Voyager Digital Loses Control of Estate as Chapter 11 Trustee Requested

• A Voyager creditor requested a Chapter 11 trustee to partake in the bankruptcy trial of Voyager Digital.
• Voyager allegedly underreported loan amounts and undervalued Bitcoin in its financial reports.
• Coinbase backed out of a potential acquisition after discovering the financials did not add up.

Request for Chapter 11 Trustee

A Voyager creditor has requested a chapter 11 trustee to partake in the bankruptcy trial of Voyager Digital. Previously, Voyager and its creditors resisted Alameda Research’s attempts to recoup $446 million in loan repayments. A Voyager creditor and finance lawyer has requested the involvement of a chapter 11 trustee in the bankruptcy trial of crypto brokerage Voyager Digital. This could result in Voyager losing control of its estate. In a motion issued on 1 February, Voyager creditor Michelle DiVita accused Voyager of a history of financial statement inaccuracies and public misrepresentations that were known, or reasonably discoverable, at the start of the bankruptcy. DiVita believed that an examiner or trustee should have been requested because of this pre-bankruptcy behavior. Inasmuch, she was requesting one herself.

Financial Discrepancies

Voyager has been accused of concealing the true nature of its lending activities by publishing financial reports that materially understated its loan positions by over $1 billion USD. Shigo Lavine, a former Voyager director, highlighted some of the key allegations in the filing on Twitter on 1 February. Voyager allegedly underreported a $609 million loan to crypto hedge fund Three Arrows Capital. Moreover, it undervalued Bitcoin [BTC] in its financial reports by 546% to downplay the size of its loans.

Coinbase Responds

Coinbase also became aware of Voyager’s financial reporting inconsistencies and reportedly backed out from acquiring their assets after realizing that their finances do not add up correctly as expected for such deal to happen properly and successfully with them having required resources for it too as well as being able to fulfill their end goal from it too as well which is what any company would look for when entering into deals like these ones between themselves and another companies .

U.S Trustee Evaluates Applications

The U.S Trustee appoints a creditors committee and evaluates applications for professional re-compensation with respect to all related matters including those associated with such deals like these ones between companies too so they can be sure that there are no discrepancies between them as far as what they expect from each other when going into such deals.. Additionally, they may also recruit a bankruptcy trustee to oversee the debtor’s affairs if the debtors do not do so themselves too so there is always someone overseeing their operations even if they don’t want someone doing it themselves either way which includes all related matters associated with these kinds off dealings between two entities alike who enter into an agreement together like these ones here involving both companies involved equally altogether still yet regardless even though one maybe backing out now due to unforeseeable circumstances occurring during negotiations before hand previously already thus leading up till now currently this point still today yet despite this happening unfortunately unfortunately still yet either way nevertheless still either way regardless .

Conclusion

In conclusion ,a chapter 11 trustee may be appointed by court order if necessary , but regardless , Coinbase is no longer pursuing an acquisition due to discrepancies found within Voyagers finances . The U . S Trustee will evaluate applications for professional compensation ,and potentially recruit trustees if need be .

Bitcoin Soars 44.3% in January, Bulls Target $25K Mark

• Bitcoin rallied 44.3% from the swing low to the swing high of January, suggesting that a revival in prices and demand is taking place.
• The next level of resistance lies at the range highs of $24.3k and a breakout will target the $25k mark.
• Invalidation of the bullish idea would be a daily session close below $21.6k, signaling a reversal toward $19k.

The crypto market has been making headlines in recent months, with Bitcoin (BTC) at the forefront of the news. After experiencing a period of heavy selling pressure in 2022, the popular digital asset has witnessed a strong recovery in prices and investor sentiment in recent weeks.

January was particularly positive for Bitcoin, with the asset posting gains of 44.3% from the swing low to the swing high of the month. This rally has been a welcome surprise to many in the crypto space, as the majority of the news surrounding the asset had been bearish in nature.

The bulls have managed to hold their ground thus far, with Bitcoin currently trading above the crucial $22.2k level. This level has been identified as the lower timeframe bias breaker, meaning that invalidation of the bullish idea would require a daily close below this level.

Given the strong momentum that the asset has been displaying, a dip below $22.2k is unlikely. Should the bulls push the asset higher, they will encounter significant levels of resistance at the range highs of $24.3k, as well as $26k, $26.7k, and the $28k region.

The Relative Strength Index (RSI) shows strong bullish momentum and the On-Balance Volume (OBV) is in an uptrend, suggesting that more upside is possible in the near term. If the bulls can successfully defend the $22.2k level, they will have a great chance of pushing the asset towards the $25k level.

However, if the bears manage to break the $22.2k level, they will have an opportunity to push the asset back towards the $19k region. This could potentially invalidate the bullish idea and cause a severe sell-off in the crypto market.

At this point, it is too early to tell which direction Bitcoin will take. All that is certain is that the asset is in a period of high volatility and the coming weeks will be crucial for determining the future direction of the asset.

Nexo to Pay $45M Penalty for Selling Unregistered Securities to SEC

• The Securities and Exchange Commission (SEC) charged Nexo with selling unregistered securities on 19 January 2023.
• Nexo has agreed to settle with the SEC by ceasing the interest program and paying a $45 million penalty.
• Gurbir S. Grewal, the Director of the SEC’s Division of Enforcement, stated that all firms trading securities are subject to the law and must comply with the SEC’s expectations.

The Securities and Exchange Commission (SEC) has charged Nexo with selling unregistered securities on 19 January 2023. According to the SEC, the Nexo Earn Interest product offering and sale did not qualify for an exemption from SEC registration, which meant that Nexo was required to register its offer and sale, but did not do so. Nexo launched its Earn Interest product in June 2020 and the SEC has now taken action against the company.

Nexo has agreed to settle with the SEC by ceasing the interest program and paying a $45 million penalty. This is in addition to a $22.5 million settlement with state regulators. Thus, Nexo has to pay a total amount of $45 million. Earlier this month, Bulgarian authorities claimed that they had no proof of Nexo customers using the platform for illegal activities such as money laundering, tax evasion, and terrorist financing. However, Nexo refuted these allegations.

Gurbir S. Grewal, the Director of the SEC’s Division of Enforcement, spoke on the matter and stated: „If you’re offering or selling products that constitute securities under well-established laws and legal precedent, then no matter what you call those products, you’re subject to those laws and we expect compliance.“ Grewal further mentioned that the SEC would continue to hold crypto firms trading securities accountable under the law. This is to ensure that all firms trading securities are subject to the law and must comply with the SEC’s expectations.

The SEC has urged Nexo to cease its interest program and pay a hefty penalty for failing to register its offer and sale of securities. This is to ensure that all firms trading securities are subject to the law and must comply with the SEC’s expectations. Furthermore, Bulgarian authorities previously claimed that they had no proof of Nexo customers using the platform for illegal activities such as money laundering, tax evasion, and terrorist financing. However, Nexo refuted these allegations.

It is clear that the SEC is committed to protecting investors and taking strong action against firms that fail to comply with the law. Thus, it is important for firms to ensure that they are following all applicable laws and regulations in order to avoid any potential penalties.

Crypto Crash of 2022: The Failure of TerraUSD and Luna Demonstrates Need for Price Stability

• In November 2020, a third-party audit conducted by JS Held revealed that the Luna Foundation Guard (LFG) had spent $2.8 billion in crypto in May to defend the peg of the algorithmic stablecoin TerraUSD (UST).
• Terraform Labs (TFL), the developer of the Terra blockchain, spent $613 million defending the peg.
• In 2022, the collapse of the TerraUSD (UST) and Luna (LUNC) coins led to the cryptocurrency crash in the second quarter of that year.

In November 2020, a third-party audit conducted by JS Held revealed that the Luna Foundation Guard (LFG), an entity behind the now-defunct Terra ecosystem, had spent $2.8 billion in crypto in May to defend the peg of the algorithmic stablecoin TerraUSD (UST). Furthermore, Terraform Labs (TFL), the developer of the Terra blockchain, spent an additional $613 million defending the peg. These events demonstrate the importance of price stability when it comes to cryptocurrencies, and the need to create effective mechanisms to protect investors from extreme price volatility.

The creation of the TerraUSD (UST) stablecoin and the Luna coin in 2019 was an attempt to solve this problem. By linking the two coins, UST and LUNC, Terraform Labs hoped to provide a decentralized alternative to traditional fiat currencies, which are pegged to reserves such as gold. However, this system relies on the stability of the Luna coin, and when its price became destabilized in May 2022, it had a significant impact on the value of UST as well. This in turn led to the collapse of the entire stablecoin system in the second quarter of 2022, causing a cryptocurrency crash in the process.

The failure of TerraUSD and Luna to maintain their peg is a reminder of the need for effective mechanisms to protect investors from extreme price volatility. It is also a reminder of the importance of price stability in the cryptocurrency market, as unstable prices can have a ripple effect that can lead to the collapse of an entire system. As such, it is essential for developers to create systems that are robust and resilient, so that investors can feel secure in their investments.

Polygon Network Hardforks to Reduce Gas Fees and Reorgs

• Polygon has proposed a hardfork of its network on January 17th to address the spike in gas fees and reorgs
• The proposed changes include a decrease in the base gas fee to 6.25% and a decrease in the length of a block producer’s sprint from 64 to 16
• Following the announcement, the price of MATIC was on an upward trend, indicating a positive reaction to the change

Polygon has announced its intent to hardfork its network on 12 January, with the changes set to come into effect on 17 January. The hardfork is intended to address the recent spike in gas fees and reorgs that have been plaguing the network.

The proposed changes are set to have a major impact on the MATIC network, with the base gas fee set to decrease from its current 12.5% (100/8) rate of change to 6.25% (100/16). Additionally, the length of a block producer’s sprint will be decreased from 64 to 16, which is expected to speed up the process of verifying transactions.

The response to the announcement has been positive, with the price of MATIC on an upward trend following the news. At the close of trade on 12 January, MATIC had gained close to 3% in value, indicating a positive reaction to the changes. The asset was also in a strong bullish trend, according to the trendline on the daily timeframe.

The hardfork is set to bring a number of benefits to the MATIC network, including mitigating the increase in gas prices that occurs whenever there is heavy network usage. Additionally, the reorgs are expected to be fewer as the sprint length is cut in half. These changes should lead to improved user experience, which is great news for both developers and users alike.

Overall, the hardfork is a welcome announcement for the MATIC network, and it will be interesting to see the impact that the changes have on the network in the coming weeks.

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