Tether Has Transferred Part of Its Reserves to the Management of a Wall Street Firm

https://medium.com/coinmonks/tether-has-transferred-part-of-its-reserves-to-the-management-of-a-wall-street-firm-ebdf2624e6b?source=rss----721b17443fd5---4

The Wall Street Journal published an article on February 10, according to which a large Wall Street firm, Cantor Fitzgerald, will manage the reserves of Tether invested in US T-bills.

Journalists from The Wall Street Journal have turned their attention back to Tether. This time, journalists reported that $39 billion, which is invested in US T-bills and now represents a large part of the company’s reserves, will be managed by the financial services company Cantor Fitzgerald.

Cantor Fitzgerald is a financial services company that has been providing financial services since 1945. The company has sales departments in 30 countries around the world, employing about 12 thousand employees. Cantor Fitzgerald specializes in providing investment banking services.

According to an anonymous source in The Wall Street Journal, this is not the first time Tether has turned to Wall Street firms for help. Sources from the publication say that Tether has been transferring its reserves to financial companies since 2021 to make its reserve management more effective and transparent.

Journalists from Cointelegraph managed to get comments about the partnership between Tether and Cantor Fitzgerald:

“Tether has grown to be the most important player in the digital assets industry and is collaborating and regularly exploring new business opportunities with high-quality counterparties.”- a company representative told reporters.

US Treasury bills, worth $39 billion in its last report, make up the majority of the Tether’s total reserves. So, Tether has transferred about 58% of its assets into the hands of Cantor Fitzgerald. The transfer of a portfolio of assets to a financial company can be considered as another step for Tether to further user trust and business reliability.

Tether Reserves. Source: Tether

We have not found any more comments from Tether on social networks and on the official website. The technical director of Tether, Paolo Arduino, who usually actively comments on news related to the company, also did not react in any way to the publication of The Wall Street Journal.

We will continue our observations of the activities of Tether and its USDT stablecoin and inform you about the news!

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Tether Has Transferred Part of Its Reserves to the Management of a Wall Street Firm was originally published in Coinmonks on Medium, where people are continuing the conversation by highlighting and responding to this story.

Mt. Gox Saga Overview and Latest Updates

https://medium.com/coinmonks/mt-gox-saga-overview-and-latest-updates-2e2b269e306d?source=rss----721b17443fd5---4

The Mt. Gox saga continues. The repayment registration deadline was moved to March 2023. We propose revisiting this story and going through its main stages.

What is Mt. Gox?

We’re guessing that you haven’t heard about Mt. Gox for a while, so let’s start from scratch. Mt. Gox was a Japanese bitcoin exchange launched in 2010. Back then it was the most public and well-known brand that represented Bitcoin’s exchange market. It was handling over 70% of all bitcoin transactions worldwide by early 2014, when it collapsed.

What happened to it?

On 24 February, Mt. Gox suspended all trading, and its website went offline hours later. The collapse affected nearly 24,000 creditors. Some documents showed that the company was insolvent after having lost more than 744,000 bitcoins and thefts that had gone unnoticed for years. Later the company said it had lost almost 750,000 of its customers’ bitcoins, and around 100,000 of its own bitcoins, totalling around 7% of all bitcoins in circulation currently. Further investigation led to a conclusion that most or all of the missing bitcoins were stolen straight out of the Mt. Gox hot wallet over time, beginning in late 2011.

What was the result of almost a decade of litigation?

Japanese courts approved a petition for the exchange to begin civil rehabilitation for Mt. Gox creditors in June 2018.

🔎 Civil rehabilitation — a bankruptcy law in Japan that includes various legal mechanisms that enable a debtor to restructure its business in an easier way. The purpose of civil rehabilitation is to enable a distressed debtor to rehabilitate.

The initial schedule was delayed because of difficulty in determining the value of the lost bitcoins at the time of the hack and calculating the amount of compensation that each creditor was entitled to receive. The process had involved a lot of legal and financial analysis, which took a significant amount of time. Another factor causing the delay was the legal disputes between creditors and the trustee over the handling of the case.

Nevertheless, in October 2021 Mt. Gox trustee announced that roughly 99% of the creditors affected by the collapse approved of a rehabilitation plan . Unfortunately out of the 850,000 BTC owed, the exchange seems to only have around 150,000 BTC to pay to its creditors.

What is going on now?

Since then there have been many rumors that the pay out could happen soon, but nothing has happened yet. It was expected that the payments would take place in instalments, to avoid a situation when thousands of BTC sold all at once would create a slump in the price of Bitcoin.

In October 2022 it was announced that creditors had time until January 10 to select a repayment method and to register payee information in an online rehabilitation claim filing system. Now this deadline has moved to March 10. Consequently, the deadline for the repayments has also moved from July 31 to September 30.

❓Don’t you find it suspicious? In September 2022 two old Bitcoin addresses sent approximately 10,000 BTC and then 5,000 BTC more to several different crypto accounts. It was discovered the BTC was associated with Mt. Gox.

What does this story teach us?

Today we see more and more similar stories. Mt. Gox was just the first one in the line of exchanges that faced insolvency problems for one reason or another. Mt. Gox’s lesson shows that recent lawsuits, for example, the FTX case, may take years or even decades, which means that users won’t see their funds any time soon. And that is one of the reasons why the crypto world — and especially exchanges — need regulating.

What’s next?

We hope that the Mt. Gox case eventually will have a happy ending. Let’s see if creditors will actually see at least some of their funds by September and let’s observe how the market, and especially BTC price, will react to it.

We will provide you with updates on this story ASAP, and may your funds be safe!

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Mt. Gox Saga Overview and Latest Updates was originally published in Coinmonks on Medium, where people are continuing the conversation by highlighting and responding to this story.

Keeping Bankers Happy Could Undermine Digital Euro Before Development Even Starts

https://medium.com/coinmonks/keeping-bankers-happy-could-undermine-digital-euro-before-development-even-starts-cce5de93f42f?source=rss----721b17443fd5---4

Although the European Central Bank is still undertaking its investigative stages concerning a potential Euro-Zone CBDC, it already seems to be tying itself in knots trying to limit potential disruption to the status quo as far as commercial banks are concerned.

When it comes to central bank digital currencies, privacy rates as one the absolute top-requested features by users. When the European Central Bank undertook a public consultation on the potential digital Euro, 43% of respondents ranked privacy as the single most important aspect; significantly ahead of any other features.

It seems reasonable that, as a digital equivalent to cash, a Euro CBDC would have the same qualities, one of which being that cash is anonymous and private. And in a recent interview with German business newspaper, Handelsblatt, ECB Executive Board Member, Fabio Panetta, claimed, “We are designing the digital euro with the highest possible level of privacy. The ECB will have no access to personal data.”

So far, so good. The unbanked gain access to digital payment functionality, increasing financial inclusion across the Euro-zone, and not compromising on privacy. But a digital Euro that looked like this may be considered a bit too good… for consumers, at least.

With access to digital payments no longer requiring the services of an intermediary bank, there is no longer a compelling reason for the majority of consumers to maintain an account. In fact, Investopedia’s entry explaining CBDCs lists the elimination of third-party risks such as bank failures as one of the top issues that are addressed by them.

Investopedia also cites the value of eliminating the need for expensive infrastructure by establishing a direct connection between consumers and central banks. Unfortunately, these benefits are not part of the ECB’s vision for its potential CBDC. In the same Handelsblatt interview, Panetta states that:

“As with cash, we want to ensure that everybody in the euro area has easy access to the digital euro. To this end, we will work with supervised intermediaries such as banks, as they are best placed to interact with end users.”

In order to ensure that commercial banks aren’t an easily (and for many consumers preferably) bypassed element of a future digital Euro-ecosystem, the ECB are currently looking at two key mechanisms.

Firstly, regarding interest payments, whereby the ECB’s current position seems to suggest that payment of interest on digital Euro holdings is fairly likely. However, the central bank wishes to discourage the use of its CBDC for investment purposes, so this is likely to be a tiered system, with holdings above a certain threshold attracting ever lower rates of interest.

Although the second mechanism for protecting the current hegemony of the commercial banks makes this first point pretty much moot anyway. In its wisdom, as an attempt to maintain the digital Euro as purely a tool for payments, the ECB is suggesting that each individual’s holding could be limited to around €3,000.

Is there any need for a tiered interest rate on such a relatively low amount? Plus, in the current scenario payments received over the €3,000 limit would be automatically transferred to a nominated bank account, and big-ticket purchases above this limit must be either made in cash or using a bank account.

So if having a bank account, which inevitably already supports digital payments, is pretty much necessary anyway, then why does the European public need a digital Euro CBDC? And before you refer back to, “the ECB will have no access to personal data,” be aware that implementing such a limit on holdings will require accounts to undergo KYC procedures, thus compromising the privacy that 43% of potential users value more than any other feature of a potential CBDC.

The ECB argues that these mechanisms are also necessary to combat fraud and money laundering, but surely they should then try to impose a similar limit on cash holdings. And in any case, as the financial news cycle repeatedly shows, the overwhelming majority of money laundering is carried out through commercial banks.

It rather seems as though the ECB is putting the continued profitability of these private businesses and their shareholders above the stated desires of its users. If it continues to favor crippling the functionality of its CBDC to protect the interests of the commercial banks then it could easily make the digital Euro obsolete before it has even started active development. Our observations are to be continued…

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Keeping Bankers Happy Could Undermine Digital Euro Before Development Even Starts was originally published in Coinmonks on Medium, where people are continuing the conversation by highlighting and responding to this story.

Is BUSD Illegal?

https://medium.com/coinmonks/is-busd-illegal-ef4d5dcbe226?source=rss----721b17443fd5---4

As part of cooperating with the New York Department of Financial Services (NYDFS), Paxos Trust should stop issuing Binance USD.

On February 13, Paxos announced cessation of the release of new BUSD. The company announced this on its Twitter, and also prepared a press release on its official website. Let’s take a closer look at what’s going on.

Paxos on Twitter: "1/ This morning, Paxos announced it will halt minting new #BUSD tokens effective February 21. Read the full press release from Paxos here: https://t.co/jXZY1ak8DR / Twitter"

1/ This morning, Paxos announced it will halt minting new #BUSD tokens effective February 21. Read the full press release from Paxos here: https://t.co/jXZY1ak8DR

On February 12, The Wall Street Journal published an article according to which the Securities and Exchange Commission sent Paxos a paper representing a Wells notification. Sources from The Wall Street Journal indicated that the notification concerns the BUSD stablecoin. The problem is that regulators have recognized BUSD as an unregistered security.

💡 The Wells Notice is a letter by which the U.S. Securities and Exchange Commission notifies individuals or firms of its intention to initiate enforcement actions against them.

On February 13, this information was confirmed. Paxos announced that by the decision of the regulatory authorities, the release of new BUSD tokens is being halted. The main points from the company’s statement on the official website:

  • Paxos, in cooperation with the New York Department of Financial Services (NYDFS), stops issuing new BUSD tokens from February 21;
  • “Existing Tokens Remain Fully-Backed and Redeemable Through Paxos Trust Company Through to At Least February 2024”.

The company also issued a press release stating that it categorically disagrees with the SEC’s decision regarding the BUSD stablecoin.

“Paxos categorically disagrees with the SEC staff because BUSD is not a security under the federal securities laws. This SEC Wells notice pertains only to BUSD. To be clear, there are unequivocally no other allegations against Paxos. Paxos has always prioritized the safety of its customers’ assets. BUSD issued by Paxos is always backed 1:1 with US dollar-denominated reserves, fully segregated and held in bankruptcy remote accounts. We will engage with the SEC staff on this issue and are prepared to vigorously litigate if necessary.”

Of course, after such news, market capitalization of the stablecoin BUSD decreased by $290 million. Down from $16.15 billion on February 13, to $15.86 billion on February 14, according to CoinMarketCap.

BUSD stablecoin market capitalization chart. Source: CoinMarketCap

In this situation, comments from the head of Binance, Changpeng Zhao (CZ), didn’t come as a surprise. In his Twitter, he paid attention to several points.

Firstly, CZ was well aware that the market capitalization of the stablecoin would decrease amid panic, but this hasn’t threaten a total run, since BUSD has reliable reserves.

CZ 🔶 Binance on Twitter: "4/ Paxos will continue to service the product, and manage redemptions. Paxos also assured us the funds are #SAFU, and fully covered by reserves in their banks, with their reserves audited many times by various audit firms already. / Twitter"

4/ Paxos will continue to service the product, and manage redemptions. Paxos also assured us the funds are #SAFU, and fully covered by reserves in their banks, with their reserves audited many times by various audit firms already.

Secondly, the head of Binance stressed that the recognition of BUSD as a security by the judicial system can have a significant impact on the crypto industry.

Thirdly, CZ emphasized in another tweet that Binance will continue to support BUSD, but may remove it from being the default trading stablecoin.

CZ 🔶 Binance on Twitter: "7/ Binance will continue to support BUSD for the foreseeable future. We do foresee users migrating to other stablecoins over time. And we will make product adjustments accordingly. eg, move away from using BUSD as the main pair for trading, etc. / Twitter"

7/ Binance will continue to support BUSD for the foreseeable future. We do foresee users migrating to other stablecoins over time. And we will make product adjustments accordingly. eg, move away from using BUSD as the main pair for trading, etc.

Time will tell how much these events will affect the work of BUSD and how the interaction between Paxos and regulatory authorities will develop. And we will continue our observations and report the news!

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Is BUSD Illegal? was originally published in Coinmonks on Medium, where people are continuing the conversation by highlighting and responding to this story.

Premier League and Sorare Sign 4-year Fantasy Soccer NFT Deal

https://medium.com/@observer1/premier-league-and-sorare-sign-4-year-fantasy-soccer-nft-deal-165facf26623

French startup Sorare has signed a four-year licensing partnership with the Premier League to create trading cards representing football…

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CoffeeZilla Tricks MMA Fighter into Promoting Fake NFT Project

https://medium.com/@observer1/coffeezilla-tricks-mma-fighter-into-promoting-fake-nft-project-2e46d0d29929

CoffeeZilla, a YouTuber who targets shady finance schemes, posted about an MMA fighter Dillon Danis where he accused Danis of scamming…

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