Kategorie: Crypto News

• THORChain node operators have approved a restructuring plan allowing it to convert its $200M debt into equity tokens.
• The move is aimed at stabilizing THORChain’s operations by addressing its liabilities.
• THORChain (RUNE) price rose 13.7% after the news but remains down 72.7% over the past month.

THORChain node operators have approved a restructuring plan proposal that will see a decentralized liquidity network convert a $200 million debt into equity tokens.

The approval will allow THORChain to address its financial liabilities, stabilize operations, and restore confidence among its users.

The restructuring proposal, dubbed “Proposal6,” the plan, arose after THORChain decided to pause its lending and savers programs on January 23, following community discussions about the existential risks posed by its ThorFi feature.

At that time, the platform had accrued roughly $200 million in liabilities. The pause led to a contraction of the network, with 31 validators exiting, around $100 million in liquidity being shed, and a significant drop in the price of RUNE, THORChain’s native token. However, the network continued its core operations, demonstrating its resilience amidst the turmoil.

The approved restructuring plan

Proposed by Maya Protocol’s Aaluxx Myth, the restructuring plan was put to a vote by Node Operators and has now been officially ratified.

Under this proposal, THORChain will mint 200 million “TCY” tokens, each representing $1 of the platform’s debt. These tokens will be airdropped to those affected by the lending and savers programs’ suspension.

The TCY tokens are designed to receive 10% of THORChain’s network revenue in perpetuity, providing holders with a continuous revenue stream in RUNE tokens, similar to dividends.

To facilitate liquidity for these new tokens, THORChain’s treasury will seed a liquidity pool, allowing holders to convert their equity tokens into other assets at their discretion.

This setup aims to give creditors the flexibility to exit their positions as market demand for THORChain’s revenue becomes reflected in the token’s price.

Following the approval of the proposal, the implementation is now in the hands of THORChain’s development teams, which include groups from Nine Realms Capital, Maya Protocol, Rujira Network, and Strangelove Labs.

The development teams are tasked with ensuring a prompt yet meticulous rollout, with details on the exact timeline still being finalized.

Community members have, however, expressed mixed reactions. While some see this as a pathway back to stability and growth for THORChain, others are sceptical about the plan’s long-term viability, the complexity of the new token structure, and potential legal implications regarding the issuance of what might be considered unregistered securities.

THORChain (RUNE) reaction to the development

Following the announcement of the approved plan, the price of RUNE experienced a notable uptick. As of the latest trading data, RUNE was priced at $1.38, marking a 13.7% increase within the last 24 hours.

However, this positive movement comes after a period of significant decline, with RUNE down 37.8% over the last week, 58.2% over two weeks, and 72.7% over the last month, suggesting that while the restructuring news has been met with some optimism, broader market conditions or concerns about THORChain’s future stability might still be influencing investor sentiment.

The post THORChain approves conversion of $200M debt into equity tokens appeared first on CoinJournal.

• Telcoin has received approval for its Digital Asset Depository Bank Charter in Nebraska
• This positions Telcoin as one of the first federally regulated digital asset depository banks in the USA
• With this charter, Telcoin can now issue stablecoins and hold deposits at a Federal Deposit Insurance Corporation.

In a landmark decision, the Nebraska Department of Banking and Finance has given the green light to Telcoin, Inc., allowing it to become one of the first federally regulated digital asset depository banks in the United States under the Nebraska Financial Innovation Act (LB 1074, 2024).

This approval, anticipated since the public hearing held in December 2024,  marks a significant milestone in the integration of digital assets into the traditional banking framework.

Telcoin’s business plan

Telcoin’s application for this charter was accompanied by an extensive business plan, running into hundreds of pages with 29 appendices. This document, along with the detailed backgrounds of its directors and officers, demonstrated not only the adequacy but also the plausibility of Telcoin’s proposed operations.

The plan articulates a vision where Telcoin will issue US dollar-backed stablecoins, which it refers to as “Digital Cash” or eUSD,  to facilitate its safekeeping and seamless integration into mainstream financial systems using independent node verification networks.

The conditions for Telcoin to commence operations

The Digital Asset Depository Bank Charter approval was granted based on the assurance that Telcoin will operate safely and soundly.

Notably, the testimony of witnesses during the December 5, 2024, public hearing and the thoroughness of the business plan were pivotal in getting the approval.

To operate as a federally regulated digital asset depository bank within the US, Telcoin should maintain unencumbered liquid assets in US dollars, equivalent to 100% of the value of any outstanding stablecoins it issues, ensuring financial stability and consumer protection.

It must also adhere to stringent regulatory conditions, including providing a surety bond or pledge of assets worth $1 million and securing insurance for directors’ and officers’ liability, errors and omissions, as well as IT infrastructure, amounting to $10 million.

Furthermore, all US currency received from customers must be held in FDIC-insured institutions in Nebraska, ensuring the safety of customer deposits.

Another notable aspect of Telcoin’s charter involves community engagement and education. The company has been tasked with maintaining a public file accessible to anyone, detailing its efforts in meeting community needs, including financial literacy programs for Nebraska students focusing on digital assets, budgeting, credit, and more.

Telcoin should also conspicuously display notices that digital asset deposits are not insured by the FDIC, alongside warnings about the inherent risks of holding digital assets.

Also, Telcoin must use its full legal name, “Telcoin Bank, a Digital Asset Bank,” in all its official communications and branding, ensuring clarity and recognition in the market. The charter also stipulates that Telcoin must pay a charter fee of $50,000 and cover the costs associated with the approval hearing.

Furthermore, any material changes in Telcoin’s condition before it becomes fully operational could lead to the amendment, suspension, or withdrawal of the approval.

With these conditions met, Telcoin is set to commence operations, having the legal authority to issue stablecoins and leverage independent node verification networks for payment systems.

With this approval, the Nebraska Department of Banking and Finance has laid down a pathway for digital assets to coexist with traditional banking, focusing on safety, soundness, and consumer education.

The approval sets a precedent for how digital asset companies can operate within regulatory frameworks, potentially paving the way for further innovations in the financial sector.

The post Telcoin has received approval for its Digital Asset Depository Bank Charter appeared first on CoinJournal.