In today’s bitcoin and cryptocurrency news, learn about in 2023, Nubank, a digital banking company in Brazil, will become the latest major financial institution to venture into digital assets by releasing its own cryptocurrency in the country. On the other hand, after agreeing to resolve charges against firm leaders, crypto lender Voyager Digital has emerged from bankruptcy. The executives in question approved a dangerous almost $1 billion loan to failing crypto hedge fund Three Arrows Capital (3AC) with no due diligence. Lastly, the newly hired Cryptocurrency Executive Director at JPMorgan was previously the Head of Policy and Regulatory Affairs at defunct Crypto Lender Celsius.
Nubank, a Buffett-backed Digital Bank, Will Release Its Own Cryptocurrency in Brazil
Original Source: Buffett-backed digital bank Nubank to launch its own cryptocurrency in Brazil
The Brazilian digital banking company Nubank will launch its own cryptocurrency next year, marking the latest step into digital assets by a significant financial institution.
Nubank said Wednesday it will launch Nucoin in the first half of 2023. In a press statement, the firm offers Nucoin as “a unique approach to honor client loyalty and stimulate participation with Nubank products.” Nubank wants to offer discounts and other incentives to token holders.
“The project is another step in our confidence in the revolutionary potential of blockchain technology and to democratize it even more,” Fernando Czapski, general manager for Nucoin at Nubank, said in a statement.
Nubank stated it would invite 2,000 clients to join a discussion group to guide the development of Nucoin “adhering to established blockchain project principles.” “In this phase, more than comments, the proposal is to investigate a decentralized method of product creation, distinctive of Web3,” Nubank added.
The coin was created on the Polygon network, a so-called “Layer 2” protocol that promises to ease congestion on the Ethereum blockchain, where transactions can be costly and slow. Polygon believes its platform can support thousands of transactions per second.
Nubank isn’t the first bank to establish its own coin. JPMorgan brought out its own cryptocurrency, JPMCoin, a so-called stablecoin pegged to the U.S. dollar. Unlike that coin, Nucoin’s price changes dependent on supply and demand, like bitcoin and ether.
It follows banks and payment corporations into the crypto sector. Mastercard announced Crypto Secure in October to help card issuers prevent fraud involving crypto exchanges. PayPal and Robinhood also trade cryptocurrencies. Wall Street firm Goldman Sachs has its own internal crypto trading department.
The latest token offering comes amid a dismal backdrop for cryptocurrencies. The sector is in a steep decline investors are calling “crypto winter” Many digital currency, including the world’s largest, bitcoin, have lost nearly half their value since the start of 2022.
Regulators have been more suspicious about digital currencies and the potential damages they pose to consumers, with governments in the U.S., EU, and elsewhere creating rules for regulating the industry.
When asked if Nubank had sought regulatory approval in Brazil before introducing its coin, a representative said the company “constantly monitors the regulatory framework as part of our product development process.”
Nubank debuted in 2013 with a purple no-fee credit card in Sao Paulo, Brazil, a country infamous for its high-fee, low-tech banking system. Since its debut nine years ago, the company boasts 70 million customers across Brazil, Mexico, and Colombia.
Nubank, which went public last year, counts Warren Buffett among its supporters. Buffett’s firm Berkshire Hathaway bought a $500 million stake in Nubank in June 2021. The stock market values the corporation at $20.4 billion, approximately half what it was worth in December 2021.
Nubank had previously gone into crypto through its Nucripto platform, which facilitates trading in bitcoin and ether. The exchange, which depends on blockchain infrastructure firm Paxos, hit 1 million customers in July, a month after starting.
Voyager Crypto Settles With Executives Who Approved the Financing Despite Its High Risk
Original Source: Crypto lender Voyager settles with executives who approved risky loan
Voyager Digital has agreed to resolve allegations against firm leaders who granted a risky $1 billion loan to failed crypto hedge fund Three Arrows Capital (3AC) after insufficient due diligence, a miscalculation that contributed to Voyager’s bankruptcy.
Voyager said in a Monday court filing that suing CEO Stephen Ehrlich and another executive wouldn’t be cost-effective. Ehrlich will pay $1.125 million in cash to Voyager, and the business will pursue recovery from director and officers insurance plans worth up to $20 million, according to the document.
Voyager filed for bankruptcy in July, claiming 3AC’s June 2022 default on the loan as a main issue. 3AC commenced liquidation procedures in the British Virgin Islands in late June.
Voyager lost value during an industry-wide cryptocurrency drop precipitated by the collapse of the Terra Luna stablecoin in May 2022 and banned clients from withdrawing crypto assets shortly before its bankruptcy filing.
The loan to 3AC comprised of 15,250 bitcoins and $350 million worth of USD coin, a stablecoin pegged to the U.S. dollar. The loaned crypto was worth $935 million in April 2022, according to court filings, but the price of bitcoin has fallen by half since then, making the debt worth closer to $650 million today.
Ehrlich approved the 3AC loan based on a one-page statement indicating the hedge fund had $3.729 billion in bitcoin holdings, according to court records. 3AC refused to offer more precise financial details, stating it had a terrible experience with a competitor who exploited its crypto holdings to imitate its trading technique.
Voyager’s board of directors agreed to settle 3AC-related allegations against Ehrlich and chief commercial officer Evan Psaropoulos, both of whom remain in leadership positions at Voyager, according to Monday’s court filing.
While the settlement is “only a small proportion” of the possible 3AC loss, litigating to recover more from the two men’s personal assets would result in higher legal fees and lesser D&O policy recovery, according to Voyager.
Ehrlich and Psaropoulos could not immediately be reached for comment.
Crypto exchange platform FTX won a bankruptcy auction for Voyager’s assets last month.
Voyager plans to sell its firm to FTX for $1.42 billion after rejecting an earlier FTX proposal as a “low-ball deal disguised up as a white knight rescue.”
The FTX sale and the 3AC loan settlements must be approved in bankruptcy court.
The case is In re: Voyager Digital Holdings Inc., U.S. Bankruptcy Court for the Southern District of New York, No. 22-10943
Kirkland & Ellis’ Joshua Sussberg, Christopher Marcus, and Christine Okike represented Voyager.
A Former Executive From Celsius Has Joined Jpmorgan to Lead Their Crypto Policy Efforts
Original Source: Former Celsius Exec Joins JPMorgan as New Crypto Policy Head
JPMorgan CEO Jamie Dimon may term cryptocurrencies like Bitcoin “decentralized Ponzi schemes,” but this hasn’t stopped the world’s largest investment bank from appointing a new head of digital assets regulatory policy.
Aaron Iovine, who held a similar job at the now-bankrupt crypto loan startup Celsius, joined JPMorgan, according Bloomberg Law.
Iovine’s LinkedIn profile claims he worked at Celsius between February and September after roughly three years at a crypto-friendly New Jersey financial services company.
He will apparently work with JPMorgan’s regulatory affairs group led by Sharon Yang, a former deputy assistant secretary for international financial markets at the Treasury Department.
Decrypt has reached out to JPMorgan and Iovine for comment but hasn’t heard back as of this writing.
JPMorgan and crypto
Iovine’s appointment came less than a month after JPMorgan CEO Jamie Dimon lashed out at cryptocurrencies, calling them “decentralized Ponzi schemes”
This wasn’t the first time Dimon has looked into crypto.
The 66-year-old entrepreneur first spoke about Bitcoin in January 2014, before the collapse of Mt. Gox. He said the world’s greatest digital asset was “a poor store of wealth” and that the cryptocurrency “can be copied over and over.”
Over the years, Dimon has termed Bitcoin a “fraud” and “fool’s gold,” yet in 2019, JPMorgan created its own U.S.-dollar pegged stablecoin named JPM Coin.
The bank allows wealth management clients to acquire Bitcoin, Ethereum, Bitcoin Cash, and Ethereum Classic as well as shares in Grayscale Bitcoin Trust (GBTC).
JPMorgan also posted a digital assets counsel position with its corporate and investment bank in New York this month. The successful applicant will be responsible for a wide range of duties, including advising on regulatory and compliance issues, daily business support, and documentation issues related to the bank’s digital assets initiatives.
Summary of today’s Bitcoin and Cryptocurrency news
Overall, Nubank has previously entered the cryptocurrency market via its Nucripto platform, which allows for the trade of various tokens such as bitcoin and ether. The exchange, which It It uses technology developed by blockchain infrastructure firm Paxos, surpassed 1 million users in July, just one month after its debut.
On the other hand, last month, a bankruptcy auction for Voyager’s assets was won by FTX, a cryptocurrency exchange platform. After rejecting an earlier FTX offer as a “low-ball deal dressed up as a white knight rescue,” Voyager has decided to sell its firm to FTX for $1.42 billion. Prior to the closing of the FTX transaction and the settlement of the 3AC loans, bankruptcy court approval is required.
Lastly, Iovine worked at Celsius between February and September after almost three years at crypto-friendly Cross River in New Jersey. He will apparently work with JPMorgan’s regulatory affairs group led by Sharon Yang, a former Treasury Department deputy assistant secretary.
