Simon Dixon

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

Leaked bids: Binance, Galaxy Digital among secret bidders for Celsius assets

January 27, 2023 Coin Telegraph

Bank to the Future

Crypto blogger Tiffany Fong has shared documents she claims to have obtained in late December detailing several bids for Celsius' crypto assets.

At least five firms placed bids on Celsius Network’s crypto assets, including Binance, Bank To The Future and Galaxy Digital, according to leaked information shared by crypto blogger Tiffany Fong.

Fong, a follower of Celsius developments who shot to fame after several exclusive interviews with Sam Bankman-Fried following its collapse, has leaked information from documents she says were obtained on Dec. 20 “detailing the bids on Celsius Network’s crypto assets.”

In a Substack post, Fong explained that she initially refrained from leaking the bids to avoid disrupting the bidding process but was prompted to do so after recent commentary from a lawyer representing Celsius.

"I refrained from sharing the bids publicly to avoid disrupting the bidding procedures or negatively impacting customer recoveries; however, in yesterday’s Celsius Network court hearing (1/24/23), Kirkland & Ellis attorney Ross M. Kwasteniet proclaimed the bids 'have not been compelling,” Fong explained.

Among the bidders revealed by Fong include crypto exchange Binance, online investment platform Bank To The Future, digital asset investment manager Galaxy Digital, crypto trading company Cumberland DRW and digital asset investment firm NovaWulf.

According to Fong, the proposals from these crypto firms were submitted in November 2022, with Fong noting that they are "for the most part, abandoned."

The blog stated that Binance proposed a bid of $15 million for the assets, stating that $12 million wouldgo to the Celsius estate and $3 million would be distributed to “migrated users on a pro-rata basis.”

In the purported Summary Term Sheet from Binance, it said that it intends to “acquire and transfer all liquid and certain illiquid crypto” at the fair market value to Binance’s platform.

Galaxy Digital proposed to acquire all illiquid and staked Ethereum (ETH) assets as sough to be “designed stalking horse bidder" — a name given to the initial bidder for the sale of distressed assets — for the amount of approximately $67 million.

Meanwhile, Bank To The Future's bid stated in its transaction structure that all liquid crypto assets and collateral to be returned to creditors pro rata, under the management of Bank To The Future.

In a Jan. 26 tweet, CEO of Bank To The Future Simon Dixon has since confirmed that the contents of the leaked bids relating to his firm were accurate.

I can confirm it is a true reflection of the term sheet @BankToTheFuture sent in to give everybody all coins left with no charge & 100% of illiquid assets. https://t.co/MrYGvoB9eB
— Simon Dixon (@SimonDixonTwitt) January 26, 2023

Fong noted in the blog post that she is “only aware of these five bids” on Celsius’ crypto assets.

She added that Novawulf’s bid was “particularly interesting,” due to having a vague resemblance to “Celsius Network’s newly-proposed restructuring plans.”

In comments to Cointelegraph, Fong said that she has had conversations with “multiple Celsius Network employees” and to her surprise, most employees “were not even made privy to the bids.”

She added “not even those in upper-level management,” were aware of this information.

Fong said that creditors and “even most employees” have been left in the dark about the bids on crypto assets that investors deposited onto the platform.

Fong is not sure how “things will unfold,” but thinks that creditors deserve “more transparency” and have a right to see the bids on assets that “we deposited onto the platform.”

Cointelegraph has reached out for comments from Binance, Galaxy Digital, BnkToTheFuture, NovaWulf and Cumberland DRW.

US Trustee Plans to Appoint an Examiner to FTX Case, While SBF Describes Strange Margin Trading Practices

December 2, 2022 Bitcoin.com

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.”

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.