Crypto mining company Core Scientific has announced a resolution to their prolonged legal dispute with lending firm Celsius Network.
The agreement, disclosed on September 15, outlines Core Scientific’s decision to sell a Bitcoin mining data center to Celsius for $14 million in cash.
This settlement effectively brings an end to all existing litigation between the two parties.
However, the deal remains subject to court approval due to its significant financial implications.
The origins of the conflict can be traced back to October 2022, when Core Scientific alleged that Celsius had defaulted on its financial obligations.
In retaliation, Celsius asserted that Core Scientific had failed to deploy mining rigs as stipulated in their contractual agreement.
The ensuing legal battle led both companies to file for Chapter 11 bankruptcy protection separately.
Core Scientific pursued this route in Texas in December 2022, while Celsius did so in New York in July 2022.
The Texas-based data center, valued at approximately $45 million, is the crux of the agreement.
Pending court approval, it is anticipated that the data center will become part of Celsius’s mining operations.
Despite being nonoperational at the time, the facility has the capacity to supply 215 megawatts to Bitcoin mining rigs.
Notably, Chris Ferrero, CEO of Celsius, acknowledged the pivotal role played by crypto mining firm US Bitcoin in facilitating and executing this transaction.
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US Bitcoin was also part of the winning bid for Celsius’s assets in the bankruptcy proceedings.
It’s crucial to note that the legal disputes between the two companies are distinct from the criminal charges faced by former Celsius CEO Alex Mashinsky and former Chief Revenue Officer Roni Cohen-Pavon.
Mashinsky, arrested in July, has pleaded not guilty to charges related to fraud and market manipulation.
In contrast, Cohen-Pavon pleaded guilty to four charges on September 13 and awaits sentencing in December.
In conclusion, Core Scientific and Celsius Network have reached a landmark agreement, effectively settling their protracted legal battle.
This resolution involves the sale of a Bitcoin mining data center in Texas, valued at $45 million, for $14 million in cash.
Pending court approval, this transaction marks a significant turning point for both companies, and it is expected to have a substantial impact on Celsius’s mining operations.
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Binance.US Challenges SEC’s ‘Unreasonable’ Demands in Legal Showdown
The United States Securities and Exchange Commission (SEC) has escalated its confrontation with Binance.US, alleging a lack of cooperation on September 14th.
In a recent court filing, the SEC criticized Binance.US, accusing its holding company, BAM, of providing only a paltry 220 documents during the discovery process.
Many of these documents, as per the SEC’s assertion, were plagued by unintelligible content, lacking essential dates or signatures.
The SEC further accused BAM of evading the production of vital witnesses for deposition, opting to cooperate with only four depositions it considered suitable.
Moreover, the regulatory body claimed that Binance.US responded to requests for pertinent communications with blanket objections, and conveniently asserted that certain documents crucial to their business operations did not exist.
Ironically, the SEC later obtained some of these supposedly non-existent documents from alternative sources, raising serious concerns about the exchange’s transparency.
The SEC also voiced apprehensions about Binance.US’s utilization of Ceffu, a wallet custody software provided by global entity Binance Holdings Ltd.
Inconsistent statements from BAM regarding Ceffu’s role in wallet and customer funds management drew the SEC’s attention.
Initially, BAM had declared Ceffu as its wallet custody software and service provider but later switched its stance to claim that Binance fulfilled this role.
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This inconsistency led the SEC to question whether Binance.US’s use of Ceffu contravened a prior agreement designed to prevent fund diversion overseas.
The SEC’s legal battle against Binance commenced on June 5th, with the regulatory body leveling 13 charges against the crypto exchange.
These charges encompassed unregistered securities offerings, as well as allegations related to the Simple Earn and BNB Vault products and its staking program.
According to the SEC, Binance.com, Binance.US, and BAM Trading should have registered as clearing agencies, broker-dealers, and exchanges, respectively.
Furthermore, the unregistered sale of Binance.US’ staking-as-a-service program necessitated BAM Trading to register as a broker-dealer.
These fresh allegations by the SEC come amidst a backdrop of internal turmoil at Binance.US.
The departure of CEO Brian Shorder and a string of high-ranking executives, including the head of legal and the chief risk officer, have raised questions about the exchange’s stability and management. Binance.US has yet to provide a response to these latest accusations.
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Despite fresh data indicating rising inflation in the United States, Bitcoin (BTC) continued its upward trajectory as it entered the Wall Street trading session on September 14.
The cryptocurrency reached new highs for September, reaching a peak of $26,762.
Bitcoin’s strength persisted from the previous day’s closing, seemingly unfazed by the resurgence of U.S. inflation as confirmed by the Consumer Price Index (CPI) and Producer Price Index (PPI) August reports.
The PPI, in particular, exceeded market expectations by coming in at 1.6% year-on-year, while analysts had predicted 1.3%.
Interestingly, the crypto market aligned itself with traditional financial markets in rejecting the notion that U.S. macroeconomic policy might tighten further to combat inflation.
CME Group’s FedWatch Tool indicated a lack of consensus on the Federal Reserve raising interest rates later in the month, with odds of a rate hike pause standing at 97% at the time of this report.
The European Central Bank (ECB) added to this paradox by increasing rates by 0.25% on the same day.
This marked the ECB’s 10th consecutive rate hike, bringing rates to 4.5%, their highest since 2001. Notably, the ECB also downgraded its growth forecasts for the years leading up to 2025, emphasizing the ongoing battle against inflation.
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Market sentiment surrounding Bitcoin remained optimistic, with many participants hopeful for further price gains, aiming for a target of $27,000.
Traders closely watched the $26.4K level, considering it crucial to break through to escape the current trading range and aim for an upward move toward approximately $27,000.
Popular trader Jelle observed that Bitcoin was following the Power of Three setup, pressing against local resistance. He suggested that a break above $26,400 could pave the way for a push towards $27,600.
However, trader and analyst Rekt Capital adopted a more conservative stance, drawing parallels with a chart fractal from 2021, which coincided with Bitcoin’s previous all-time high.
He noted that as long as Bitcoin maintained support around $26,000, the Phase A-B of the fractal could come into play.
Nevertheless, he cautioned that past occurrences of this fractal had sometimes led to a relief rally followed by rejection, potentially indicating weakening support around the $26,000 level.
In summary, despite concerning inflation data in the U.S. and global central banks anticipating prolonged rate hikes, Bitcoin remained resilient, with market participants eyeing further price gains, albeit with varying degrees of caution.
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Representative Tom Emmer, along with 49 original co-sponsors, has reintroduced the “CBDC Anti-Surveillance State Act” in the United States House of Representatives, aimed at preventing what they perceive as excessive control by unelected officials in Washington over central bank digital currency (CBDC) issuance.
Their primary objective is to safeguard the financial privacy rights of American citizens.
In a statement, Emmer expressed concerns about the Biden administration’s willingness to compromise financial privacy for the sake of a surveillance-style CBDC.
He emphasized the importance of upholding American values such as privacy, individual sovereignty, and free-market competitiveness.
Emmer initially introduced this legislation in January 2022, and it was formally presented to Congress in February 2023.
The bill seeks to curtail the Federal Reserve’s authority to create a programmable digital dollar, which Emmer perceives as a tool for surveillance that could undermine American society.
The legislation has specific provisions aimed at limiting the Federal Reserve’s powers.
Firstly, it prohibits the issuance of CBDCs directly to individuals, a measure designed to prevent the central bank from transforming into a retail bank capable of collecting individuals’ personal financial data.
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Additionally, the bill bars the central bank from utilizing CBDCs as a means of implementing monetary policy.
Emmer has previously voiced concerns about the potential weaponization of money by the federal government in its quest to expand financial control.
He has been joined in these concerns by U.S. presidential candidate Robert F. Kennedy Jr., who argued that CBDCs would grant the government unprecedented power to stifle dissent by denying access to funds at the click of a button.
Several notable figures, including Senators French Hill, Warren Davidson, and Mike Flood, also support the CBDC Anti-Surveillance State Act.
Their united front reflects a growing apprehension within certain political circles regarding the potential risks associated with CBDCs and their implications for individual privacy and government control over financial transactions.
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The Nasdaq stock exchange has made a significant move by submitting an application to the Securities and Exchange Commission (SEC) in hopes of gaining approval to list an Ethereum Exchange-Traded Fund (ETF) offered by Hashdex, a reputable asset management company.
What sets this ETF apart is its innovative approach to cryptocurrency investment within the boundaries of regulatory compliance.
Dubbed the Hashdex Nasdaq Ethereum ETF, this investment vehicle marks a milestone as the first Ethereum futures filing under the ’33 Act.
It is administered and overseen by Toroso Investments, a registered commodity pool operator with the Commodity Futures Trading Commission (CFTC) and a member of the National Futures Association.
The recent influx of cryptocurrency ETF applications has put a spotlight on whether these proposed funds will include futures contracts or spot assets.
While the SEC has given the green light for the former, the latter remains unapproved.
Fund managers are now exploring a middle-ground strategy, testing the waters in this evolving regulatory landscape.
The primary objective of the Hashdex fund is to ensure that its shares closely reflect the daily fluctuations in the Nasdaq Ether Reference Price.
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To achieve this, the fund plans to diversify its assets by investing in ether, ether futures contracts traded on the CME, and maintaining cash and cash equivalents.
According to Nasdaq’s 19b-4 form, the fund’s approach is to reduce its dependence on the spot market, which could be susceptible to price manipulation, by incorporating a mix of Spot Ether, Ether Futures Contracts, and cash.
Hashdex’s strategy differs from recent filings in the cryptocurrency ETF space.
Notably, it will not rely on the Coinbase surveillance sharing agreement, opting instead to acquire spot Bitcoin from physical exchanges within the CME market.
In recent developments, both Ark Invest and 21Shares have also submitted applications to the SEC for spot ether ETFs, a type of ETF also sought after by VanEck.
The SEC has yet to make determinations on all the applications it has received for spot cryptocurrency funds, keeping investors and enthusiasts eagerly awaiting further developments in the evolving landscape of cryptocurrency investments.
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According to Ripple CEO Brad Garlinghouse, the United States is currently one of the least favorable places to launch a cryptocurrency startup in the world.
His assertion comes amidst a legal battle between Ripple and the U.S. Securities and Exchange Commission (SEC).
Speaking at the Token 2049 conference in Singapore on September 12, Garlinghouse expressed his concerns, stating that he would not encourage anyone to start a crypto company in the U.S. at this time.
Garlinghouse emphasized that the U.S. needs to take a cue from countries like Singapore, the United Kingdom, the United Arab Emirates, and Switzerland, which have implemented policies that foster cryptocurrency innovation while ensuring consumer protection.
He firmly placed the blame on the SEC, accusing the regulatory body of waging a political war against the crypto industry through its lawsuits.
Garlinghouse contended that the SEC’s lawsuit strategy was ineffective and pointed to recent court victories by Ripple and Grayscale as indicators that the tide might be turning in favor of the crypto industry.
Although these court decisions are not legally binding, he argued that they offer some much-needed clarity to crypto exchanges and custody providers operating in the U.S., at least temporarily.
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Hong Fang, President of OKX, acknowledged the political aspects of the situation but urged crypto firms to concentrate on what they can control – building the right products, focusing on technology, and supporting responsible regulations.
Despite the U.S. being a significant market for Ripple, Garlinghouse disclosed that the company is expanding its services to countries that he believes have a more progressive outlook and a better understanding of blockchain technology’s potential benefits.
During the panel discussion, Hong Fang expressed reservations about the readiness of investors for custody solutions built around a potential spot Bitcoin exchange-traded fund (ETF).
He highlighted concerns about the untested nature of much of the new blockchain-based infrastructure, suggesting that the industry might not be prepared for such developments.
Fang noted that while a spot Bitcoin ETF could attract more institutional investments, he doubted whether investors were prepared to handle the volatility of Bitcoin.
He also questioned the industry’s readiness to continue building more applications on top of Bitcoin, emphasizing the need for a stable infrastructure to support these endeavors.
In conclusion, Ripple’s CEO Brad Garlinghouse’s comments underscore the challenges faced by cryptocurrency startups in the U.S. due to regulatory uncertainty, while also highlighting the need for responsible regulation and a stable infrastructure in the crypto space.
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Former PayPal president, David Marcus, has raised concerns about the outdated nature of global payments despite the ease of transferring information online.
He argues that while we can send emails or texts instantaneously, international money transfers remain stuck in the “fax era.”
According to Marcus, the lack of a universal protocol for online money transfers poses a significant challenge.
If you want to communicate with someone, you can simply ask for their email address and connect with them within minutes.
However, when it comes to sending money, the process is far from seamless. Marcus illustrated this by highlighting the difficulty of sending money to someone outside the U.S. who doesn’t use the same fintech apps.
In such cases, one would need the recipient’s bank account number and often resort to expensive international wire transfers costing as much as $50.
To address this issue, Marcus is leading the charge with his Bitcoin Lightning-focused payment service, Lightspark, which he co-founded in May 2022.
He believes that the Bitcoin Lightning Network has the potential to revolutionize the cumbersome process of sending money across borders.
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While Marcus acknowledges that Bitcoin’s Lightning Network may not become the go-to currency for everyday purchases, he sees its primary utility in facilitating international transfers.
Rather than being used for buying goods and services directly, Bitcoin could serve as a bridge currency, allowing users to send U.S. dollars that are seamlessly converted into other currencies, such as Japanese yen or euros, on the recipient’s end.
The key advantage of this approach is the speed and cost-effectiveness of Bitcoin Lightning’s settlement layer.
It enables near-instantaneous and low-cost cash finality, making it a promising solution for cross-border transactions.
In essence, Marcus envisions Bitcoin’s Lightning Network as the remedy to the outdated and expensive global payment systems that continue to prevail in today’s interconnected world.
In conclusion, David Marcus, the former PayPal executive and co-founder of Lightspark, believes that Bitcoin’s Lightning Network holds the key to modernizing international money transfers and bringing them out of the “fax era.”
With its potential to revolutionize cross-border payments, Bitcoin Lightning could pave the way for a more efficient and cost-effective global financial system.
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Key figures from leading mining and manufacturing firms are anticipating that the fourth Bitcoin halving, scheduled for 2024, could propel the price of Bitcoin (BTC) beyond the $100,000 mark.
This intriguing insight was shared by Canaan’s Vice President, Davis Hui, during a panel discussion at Canaan’s Avalon Bitcoin and Crypto Day (ABCD) in Singapore.
This panel included prominent Bitcoin mining executives from Singapore, Kazakhstan, and the United Arab Emirates, all of whom offered similar BTC price predictions for 2024, citing the profound impact of the upcoming Bitcoin mining reward halving.
Hui emphasized the impending reduction in Bitcoin’s supply, which will drop to 6.25 BTC per block after the reward halving.
Simultaneously, traditional financial institutions are displaying an increasingly keen interest in investing in the cryptocurrency sector.
Hui pointed out that industry giants like BlackRock, managing a staggering $10 trillion in assets, hold five times more value than the entire cryptocurrency market capitalization, currently standing at $2 trillion.
This surge in institutional interest, coupled with the halving’s supply reduction, is expected to drive BTC’s price upward.
Furthermore, Hui underscored the significance of several Bitcoin exchange-traded fund (ETF) applications pending with the United States Securities and Exchange Commission (SEC), submitted by some of the world’s largest asset managers.
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These applications, once approved, are anticipated to inject substantial capital into the cryptocurrency market, further fueling the demand for BTC and contributing to its price surge.
Hui also shed light on the challenging environment faced by most miners in the fiercely competitive market, where all-time high hash rates and network difficulties are eroding miner profitability.
In response, miners who cannot cover their electricity costs with their mining rewards are shutting down their operations.
However, those continuing to mine are doing so with an eye on the potential gains following the 2024 halving.
He also noted that miners capable of upgrading to more efficient and powerful machines are likely to maintain better profitability.
Hui speculated that mining companies in the United States might face particular challenges due to high electricity and administrative costs.
In a candid admission, Hui revealed that Canaan, like other industry players, reported a financial loss in the first quarter of 2023, underscoring the prolonged impact of the cryptocurrency bear market.
Despite these challenges, the industry remains optimistic about the future, driven by the potential market dynamics set to unfold as a result of the fourth Bitcoin halving.
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Astana-based financial technologies firm Collect & Exchange has rolled out an advanced digital asset exchange platform to facilitate cryptocurrency and fiat exchange, as well as cryptocurrency payments. According to a press release from August 23, 2023, the new platform supports over 1500 trading pairs, providing a broad trading ecosystem for both cryptocurrencies and traditional currencies.
Cryptocurrency exchanges have come under fire for regularly struggling with issues such as lack of transparency, inefficient exchanges, and outright fraud. Collect & Exchange’s entry comes as a breath of fresh air, promising rapid onboarding for clients in various industries, from advertising and IT to e-commerce and gaming. Asaf Hanukaev, co-founder of Collect & Exchange, heralds the launch as a “paradigm shift” in how diverse sectors engage with digital assets.
Setting new standards
The Collect & Exchange platform, regulated by Astana Financial Services Authority (AFSA), offers a streamlined onboarding experience thanks to its adoption of modern KYC and AML procedures. Notably, the new platform claims that its approach ensures that both businesses and individual clients can be fully operational in a matter of days – this is in stark contrast to the current industry standard, as corporate clients are often waiting weeks to open new accounts with cryptocurrency exchanges.
Further elevating the user experience, Collect & Exchange reportedly features an intuitive and customizable dashboard. Funding options are also versatile, allowing for easy deposits, withdrawals, and internal transfers across major digital assets like Bitcoin, Ethereum, Tron, and Binance Smart Chain. Moreover, seamless fiat funding and withdrawal are enabled through traditional bank transfers, supporting top fiat currencies such as the US Dollar, Euro, Swiss Francs, Chinese Yuan, Emirati Dirham, and British Pound.
“We’ve constructed Collect & Exchange to serve a broad array of sectors, not just those who are tech-savvy or steeped in finance,” said Yaron Noah, another co-founder of the venture.
Perhaps its most unique feature, the platform aims to go above and beyond in customer service, offering each user a dedicated support agent. This is rather unusual in the cryptocurrency trading space, with major platforms facing backlash for untrained or even indifferent support agents.
George Arakelov, CEO of Collect & Exchange, explains, “In the dynamic realm of digital asset trading, a personal touch can be a game-changer. Our devoted support agents stand ready to resolve any issues immediately, underscoring our dedication to an unparalleled customer experience and transparency.”
The bottom line
Collect & Exchange’s launch might be the harbinger of an industry-wide transformation, particularly in terms of customer service and accessibility. With a rapid setup and multiple currency options, the platform has the potential to be a universal solution for digital asset management and payments, aligning with the larger trends of decentralization and blockchain adoption in various industries.
By offering dedicated customer support agents, the company is also setting a new standard in customer service within the digital asset trading landscape—a timely update given the complexities and fast pace associated with such trading. As the digital asset ecosystem continues to evolve, Collect & Exchange’s comprehensive, user-friendly platform could very well set the tone for the industry’s future, and also serve as a case study for other sectors wrestling with similar issues.
The United States Securities and Exchange Commission (SEC) has submitted a filing, urging the court to grant its motion to appeal a ruling from the Ripple Labs lawsuit that deemed the XRP token to not be a security when sold to retail investors.
The agency argues that “knotty legal problems” surrounding the court’s application of the law, specifically the Howey test, warrant a review.
In a filing dated September 8, the SEC calls for the U.S. District Court for the Southern District of New York to grant its motion for interlocutory appeal and “stay further proceedings until the resolution of that appeal,” citing the “knotty legal problems” raised by the court’s summary judgment order.
Judge Analisa Torres ruled in July that XRP is generally not a security under SEC guidelines, particularly when distributed via programmatic sales, such as being sold to retail investors through exchanges.
In its latest filing, the SEC argues that the rulings on programmatic sales and other distributions present significant “legal questions” justifying approval of the agency’s interlocutory appeal.
The SEC suggests that the legal ambiguity arises from whether certain crypto assets fall under the classification of investment contracts via the Howey test, citing differing opinions within the district and other courts considering similar issues.
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The SEC states that while interlocutory appeal should be the exception, this case is exceptional due to its industry-wide significance and special consequence, inviting interlocutory appeal.
These sentiments contradict previous statements from the SEC and its Chair, Gary Gensler, who has previously opposed the need for new crypto regulation, asserting that the SEC’s existing guidelines adequately cover the crypto market, including the notion that most crypto assets on the market are securities.
In a September 8 tweet, Ripple’s chief legal officer Stuart Alderoty calls the SEC’s filing “hypocritical” in light of Gensler’s prior statements about clear rules.
Coinbase’s chief legal officer, Paul Grewal, also questions how crypto firms can have “fair notice” if unresolved legal questions persist in court.
The SEC originally moved to appeal and stay Judge Torres’s decision in August, arguing substantial differences of opinion.
On September 1, Ripple Labs responded with a memorandum of law opposing the SEC’s appeal, contending that the agency lacks substantial grounds for the requested appeal.
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