The Crypto Currier - 19th July 2022

This week's biggest news in blockchain and crypto in the Crypto Currier:

Troubled crypto fund Three Arrows Capital has assets frozen by judge. Crypto lender Celsius shows a murky picture with its lawyers saying its Earn users gave up their rights to their crypto. Putin fully bans crypto payments as some Russians abroad have turned to crypto donations to help Ukrainian refugees. NFTs are now a legal way to serve court documents. Texan crypto miners are feeling the heat. And a new South Park movie roasts crypto.

Sustainable blockchain network 5ire secures $100 million Series A

5ire, a blockchain ecosystem focused around sustainability initiatives has raised $100 million in Series A funding. It is now dubbed the fastest growing blockchain unicorn in India and the only sustainable blockchain unicorn in the world, with a valuation of $1.5 billion. It aims to incentivise practices that align with the UN’s Sustainable Development Goals to move from the 4th to the 5th industrial revolution. Pratik Gauri, CEO and founder said “We are on a mission to embed sustainability into blockchain and shift the current paradigm from ‘for-profit’ to ‘for-benefit’." (Finextra) Read More

Three Arrows Capital Assets Ordered Frozen By Judge

A judge has reportedly frozen the assets of troubled crypto hedge fund Three Arrows Capital. The fund can't dispose of or transfer assets held in the United States, over which liquidators now have authority and control. (Bitcoinist) A filing warns of a “heightened risk” that the founders could attempt to transfer 3AC assets to new accounts or wallets because “a substantial portion” are “cash and digital assets that are readily transferable.” The founders Su and Davies still appear to be in hiding with their whereabouts unknown. A visit to their office by court-appointed liquidators found nothing but a locked door and unopened mail.(Decrypt) Genesis has now filed a $1.2 billion claim against them. (Coindesk)

Celsius Bankruptcy Filings Show Murky Picture

The chapter 11 bankruptcy filing of crypto lender Celsius Network has revealed some surprises about the state of its platform, including what appears to be a $1.2 billion deficit formed largely of user deposits. The filing reveals that Celsius holds roughly $4.3 billion in assets against $5.5 billion in liabilities. The value of these assets is questionable, given that its CEL tokens are valued at $600 million despite its current market cap hovering under $200 million, according to Coinmarketcap. CEO Alex Mashinsky has signed a document stating that Celsius could sell around 15,000 Bitcoin until 2023 from its mining operation to “generate sufficient assets” to repay at least one of its loans and provide revenue. (Cointelegraph) Celsius also reportedly 'admitted to taking customer funds, and speculating directionally in various futures instruments'. 35,000 ether also went missing because private keys were lost. The full filing document can be read here. (Bitcoin Magazine) In a press release, Celsius revealed it only holds $167 million in cash, which will be used to “support operations” which include continuing to pay staff without disruption. (Crypto Slate)

Celsius lawyers claim Earn and Borrow users gave up legal rights to their crypto

Lawyers acting for Celsius have said that its 1.7 million registered clients in 100 countries gave up title to the crypto they deposited into its Earn and Borrow accounts. They say users transferred the title of their coins to the firm as per its terms of service. As a result, they say Celsius is free to “use, sell, pledge, and rehypothecate those coins” as it wishes, in a key case of 'not your keys, not your coins'. However, a legal question has arisen around whether holders of coins in Celsius Custody accounts retain title and ownership of their assets. Celsius terms of service claim that the firm cannot use coins in Custody accounts without user permission. It isn't yet clear however if or how those users will get their coins back. (Cointelegraph) Read More

Crypto VC Investments Drop 26% in First Half of 2022

Venture capital investment in crypto companies was down 26% in the first half of 2022, totalling $9.3 billion compared to $12.5 billion in the same period last year, but the number of deals increased. This can partly be attributed to cryptocurrency price drops, the collapse of the terraUSD stablecoin and liquidity crises faced by crypto lenders and crypto hedge fund Three Arrows Capital. This didn't stop venture firm Andreessen Horowitz (a16z) from launching a record-breaking $4.5 billion crypto fund in May. (Coindesk) Read More

Customers Flee Coinbase’s Fees, Pushing Exchange Out of Top 10

Crypto exchange Coinbase has dropped from fourth to 14th largest crypto exchange in 8 months, dropping from 9% of global trading to 2.9%. It seems retail customers are leaving due to its high fees. Mizuho analyst Dan Dolev says Coinbase is “suffering from a perfect storm of more competition in a declining market while take rates are perceived to be too high and unsustainable”. Its May warning that in the event of a bankruptcy, its users would face losses also raised fears. (Pymnts) Read More

Putin Signs Law Banning Crypto Payments In Russia, Ruble sole legal tender 

Russian President Vladimir Putin has approved a legislation to immediately ban the use of digital financial assets including all cryptocurrency and digital securities as a payment method in the country. This is an extension of an earlier law that banned crypto in payments. This action maintains the ruble as the sole legal tender in the Russian Federation. This law means owners of platforms offering exchange services will have to block any transactions that facilitate the substitution of digital financial assets for the ruble. Russia's financial authorities worry cryptocurrencies threaten the country's stability... Russians transact about $5 billion a year in crypto. (Bitcoinist) Read More

Russian Activists Turn to Crypto for Donations to Aid Ukraine Refugees

Several Russians have turned to crypto to help Ukrainian refugees. In one example, a new shelter opened in Ukraine needed funding but did not have a bank account, so those behind it started a crypto fundraiser. Since the war started with Russians cut off from the global payment systems as a result of sanctions, crypto has become the fastest way to help people across borders as it can be sent and received quickly without needing to open a new bank account abroad. It may also be safer, with Russians helping Ukrainians facing the risk of threats at home for doing so. “For Russian citizens, sending money to help Ukrainians might not be safe” through the banking system, said one volunteer. (Coindesk) Read More

Dutch Central Bank fines Binance EUR 3.3m for operating without registration

The Dutch central bank has fined Binance EUR 3.325 million for offering it services in the Netherlands without registration. The fine comes nearly a year after De Nederlandsche Bank publicly warned the exchange that any firm wanting to offer crypto services in the country had to register under the Money Laundering and Terrorist Financing Act. The fine was increased from EUR 2 million because it has a "very large number of customers" there and the violations took place over a long period of time. Binance has now applied for registration and been "relatively transparent", leading to a 5% reduction in the fine. (Finextra) Read More

Texas Crypto mining plants overheating, risk being shut down

Energy intensive crypto mining plants had become known for moving to set up in Texas, due to low electricity rates. They are now in at risk of shutting down. The state has struggled to keep up with energy demands, issuing pleas to residents to use less. This seems to be working, a little. Crypto mining rigs in Texas shut down this week to prevent blackouts and price hikes, and now experts aren't sure the state's power plants will be able to keep up with ongoing energy demands. This, as Texas plants are reportedly running nonstop and skipping out on some maintenance and repairs to keep from shutting down. As Texas has also been hit by soaring temperatures, they are pushing limits and aren't getting the service and maintenance they need to stay safe and consistent. "Things are going to break," executive director of Texas Competitive Power Advocates Michele Richmond said "We have an aging fleet that’s being run harder than it’s ever been run." Crypto miners in the US are now using as much power as Houston. (Futurism) Read More

UK’s government-backed Millicent Labs demos a retail full-reserve digital currency

An Innovate UK fintech, Millicent Labs, has completed a sandbox test of a retail full-reserve digital currency (FRDC). An FRDC is a privately issued digital currency pegged to a fiat currency. Its currency is a synthetic central bank digital currency (sCBDC), a form of CBDC that it says overcomes the tendency of CBDCs to be “overly-focused on domestic policy—a strategy that risks simply replacing today’s siloed, closed-loop financial systems with new ‘digital islands.’" Millicent Labs says it is introducing a range of FRDCs that are fully collateralized by cash deposits in a central bank account safeguarded by a regulated third party. It says its FRDC is fully backed by liquid assets. (Cointelegraph) Read More

Andorra green lights Bitcoin and Blockchain with Digital Assets Act

The Andorran government has approved a regulatory framework for digital currencies and blockchain technology. Its Digital Assets Act is split into two parts, the first regards the creation of digital money, or “programmable digital sovereign money” which can be exchanged in a closed system, which would allow the Andorran state to create its own token. The second refers to digital assets as financial instruments and intends to create an environment in which blockchain and distributed ledger technologies can be regulated. A CEO of a local Bitcoin company said “The outcome they’re trying to achieve is to actually attract new businesses to locate in the country by offering some legal clarification making it easier and more transparent. They see this as a way to attract talents and entrepreneurs to the new economy.” (Cointelegraph) Read More

NFTs Are Now a Legal Way to Serve Documents in UK Courts 

The High Court of England and Wales has permitted the court to serve documents of court proceedings via the transfer of an NFT on the blockchain. The novelty here is that a claimant was able to notify unknown persons by alternative methods including airdropping NFTs. In this case, D’Aloia v. Binance Holdings & Others, Fabrizio D’Aloia filed a claim against four cryptocurrency exchanges — Binance, Polo Digital Assets, Aux Cayes Fintech and Bitkub Online, after his cryptocurrency was stolen by unknown persons operating a fraudulent clone online brokerage. NFTs of documents were airdropped to two wallets known to hold his stolen crypto. This is the first time in the U.K., and second in the world that a court has been allowed to “serve” documents in a blockchain. Also important in this case, is that the court recognised that the cryptocurrency exchange defendants that hold his stolen crypto are constructive trustees, which could make them responsible for the funds stolen and deposited on the exchange. (Pymnts) Read More

A lawyer's take, by Charlie Kerrigan, partner, CMS: “A bunch of encouraging things here – first, lawyers can be creative (who knew? 😊) – this method of service was first adopted in the US and it has now been picked up in the UK – it is smart because it follows the logic of pseudonymous systems (i.e. you know the wallet but not the person); second, the UK courts will adapt their administrative rules to fit the crypto context; third, the UK courts are going into their toolbox to help find remedies where they see there is a wrong – and creates a legal hack for cases where crypto or digital assets are in the wrong hands, so it is helpful that the courts are prepared to us it for crypto that can otherwise disappear without notice.” Charles.Kerrigan@cms-cmno.com

New platform to turn you into a human NFT of your favourite avatar in online meetings

A Google Chrome extension, Hologram, is now allowing users to log in with crypto wallets and become get an animated NFT avatar to use in video meetings. The aim is to give users a way to express themselves as they like. It says it doesn't collect any user data and can also change users' voice. For a bit of old school celebrity backing, the lead singer of band Linkin Park is investing in the platform. (Futurism) Read More

34% of gamers want to use crypto in the Metaverse, despite the backlash

A new survey by institutional software developer Globant and conducted by YouGov has found that 34% of gamers have expressed interest in using crypto in the Metaverse. 40% said they were interested in the 'play-to-earn' aspect of gaming, whilst 49% said they were only interested in gaming, and 11% more interested in earning than playing. The survey only however polled 1100 adult gamers. (Cointelegraph) Read More

🎥 And for fun? The new South Park movie is basically just one long crypto roast 

The new South Park movie, South Park The Streaming Wars Part 2, now out on Paramount Plus, is one long piss take (literally - it contains lots of jokes about pee) of many of the celebrities who have promoted cryptocurrency projects of varying qualities. Perhaps needless to say, many of those who invested at the time the celebrities in question told them to would have lost money. The clips on the link are worth watching for a few minutes of light humour. Fortune favours the brave. (The Verge) Read More

The Crazy Startup- reality TV meets blockchain startup launchpad - launching

A new reality TV show meets startup launchpad meets blockchain accelerator backed by its own crowdfunding platform is launching. The Crazy Startup aims to rival the likes of Shark Tank and The Apprentice but with a marketplace for startup shares and crypto. It's launching first in Brazil, where it has recently closed the partnership with Brazil’s biggest podcast FLOW and has a partnership with the Mayor’s Office of Rio de Janeiro and SEBRAE, a governmental institution supporting small and medium enterprises and they are also looking into Lisbon, Dubai and Miami. The founder Renato Dimarzio is in London at the moment and is looking to connect with potential partners and investors. The latest promo video shot with the Mayor of Rio de Janeiro and see more here or email renato@thecrazystartup.com