Crypto News Headlines (01-Sep-2022)

Ethereum-based asset management protocol Babylon Finance will fully shutter in November after failing to recover from the impact of April’s $80 million exploit on Rari Capital.

Rari allowed users to supply and borrow any asset in its Fuse pools to earn yields. Users can set up their own pools with a basket of Ethereum-based assets, such as Babylon’s tokens, and other users can deposit funds into those pools to earn yields. The yields are generated as rewards for trading activity on those liquidity pools.

Babylon stored some $30 million in various cryptocurrencies at its peak and was among the top lending pools on Rari with $10 million in user-supplied assets.

The Babylon protocol took a 0.5% management fee and a 5% performance fee on yields offered to users, who supplied its native BABL tokens as collateral for loans on the platform.

The Iranian government has evaluated all issues relating to cryptocurrencies and approved a set of cryptocurrency regulations, Reza Fatemi-Amin, the minister of Industry, Mines, and Trade, told reporters at the conclusion of an automotive industry event in Tehran Sunday.

He explained that the government has ratified a “comprehensive and detailed” law that defines cryptocurrency regulations, including the use of fuel and electricity for crypto mining and the authorized uses of cryptocurrencies, Tasnim news agency conveyed.

The minister added that under an agreement between his ministry and the central bank of Iran, cryptocurrency can be used to pay for imports. He additionally noted that local business owners can import cars using cryptocurrencies instead of the U.S. dollar or euro.

The use of cryptocurrency to pay for imports is seen as a way to circumvent U.S. sanctions imposed on the Iranian finance and banking sector, allowing Iran to trade with countries similarly embargoed by U.S. sanctions, including Russia.

High-profile crypto attorney Kyle Roche has withdrawn from several class action suits against Binance and other major crypto companies, just days after the release of leaked videos in which he discussed his relationships with crypto clients over drinks.

Roche was the counsel on cases brought against companies including Tether, Bitfinex, Tron Foundation, HDR Global Trading (which operates as BitMEX), and Binance—all major players in the crypto space. New court documents reveal that the lawyer filed motions to withdraw from many of the cases today. According to the filings, Roche is pulling out of his own firm’s class action practice, though the practice will continue.

The move comes after self-proclaimed whistleblower website Crypto Leaks published videos showing Roche discussing his close relationship with Ava Labs, the company behind the Avalanche blockchain. The web site alleged that Roche was paid to damage Avalanche competitors like Solana.

The President of Paraguay – Mario Abdo Benítez – vetoed a bill that could have regulated cryptocurrency mining and turned it into an industrial activity. The reason appears to be the high electricity consumption.

Over the past several months, Paraguay made some significant steps toward the digital asset universe. Some reports suggested that the South American country might follow El Salvador’s example and make bitcoin legal tender. At the end of 2021, the Senate approved a bill that could have regulated and promoted cryptocurrency trading and mining activities.

The President Said No

Paraguay’s President gave his “total veto” on a bill that could have regulated cryptocurrency mining, as well as allowing the “commercialization, intermediation, exchange, transfer, custody and administration” of digital asset activities.

The bankrupt cryptocurrency lender Celsius is facing more legal issues as disgruntled clients are taking action to recover their funds after the platform froze withdrawals in June.

An ad hoc group of 64 custodial account holders at Celsius on Wednesday filed a complaint with the U.S. Bankruptcy Court for the Southern District of New York in order to recover their assets.

According to court documents, the creditors are seeking to recover a total of more than $22.5 million worth of cryptocurrency assets collectively held in Celsius’ custody service. The ad hoc group is represented by bankruptcy-focused law firm Togut, Segal & Segal.

The plaintiffs noted that Celsius has “not honored any withdrawals from any programs,” including custody services. According to the complaint, that contradicts the “plain language of the debtors’ terms of use” as they provide that title to custody assets “always remains with the user.”

Hashdex, a Brazilian crypto asset manager, has been approved to list exchange-traded products (ETP) in the European Union, the company announced Tuesday.

Hashdex is already working with European service providers − including exchanges − to list ETPs in different countries of the European Union, the company said in the statement. “We hope to move forward to be the main European issuer of cryptocurrency products, always promoting innovative and diversified strategies,” said Bruno Sousa, the company’s head of new markets.

In May, Hashdex launched the Hashdex Nasdaq Crypto Index Europe ETP on the SIX stock exchange in Switzerland after having won approval to operate in that country.

Hashdex currently offers six crypto-related exchange-traded funds (ETFs) in Brazil.

The Federal Bureau of Investigation (FBI) published an “Inside the FBI” podcast episode last week titled “Ten Most Wanted Fugitive Ruja Ignatova.” Also known to some as “Crypto Queen,” Ignatova co-founded Onecoin, one of the world’s largest cryptocurrency scams.

Inside the FBI podcast highlights news, cases, and people from around the bureau in audio form. The show’s host, Monica Grover from the FBI’s Office of Public Affairs, explained:

On this episode of Inside the FBI, we’ll learn how Ignatova, through a company once marketed as the ‘Bitcoin killer,’ didn’t change the world … but instead robbed investors of billions of dollars.

Ignatova was added to the FBI’s 10 most wanted fugitives list in June. The law enforcement agency is offering a reward of up to $100,000 for information leading to her arrest.

The Onecoin co-founder is also on the list of Europe’s most wanted. Europol is offering a reward of up to 5,000 euros ($5,000) for any information that could lead to the arrest of Ignatova.

Top cryptocurrencies, including Bitcoin (BTC) and Ethereum (ETH), have posted severe losses over the past week.

Bitcoin, the leading cryptocurrency with a market capitalization of roughly $382 billion, has plummeted 7.9% over the past week. It trades at around $19,990, down 1.6% over the past 24 hours, per data from CoinMarketCap.

Bitcoin held range-bound this week, trading between a weekly high of $21,804.91 and a low of $19,600.79.

The week’s bearish price action puts Bitcoin down 71.07% from its historical all-time high of $68,789.63 recorded in November 2021, according to data from CoinMarketCap.

Bitcoin long trades worth $166.42 million have been liquidated over the past week, too, per data from Coinglass. Short positions worth $85.37 million were liquidated over the same period.

Some of the funds will be used to revitalize 15,000 square meters of El Zonte, which has come to be known as Bitcoin Beach due to the pervasive use of the cryptocurrency there, President Nayib Bukele said in an announcement last week. The planned developments include a beach club, shopping center, parking lot, as well as a treatment plant. The other portion of the investment went to the Surf City project in nearby La Libertad.

Bitcoin Beach

The Bitcoin Beach project was founded three years ago with an anonymous endowment of digital currency at the beach town of El Zonte. Since then, entrepreneurs and tourists in the area have increasingly used Bitcoin to conduct transactions, while workers in the town receive their salaries in digital currency.

Bitcoin Beach’s success quickly gained attention, which subsequently led to a national conversation about cryptocurrencies. This then led to Bukele introducing legislation that would legalize Bitcoin as legal tender in El Salvador, which passed shortly thereafter.

The government of Indonesia returned to its plan to set up a digital assets exchange, publicly announced first time back in 2021. A so-called “crypto bourse” is planned to be established by the end of 2022.

According to DealStreetAsia, Indonesia’s deputy trade minister Jerry Sambuaga confirmed during the NXC International Summit 2022 in Bali that the country is still planning on the crypto bourse’ launch, while the whole project has been delayed due to additional preparations:

“We will make sure that every requirement, procedure and the necessary steps have been taken.”

Sambuaga also described some inevitable preparatory tasks ahead of the launch, such as an assessment of entities that “could be included in the bourse” and setting the minimum requirements for them.

CEO of Tokokrypto, one of the 25 licensed crypto exchanges in Indonesia with a large share owned by Binance, Pang Hue Kai, called a bourse project a catalyst for the Indonesia crypto ecosystem.