BnkToTheFuture

Banking is ‘slowly dying’ — Former TradFi execs on reasons for joining crypto

June 22, 2023 Coin Telegraph

BetaCarbon

Cointelegraph spoke to former senior executives in traditional finance who've made the move to crypto. Would they ever go back?

Despite plenty of regulatory action in the United States and an ongoing crypto winter, former TradFi executives, now in crypto, said there’s no desire to return to their old banking lives.

Instead, several former traditional bankers told Cointelegraph they remain bullish about the industry's future and love the fact they can actualize real innovation.

Lisa Wade, CEO of DigitalX, is one such executive, having pivoted to crypto in December 2021. She was once the head of innovation and sustainability at National Australia Bank (NAB), one of Australia’s Big Four banks.

DigitalX Funds Limited (ASX:DCC) announced that it has recruited Lisa Wade (she/her) Wade as its new Chief Executive Officer.#executiveleadership #citi #natwest #nab https://t.co/lxORT3KDJp
— Finance Magnates (@financemagnates) December 23, 2021

Wade told Cointelegraph that the crypto industry provides her with greater freedom to take innovative risks compared to the banking sector.

“It is becoming very obvious Web3 financial rails are the future — it is hard to innovate internally so those of us with a fire in our bellies are jumping ship.”

Wade holds the belief that crypto will witness widespread adoption in the coming years, stating that “like ESG, this will be mainstream in 10 years or sooner.”

She added that she moved over to the crypto industry to “build something great […] in a way that a bank couldn’t.”

Similarly, Guy Dickinson, the CEO of carbon trading platform BetaCarbon, moved away from a lucrative executive banking role in 2022 as the former treasurer of HSBC Australia.

“I moved into the Web3 space as the carbon credit and environmental markets space was not easily accessible and Web3 provided access to the market,” he said.

I left my engineering job at a TradFi company in 2017 to professionally work in the crypto space. My colleague turned to me when I resigned and said “Remember, quitters never win and winners never quit.” No hard feelings, but I think about your stupid statement often, Steve
— Malcolm (@mxlcolm) February 3, 2022

For Dickinson, the motivation behind the move wasn’t driven by money, but rather by a quest for personal fulfillment.

“It is not more lucrative; it is however far more satisfying,” he said, adding that jobs in traditional finance are not as safe as they once were:

“The banking industry is slowly dying. Constant layoffs and technological efficiencies render many professional service roles at risk. A senior banking official always has a target on his back in the current landscape.”

Simon Dixon, CEO of investment platform BnkToTheFuture, told Cointelegraph he actually attempted to create a traditional bank in 2011 before building a “regulated crypto securities business.”

Dixon said when he did his research into creating a traditional bank, he found out it was actually a massive risk:

“When we applied for a license, the regulators told us we had to store our funds in another fractional reserve bank and that it’s only profitable if we leverage client funds like all banks.”

Later that year, Dixon discovered Bitcoin (BTC) and took an interest in the fact that “funds are owned in self-custody, spent peer to peer and backed by full reserve math and code.”

TradFi executives have been making their way over to crypto for years now.

According to a Fortune report published in July 2022, two JPMorgan executives, Eric Wragge and Puja Samuel, resigned to pursue a career in the crypto industry.

Wragge, previously a managing director at JPMorgan, made the decision to join Algorand (ALGO) as its head of business development and capital markets.

Samuel, who served as head of ideation and digitalization at JPMorgan, took on the position as head of corporate development at Digital Currency Group.

Magazine: Peter McCormack’s Real Bedford Football Club puts Bitcoin on the map

Celsius wants to extend the deadline for claims as lawyer fees mount

December 29, 2022 Coin Telegraph

BnkToTheFuture

Administrative expenses from the bankruptcy proceedings have already topped $53 million, and continued delays are chipping away at Celsius’ estate.

Bankrupt crypto lender Celsius Network is planning to file a motion that would extend the deadline for users to submit their claims by another month.

The crypto community has started to grow impatient, noting that Celsius’ lawyer fees have continued to stack up and are eating away at the lender's estate.

In a Dec. 29 tweet, Celsius announced that it would seek to extend the current deadline for claims from Jan. 3 to early February.

The bankruptcy court is set to hear the motion on Jan. 10, and according to Celsius, the Jan. 3 deadline will be extended until at least then.

Celsius is preparing to file a motion later this week requesting an extension of the bar date, which is the deadline to file a claim, from January 3, 2023, until early February.
— Celsius (@CelsiusNetwork) December 29, 2022

The claims process allows creditors who believe they have a right to payment to file claims during bankruptcy proceedings. Celsius’ creditors had made over 17,200 claims as of Dec. 29.

However, Celsius’ creditors appear antsy as Celsius’ administrative fees have continued to rack up since it first filed for bankruptcy in July. A Dec. 27 Financial Times report noted that the fees charged by bankers, lawyers and other advisers in the bankruptcy case had already reached $53 million.

As an example, a Dec. 15 fee statement from one of the law firms representing Celsius, Kirkland & Ellis, requested a fee of over $9 million for work done during the months of September and October.

In comparison, only $44 million has so far been earmarked by Celsius to be returned to customers. This money belongs to users who only ever held funds within the Custody Program, and represents a minority of the $4.72 billion of user deposits held by Celsius.

Some in the crypto community have been unimpressed with the latest postponement in the proceedings, alleging that it’s yet another “delay tactic.” For example, one user noted “Stop wasting time stop extending, just go on with proceedings and give me my money back!!!!” while another simply said: “Stop wasting time and my money.”

So the lawyers get millions but I wonder what us small fry folks get?
— Chris (@browncoat1of1) December 29, 2022

Global investment platform BnkToTheFuture founder Simon Dixon, who has been an active voice in the Celsius bankruptcy proceedings, noted in a Dec. 23 tweet that by the time users are able to get their funds back from Celsius, they should only expect around to receive around hal what they put in.

Prepare yourself for 50% in 6 months with #Celsius Chapter 11 to manage your expectations | Focus on your family over XMas & rebuilding in 2023. https://t.co/E0WeDuPem0
— Simon Dixon (@SimonDixonTwitt) December 23, 2022

At the behest of Celsius, the U.S. trustee, and the unsecured creditors’ committee, judge Martin Glenn appointed fellow judge Christopher Sontchi to be a “fee examiner” on Oct. 20. His job is to negotiate and approve the fees set by lawyers and other professionals in the case.

The fee examiner is also being paid out of Celsius’ estate, with the latest fee statement submitted on Dec. 21 requesting just under $20,000 for work done during November.

Getting funds out of FTX could take years or even decades: Lawyers

November 21, 2022 Coin Telegraph

Bankruptcy

The complexities that come with digital assets, cross-border insolvency and competing jurisdictions could add years to the timeline.

While investors are eager to know when they will be able to get their funds back from the now-bankrupt crypto exchange FTX, insolvency lawyers warn it could take “decades.”

The crypto exchange, along with 130 affiliates filed for Chapter 11 bankruptcy protection in the United States on Nov. 11.

Insolvency lawyer Stephen Earel, partner at Co Cordis in Australia said it will be an “enormous exercise” in the liquidation process to “realize” the crypto assets then work out how to distribute the funds, with the process potentially taking years, if not “decades.”

This is due to the complexities that come with cross-border insolvency issues and competing jurisdictions, he said.

Earel said unfortunately FTX users are in the queue with everyone else including other creditors, investors and venture capital funders, warning those that have made “crypto to crypto trades” may not see a distribution “for years.”

Simon Dixon, founder of global investment platform BnkToTheFuture who has been an active voice in the Celsius bankruptcy proceedings noted that anyone who holds funds on FTX will become creditors, with a creditors committee to be established to represent their interests.

He stated that the remaining assets will eventually be available to creditors depending on what remains after bankruptcy costs.

These costs could be high given the time required to recover funds, according to Binance Australia CEO, noting that this means more legal and administrative fees that eat into customers' return.

Meanwhile, Digital Assets Lawyer Irina Heaver, Partner at Keystone Law in UAE told Cointelegraph that there are users in the Middle-East also feeling the pain from the FTX collapse, as the region was the third largest user base of FTX.

Heaver explained that as FTX already received a license and regulatory supervision from the newly formed Dubai’s Virtual Assets Authority regulator (VARA), it presents major complications for the regulators as they already have a “huge regulatory failure” on their hands.

Heaver said only “when and if” FTX moves into Chapter 11 bankruptcy procedures, creditors’ rights will be overseen by the legal system, with courts and bankruptcy administrators involved.

Heaver’s advises people with substantial losses due to the FTX collapse to get legal advice and get together with “other injured parties.”

The recent FTX collapse has had significant consequences for investors across the world. It was recently revealed that the bankrupt cryptocurrency exchange may have “more than 1 million creditors.” According to a Reuters article published on Nov. 20 the bankrupt cryptocurrency exchange owes its biggest 50 creditors “nearly $3.1 billion.”

Celsius bankruptcy judge gives the nod for independent examiner probe

September 15, 2022 Coin Telegraph

BnkToTheFuture

Following a motion in August, U.S. Bankruptcy Judge Martin Glenn has signed off on a request to appoint an examiner in the Celsius case.

A federal judge overseeing crypto lender Celsius’ bankruptcy case has given the green light for the motion to appoint an independent examiner to investigate aspects of Celsius’ business.

In an order dated Wednesday from the United States Bankruptcy Court of the Southern District of New York, the order notes that the examiner’s investigation will look into Celsius’ digital assets, tax payment procedures and the current status of its mining business following calls for greater transparency.

The examiner will also look into why there was a change in account offerings in April, resulting in some customers being moved from the Earn Program to Custody Services while others were moved to a “Withhold Account.”

The U.S. Trustee had previously referred to a lack of transparency around these accounts, with customers unaware of who holds what account and why. This may be important given Celsius had asked the court to return assets to “custody clients,” but not its “earn-and-borrow” clients.

A motion to appoint an examiner originally came from an Aug. 18 filing from the United States Trustee handling Celsius’ bankruptcy proceedings, citing “significant transparency issues” surrounding Celsius’ business operations.

However, BnkToTheFuture CEO Simon Dixon said the scope of the examiner’s investigation was pared down since the motion was initially filed so that Celsius doesn’t run out of money.

He also noted that Celsius Network CEO Alex Mashinsky would need to provide information on his withdrawals from the platform before the freeze.

CELSIUS HEARING LIVE; @CelsiusUcc legal council going over the examiner motion & reducing the scope so that @CelsiusNetwork doesn't run out of money. They said @Mashinsky to provide information on his withdrawals from the platform before the freeze.
— Simon Dixon (Beware Impersonators) (@SimonDixonTwitt) September 14, 2022

The latest order also outlined that the scope of the investigation could be expanded if deemed necessary, but would require consultation with Celsius and the official committee of unsecured creditors.

Celsius will be required to produce all documents the examiner “reasonably deems relevant to perform the Investigation, though Celsius will have grounds to reject a request, which would then be decided by the courts.

Once the identity of the examiner has been approved, they will have seven business days to produce a work plan and budget.

The court will then have seven days to approve these, after which the examiner will have 60 days to complete their investigation.

Celsius filed for Chapter 11 bankruptcy and froze withdrawals in July. Since then, some depositors have been told their funds will be released, but most are still unable to access their assets with no guarantee they will ever receive them.

It seems as though the Examiner will be very busy once they are appointed, with Dixon also tweeting that the U.S. Trustee already has forty parties ready to be interviewed.

CELSIUS HEARING LIVE; @CelsiusUcc legal council opposed to Trustee takeover as they think it may lead to liquidation which is undesirable. Examiner preferred. US Trustee has 40 parties ready to interview for examiners next week.
— Simon Dixon (Beware Impersonators) (@SimonDixonTwitt) September 14, 2022

Keys lost in the Vauld: Singapore crypto exchange freezes withdrawals

July 4, 2022 Coin Telegraph

BnkToTheFuture

Not your keys, not your coins. Crypto CeFi lender Vauld has suspended "all withdrawals, trading and deposits."

Crypto contagion claims another casualty. In a statement, Singapore-based crypto exchange Vauld has made the “difficult decision to suspend all withdrawals, trading and deposits on the Vauld platform with immediate effect.”

In what appears to be a run on the crypto bank, the group intends to “apply to the Singapore courts for a moratorium,” as Vauld customers have tried to withdraw an “excess of a $197.7 million since 12 June 2022.”

The decision to suspend withdrawals is a screeching U-turn. Reportedly, Vauld boasted $1 billion assets under management in May this year, while on June 16, a company email stated that business would “continue to operate as usual.” Just 18 days later, the company is exploring “potential restructuring options.”

On June 21st, CEO, Darshan Bathija tweeted that Vauld had cut their team by 30%–the first sign that the company was under duress. Separately, Bathija also stressed that Three Arrows Capital (3AC) was an early investor in the company, but had exited in late 2021:

We’ve sent an email about this. We do not have direct exposure to 3AC or Celsius.

Full disclosure: 3AC was a seed investor in us since 2020, who we facilitated a complete exit in Dec 2021.
— Darshan Bathija (@darshanbathija) June 23, 2022

The statement from Vauld suggests that "volatile market conditions, the financial difficulties of our key business partners inevitably affecting us, and the current market climate," were reasons behind their decision to freeze customers' money.

Nonetheless, 3AC’ demise is cited and considered a significant contributor to capitulation among CeFi (Centralised Finance) companies. 3AC had substantial exposure to Terra (originally Luna, now LUNC) which blew up in spectacular fashion reducing 3AC’s holdings from $560 million to $670.

Indeed, Vauld follows in the footsteps of large CeFi platforms such as Celsius, Voyager, and BlockFi. Voyager explicitly blamed 3AC for their recent decision to freeze customers’ funds; BlockFi is close to a $240 million deal with FTX following financial difficulties, while plans to salvage Celsius from bankruptcy were recently shared by lead investor BnkToTheFuture.

For crypto investigative journalist Otterooo, Vauld’s strife is more motivation for investors to hold their own keys. Holding onto one’s private keys is a “guiding principle” of crypto investing: if you do not hold your own keys, you do not own your coins.

VAULD closes withdrawals, undergoing debt restructuring

another cefi lender bites the dust

its a broken business model

either withdraw today or spend years battling lawyers for YOUR MONEY

DON'T BE STUPID ANON, withdraw to cold wallet NOWhttps://t.co/X3H8iLCuYi pic.twitter.com/hS2vv2IBJo
— otteroooo (@otteroooo) July 4, 2022

As Cointelegraph reported in a March 2021 press release, Vauld boasted double-digit interest rates on popular stablecoins such as Tether (USDT) and DAI, while Bitcoin (BTC) interest could reach 7.23%. In effect, in “lending” your cryptocurrency tokens to Vauld, you would generate a yield; however, the company effectively owns your assets.

Vauld's interest rates from March 2021. Source: Vauld

The rates were competitive with lenders and interest bearers such as Celsius, BlockFi, and Nexo–one of which continues to function. Nexo tweeted that there may be delays to customer transactions due to Independence Day in the United States.

BnkToTheFuture unveils 3 proposals to rescue Celsius from oblivion

July 1, 2022 Coin Telegraph

BnkToTheFuture

BnkToTheFuture's three proposals include two different ways to restructure and relaunch the firm, or an option to co-invest in the firm with a bunch of Bitcoin whales.

Celsius’ lead investor BnkToTheFuture has outlined three proposals to save Celsius from bankruptcy while finding a good outcome for shareholders and depositors with funds stuck on the platform.

Shared on Twitter by BnkToTheFuture CEO Simon Dixon on June 30, the three distinct proposals include either two options of restructuring and relaunching Celsius, or potentially co-investing in the platform alongside wealthy Bitcoin Whales.

“Proposal #1: A restructuring to relaunch Celsius and allow depositors to benefit from any recovery through financial engineering.

Proposal #2: A pool of the most influential whales in Bitcoin to co-invest with the community.

Proposal #3: An operational plan that allows a new entity and team to rebuild and make depositors whole.”

Dixon previously referred to “financial innovation” being needed to be applied to Celsius, similar to the issuance of equity debt tokens like in the case of Bitfinex in 2016, which were designed to represent $1 of debt per token.

“We believe all attempts should be made to make depositors whole in order to maintain shareholder value,” the team wrote, adding it will be calling for a shareholder meeting that “legally cannot be ignored by the Celsius board.”

“Bnk To The Future Capital SPC holds over 5% of Celsius shares and therefore we believe that this allows us to call a shareholder meeting as part of our statutory shareholder rights that legally cannot be ignored by the Celsius board.”

#DepositorsFirst Celsius Recovery Plan https://t.co/YkGy3N0Gwd
— Simon Dixon (Beware Impersonators) (@SimonDixonTwitt) June 30, 2022

BnkToTheFuture also suggested that after first submitting these proposals to Celsius and its advisors, is it now looking to “apply pressure” to the firm after getting “worried that time was running out” with its lack of a distinct plan of action. These sentiments were also echoed by Dixon in a Digital Assets News Interview on the same day:

“You have to move really fast, because the longer you go on, the more FUD comes out, bad PR comes out, more predatory offers come out, the more the community stops believing in what they originally believed in.”

Celsius’ users have been unable to withdraw assets from the platform since June 13 amid the firm’s ongoing liquidity issues, and there are fears that users may never get their funds back if the company were to go bankrupt.

Celsius may have its own solution

In a blog post from July 1, Celsius stated that it is working as fast as it can to stabilize its liquidity problems so that it can be “positioned to share more information with the community.”

While the firm did not reveal much about what this entails, Celsius stated that it is exploring options to protect its assets such as pursuing strategic transactions as well as a restructuring of our liabilities, among other avenues.”

“These exhaustive explorations are complex and take time, but we want the community to know that our teams are working with experts from many different disciplines,” the blog post read.

FTX walked away from Celsius deal over bad financials

Reports surfaced on June 30 that Sam Bankman-Fried’s crypto exchange FTX recently walked away from a deal to purchase Celsius after finding a $2 billion hole in the company’s finances.

According to two unnamed sources close to the matter, FTX had entered talks with Celsius to either provide financial support or acquire the firm outright, however apart from having $2 billion an account for Celsius was said to be difficult to deal with.