Crypto Currencies: The Basel Committee Eases Its Requirements

In late June 2022, the Basel Committee of Banking Regulators met and made proposals, including blockchain, cryptocurrency wallet that supports Bitcoin, Bitcoin Cash and Ethereum.
“Banks should be careful about setting aside capital to cover risks associated with ‘un-backed’ crypto assets on their books,” the Basel Committee of Global Banking Supervisors said in proposals that now also cover blockchain.

The reasons for this relaxation
The value of cryptoassets has fallen sharply in recent weeks, driven in part by the collapse of terraUSD, a stablecoin whose value was derived through complex algorithmic processes. As a result, regulators such as the Basel Committee are concerned about the potential risks to the financial system from the poorly regulated cryptocurrency sector, even though it is still small compared to the size of global stock markets, bonds and derivatives.
The June 30 proposals mark Basel’s second public consultation on cryptocurrencies, which would require banks to adopt a conservative stance in setting aside capital for cryptocurrency holding companies.
He also proposed a new limit on gross exposures to these crypto assets.
In June last year, Basel released an initial consultation on the cryptocurrency industry, proposing that banks hold enough capital to fully cover losses on bitcoin holdings.
Basel said it maintained the basic structure of that first proposal, which divided crypto assets into two broad groups, one made up of stablecoins, and the other higher-risk crypto assets, which would require a more conservative treatment of capital.
Basel’s latest proposals include new elements such as additional capital to cover the “evolving risks” of distributed ledger or blockchain technologies, which support the crypto assets. The Committee said it would continue to monitor market developments to see if the proposals needed further tightening. These rules should be final by the end of the year
Source (Marketplace)

framed

US: Voyager Digital cryptocurrency lender goes bankrupt
Cryptocurrency lending specialist Voyager Digital announced on July 5, 2020 that it had filed for US bankruptcy protection, less than a week after freezing withdrawals on its platform.
In a document filed on the evening of July 4 in New York’s Southern District bankruptcy court, the company said it had more than 100,000 creditors. The estimated value of Voyager’s assets is between $1 billion and $10 billion. The estimated amount of his liabilities is in the same range, from 1 to 10 billion dollars. In the United States, invoking Chapter 11 allows a company that can no longer repay its debt to restructure itself, protected from its creditors, while continuing its current operations. At the end of June, Singaporean alternative investment firm Three Arrows Capital failed to repay a $350 million and 15,250 bitcoins (about $310 million) loan from Voyager.
A few days later, Voyager stopped trading, deposits, withdrawals and loyalty programs. Three Arrows Capital has since been liquidated, but Voyager plans to recover what it owes. Other cryptocurrency platforms specializing in loans have been in turmoil in recent weeks and have had to suspend withdrawals, including Celsius Network, CoinFlex and Babel Finance. These companies are suffering from the sharp decline in cryptocurrencies in a market that is not inclined to risky bets.
Source (Marketplace)

NEWS

Vauld platform suspends withdrawals

Singapore-based crypto lending and trading platform Vauld said on July 1 it would suspend withdrawals and trading and seek new investors.
Vauld CEO Darshan Bathija said in a blog post that he faces financial challenges due to “volatile market conditions, financial difficulties of our major trading partners that inevitably affect us, and the current environment. $197.7 million as of June 12.”
The cryptocurrency sector has been rocked by a series of meltdowns in recent months, including the bankruptcy of TerraUSD, the cessation of withdrawals by major US lender Celsius Network and the liquidation of Singapore crypto hedge fund Three Arrows Capital.
Vauld said she had appointed legal and financial advisers, was in talks with potential investors and would also ask the Singapore courts for a moratorium that would stop all proceedings against her to give her time to implement a restructuring. .
Source (Marketplace)

Cascading complaints against Liyeplimal . boss

Cameroon, Central African Republic, United States, Canada and soon in France. Emile Parfait Simb, founder of the Liyeplimal platform and Global Investment Trading SA, is now being prosecuted in these various states. Information about the complaint in France was disclosed by Jeune Afrique on its website. It is a group of 106 subscribers of 15 different nationalities who have revolted against Emile Parfait Simb. In addition to Simb, 100 people who acted as intermediaries or encouraged savers to invest in this financial investment, which is presented as one of the biggest cryptocurrency scams in recent years, are being prosecuted.
This collective has already seized the Cameroonian, American and Canadian judges. But their lawyers believe that the Cameroonian justice system is not moving fast enough. They complain that they had to wait two months before receiving a pre-trial garnishment order, which they say gave Simb time to clear his bank accounts and file for bankruptcy. The plaintiffs, who estimate their damages at 5.2 billion FCFA (7.94 million euros), would only represent part of the possibly affected 300,000 subscribers around the world.
This company was also arrested in June 2020 for the same offenses by the Central African Financial Market Surveillance Commission (COSUMAF).
Source (YoungAfrica)

Edition number: 447

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