dtcpay forges strategic partnership in launch of crypto payments system

A settlement agreement between failed crypto lender BlockFi and bankrupt Singaporean crypto hedge fund Three Arrows Capital (3AC) has received approval from a U.S. judge. However, the specifics of the settlement remain sealed, citing concerns raised by yet another failed crypto platform, FTX. Dispute resolvedDuring a hearing on Feb. 6, New Jersey Bankruptcy Court Judge Michael Kaplan resolved the dispute, which saw BlockFi claiming $129 million owed by 3AC, while the Singapore-based firm contended that BlockFi owed it $280 million. Judge Kaplan's decision to keep the settlement agreement sealed stemmed from a perspective that unsealing it would be counterintuitive. BlockFi had filed a motion to seal the settlement terms last month. The U.S. Trustee objected to the seal, asserting that the debtors hadn't provided sufficient justification for sealing the agreement.Photo by mk. s on UnsplashSensitive settlement termsBlockFi justified the need for confidentiality, citing the sensitive commercial nature of the terms, which could potentially impact ongoing litigation involving FTX. The approval of the settlement now paves the way for BlockFi to proceed with distributions from the lending estate to its 100,000 creditors, with the firm owing up to $10 billion. Central to the dispute were preferential payments, transactions made just before bankruptcy that could have given the recipient more than they would have received through court proceedings. The resolution of counterclaims between BlockFi and 3AC follows mediation ordered by Judge Kaplan in October, likely culminating from a two-day hearing starting on Jan. 5 aimed at resolving the matter conclusively. This settlement follows another agreement between 3AC and Genesis, settling $1 billion in claims by 3AC. The company filed for bankruptcy in July 2022, attributing the extreme fluctuations in cryptocurrency markets as the reason for its collapse. Projected 46% 3AC creditor recoveryAccording to a December report to creditors by Teneo, it's estimated that 3AC creditors will receive approximately 45.74% of their claims from the bankrupt estate. As of Dec. 18, 2023, 3AC's assets were valued at $1.16 billion, while recognized claims for distribution stood at $2.7 billion. In an ongoing effort to secure 3AC's assets, a British Virgin Islands (BVI) court froze $1 billion in assets belonging to 3AC's founders, amid the liquidation process. This move is part of a broader strategy to seek recoveries from the founders and Kelly Chen, wife of one of the co-founders. 154 claims totaling $3.4 billion were filed against the 3AC estate, with $200 million not admitted for distribution and $322 million rejected or expected to be rejected. Additionally, claims worth $76 million are currently under dispute. BlockFi, along with eight affiliates, filed for Chapter 11 bankruptcy in November 2022. The firm cited significant exposure, including obligations owed to BlockFi by FTX-linked hedge fund Alameda Research, assets on the FTX platform and an undrawn credit line from FTX. 3AC’s collapse in June 2022, followed by FTX's downfall, led to BlockFi's bankruptcy filing in late November 2022. In a separate development, OPNX, a crypto bankruptcy claims platform launched by 3AC co-founders Su Zhu and Kyle Davies, announced its cessation of operations, with plans to shut down by Feb. 14.  

Gemini Opening Engineering Center in IndiaUS-based crypto exchange Gemini announced on Thursday that it is in the midst of opening an engineering center in India. The company plans to open the center in Gurgaon, making it Gemini’s second largest engineering hub behind its existing base in the United States. Gemini also has offices in the United Kingdom, Singapore and Ireland.©Pexels/Studio Art SmileDeveloping next-gen user experiencesThe objective of the India-based engineering, design and operations team will be to work on the development of core platform fundamentals relative to compliance, security, payments, and data pipelines and warehousing. Furthermore, the unit is being set the goal of building new feature sets relative to the company’s NFT and digital asset marketplaces. What that team develops is intended to be used within Gemini’s overall retail and institutional product and service offering across in excess of seventy countries worldwide.In the statement published to its website, Pravit Tiwana, Gemini’s Global Chief Technology Officer (CTO) and Asia-Pacific (APAC) region Chief Executive Officer (CEO) stated that the firm is actively recruiting software engineers and technical product managers and for other technical roles to staff the Gurgaon facility. Tiwana emphasizes a need for people who are “inspired to learn quickly” relative to DeFi, Web3, NFTs and DAOs.Singapore expansionTiwana himself has been newly appointed to his role and in a separate announcement Gemini founders Tyler and Cameron Winklevoss welcomed Tiwana on-board. The statement also reveals that in addition to establishing an engineering team presence in India, it also intends to add a business team in India and to expand its business team at its existing Singapore base with the objective of growing its institutional and retail customer base in the APAC region.The Winklevii twins said that they believe that “crypto and Web3 products will continue to have a [sic] strong growth trajectories in APAC. Crypto knows no boundaries, and that is why Gemini is a global company.”Expanding beyond the USIt’s patently obvious to anyone following developments in the crypto space over the course of recent months that the Biden administration in the United States is currently hostile to crypto. The Washington, D.C. government has used various mechanisms of state including the Federal Reserve, the Securities and Exchange Commission (SEC), the Department of Justice and the Department of the Treasury to instigate a purge against crypto companies, including those who bank crypto companies. That has seen key operators in the US crypto ecosystem looking beyond US borders right now.Earlier this week, Coinbase CEO Brian Armstrong signaled that the company would act and move overseas if the regulatory environment in the United States didn’t improve. Subsequently, it emerged that Coinbase had established a presence in Bermuda. It’s being speculated that this entity could be used to float an offshore exchange. Similarly, the company is understood to be seeking a crypto license in Abu Dhabi.Gemini looking to develop overseas is likely to be motivated by similar concerns. Crypto companies can see that jurisdictional arbitrage applies and if governments act to stymie such business activity, other global centers such as Singapore, Hong Kong, Abu Dhabi, India and others will seize the opportunity and nurture that business and the innovation at hand.

China’s leading science foundation has initiated a research program to examine the effects of stablecoins, reflecting concerns that such digital currencies could pose a risk to the nation’s financial system and its fiat currency. According to the South China Morning Post, the National Natural Science Foundation of China (NSFC) is now offering grants for studies focused on stablecoins and the creation of cross-border monitoring frameworks. The foundation expressed that the unmonitored circulation of private stablecoins, particularly those pegged to the U.S. dollar, could weaken capital controls and present a potential challenge to the yuan. This initiative emerges as governments around the world, from the U.S. to regional financial centers, are actively developing rules for the digital asset sector.Photo by  Christian Lue on UnsplashStrategic research and internal debateThe NSFC will fund the projects with grants valued between 200,000 and 300,000 yuan ($28,042 to $42,063). Researchers are expected to complete their work within a year and deliver policy recommendations on how China can manage the challenges posed by global stablecoins and contribute to digital finance governance. The deadline for applications is Oct. 9. This research program is set against a backdrop of internal discussion in China regarding the possible launch of a yuan-backed stablecoin. While some economists support the idea of boosting the yuan's international profile, Bloomberg noted that former central bank governor Zhou Xiaochuan has advised caution. He recently said the high efficiency of China's current payment systems and warned that financial stability could be threatened by speculation in the stablecoin market. Analysts believe any state-sanctioned yuan stablecoin would likely be confined to offshore markets and tied to the offshore CNH. Global regulatory landscapeChina’s examination of stablecoins is part of a broader global trend of increased regulatory focus on the asset class. In Hong Kong, a new ordinance took effect on Aug. 1, creating a mandatory licensing system for stablecoin issuers under the oversight of the Hong Kong Monetary Authority. Other Asian nations are also taking action. South Korea’s government is reportedly exploring a model for a won-pegged stablecoin involving a consortium of banks and non-bank entities. Separately, Cointelegraph reported that Kyrgyzstan has introduced legislation outlining a regulatory framework for such assets. Developments are also accelerating in the U.S., where the Guiding and Establishing National Innovation for U.S. Stablecoins (GENIUS) Act was signed into law, creating a federal structure for stablecoin oversight. On a commercial level, a Minnesota-based credit union, St. Cloud Financial, intends to introduce its own stablecoin later this year, a move highlighted by Cointelegraph. This token, named Cloud Dollar (CLDUSD), is designed to integrate with the credit union's banking system to facilitate faster and cheaper transactions for its members within a regulated environment.