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

December 29, 2022 Coin Telegraph

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.

Australian CBDC receives unexpected interest but could hurt banks: RBA

December 8, 2022 Coin Telegraph

Coin Telegraph

The pilot "eAUD" program is unique in that the Reserve Bank of Australia has not proposed use cases, and has received numerous suggestions from the industry.

A Central Bank Digital Currency (CBDC) pilot program in Australia has received more than 140 use case proposals from the finance industry, but the Reserve Bank of Australia (RBA) warns that it could displace the Australian dollar and result in people avoiding commercial banks entirely.

The RBA released a speech on Dec. 8 to be given by Assistant Governor Brad Jones at a central bank conference held from Dec. 8 to Dec. 9 local time, in which Jones speaks at length about what effect a CBDC could have on the Australian economy.

Jones notes that the RBA has been surprised by the industry interest they have received since releasing a white paper on Aug. 9, with over 80 financial entities proposing use-cases covering many areas such as e-commerce, offline, and government payments.

The team working on the pilot “eAUD” program is working out which of the proposed use-cases to take into its pilot phase early next year, and is expecting to publish a report on the project around the middle of 2023.

Jones also discusses the potential risks that are associated with an Australian CBDC, and points to liquidity issues and other issues the banks could face if a CBDC becomes the preferred source of holdings.

For example, with deposits of Australian residents such as savings accounts now making up over 60% of total funding for their banks, enough Australians choosing a CBDC over the Australian dollar could result in banks not having sufficient capital to lend to consumers, which in turn would make it harder for the RBA to transmit monetary policy, he said.

*Funding composition of banks in Australia. Source: RBA*

Jones also notes that Australians preferring to hold their funds in a “risk-free'' CBDC could lead to bank runs, with Australians withdrawing deposits en masse.

However, the Assistant Governor suggests CBDCs could also provide Australians with many benefits, such as privacy benefits — arguing that the central bank has no incentive to use personal data which can be exploited by private organizations — and could help safeguard monetary sovereignty that may be lost if a stablecoin or foreign CBDC fills a domestic vacuum.

He also points to the potential for offline transactions to increase the resilience of existing payment systems, in addition to increased efficiency and cost reductions for end-users.

Jones finished the speech by adding that Australians should be confident the Reserve Bank will continue to issue banknotes “for as long as they place value on them as a public good.”

Critics are often concerned that the introduction of CBDCs will end with banknotes being phased out however, a fear which is given credence by Nigeria’s move to further limit cash withdrawals on Dec. 6 following the issuance of the eNaira.

Swyftx cuts 40% of staff as it braces against ‘worst-case scenario’

December 5, 2022 Coin Telegraph

Alex Harper

The Australian crypto exchange said while it had no exposure to FTX, it was "not immune" to its fallout.

Australian-based crypto exchange Swyftx has laid off a total of 90 staff members, which it said was in preparation for a “worst-case scenario” caused by the fallout of FTX and a potential fall in global trading volumes next year.

The news was shared by Swyftx co-CEO Alex Harper in a Dec. 5 statement, noting that despite not having any exposure to FTX, the company was “not immune” to the fallout over the bankrupt exchange, adding:

“As a result, we have to prepare in advance for a worst-case scenario of further significant drops in global trade volumes during H1 next year and the potential for more black swan-type events.”

A Swyftx spokesperson told Cointelegraph that the 40% staff cut was also in anticipation of a fall in trading volumes, despite these figures increasing in November.

“We have let go of staff in expectation of a potentially sharp fall in global trade volumes in the first half of 2023 and further aftershocks from FTX’s collapse," said the spokesperson.

Harper in the statement said the tough decision was necessary in order to get through the prolonged crypto winter:

“Our business is uniquely well-positioned to weather events like FTX [...] But as much as we might wish it, we do not exist in isolation from the market and that’s why we are acting fast and acting early by significantly reducing the size of our team.”

The Swyftx spokesperson reiterated that the company’s balance sheet remained intact despite it being indirectly affected by the FTX collapse, adding:

“Just for clarity, I should say we have no exposure to FTX. We hold customer funds 1:1 and don’t lend customer assets to third parties.”

Harper also revealed that his company would become more risk-averse in its business decisions and that the staff cuts would ease operational costs on its balance sheet.

“Swyftx maintains strong revenue but we’re not willing to take any risks post-FTX and are being exceptionally cautious about costs next year,” added the spokesperson, who also noted that priority areas like security, compliance and customer support services wouldn’t be affected.

As for who was laid off, a Swyftx spokesperson told Cointelegraph that the firm’s research and development team was most affected by the staff cuts.

The latest staff layoffs follow another wave of layoffs in Aug. 2022, which saw 74 employees leaving the firm, accounting for 21% of its staff at the time.

In August, Harper said the company “grew too fast” in 2021 when the market peak, but “we are simply far larger than we need to be to operate and grow.”

Digital Surge halts withdrawals

Meanwhile, another Australian-based trading platform Digital Surge, which halted withdrawals on Nov. 16, has been another company in Australia impacted by the FTX contagion.

The crypto exchange confirmed on Nov. 16 that it has suspended deposits and halted withdrawals, promising customers they’d give more details within two weeks.

However, as at the time of writing, the company has yet to provide any further information publicly.

Cointelegraph has reached out to Digital Surge for comment but has not received an immediate response.

2 More Crypto Platforms Pause Withdrawals as Liquid Global and Salt Lending Cite Exposure to FTX

November 15, 2022 Bitcoin.com

FTX website comes back online with message advising against deposits

November 10, 2022 Coin Telegraph

Alameda Research

Neither FTX CEO Sam Bankman-Fried nor any FTX official has provided its users with clarity as to why FTX’s website was taken down.

Financially-troubled crypto exchange FTX has brought its website back online following a period of intermittent downtime — with the trading platform now sporting a banner confirming withdrawals are halted and advising users against depositing.

The FTX website returned online at approximately 9:00 pm UTC on Nov. 9, after encountering five separate periods of network downtime spanning over two hours, according to the “IS IT DOWN OR JUST ME” website.

The crypto community on Twitter has also noticed a new bright red banner that can be seen throughout the website that reads:

“FTX is currently unable to process withdrawals. We strongly advise against depositing.”

*FTX's notification on deposits and withdrawals on the trading platform. Source: FTX.com*

A pinned message on the official FTX Telegram Group on Nov. 8 also confirmed the halting of withdrawals, without any estimates about when they would return.

"We are waiting for confirmation from our team to ramp it up. Right now we dont have an ETA but surely will communicate it as soon as we have it," a member of FTX support staff wrote in the message.

Attempting to sign up for a new account on the website also comes with an alert that “signups are paused” at this current time, Cointelegraph has discovered.

This suggests that deposits, while “strongly advised against,” are only accessible to those who have existing accounts on the trading platform.

Meanwhile, two websites linked to the crypto exchange including Alameda Research and FTX Ventures remain down at the time of writing.

It comes amid an ongoing liquidity crisis being faced by the crypto exchange.

A Nov. 9 report from the Wall Street Journal claims that the exchange is facing a shortfall of $8 billion, and is unable to meet withdrawal demands without emergency funding.

Binance initially signed a non-binding letter of intent to buy out the embattled exchange but pulled out less than 48 hours later, citing the mishandling of customer funds and alleged U.S. agency investigations as the reasons for its change in decision.

Google search results for “FTX website” also saw a large spike over the last few hours following the reports that the FTX website was intermittently going down, according to Google Trends: