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Crypto Wealth Bolsters Real Estate Markets and Consumer Spending, Study Finds

Crypto Wealth Bolsters Real Estate Markets and Consumer Spending, Study FindsAs cryptocurrency becomes a significant part of American investment portfolios, its influence extends beyond digital transactions into tangible impacts on real estate markets and household spending, a recent study finds. Report Shows Cryptocurrency Wealth Adds ‘Meaningful Implications for the Real Economy’ The study, first reported on by Bloomberg, analyzes bank and credit card data from […]

‘BITSANITY’ — Records broken with $70B in volume for Bitcoin stocks, ETFs

US voters across 4 swing states oppose anti-crypto pres candidates: Coinbase

A poll of voters in New Hampshire, Nevada, Ohio and Pennsylvania found 55% would be less likely to vote for anti-web3 presidential candidate, said Coinbase.

Crypto exchange Coinbase says it will focus its "Stand with Crypto" campaign on nine states in the U.S., including four “swing states” with voters polled as less likely to choose anti-crypto presidential candidates.

The four “swing states” include New Hampshire, Nevada, Ohio, and Pennsylvania, which are just some of the states the crypto exchange is set to focus its “Stand with Crypto” campaign, it said in a Sept. 19 blog.

“Polling in the fall of 2022 showed that in the key states of NH, NV, OH, and PA, over half (55%) of voters stated that they would be less likely to vote for candidates who oppose crypto and Web3,” said Coinbase, citing survey data collected in a Morning Consult poll a year prior.

The October-published poll included 800 likely voters across the four states. Between 13-19% of respondents in the four states claimed to own cryptocurrency at the time of the polling.

Percentage of voters in the four swing states that own cryptocurrencies or nonfungible tokens. Source: Morning Consult

Coinbase also cited that in Nevada, Ohio and Pennsylvania in particular, more than 40% of crypto owners use blockchain to remit money overseas to help family members pay for food, housing and health care for far less than what banks typically charge with international wire transfers.

Coinbase attempts to mobilize crypto users

The highlighted research comes amid an ongoing “Stand With Crypto” campaign, a 14-month-long campaign launched by Coinbase in August, pushing for crypto legislation in the country.

Coinbase said the campaign will focus on the four “swing states” but will also include an intense focus on Arizona, California, Georgia, Illinois, and Wisconsin, which have an “over-index” when it comes to crypto owners, it said.

“While a growing number of elected officials in Congress are advocating for legislation to regulate crypto and drive progress in the financial system, others are simply choosing to protect the status quo.

Coinbase is also set to organize a “Stand with Crypto Day” will take place in Washington D.C. on Sept. 27 to advocate for better cryptocurrency innovation and policy.

Related: Coinbase CEO says leaving US ‘not even in the realm of possibility right now’ — Report

The campaign is also encouraging crypto owners and supporters to take a moment to call their members of Congress and ask them to pass clear, sensible legislation.

“Today we kick off this effort by rallying the collective energy of the community, and taking the fight off X (formerly known as Twitter) and on to the phones."

“The campaign will encourage crypto owners and supporters to take one minute of their day to call their member of Congress and ask them to pass clear, sensible legislation,” it added.

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‘BITSANITY’ — Records broken with $70B in volume for Bitcoin stocks, ETFs

Nevada court approves regulator’s petition to place Prime Trust into receivership, pending hearing

Prime Trust will have the opportunity to show why a petition from the Nevada Financial Institutions Division should not be permanently granted in an Aug. 22 hearing.

The Eighth Judicial District Court of Nevada has granted a petition from the state’s Financial Institutions Division (NFID) placing crypto custodian Prime Trust into receivership, pending a hearing to show cause. 

In a July 14 filing, the Nevada court ordered the appointment of a receiver for Prime Trust following a June 26 petition from the state financial regulator. Prime Trust will have an opportunity to show cause why the petition should not be permanently granted in an Aug. 22 hearing.

“The court appointed receiver will take over the day-to-day operations of the company to determine the best option to protect Prime’s clients,” said the NFID.

The order requires Prime Trust’s employees and executives to largely not take any actions interfering with the court’s decision. According to court filings, Prime Trust agreed to the petition for receivership with the Financial Institutions Division based on the “substantial deficit between its assets and liabilities.”

At the time, the Nevada financial regulator called for the immediate appointment of a receiver due to the risk of “irreparable harm” to users, the public and “confidence in the emerging market of cryptocurrency.” The Financial Institutions Division said Prime Trust was “unable to honor customer withdrawals” as part of a June 21 cease-and-desist order.

Related: TrueUSD assures users it has no exposure to troubled Prime Trust

According to the June 26 petition, Prime Trust owed more than $85 million in fiat and $69.5 million in crypto to its clients. However, the firm reportedly only held roughly $2.9 million in fiat and $68.6 million in crypto.

Prior to Prime Trust’s financial woes, wallet infrastructure provider and digital asset custodian BitGo had been considering an acquisition of the firm. The deal was officially called off by BitGo on June 22, roughly one day after the NFID issued its cease-and-desist order.

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‘BITSANITY’ — Records broken with $70B in volume for Bitcoin stocks, ETFs

Marathon shareholders file lawsuit against company’s top management

The CEO and other top executives are being accused of a breach of fiduciary duties, unjust enrichment and waste of corporate assets.

A United States-based crypto mining company, Marathon Digital, heads to court, as its shareholders allege that CEO Fred Thiel, alongside other top executives, committed a breach of fiduciary duties, unjust enrichment and waste of corporate assets. 

A shareholder complaint against Fred Thiel and nine other Marathon executives was filed in the United States District Court of Nevada on July 8. The company executives are being sued on the basis of five claims. Among them are violations of the U.S. Exchange Act, breach of fiduciary duties, unjust enrichment, and waste of corporate assets.

The plaintiffs also demand retribution from Thiel, Okamoto, Salzman and Gallagher for wrongful acts, leading to the Securities and Exchange Commission (SEC) complaint against the company. The legal team, representing shareholders, didn’t request a specific sum from the defendants, leaving it to the court to decide on any compensation.

The shareholders also aim to correct the governance of the company by strengthening the Board’s supervision of operations, nominating at least four candidates from shareholders to the Board and eliminating the previous procedure of directors’ elections.

Related: Marathon Digital blames weather conditions for mining 21% less Bitcoin in June

According to the legal team, the company’s management has been downplaying its problems, artificially inflating Marathon’s valuation, receiving excessive compensation, making lucrative insider sales and receiving unjustifiably elevated bonuses based on the false and misleading statements.

In May, Marathon received a subpoena from the SEC, “relating to, among other things, transactions with related parties” that occurred while it was creating the facility in Montana. Before that, in 2021 the regulator ordered a firm to produce documents and communications for the same mining facility.

However, only a couple of months ago, in May, Thiel was optimistic while explaining the company’s strategy for reducing its net loss from $12.9 million ($0.12 per share) in Q1 2022 to $7.2 million ($0.05 per share) this year.

Although Bitcoin’s price also affected the company’s quarterly results, Marathon managed to reduce its debt in March. The mining firm paid off a term loan with Silvergate Bank, freeing up the 3,132 Bitcoin held as collateral for the loan. At the time, Marathon said the move would eliminate $50 million worth of debt and reduce its annual borrowing cost by $5 million.

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‘BITSANITY’ — Records broken with $70B in volume for Bitcoin stocks, ETFs

Nevada financial regulator petitions court to place Prime Trust into receivership

The filing suggested Prime Trust had financial liabilities to its users totaling more than $82 million in fiat and $800,000 in crypto.

Following the filing of a cease and desist order, Nevada’s Financial Institutions Division has again moved against crypto custodian Prime Trust by petitioning for the appointment of a receiver.

In a June 26 filing, the regulator petitioned the Eighth Judicial District Court of Nevada for a temporary restraining order and an order appointing a receiver to Prime Trust Technologies, which would include its crypto custodian arm. Prime Trust has agreed to the receivership along with the regulator based on the “substantial deficit between its assets and liabilities.”

The petition called for an immediate appointment, claiming there was a risk of “irreparable harm” to customers, the public and “confidence in the emerging market of cryptocurrency”: 

“Prime is in an unsafe financial condition and/or is insolvent. Additionally, Prime’s condition will only progressively worsen as customers continue to withdraw from Prime.”

The Financial Institutions Division’s filing included claims that Prime Trust contracted Fireblocks to store all its crypto assets in 2019 and underwent a change in management in 2020. The custodian reintroduced legacy wallet forwarding addresses to customers in January 2021 “because of limitations” with Fireblocks. Prime Trust has not had access to its users’ legacy wallets since December 2021, and it purchased crypto using customer funds. 

Related: TrueUSD assures users it has no exposure to troubled Prime Trust

According to the petition, Prime Trust owed more than $85 million to its clients in fiat but had roughly $2.9 million as of the filing. The Nevada regulator said Prime Trust’s liability in digital assets was smaller but still significant: The firm owed more than $69.5 million in crypto but held roughly $68.6 million.

The legal move followed the Nevada regulator issuing a cease and desist order on June 21, claiming Prime Trust’s financial condition had “considerably deteriorated,” and the firm was “unable to honor customer withdrawals due to a shortfall of customer funds.” Wallet infrastructure provider and digital asset custodian BitGo announced on June 22 that it planned to cancel its acquisition of Prime Trust.

Magazine: Get your money back: The weird world of crypto litigation

‘BITSANITY’ — Records broken with $70B in volume for Bitcoin stocks, ETFs

Prime Trust can’t honor customer withdrawals, says Nevada regulator

Nevada's business regulator issued a cease and desist order to the crypto custodian alleging it has a "shortfall of customer funds."

Prime Trust's financial condition is "critically deficient" and the crypto custodian has been unable to honor customer withdrawals since June 21, according to Nevada's business regulator.

In a June 21 cease and desist order, Nevada's Department of Business and Industry claimed Prime Trust's financial condition ha"considerably deteriorated" and the firm is now in an "unsafe or unsound condition" to continue business:

"On or about June 21, 2023, Respondent's [Prime Trust] was unable to honor customer withdrawals due to a shortfall of customer funds caused by a significant liability on the Respondent's balance sheet owed to customers."

The order added Prime Trust has "materially and willfully breached its fiduciary duties to its customers by failing to safeguard assets under its custody." The regulator again alleged the firm is "unable to meet all customer disbursement requests."

Statements made by the Nevada Department of Business and Industry against Prime Trust. Source: Nevada Government

Prime Trust has 30 days to respond to the cease and desist order and can request an administrative hearing to contest the order.

Related: TrueUSD assures users it has no exposure to troubled Prime Trust

If Prime Trust fails to contest, the cease and desist order will be considered final.

On June 13, the payments subsidiary of Prime Trust, Banq, filed for bankruptcy protection in the United States.

Since then, wallet infrastructure provider and digital asset custodian BitGo confirmed on June 22 that it decided to cancel its acquisition of Prime Trust.

Cointelegraph reached out to Prime Trust for comment but did not recieve an immediate response.

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‘BITSANITY’ — Records broken with $70B in volume for Bitcoin stocks, ETFs