Autor Cointelegraph By Brian Quarmby

BTC mining firm Compute North files for bankruptcy

BTC mining firm Compute North files for bankruptcy

Uverejnil používateľ | sep 23, 2022 |

Bitcoin (BTC) mining hosting firm Compute North has filed for chapter 11 bankruptcy, amid growing pressure on the firm due to the effects of crypto winter and rising energy costs. The firm’s CEO Dave Perrill has also stepped down but will remain on the board. The company submitted a Chapter 11 bankruptcy filing in the U.S. Bankruptcy Court for the Southern District of Texas on Sept. 22, which is now pending before Judge David Jones. Under a Chapter 11 filing, the firm is still able to keep its operations going as it works out a plan to repay creditors. The filing reportedly outlines that Compute North owes around $500 million to 200 creditors, while its assets are said to be worth between $100 million and $500 million. Compute North offers large scale crypto mining hosting services and facilities, hardware and a BTC mining pool. It is one of the largest data center providers in the U.S. has big name partners in the BTC mining sector such as Compass Mining and Marathon Digital. Both companies have come out with statements via Twitter, noting that with the information they have at this stage, their business operations will continue as normal. “Compute North’s staff informed us today that the bankruptcy filing should not disrupt business operations. We are continuing to monitor the situation and will provide further updates as they become available,” noted Compass Mining. Today, a filing related to one of our hosting providers was published. Based on the information available at this time, it is our understanding that this filing will not impact our current mining operations.— Marathon Digital Holdings (NASDAQ: MARA) (@MarathonDH) September 22, 2022The bearish performance of BTC in 2022 has had a significant impact on the mining sector this year, and in the context of Texas, rising energy costs and multiple power outages during intense heat waves haven’t helped either.Related: Maple Finance launches $300M lending pool for Bitcoin mining firmsBloomberg Business reporter David Pan highlighted on Twitter that Compute North may have been impacted by a costly delay to a large mining facility in Texas that it wasn’t able to monetize for months. “Compute North’s massive 280MW mining facility in TX was supposed to run rigs in April but it couldn’t due to pending approvals. From then to later this year when it finally was able to energize the machines, Bitcoin prices had gone through multiple downward cycles, fundraising opportunities dried up and major lenders scaled back,” he wrote. Compute North adds to a long list of crypto firms that have either fallen victim to crypto winter — or in some cases helped create it — including Voyager Digital, Three Arrows Capital, Celsius Network and BlockFi to name a few.

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CTFC slammed for 'blatant regulation by enforcement' over Ooki DAO case

CTFC slammed for 'blatant regulation by enforcement' over Ooki DAO case

Uverejnil používateľ | sep 23, 2022 |

The Commodities Futures Trading Commission (CFTC) has sparked strong criticism from the community after filing a federal civil enforcement action against members of decentralized autonomous organization Ooki DAO over digital asset trading violations. In a Sept. 22 release, the CFTC stated that it had filed and simultaneously settled charges against the founders of decentralized trading platform bZeroX Tom Bean and Kyle Kistner for their role in “illegally offering leveraged and margined retail commodity transactions in digital assets”However, the community has kicked up a fuss over a simultaneous civil enforcement action against bZeroX’s associated Ooki DAO and its members, which it alleges it operated the same software protocol as bZeroX after it was passed control of it, and thus “violating the same laws as the respondents.”The enforcement action has drawn the ire of a number of crypto lawyers and even a CFTC commissioner with concerns it will set an unfair regulatory precedent.In a dissenting statement on Sept. 22, CFTC commissioner Summer Mersinger noted that while she supports the CFTC’s charges against the bZeroX founders, the enforcement body is stepping into uncharted legal territory when taking action against DAO members that voted on governance proposals. “I cannot agree with the Commission’s approach of determining liability for DAO token holders based on their participation in governance voting for a number of reasons.”“This approach constitutes blatant ‘regulation by enforcement’ by setting policy based on new definitions and standards never before articulated by the Commission or its staff, nor put out for public comment,” she said. Jake Chervinsky, lawyer and head of policy at the U.S. Blockchain Association on Twitter said the enforcement action “may be the most egregious example” of regulation by enforcement in the history of crypto, and drew comparisons between the U.S. Securities and Exchange Commission and the CTFC, noting that: “We’ve complained at length about the SEC abusing this tactic, but the CFTC has put them to shame.”It’s deeply disappointing to see the CFTC damage its own reputation like this among those who care about the future of crypto in the United States, especially at a critical moment while it pitches itself in Congress as the right agency to regulate “digital commodity trades.”— Jake Chervinsky (@jchervinsky) September 22, 2022The DeFi Education Fund also chimed in by noting that the CFTC’s charges also offer a gloomy prospect for people trying to innovate via DAOs. Related: CFTC commissioner visits Ripple offices as decision in SEC case looms“’Lawmaking via enforcement’ stifles innovation in the US, and today’s action will sadly further discourage any US person from not only developing but also *merely participating* in DAOs,” it wrote.Big picture themes to take away: 1. How much control does a Dao have? if it’s too much, maybe it’s the counterparty to the transactions offered by the protocol; maybe decentralization of control over the protocol, not over voting to control of the protocol is what matters. /11— Drew Hinkes (@propelforward) September 22, 2022

The list of charges include illegally offering retail leverage and margin trading; “engaging in activities only registered futures commission merchants (FCM) can perform;” and failing to incorporate a customer identification program under the Bank Secrecy Act. The CTFC also outlined that Bean and Kistner indicated that they wanted to transfer bZeroX over the Ooki DAO as part of a move to avoid crackdowns under the gray area of decentralization.“By transferring control to a DAO, bZeroX’s founders touted to bZeroX community members the operations would be enforcement-proof — allowing the Ooki DAO to violate the CEA and CFTC regulations with impunity,” the CFTC stated.

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Many NFT projects lack adequate smart contract testing, says nameless founder

Many NFT projects lack adequate smart contract testing, says nameless founder

Uverejnil používateľ | sep 23, 2022 |

Jimmy McNelis, the founder of Web3 tech firm nameless, says there are too many NFT projects rushing to market without proper smart contract testing — potentially leading to millions lost. Speaking with Cointelegraph, McNelis suggested that a lot of NFT projects often rush to market without fully simulating how its smart contracts will work, even skipping extensive audits in some cases. McNelis said an example of this was observed during the sale of the Akutars NFT collection in February 2021 — featuring 15,000 tokens that went up for sale on Winklevoss-owned NFT marketplace Nifty Gateway.McNelis said while the NFT drop sold out, a major bug saw $33 million worth of Ether (ETH) generated from the sale locked up in a smart contract that the devs have no access to, explaining:“That was the sort of thing that they could have tested more completely in a private test environment and run the tests against those sales and edge cases, that they may or may not have taken the time to do or thought to do on a public testnet.”McNelis emphasized the importance of getting the test phase right, given that smart contract bugs can’t be patched post-launch: “The testing phase of a project is extremely critical because it’s going to determine really the success of your drop or launch as far as the technical and marketplace solutions go.”McNelis explained that while projects can use public test nets to conduct trials for networks like Ethereum, many don’t as it could open the door for copycat scam projects. He also says that some don’t want to test in public environments of the lack of confidentiality.“The other thing is there’s a lot of brands that may be wanting to explore the Web3 space but aren’t ready to announce publicly that they’re doing so.”Related: NFTs ‘biggest on-ramp’ to crypto in Central, Southern Asia and Oceania — reportNameless was founded by McNelis in mid-2021, and the project has so far received backing from popular entrepreneur and NFT proponent Gary Vaynerchuck among others. It is gearing up for a new product launch later this month with an NFT software called StealthTest, which provides private testnets for devs to trial smart contracts for Ethereum, IPFS, and Arweave. Commenting on the NFT market, McNelis expects big-name companies to continue to pile into the space with their own tokenized products, and for organic retail interest to continue to increase. He did note that in terms of investments, it’s still too early for the big financial firms to want to speculate on NFT themselves. “I think institutions are still going to be primarily focused on producing things like that. But some of the braver ones may speculate into some NFTs, but I don’t think that NFTs are mature enough yet and the markets are mature enough yet to make safe long-term investments,” he said.

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FTX in talks with investors to raise $1B for further acquisitions — Reports

FTX in talks with investors to raise $1B for further acquisitions — Reports

Uverejnil používateľ | sep 22, 2022 |

Sam-Bankman Fried’s crypto exchange FTX is reportedly engaged in talks with investors to raise $1 billion in new funding, as it looks to utilize extra capital for financial acquisitions during the bear market. According to a Sept. 21 report from CNBC which cites sources close to the matter, the talks are still ongoing and the details could still be subject to change. If found to be true, the funding amount would keep the FTX’s current valuation of roughly $32 billion intact. The potential $1 billion funding round would add to the $400 million FTX raised in January, and could signal strong investor faith in the firm despite the sector undergoing a lengthy crypto winter. Other details are sparse at this stage, however, the sources said some of the new funds would be put towards more wheeling and dealing in the crypto space, which is unsurprising given how active FTX and SBF’s quantitative research firm Alamada Research have been in the bear market. A potential FTX acquisition of beleaguered crypto lender Voyager Digital has been rumbling on since July, after it outlined a joint proposal with Alameda to purchase Voyager following its filing for bankruptcy. The proposal was slammed by Voyager, describing it in New York bankruptcy court filings as “a low-ball bid dressed up as a white knight rescue” and as a move “designed to generate publicity for itself rather than value for Voyager’s customers.”FTX has stayed on the hunt however, as Voyager started the auction of its remaining assets on Sept. 13. According to a Sept. 20 report from The Wall Street Journal (WSJ), both Binance and FTX are said to now be the leading bidders of Voyager’s assets, with Binance’s bid said to be around $50 million and FTX being just slightly under that figure. The auction is running until Sept. 29 and the WSJ stated that neither bid has been accepted at this stage. Related: Alameda Research ‘happy to return’ $200M loan to Voyager DigitalEarlier this month FTX Ventures, an investment arm of the firm, announced that it would acquire a 30% stake in Anthony Scaramucci’s asset management firm SkyBridge Capital for an undisclosed amount. In June FTX also entered into an agreement to purchase Canadian crypto platform Bitvo as part of broader plans to expand into Canada. A month prior FTX US also signed a deal with troubled lending firm BlockFi to provide it with a $400-million revolving credit facility and an option to buy the firm for around $240 million.

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‘FED sledgehammer’ will further batter BTC, ETH prices, says Bloomberg analyst

‘FED sledgehammer’ will further batter BTC, ETH prices, says Bloomberg analyst

Uverejnil používateľ | sep 20, 2022 |

The U.S. Federal Reserve’s inflation “sledgehammer” is about to batter the prices of Bitcoin (BTC) and Ether (ETH) down even further, before reaching back to new all-time highs in 2025, according to Bloomberg analyst Mike McGlone. Ahead of the latest Fed interest rate hike to be announced this week, the market is expecting a minimum of a 75-basis-point increase, however some fear it could be as high as 100 basis points — which would represent the biggest rate hike in 40 years. Speaking with financial news outlet Kitco News on Sept. 17, McGlone, the Senior Commodity Strategist at Bloomberg Intelligence, suggested that further market carnage is on the cards for BTC, ETH and the broader crypto sector, as Fed’s actions will continue to dampen investor sentiment. “We have to turn over to the macro big picture and what’s been pressuring cryptos this year and that is the Fed sledgehammer.” The price of BTC has dropped 13.4% over the past seven days to sit at roughly $19,350 at the time of writing, while ETH has plunged a hefty 20.7% within that timeframe to around $1,350. ETH’s 20% drop in particular has been a cause of discussion, as the price of the asset has tanked since the highly anticipated and long awaited Merge went through on Sept. 15. With the major network upgrade essentially resulting in a “buy the rumor, sell the news event,” moving forward McGlone thinks that ETH might drop to “$1,000, or even get a bit lower” given how hawkish the Fed has been, and will continue to be, this year. “I’m afraid [The Merge] got too hyped,” said McGlone, adding that ETH’s price decline is “within a significant macroeconomic broad-based bear market for all risk assets.”During the interview, McGlone even went as far as to predict that the latest rate hike could cause a crash across assets that is worse than the 2008 housing bubble meltdown. “I think it’s going to be worse than the 2008 correction, worse than the Great Financial Crisis.” “The Fed started easing in 2007, and then they added massive liquidity. They cannot do that anymore,” he added. There is of course a pinch of hopium, however, as McGlone also tipped BTC to strongly rebound and hit a new all time high of $100,000 by 2025, while he is very bullish on ETH long-term due to future potential for institutional adoption. Related: The market isn’t surging anytime soon — so get used to dark timesLooking elsewhere, other analysts and experts have shared a similar amount of short-term pessimism to McGlone. Speaking to the New York Times on Sept. 19, Kristina Hooper, the chief global market strategist at Invesco noted the latest Fed announcement will be pivotal because of “what it could mean for the direction of the stock market for the rest of the year.” “The Fed has been the key driver of the stock market this year, and it has been mostly bad,” she said. While Ark Invest CEO Cathie Wood also added to her warning from last week that the Fed’s continued hikes could instead end up causing deflation, stating in a Sept. 18 tweet that the “Fed is solving supply chain issues by crushing demand and, in my view, unleashing deflation, setting it up for a major pivot.” This inflation started fewer than two years ago with COVID and supply chain bottlenecks, exacerbated by Russia’s invasion of Ukraine this year. The Fed is solving supply chain issues by crushing demand and, in my view, unleashing deflation, setting it up for a major pivot.— Cathie Wood (@CathieDWood) September 17, 2022

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