise them of the situation:

Zipmex letter to customers. Source: Zipmex

While Coinbase didn’t acquire the exchange, it poured in an undisclosed amount of strategic financing after the acquisition deal fell through. In August last year, Zipmex separately raised over US$40 million.

Crypto Contagion Spreads

Zipmex is the latest of the numerous crypto-focused companies that have had to suspend withdrawals and other services amid current crypto market turmoil, causing contagion across the industry.

Two weeks ago, Crypto News Australia reported that Singaporean crypto lender Vauld had frozen withdrawals, trading and deposits on its platform.

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Crypto Exchange FTX Markets Terra Tether

FTX Founder ‘SBF’ Warns Some Crypto Exchanges Are ‘Already Insolvent’

One of the richest men in crypto, 30-year-old FTX founder and CEO Sam Bankman-Fried (also known as SBF), has warned that some “third-tier” crypto exchanges are already secretly insolvent.

Among his recent comments to Forbes, SBF declined to name which exchanges he believes are currently broke. However, his warning comes as the fallout from the May collapse of the Terra blockchain continues to wreak havoc across the crypto market, with the highly Terra LUNA-exposed Singapore-based venture capital firm Three Arrows Capital (3AC) recently announcing it’s nearing insolvency.

SBF Bails Out Struggling Firms

As a result of 3AC’s insolvency issues, fellow crypto-focused firms BlockFi and Voyager Capital – which had each given 3AC sizeable loans – also found themselves in treacherous financial waters. 

Fortunately for these firms, SBF swooped in, through his exchange FTX and trading firm Alameda Capital, to provide US$250 million in credit to prop them up and protect their customers’ funds.

Speaking to Forbes about the credit infusion SBF said, “ … You know, we’re willing to do a somewhat bad deal here, if that’s what it takes to sort of stabilise things and protect customers.” 

Of course, stabilising the crypto market and seeing it grow is also very much in SBF’s interest – his US$20.5 billion fortune is closely tied to the performance of the crypto market.

It has also recently emerged that SBF may be looking to go beyond simply providing credit to BlockFi, with reports suggesting he is now in talks to acquire the New York-based firm.

SBF Expects to See Numerous Exchanges Fail

Despite his willingness to prop up some ailing crypto firms, SBF doesn’t anticipate this generosity being applied indiscriminately across the industry. Talking to Forbes, SBF said there were companies throughout the crypto industry that were beyond saving:

There are companies that are basically too far gone and it’s not practical to backstop them for reasons like a substantial hole in the balance sheet, regulatory issues, or that there is not much of a business left to be saved. 

Sam Bankman-Fried, founder, FTX 

Tether Won’t Collapse

One much-maligned digital asset SBF has no fears for is crypto’s largest stablecoin, Tether (USDT). While many consider the collapse of the US$70 billion stablecoin is inevitable due to its reportedly less than ideal collateral situation, SBF claims there’s no reason to worry, saying: “I think that the really bearish views on Tether are wrong … I don’t think there is any evidence to support them.”

In other SBF news, the crypto magnate declared on a podcast last month that he was willing to donate up to US$1 billion to the US Democratic Party to keep Donald Trump from returning to the White House.

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Australia Crypto Exchange Crypto News Payments

Aussie Exchange ‘Banxa’ Cuts 30% of Staff, Citing ‘Crypto Winter’

Australian crypto payments operator Banxa will lay off more than 30 percent of its global staff to reduce operating costs amid the ongoing bear market.

“Like many others in our industry [we] are anticipating another crypto winter, with trading volumes declining significantly,” said Banxa CEO Holger Arians in a grim letter to staff.

“We saw our market capitalisation nearly halve in a matter of days, and the forecast is that these conditions will most likely continue for another 12 months.”

Banxa must take decisive actions to reduce costs now, or else our company won’t be able to succeed over the long run.

Holger Arians, CEO, Banxa

With staff across seven different countries, including Australia, APAC, the US, UK and Canada, Banxa will reportedly cut employee numbers from 230 employees to 160.

European MD Also Out the Door

Banxa is an international Web3 on-and-off ramp solution that facilitates conversions between digital assets (including cryptocurrencies and NFTs) and fiat currencies. The company’s European managing director, Jan Lorenc, is also likely to step down, indicating Banxa’s diminishing interest in the Euro market.

The company has traded on the Toronto Stock Exchange’s early-stage TSX Venture Exchange since January 2021, but its shares have plunged 74 per cent in the past 12 months as the crypto and broader tech markets continue to cop a hammering.

Banxa will centralise its operations in the Australian and Philippines markets in order to better prioritise higher margins and profitability in the face of current industry headwinds, according to a spokesperson.

Jobless Crypto Queue Lengthens

Other major cryptocurrency platforms have also slashed their head counts. In mid-June, lending platform BlockFi and major exchange Crypto.com announced they would cut more than 400 jobs between them. Just a day later, Coinbase revealed it would be liquidating 1,100 jobs, or around 18 percent of its total workforce. With Gemini and Robinhood also recently rationalising their staff numbers, it would seem that the crypto winter is already upon us.

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Crypto Exchange Crypto News FTX Investing

FTX and Morgan Creek Want a Piece of Troubled Crypto Lender ‘BlockFi’

Less than a week after extending a US$250 million line of credit to BlockFi, Bahamian-based exchange FTX is now in talks to acquire a stake in the beleaguered crypto lending company.

FTX’s credit line offer stood to effectively wipe out all BlockFi shareholders, including investment firm Morgan Creek Digital, the firm told its investors. For this reason, Morgan Creek – a longtime backer of BlockFi – is attempting to raise an equivalent amount from investors to purchase a majority stake in the troubled lender, according to a leaked investor call.

VC Funds Line Up to Help Bail Out BlockFi

While Morgan Creek has declined to comment on the move, multiple venture capital funds are said to be exploring ways to provide equity financing to BlockFi as the lender struggles to stay afloat, according to an insider.

Morgan Creek managing partner Mark Yusko did reveal via the leaked call that BlockFi founders Zac Prince and Flori Marquez had good reason to accept FTX’s terms. Of the several emergency financing offers BlockFi had received, FTX’s was the only one that would not subordinate client assets to the rescuer:

Deal Just Days Away

Yusko also revealed on the leaked call that FTX and BlockFi were “probably three days away from signing a definitive agreement”. The outcome may prove to be the only bright light in what’s been a bleak month for BlockFi – and crypto in general – with Prince announcing in a June 14 tweet that “roughly 20 percent” of its workforce would be let go in the wake of the current market slump.

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Crypto Exchange DeFi NFTs Uniswap

Uniswap Users Will Soon Be Able to Buy NFTs Directly on its Web App

Uniswap Labs announced on June 21 that it had acquired the NFT marketplace aggregator Genie, and plans to integrate NFTs into its products starting with the Uniswap web app:

The integration of NFTs into the popular decentralised exchange means users will soon be able to buy and sell the assets across most major marketplaces using Uniswap.

Uniswap Labs also plans to incorporate NFTs into its other products, including its developer APIs and widgets, which it says will make Uniswap “a comprehensive platform for users and builders in Web3”.

Airdrop for Genie Users

As part of its acquisition of Genie, Uniswap Labs will be launching an airdrop of USD Coin (USDC) to historical Genie users. In a tweet, the company said the airdrop would be open to any Genie users who had used the platform more than once before the snapshot was taken on April 15, along with any user who holds a GENIE:GEM NFT.

The airdrop is planned to launch in August and will be claimable by eligible users for 12 months.

Not Uniswap’s First Foray into NFTs

This is not the first time Uniswap Labs has dabbled in NFTs. In 2019, the company launched Unisocks, a platform where users could purchase a $SOCKS token that could then be redeemed for one real pair of limited edition socks. Uniswap Labs also helped to pioneer on-chain generative SVG images with the development of its Uniswap V3 NFT positions technology.

In its statement about the Genie acquisition, Uniswap Labs expressed its belief that NFTs are simply another way of generating value in the Web3 economy and are not separate from the ERC-20 tokens Uniswap has previously focused on:

We see NFTs as another format for value in the growing digital economy – not a separate ecosystem from ERC20s – and they’re already an important gateway to Web3.

Uniswap blog

Highs and Lows

Launching in late 2018, Uniswap was one of the first – and is currently one of the largest – decentralised exchanges on the Ethereum blockchain. In February 2021, the volume of Wrapped Bitcoin (wBTC) trading on the platform hit an all-time high following Tesla’s purchase of large amounts of Bitcoin.

More recently, in April this year a class-action lawsuit was launched against Uniswap alleging the decentralised exchange had been involved in the sale of unauthorised securities.

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Australia Crypto Exchange Crypto News

Australian Exchange BTC.com.au Shuts Down Amid Market Volatility

The Australian-based crypto exchange BTC.com.au has announced it will be closing down by the end of this week, citing crashes in both the stock market and crypto market as the primary cause. 

As you have all likely seen and heard in the media this week, there have been multiple market crashes in both the crypto and stock markets, and sadly we have been very hard hit in this volatile climate and it is not possible for us to continue operating.

BTC.com.au statement

BTC.com.au says however it will keep its service alive until Friday, July 22 – giving users just over a month to prepare for its closure.

BTC.com.au Started Small, Had Recently Expanded Heavily

BTC.com.au started out in 2018 offering just a single cryptocurrency, Bitcoin (BTC). In the past year, as the crypto market boomed, the exchange expanded significantly, increasing its employee count five-fold.

In April this year, BTC.com.au announced the launch of its new full-fledged trading platform, adding support for several new cryptocurrencies and numerous other features.

Crypto Crash Puts Pressure on Exchanges

According to data from CoinGecko, since its peak last November the overall crypto market cap has plummeted close to 70 percent – falling from over US$2.9 trillion to under US$1 trillion. Many individual cryptocurrencies have seen even bigger declines, dropping 80-90 percent from recent highs. 

This degree of volatility can easily decimate heavily crypto-exposed businesses; unfortunately for BTC.com.au, the crypto winter hit immediately following its rapid expansion when it seems to have been particularly vulnerable.