Stanford University has indicated that it intends to reimburse millions to FTX after confirming illegal donations by Sam Bankman Fried.
FTX legal counsel has increased efforts to crawl back all donations that were made by EX-CEO Sam Bankman Fried using customer deposits
Stanford University has confirmed receiving donations from FTX for pandemic-related prevention and research but will fully refund it. The institution is complying with calls from FTX liquidation officials to refund the money which had been part of customer deposits.
FTX continues ploughing back illegal donations
FTX, under Sam Bankman Fried’s leadership, had dished out multiple donations, which are alleged to have come from customer deposits. The CEO sought political and other strategic allies, giving out those donations.
Following the collapse of the multi-billion dollar company, it has been understood that there were a lot of fraudulent activities and mismanagement of customer funds, which has hurt customers and creditors. While Sam Bankman Fried is facing charges in the United States, FTX is under a liquidation process to repay its creditors and refund customer deposits.
As part of the repayment process, the current leadership has moved to reclaim all donations made illegally. The California-based institution, Stanford University, falls in the entity category that is to refund all donations issued to them.
The university received $5.5 million between November 2021 and May 2022. In a Sept. 19 email, the institution’s spokesperson said that its administration had been discussing with FTX legal counsel to recover the gifts received and intended to refund the defunct exchange.
Similar efforts and reports of donations being ploughed back are still expected to happen with time as the FTX debtor’s legal counsel seeks to gather as much funds as possible from the liquidation process. Keep watching Fintech Express for more updates on crypto and other fintech-related fields.
Mark Zuckerberg’s Meta is reportedly working on an AI project that is meant to rival OpenAI’s ChatGPT
Wall Street Journal Exclusive story indicates that Meta is in very advanced stages of AI chatbot development
Meta has been on the spot before for training its AI with licensed artwork, and reports leaked that it was working on an AI chatbot. A Wall Street Journal exclusive story now indicates that its AI project will rival OpenAI.
Meta’s AI conversation continues.
Meta, the parent company to multiple social media platforms, WhatsApp, Facebook, Instagram, and Threads, has indicated that it is working on the world’s most powerful artificial intelligence project.
This project is meant to rival OpenAI’s ChatGPT models, with sources close to the company saying it aims to have its AI (Llama) be “several times” more powerful than its earlier version, the Llama 2 model released earlier this year.
Meta has been building data centers necessary for developing such a project, acquiring respectable numbers of Nvidia’s H100 semiconductor chips- the most powerful and highly coveted ones on the market. Wall Street Journal’s sources expect that the company will make the AI project open, allowing other companies to learn from its code and produce similar high-level models.
Llama was trained on over 70 billion parameters, making it one of the most potent AI projects. However, OpenAI’s ChatGPT 4 was reportedly trained on over 1.5 trillion parameters, though official numbers are yet to be released.
At the same time, the claims of Meta having a rival Llama model remains to be certified as no official communication is out yet. Keep watching Fintech Express for updates on this and other tech-related developments.
The United Kingdom Treasury has released a consultation paper seeking to understand the effects of a blanket ban on crypto-related cold calls.
The new fieldwork seeks to understand the impacts such a crypto regulation would have on businesses and the economy at this time.
The U.K. has continued to push its limits regarding crypto regulation after His Majesty’s Treasury released a consultation paper that seeks to gauge what the impacts of a blanket crypto cold calls ban would have on the economy.
U.K. crypto regulatory efforts continue
The United Kingdom government is increasing its oversight on crypto assets as it considers the industry risky to its citizens. Some of its regulators have been issuing tighter restrictions, like the UK FCA and advertising boards, to control what it considers a ‘mayhem’ in the industry.
On May 3, it announced an ambitious fraud strategy that created new jobs in a push to review policies around emerging technologies sectors. The country’s National Crime Agency estimates that fraud costs are approximately $8.7 billion annually, an arrangement the government will not “tolerate.”
Now, the Treasury’s Economic Secretary, Andrew Griffith, has said that an increasing number of cold calls, often used to target vulnerable members of society, leads to fraudulent activities. As a result, the Treasury is now weighing whether to impose a blanket ban on crypto related cold calls.
In the consultation paper, the Treasury highlighted numerous cold calls being responsible for significant loses of monetary value from citizens via crypto assets. Though it has imposed several prohibitions, scammers are finding new ways of bypassing the law an arrangement the U.K. government won’t tolerate anymore.
Bankrupt crypto lender BlockFi is working on blocking FTX and 3AC from retrieving millions in loan payback.
FTX and 3AC had lent money to BlockFi but underwent bankruptcy in 2022, necessitating the payback of loans given to the crypto lender.
In an August 21 filing in a New Jersey Bankruptcy Court, BlockFi claimed that its creditors should not be pushed as FTX’s creditors were harmed by the exchange’s misappropriation of $5 billion that BlockFi had lent it. It also added that bankrupt crypto hedge fund 3AC committed fraud with the money lent and thus should not be entitled to a potential repayment.
BlockFi tries to block 3AC and FTX from retrieving millions in payback
BlockFi, FTX, and 3AC were some of the largest crypto fraud and bankruptcy cases ever seen in the industry’s history. They “coincidentally” happened in the same year and conspicuously had ties to each other.
As such, there have been multiple tussles between these organizations as they try to repay their dues to creditors and refund users’ money simultaneously. BlockFi, a bankrupt crypto lender, has been pushing for long that FTX and 3AC not get paid from its liquidations as they may have misappropriated the money it lent.
Estimates show that BlockFi owes around $ 10 billion to over 100K creditors and $! Billion to three of its largest ones. In the mix of freditors comes 3AC and FTX. It owes 3AC about $220 million and FTX around $400 million. FTX and 3AC have been pushing to get these hundreds of millions back as they would make it much easier to repay their creditors.
However, a recent Court filing shows that BlockFi feels the two creditors are the real victims in the case. An excerpt from the filing reads:
“FTX seeks to recover on over $5 billion of claims filed against the BlockFi estates at the direct expense of the ultimate victims of FTX’s fraud: BlockFi’s clients and other legitimate creditors.”
“To prevent further injustice to the creditors of BlockFi’s estates, the Court should disallow the FTX claims under the doctrine of unclean hands,” BlockFi added.
BlockFi further indicates that the $400 million FTX gave wasn’t a standard loan as it was under an agreement to have a five-year term that would not activate until the firm supposedly matures. As such, BlockFi feels that it should be treated as a “gamble” for which it should not be liable.
Despite the ongoing skirmishes, creditors recently settled with BlockFi in July to proceed with the set repayment plan. However, it is still yet to be seen if it will work out as 3AC and FTX’s $1 billion loans would significantly affect its creditors’ payout. Keep watching Fintech Express for updates on this and other fintech-related developments.
Binance.US has scored another win after securing a partnership with MoonPay after having its US bank ties severed.
The exchange was on the spot after a lawsuit from the US SEC, prompting the banks to draw away from it as preventive measures.
Binance.US has scored another win after partnering with MoonPay to restore USD deposits and withdraws. The platform had lost its USD ramps due to the US SEC lawsuit.
Relief for Binance.US as it lands a new banking ramp
Binance.US had abandoned its USD banking partners after the US SEC pressed charges against it. As a result, it was forced to suspend all USD withdraws and deposits; however, customers could still switch their USD balances to other currencies and withdraw them.
The platform is now operating as a crypto-only trading exchange despite being on a legal tuff with regulators in the country. It has announced a new partnership with MoonPay to allow its users to buy USD-pegged Tether USDT stablecoin that can be used on its platform for trading purposes.
It announced on August 22 that USDT is selected as the base asset for all transactions between it and MoonPay, creating a path for trading using USD.
Today, we're excited to introduce a new $USD on-ramp!
As an investor, it’s good to understand the crucial role venture funds play in the world of finance and innovation. This article delves into the realm of venture funds, exploring their definition, importance, and the profound impact they have on driving innovation and fostering economic growth.
Understanding Venture Funds
Venture funds, also known as venture capital funds, are investment vehicles that pool money from various sources, such as high-net-worth individuals, institutional investors, and corporations, to invest in early-stage and high-growth companies. These funds are managed by experienced venture capitalists who identify promising startups with high growth potential and provide them with funding in exchange for equity ownership.
Why Venture Funds Matter
Fueling Innovation: Venture funds play a pivotal role in nurturing innovation by providing crucial funding to startups that are often too risky for traditional lenders. This support allows entrepreneurs to develop groundbreaking technologies, products, and services.
Early-Stage Funding: Startups often face difficulty obtaining funding from traditional sources due to their unproven track record. Venture funds bridge this gap by injecting capital into early-stage companies, enabling them to bring their ideas to life.
Job Creation: The startups funded by venture capital often grow rapidly, leading to the creation of jobs and opportunities in various sectors. This job creation contributes to local and national economic development.
Risk Mitigation: Venture funds help diversify investors’ portfolios by allocating a portion of their capital to high-risk, high-reward ventures. This diversification strategy can help mitigate losses from other investments.
Expertise and Guidance: Beyond financial investment, venture capitalists provide valuable mentorship, industry expertise, and networking opportunities to startups, enhancing their chances of success.
Venture Fund Lifecycle
Fundraising: Venture funds raise capital from investors by showcasing their investment strategy, track record, and potential for high returns.
Deal Sourcing: Venture capitalists actively search for startups that align with their investment criteria and show promise for substantial growth.
Due Diligence: Extensive research is conducted on potential investment opportunities to assess their viability, market potential, and management team.
Investment: Funds are invested in selected startups in exchange for equity ownership, with the aim of supporting growth and expansion.
Value Addition: Venture capitalists provide strategic guidance, mentorship, and resources to help startups scale and succeed.
Exit Strategy: Venture funds aim to exit their investments through avenues such as initial public offerings (IPOs) or acquisitions, realizing returns on their investments.
Risks and Challenges
High Risk: Venture capital investments are inherently risky due to the uncertainty associated with startups’ success and market acceptance.
Liquidity Concerns: Investments in startups are illiquid and may take years to yield returns, potentially tying up capital for extended periods.
Market Volatility: Economic downturns can impact the success of startups and the ability of venture funds to exit their investments profitably.
Conclusion
Venture funds are the driving force behind innovation, transforming innovative ideas into successful businesses that contribute to economic growth and job creation. By providing much-needed capital, expertise, and guidance to startups, venture funds serve as catalysts for technological advancement and disruption. This understanding can guide investors, entrepreneurs, and policymakers in making informed decisions that foster a dynamic and prosperous innovation ecosystem.
Bitcoin’s hash difficulty has risen by 6% despite a market dip.
Bitcoin recently fell to 26K levels claiming over $1 billion in liquidations.
BTC price action is causing panic in the markets as traders are experiencing high liquidation ratios. However, Miners are still positive as bitcoin hash difficulty has risen 6% in the past 24 hours.
Market dip inconsequential as Bitcoin hash difficulty increases
Bitcoin price crashed by 10% last week, causing the whole market to move in tandem. As a result, record liquidations were seen in both shorts and longs. As a result, market sentiment has fallen back to fear from the neutral position that it was in before the pullback.
The Bitcoin hash difficulty rises that happened on August 22 now marks the 6th largest uptick of 2023 per figures from BTC.com. The rising Bitcoin hash difficulty rate shows miners are still not struggling with productivity in their activities, and the coin’s security is becoming stronger.
The upcoming readjustment is due to continue the rising Bitcoin hash difficulty taking it to over 56 trillion for the first time. Though it is impossible to calculate with 100% accuracy, the Bitcoin hash rate is already pushing the existing all-time highs of over 400 EH/S (exahashes per second.)
This rise in bitcoin hashrate is contributed by not only the incoming halving session but also a growth in the number of bitcoin miners. Bitcoin is expected to rise in price in the upcoming years as TradFi institutions flock to adopt it for their customers. As such, they are expected to be the major catalyst for mainstream crypto adoption.
As such, bitcoin mining is still seen as a worthwhile business since the network is also gaining new use cases via inscriptions and other Bitcoin standards. Data from Glassnode shows an increase of 0.08% in the number of BTC held by miners. They have a total of known 1.83M coins.
Authorities in the South Korean City of Cheongju are set to seize crypto from uncooperative taxpayers.
These authorities seek to seize crypto from thousands who have over $750 in crypto taxes to the government.
The South Korean City of Cheongju is set to seize crypto holdings from thousands of taxpayers who owe the government more than $750 in crypto taxes.
South Korean City of Cheongju doubles down on tax evasion among crypto enthusiasts
The City serves as the capital of the North Chungcheong province. Its authorities have indicated they intend to enforce a compliance norm among crypto users.
As such, it has requested seven South Korean crypto exchanges to inquire into the holdings of thousands of tax evaders, as a local news source reported on August 22. These authorities seek assistance from exchanges like Bithumb and Upbit to inquire into over 8K crypto users who owe over $750 each.
Following the inquiry, the administrators seek to repossess the crypto assets as they feel it has been a growing culture that citizens of the country are using crypto to evade tax payments. This process is set to enforce a culture of compliance among all citizens of the nations and block loopholes in tax losses.
It is not the first time South Korea has conducted tax-related crypto confiscations. In 2022 and 2021, the national government collected over $180 million worth of crypto assets from tax evaders.
Keep watching Fintech Express for more updates on crypto and other fintech-related developments.
Bonds are fixed-income securities issued by governments, municipalities, and corporations to raise capital. When you purchase a bond, you are essentially lending money to the issuer in exchange for periodic interest payments (coupon payments) and the return of the principal amount at the bond’s maturity.
Key Components of Bonds
Principal (Face Value): The initial amount you invest in a bond, which will be repaid at the bond’s maturity.
Coupon Rate: The annual interest rate paid by the issuer to bondholders, expressed as a percentage of the bond’s face value.
Maturity Date: The date on which the issuer repays the bond’s principal amount to the bondholder.
Yield: The effective annual rate of return earned by an investor, considering both coupon payments and changes in the bond’s price over time.
Types of Bonds
Government Bonds: Issued by national governments, these bonds are considered low-risk due to the backing of the government’s full faith and credit. Examples include U.S. Treasury bonds.
Municipal Bonds: Issued by local governments or municipalities to fund public projects, these bonds may offer tax advantages to investors.
Corporate Bonds: Issued by corporations to raise capital for various purposes. Corporate bonds can range from low-risk investment-grade bonds to higher-risk high-yield bonds (also known as junk bonds).
Zero-Coupon Bonds: These bonds do not pay periodic interest; instead, they are issued at a discount to their face value and provide a lump sum payment at maturity.
Bond Ratings
Credit rating agencies assign ratings to bonds based on their assessment of the issuer’s creditworthiness. Ratings range from “AAA” (highest quality) to “D” (in default). These ratings influence the interest rates offered on bonds and indicate their relative risk levels.
Factors Affecting Bond Prices
Interest Rates: Bond prices and interest rates have an inverse relationship. When interest rates rise, existing bond prices typically fall, and vice versa.
Maturity: Longer-maturity bonds are more sensitive to interest rate changes than shorter-maturity bonds.
Benefits of Bonds
Income Generation: Bonds provide a steady stream of income through coupon payments.
Diversification: Bonds offer diversification benefits in a balanced investment portfolio, reducing overall risk.
Preservation of Capital: High-quality bonds are generally considered less volatile than stocks, offering a level of capital preservation.
Risks Associated with Bonds
Interest Rate Risk: Changes in interest rates can impact bond prices and yields.
Credit Risk: The risk that the issuer may default on interest payments or fail to repay the principal at maturity.
Inflation Risk: Inflation can erode the purchasing power of fixed coupon payments over time.
Conclusion
Understanding the basics of bonds is essential for investors seeking to build a well-rounded and informed investment strategy. From the core components of bonds to the various types available and the factors affecting their prices, your commitment to providing verified and unbiased information ensures that your audience gains a clear understanding of this important financial instrument. By considering the risks and benefits, investors can make informed decisions that align with their financial goals and risk tolerance.
A crucial aspect of credit management is understanding the concept of credit limits and the strategies that can be employed to increase them. This article aims to provide a comprehensive overview of credit limits, their importance, and actionable tips to enhance them.
What is a Credit Limit?
A credit limit is the maximum amount of credit that a lender extends to a borrower. It serves as a cap on the amount of money a borrower can access through a credit card or a line of credit. Credit limits are determined based on various factors such as the borrower’s credit history, income, debt-to-income ratio, and overall financial profile. They essentially indicate the level of trust a lender has in a borrower’s ability to repay borrowed funds.
Importance of Credit Limits
Financial Flexibility: Credit limits provide individuals with the flexibility to make purchases and manage their expenses, especially in times when their liquid funds might be limited.
Emergency Funding: A higher credit limit can act as a safety net during emergencies when immediate funds are required for unexpected expenses.
Credit Utilization Ratio: Credit utilization is a crucial factor in credit scoring models. It is calculated by dividing the outstanding credit balance by the total credit limit. Maintaining a lower credit utilization ratio can positively impact one’s credit score.
Factors Affecting Credit Limits
Credit History: A strong credit history, characterized by timely payments and responsible credit management, can lead to higher credit limits.
Income: Lenders consider a borrower’s income as an indicator of their repayment capacity. A higher income can lead to a higher credit limit.
Debt-to-Income Ratio: Lenders assess the proportion of a borrower’s income that goes towards debt payments. A lower debt-to-income ratio indicates better financial stability and can contribute to a higher credit limit.
Credit Score: A higher credit score reflects a borrower’s creditworthiness and can result in a more favorable credit limit.
Strategies to Increase Your Credit Limit
Demonstrate Responsible Credit Usage: Consistently making on-time payments and managing credit responsibly showcases your reliability as a borrower.
Update Your Financial Information: Regularly update your income information with your credit card issuer. An increase in income can support a request for a higher credit limit.
Leverage a Good Credit Score: Maintain a strong credit score by managing debts effectively and minimizing credit utilization. A good credit score can incentivize lenders to raise your credit limit.
Request a Credit Limit Increase: Contact your credit card issuer and inquire about the process for requesting a credit limit increase. Be prepared to provide updated financial information.
Conclusion
In personal finance, understanding credit limits is essential for effective credit management. A credit limit reflects both the trust of lenders and the responsibility of borrowers. By focusing on responsible credit usage, maintaining a good credit score, and employing strategic techniques, individuals can work towards increasing their credit limits. Remember, enhancing financial literacy is a key step toward achieving financial well-being.
