Crypto News Headlines (01-Feb-2023)

Binance, a leading cryptocurrency exchange by volume traded, announced on Jan. 30 the launch of its Binance card in brazil, a product that will allow crypto users to make payments in crypto to legacy merchants. The card, which is backed by Mastercard, will enable registered customers of the exchange from all over Brazil to make crypto payments with 13 supported cryptocurrencies, including on-the-fly conversions to the Brazilian real.

The release of this product comes as no surprise to some, as Matthew Shroder, global vice president and regional director at Binance, had stated in September that Brazil was one of the top upcoming markets for the launch of a prepaid card in Latam.

Tesla lost over $140 million betting on Bitcoin last year, according to a Monday filing with the U.S. Securities and Exchange Commission. The electric car manufacturer took a $204 million impairment charge while gaining $64 million through converting Bitcoin in 2022.

“In the year ended December 31, 2022, we recorded $204 million of impairment losses resulting from changes to the carrying value of our Bitcoin and gains of $64 million on certain conversions of bitcoin into fiat currency by us,” Tesla said in the filing.

An impairment charge describes a reduction or loss in the value of an asset. It can occur because of a change in economic circumstances, like the crypto winter that gripped the market after the collapse of Terra Luna in May 2022.

The U.K.’s finance ministry is proposing new rules to govern multiple areas of the crypto sector and wants stakeholders to weigh in.

The hotly anticipated consultation, to be published by His Majesty’s Treasury on Wednesday, asks for feedback from industry members and experts on rules that focus on protecting consumers that also align with the country’s ambition to become a hub for crypto.

Some proposals will place more responsibility on trading venues, such as crypto exchanges, to define and detail requirements for admission and disclosure documents, the Treasury said in a statement to the press.

The proposed rules also target financial intermediaries such as custodians and seek to set up a regime around the lending of crypto assets. The Treasury is inviting feedback on a planned market abuse regime aimed at improving market integrity, consumer protection and operational resilience of firms. The consultation also proposes prudential and data reporting requirements for crypto companies.

Bankrupt crypto lender Celsius published the names of users who are allowed to withdraw a majority of their assets locked on the platform.

The 1,400-page document filed with a New York bankruptcy court on Tuesday shows the company has court permission to distribute 94% of each user’s assets. While eligibility is contingent upon certain criteria – for instance, transfers had to be less than $7,575 when they were made – withdrawals will be processed only if the users have enough assets on the platform to cover any withdrawal fees, and only if they update “specific customer information related to Anti-Money Laundering (AML) and Know Your Customer (KYC) information.”

“Whether and when Eligible Users are entitled to a distribution of the remaining 6% will be determined at a later date by the Court,” the filing said.

Cryptocurrency and blockchain technology found no mention in India’s union budget for the year 2023, bringing down the hopes of millions of crypto holders in the country. Many in the Indian crypto community were hoping for some reduction to the high crypto tax, implemented in March 2022.

Indian Finance Minister Nirmala Sitharaman presented the union budget on Feb. 1, announcing key changes to the income tax slabs. However, during the session, the minister didn’t mention crypto, central bank digital currency, or blockchain tech. Last year, India levied a 30% tax on crypto profits and a 1% tax deducted at source (TDS) on all crypto transactions, derailing a thriving industry almost immediately.

Devere Group, a global financial advisory and asset management firm with $12 billion in assets under management (AUM) worldwide, published the results of its crypto survey Monday. Devere found that among its millionaire clients with between $1 million and $5 million of investable assets, 82% have sought advice about investing in cryptocurrencies. Without providing additional details, the asset management firm wrote:

Eight out of 10 high net worth (HNW) individuals have asked their financial advisers about including cryptocurrencies, such as bitcoin, into their portfolios over the last 12 months — despite the market experiencing a difficult year in 2022.

“In 2022, the crypto market delivered its worst performance since 2018, with bitcoin, the headline-grabbing market leader, falling about 75% during the year,” Devere Group CEO Nigel Green commented. He explained that the crypto price drops resulted from investors reducing “their exposure to risk-on assets, including stocks and crypto, due to heightened concerns about inflation and slower economic growth.”

Ethereum is preparing to launch a user-facing dress rehearsal of its much-anticipated Shanghai upgrade, with a public testnet of the software set to go live Wednesday morning.

The public testnet, dubbed Zhejiang, will allow any Ethereum user to simulate the process of withdrawing staked ETH. That full capability will be rolled out when the Shanghai upgrade goes live—sometime in March or April, Ethereum core developer Terence Tsao told Decrypt. Previously, estimates for the upgrade were firmly committed to a release by March.

Shanghai’s release timeline has been scrupulously monitored and haggled over, largely due to pressure created by the massive amount of capital that will remain in limbo until the upgrade’s successful implementation.

Bitcoin (BTC) had a rough year all throughout 2022.

But fresh on-chain and futures market data show positive signs that the leading cryptocurrency by market capitalization has started to recover.

After a bevy of short liquidations, the futures market is pointing toward renewed equilibrium. According to data from Glassnode, short position liquidations cleared out unhealthy market speculators, on-chain and exchange data now point to an improving spot market and exchange netflows.

A large group of investors that were previously at a loss is now back in the category that Glassnode analysts label as “unrealized profits.”

Massive short liquidations set the groundwork for new investors to thrive

Futures data typically hold an equilibrium between longs and shorts. As the market moves, investors tend to update their futures to avoid liquidation. Conversely, in mid-January investors were caught off guard which resulted in an all-time high of 85% short liquidations.

Bankrupt cryptocurrency exchange FTX had around $1.4 billion in cash as of the end of 2022, according to an interim financial update filed on Wednesday.

The figure is around 19% higher than the $1.2 billion reported in November when FTX filed for bankruptcy.

Amongst the various arms Sam Bankman-Fried’s fallen crypto empire, FTX.US has $260 million in cash. Bankman-Fried has repeatedly claimed that the U.S. wing is solvent. Last month he blogged that FTX US “had at least $111m, and likely around $400m, of excess cash on top of what was required to match customer balances.”

“Customer balances are likely around $199m, and certainly less than $497m (which they were a day earlier before massive withdrawals),” he added.

According to the latest update, FTX’s headcount has dropped from 320 at the time of bankruptcy to 195 by year-end.

The holding company for the crypto-friendly bank, BankProv, has revealed it is no longer providing loans secured by cryptocurrency mining rigs after writing off $47.9 million in loans primarily secured by them throughout 2022.

According to a Jan. 31 filing with the United States Securities and Exchange Commission (SEC), BankProv has nearly halved the proportion of its digital asset portfolio consisting of rig-collateralized debt since Sep. 30, 2022.

The bank held $41.2 million in digital asset-related loans as of Dec. 30 last year, consisting of $26.7 million worth of loans collateralized by crypto mining rigs, which “will continue to decline as the Bank is no longer originating this type of loan.”

The crypto mining industry has taken on huge amounts of debt during the 2021 bull market, often offering up mining rigs they own as collateral in order to lower their interest rates.