Thailand plans to enable tourists to spend crypto

Terraform Labs civil trial proceeds with confidential filingsSingaporean blockchain development firm Terraform Labs, the creator of the failed Terra blockchain protocol, has reached an agreement on a protective order in their ongoing civil case with the United States’ Securities and Exchange Commission (SEC).Photo by Thomas Habr on UnsplashData shielded from public disclosureThe decision, sanctioned by the U.S. District Court Judge Jed Rakoff in the Southern District of New York on Wednesday, ensures that materials marked as confidential by the involved parties will remain shielded from public disclosure. The court is obligated to seal any discovery filings labeled confidential ahead of the trial.Judge Rakoff conveyed his likelihood of denying requests to unseal these confidential documents, although the order did not delve into the specific rationale for maintaining their confidential status beyond citing “good cause.” The finalized agreement on this protective order took place on Dec. 18, with legal representatives from both the SEC and Terraform Labs, including co-founder Do Kwon, giving their consent. Kwon, presently detained in Montenegro, faces potential extradition to the United States or South Korea.Pivotal momentThe depegging of Terraform’s stablecoin TerraUSD (UST) from the U.S. dollar marked a turning point in the cryptocurrency sector. This event is believed to have significantly contributed to the crypto market downturn in 2022, as it had a knock-on effect on countless other crypto businesses and platforms that were over-exposed to the flawed algorithmic currency.That chain of events led to the SEC taking action after the fact. However, it has subsequently also pursued a much criticized “regulation by enforcement” policy relative to the crypto sector. To that end, the Commission has pending cases against Coinbase, Ripple, Kraken and Binance, among others.In February, the SEC accused Terraform Labs and Do Kwon of conducting a multi-billion dollar crypto asset securities fraud by offering and selling unregistered securities. As proceedings have unfolded, both Terraform and the SEC have traded unsuccessful attempts to obtain summary judgment.Far-reaching consequencesThe ongoing SEC vs. Terraform civil case carries potential far-reaching consequences in terms of legal precedents within the cryptocurrency sector. In a separate ruling in August, the court allowed Terra to issue subpoenas to FTX entities as part of FTX’s bankruptcy proceedings. Judge Rakoff, in November, accepted confidential materials from Jump Crypto Holdings for discovery in this case.Troubled crypto lender Genesis Trading has also been tangled up in the proceedings with the courts directing it to comply with a subpoena initiated by Terraform Labs. The outcome of this case is poised to offer essential legal guidance for numerous companies operating in the crypto space.The SEC’s regulatory approach toward cryptocurrency firms in the United States has been subject to considerable debate and criticism. The commission’s alleged “regulation by enforcement” strategy, especially in dealings with major players in the crypto industry, has drawn accusations.While many in the U.S. have been unhappy with “regulation by enforcement,” the upside is that over the longer haul, the courts will be able to eventually furnish the regulatory clarity that the SEC refuses to provide. The ongoing scrutiny of regulatory approaches and the outcomes of cases like Terraform Labs vs. SEC will undoubtedly shape the future legal landscape of the cryptocurrency industry.

Beijing-headquartered crypto mining equipment manufacturer Canaan recently revealed its financial results for the fourth quarter of 2023, demonstrating that it continues to struggle with profitability despite positive numbers relative to revenues and growth.Photo by Sasun Bughdaryan on UnsplashIncreased revenues and salesAccording to the company’s filing, during the last quarter of 2023 Canaan reported a surge of 45.7% in total computing power sold compared to the preceding quarter, reaching 5.5 million Thash/s. This ascent, which reflects a 191.9% increase from the same period in 2022, signifies not just a recovery but a robust resurgence in demand and operational ability. The company's dispatch of 19.6 million Thash/s throughout the year, marking a 29.6% leap from 2022, aligns with the rebound in bitcoin prices observed in Q4 2023, a pivotal factor shaping Canaan's operational revitalization. 47% growth on previous quarterA closer examination of the financials reveals not only surpassing total revenues but also a notable 47.3% quarter-over-quarter growth. Canaan's foray into international markets, bolstered by securing substantial orders from esteemed public company clients, underscores a buoyant sales performance and a positive outlook for the computing sector. Despite the buoyant sales and revenue figures particularly in the mining machine market, the sector has faced ongoing regulatory uncertainties and market fluctuations. Nonetheless, the company's strategic initiatives, alongside the positive market effects of the approval and listing of spot bitcoin exchange-traded funds (ETFs), have been positive. Moreover, Canaan's investments in wafer supply capabilities and strategic financial maneuvers garnered approximately US$136 million through at-the-market (ATM) programs and preferred shares. Recording a lossYet, the company’s journey in 2023 was not without its hurdles. Q4 2023 witnessed a significant increase in product revenues from the previous quarter but a decline from Q4 2022, attributed to dwindling sales prices as the halving event loomed, underscoring the volatility inherent in the cryptocurrency market. Results published last year are indicative of the company’s difficulty. In Q2 2023, revenues were strong, yet the company wasn’t turning a profit.With Q4 results, it’s now clear that the firm lost $421 million in 2023. In Q4, Canaan recorded a net loss of $139 million. That compares with a loss of $91 million in Q4, 2022. The company also expects tough market conditions in 2024. In its forward-looking outlook, it stated:”For the first quarter of 2024, and the second quarter of 2024, the Company expects total revenues to be approximately US$33 million and US$70 million, respectively, considering the challenging market conditions across the industry. This forecast reflects the Company’s current and preliminary views on the market and operational conditions, which are subject to change.” The crypto mining sector remains a very challenging market. With the upcoming Bitcoin halving event set to occur in April, it’s expected that as much as 20% of mining capacity could be forced offline, as some equipment would simply fail to mine on a profitable basis. Indicative of the challenges within the sector, crypto miner Core Scientific was forced into bankruptcy due to market difficulties in December 2022. It has only recently exited that bankruptcy process and now expects to generate revenues of $600 million in 2024. Another Bitcoin miner, Riot Platforms, has warned that profitability may be difficult to achieve in 2024 due to chip shortages.   

Hong Kong Crypto Exchange Contemplates Sale at HK$1 Billion ValuationHong Kong’s BC Technology Group is reportedly considering the sale of its crypto platform, OSL, with a suggested valuation of approximately HK$1 billion ($128 million).Photo by Samuel Chan on UnsplashDiscussions with potential buyersThat’s according to a report published by Bloomberg on Monday. OSL holds the distinction of being one of only two exchanges alongside competitor HashKey licensed under the digital asset regulations introduced by the city of Hong Kong in June. Bloomberg cited anonymous sources familiar with the matter having revealed that BC Technology has initiated discussions with potential buyers, including industry players and funds.OSL’s platform encompasses prime brokerage, exchange services, and secure custody solutions for the cryptocurrency markets. Furthermore, OSL plays a pivotal role in facilitating financial institutions’ access to virtual asset trading. Rather than a complete sale of the company, BC Technology is considering the possibility of divesting specific parts of the business, according to these sources.It’s important to note that these deliberations are ongoing, and there is no guarantee that they will culminate in a final deal, as highlighted by the insiders. In response to an inquiry from Bloomberg News, a representative from BC Technology stated:“We are a highly transparent and regulated company. We do not comment on market rumors and speculations.”Valuable trading licenseOSL's regulatory licensing is likely to add considerably to its value. Earlier this year it emerged that digital asset sector firms were shelling out a range between HK$20 million and HK$200 million in their efforts to secure crypto trading licenses in Hong Kong.In May the company obtained Type 1, 4, and 9 licensing from Hong Kong’s Securities and Futures Commission (SFC) through its OSL Asset Management (OSLAM) business. Following the acquisition of licensing, the firm moved to launch its first fund, concentrating on blockchain, artificial intelligence (AI), and Web3 technologies.Hong Kong’s crypto hub challengesHong Kong enabled retail-level crypto trading on June 1, with the aim of further establishing the city as a hub for the cryptocurrency sector. The regulatory change enabled retail investors to trade larger tokens such as Bitcoin and Ethereum on licensed exchanges. Despite these efforts, demand for cryptocurrencies remains lackluster due to the lingering effects of last year’s wave of crypto sector bankruptcies.To compound matters, Hong Kong is also grappling with the repercussions of the JPEX exchange scandal, an unlicensed Dubai-headquartered entity that further tarnished the reputation of the digital asset industry in the region.BC Technology’s market value has shown substantial growth, surging to almost HK$1.9 billion from its low point earlier in the year. However, the company’s shares remain down by 80% from their peak in June 2021, which coincided with the cryptocurrency market’s frenzy during the pandemic.In response to market developments, OSL has withdrawn its application for a digital asset license in Singapore and it is preparing a revised submission. It’s worth noting that certain clients from Singapore are being transitioned to the exchange in Hong Kong.