Category: Crypto Exchange

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Aussie Exchange ACX Case: Blockchain Global Collapses Owing Creditors $21 Million

Australian crypto exchange ACX came in for criticism “multiple times” last year from concerned traders and users who reported they were unable to withdraw funds.

Now the developer of the failed ACX trading platform, Blockchain Global (BGL), has entered voluntary administration, owing creditors A$21 million.

BGL has variously claimed to be the developer, operator and owner of ACX. Administrators were appointed on October 19, less than a month after BGL was ordered to disclose its assets by Victorian Supreme Court Justice Peter Riordan.

$12.3 Million Shortfall in BGL Assets

Sam Lee, CEO of BGL, claims to have stepped down as a director in March 2019 but he retains ownership of the brand. A preliminary administrators’ report dated October 24 revealed a $12.3 million shortfall in assets.

It’s a business decision for existing directors that it is in the best interest of creditors and shareholders to wind up the company. I abstained from all decision-making after my appointment as I didn’t have enough visibility to make informed decisions.

Sam Lee, CEO, BGL

According to the preliminary administrators’ report, BGL has A$8,264,764 in assets including A$5,729,175 in crypto spread across bitcoin, ethereum, MobileGo and XEM, plus A$1.3 million in shares along with another A$1 million in cash held in accounts with the Bank of Melbourne.

The value of BGL’s assets and uncollected debts, however, is far exceeded by its creditors. Since ACX ceased trading and froze the accounts of its users in March last year, an estimated 200 investors – who are understood to have lost as much as A$10 million – have been kept in the dark.

ACX Banned For Life, Digital Currency Licence Revoked

ACX was banned for life by the peak industry body while the financial intelligence regulator AUSTRAC revoked its digital currency licence. Many of those investors have since given up hope of ever getting their money back.

One of them, University of Queensland research fellow Khaled Said, invested “a few thousand dollars” in popular currencies such as Ripple and Ethereum with ACX during the first bitcoin boom in 2017. He lost interest during a downturn but returned to the platform when prices began to recover in 2019, only to find he was one of many who could put money into ACX but could not take it out.

As far as we can tell there are 10 or 20 [investors] who lost a lot, who lost more than half a million, and the rest are people like me who lost a few thousand each.

Khaled Said, ACX investor and creditor

‘Nobody Wants to Take the Case’

Investors say the collapse of the platform has been reported to the Australian Securities and Investments Commission, the Australian Competition and Consumer Commission, the Federal Police, various state police, the Australian Signals Directorate’s Cyber Crime Unit and several members of parliament.

Said personally reported his loss to ASIC in August 2020. He was sent a few links to fact sheets and has not heard anything since. “Nobody is willing to take our case, which is really concerning,” Said complains.

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Australia Crypto Exchange Crypto News Cryptocurrency Law Tokens

$100 Million Class Action Lawsuit Looms Against Aussie Crypto Qoin

Queensland-based Australian crypto dispute specialist law firm Salerno is preparing a A$100 million class-action suit against the issuers of Qoin, a controversial token promoted by the backers of Bartercard, a 30-year-old trading exchange based on the Gold Coast.

Salerno Law began collecting expressions of interest just a week ago, seeing more than 100 merchants, agents, consumers and other clients declare their intention to join the class action.

The firm says it is investigating potential breaches of the Corporations Act, the Australian Securities and Investments Commission (ASIC) Act, and Australian consumer law, including (as quoted):

  • misleading and deceptive conduct;
  • making false or misleading representations;
  • pyramid selling of financial products;
  • failure to comply with financial services obligations and consumer guarantees; and
  • fraud.

Bartercard Australia Directors Linked to Lawsuit

The lawsuit targets Southport-based BPS Financial Limited, controlled by co-directors Tony Wiese and Raj Pathak who also oversee Bartercard, a firm that allows businesses to exchange goods and services without direct cash payments.

BPS launched Qoin in late 2019 and claims to have more than 35,000 merchants signed up, along with 50,000-plus “wallet holders’’ who have acquired the digital product. It’s estimated that in excess of A$20 million worth of Qoin has been transacted since.

Qoin tokens can be swapped as a digital currency only via Block Trade Exchange Limited, aka the BTX Exchange, which is linked to BPS and has the same two directors, Wiese and Pathak. Critics allege this is a closed system that creates a potential conflict of interest.

According to Salerno’s website, “Qoin has entered into an exclusive trading arrangement with BTX Exchange which, according to its terms, limits users to one daily transaction with a $125 sell limit per day per person, subject to buyer demand.

It has been alleged by holders and merchants that they are either unable to accept Qoin payments or exchange the token for fiat currency due to the terms of BTX Exchange, leaving them with a token of no utility. For merchants, this is alleged to have caused a significant loss in revenue.

salernolaw.com.au

BPS Executive Denies Wrongdoing

Senior BPS executive Andrew Barker denies the company has done anything wrong and blames the impending lawsuit on a single disgruntled merchant. “We have reviewed the alleged potential grievances and consider them baseless,” the company stated on its own website. “We have received no direct communication and therefore have no further comment to make at this time.”

The threatened lawsuit follows Qoin’s expulsion earlier this year by Blockchain Australia (BCA), who in a statement in February asked for its name and logo to be removed from Qoin marketing material but did not provide details as to why.

Qoin’s issuers responded angrily that the timing of BCA’s statement “aligns with the emergence of false and misleading comments … made by certain antagonists on social media platforms, including a previous board member”. This was in reference to a former BCA director who had previously alleged in a tweet that Qoin was the nation’s “biggest crypto scam’’.

Qoin Clients Voice Concerns on TrustPilot

Consumer review website Trustpilot lists several more recent Qoin critics, among them former clients and representatives:

QOIN are basically worthless. Don’t believe me? Try selling some through BTX exchange as directed to by Qoin. BTX don’t want them either. Not many retailers accepting them in NSW. They wiped my wallet clear and kept my money after I complained. RUN a mile … and keep running.

Peter, Trustpilot.com reviews

Can’t cash out and the local “recruiter” was rude and forceful. His sales pitch was basically telling you to avoid paying tax by trading a dodgy QOIN you can’t sell.

Jackson, Trustpilot.com reviews

Absolutely a Ponzi scheme. Can’t sell. If you are lucky enough to it’s at half the value … Disgraceful they are allowed to continue operating in this country.

Jih, Trustpilot.com reviews

Crypto News urges Australian and New Zealand retailers and local businesses to stay vigilant and do your research before getting involved in any new ventures offering “free” cryptocurrency.

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Bitcoin Crypto Exchange Crypto News Investing Market Analysis Markets

Bitcoin Slips to $58,000 Amid $1 Billion Liquidity Flush

After hitting new all-time highs, a sharp market correction and a US$930 million “liquidity flush” has knocked bitcoin back to US$58,000, according to data from analytics firm Bybt.

Due to a price drop in “digital gold” and the overall crypto market in the past 24 hours, a series of liquidations was triggered across exchanges as traders were unable to meet margin requirements in their leveraged positions.

The total value of liquidations reached more than US$930 million, with 87,135 traders liquidated. The largest single liquidation order happened on Bitmex-ADA, with a value of US$3.85 million.

Total liquidations observed. Source: Bybt

Recent History Repeats

Crypto analyst and investor Justin Bennett took to Twitter to explain to his followers that despite the dip, bitcoin seems to be primed to follow the same pattern as it did in September:

Bennett went on to say that he believes the worst is probably over for the altcoin market, and even if bitcoin sees further price drops, altcoins will likely not be greatly affected. At the time of writing, the price of bitcoin was sitting at US$61,165 according to data from CoinGecko.

Bitcoin Dump or Short-Term Flushout?

Although bitcoin’s price is trending down amid signs of excess leverage and greed in the market, many are wondering whether this is it, or is it just the beginning of a more extensive correction needed to liquidate the high leverage recently exercised by retail investors?

All signs seem to point to the correction being short-lived, with bitcoin having stabilised. If all goes well, we should see a recovery take place, but only once leveraged investors have been flushed out.

William Clemente, lead insights analyst at Blockware Solutions, took to Twitter to share his view:

Just Buy the Dip!

The first US-based Bitcoin exchange-traded fund (ETF) has been greeted with mixed emotions. All things aside, this is certainly a massive move in the right direction for Bitcoin and crypto adoption.

Overall, the picture for the bitcoin price is bullish. Over the past five months, about 70 percent of the total supply of bitcoin has not moved, indicating that the majority is held by long-term holders or HODLers.

The market has also seen traces of whales, with Bitcoin addresses with 100 to 1,000 BTC accumulating over 85,700 BTC in a two-week period. Along with an increased demand for bitcoin, a supply squeeze is being created that looks bullish in the long term.

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Bitcoin Crypto Exchange Crypto News Hackers

Infamous Mt Gox Hack Draws to a Close, Creditors Expect 150,000 in BTC Within a Month

The end may well be in sight for creditors of the now-defunct Mt Gox, which between 2011 and 2013 was hacked to the tune of an estimated 600,000 bitcoin or approximately US$53 billion based on today’s values.

In a statement issued this week, 99 percent of creditors voted in favour of a resolution distributing bitcoins in custody back to the creditors.

Creditors wait outside Mt Gox offices. Source: The Verge

The Notorious Mt Gox Heist

At one stage, Japanese exchange Mt Gox handled over 70 percent of all bitcoin transactions worldwide. The industry was in its infancy and, soon enough, the exchange’s security was quickly exposed as being woefully inadequate. Through a combination of ignorance, naivety and mismanagement, around 850,000 BTC were stolen between 2011 and 2013, the vast majority belonging to its customers.

Today, we have a plethora of user-friendly applications that make it incredibly easy for non-technical users to take control of their keys. This naturally reduces the financial harm experienced by users when exchanges are hacked, as was the case in Hong Kong earlier this year. Unfortunately for Mt Gox customers, at the time there simply wasn’t a convenient and uncomplicated way for non-technical users to take custody of their bitcoin.

After a series of hacks and growing negative press, Mt Gox ultimately filed for bankruptcy in 2014. Since then, creditors have been embroiled in various court cases in an attempt to recover their funds.

The End May Be in Sight for Creditors

According to the statement released, the Mt Gox trustee indicated that around 99 percent of the 24,000 creditors impacted by the exchange’s collapse approved the draft rehabilitation plan originally filed in the Tokyo District Court in February. Furthermore, claimants representing roughly 83 percent of total voting rights voted in favour of the plan.

The trustee indicated that he expected the distribution of assets to commence within a month or so, once the rehabilitation plan became “final and binding”.

Unfortunately for the creditors, although unconfirmed, the trustee is said to only have 150,000 BTC to repay the affected users. While some are undoubtedly going to feel aggrieved, for some it may well have been a blessing in disguise in the sense that they are likely to have sold a long time ago.

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New Binance Australia CEO Sets Out His Vision for the Company

With a background of seven years in the Australian cryptocurrency market so far, newly appointed Binance Australia CEO Leigh Travers has vowed to dedicate his life to the development and growth of the industry, and he has big plans for the future of blockchain down under.

As early as high school, Travers was already investing. “I didn’t really see a lot of point in putting money into the bank and earning some interest,” he says, seeing more opportunity and excitement investing his first $500 into stocks and smaller innovative companies, which he saw as having huge upside potential.

Travers was a publicly listed wealth manager for small to mid-cap growth companies in more traditional sharemarket and investment banking before following his passion for investing into more volatile terrain: the attraction to crypto was inevitable as the next natural step in Travers’ career.

Watch the full live AMA below:

Current State of the Australian Crypto Market 

Australian projects are positioned “at the top tier” in the crypto space worldwide, with some amazing DeFi and NFT products coming out of the country. Roughly there are 600,000 actual users on Binance Australia, with potential for a million customers and an equity market of 10 million.

Binance Australia’s team has doubled over the past few months to tackle its number one priority: to grow the market overall into a much larger user base. Travers says that the market is in a high-growth phase, with Binance user numbers expanding at a rate of 10 percent per month.

Corporate Onboarding to be Expedited 

Over the next 15 years, Travers sees equities moving towards crypto-based economic models. The SMSF (Self-Managed Super Fund) marketplace in Australia has massive potential – in a country with 800,000 self-managed super funds and an A$800 billion market, Binance Australia wants to gain maximum exposure into the “most liquid, lowest-cost, digital asset exchange in Australia”.

According to Travers, Binance Australia will focus on leading the way in the areas of:

  • integrating risk-managed crypto portfolios into wealth management platforms;
  • offering support with tax reporting;
  • extending education resources; and
  • vastly improving the platform’s onboarding processing time, from a few weeks to only a few days.

Priority to Binance Crypto Debit Card

Travers says the number one product customers from the community want is a crypto debit card. “You’ve got to give the people what they want,” he says, “and it’s quite clear.” As he explains, people want to be able to have more utility for their crypto, to spend it in everyday life, to pay bills, paying merchants, etcetera.

The Binance crypto debit card is a top priority and is in development now, aiming to hit the Australian market as soon as possible – possibly by the end of the current quarter. If its second-quarter results are any indication, the immediate future for Binance Australia looks bright.

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Binance Launches $1 Billion BSC Growth Fund to ‘Bring Next 1 Billion Users to Crypto’

Binance, one of the world’s leading crypto exchanges, has announced the biggest funding program of its kind for the cryptocurrency industry. The US$1 billion Binance fund will help expand the Binance Smart Chain (BSC) ecosystem and advance the mainstream adoption of blockchain technology by the financial industry overall.

With collaborations from industry-leading organisations, the investment fund will target scaling blockchain technology for real-life use cases and will bridge the gap between crypto-blockchain and the current technical-financial sectors.

Binance.org

Binance stated its mission was to disrupt financial infrastructures by allocating half the new fund to its Investment Program, which will focus on growing decentralised computing, gaming, metaverse, virtual reality, artificial intelligence and financial services.

BSC will not be the only blockchain supported, consistent with previously voiced ambitions from the company. As Binance CEO Changpeng “CZ” Zhao, who has frequently said in interviews “there is room for everyone”, tweeted yesterday:

$1 Billion Growth Across Four Sectors

The fund will be allocated across four different sectors:

  1. US$100 million for Talent Development: mentoring developer communities, educating new crypto investors, providing academic scholarships to universities, running boot camps and supporting R&D on cutting-edge blockchain innovations.
  2. US$100 million for Liquidity Incentive Program: multiple programs to encourage participation from traditional financial markets and crypto, targeted to developing compliant relationships between investors and emerging digital asset markets.
  3. US$300 million for Builder and Incubation Program: $100 million to conduct regional and global hackathons, run developer conferences, and support existing mainstream development programs; $200 million to incubate 100 innovative dApps.
  4. US$500 million for an Investment Program: to accelerate mainstream adoption and bring disruption to financial infrastructures.
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Coinbase Crypto Exchange Crypto News Ethereum NFTs

Coinbase’s 43 Million Users Will Soon Be Able to Buy NFTs

US crypto exchange Coinbase has announced that it too will be joining the non-fungible token (NFT) game, with “Coinbase NFT” expected to launch by the end of this year.

Coinbase’s NFT marketplace will allow its 43 million users to buy and sell Ethereum-based collectibles, the company announced on October 12. Coinbase currently relies on its exchange fees but is now branching out into other revenue streams.

Today, we’re announcing Coinbase NFT, a peer-to-peer marketplace that will make minting, purchasing, showcasing and discovering NFTs easier than ever. Just as Coinbase helped millions of people access Bitcoin for the first time in an easy and trusted way, we want to do the same for NFTs.

Coinbase announcement

Coinbase Cashes In On NFT Madness

NFTs have certainly been the talk of the crypto-town in recent months, with transaction volumes topping US$10 billion in the third quarter of 2021, and Coinbase has got on board.

Coinbase NFT will include “social features” and tap into the creator economy of people making money by posting content online. NFTs have become a great way to fairly compensate artists who have been negatively affected by the availability of digital media.

The crypto exchange’s newest release will provide direct competition for NFT marketplace OpenSea, currently home to the majority of Ethereum-based NFT trading.

Coinbase Making Strides in the Crypto World

News of an NFT marketplace may console Coinbase users who were left furious when the platform failed during the September 7 crypto crash. Soon after that unfortunate event, Coinbase announced that US workers could be paid in crypto via the platform.

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New Zealand’s Easy Crypto Exchange Raises $11 Million, May List on Stock Exchange

New Zealand-based exchange Easy Crypto has just come off a Series A funding round, led by venture capital fund Nuance Connected Capital, securing US$11.75 million.

In an October 6 announcement, the company claimed this was the largest first funding round successfully completed by any New Zealand firm, and that the round was oversubscribed by 50 percent. Investors included Pathfinder, Icehouse Ventures, Even Capital, and US-based Hutt Capital.

Easy Crypto Reaches ‘Significant Milestone’

Janine Grainger, CEO and co-founder of Easy Crypto, said that the funding represents a significant milestone for the company and the future of cryptos in New Zealand. Investment had been difficult to secure, as it took 13 months for Easy to attract its first influx of capital.

Cryptocurrency is seen as a bit fringe still [in New Zealand], a bit volatile and I think it’s taken us a while to find investors who perhaps had that forward-looking and strategic vision to be able to take a punt on what we’re doing.

Janine Grainger, CEO and co-founder, Easy Crypto

Grainger is also co-founder of Vault Digital Funds, which has just established New Zealand’s first bitcoin-only fund, to be managed by Implemented Investment Solutions.

Using Funds to Accelerate Growth

Easy Crypto is a retail platform that enables its customers to buy, sell and trade over 150 cryptos. Co-founded three years ago by Grainger and her sibling Alan, the company has since experienced rapid growth, generating US$760 million (NZ$1.1 billion) in sales and increasing platform user numbers almost fivefold over the past 12 months.

Janine Grainger has said that the funds will be used to accelerate further growth by expanding product development and will move into new customer markets in South-East Asia such as Indonesia and the Philippines:

The reason we’re targeting those markets was that there is a large population of people who are unbanked or underbanked, and don’t have the same access to financial products as you and I do.

Janine Grainger, CEO and co-founder, Easy Crypto

Easy Planning to Go Public

Grainger has said that a share float might be on the cards in the long term: “We’re still working out what that looks like, and what plans there are for us into the future, but very likely we would be looking at an IPO [initial public offer].”

For now, however, the company’s focus is on what it can deliver to customers both locally and internationally.

Australia’s trans-Tasman neighbour is quickly realising the benefits of crypto. In November last year, Crypto News reported that New Zealand had built a green energy plant, paid for partly in bitcoin.

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SEC Chair Confirms It Has ‘No Plan to Ban Crypto’, Leaves It Up to Congress

US Securities and Exchange Commission (SEC) chairman Gary Gensler has confirmed the regulator has no intention of banning digital currencies and adopting a policy akin to the Chinese government’s, instead stating that any such ban “would be up to Congress”.

Gensler was appointed earlier this year, much to the joy of the crypto industry for his pro-blockchain and Bitcoin stance. Until recently he has been quiet regarding his stance on cryptos but has since broken his silence.

CBDC Looking Unlikely

At a hearing before the US House Committee on Financial Services on October 5, Gensler was questioned about whether the regulatory body had any intention of banning cryptos in favour of a prospective central bank digital currency (CBDC).

The chairman indicated that it would be up to Congress to enact such a ban. He added that the focus of the government was to ensure the crypto industry complies with investor and consumer protection, anti-money laundering and tax laws.

It’s a matter of how we get this field within the investor consumer protection that we have, and also working with bank regulators and others. How do we ensure the Treasury department has it within anti-money laundering, tax compliance? Many of these tokens do meet the test of being an investment contract, or a note, or security.

Gary Gensler, SEC chairman

Last month, the SEC issued threats to sue the crypto exchange Coinbase if it were to proceed with launching its Lend program, on the basis that Lend is a security.

Jerome Powell, chairman of the Federal Reserve, similarly stated it had no intention to limit or ban the use of the US$2.2. trillion asset class.

During the house committee hearing, Gensler further addressed questions regarding cryptos, stablecoins, and the regulation of exchanges and decentralised finance (DeFi). The requirement for digital asset firms to sign up with the regulatory body was also discussed, with Gensler hinting that decentralised exchanges (DEXs) could be required to comply with the same rules.

Even in decentralised platforms – so-called DeFi platforms – there is a centralised protocol. And though they don’t take custody in the same way [as centralised exchanges], I think those are the places that we can get the maximum amount of public policy.

Gary Gensler, SEC chairman

The SEC has been “actively investigating” Uniswap Labs, the parent company of the leading DEX, Uniswap.

Stablecoins Are Like “Poker Chips” at the Casino

Gensler consolidated his position on stablecoins, indicating they may prove to be a risk for the economic system. With an estimated US$125 billion tied up in stablecoins, Gensler has described them as “poker chips” in the crypto casino, raising concerns that the market, which has grown tenfold in the past year, might be creating a system-wide risk.

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Australia Bitcoin Crypto Exchange Crypto News Investing Tokens

Important Crypto ETF Decision Dates Coming Up in Late 2021

As worldwide interest grows in crypto, the need for exchange-traded funds (ETFs) is growing along with it. Some countries and institutions have got on board, filed, and have been approved, while the decision for others still looms.

What Is a Cryptocurrency ETF?

A crypto ETF is a fund consisting of cryptocurrencies. While most ETFs track an index or basket of assets, a crypto ETF tracks the price of one or more digital tokens. The price fluctuates daily based on investor sales and purchases, and provides many benefits to investors. These include significantly lower crypto ownership costs and outsourcing of the steep learning curve associated with trading cryptos. 

For the crypto enthusiast, ETFs are the holy grail that will boost liquidity and the adoption of cryptocurrencies for the purpose of investment.

Crypto ETFs are trading in a number of countries, but thus far US regulation has denied attempts to offer ETFs on exchanges. Many companies who have applied to the Securities and Exchange Commission are expecting to hear the outcome later this year.

ETF Timeline – Important Dates Source: Arcane Research
ETF Timeline Source: Arcane Research

Interest in ETFs is Growing

Entering the crypto market can be challenging, with concerns including price volatility, market manipulation, and lack of fundamentals to properly gauge value. ETFs offer an easier way to access the cryptosphere. Instead of trading cryptos on an exchange, ETFs trade on market exchanges such as the NASDAQ or NYSE, thereby circumventing the often daunting process of purchasing cryptos.

Crypto News Australia recently reported on a survey conducted regarding institutional interest in digital assets and crypto-based products such as ETFs across the US, Europe and Asia. It was found that over half were already invested in cryptos, while nine in 10 found crypto appealing and saw the potential upside.

Bitcoin-ETFs Rising Globally

Canada, the first country in the world to offer ETFs, launched a third Bitcoin-ETF earlier this year with the world’s lowest management fee, at only 0.4 percent per annum. Dubai has become the first city-state in the Middle East to offer ETFs and has launched a Bitcoin-ETF which is listed on the Nasdaq Dubai Exchange.

It is expected that Australia will see its first crypto ETF soon, as there is growing sentiment among millennials to retire at the age of 50 via investment in ETFs.

Earlier this year it was reported that the Australian crypto ETF could launch on the ASX in 2021. The Aussie ETF is currently delayed due to uncertainty in deciding how the arrangement with custodians will work. The Australian Securities and Investments Commission is, however, in the final stages of consultation to decide if a crypto ETF will be allowed to trade locally.