Founder of collapsed crypto exchange Thodex detained in Turkey

April 20, 2023 Coin Telegraph

Founder and former CEO of Thodex is finally brought to Turkey after two years since the exchange halted operations.

The saga of the Turkish cryptocurrency exchange Thodex continues, with the founder being finally brought back home in two years after the platform halted trading.

Faruk Fatih Ozer, founder and former CEO of Thodex, has been extradited from Albania to Turkey, Cointelegraph Turkey reported.

Facing charges of fraud and money laundering, the local police immediately detained the 27-year-old upon his arrival at Istanbul Airport on April 20, the Turkish state-run news agency Anadolu Agency reported.

According to the report, the plane carrying Ozer took off from the Albanian capital Tirana in the morning and landed at Istanbul Airport on Thursday. The Istanbul Airport Police Department took custody of Ozer on arrival. The detained founder is expected to undergo health check-ups and then will be taken to the Istanbul Police Department.

Ozer’s arrival in Turkey comes almost two years after the Thodex exchange abruptly halted trading and withdrawals amid reports of police raids at its offices on April 22, 2021. Local publications speculated that the suspension was part of an exit scam involving Thodex CEO Ozer, who fled Turkey with at least $2 billion worth of cryptocurrency stolen from Thodex. Interpol subsequently issued a red notice for Ozer, who reportedly ran to Albania.

In about a year after Thodex collapsed, the fugitive founder was arrested in Albania in August 2022. Additionally, Turkish police detained 62 people over alleged Thodex exit scam, also arresting some siblings of the then-missing CEO.

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Paxful co-founders’ litigation cites misappropriation of funds, money laundering, U.S. sanctions evasion

April 6, 2023 Coin Telegraph

Coin Telegraph

A bitter dispute between Paxful's co-founders in Delaware courts may have led to the crypto marketplace's sudden closure.

A bitter dispute between Paxful’s co-founders, Artur Schaback and Mohamad (Ray) Youssef, in Delaware's courts may have been the real reason behind the Bitcoin marketplace’s sudden closure on April 4.

Schaback and Youssef, who started Paxful in 2015 with a shared passion for Bitcoin (BTC), are now litigating the company’s control, with several accusations against each other, according to court documents. The allegations include misappropriation of company funds, money laundering and evasion of United States sanctions against Russia, among others.

Founders disagree

Schaback was the chief operating officer of Paxful until February 2022, when he was allegedly blocked from participating in the company’s operations over disagreements with Youssef — Paxful’s CEO — about the marketplace’s future and operations, including conflicts about “the legitimacy of ever-increasing expenditures to undisclosed entities.”

*Court documents filed in Delaware on March 21, 2023.* *Source: U.S. Court of Chancery of* *Delaware.*

According to Schaback’s claims in the lawsuit, a large quantity of Paxful’s Bitcoin has been transferred to a Turkish entity called “EMiR,” which he claims is not a legitimate software company. “It does not have a website publicizing software or web development services and its physical address [...] appears to belong to a clothing company.”

Dekslektika, a St. Petersburg, Russia-based company owned by former Paxful directors, is a subcontractor allegedly receiving payments from EMiR. As per the court filings, those entities were accused of being behind “massive non-ordinary-course transactions” that began after Schaback was frozen out of the company’s operations. “There is no legitimate business purpose for these transfers,” says the lawsuit.

In comments to Cointelegraph, Youssef classified the claims as "ridiculous." According to him, the accusations center around salary payments to a Turkish engineering company working for Paxful. “He [Schaback] blocked these salary payments to our engineers with these accusations, claiming they were fake and even that they were performing no such services. He played an insane game of chicken until the entire team of 80 engineers stopped working. [...] Mr. Schaback himself was forced to admit that this was a critical mistake and authorized these engineers to be given their back pay at a board meeting,” noted Youssef.

*Court documents filed on March 3, 2023.* *Source: U.S. Court of Chancery of* *Delaware.*

Youssef’s point of view

Youssef claimed his co-founder’s legal tactics “bordered on terrorism” and cost Paxful many employees and directors. “His accusations were so slanderous that we lost our GC, CTO, CISO, VP of finance and VP of HR. He even went after our law firm, McDermott Will and Emery, one of the most respected law firms in the United States, demanding they be removed from representing us in Delaware,” he told Cointelegraph.

Under the imminent resignation of his team, Youssef said it was impossible to keep Schaback at Paxful.

“Artur and I were homeless for a time in NYC while we built Paxful. He came from a working-class family like me, and we bonded over many things. He worked hard in the beginning and added value. I respected that he took care of his family. Sometime around 2018, he began to change. I covered for him, but when the entire ELT threatened to resign, I had to accept the ugly truth that he had changed and was not who I thought he was.”

Schaback’s point of view

In an interview with Cointelegraph, Schaback said Youssef took unilateral action to shut down Paxful on April 4. “Mr. Youssef’s actions were meant to consolidate power in a jurisdiction outside that of the United States and to remove me and other shareholders from his plans.”

Schaback said he has limited access to information in the company and hasn’t been involved in day-to-day operations for 18 months.

“Mr. Youssef and I had fundamental differences in Paxful’s product direction and corporate governance, and you can see by his current actions that his goal all along was to remove Paxful from U.S. jurisdiction due to regulatory pressure.”

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Crypto donations amplify speed and global reach during crisis

March 2, 2023 Coin Telegraph

Charity

Cryptocurrencies are proving useful in facilitating fast and unencumbered donations during crises, as recently seen during earthquake relief efforts in Turkey and Syria.

Donations made in cryptocurrencies are proving to be a fast and far-reaching means of providing financial aid during times of crisis, according to multiple industry players.

This has proven to be the case after devastating earthquakes hit parts of Turkey and Syria in February. Blockchain analytics firm Chainalysis estimates that around $5.9 million of donations have been made to support relief efforts in the region in the month since the natural disaster took place.

The likes of Turkey’s Ministry of Interior Earthquake Humanitarian Aid campaign, Turkish Red Crescent, Save the Children and Project Hope have received cryptocurrency-based donations. In addition, a number of cryptocurrency exchanges, including Binance, Tether, Bitfinex, OKX, and KuCoin, donated more than $9 million to support victims in the area.

Cointelegraph reached out to Chainalysis to unpack the methodology used to monitor crypto-based donations supporting disaster relief efforts in Turkey and Syria.

Chainalysis director of research Kim Grauer said the firm uses a combination of human intelligence gathered by its experts and proprietary heuristics to identify and monitor flows to cryptocurrency services. This includes organizations accepting donations as well as scams that have looked to divert donations from unwitting supporters.

Grauer believes that the speed of transactions and global nature of cryptocurrency transactions are proving to be an important means of providing quick monetary support during times of crisis:

“Cryptocurrency is cross-border, instantaneous, and liquid, making it an ideal technology for raising funds and getting them to where they are needed most quickly.”

Grauer also highlights the ability to accurately monitor blockchain data as another strong argument for the utility of cryptocurrencies in facilitating donations and support after disasters and major emergencies:

“The transparency of blockchains is a unique benefit to cryptocurrency, providing opportunities to aid organizations to track donations and for law enforcement agencies to identify and trace illegitimate schemes attempting to capitalize in times of crisis.”

Antonia Roupell, Web3 operations lead at Save the Children, tells Cointelegraph that the organization first accepted Bitcoin as a method of donation in response to Typhoon Haiyan that ravaged the Philippines in 2013. From 2020 onwards, the charity has raised $7.4 million in cryptocurrency donations.

This has continued during the organization’s earthquake relief work in Turkey and Syria. Roupell highlights a number of benefits of crypto-based donations in comparison to fiat-based donations.

“The vast majority of our crypto donors are first-time donors to Save the Children so crypto has enabled us to access a new and growing supporter base.”

Blockchain functionality also powers recurring giving, according to Roupell. In 2021, Save the Children received a number of Ethereum donations from NFT sales, some of which coded future donations through the smart contract functionality of specific NFTs.

Roupell also highlights tax benefits in the United States for donating cryptocurrency to charity, which has led to an increase in donations at the end of the financial year. She also notes that crypto donations are, on average, significantly higher than fiat ones.

While highlighting positives, Roupell said a downside was the anonymity of the majority of cryptocurrency donors, which rules out the ability to thank benefactors for their contributions.

Roupell believes there is great value in blockchain-based solutions facilitation and support aid efforts around the world and that humanitarian organizations will have an increasingly key role to play in integrating and scaling access at grassroots levels:

“Cryptocurrency is a great donation vehicle, but the underlying technology, peer-to-peer electronic cash, is truly revolutionary for economic inclusion.”

The charity supports a variety of cryptocurrencies that are accepted by the crypto donation platform The Giving Block, while Roupell said the organization does ‘not endorse, promote or pass judgment’ on any specific tokens. It also accepts global fiat currencies and stocks, with a priority to raise urgent funds to support global humanitarian responses.

Vitalik Buterin donates $227k to help earthquake victims in Turkey

February 13, 2023 Coin Telegraph

Vitalik Buterin donates 7k to help earthquake victims in Turkey

Coin Telegraph

The Ethereum co-founder has sent around $227,000 in ETH to two Turkish earthquake relief organizations.

Ethereum co-founder Vitalik Buterin has now made at least two substantial contributions to help the victims of last week’s devastating earthquake in Turkey and Syria.

The Turkey-Syria 7.8 magnitude earthquake struck on Feb. 6. Its death toll has now risen to 33,000 — one of the nation’s worst in decades.

Over the week, the Ethereum co-founder has been one of many actively donating Ethereum to support relief efforts in Turkey. His latest donation on Feb. 12 was for 50 ETH, or approximately $77,000, to Anka Relief as reported by blockchain security firm PeckShield.

Anka thanked the Ethereum co-founder for his donation and said that crypto donations had been flowing since the first day.

“Since day 1 of the disaster, we witnessed donations piling in the wallets of a handful of major NGOs. Great that they have attracted and will be attracting more funds,” said the organization.

We want to thank @VitalikButerin for donating 50 ETH ~$75k to Anka Relief, a crypto aid fund & community to support Türkiye after the recent earthquakes. https://t.co/kGwXSGWL8J

Dive into the thread below to better understand our mission and ops

https://t.co/92CkxevI5e
— Anka Relief (@AnkaRelief) February 12, 2023

Anka provided a list of crypto wallets than can be used for donations. The Web3 relief support organization has also spearheaded the Ukraine DAO project to raise crypto donations to support efforts in the besieged country.

The latest donation adds to another 99 ETH that Vitalik sent in support of earthquake victims. On Feb. 11 the vitalik.eth address sent around $150,000 worth of ETH to Ahbap, a non-governmental and nonprofit organization dedicated to relief efforts in Turkey.

Ahbap has also provided several crypto addresses for various tokens it can accept as donations.

To date, it claims to have received $4.3 million in crypto donations with stablecoins being the most popular tokens sent. According to Etherscan, the Ahbap wallet contains 409 ETH worth $622,000 at the time of writing.

Late last week, London’s Financial Times reported that crypto donations had been pouring in from across the globe. More than $10 million in crypto had been sent by companies with Binance alone donating $5 million in support of Turkish relief efforts.

Binance also announced $100 in BNB airdrops to those in the hardest-hit areas last week.

On Feb. 7, just a day after the devastating quake, Cointelegraph reported how the Web3 community was coming together to arrange crypto donations for NGOs and support.

It is not the first time crypto has been used for earthquake relief donations. In 2015, Bitcoin donations were sent to relief organizations following the massive quake in Nepal.

Web3 community unites for Turkish–Syrian earthquake victims: Finance Redefined

February 10, 2023 Coin Telegraph

Coin Telegraph

The Web3 ecosystem came together to offer all possible help and aid to the victims of the Turkish-Syrian earthquake — one of the worst natural disasters in recent history.

Welcome to Finance Redefined, your weekly dose of essential decentralized finance (DeFi) insights — a newsletter crafted to bring you significant developments over the last week.

In the aftermath of a deadly 7.8-magnitude earthquake in southeastern Turkey, the Web3 community has come together to raise awareness and aid for disaster victims.

Stablecoins could prove to be a critical factor in larger DeFi adoption, says Aave founder Stani Kulechov. According to the Aave executive, building the “payment layer,” which involves stablecoins, can potentially hook regular people into the space, eventually introducing them into DeFi. On the other hand, S&P Global Ratings believe DeFi protocols can attract institutional interest if they get securitization right.

Venture capital firm Andreessen Horowitz (a16z) used 15 million Uniswap (UNI) tokens to vote against the deployment of Uniswap v3 on BNB Chain using the Wormhole bridge. Web3 developer ConsenSys has cast 7.03 million UNI votes in favor of its deployment on BNB Chain.

The DeFi market broke its four-week bullish streak after news about Kraken settling with the United States Securities and Exchange Commission and winding down its crypto staking services. The settlement means U.S.-based exchanges must shut down their staking services, which has come at a critical time for Ethereum, as the upcoming Shanghai upgrade will allow Ether (ETH) stakers to withdraw their staked ETH.

The Web3 community responds to Turkish–Syrian earthquake tragedy

A massive earthquake hit southeastern Turkey along the border with Syria on Feb. 6, which has so far caused the death of more than 18,000 people. The quake registered a magnitude of 7.8 on the Richter scale, which is internationally categorized as a “major” earthquake, and occurred along 100 kilometers of the fault line.

Infrastructure in the area suffered significant damage, resulting in a deadly cross-border humanitarian disaster. However, the world was quick to respond. Across the internet and various social media platforms, people have been gathering funds for local and international aid organizations to provide relief to those in the affected areas.

Continue reading

Stablecoin adoption could lead to DeFi growth, says Aave founder

Stani Kulechov, the founder of the DeFi protocol Aave, highlighted several issues within the DeFi space at the StarkWare Sessions 2023, held at The Cameri Theatre in Tel Aviv, Israel.

In a fireside chat titled “DeFi: Resilience in the Face of Global Uncertainty,” Kulechov and Cointelegraph’s managing editor Alex Cohen discussed various topics, including DeFi’s risks compared to traditional finance and how stablecoins can lead to more DeFi adoption.

Continue reading

DeFi securitization of real-world assets poses credit risks, opportunities: S&P

DeFi’s use case in traditional finance could grow in the coming years as new protocols attempt to support the securitization of real-world assets, according to a new research report from credit rating agency S&P Global Ratings.

The financing of real-world assets will likely be a key focus area for DeFi protocols moving forward, S&P said in a report titled “DeFi Protocols For Securitization: A Credit Risk Perspective.” Although the industry is still in its nascent stages, S&P highlighted several benefits DeFi could bring to securitization, including reducing transaction costs, improving transparency on asset pools, reducing counterparty risks and enabling faster payment settlement for investors.

Continue reading

a16z votes against proposal to deploy Uniswap v3 on BNB Chain

Venture capital firm a16z voted against a final proposal to deploy Uniswap v3 on the BNB Chain using the Wormhole bridge, the Uniswap DAO forum shows.

The governance proposal to deploy the latest Uniswap iteration on the BNB Chain was submitted on Feb. 2 by 0xPlasma Labs on behalf of the Uniswap Community after it passed a temperature check with 20 million (80.28%) votes for yes, and 4.9 million (19.72%) votes for no. On Feb. 5, the venture firm used 15 million of its UNI holdings to vote against the move.

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ConsenSys adds 7.03M votes to Uniswap BNB Chain migration proposal amid VC battle

Web3 infrastructure developer ConsenSys, the maker of the popular MetaMask digital wallet, cast 7.03 million votes in favor of a proposal that would see decentralized exchange Uniswap’s v3 protocol deployed on BNB Chain, according to data from Tally.

As Cointelegraph reported, venture capital firm Andreessen Horowitz cast a vote against the proposal. A16z, which reportedly holds 55 million UNI tokens, voted 15 million UNI against the move due to its reliance on the Wormhole bridge. The VC firm instead supported using LayerZero as the interoperability protocol. LayerZero Labs is part of a16z’s portfolio and raised $135 million in a funding round in March 2022, with a $1 billion valuation.

Continue reading

DeFi market overview

Analytical data reveals that DeFi’s total market value fell back to $40 billion this past week, trading at about $40.1 billion at the time of writing. Data from Cointelegraph Markets Pro and TradingView shows that DeFi’s top 100 tokens by market capitalization had a bearish week, with most of the tokens bleeding this past week, registering double-digit losses on the weekly charts.

Thanks for reading our summary of this week’s most impactful DeFi developments. Join us next Friday for more stories, insights and education in this dynamically advancing space.

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Turkish automaker Togg onboards Metaco for crypto custody and governance

January 10, 2023 Coin Telegraph

Avalanche

The partnership with Metaco will see the use of its digital asset custody and orchestration platform, Harmonize, to safeguard the custody and governance of Togg’s digital assets.

Turkish automotive company Togg announced a partnership with Metaco, a digital asset custody orchestration technology provider, to secure its open mobility ecosystem built on Avalanche.

Togg’s Mobility-as-a-Service platform (MaaS), a.k.a, Mobility Ecosystem, aims to deliver smart contract-powered use cases — including tokenization of mobility services, assessment of CO2 footprint and nonfungible token (NFT) ownership — for users in Türkiye and Europe.

The partnership with Metaco will see the use of its digital asset custody and orchestration platform, Harmonize, to safeguard the custody and governance of Togg’s digital assets. Sharing insights on the initiative, Togg CEO M. Gürcan Karakas stated:

“Blockchain-enabled digital tokens allow data and other assets to be stored and transferred in a fast, secure, and green way. By leveraging technology from Metaco, we make this possible.”

Hosted over IBM Cloud, Metaco’s platform provides Togg with total control of its encrypted data, workloads and encryption keys. According to the announcement, Harmonize is equipped with compliance standards used by Tier 1 banks dealing with digital assets.

German car manufacturer BMW recently onboarded two blockchain firms to improve its customer loyalty program in Thailand. On Dec. 29, 2022, BMW announced partnerships with blockchain infrastructure firm Coinweb as its decentralized architecture provider and BNB Chain for settling transactions.

The first phase of the initiative is focused on integrating decentralized tech into automating BMW’s daily manual operations. The project's second phase would see Coinweb develop a customized Web3 application for BMW’s customer loyalty program.

Turkey

Founders disagree

Youssef’s point of view

Schaback’s point of view

The Web3 community responds to Turkish–Syrian earthquake tragedy

Stablecoin adoption could lead to DeFi growth, says Aave founder

DeFi securitization of real-world assets poses credit risks, opportunities: S&P

a16z votes against proposal to deploy Uniswap v3 on BNB Chain

ConsenSys adds 7.03M votes to Uniswap BNB Chain migration proposal amid VC battle

DeFi market overview

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