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Alexander Höptner is leaving his role as CEO of crypto exchange Bitmex after less than two years with the company.

“Stephan Lutz has been appointed as Interim CEO of Bitmex after Alexander Höptner has left our business with immediate effect,” a Bitmex spokesperson said in an email after The Block approached the exchange for a comment. “Stephan will continue to serve as our CFO, a role he has held since May 2021.”

“Together with the rest of the management team and our talented staff members, I will make sure that Bitmex continues to deliver great, innovative crypto trading products and a secure and stable trading environment for our clients,” Lutz said in the emailed statement. “We want to thank Alexander for his support to the business during his tenure and wish him well in his future endeavours.”

Founded in 2014,  Bitmex was one of the first exchanges to offer crypto derivatives. It has since struggled with a number of legal battles.

Höptner joined Bitmex in January 2021. He previously held positions at Börse Stuttgart, Deutsche Börse AG and led Euwax AG, playing a role in the build out of Bison, a crypto trading subsidiary of Börse Stuttgart. Upon his appointment, he told The Block he planned to leverage his past experience of building a regulated digital asset venue to help execute a global vision for Bitmex.

Bitmex’s legal troubles

Höptner took over from Vivien Khoo, who was appointed as interim CEO by the 100x Group, Bitmex’s parent company, after co-founder and CEO Arthur Hayes had to step down following lawsuits from both the Commodities Futures Trading Commission and Department of Justice. 

In May, Hayes pleaded guilty to violating the U.S. Bank Secrecy Act (BSA) and received a sentence of six months of home detention as part of a two-year probationary period.

Around the same time, the exchange cut around 75 jobs after abandoning plans to acquire German bank Bankhaus von der Heydt.

Dwindling market share

Bitmex was once considered a leader in cryptocurrency derivatives. Now crypto players such as FTX and Coinbase and traditional market participants such as the CME Group are stealing its market share.

The exchange had been pursuing a “beyond derivatives” strategy expanding services to include spot trading, brokerage and custody. In May, the exchange launched a spot market.

Höptner’s departure comes at a time when an executive exodus is taking place across the industry. Many top executives from leading crypto firms such as FTX, NYDIG, OpenSea and Genesis have stepped down from their positions. Layoffs have also taken place across the industry at firms like GSR, Crypto.com and Coinbase. 

© 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.

Gaming blockchain Oasys has taken the final steps towards debuting its mainnet, with 21 initial validators. There will be three initial phases, the first of which commences today.

Validators are set to begin taking operations of all nodes — ensuring that Oasys Layer 1, the Hub-Layer, can maintain stable performance, according to a company release.

The second phase, which will begin to integrate its Layer 2 Verse-Layer on top of existing framework, is expected around the second week of November.

Phase three will follow on Nov. 22, when the blockchain plans to integrate the Oasys-Hub, a front-end user portal. 

Credit: Oasys

“The blockchain gaming ecosystem has grown rapidly over the past few years, reflecting an increasing appreciation of the value that projects such as Oasys have brought to the wider industry,” Daiki Moriyama, director of Oasys, said in a statement. “However, now is not the time to reflect on past accomplishments, but focus on the exciting possibilities of the future.”

The blockchain has already established itself among traditional gaming industry incumbents and counts publishers Square Enix, Ubisoft and Sega among its initial node validators. These are alongside Bandai Namco, Yield Guild Games, WeMade, Neowiz, Netmarble and Com2Us.

Oasys also revealed that it raised $20 million in a private token sale led by Republic Capital, Jump Crypto, Crypto.com, Huobi, Kucoin, Gate.io, Bitbank and Mirana Ventures earlier this year. The mainnet launch is the final step ahead of a public token listing.

The project says it is working to bring in more strategic investors and partners.

© 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.

South Korean prosecutors are pushing for Lee Jung-hoon, former chairman of crypto exchange platform Bithumb, to serve up to eight years in prison for alleged fraud, according to a report by South Korean news agency Yonhap.

The fraud case is in connection to the sale of Bithumb’s BXA tokens, which was part of an attempt by Singapore-based BK Group to acquire the crypto exchange in 2018. The initial deal saw Lee presell BXA tokens worth $25 million to BK Group as part of the acquisition process. These tokens were also sold to investors to the tune of about $45 million.

However, Bithumb did not list BXA and this allegedly led to significant losses on the part of investors. These investors sued both Lee and Kim Mo, chairman of the BK Group, in court for fraud. South Korea’s investigative agency previously determined that Kim did not have a case to answer. Investigators concluded that Kim was as much a victim as the other investors in the BXA token sale.

Now, prosecutors are asking for Lee to be convicted of fraud, according to South Korea’s Act on the Aggravated Punishment of Specific Economic Crimes. “The amount of damage is very large, and the damage is especially great for ordinary coin investors,” said the prosecution at a Tuesday hearing before the Seoul Central District Court.

Lee’s defense, however, argued that the token sale was in accordance with a “typical stock sale contract.” The defense further argued that BK Group’s Kim was trying to avoid criminal responsibility for his part in the BXA token sale debacle.

The court will hold its sentencing hearing on December 20.

© 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.

Tech giant Meta has struck a partnership with makeup brand L’Oréal and French business school HEC Paris backing a new startup acceleration program for creativity in the metaverse. 

It will aim to help businesses that specialise in 3D production, AR, VR, mixed reality, avatar creation, portability in user experience, token economy or other topics related to the metaverse and web3, according to a report by Vogue Business. At least five businesses will partake. 

The social media firm, which reports earnings later this week, will play host to the project in Station F — a startup campus in Paris. It will run from January 2023 to June 2023 with successful applicants being granted access to mentors and experts for their businesses. 

Incubators and accelerators have become a popular way for big tech firms to get a look in on the nascent web3 industry. AWS also opened applications for a fintech startup accelerator in July this year. 

Meta has already dipped its toe in the metaverse fashion waters, having partnered with digital fashion startup DressX in July to provide new avatar fashion looks on Meta’s Avatar Store. The company also said earlier this year that it would launch a digital fashion marketplace through partnerships with Balenciaga, Prada and Thom Browne. 

Although Meta and L’Oréal’s accelerator will not be specifically focused on fashion, the industry has by and large embraced the potential of web3. Earlier this year, Gucci announced joining its first decentralized autonomous organization with SuperRare. Burberry also launched a web3 game. 

© 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.

A federal bankruptcy judge has approved Celsius’ bidding procedure plans, setting a schedule in motion that could see the platform’s assets sold by the end of the year.

While Celsius may still submit a standalone proposal to reorganize, the procedures lay out the steps for a sale of the platform’s assets.

Celsius plans to solicit bids for the retail asset business, which includes the earn accounts and coin balances, the retail and institutional lending portfolio, its swap services, staking platform, payment feature, decentralized finance arm and any crypto assets it’s still holding. It also plans to solicit bids for the “remaining assets,” which would include the mining business. 

Today’s order sets dates and deadlines related to a possible sale, authorizes Celsius to select a stalking horse bidder if it chooses to do so and sets the layout for a sale, directing the lender to enter a sale order that the court and creditors would have to approve. The order sets a Dec. 12 deadline for final bids. An auction, if necessary, would be slated for Dec. 15. Once a winner is selected, a sale hearing for any objections or discussion on the sale order would follow on Dec. 22. 

The order also includes the appointment of a consumer privacy ombudsman. Part of the sale process could include the sale of customer lists and information, and the outside party would ensure that customer information is adequately protected throughout the sale process.

Celsius pushed back on the initial proposal from the government’s representative in the case — the U.S. Trustee — that the court appoint an ombudsman, saying it was unnecessary since it planned to comply with its own privacy policy.

However, the U.S. Bankruptcy Court for the Southern District of New York found that “appointing a neutral Consumer Privacy Ombudsman early in the sale process will ensure that any sale adequately protects such customer data.” The U.S. Trustee is directed to submit a court order appointing a person with knowledge of consumer privacy laws to the role. 

The U.S. Trustee previously objected to the bidding procedures, saying it remained unclear what assets are being sold and there isn’t a clear justification for the swift timeline Celsius proposed. The Trustee asked that any sale wait for the upcoming examiner report, since the independent examiner’s findings could raise issues related to the sale. The court appointed an outside examiner to Celsius earlier this month after continued complaints of a lack of transparency from the firm. 

Likewise, securities regulators across 12 states objected, saying any sale should wait until the parties have hashed out who owns certain assets. There is an ongoing dispute over which funds are considered custodied and should be returned to creditors — an issue which the independent examiner is tasked with tackling in her report.

Chief Bankruptcy Judge Martin Glenn ultimately approved a revised form of the procedures that shifted the timeline to after the Dec. 10 deadline for the examiner report and provided that any successful purchaser will have to gain the necessary regulatory approvals to move forward, satisfying state regulators. He also disagreed with the U.S. Trustee, saying that because Celsius has essentially filed to sell all of its assets, there is sufficient clarity into the assets being sold at the stage. 

A sale would mark the end game of a bankruptcy process that began in July of this year. As of now, Celsius has developed a list of more than 30 parties that may further explore the possibility of bidding for the platform. Any that wish to move forward would enter confidentiality agreements in the next phase.

© 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.

Bitcoin mining stocks tracked by The Block had mixed results on the market Monday, with half of them going up and the other half falling.

The coin was trading at around $19,300 by market close, according to data from TradingView.

BTCUSD Chart by TradingView

Argo Blockchain’s stock fell 9.80% (on Nasdaq), followed by Core Scientific (-9.57%) and Greenidge Generation Holding (-5.43%).

On the other side, Digihost Technology saw its stock go up by 13.19%, followed by Marathon (+10.26%), Mawson Infrastructure Group (8.37%).

Here’s how crypto mining companies performed on Monday, Oct. 24:

© 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.

Apple updated its App Store policy to restrict apps from using NFTs to incentivize users to purchase items or features the tech giant can’t tax.
 
The Cupertino, California-based company charges up to 30% both on all purchases made on its App Store and all money spent when using apps.

In a recent update, Apple updated its policy to prohibit apps from using NFTs that include “buttons, external links of other calls to action that direct customers to purchasing mechanisms other than in-app purchase.” 

Apps can “sell and sell services related to” NFTs “such as minting, listing and transferring,” according to Apple’s update. But, using NFTs to unlock additional “features or functionality” is not allowed.  
 
Folding additional functionality and premium features into NFTs is way to boost their utility, or value. With trading volumes cratering in recent months NFT creators are trying to be more creative with how they market NFTs. Attaching added features is, in some cases, viewed as a way to increase demand.
 
Apple has already been criticized by NFT startups for wanting to take 30% — considered a hefty commission by many companies big and small — of NFT transactions when marketplaces charge about one-tenth of that percentage. Effectively Apple’s policy means that users are severely discouraged to do anything more than using marketplace apps like OpenSea and Magic Eden to view NFTs. If a user wants to buy or sell an NFT, they can do so for much cheaper on the marketplace’s website.

The company did not immediately respond to requests for comment.

© 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 Texas securities regulator who asked a judge to put a hold on FTX’s acquisition of the assets of failing crypto lender Voyager clarified that an enforcement action against the crypto giant isn’t a given.

“It was a declaration that talked about an investigation,” said Joseph Rotunda, director of the Texas State Securities Board’s enforcement division. “It means we’re gathering information.”

Last week, the TSSB wrote a judge overseeing the auction process for Voyager’s remaining assets with a request to pause that acquisition until regulators from the state complete an investigation into whether the exchange complies with securities laws.

The filing noted that Rotunda was able to register for an FTX account and earn a yield on it, indicating that the company may not be in compliance with state and federal financial laws. But Rotunda clarified that he’s not ready to make allegations yet.

Speaking at a Rutgers Law School event hosted in New York by the law firm Lowenstein Sandler, Rotunda said that he and his bosses have not yet pursued an enforcement action against FTX. 

“If I was ready to make an accusation, and it got to the point of being about an enforcement action, I will make my accusations in a public document,” he said.

Rotunda, who sat on the panel with FTX.US General Counsel Ryne Miller, added that his agency coordinates with federal counterparts at the Securities and Exchange Commission and Commodity Futures Trading Commission.

But Rotunda also said that despite his position as enforcement director for the state regulatory agency, “I do not like filing enforcement actions.”

“I do not want to solve matters with an enforcement action that can be solved with a telephone call,” he added.

FTX’s Miller reiterated his company’s call for a regulatory shift on digital assets in the U.S., including support for a bill that’s been a source of pushback by other industry participants.

“I hope that we as an industry and a regulatory community, focus on getting that right and not stopping the U.S. growth of digital asset markets,” said Miller.  

© 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.

A key market regulator predicts a return to crypto’s spring market crash is “just a matter of time.”

“We can think about what happened last spring with Celsius and Three Arrows and some of the other funds that blew up,” said Commodity Futures Trading Commission Chair Rostin Behnam. “I know a lot of that leverage was sort of unwound, we’ve had a much tighter trading range in the crypto space but it’s just a matter of time before it builds up and renews itself and I’d much rather be ahead of it than behind it the next time.”

Speaking in New York City at the annual meeting of the Securities Industry and Financial Markets Association, Behnam issued his latest call for broader direct authority over crypto markets, which is currently under consideration by Congress, to allow his agency to directly oversee and write rules for spot markets of digital commodities like bitcoin. The CFTC currently can — and has — taken enforcement actions against alleged fraud and market manipulation in crypto markets, but its rulemaking authority is limited to derivatives and futures contracts. 

The CFTC chair noted that the structure of crypto intermediaries is “fraught with potential disaster,” because crypto exchanges fuse a number of duties that would typically be split. 

“A native exchange in the crypto space is probably an exchange, a dealer, a custodian and a bank, all in one. Right? I mean, just think about that in traditional finance, there’s too many conflicts layered on, we wouldn’t have that. So those are the types of things we need to remediate,” Behnam said. “This just raises a lot of interesting policy questions about market structure. And that’s why I think we have to be very proactive in coming up with a policy framework that is not too different from what we have now in our traditional market spaces.” 

A bill before the Senate Agriculture Committee that would grant Behnam and his agency the direct authority over crypto spot markets that he’s called for has vocal support from FTX CEO Sam Bankman-Fried and his company, but has received skepticism if not opposition from some developers and lobbyists for the digital asset industry. 

© 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.

After the community behind DAI stablecoin issuer MakerDAO approved MIP 81, Coinbase Prime will custody up to $1.6 billion USDC from the protocol, the exchange said.

With MIP 81 ratified, MakerDAO joined Coinbase in its institutional rewards pilot program to earn 1.5% on the USDC for which Coinbase acts as custodian. Coinbase will maintain 24-hour year-round accessibility to the DAO Peg Stability Module (PSM) responsible for managing governance fees the MakerDAO earns from swaps.

The MakerDAO community also ratified MIP 82 in a step that will move ahead with the issue of a $500 million USDC loan to Coinbase collateralized via ETH and BTC and facilitated through the PSM at a variable interest rate between 4.5%-6%, paid monthly.

© 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.