FTX Acquiring BlockFi? UPDATE Proposal for CELSISUS

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2022-09-21 21:51:07

Market situation

Yesterday, the situation was not good for the stock market. Nasdaq fell 1.33%, S&P 500 fell 0.88% and Dow Jones fell 0.82%. Stock futures also continued to fall on all three indexes. Oil and gold also fell slightly to 105 USD/barrel and 1805 USD/ounce, respectively.

Bitcoin after falling to more than 18,300 USD has recovered around 20,000 USD. Altcoins are still falling but the drop rate is not high.

Stocks went down because inflation was still high. The report on the PCE inflation index, excluding food and energy, increased by 4.7% from a year ago. This figure is still 0.2% lower than expected. However, the main inflation index (which counts food and energy) remains high, rising 0.6% on the month and remaining near the highest level since 1982.

Update information about Celsius

Yesterday, YouTube channel Digital Assets News had an interview with Simon Dixon. is the CEO & co-founder of online investment platform BnkToTheFuture.com who has invested over $60 million in FinTech companies. He is also the Fund Manager of Bitcoin Capital and the author of the book ‘Banking to the Future’. BnkToTheFuture company is also Celsius’ shareholder with 5% stake, this company has also advised companies facing similar problems to Celsius today. Simon Dixon was also invited to be a member of Celsius’s board of directors and advisor, but he declined. Therefore, he can still share information that is not inside Celsius information.

Through interviews, we really see that Celsius is having financial problems. Along with that, there is also unconfirmed information that Celsius is losing about 2 billion USD. The problem Celsius faces is the loss of liquidity for users of the cryptocurrency lending network. The reason why Celsius lost liquidity may be that this company is using money to invest and can withdraw until maturity. The second case may be Celsius has actually lost a large amount of money. This second possibility is more appreciated.

Therefore, BnkToTheFuture proposed three solutions for Celsius to solve the current problem.

The first solution is Celsius to explain to the community about their current situation. The remaining amount of Celsius is used to give back to the community. The proposal also suggests Celsius issue more tokens to compensate users for the loss. This choice is only made when users have great faith in Celsius and this company needs to do it immediately after the problem occurs. So Simon Dixon thinks this option is too late for Celsius.

Raising additional capital through selling shares is the second solution offered by Simon Dixon. With this solution, Celsius needs to convince the investor to provide a problem to solve the current problem. The company’s stock will have to accept to lose a part of its shares to raise capital. From there, Celsius rebuilds trust with users, takes advantage of the existing brand to continue to recover and develop, investors also get profits. This is also the way Bitfinex did in 2016.

A third recommendation is to form an operational plan that will allow a new organization and team to rebuild the company. That means Celsius will sell its company to another company. At that time, the new company will reform and be accountable to users.

All three of these proposals are being reviewed by Celsius’s board of directors. Simon Dixon believes that the most important thing is to ensure that users’ funds are not lost. Users and customers still have faith in the company, Celsius still has the opportunity to turn around. However, Simon Dixon also made it clear that, once this incident is over, Celsius cannot continue to operate as before and may face legal problems. The current proposals are the best possible options for Celsius’s situation right now.

EU passes MiCA law

The EU has agreed on a MiCA law to apply to crypto under a new single regulatory framework. The act includes rules that will cover issuers of unsupported crypto assets, stablecoins, trading platforms, and crypto asset wallets.

This law has two major points that are notable in that stablecoin issuers build up a sufficiently liquid reserve. At the same time, the limit for stablecoins is 200 million euros in transactions per day. Crypto Twitter users have deemed this regulation impossible, as the 24-hour daily trading volume of stablecoins is huge like Tether (USDT) at $50.40 billion (about 48.13 billion euros). ) and USD Coin (USDC) of $5.66 billion (5.40 billion euros). With this law, many exchanges can avoid it by prioritizing the use of decentralized stablecoins like DAI.

The second point makes it difficult for crypto service providers like exchanges. Crypto-asset service providers (CASPs) will be subject to strict consumer protection requirements and may also be held liable if they lose investors’ crypto-assets . When an exchange lists tokens without a specific founder (e.g. BTC), the exchange will also be held liable if the token is fraudulent or fraudulent. This provision will make exchanges more careful before listing any tokens.

Other information:

  • Analysts from Deutsche Bank forecast Bitcoin (BTC) to recover to $28,000 by December 2022 as the crypto market continues to grapple with dismal times. The reason they give is that BTC is having a high correlation with the Nasdaq 100 and S&P 500, and the bank predicts a rally at the end of the year, so so does BTC.

  • VanEck Investments has filed a new application for a spot bitcoin exchange-traded fund (ETF) with the US Securities and Exchange Commission. VanEck’s application for its VanEck Bitcoin Trust comes just eight months after the SEC rejected their previous application and just one day after the agency rejected Grayscale Bitwise’s bitcoin ETF applications.

  • According to an unnamed source, the FTX exchange is planning to buy BlockFi company for an expected price of about $ 25 million. This is 99% less than BlockFi’s final private valuation of $4.8 billion. Then, BlockFi CEO Zac Prince said that their company certainly won’t sell for $ 25 million. However, he did not say that the company would not sell. Therefore, many people believe that the information that FTX buys BlockFi is possible but at a different price.

  • A new report has indicated that cryptocurrency exchange Coinbase has provided Immigration and Customs Enforcement (ICE) agents with a “feature set” aimed at tracking the company’s customers. According to the report, ICE has been given access to an intelligence-gathering app, called Coinbase Tracer, that offers a variety of capabilities for tracking user data. The purpose of Coinbase Tracer is to assist ICE in tracing malicious and fraudulent transactions on blockchains. Coinbase has stated that Coinbase Tracer derives its information from public sources and does not use user data and that the above information is incorrect.

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