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Crypto exchange Zipmex has filed to extend its protection against creditors until next April amid a possible rescue deal. 

The Singapore-based exchange briefly halted withdrawals in June amid a liquidity crisis triggered by exposure to beleaguered crypto lenders Babel Finance and Celsius. In July, it filed for protection against creditors in Singapore, and extended it in August. Now, according to a statement issued today, it’s asking to extend the protection until next April 2. 

Zipmex Group operates five entities — Zipmex, Zipmex Asia, Zipmex Thailand, Zipmex Indonesia and Zipmex Australia — all of which sought creditor protection from the Singapore High Court.

Since then, the exchange has courted potential investors to rescue it. On August 26, The Block reported that Zipmex was in advanced talks with the son of Thai billionaire Prayudh Mahagitsiri and Thai investment firm Country Group Holdings. Mahagitsiri later asked Zipmex CEO Marcus Lim to forfeit all his shares. 

Earlier this month, the exchange was reportedly close to signing a $100 million rescue package with existing investor V Ventures in return for a 90% stake. Today, CoinDesk reported that Zipmex remains in talks with an investor for a takeover deal that may be completed as early as next week. 

© 2022 The Block Crypto, Inc. All Rights Reserved. This article is provided for informational purposes only. It is not offered or intended to be used as legal, tax, investment, financial, or other advice.

Crypto prices traded up marginally on Friday, while shares in Coinbase and Silvergate continued to trade lower. 

Bitcoin was up 0.1% over the past 24 hours, trading at $16,693. Meanwhile, ether added 0.2% as it traded at $1,212. 

BTCUSD chart by TradingView

Binance’s BNB added 1.5% on the last day. Other cryptocurrencies added modest gains — DOT was up 0.5%, and ADA grew by 0.8%. Polygon’s MATIC faltered, falling 0.8%.

Crypto stocks

Public companies closely tied to crypto and blockchain technology have traded down all week. Early morning trading in the U.S. today showed no signs of a trend reversal.

The S&P 500 and the Nasdaq 100 were up slightly, 0.26% and 0.01%, respectively. 

Silvergate, which has traded down throughout the week, dipped 6% shortly after the opening today, according to Nasdaq data via TradingView. Goldman Sachs analysts had revised its price target to $40 from $64. The crypto bank is down almost $10 this week, trading around $26.

Coinbase fell 5% to $46.24. Block shares were down over 1.75% to $66.80. MicroStrategy fell almost 2%, trading around $170.

Grayscale woes

Grayscale’s bitcoin and ether trust hit new record lows as the firm’s parent company, Digital Currency Group, moved to allay contagion fears. 

The Grayscale Bitcoin Trust (GBTC), which has been trading at a discount since the beginning of 2021, hit a record low on Thursday.

GBTC is currently trading at a discount of -42.7%, its lowest point ever, according to The Block’s Data Dashboard. The discount represents the market price of GBTC shares, which are more than 40% lower than its net asset value, or NAV.

The Grayscale’s ETHE product also hit an all-time low yesterday. ETHE was trading at a discount of -40.1%, according to The Block’s data. 

Grayscale said its products are operating “business as usual” on Wednesday, and operations have not been impacted by “recent events.” Genesis Global Capital halted withdrawals on the same day. While a separate entity, it is affiliated with Grayscale via DCG. 

© 2022 The Block Crypto, Inc. All Rights Reserved. This article is provided for informational purposes only. It is not offered or intended to be used as legal, tax, investment, financial, or other advice.

Genesis Block HK, a crypto over-the-counter (OTC) trading firm based in Hong Kong, has funds stuck in the now-bankrupt crypto exchange FTX, two people with knowledge of the matter told The Block.

The exposure is worth more than $50 million, one of the sources said. The impact is significant enough that Genesis Block is shutting down its OTC business on Dec. 10, according to the source and an email from Genesis Block sent to its customers and obtained by The Block.

“With regret, we will be closing down the genesisblockotc.com portal website on 10 December (Fri) 2022 at 6:00 pm HKT,” reads the email. “Withdrawals of user balances are fully functional via the OTC chat group. Please do NOT deposit any crypto assets into the portal.”

Genesis Block declined to comment when contacted by The Block.

Genesis Block was founded in 2012 by Wincent Hung and Clement Ip and served both individual and institutional clients. Its OTC trading desk required a minimum of about $20,000 of transaction value, according to its website. Genesis Block and FTX were related, Hong Kong-based news outlet HK01 reported on Thursday. Ip reportedly once served as a director at FTX Hong Kong and the two companies are said to have shared offices in Hong Kong. Ip did not respond to The Block’s request for comment.

Reuters, citing one person with knowledge of the matter, reported today that one Genesis Block official was previously a director in FTX Hong Kong, but resigned this month. FTX Hong Kong is one of the 134 FTX-affiliated companies that filed for Chapter 11 bankruptcy protection last week.

Genesis Block HK is the latest firm to suffer from FTX fallout. Crypto.com, Genesis, Galaxy Digital, Nickel Digital and Vauld all have exposure to FTX. High-profile investors of FTX, including Temasek, Paradigm and Sequoia Capital, recently wrote down their investments to zero.

© 2022 The Block Crypto, Inc. All Rights Reserved. This article is provided for informational purposes only. It is not offered or intended to be used as legal, tax, investment, financial, or other advice.

The Ontario Teachers’ Pension Plan (OTPP), one of the most important pension funds in the world, will write down all of its $95 million investment in FTX and FTX US.

The OTPP had invested the money across two funding rounds, initially invested in October 2021 via a Series B and then again in January via a Series C. The OTPP manages over CAD$221 billion ($165 billion).

Other household names caught up with the FTX collapse in BlackRock, Softbank, and Temasek, which also wrote its investment down to zero.

In an update on Thursday, the pension fund said the investment in FTX reflected its approach to diversification. “Our strategy aims to diversify investments across asset classes, geography, time horizons, and economic outcomes to mitigate risk and enhance returns.” 

OTTP will write down its investment to zero at the end of the year. The loss from the investment will have a “limited impact … given its size relative to our total net assets and our strong financial position.”

“However, we are disappointed with the outcome of this investment, take all losses seriously, and will use this experience to further strengthen our approach,” the firm said.

Sequoia Capital, the Silicon Valley investment firm, was quick off the mark in writing down its investment to zero on Nov. 9 — it made $213.5 million worth of investments in FTX entities.

© 2022 The Block Crypto, Inc. All Rights Reserved. This article is provided for informational purposes only. It is not offered or intended to be used as legal, tax, investment, financial, or other advice.

Crypto payments company Ripple is seeking a virtual asset service provider license from the Irish regulator as it expands its operations in Europe, according to CNBC. 

When new laws on crypto regulation in the European Union come into force, expected in 2024, Ripple would then be able to “passport” its European license to the rest of the 27 states in the bloc. Ripple will also seek an e-money license “shortly,” Ripple general counsel Stuart Alderoty told CNBC.

The U.S.-based company is involved in a dispute with the Securities and Exchange Commission that is driving the company to look for business abroad. “Effectively, Ripple is operating outside of the U.S.,” Alderoty said in the report.

The SEC filed a lawsuit against Ripple in 2020 alleging that the sale of its XRP tokens counted as unregistered securities worth $1.3 billion. Ripple’s head of public policy, Susan Friedman, recently told The Block that they are in the process of filing a reply brief to summary judgment and are expecting a ruling in 2023. 

Amid its expansion into Europe, Ripple also sought licensing from the UK regulator this week. Ripple has about 60 people on the ground in the UK and two in Ireland. 

Ireland granted the currently troubled Gemini exchange a virtual asset service provider license in October.

© 2022 The Block Crypto, Inc. All Rights Reserved. This article is provided for informational purposes only. It is not offered or intended to be used as legal, tax, investment, financial, or other advice.

Crypto investment firm Nickel Digital Asset Management has around $12 million of its funds’ capital stuck on FTX after the exchange halted client withdrawals and filed for bankruptcy protection. 

That figure amounts to about 6% of its $200 million in assets under management, founder partner and chief investment officer Michael Hall said at the City & Financial Global conference in London. Around a third of Nickel Digital’s funds on FTX were insured, he added.

Founded in 2019, Nickel Digital serves institutional investors. The London-based firm is authorised and regulated by the UK’s Financial Conduct Authority and registered with the U.S. Commodity Futures Trading Commission, according to its website.

Hall said Nickel Digital only trades on large, profitable exchanges and initially avoided using FTX. “We looked at them and saw that the bid-offer spreads were quite tight. That was probably Alameda taking advantage… so we didn’t see any advantage to trading on FTX,” he said.

But Nickel started to use FTX in 2021 after the crypto exchange operator raised money from big-name institutional investors. “We relied on the due diligence of equity investors. We thought they were the smart money. It turned out not to be,” Hall said.

FTX’s high-profile investors

FTX raised $1.8 billion in total funding and was valued at $32 billion before it filed for bankruptcy protection last week. The company had high-profile investors, including Temasek, Paradigm and Sequoia Capital, and all three of them recently wrote down their investments to zero.

Nickel Digital is one of several companies feeling severe repercussions of FTX’s fallout. Crypto.com, Genesis, Galaxy Digital and Vauld all have exposure to FTX.

© 2022 The Block Crypto, Inc. All Rights Reserved. This article is provided for informational purposes only. It is not offered or intended to be used as legal, tax, investment, financial, or other advice.

Quick Take

• Rapid Insights provide a deeper analysis of the current crypto landscape in a timely fashion.
• After the fall of FTX, the crypto community has publicly called on for exchanges to provide users with a Proof-of-Reserves
• Nansen announced that they were working with exchanges to display Proof-of-Reserves 
• While Proof-of-Reserves does provide some transparency into an exchange’s financial health, it offers no information on the exchange’s liabilities

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members of The Block Research.
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An American regulatory body has begun an examination of crypto communications practices, following the collapse of the FTX exchange.

The Financial Industry Regulatory Authority, which regulates member brokerage firms and exchange markets, is asking some companies to “provide all retail communications,” according to an announcement made earlier this week.

This includes “video, social media, mobile applications, and websites” within the examination period between the beginning of July and the end of September. Companies will also need to file compliance and training manuals, as well as review and approval processes. 

Regulators like FINRA conduct “sweeps,” or targeted examinations like this one to gather information that is used to “pinpoint a regulatory response to emerging issues,” FINRA’s website says. FINRA’s inquiries are limited to a small number of firms in order to “reduce the regulatory burden on the majority of firms,” the organization added on its website.

The move toward regulating crypto communication follows a globally watched meltdown of one of the world’s biggest crypto exchanges. FTX and other crypto firms dominated advertising at the Super Bowl earlier this year, targeting retail users.

The Block asked FINRA for more information, including which firms were targeted in its probe, but it had not responded by publication of this story.

© 2022 The Block Crypto, Inc. All Rights Reserved. This article is provided for informational purposes only. It is not offered or intended to be used as legal, tax, investment, financial, or other advice.

Cardano developer Emurgo announced plans to issue a U.S. dollar-pegged stablecoin called USDA on the network in early 2023.

Emurgo, which functions as Cardano’s official commercial arm, said USDA will be the first regulated stablecoin on the blockchain that is backed by a fiat currency. The Cardano developer also revealed that USDA will be the first delivery from its Anzens product market line. Anzens is the Cardano developer’s financial services product, created to bridge crypto and real-world finance.

Stablecoins have become an integral part of the crypto trading and credit ecosystem. Major Layer 1 networks including Ethereum, BNB Chain and Solana have stablecoins. These stablecoins facilitate activities like trading, borrowing, lending and staking, among others. Such stable currencies offer a means of transferring value between the crypto and broader financial markets. They also help users store value, as crypto tokens tend to have volatile price movements.

Cardano developers have been working to create stable currencies for the network. USDA joins a list of other planned stablecoins, including Djed, an algorithmic stable currency being developed by Cardano in partnership with the Coti Network.

© 2022 The Block Crypto, Inc. All Rights Reserved. This article is provided for informational purposes only. It is not offered or intended to be used as legal, tax, investment, financial, or other advice.

Episode 114 of Season 4 of The Scoop was recorded live with The Block’s Frank Chaparro and Roubini Macro Associates Chairman and CEO, Nouriel Roubini.

Listen below, and subscribe to The Scoop on Apple, Spotify, Google Podcasts, Stitcher or wherever you listen to podcasts. Email feedback and revision requests can be sent to podcast@theblockcrypto.com.

Part one of this two-part special on Nuriel Roubini’s new book, Megathreats: Ten Dangerous Trends That Imperil Our Future, And How to Survive Them, examined how the economy is facing a combination of interconnected phenomena that Roubini believes will result in a severe economic crisis.

In part two of this two-part macro special of The Scoop, Roubini discusses some alternative assets that could gain prominence in the event of a global financial meltdown and explains why he prefers gold over bitcoin in such a situation.

According to Roubini, the “weaponization” of the U.S. dollar is making it less attractive as a reserve currency:

“We have weaponized the dollar as a tool of national security and foreign policy… If I owe you a billion it is my problem; if I owe you a trillion it is your problem because we could default on those treasuries eventually if there is a conflict…”

Similar to USD, Roubini believes other common reserve currencies such as the euro, yen, pound, and Swiss franc can be similarly weaponized, leaving gold as the only widely held reserve currency that remains a viable option:

“What’s the only other asset that is a liquid asset that can be a reserve currency?… What’s the only one that cannot be seized if there are sanctions? It’s gold — as long as you keep it in your own vault.”

Although ardent bitcoin proponents claim BTC has similar properties, Roubini is dismissive of the largest cryptocurrency’s potential to be used legitimately in global commerce. 

“Bitcoin and other cryptocurrencies — we know they are not currencies,” Roubini says, “They are not a unit of account, nobody’s pricing anything in Bitcoin, they’re not scalable means of payment.” 

During this episode Chaparro and Roubini also discuss:

• How to distinguish between data and narratives
• Why ‘zombie’ companies and nations are going to be exposed
• The future impact of climate change on the housing market

This episode is brought to you by our sponsors Tron, Ledn, Athletic Greens
About Tron
TRON is dedicated to accelerating the decentralization of the internet via blockchain technology and decentralized applications (dApps). Founded in September 2017 by H.E. Justin Sun, the TRON network has continued to deliver impressive achievements since MainNet launch in May 2018. July 2018 also marked the ecosystem integration of BitTorrent, a pioneer in decentralized web3 services boasting over 100 million monthly active users. The TRON network completed full decentralization in December 2021 and is now a community-governed DAO. | TRONDAO | Twitter | Discord |

About Ledn
Ledn was founded on the unshakeable conviction that digital assets have the power to democratize access to the global economy. We help you to experience the real life benefits of your Bitcoin without having to sell it. Start a savings account, take out a loan, or double your Bitcoin. For more information visit Ledn.io

© 2022 The Block Crypto, Inc. All Rights Reserved. This article is provided for informational purposes only. It is not offered or intended to be used as legal, tax, investment, financial, or other advice.