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Crypto exchange KuCoin is set to mandate know-your-customer (KYC) procedures for all clients starting July 15.

Users must complete KYC to fully access KuCoin’s products and services, or they will face limitations, the exchange operator said Wednesday. If KYC procedures are not completed, users will only be able to use services such as spot trading sell orders, futures trading deleveraging, margin trading deleveraging, “earn” product redemptions and ETF redemptions, KuCoin said. They will not be able to make deposits to the exchange but they can withdraw.

The move comes amid a regulatory crackdown in the United States. KuCoin rival Binance was recently charged by the U.S. Commodity Futures Trading Commission, where the regulator said Binance designed “special policies and procedures to help VIP customers evade both IP address-based compliance controls and KYC documentation-based compliance controls.”

The updated KYC policy is to “better comply with the applicable regulatory requirements,” KuCoin CEO Johnny Lyu told The Block. “As users provide more information to complete their profiles, we will offer users a wider range of platform products and services, including but not limited to higher daily withdrawal limits, more comprehensive trading tools, and a greater variety of user activities,” Lyu said.

KuCoin’s updated KYC policy

Launched in September 2017, KuCoin is currently the eighth largest crypto exchange by trading volumes, according to The Block’s Data Dashboard. Lyu said KuCoin has over 27 million users across the globe and serves both institutional and retail clients. It does not serve users in several countries, including the United States, Canada, Singapore, China, and Hong Kong, according to its terms of use.

KuCoin’s total trading volume this month to date is above $15 billion compared to Binance’s over $211 billion, per the dashboard. Given the new KYC policy, Lyu said there could be “a short-term decline in trading volume, but in the long run, mandatory KYC is highly beneficial for combating malicious activities within the industry, protecting the funds of users/partners, and establishing a healthy and sustainable ecosystem.”

“We also believe that our users will adapt to changes and support our initiatives,” Lyu added.

Last year, KuCoin was valued at $10 billion when it raised $150 million in a pre-Series B funding round. Investors included Jump Crypto, Circle Ventures, IDG Capital and Matrix Partners.

© 2023 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.

Creditors of BlockFi have filed to liquidate the company’s estate, accusing the now-defunct crypto lender, and CEO Zac Prince in particular, of “fraud, dishonesty, incompetence or gross mismanagement” and intentionally delaying bankruptcy resolution. 

According to a document filed in the New Jersey Bankruptcy Court on Tuesday, the creditors claim that BlockFi is using the delay to negotiate legal releases for its senior management — who bear responsibility for loans made to FTX’s Alameda Research, CoinDesk first reported. 

Creditors said it was time to “end the extortion tactics,” adding, “It is time for the Debtors’ unsecured creditors to finally come to know what BlockFi truly was, who Zac Prince truly is, how much he personally profited from the company, and what he and certain of his colleagues were doing when no one was watching.”

The filing said mediation had failed, and negotiations were at a standstill. With no revenue coming into the company and compounding losses, creditors argued the case should proceed as a liquidation. Creditors criticized BlockFi’s administrative costs, including salaries for over 100 individuals who “have had little to do but work on their golf game,” arguing “the Debtors are intentionally burning on average more than $16 million per month, merely to augment defensive positions for historical management.”

Updated bankruptcy plan

In a separate filing today, BlockFi updated its plan under Chapter 11 of the bankruptcy code. The revised disclosure statement said that holders of BlockFi interest accounts, owed approximately $1 billion in total, could recover between 39% and 100% of their assets under the bankruptcy plan, compared to 36% and 60% via liquidation.

BlockFi did not immediately respond to a request for comment.

© 2023 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.

Bitpanda Pro, a unit of the Austrian crypto firm targeting institutional and professional traders, has spun out into a new entity under the leadership of Josh Barraclough, a former digital innovation head at JPMorgan. 

The new entity will be named One Trading and has raised €30 million in a Series A round, according to an announcement this morning.

Peter Thiel’s Valar Ventures led the raise, alongside MiddleGame Ventures, Speedinvest, Keyrock and Wintermute Ventures. Bitpanda will retain a stake in the company.

“It is our philosophy at Bitpanda that you have to stay agile and focused to provide the best services in this fast environment. Since we first launched Bitpanda Pro, given its potential, we always knew and planned that its success would naturally make it evolve to become its own business,” said Bitpanda CEO Eric Demuth in a statement.

Barraclough, who joined Bitpanda in October 2021 to run the Pro product, said One Trading will soon be launching “the fastest and most scalable exchange” in crypto.

“We aim to become a utility for large liquidity providers to exchange unlimited amounts of risk under a membership model instead of pay-per-trade and have low fees and deep books for retail with a number of liquidity protections,” he added.

“We will then start listing more products with appropriate controls and vetting as we move into derivatives. Above all we want a regulated, institutional-grade platform where people feel safe to trade with unique product options.”

Bitpanda in the bear market

Bitpanda raised hundreds of millions of dollars from venture backers in the crypto bull market and hit a valuation of $4.1 billion. Like many in the sector, however, it ran into trouble in the bear market. In June 2022, it emerged that the platform had cut roughly a quarter of its staff.

Founded in 2014 and headquartered in Vienna, Bitpanda was largely retail-focused until the launch of its Pro product in 2019.

One Trading said in this morning’s announcement that it intends to operate as a MiFID Trading Venue. It also has a VASP licence. The pairing should allow it to offer “capital efficient spot and derivative products” for a wide range of customers. The MiFID licence will also allow the startup to list financial instruments, it added.

© 2023 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 exchange trading volumes are marching upwards in a move driven by institutions, according to JMP analyst Devin Ryan. 

The Block’s data dashboard shows the seven day moving average for daily exchange volumes has surged over the course of the last month, climbing from $11 billion on May 26 to nearly $19.5 billion on June 26. 

That said, daily exchange volumes are down significantly from their peak of over $150 billion clocked in during the previous crypto bull cycle. 

Institutions getting involved

Devin Ryan of equity research shop JMP attributed the recent increase in trading volumes to institutions entering the space.

“We believe the uptick in trading volume during the week ended 6/24, which was accompanied by a 12% W/W appreciation in total crypto market cap, can likely be attributed to some momentum in the space after BlackRock (BLK, NC) filed an application with the SEC for a spot Bitcoin ETF,” he said, referring to the asset manager’s June 15 filing. 

In the wake of the filing, a wide range of companies from WisdomTree to Invesco have refiled their own applications for funds to track the price of the largest cryptocurrency. As The Block reported, asset management giant Fidelity plans to submit its own filing for a spot bitcoin ETF. 

The institutional activity driving higher volumes is evident in LMAX Digital’s more healthy performance recently. The firm, which exclusively services institutional clients, has seen total notional volumes for Monday come in at $415 million — a figure that’s 15% above its 30-day average. 

“Looking at average position size over the past 30 days, we’re seeing average bitcoin position size at $6,701 and average position size for ether at 2,743,” the exchange said. 

“Volatility has trended up in June after trading down at yearly low levels earlier in the month. We’re looking at average daily ranges in bitcoin and ether of $1,008 and $65 respectively,” it added.

© 2023 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.

FTX’s plan to sell off one of its most valuable assets has been paused, according to a report by Bloomberg News. 

As per the report, the bankrupt exchange’s financial advisors, Perella Weinberg, told bidders this month that its stake in artificial intelligence company Anthropic was no longer on the market. Citing people familiar with the situation, Bloomberg’s report notes that the pause followed a process of several months during which time multiple potential parties conducted due diligence. 

Alameda, the hedge fund founded by former billionaire Sam Bankman-Fried, invested $500 million into the company, according to internal documents reviewed by Bloomberg. Founded in 2021, the firm announced in May a $450 million Series C with participation from Google, Salesforce Ventures, and Zoom Ventures.

The news of the halt comes soon after FTX and its debtors released its second investigative report, which highlighted findings from its asset recovery process. The group found that FTX.com owed customers about $8.7 billion. 

In December, Bankman-Fried was charged with defrauding investors by the Securities and Exchange Commission for concealing a diversion of funds from FTX clients to Alameda. 

© 2023 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.

Voyager Digital is set to shell out $1.1 million to its legal advisor, Kirkland & Ellis, for fees and expenses related to its work on the erstwhile brokerage firm’s bankruptcy process in April. 

As per documents, the law firm charged a blended hourly billing rate for all services during the month of $1,313.18. Total fees charged for attorneys and paralegals topped $1.4 million, with some of the firm’s top brass charging an hourly rate of over $2,000. 

Kirkland & Ellis counts a number of bankrupt crypto companies as clients, including BlockFi and Celcius. 

Voyager filed for Chapter 11 bankruptcy protection in July after it was hit hard by the crypto credit crisis that blew out several lenders and brokers. Previously led by former E*Trade executive Steve Ehrlich, the company was publicly traded in Canada and reported liabilities somewhere between $1 billion and $10 billion at the time of its bankruptcy filing. 

Voyager isn’t alone in having to pay hefty fees as its navigates its bankruptcy process. As The Block previously reported, FTX clocked up more than $120 million in financial and legal advisory fees between February 1 and April 30. 

© 2023 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.