ACE Exchange in turmoil as Taiwanese prosecutors broaden investigation

Asian fund acquires majority stake in The BlockIn the wake of certain difficulties experienced following the FTX collapse, prominent crypto publication The Block has secured its future through a strategic sale to Singapore-based venture capital group Foresight Ventures.Taking to the X platform on Monday, The Block’s CEO Larry Cermak announced the acquisition, with Foresight Ventures taking a majority stake in the publication. The deal results in a valuation of the US media group at $70 million. Cermak stated:”This [transaction] gives The Block a fresh start ahead of the bull market and provides us with more capital to build out new exciting products and expand our footprint into Asia and the Middle East.”Cermak also thanked New York-based investment bank Moelis & Company for its help in running the process.Photo by Kelly Sikkema on UnsplashFTX controversyThe sale should allow the firm to move on from a difficult situation which saw it implicated in the activities of convicted fraudster and former FTX CEO Sam Bankman-Fried (SBF). The fallout from the collapse of the FTX exchange in November of last year included the revelation that The Block had relied on undisclosed loans from SBF to sustain its operations.Michael McCaffrey, the former CEO of The Block, resigned last December after it was disclosed that he had borrowed $43 million from SBF’s Alameda Research, a crypto trading company. This financial arrangement was allegedly aimed at supporting the media company and facilitating property acquisitions.Following the conviction of SBF on charges of fraud and money laundering in New York earlier this month, The Block faced challenges and turned its focus towards building a more robust institutional customer base. The media group has been actively engaged in compiling industry deals and offering subscription-based news services.McCaffrey had taken loans totaling $27 million to buy out shareholders and support the media group, with an additional $16 million used for property acquisition in the Bahamas. The financial arrangement with Alameda was undisclosed to the broader team at The Block, as revealed by Bobby Moran, the company’s chief revenue officer at the time.It’s still unclear if McCaffrey has repaid these loans to the FTX Debtor that is currently managing the FTX business. FTX filed for Chapter 11 bankruptcy in November 2022 and with that, it is in the process of being restructured.$56 million investmentAs part of the deal, Foresight Ventures will invest $56 million, securing an 80 percent stake in The Block, according to a source cited by the Financial Times (FT). The investment is a strategic move, especially considering the recent slowdown in venture capital investment in the crypto market.While investors injected approximately $30 billion into crypto projects in both 2021 and 2022, the figure plummeted to $7 billion by the end of September of this year, according to PitchBook.Foresight Ventures CEO Forest Bai confirmed to the FT that The Block will continue to operate as an independent business. Bai stated: “We think The Block is one of the crown assets in the crypto media space. Our view is that the media aspect will continue to drive education and adoption in the space.”

Leading crypto exchange platform OKX has disclosed plans to discontinue its mining pool services, marking a strategic shift for the platform.Photo by engin akyurt on UnsplashService shutdown within one monthThe move, outlined by the firm in a notification to platform users on Friday, involves ceasing new user registrations effective immediately. Existing users will be granted access to the mining pool until Feb. 25. All mining pool-related services on OKX will be completely halted by Feb. 26. Mining Pools data reveals that OKX holds the 36th position among the top 70 bitcoin-focused mining pools, boasting a total hash rate slightly exceeding 496 TH/s. The decision to phase out mining pool services was attributed to "business adjustments," as communicated by OKX, though further details were not provided regarding the specific nature of these adjustments. Previously, OKX's mining pool supported various proof-of-work cryptocurrencies and offered staking services. However, over recent years, many supported assets had been terminated. Presently, the website only displays bitcoin, litecoin and ethereum classic pool services. Once accounted for 5% of all BTC blocks minedOKX's bitcoin mining pool had once accounted for around 5% of the blocks mined on the network. However, a setback occurred on October 16, 2020, when the crypto exchange temporarily suspended withdrawals due to one of its private key holders “cooperating with a public security bureau in investigations.” This led to a significant drop in hashpower connected to the pool, from 9,000 PH/s to 20 PH/s. The pool's current 528 TH/s now represents less than 0.0001% of bitcoin’s total hash rate. Industry trend formingThis strategic move by OKX reflects the evolving landscape of the crypto industry and the challenges faced by mining pools, particularly in the context of regulatory and operational adjustments within the market. The decision may even amount to a formative trend, given that global crypto exchange platform rival KuCoin made a similar move back in August. At the time, KuCoin outlined its plans to temporarily suspend its bitcoin and litecoin mining pools. Although it suggested a temporary halt to such services, there was no indication of when such mining-related services would resume. A company spokesperson stated:“We will see if it is needed to restart based on the market and users’ demand in the future.” Bitcoin halving pressuresOKX’s decision to discontinue mining pool services comes ahead of bitcoin's anticipated fourth halving in April, which is expected to reduce miner rewards from 6.25 to 3.125 BTC. The halving is casting a shadow over the mining sector. Miners' business cost per bitcoin mined is going to increase significantly. Some industry commentators speculate that the break-even point for miners will reach an unsustainable level. NASDAQ-listed Riot Blockchain, in particular, is being singled out as potentially being susceptible due to its cost structure. Miners have had a difficult couple of years, working their way through the bear market component of the last market cycle. That period saw leading miner Core Scientific declare bankruptcy. The company has since restructured and has been relisted on the NASDAQ.  

Coinbit suspends operations, marking second crypto exchange shutdown this monthCoinbit, a South Korean cryptocurrency exchange operated by blockchain service provider AXIASOFT, has suspended its services according to an official announcement on its website posted on Thursday (local time). This development comes just over a year after it became a virtual asset service provider (VASP) on Sept. 1 last year. It is also the second crypto exchange in the country that has ended its operations after Cashierest on Nov. 6, indicating that troubled predictions previously projected by industry sources are becoming a reality.Photo by Andrew Winkler on UnsplashBusiness transitionCoinbit explained that, despite its efforts to create an environment optimized for transparent crypto transactions, it was pushed by ongoing changes in regulatory policies to make changes to its business. It intends to shift its focus to establishing a securitized transaction system.Membership registration and deposits will no longer be allowed starting at 5 p.m. next Friday. Transactions and withdrawal services will be suspended from 1 p.m. on Dec. 29. The exchange advised its users to withdraw their virtual assets accordingly.Earlier, it was reported that Coinbit was facing difficulties maintaining smooth operations due to its exceedingly low trading volume. Industry sources believe that the realization of the previously speculated closure of coin market exchanges.More shutdowns to come?“Much of the workforce at crypto exchanges have been taking hits, leading to challenging business conditions,” stated an unnamed industry expert, proposing conjecture that more announcements of service suspensions may be imminent. According to a survey conducted earlier this year by the Financial Intelligence Unit (FIU), 10 out of 21 crypto exchanges reported zero revenue from transaction fees, and 18 were in a state of complete capital impairment.