Kategorie: Crypto Business

• Ex-SEC Chair Jay Clayton, who left the US securities watchdog in December 2020, joins Electric Capital as an advisor.
• Electric Capital has also tapped Kevin Warsh, a former Federel Reserve Board of Governors member and Meta Platforms’ Pratiti Raychoudhury.
• Crypto is seeing a new trend with these kind of appointments and hires.

Jay Clayton, a former US Securities and Exchange Commission (SEC) Chair, has joined Electric Capital as an advisor, the venture firm announced on Wednesday.

The firm, which focuses on early-stage investments in the crypto, blockchain, and fintech sectors, also named two other high-profile individuals to its advisory team – former Federal Reserve Board of Governors member Kevin Warsh aand Meta VP and Head of Research Pratiti Raychoudhury.

According to Electric Capital, the three are expected to support the firms’ Web3 founders, providing regulatory insight among other aspects as the team looks to build scalable crypto-enabled products eying billions of users.

Electric Capital recently announced a new capital injection of $1 billion, which the company plans to invest in early-stage Web3 projects whose investment size is between $1 million and $5 million. The firm has investments in several top crypto platforms, including Bitwise, dYdX, NEAR, Hashflow, and Magic Eden.

A new trend in crypto

Electric Capital’s appointment of Jay Clayton as part as an advisory team adds to a trend that has seen many former regulators and other top government officials jump into the crypto space. These appointments have increased over the past year, largely amid the sector’s push for regulatory clarity.

The moves have also come amid growing attention on crypto from across the global regulatory community.

Among those to join projects in the industry include Brian Quintenz, a former Commodity Futures Trading Commission (CFTC) commissioner. Quintenz is currently an advisor at Andreessen Horowitz.

Crypto platform Bitfury also tapped Brian Brooks, a former regulator at the Comptroller of the Currency, while former UK chancellor Lord Philip Hammond joined crypto startup Copper as an advisor in 2021.

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• The $100 million DAI loan is the first collaboration between MakerDAO and a US regulated bank.

MakerDAO has announced its “first commercial loan collaboration” with a US-regulated bank, opening up the realm of possibility between real-world finance and decentralised finance (DeFi).

The loan programme, set to debut at $100 million DAI, will help Huntingdon Valley Bank support its businesses, MakerDAO said on Tuesday.

“Maker is connecting to the legacy economy through the largest real-world asset vault to date and its first relationship with a US-based bank,” the DAI stablecoin issuer noted.DAI is pegged 1:1 to the US dollar.

Today is a defining moment to envision the potential of connecting decentralized finance and real-world finance.

Huntingdon Valley Bank and Maker pioneer the first commercial loan participation between a U.S. Regulated Financial Institution and a decentralized digital currency. pic.twitter.com/wajJYVJwwz

— Maker (@MakerDAO) August 23, 2022

The facility will work via a recently established Trust dubbed the RWA Master Participation Trust, which will maintain access to DAI liquidity. Meanwhile, the bank will handle loan origination, submitting eligible ones to the Trust for participation.

Loan eligibility will be processed by Ankura Trust, who is the calculation agent.

“On a monthly basis, HVBank will remit to the Trust the pro-rata portion of all amounts received by HVBank in respect of the loan Participations. Upon receipt of such amounts, the Trustee will make payments in accordance with the cash waterfall defined in the Trust Agreement,” MakerDAO wrote.

And in all these, Maker or the Trust and HVBank will not operate on a borrower-lender type of relationship, the protocol emphasised.

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Singapore-based crypto lender Hodlnaut has revealed a financial shortfall of $200 million as it seeks court protection.

Embattled crypto lender Hodlnaut revealed in a court affidavit filed earlier this month that it has suffered a financial shortfall of $193 million. This is according to a report by The Block earlier on Monday. 

The affidavit revealed the situations that led the company to freeze withdrawals on its platform on August 8.

The court documents were made available to customers after the crypto lender published a blog post on August 19 confirming that it is facing police proceedings in Singapore.

The company also laid off 80% of its staff in a bid to conserve cash. The affidavit revealed that Hodlnaut has an outstanding liability of SGD 391 million (around $281 million). 

Meanwhile, the company’s asset was SGD 122 million ($88 million), resulting in a financial shortfall of roughly $193 million. The company said;

“As of 8 August 2022, the Hodlnaut Group has an outstanding liability balance of SGD 391M and estimated realisable assets of SGD 122M in cryptocurrency. This financial position gives the Hodlnaut Group a realisable cryptocurrency Asset to Debt ratio of about 0.31 (i.e. 31 cents on the dollar).”

Hodlnaut already filed for creditor protection in Singapore on August 16 as it seeks time to resolve its financial issues.

The cryptocurrency lender’s financial struggles began following the Terra crash. The company held around  $317 million in UST, the failed stablecoin, in Anchor Protocol on Terra.

The UST stablecoin lost its peg against the US Dollar in May, resulting in a $189.7 million loss for Hodlnaut. 

The company suffered further financial afflictions between June 14 and July 15 as panicked customers sought to recover their funds. Hodlnaught lost around $150 million at the time, the affidavit added. 

Hodlnaut also said its bitcoin (BTC) and ether (ETH) holdings were affected by the bear market currently affecting the broader market. 

The court affidavit also revealed that the number of potential creditors of Hodlnaut currently stands at 17,513. 

The document said the company is looking at the option of allowing “limited exits” for users at 25 cents on the dollar. Hodlnaut is in talks with the FTX crypto exchanges about the feasibility of the proposal, the company added. Hodlnaut said;

“This would likely be a better option than liquidation as the latter would take a longer period of time, and likely result in a lower return than 25 cents on the dollar given the fees involved in a liquidation situation and given the present cryptocurrency asset to debt ratio of the Hodlnaut Group.”

A few cryptocurrency lenders, including Celsius and Voyager Digital, have already filed for bankruptcy following Terra’s collapse and the ongoing bear market.

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• Financial Conduct Authority (FCA) has given a nod to the acquisition of a UK money payment firm by US-based company.
• Blockchain company Future Fintech will acquire 100% of Khyber Money for  €685,000 (about $687,534).
• The deal is expected to close within the next three months.

Future FinTech Group Inc., a Florida-based publicly traded blockchain applications technology firm, is set to acquire UK-based money payments services firm Khyber Money Exchange following approval from the Financial Conduct Authority (FCA).

Following the approval, Future Fintech will acquire 100% of Khyber Exchange equity, at a disclosed purchase price of €685,000 (roughly $687,534).

The Nasdaq-listed fintech company, which also engages in cryptocurrency mining, operates a blockchain-based e-commerce platform and offers crypto investment management services, announced this on Friday.

FCA approves wholly-owned subsidiary

Per the firm, the FCA greenlight was given to its wholly-owned subsidiary FTFT UK Ltd, which is regulated in the United Kingdom.

“We are pleased to have received approval from the FCA to acquire Khyber Exchange since it further extends our fintech footprint and diversifies our geographical reach,” Future Fntech CEO Shanchun Huang noted.

Khyber Exchange offers global money transfer services across its agent locations, on the web vial its online portal and through mobile access. The UK-headquartered company was founded in 2009 and has offices in Italy and Germany.

The acquisition will help Future Fintech tap further into the money payment services business, which Huang said is a high margin industry and one that’s likely to boost goals towards global expansion.

Future Fintech expects the deal to close within the next three months as outlined by the FCA.

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• FTX saw its 2021 revenue grow from $89 million to hit over $1 billion as the crypto market rallied.
• Growth came amid huge expansion across the globe, CNBC said in a report citing leaked documents.
• Despite crypto winter, FTX has looked to add to its growing portfolio of companies. 

FTX saw its revenue grow more than 1000% in 2021 as the massive bull market that took Bitcoin to highs of $69,000 pushed the cryptocurrency exchange’s revenue from below $90 million in 2020 to over $1 billion last year.

A CNBC report, citing leaked audited documents, revealed that the company, led by CEO Sam Bankman-Fried, generated the huge revenue amid a growing footprint built on crucial acquisitions.

FTX’s revenue hit $1.02 billion

In 2021, as rallying markets pulled in new money and helped crypto business establish a foothold following the previous market cycle, FTX emerged as one of those that took full advantage.

Financial success only helped to fuel global expansion for the company, adding to the overall revenue growth year-over-year, per documents the publication cited. Indeed, FTX’s revenue reportedly jumped from $89 million in 2020 to $1.02 billion in 2021 – reflecting an increase of more than 1000%.

The crypto exchange also saw its net income rise significantly – while in the previous year it stood at around $17 million, the crypto craze helped push that to $388 million. The company’s operating income went up from $14 million in 2020 to over $272 million in 2021.

Documents also showed FTX had cash holdings of nearly $2.5 billion at the end of 2022, with 27% profit margins.

FTX continues to grow its global footprint 

The revenue in Q1 2022 was $270 million, with forecasts looking at $1.1 billion for the year. This outlook is likely to be clearer with the release of Q2 figures, given the impact of crypto winter on crypto prices during the quarter.

Despite the crypto winter, Bankman-Fried’s company has looked to continue with its acquisition blitz. Evidently, the crypto turmoil seen in the first half of the year has provided an opportunity to snap up some companies on the cheap.

For instance, June saw FTX acquire Canada-based crypto trading platform Bitvo, and FTX US acquire clearing firm Embed. The deal with the latter has been key in FTX US’ offering of stocks trading. Other deals on the FTX table are for crypto lender BlockFi and Bithumb, a South Korea-based cryptocurrency exchange.

As well as these major acquisitions, FTX has struck deals and bought multiple businesses around the world. 

Notably, the leaked documents show 15 smaller firms spread across Singapore, Australia, Germany, Turkey, Switzerland and the United Arab Emirates, Cyprus and Gibraltar, among other countries.

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