Voyager Digital Shares Slump on Possible 3AC Loan Default

Key Insights:

  • On Wednesday, Voyager Digital Ltd (“VOYG”), listed on the TSX, slumped by 52.5%.
  • News of a possible Three Arrows Capital $650 million loan default hit VOYG shares.
  • Market conditions have increased calls for a more regimen crypto regulatory framework. The Lummis and Gillibrand bill may kick start the process.

In recent weeks, crypto-related companies have frequented the news wires, with the media reporting on the effects of the extended crypto winter.

Numerous companies have made announcements of plans to tighten the purse strings.

While it has been a bleak winter, leading exchanges don’t envisage market conditions improving anytime soon.

Prevailing market headwinds include inflation, central bank monetary policy, and the threat of a global recession.

On top of these more broad-based headwinds impacting the global financial markets, the collapse of TerraUSD (UST) and Terra LUNA has added to the crypto market woes. Regulators have found a new impetus to roll out more restrictive rules that could prove punitive to the crypto market.

Market share prices of publicly listed crypto exchanges have reflected investor sentiment towards the crypto market outlook.

Voyager Digital Shares Tumble 52.5% on News of a Possible Loan Default

On Wednesday, Voyager Digital Ltd. (VOYG), listed on the Toronto Stock Exchange (TSX), tumbled by 52.5%.

The extended sell-off saw VOYG slide to a new current-year low of C$0.55 before a partial recovery to close the day at C$0.76.

VOYG had slumped by 58% before the partial recovery. More significantly, VOYG was down 97% year-to-date.

While the crypto winter has taken a bite, the latest sell-off was in response to news of a possible loan default.

On Wednesday, Voyager Digital Ltd., owner of crypto exchange Voyager Digital issued a press release relating to its subsidiary Voyager Digital LLC.

According to the press release,

“Voyager Digital Holdings, Inc. (“VHD”) has entered into a definitive agreement with Alameda Ventures Ltd. (“Alameda”) related to the previously disclosed credit facility, which is intended to help Voyager meet customer liquidity needs during this dynamic period.”

The press release went on to say,

“VDH entered into a definitive agreement with Alameda for a US$200 million cash and USDC revolver and a 15,000 BTC revolver (the “Loan”).

In addition, the press release announced,

“Concurrently, Voyager announced that its operating subsidiary, Voyager Digital, LLC, may issue a notice of default to Three Arrows Capital (“3AC”) for failure to repay its loan.”

The press release added,

“Voyager exposure to 3AC consists of 15,250 BTC and $350 million USDC.”

Voyager Digital, LLC has requested payment of $25 million USDC by June 24 and repayment of the entire balance by June 27.

Founded in 2018, Voyager is a US cryptocurrency platform that supports the trading of more than 100 crypto assets. Its subsidiary, Coinify ApS enables Voyager to also offer crypto payment solutions for consumers and merchants globally.

Voyager Digital LLC Puts the Regulatory Spotlight Back on Cryptos

Wednesday’s sell-off and the Voyager press release put the spotlight back on the crypto market.

The press release highlights a lack of controls. Voyager was able to issue a loan more than four times in size than its very own cash and crypto equivalent on hand, which reportedly stood at $152 million.

With Coinbase, Gemini, and FTX having to tighten the purse strings and lawsuits filed in their droves, a regulatory overhaul could be a positive rather than a negative.

The collapse of TerraUSD and Terra LUNA and contagion across the broader market calls for a more rigid framework.

However, it remains to be seen whether the Lummis and Gillibrand bill will make its way through Congress unscathed to give the CFTC overall responsibility.

TAG Heuer Partners with BitPay to Accept Crypto Payments in the US

Key Insights:

  • On Thursday, TAG Heuer announced the introduction of online cryptocurrency payments in the US.
  • TAG Heuer customers in the US can now make online purchases of up to $10,000 per transaction with the support of BitPay.
  • As a Red Bull Formula 1 Racing Team official partner, Web3 options are endless.

Since 2021, the fashion industry and luxury brands have embraced cryptocurrencies and Web3. The acceptance of cryptocurrencies for payment is a natural step into the Web 3 space.

As the transition from the real to the virtual world gathers pace, the adoption of cryptocurrencies for payment has also gained momentum.

The wider acceptance of cryptocurrencies for payment comes despite this year’s crypto sell-off. Earlier this month, Web3 advocate and luxury fashion house Gucci started accepting crypto payments in US stores.

This week, Swiss luxury watchmaker TAG Heuer joined an ever-increasing list of names to accept crypto payments.

Swiss Luxury Watchmaker Takes US Online Crypto Payments

On Thursday, TAG Heuer announced customers within the United States can make online purchases of timepieces and accessories using cryptocurrencies.

According to the announcement,

“With an increasing number of customers using or earning digital currencies regularly, TAG Heuer intends to be a key player in the imminent transformation of the e-commerce and retail spaces.”

The announcement went on to say,

“With the support of BitPay which specializes in building custom blockchain payment technology for businesses, TAG Heuer now accepts a total of 12 cryptocurrencies at checkout.”

The 12 cryptos include Bitcoin (BTC), Bitcoin Cash (BCH), Dogecoin (DOGE), Ethereum (ETH), Litecoin (LTC), Shiba Inu (SHIB), Wrapped Bitcoin (WBTC), and five USD-pegged stablecoins.

The USD-pegged stablecoins include BUSD, DAI, GUSD, USDC, and USDP.

There is no minimum spend, and US customers can purchase up to $10,000 per transaction in supported cryptos.

Frederic Arnault, CEO of TAG Heuer, said,

“We have been following cryptocurrency developments very closely ever since Bitcoin first started trading. As an avant-garde watchmaker with an innovative spirit, we knew TAG Heuer would adopt what promises to be a globally integrated technology in the near future despite the fluctuations – one that will deeply transform our industry and beyond.”

Arnault added,

“As a luxury brand, we had to ensure that our entrance into Web3 would meet our standards of excellence and thanks to our nimble teams in-house and with the support of BitPay we are able to dive into this new financial world in the best way possible. This new crypto payment feature is just the beginning of many exciting projects for TAG Heuer in the Web3 universes.”

With TAG Heuer the official partner and timekeeper of the Red Bull Racing Formula 1 Team, Web3 is a target.

Formula 1 Team Owner Red Bull Looks to Lead the Way into Web3

In March, FX Empire reported Red Bull filing digital and metaverse-related trademarks. The applications raised the prospects of a Red Bull zone in the metaverse. Here, the opportunities are endless. Fans could buy drinks, clothing, and equipment, and even experience Red Bull-sponsored extreme sports.

With TAG Heuer now embracing Web3, the Formula 1 interlink could prove a mouth-watering prospect.

Red Bull Racing Formula 1 paved the way, partnering with Tezos (XTZ) to launch Red Bull Racing Formula 1 NFTs. NFTs from the Red Bull Racing Digital Collectibles are available for sale on the Sweet marketplace.

At the time of writing, however, there were no NFTs available for sale, with the “MAX VERSTAPPEN, WORLD CHAMPION 2021” NFT sold out.

TAG Heuer’s move into the space could give Red Bull and Red Bull Racing Formula 1 an incentive to dive deeper into the virtual space.

Gemini, Chainalysis, and Robinhood Join Crypto Market Integrity Coalition

Key Insights:

  • A total of 30 companies have joined the Crypto Market Integrity Coalition (CMIC).
  • CMIC signatories have signed a pledge to combat market manipulation.
  • Deltec, Chainalysis, and Robinhood are among the new joiners.

The Crypto Market Integrity Coalition (CMIC) was founded two months ago by 17 cryptocurrency exchanges, firms, and industry associations across the globe. Recently, another 13 firms joined CMIC, making it a 30 member body.

CMIC’s Onboards New Members

Risk-monitoring software company Solidus Labs convened the CMIC. CMIC has been urging digital currency companies to sign a ‘market integrity’ pledge that acknowledges the potential for fraud in the cryptocurrency space and the need for the industry to protect investors.

Recently, 13 major players in the crypto industry have joined forces with the CMIC intending to prevent market manipulation. By joining CMIC, crypto institutions provide regulators with additional assurances that investment in the crypto markets is safe.

The new signatories include crypto analytics firms Chainalysis, TRM, Elliptic, and exchanges like Gemini, Robinhood Markets, Nexo, and Bitpanda. These firms have joined CMIC’s 17 original members, including Coinbase, BitMEX, and Solidus Labs, bringing the total number of members to 30.

Solidus Labs Vice President of regulatory affairs Kathy Kraninger said that membership is open to all industry participants in an introductory video. Kraninger further added,

“To enable the promise of crypto and DeFi, we must as an industry be vocal about our commitment to address and mitigate the risks.”

The Need For A Safer Crypto Space

Participants and firms alike have voiced the need for a secure and protected crypto space. Hacks and security breaches have been more commonplace now. Ola Finance saw over $3.6 million siphoned off the protocol in an exploit in early April.

CMIC was formed to crack down on market manipulation to instill trust in the burgeoning digital asset industry. Founding members include prominent industry players such as Coinbase, BitMEX, Huobi Tech, Anchorage Digital, the Chamber of Digital Commerce, and CryptoUK.

The group aims to unite the disparate crypto groups behind its business principles. The coalition plans to advance training programs and encourage a dialog with regulators.

Apart from CMIC, other crypto industry advocacy groups include GoodFi, launched by Radix in 2021. GoodFi focuses on decentralized finance (DeFi) education, research, and best practices. It has 55 member organizations and hopes to get 100 million people to put at least a dollar into DeFi by 2025.

Another one is the Crypto Open Patent Alliance launched in 2020 by Square, now known as Block. This group has 33 members and shares a patent library to defend the crypto community against patent trolls and aggressors.

After FINRA Approval, Gemini Now Joins the Crypto Council for Innovation

Key Insights

  • The Crypto Council for Innovation announced that Gemini would be joining them this week
  • The Council aims to lead global efforts to promote responsible advocacy and education about crypto
  • This is Gemini’s second major membership this year after receiving FINRA membership approval

As one of the top 10 cryptocurrency exchanges globally, Gemini is a well-known name in the crypto space. However, its influence extends beyond just being a medium of exchange, evident with its growing associations.

Gemini in the CCI

The Crypto Council for Innovation (CCI) is an alliance of crypto space leaders worldwide.

These leaders work together to exhibit the true strength of crypto and how important it is in the future of finance.

For the same reason, it tasks itself with communicating with the policymakers and regulators worldwide. It further aims to eliminate the general lack of awareness and understanding of crypto.

While Gemini is its latest addition, the Council already boasts of some notable industry leaders as its members.

These include Block (formerly Square), Coinbase, Fidelity Digital Assets, Paradigm, Andreessen Horowitz, and Ribbit Capital.

Per the announcement, the Chief Executive Officer of the Council, Sheila Warren, said:

“We welcome Gemini as a trusted and knowledgeable stakeholder to help accelerate our growth and global leadership, we look forward to increasing awareness of digital assets and driving the evolution of financial systems to bring greater choice, agency, and opportunity to individuals and communities around the world.”

Since its launch in 2014 by the Winklevoss brothers Tyler and Cameron, Gemini has significantly grown as an organization.

Last month, the company received its Financial Industry Regulatory Authority (FINRA) approval.

This approval allowed the Gemini Galactic Markets to operate a broker-dealer registered with the Securities and Exchange Commission (SEC).

Regarding the CCI joining, Gemini’s Head of Policy and Regulatory Affairs Ji Kim stated:

“We are fully aligned with CCI’s mission in ensuring the continued responsible growth of crypto in a way that unlocks its potential to improve the lives of many. As a CCI member, we will continue to partner closely with policymakers and regulators around the world to help build a bridge to the future of cryptocurrency,”

SEC Inquires Gemini

While the exchange stands for one of the industry leaders, it is not surprising that the SEC found a way to hassle them.

Last month major crypto firms – Gemini, Celsius Network, Voyager Digital were all inquired concerning their lending policies.

These platforms pay higher interest rates than most banks do, which the SEC has been wary of citing investment risks.

Although the regulatory authority took no action, the incident did demonstrate how Gemini’s growth is being watched by investors and bodies alike.

77% Crypto Investors Prefer Gaming, Exchange & Blockchain Projects

In an exclusive research report provided to FXEmpire from BDC Consulting, various aspects of the process behind an investor’s decision-making have been analyzed. The research focused on just five essential questions that encompass investor psychology.

The “How” Behind a Decision

BDC Consulting selected 16 individuals, each with a different timeframe of experience in the crypto space. This focus group included eight people with up to one experience in crypto investments.

Another four people have been investing in crypto for between one to two years, and four more investors have been in this space for more than two years. 

The game, created with a simple objective of maximizing profits through investment distribution, brought forward some interesting insights.

Firstly it was observed that the focus group tended to approach the group choice when it came to investing.

Coincidentally this decision also benefited them as each individual gained 15% higher benefits. In line with the same, the report stated:

“ – The opinion of the group will allow paying attention to the details of the projects that were not touched upon in the first study; 

– Project discussions can also demonstrate an unexpected and attractive investment decision; 

– Also, by participating or taking into account the group discussion, one can more accurately determine the most profitable project from the set.”

Secondly, when it came to alluring factors while choosing a project, the research found that individuals also focused on the more intrinsic details beyond the common profitability characteristic.

Transparency, a strong development team, community support, understanding the mechanics of the project, and stability were some critical factors in their decision-making process. Other expectations from the project included the following:

Biggest expectations from a project | Source: BDS Consulting

The most interesting outcome was the focus group’s choice of project based on its functionality.

About 34% of choice came for Exchange projects (Binance, Kraken, Gemini, etc.), 22% for Blockchain projects, and 21% for Gaming (GameFi) projects (Axie Infinity, Decentraland, etc.).

On the other hand, DeFi and MEME projects (Dogecoin, Shiba Inu, etc.) accounted for just 7% and 15% preference, respectively.

Investors did not prefer DeFi and MEME projects as much | Source: BDS Consulting

Furthermore, on the discussion of how a group investment decision is formed, the research found that ‘group decision is an ambiguous tool.’ Adding to the same, the report stated:

“The basics of DAO principles allow one to build the most effective communication according to two advantageous strategies: a deep review of each project or selection by key weaknesses. The first strategy is better suited for a small set of projects, and the second is suited for working with an array.

Analytical and logical arguments are important. They allow you to adjust the willingness to take risks. However, the group is more susceptible to misconceptions and biases that do not correlate with real data, making this practice potentially dangerous for making high-risk decisions”

Finally, BDC Consulting highlighted that different market categories’ projects are identified based on their yield in the last observation.

Although, a group selection better distinguishes projects of higher yield than lesser profitable projects.

In the prevailing market conditions, these factors play a significant role when it comes to deciding upon crypto investments.

Sling TV to Accept Dogecoin and Other Digital Assets for its Subscriptions

Popular meme coin, Dogecoin, has witnessed a new addition to the list of firms accepting it as a payment method. 

Sling TV Partners With BitPay

According to available information, Sling TV has announced that it is partnering with crypto service provider BitPay, to accept crypto payment. This means that users can subscribe to the streaming service using crypto payment options.

Sling TV is a US-based streaming service owned by Dish Network and has over 2 million subscribers in the United States.

The firm’s addition of crypto payment option also means that the firm would accept payment through Litecoin, Bitcoin, Ethereum, Bitcoin Cash, Wrapped Bitcoin, and Shiba Inu. It would also accept 5 USD-pegged stablecoins, including GUSD, USDP, BUSD, DAI, and USDC.

Crypto Payment Option is Available for Existing Users Only

Presently, the crypto option would only be available to existing users as new subscribers have to first sign up for the service using American dollars. However, subsequent renewals can be made via crypto.

Also, users cannot automate their crypto payments presently. Instead, they’ll have to make a manual repayment each time the existing one expires. The manual prepayment option ranges between one to six months, so users don’t need to renew every month if they don’t want to.

Sling TV has also set up a support page that provides users with all the necessary information about paying in crypto.

The comprehensive page will guide users through the process of making payments. In addition, it will help to reduce any errors that are likely to arise for first-time users of this technology.

Sling TV’s decision to support crypto payments is part of its desire to give users more flexibility and ease of use. 

Apart from Sling TV accepting Dogecoin, Elon Musk also confirmed that Tesla will soon be accepting Dogecoin for its charging stations in the future. The carmaker is already one of the few institutions that accept DOGE payments for its products.

The growing acceptance of Dogecoin is yet to tell on its price, which is currently trading at $0.1385 after a 0.4% rise in the last 24 hours. During the last seven days, the asset’s value has dropped by over 7%.

Circle’s Value Jumps by 100% to $9 Billion Post New Agreement

One of the biggest names in the crypto space, Circle announced that it will be terminating the existing business combination with Concord Acquisition Corp and will now enter into an agreement with new terms.

This change of agreements is the reason behind Circle’s increased valuation.

Circle Squares Up

Best known for issuing the second biggest stablecoin in the world and the fifth-biggest cryptocurrency in the world, the USD Coin (USDC), Circle has revamped its terms with Concord today. 

Back in 2021, Circle had entered into a definitive business combination agreement with Concord, a publicly-traded SPAC (special purpose acquisition company).

This agreement’s expiration date is set on April 3 2022 and because due to unspecified reasons it could not be completed, the companies will simply be replacing the new deal with the older business agreement.

Once successfully executed, this agreement would allow both the companies to be listed on NYSE under a holding company tradable under the ticker “CRCL”

On the prospect of soon becoming a public company, the Co-founder and CEO of Circle Jeremy Allaire stated:

“Being a public company will further strengthen trust and confidence in Circle and is a critical milestone as we continue our mission to build a more inclusive financial ecosystem. Making this journey with Concord under our new agreement is a strategic accelerator.”

In conclusion, the improvement in Circle’s financial outlook and competitive position owing to the growth of USDC has resulted in Circle’s overall value rising by 100% from the previous $4.5 billion to $9 billion.

Additionally, as per an announcement today, Circle joined the likes of Coinbase, Robinhood, Gemini, Fidelity Digital Asset Services, Gemini, and more in launching TRUST.

The platform has been created to serve as an industry-wide solution to comply with the mandates of the Travel Rule while still keeping users’ personal details secure.

The Growth of USDC

USDC currently has a market cap of $52.6 billion. This time last year the same market capitalization was sitting at $7.29 billion.

Put simply this growth translates to a 621.53% year-on-year growth and if USDC continues to rise at this rate by this date in 2023 the market cap would be sitting at $379.52 billion.

Although the market dip of February 10 did result in a slowdown in USDC issuance, the same would improve once the market goes back into either posting a green candle or simply consolidating at current levels without dropping further.

USDC circulation slowed down slightly post the February 10 market dip | source: Messari

Coinbase, Robinhood & Others Launch TRUST To Deal With Travel Rules

As described by themselves, TRUST aims to be an industry-wide solution that has been created in order to comply with the mandates of the Travel Rule.

Through this, the member cryptocurrency exchanges can easily and securely provide requisite data necessitated by the FinCEN.

Time to TRUST?

According to the regulations set by the Travel Rules, every financial institution that is facilitating transactions among its customers is required to share certain data with the FinCEN (Financial Crimes Enforcement Network).

Thus, now even cryptocurrency exchanges have been mandated to follow the rule since it acts as a medium of such transactions.

Furthermore, the rules explicitly state a list of details such as the name, account number, address, identity, etc. which are compulsory for the intermediary financial institution to pass on to the authorities.

Thus, a myriad of cryptocurrency exchanges joined hands in order to find a much more secure way to share these details which led to the birth of TRUST.

The present members of TRUST include Anchorage, Avanti, Bitgo, bitFlyer, Bittrex, BlockFi, Circle, Coinbase, Fidelity Digital Asset Services, Gemini, Kraken, Paxos, Robinhood, Standard Custody & Trust, Symbridge, TradeStation, Zero Hash, and Zodia.

The TRUST platform uses ingenious methods to ensure the personal details are not put at risk in any way. Since TRUST only acts as a secure medium, sending required information through an end-to-end encrypted channel.

Secondly, TRUST has stated to have established a mechanism in play that would make it compulsory for the receiving crypto exchange to have proof of their ownership of the incoming crypto information.

The announcement stated,

“The launch of TRUST resoundingly demonstrates that top-tier compliance can go hand-in-hand with a core industry value–robust protection of customer privacy and security.”

The TRUST also added that they aim at reaching international exchanges as well when it begins with its expansion plan since it does not plan on limiting just to US-licensed exchanges.

The SEC’s Hand

Recently one of the members of TRUST, BlockFi, faced SEC’s wrath as it received a $100 million fine, the biggest in SEC’s history. The penalty came due to non-compliance with regulatory laws in the country.

Thus considering, the income tax on crypto, legislation for insuring “Qualified Stablecoins” and now TRUST, it seems like authorities and people are both looking at creating a strong adoption case for crypto as soon as possible.

Crypto Exchange Gemini’s Galactic Markets Is Officially a FINRA Member

The Gemini Trust Company successfully received the approval of the Financial Industry Regulatory Authority (FINRA) yesterday.

This makes Gemini Galactic Markets a member of the independent regulatory body which allows it to operate a broker-dealer registered with the Securities and Exchange Commission (SEC).

Gemini Galactic in FINRA

Thanks to this approval, Gemini Galactic Markets, as per the announcement has become capable of operating an ATS (alternative trading system) which will be used to facilitate digital asset securities’ trading.

Founded in 2015 by the Winklevoss Twins, Gemini has grown immensely over the years. Conducting over $268 million worth of trading on a daily basis, the cryptocurrency exchange is the eleventh biggest exchange in the market today.

Along with the announcement of Gemini Galactic gaining FINRA membership, the company stated:

“Gemini is committed to proactively working with regulators to ensure our customers have as much freedom and choice as possible in accessing the digital asset ecosystem. Gemini Galactic’s broker-dealer registration is an important step in fulfilling that vision, and we’re excited to expand our offerings in lockstep with the growth and maturity of the industry.”

The company stated that the digital asset security ecosystem is yet to reach its peak. This makes Gemini Galactic a first mover and they intend on further developing this place. The announcement also said: 

“Gemini Galactic will leverage the existing experience and expertise in crypto assets across the Gemini family to operate a secure and compliant trading platform and offer new products to our users.”

Not the Best Timing?

The crypto market was seeing some momentum build up in the last few days but it seems to be subsiding with the current status of the market. The strength of the active downtrend is at its peak which is certainly not a good sign for the overall market as well. 

Bitcoin is presently trading at $36.4k, but even at the worst of it, the king coin is far away from touching the $30k that many feared for the last few days.

Bitcoin is still trading in red at $36.6k – Source: FXEMPIRE