Kategorie: Crypto Markets

• Singh was integral in the founding of FTX, faces charges
• Code was written to help Alameda take out unlimited line of credit  
• Singh and Gary Wang borrowed hundreds of millions

US authorities are ramping up pressure on Sam Bankman-Fried’s inner circle as they scrutinize Nishad Singh, a former close FTX associate according to insiders. Singh was integral in the founding of FTX. He has not been charged with anything, but he may be. Bloomberg’s Sonali Basak reports. 

Is Singh cooperating? 

Basak says:

We don’t know, but we do know he was in the “penthouse”, he lived with SBF. He was an insider who was really close friends with Sam’s brother. Gary Wang, who pled guilty, is cooperating. Part of the CFTC’s allegations are that code was written to help Alameda take out this unlimited line of credit that has essentially been found to be customer money. The aim is to see what role Nishad Singh played. 

Who else was in the penthouse?

Who else might prosecutors be looking at? One issue is the cooperators in the investigation. Damian Williams of the US District Attorney’s office said there are thousands of documents, signal messages, etc. Is it just the penthouse you’re looking at, or is it the broader FTX empire?

Basak brought up Ryan Salem, who was found in the court documents in the Bahamas to have tipped off Bahamian authorities. Then, there’s the entity FTX.US, which is said to be more shielded. There are things people knew…that this “penthouse suite” kept from them. 

Follow the money

When Singh’s name first came up, the new control of FTX had taken over. They put out that report and they talked about this idea that SBF had taken out about a billion dollars in loans through Alameda. They also said Singh and Wang had borrowed hundreds of millions. That’s the allegation. They have not responded, at least not publicly. 

Whose loans went where? 

Some of the information is coming from the bankruptcy filings. The prosecutors are not bankruptcy experts. The authorities are working on tracking “whose loans went where to buy what.” Ultimately, you’re going to have to seize those assets and get that money back. 

The domino effect 

In related news, crypto broker Genesis Global Trading eliminated 30% of its staff. Withdrawals have been halted by Genesis Lending for over a month. The question is: how much of this is contained to lending and how much is it a bigger problem for crypto conglomerate Digital Currency Group’s (DCG) head Barry Silbert, who is a big Wall Street voice? 

The Gemini-Genesis drama 

CNBC reported that Cameron Winklevoss, co-founder and president of Gemini crypto exchange, accused Silbert of engaging in “bad faith” tactics. He wants to resolve a thorny lending dispute with the company that emerged after FTX collapsed.

The dispute arose from an agreement between Gemini and Genesis Lending, a DCG subsidiary.  Gemini offered customers yields of up to 8% through its lending product Gemini Earn. To generate that yield, Gemini lent customer funds to Genesis Global Capital, which lent them out to institutional clients.

Gemini suspended redemptions for its Earn service a few days after FTX filed for bankruptcy. Genesis Global Capital also suspended its loan services. While Gemini denies any link to FTX, Genesis tweeted in November that they had around $175 million in funds locked inside FTX.

Conflict resolution deadline is tomorrow 

On January 2, Cameron Winklevoss wrote an open letter to Barry Silbert, alleging the latter had refused to meet with the Gemini team on numerous occasions. He set a deadline on January 8 when Gemini wants to see a proposal to resolve the conflict…or else. 

It was a fiery letter, the hosts on Bloomberg conceded. Basak concluded: 

When these things are hashed out on Wall Street, they are done behind investment bankers and lawyers. In crypto, they’re done on Twitter… 

 

 

The post Prosecutors ramp up pressure on SBF associate Nishad Singh appeared first on CoinJournal.

• Shares are down by more than 90% from their all-time high in November 2021 
• Silvergate is a “great example of everything that’s wrong with this industry”  
• They were working on a MMF, the most dangerous link in the crypto chain

Jim Cramer talked about why Silvergate is a ‘pivotal’ part of the crypto ecosystem on Mad Money, CNBC.

Silvergate’s shares plummeted, losing more than 43% yesterday, then another 2% or so. They are down by more than 90% from their all-time high in November 2021. According to the bank, the crypto industry’s breakdown caused a run on deposits, prompting it to fire 40% of its staff and sell assets at a major loss. Silvergate held deposits for FTX units and Alameda. 

Stocks can always go lower 

According to Cramer, stocks can always go lower and as long as they’re above zero, it’s fine. However, Silvergate is a pivotal part of the crypto ecosystem because it’s a “great example of everything that’s wrong with this industry.” Cramer said: 

The bank made a series of horrifying disclosures, which caused (the drastic fall). If we don’t address it, I worry that the market cap will shrink to the point where we won’t be allowed to talk about it on air. 

History of Silvergate Bank

Silvergate Bank was founded as a savings and loan association in 1988. It was transformed into a bank in 1996 by Dennis Frank and Derek J. Eisele. At first, it was quite small with just three branches in southern California. 

In 2013, CEO Alan Lane made a personal investment in Bitcoin, and the bank went into crypto. They launched services to companies in the crypto space, especially crypto exchanges. They got in very early according to Cramer, when most banks didn’t want to have anything to do with Bitcoin. Then, it was “really only Bitcoin.” 

Silvergate grew rapidly thereafter, reaching $1.9 billion in assets by 2017. The company was listed in November 2019 at a stock price of $13. The price had risen by 1580% in November 2021. 

Why did they fail?

As mentioned, the price is now down over 90% from then. Cramer explains:

Silvergate established the Silvergate Exchange Network (SEN), a payment network for the crypto space. You can send USD to other Silvergate customers instantly, 24/7, just like crypto transactions. The bank also offered loans with Bitcoin as collateral. They were working on their own stablecoin, like a pseudo money market fund (MMF) that allows you to go in and out of the market without friction, which is the most dangerous link in the crypto chain.

The post Jim Cramer explains Silvergate’s failure on Mad Money appeared first on CoinJournal.

• Cowen cited the absence of clarity on a possible trading volume recovery after FTX collapsed 
• Cowen also reduced its price target on the shares
• Coinbase has features that make it one of the safest platforms to trade

Financial services and investment firm Cowen, which has locations throughout the US, Europe, and several in Asia, downgraded cryptocurrency exchange Coinbase shares from outperform to market perform. 

They cited the absence of clarity on a possible trading volume recovery after competing crypto exchange FTX collapsed, CNBC reported. 

Shares dropped to $37 in premarket session

Cowen also reduced its price target on the shares from $75 to $36, almost 50%. In the premarket session, the stock lost 1.5%, falling to $37.14. Coinbase shares lost 84% last year. 

Positive predictions despite current developments 

How Coinbase will perform in 2023 remains to be seen. According to experts, however, the regulated company has an excellent security record and disposes of a number of features that make it one of the safest platforms to trade, buy, and sell crypto. 

Sterner scrutiny from regulators 

The collapse of Sam Bankman-Fried’s exchange sent shock waves throughout the industry. One effect is likely to involve sterner scrutiny from watchdogs like the US Securities and Exchange Commission according to insiders. 

Reduced crypto valuations will lead to lower retail trade volumes 

Lowered crypto valuations will result in depressed retail trading activity. There is still some interest from institutional investors, but they are becoming far more cautious, conducting careful due diligence in each sector. Analysts George Kuhle and Stephen Glagola wrote in a note: 

COIN’s business is significantly correlated to crypto asset prices, trading volumes and volatility.

Visibility remains low 

The leading US exchange’s monthly trading volumes have been declining fairly consistently each month since the universal all-time high in November 2021. 

Visibility remains low into a rebound and a stabilization in retail trading volumes in the current year considering the FTX contagion risks, the macroeconomic backdrop, and their compounded effects on crypto prices.  

The post Cowen downgrades Coinbase to market perform appeared first on CoinJournal.

• Silvergate held deposits for FTX units and Alameda Research
• Silvergate appears to be most at risk from what happened to FTX  
• Shares plunged by more than 40%  

Shares of crypto bank Silvergate Capital Corp. have plummeted. The company says the crypto industry’s breakdown caused a run on deposits, prompting it to fire 40% of its staff and sell assets at a major loss. 

Silvergate held deposits for FTX units and Alameda Research, the company at the core of the crypto exchange’s collapse. Su Keenan reports on Bloomberg Television.

The FTX collapse continues to have ramifications

The bank Silvergate is reeling. It appears to be most at risk from what happened to FTX. They made a big bet on crypto, but the FTX collapse put it in crisis. It’s down 42% in the latest session. It was holding funds and assets for many of these crypto entities, Bloomberg TV reported. 

Shares plummeted by over 40% 

Shares plunged by more than 40% after customers withdrew the equivalent of $1.1 billion of these digital assets deposits in the fourth quarter. That forced Silvergate to load off assets and fire 40% of staff, which put the bank in further crisis. 

Regulators are also eyeing the bank 

Lawmakers are scrutinizing the bank itself due to its affiliation with FTX and some of its deposits. Meanwhile, crypto broker Genesis has laid off 30% of its staff and the former CEO of bankrupt crypto lender Celsius is being sued by the New York Attorney General for defrauding investors. 

All of this news is tarnishing the space even further and dispersing gloom throughout the industry. 

The post Silvergate plunges after crypto meltdown triggered deposit run appeared first on CoinJournal.

• Despite the current crypto winter more and more people would want to link their businesses to cryptocurrencies.
• Online casinos are now accepting crypto deposits and withdrawals.
• There are also various companies that have ventured into creating infrastructure for the crypto industry.

In 2021, the cryptocurrency market experienced significant growth, which led to many global companies showing interest in digital assets. If earlier investments in cryptocurrency were made only by companies that firmly believed in this industry’s development, now more and more people would want to transfer their business to tokens.

You should not think that the transition to cryptocurrency is connected only with trends and that now everyone uses such coins. Today we will discuss why traditional companies use digital currency. We will also tell you about the markets that will switch to cryptocurrency in 2023.

Crypto in Gambling

The most popular area of application of cryptocurrency is the sphere of gambling on the Internet. Both online casinos and bookmakers can make payments in bitcoins and other tokens. The transition of many sites to cryptocurrencies is due to the advantages that these coins provide:

• Fast speed of payments. Casino customers can replenish their accounts and withdraw winnings almost instantly.

• No need for verification.

• Minimal commissions or their complete absence.

With cryptocurrency, you will have access to the whole range of gambling entertainment – games with live dealers (here’s a trusted site to try it out; https://www.ignitioncasino.eu/live-dealer), classic video slots, sports betting, lotteries, and much more.

Technology Sector 

Already, cryptocurrencies are actively used by companies from the technology sector. Schematically, such companies can be divided into three groups. Below, we describe each group in more detail.

Investor Companies

This category includes firms that convert their regular fiat money into cryptocurrencies. The brightest representatives are Tesla and Microstrategy. They are interested in Bitcoin, despite its recent instability.

It is now known that about 7.5% of Tesla’s free money is in cryptocurrency. Not all the company’s investors appreciate this approach. Many people are sure that buying cryptocurrency is a dangerous and thoughtless act that can lead to losing a significant amount of funds.

Microstrategy is even more interested in Bitcoin. Currently, the company has more digital coins on its balance sheet than regular money. At the same time, the management is not even afraid of the situation with bitcoin – after the fall in the rate, the most famous cryptocurrency was not only not sold but also bought more.

Now, cryptocurrency is one of the safest ways to store money if you do not consider fluctuations in the exchange rate. Modern cryptocurrency wallets provide secure storage of coins. No outsider will be able to access your account.

Companies That Create Infrastructure for Crypto

We are talking about companies that develop and produce equipment for the extraction of cryptocurrency – for mining. The following manufacturers fall into this category:

• Nvidia;

• AMD;

• TSM;

• Bitfury;

• Bitmain;

• Canaan;

• Ebang.

The development of the crypto industry has led to the fact that over the past few years, the cost of video cards suitable for coin mining has increased several times. The market is constantly replenished with new manufacturers who strive to offer customers productive and energy-efficient mining equipment.

Companies Building an Ecosystem for Cryptocurrencies

This category includes firms that accept cryptocurrency as a payment method. This includes PayPal, Visa, Mastercard, JP Morgan, and many of the world’s central banks. Moreover, these firms use tokens in internal processes.

Every year, the list of such companies continues to expand. This is mainly because cryptocurrency is legalized and beginning to be accepted at the state level.

Benefits of Cryptocurrency

The ubiquity of digital tokens is due to several advantages they have:

• Inflation protection. Inflation causes the value of any currency to decrease over time. Cryptocurrency is issued with a fixed amount.

• Security and privacy. The blockchain is based on complex mathematical operations, so it takes time to decode it.

• Decentralization. Many cryptocurrencies are controlled not only by the developers but also by the people who use them.

• Convenient transactions. Cryptocurrencies allow you to make payments instantly with a minimum commission. It is also one of the most convenient ways to send money to other countries.

Remember some disadvantages of cryptocurrency. The biggest drawback is the exchange rate instability. Tokens change their value several times a day.

At the same time, exchange rate fluctuations can be severe. If you decide to invest in crypto tokens, it is worth remembering all the possible risks you may face. It is possible that the coins can completely depreciate.

It is worth remembering the situation with bitcoin. At the end of 2021, the coin’s price reached an all-time high, exceeding $60,000 per token. And 2022 was not the most successful year for bitcoin – this year, the price dropped to $16,000 and below.

Conclusion

Every year, more and more companies are starting to use cryptocurrency as their primary payment method. It is too early to say that tokens will completely replace fiat money. But in the future, people will have even more opportunities to use digital coins.

The post Markets where crypto usage is highly likely to explode in 2023 appeared first on CoinJournal.