Celsius has submitted a motion requesting that a portion of the total $225 million that is being detained in the "Custody Program and Withhold Accounts" be returned to the owners for $50 million.
The financially troubled cryptocurrency lender Celsius Network has only yesterday submitted a move to the United States Bankruptcy Court requesting permission to enable consumers to withdraw digital assets that are currently stored in specific accounts. However, there is a catch: the motion will only apply to Custody and Withold Accounts, and only for assets that are being held in custody that are valued at $7,575 or less.
The motion that will be applied
Custody and Withhold Accounts, which operate as storage wallets, have been designed by Celsius in such a manner that users are still able to legally claim ownership of bitcoin stored in such accounts. This ownership does not, however, extend to assets that are stored in accounts that provide yearly crypto earnings or lending services (Earn and Borrow accounts).
A variety of reactions have been received from members of the community in response to the motion. Some creditors are pleased that Celsius Network has acknowledged that the monies held in its "Custody Program and Withhold Accounts likely do represent the property of their estates."
However, according to a tweet that was posted by the CEO of BnkToTheFuture.com, Simon Dixon, the community feels that the amount Celsius intends to release is a far smaller amount than what is fair.
Why is the motion being set?
As Dixon points out, just $50 million of the $210 million held by 58,300 customers in custody accounts is due to be released. Furthermore, the released sum will not include any monies beyond $7,575 that were moved from the Earn Program and the Borrow Program into Custody and Withhold accounts.
Celsius is unable to avoid transferring sums to creditors that are less than the "statutory cap" of $7,575, as specified under section 547(c)(9) of the Bankruptcy Code. This provision means that Celsius must comply with requests from creditors to transfer amounts that are less than $7,575.
In addition, the statement states that as of Monday, about 5,000 clients retained a total of $15.33 million in their Withhold Accounts.
The attorneys for Celsius have made a distinction between "Pure Custody/Withhold Assets" and "Transferred Custody/Withhold Assets" in order to arrive at the $50 million figure. "Pure" assets are assets that have not been transferred from the Earn or Borrow Programs, and "Transferred" assets are assets that have been transferred. The distribution of this cash has not been warmly accepted by the residents of the community.
In reaction to a tweet that Celsius sent on Friday on Twitter, a large number of members of the community have made it clear that they demand nothing less than the return of all of their monies. According to Celsius, assets that are secured under the Earn and Borrow Programs are most likely part of their estates. Transferring these assets to Custody or Withholding accounts is referred to as "a transfer of the Debtors' property to customers," and Celsius maintains that this is the case.
Final Thoughts
The motion was filed just one day after an ad hoc group of sixty-four holders of custodial accounts filed a complaint alleging that the terms of use for the accounts state that title to custody assets "always remains with the user."
The group is attempting to recover assets valued at more than twenty-two and a half million dollars. The motion is going to be heard on October 6, and in the meanwhile, users' assets have been kept hostage on the platform for more than two months. The hearing is slated to take place on October 6.
According to allegations that were made public on Friday, the Biden administration has said that the US government agencies need to increase their enforcement efforts in the digital asset industry and uncover loopholes in cryptocurrency legislation.
Even though the White House did not express support for a digital dollar, the Treasury Department will head up a committee of government departments that will investigate the possibility of a central bank issuing its digital currency. In response to an executive order that US Vice President Joe Biden signed earlier this year "on Ensuring Responsible Development of Digital Assets," these reports have been compiled.
What was the purpose of the report?
The reports urged regulators such as the Securities and Exchange Commission (SEC) and the Commodity Futures Trading Commission (CFTC) to release guidelines and regulations for potential consequences associated with the digital asset ecosystem. These risks include the possibility that cryptocurrencies could be used in illegal activities such as money laundering or fraud.
The White House also said that Vice President Joe Biden will explore whether or not to seek Congress to alter the Bank Secrecy Act (BSA) to apply to digital asset service providers. These service providers include cryptocurrency exchanges and platforms for non-fungible tokens, or NFTs. The BSA mandates that financial institutions disclose any transactions they deem to be suspicious to the Treasury.
Other steps were taken by the government
In addition to this, Biden will review the suggestions that agencies make for the establishment of a government framework to supervise non-bank payment providers. The value of cryptocurrencies soared beyond $3 trillion last year, but the industry has struggled in recent months as investors have withdrawn out of riskier assets owing to increasing interest rates.
This has led to a decline in the value of cryptocurrencies. Without the appropriate level of control, cryptocurrencies pose a threat to both the country's financial stability and its national security, according to Brian Deese, head of the National Economic Council. If digital assets are going to play the role that the government thinks it can in stimulating innovation and boosting economic and technical competitiveness, then regulation of cryptocurrencies is required.
The report is a summary
According to a series of stories that were released on Friday, the administration of Vice President Joe Biden is reportedly pushing for further regulation of cryptocurrencies and wants agencies to step up their enforcement efforts against digital asset enterprises that cause damage to consumers. Both the Securities and Exchange Commission (SEC) and the Commodity Futures Trading Commission (CFTC) are urged by the administration to "aggressively pursue investigations and enforcement actions against illegal acts in the digital assets area" in the reports.
The findings also recommend that the Consumer Financial Protection Bureau (CFPB) and the Federal Trade Commission "redouble their efforts" to monitor consumer complaints and detect abusive activities in the industry. These recommendations can be found in both of the reports. The ramifications of a central bank digital currency (CBDC) will be studied by an interagency committee, and the Treasury Department will serve as the group's leader, according to a recent announcement.
The new framework is a response to an executive order that Vice President Biden issued in March. In that order, he requested that government departments investigate the threats and opportunities involved with the rapidly developing cryptocurrency industry.
Final Thoughts
According to a fact sheet provided by the White House, one of the many objectives that were listed in the report is that the White House is contemplating whether or not to call on Congress to alter the Bank Secrecy Act (BSA) and prohibitions against unlicensed money transmission to apply expressly to digital asset service providers, digital asset exchanges, and nonfungible token (NFT) platforms. According to the White House, the United States Department of the Treasury will finish an illicit finance risk assessment on decentralized finance by the end of February 2023, and an evaluation on non-fungible tokens will be finished by July 2023. According to the White House, Vice President Biden is also taking into consideration agency proposals to build a federal framework to regulate nonbank payment providers.
Through the use of the Beldex blockchain, Beldex Labs is collaborating with the decentralized platform Geometry Labs. The platforms want to solve concerns such as privacy in blockchain with this agreement, which will also allow the creation of privacy solutions that will assist users in protecting their data while it is stored online.
What Does Beldex (BDX) Mean?
The Beldex network is an ecosystem that is decentralized and built on privacy, and it was designed so that users may engage in anonymous and secure chat and transactions. By providing financial incentives to network validators, the Beldex network ensures that the digital footprints left by consumers of internet services are concealed. The Beldex network's native cryptocurrency is denoted by the ticker symbol BDX.
The objective of the Beldex platform, as stated in the whitepaper, is to provide a workable answer to the issues of scalability and privacy that arise within the context of the blockchain technology network. When it comes to the mining process, Beldex makes use of master nodes so that it may be scaled. The master nodes are servers that confirm transactions in the network by locking currency. They do this by using the proof-of-stake idea.
The Beldex platform makes use of Monero's source code, in addition to a mix of ring signatures, stealth addresses, and RingCT, to protect users' anonymity while they are using the network.
The new partnership announcement
Beldex Research Labs, which is the research arm of the Beldex project, has announced a partnership with Geometry Labs, which is a decentralized finance and cryptography research and development lab. The purpose of this partnership is to increase the capacity of the Beldex blockchain so that it can accommodate the development of applications like BChat over the network.
The platforms want to solve concerns such as privacy in blockchain with this agreement, which will also allow the creation of privacy solutions that will assist users in protecting their data while it is stored online. To be more specific, the mission of Beldex is to develop platforms that will contribute to the expansion of free expression and an open peer-to-peer economy. Although existing blockchains and the decentralized apps (dApps) that have been created on top of them are believed to be autonomous, they do not provide the necessary level of anonymity to keep gatekeepers at bay.
Geometry Labs intends to provide technical consulting services in the areas of cryptography and protocol design, methods of scalability, and applications for decentralized and private protocols. According to Codeman Crypto, Chief Technical Officer of Beldex, as a prelude to adding EVM compatibility, Beldex is working on the implementation of a blockchain network to improve the synchronization of nodes and storage efficiency by utilizing cryptographic accumulators. This is being done in preparation for the addition of EVM compatibility.
Final Thoughts
The implementation of apps like BelNet, Beldex Browser, and Beldex Privacy Protocol will go more smoothly as a result of this. It is now using the Ring Confidential Transactions (RingCT) protocol to anonymize the sender and recipient identities, as well as the amount of value that is being moved, according to insights obtained from the Beldex network. The network asserts that it provides adequate anonymity with a ring size of 11, which is necessary to guarantee that the transactions cannot be linked to one another. On the other hand, the use of decoys in each transaction makes them cryptographically flexible. The Beldex team plans to grow the network by first validating the existing RingCT protocol and then implementing a proving system that does not need a setup to minimize the number of proofs and transactions. Beldex anticipates that its network will see an increase in the number of transactions that take place per second (TPS) as a result of the reduction in proof size, laying the groundwork for the addition of smart contract capabilities to it.
The majority of the cryptocurrency world is still buzzing with excitement after the successful completion of the Merge, which coincides with Ethereum's historic switch to proof-of-stake (PoS). The most significant improvement that Merge has brought about for Ethereum is a 99% decrease in its overall energy consumption.
"This moves Ethereum away from a proof-of-work (PoW) consensus and toward a proof-of-stake consensus," Prashant Kumar, founder, and CEO of weTrade said in an interview with FE Blockchain. "This makes the blockchain more energy efficient, increases scalability, improves the speed of computations, and reduces costs."
What are the effects of the ETH Merge?
The Ethereum community commemorated the successful transfer of the network to PoS by producing artwork and music during the Ethereum Merge. In addition, a non-fungible token (NFT) artist by the name of Beeple, who is also the creator of one of the most expensive NFTs that has ever been sold, recently published an illustration depicting a massive Ethereum logo that appears to be gradually emerging with the assistance of people who appear to be scientists.
Hashing power has surged by approximately 200% in the space of only the last 30 days as a direct result of the announcement of this merger. According to Sathvik Vishwanath, co-founder, and CEO of Unocoin, "the impact of this revelation on Ethereum price has been speculated on since the prices have been declining over the previous week by around 6%."
What does Buterin say about the Merge?
In a series of tweets, the co-founder of Ethereum, Vitalik Buterin, discussed the future of the blockchain. Buterin went on to describe a strategy that would bring the Ethereum smart contract blockchain to what he referred to as the "endgame." This approach is an incremental one that consists of five steps.
In addition to this, it should be mentioned that the Merge will use around 99.5% less energy compared to the previous approach. The issue of ether will drop dramatically once the proof-of-work network is no longer operational, which will increase the cryptocurrency's value. In general, the modification to the protocol will result in an improvement in how bitcoin is perceived and will attract a new group of individual and institutional investors. This information was provided by Swarup Gupta, the chief of financial analysis for the Economic Intelligence Unit (EIU).
Furthermore, musician Jonathan Mann offered a rundown of Ethereum's background for the audience. Rostin Behnam, chair of the US Commodity Futures Trading Commission (CFTC), stated that the switch to PoS take on the Ethereum blockchain may assist in lowering the energy consumption of cryptocurrencies. He also hinted that legislation would presumably still be obligated to address the problem. Despite this, he believes that the switch could help reduce the energy consumption of cryptocurrencies.
While this was going on, an Ethereum researcher by the name of Justin Drake estimated that the Merge will also result in a drop of 0.2% in the usage of power all around the globe. In the hours leading up to the incident, Buterin referred to Drake's forecast. The second key shift brought about by the conversion to PoS was the decrease in the quantity of ETH released as incentives for validators' labor to maintain the network. As a result of this development, ETH has become a deflationary asset.
Final Thoughts
According to Nischal Shetty, founder, and CEO of the cryptocurrency exchange WazirX in India, Ethereum is the "OG of smart contracts" and has been an important contributor to the development of the Web3 ecosystem. The official Twitter account for Dogecoin, which is presently the second-largest PoW cryptocurrency in terms of market value, has extended its congratulations to Vitalik Buterin, the co-founder of Ethereum, as well as to everyone else who participated in the Merge.
The Crypto market is an all-time volatile virtual space. For its random volatility, users face hurdles for long-term investment or trading. Users now need its best features along with stable rates. The term stablecoins create a bridge between the crypto and fiat world as their value is connected or pegged to more stable reference assets like other currencies or digital commodities.
Stablecoins are developed to reduce or balance the volatility of crypto. It acts as the store of value and digital money to facilitate day-to-day trade or exchanges.
One of the first successful stablecoins, Tether was launched in 2014. The idea of stablecoins came into global traction. The popularity of stablecoins increased remarkably over the years.
It is expected that hot wallets are linked to the internet. Wallets are the element of cryptocurrency exchanges.
The Treasury Department imposed sanctions on Tornado Cash last month due to the allegations of laundering more than $7 billion worth of virtual assets.
The Raising Moment :
In the year 2022, in the first quarter of the year, stablecoins got a 15% increase in the market. But on the other side, Terra Luna fell painfully at the same time. Overall, the crash of Terra Luna caused the loss of billions in the market. Then it raised questions about the stability of stablecoins. The market became conscious of its upcoming years. It helped in cutting out the existing bad actors in the crypto market and it educates the investors gradually.
It raised the shortcomings of algorithmic stablecoins along with awareness among investors and traders about the fundamentals of stablecoins. Additionally, algorithmic stablecoins are not backed by any authority component. The coins maintain their value pegged to fiat through complex algorithms.
Though, the coins are not stable logically. Because their price is counted by the supply and demand of investors. However, all other collateralized stablecoins like fiat-collateralized (Tether- USDT), Commodity- collateralized (Tether Gold- XAUT), and crypto-collateralized (Makers DAO’s Dai- DAI) stablecoins are more stable and safe for crypto investment options. Because they are always backed with stable reference digital assets. They also focus on regular audits ensuring that their reserves are balanced with the stablecoin circulation.
Stablecoins managed to retain the faith of investors and it succeeded to survive the crash due to its strong fundamentals. The stablecoins are not only just investment instruments, it is more than that.
Expectations From The Stable Coins :
These pegged coins have the potential to bring revolution to the finance industry by facilitating cross-border payments. The traditional process takes a few days to conduct the wire transfer. They also charge a heavy transaction fee on international transactions. But in the case of stablecoins, it can make these payments quickly in an affordable manner for users by reducing the transaction time and fee significantly.
Due to its huge potential, several governments worldwide are trying to explore ways of integrating and regulating stablecoins. Meanwhile, Japan has recently launched a stablecoin bill for investor protection. Additionally, there are ongoing discussions in regulatory bodies to bring an effective regulatory framework for stablecoins in the EU. It is the same scenario in countries like the UK and the US etc.
Present Scenario :
Nowadays stablecoins are becoming a major part of the crypto ecosystem. They are rapidly increasing their existence in the market. Though, other competitors are entering the stablecoin space.
Recently Tether announced to launch of a new stablecoin named GBPT, which is pegged to the British pound. Alongside, Shytoshi Kusama announced that the Shiba Inu family is also planning to bring their stablecoin. The future of stablecoins is expected to be very promising. But it depends on the factors like regulatory policies and legal acceptance globally.
