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BitOasis UAE Crypto Exchange Says It Has Laid Off Some Staff Due to Sector Turmoil

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By Reuters | Updated: 20 June 2022

BitOasis, a Middle East-focused cryptocurrency exchange based in the United Arab Emirates, said on Sunday it laid off nine of its staff, the latest company in the sector to cut jobs in the face of a downturn and market turmoil.

The cryptocurrency market has been rocked by extreme volatility with crypto lender Celsius Network freezing withdrawals early last week as investors dumped risky assets on fears about aggressive Federal Reserve rate hikes to cool red hot inflation.

On Tuesday, cryptocurrency exchange Coinbase Global Inc said it was slashing 1,000 jobs, or 10 percent of its workforce.

BitOasis was founded in Dubai in 2015 and serves English and Arabic speaking customers in the Gulf.
“Earlier this week, nine employees were made redundant across offices in Dubai, Abu Dhabi and Amman,” its CEO and co-founder Ola Doudin said in an email.

A spokesperson for the company said this represented nearly 5 percent of the company’s workforce.
In 2021, BitOasis received permission to operate a Multilateral Trading Facility from the Abu Dhabi Global Market and is registered as a Virtual Asset Service Provider with the Financial Intelligence Unit of the UAE central bank.

BitOasis received provisional approval from Dubai’s Virtual Assets Regulatory Authority (VARA) in March 2022.

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Tencent’s NFT Platform Huanhe to Stop Sales for Public as Scrutiny Mounts

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By Reuters | Updated: 16 August 2022

Chinese Internet giant Tencent Holdings’ non-fungible token (NFT) platform Huanhe will no longer release digital collectibles to the public, it said on Tuesday, as regulatory scrutiny of NFTs mounts in the country.

The Shenzhen-based company said that Huanhe, officially launched early last August, will no longer release new NFTs to users from Tuesday. But the company said that owners of existing collectibles will still be able to hold, display or request a refund for their possessions.

“Based on the company’s consideration to focus on its core strategy, Huanhe is making adjustments to its business,” Tencent said in a statement.

Huanhe is one of the biggest NFT platforms in China, with new collectibles often sold out instantly upon launch.

The move marks a major retreat by Tencent from the NFT market, which has come under increased scrutiny from Chinese regulators. Digital collectibles in the form of NFTs have become popular around the world in recent years, in large part thanks to an active if not highly speculative secondary market.

After state media repeatedly highlighted issues around NFT speculation in the country, tech giants including Tencent and Ant Group in June signed a pact to stop the secondary trading of digital collectibles and “self-regulate” their activities in the market.

The potential shutdown of Huanhe was first reported by Chinese media last month. In its statement on Tuesday, Tencent did not elaborate on what will happen to the Huanhe brand.

Chinese tech giants have trodden carefully with their NFT platforms within mainland China. Most domestic platforms mostly avoid the wording NFT, opting to describe them as “digital collectibles” instead in a bid to distance them from cryptocurrencies, which are banned in China.

© Thomson Reuters 2022

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ED Raids WazirX for Money Laundering Investigation, Freezes Bank Deposits Over Rs. 64.67 Crore

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By Press Trust of India | Updated: 5 August 2022

The Enforcement Directorate (ED) on Friday said it has frozen bank deposits of Rs. 64.67 crore as part of a money laundering probe against crypto currency exchange WazirX.

The federal agency said it conducted raids against a director of Zanmai Lab Private Limited, which owns WazirX, on August 3 in Hyderabad and alleged he was “non-cooperative”.

The agency’s probe against the crypto exchange is linked to its ongoing investigation against a number of Chinese loan apps (mobile applications) working in India.

The agency had charged WazirX last year for alleged contravention of the Foreign Exchange Management Act (FEMA).

“It was found that Sameer Mhatre, Director WazirX, has complete remote access to the database of WazirX, but despite that he is not providing the details of the transactions relating to the crypto assets, purchased from the proceeds of crime of instant loan app fraud.” “The lax KYC norms, loose regulatory control of transactions between WazirX and Binance, non-recording of transactions on block chains to save costs and non-recording of the KYC of the opposite wallets has ensured that WazirX is not able to give any account for the missing crypto assets,” the ED alleged in a statement.

It said the company made no efforts to trace these crypto assets. “By encouraging obscurity and having lax AML (anti-money laundering) norms, it has actively assisted around 16 accused fintech companies in laundering the proceeds of crime using the crypto route,” it said.

Therefore, the ED said, equivalent movable assets to the extent of Rs. 64.67 crore lying with WazirX were frozen under the Prevention of Money Laundering Act (PMLA).

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Blockchain.com Gains Regulatory Approval to Offer Crypto, Digital Wallet Services in Italy: Details

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By Reuters | Updated: 5 August 2022

London-based crypto firm Blockchain.com said on Thursday it had registered as a virtual asset service provider in Italy, the latest in a string of digital asset firms to do so.

Italy created a special registry with its brokerage regulator in February to list crypto operators with a stable presence in the country, provided they meet certain requirements.

Blockchain.com said in a statement it could now offer crypto and digital wallet services to Italian residents and institutional investors under the regulator, known as the OAM.

Major exchanges Binance and US-based Coinbase, as well as Singapore-based Crypto.com and German investment platform Trade Republic, are among those to have already secured registration with the OAM.

Regulators across the world are working out how to bring to heel the crypto sector, which is subject to patchy rules. Consumer protection, financial stability threats and illicit usage of digital coins are issues on the agenda.

Crypto platforms are looking to bolster their bases in Europe before groundbreaking crypto rules agreed last month by the European Union come into force.

Under the rules, expected to go live after 2024, crypto firms will need a licence and customer safeguards to issue and sell digital tokens in the bloc.

“This registration strengthens our position to offer services across Europe,” Blockchain.com said.

OAM oversees financial agents and credit brokers in Italy. It says it can collect and share with anti-mafia and anti-terrorism investigators in Italy data provided by crypto firms on their clients and operations.

Last month, major US crypto exchange Coinbase said it had won approval from Italian regulators to continue to serve customers in Italy. Coinbase had revealed that it met requirements from the OAM, OAM, which also implements anti-money laundering controls.

Financial watchdogs across the world are grappling with how to regulate the cryptocurrency market, which remains subject to patchy rules. Consumer protection, threats to financial stability and illicit usage of digital coins are among the top issues on regulators’ agendas.

© Thomson Reuters 2022

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US SEC Charges 11 People for Promoting Fraud Crypto Pyramid, Ponzi Scheme

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 By Reuters | Updated: 2 August 2022 

The Securities and Exchange Commission said on Monday it charged 11 people for their roles in creating and promoting a fraudulent crypto pyramid and Ponzi scheme that raised over $300 million (roughly Rs. 2,500 crore) from retail investors worldwide, including in the United States.

Those charged included the four founders of the scheme named Forsage. They were last known to be living in Russia, the Republic of Georgia, and Indonesia, the SEC said in a statement.

The charged individuals could not immediately be reached for comment.

According to the SEC’s complaint, the scheme’s website was launched in January 2020 and allowed millions of retail investors to enter into transactions via smart contracts. It allegedly operated as a pyramid scheme for more than two years, in which investors earned profits by recruiting others into the scheme, the SEC said.

Forsage also allegedly used assets from new investors to pay earlier investors in a typical Ponzi structure, the SEC complaint added.

“Forsage is a fraudulent pyramid scheme launched on a massive scale and aggressively marketed to investors,” said Carolyn Welshhans, acting chief of the SEC’s Crypto Assets and Cyber unit. “Fraudsters cannot circumvent the federal securities laws by focusing their schemes on smart contracts and blockchains.”

Without admitting or denying the allegations, two of the defendants agreed to settle the charges and one of them agreed to pay penalties, the SEC said.

In March, a crypto Ponzi scheme was busted in India when the ED arrested an accused in connection with its money laundering probe against a Kerala-based businessman, who is alleged to have cheated more than 900 investors to the tune of Rs. 1,200 crore in lieu of providing cryptocurrency to them.

Abdul Gafoor, one of the main stockist of the ‘Morris Coin cryptocurrency’, was taken into custody on March 24. He was produced before a court the next day and sent to Enforcement Directorate (ED) custody till March 31.

© Thomson Reuters 2022

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Venture Capitalists Pour Money Into Digital Currencies Blockchain Startups Amid Crypto Winter

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By Reuters | Updated: 26 July 2022

It’s not all doom and gloom.

Even as the cryptocurrency sector shivers in the bleak winter, venture capitalists are pouring money into digital currency and blockchain startups at a pace that’s set to outstrip last year’s record.

In the first half of the year, VCs bet $17.5 billion (roughly Rs. 1,39,600 crore) on such firms, according to data from PitchBook. That puts investment on course to top the record $26.9 billion (roughly Rs. 2,14,630 crore) raised last year, a warmer and happier time for Bitcoin and co.

“The current market conditions – I don’t think they faze investors,” said Roderik van der Graf, founder of Hong Kong investment firm Lemniscap, which focuses on crypto and blockchain. “The capital available is massive.”

VC funds offer financing to young companies they believe have strong growth prospects. The data suggests a solid faith in the future of crypto and blockchain tech, despite a bruising six months for the industry.

A double whammy of macroeconomic headwinds and blow-ups at major projects this year have seen Bitcoin plummet about 65 percent from its November record of $69,000 (roughly Rs. 55 lakh), with the overall value of the crypto market tumbling by two-thirds to $1 trillion (roughly Rs. 79,79,600 crore).

Companies have shuddered as prices fall, with major US exchange Coinbase Global and NFT platform OpenSea among those to lay off hundreds of workers.

Yet some VCs are shrugging off the gloom, with many deploying substantial war chests as their faith in the underlying tech behind crypto coins remains strong.

Though not all investors are so bullish in the face of the crypto carnage, not by any means.

David Siemer, CEO of California crypto management firm Wave Financial, said there were signs of a pullback from the sky-high valuations of crypto firms last year.

“This will get a lot worse – we’re a couple of months into this cycle. In the last cycle the pain for those looking for funding was about 12 months.”

American hotspot

North America, long the hotspot for VC deals, has again been the focus of activity with about $11.4 billion (roughly Rs. 90,990 crore) in the six months to June, versus $15.6 billion (roughly Rs. 1,24,510 crore) for the whole of last year.

The numbers contrast with general VC activity in United States, where deals fell to $144.2 billion (roughly Rs. 11,50,950 crore) in the first half from $158.2 billion (roughly Rs. 12,62,700 crore) in the same period last year as macro conditions and market turmoil chill investment.

Rumi Morales, director of investments at Digital Currency Group, a major American VC, said the data reflected increasingly robust faith in the crypto and blockchain sector.

“There used to be existential risk being in the space – that the whole industry was just going to go away, it was all a dream. That is not the case anymore.”

Adoption of crypto as an investment tool mushroomed last year, with the use of blockchain also gaining ground – even if the revolutionary changes from the technology promised to industries such as finance and commodities remain elusive.

Among the mega US crypto deals in 2022: $400 million raised by the US arm of crypto exchange FTX in January; a $450 million (roughly Rs. 3,600 crore) fundraising round by blockchain developer ConsenSys in March; and $400 million (roughly Rs. 3,200 crore) raised by stablecoin issuer Circle a month later.

Activity is strong in Europe too, with $2.2 billion (roughly Rs. 17,560 crore) of VC investment in the first half of the year.

Lisbon-based Fedi, an app designed to help people receive, hold and spend Bitcoin, said this month it had raised $4.2 million (roughly Rs. 30 crore) in seed financing.

“Within seven days we had all of the investment commitments,” Obi Nwosu, one of its founders, told Reuters. “And within less than a month and a half we had the initial fundraise target in the bank. Done.”

© Thomson Reuters 2022

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Thailand’s SEC Probing Potential Losses for Users of Crypto Platform Zipmex Users After Suspended Withdrawals

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By Reuters | Updated: 26 July 2022

Thailand’s Securities and Exchange Commission said on Monday it was working with law enforcement to look into potential losses among the public after the crypto exchange Zipmex temporarily suspended withdrawals last week.

The SEC said in a statement it was asking impacted users of Zipmex to submit information via an online forum on how they had been affected by the problems at the platform.

The Southeast Asia-focused cryptocurrency exchange, which operates in Thailand, Indonesia, Singapore and Australia, suspended withdrawals last Wednesday.

Withdrawals resumed on the same evening in Thailand and later on in other countries, except for transfers from one investment product, which the company later said had exposure worth $53 million (roughly Rs. 420 crore) in crypto lenders, Babel Finance and Celsius.

Celsius and Babel Finance are among crypto players that have fallen into difficulties in recent months.

Late on Monday, the SEC’s board ordered Zipmex to open trade according to trading rules within three days, including allowing withdrawals and deposits, it said in another statement.

The announcements come as crypto trading in Thailand has slowed and after Thai lender SCB X Pcl said it was extending the due diligence period for its $537 million (roughly Rs. 4,300 crore) acquisition of Thai crypto exchange, Bitkub.

Zipmex is the latest crypto firm to face difficulties following a sharp sell-off in markets that started in May with the collapse of two paired tokens, Luna and TerraUSD.

Zipmex holds a digital asset exchange and a digital asset broker license, the SEC website https://www.sec.or.th/en/pages/shortcut/digitalasset.aspx shows. At the weekend, the company said in a Facebook post it was exploring a deal with an “interested party.”

© Thomson Reuters 2022

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