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US banks must maintain cautious approach to crypto, says acting OCC head

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US banks must maintain cautious approach to crypto, says acting OCC head

US banks must maintain cautious approach to crypto, says acting OCC head Christian Nwobodo · 3 hours ago · 2 min read

National banks and federal savings associations (FSA) intending to offer crypto must undergo stringent vetting processes.

2 min read

Updated: September 8, 2022 at 2:03 am

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Cover art/illustration via CryptoSlate

Michael Hsu, the acting head of the Office of the Comptroller of the Currency (OCC) said during a Banking Policy conference that regulated banks should maintain a “careful and cautious” approach to crypto to prevent contagion that would undermine the U.S. economy.

The OCC, prior to Hsu’s appointment, had approved banks to offer crypto-related services. However, Hsu who has been a critic of the crypto industry led the agency to reverse the green light.

National banks and federal savings associations (FSA) intending to offer crypto must undergo stringent vetting processes to ensure that their activities will be performed in “a safe, sound and fair manner.”

According to Hsu, the approach saved the banks from direct exposure to the Terra ecosystem collapse that forced multi-billion crypto firms to file for bankruptcy. By contrast, the federally regulated banking system was largely unaffected.

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Hsu added:

“I believe this is due, at least in part, to the careful and cautious approach that we adopted and intend to maintain for the foreseeable future.”

Crypto to be regulated not banned

The OCC alongside other U.S. government agencies like the Fed and FDIC has been working to see that the crypto industry is duly regulated.

Earlier in May, the U.S. Congress introduced over 80 new bills to intensify its effort to bring regulatory clarity to crypto. The bill addressed issues spanning six categories, including crypto taxation, central bank digital currency (CBDC), and implications of either China or Russia’s use of crypto.

The U.S. SEC and CFTC also introduced a  framework for hedge funds to report their crypto exposure. The regulators affirmed that hedge funds may not be stopped from adding crypto assets to their portfolio, however, it needs to be properly accounted for.

U.S. Congressman Brad Sherman also turned his bias against crypto by admitting that crypto has become too big and is unlikely that Congress will ban it.

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“[Congress] didn’t ban it at the beginning because we didn’t realize it was important, and we didn’t ban it now because there’s too much money and power behind it.”

The crypto community, however, insists that crypto is unique and must be regulated differently as against SEC Chair Gensler’s view of treating crypto like the capital markets.

Bankruptcy

Bankrupt Crypto Lender Celsius’ Asset Sale Is Scheduled, Sources Say FTX CEO May Bid

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Bankrupt Crypto Lender Celsius’ Asset Sale Is Scheduled, Sources Say FTX CEO May Bid

According to a filing published by the U.S. Bankruptcy Court for the Southern District of New York, the crypto lending firm Celsius has been given a final bid deadline of October 17, 2022. Following the bankruptcy court’s final bid deadline, a sale hearing is scheduled for November 1. A report published last week noted that Sam Bankman-Fried, the CEO and co-founder of FTX, is eyeing Celsius’ assets after winning a bid for Voyager Digital’s assets last month.

Celsius Bankruptcy Sale Hearing Has Been Finalized — Myriad Interested Parties Expected to Attend Crypto Lender’s Asset Sale

An official court filing stemming from the Celsius Chapter 11 bankruptcy case indicates that the finalized dates for the company’s sale proceedings have been scheduled. The now-defunct crypto lender Celsius has been given a final bid deadline which is now set for Monday, October 17.

Roughly two weeks later, a sale hearing will take place on November 1, and it’s expected that a large number of interested parties will attend. Furthermore, “a person familiar with his deal-making” told Bloomberg that FTX CEO Sam Bankman-Fried is looking to bid on the company’s assets.

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The report concerning the reported bid by Bankman-Fried follows FTX acquiring Voyager Digital’s assets on September 26 for $1.4 billion. Bankman-Fried has told the press in the past that he and FTX were willing to deploy billions on acquisition deals.

Moreover, Ripple Labs executives have shown interest in Celsius’ assets in August when a spokesperson told Reuters that “[Ripple Labs is] interested in learning about Celsius and its assets, and whether any could be relevant to our business.”

The sale hearing for Celsius’ assets on November 1 will be held via a video conference with judge Martin Glenn. The news of the finalized sale dates follows the founder and former CEO of Celsius Network Alex Mashinsky’s recent resignation.

Furthermore, reports published on October 3 allege that Mashinsky withdrew $10 million from the digital currency platform weeks before the company shut down operations.

Tags in this story

Bankruptcy, Bankruptcy Court, Celsius, Celsius CEO Alex Mashinsky, Celsius crypto lender, Chapter 11 Bankruptcy, court examiner, Court Filings, Court trustee, Crypto lender, examiner, Finalized Sale, FTX CEO, Insolvency, judge Martin Glenn, reorganizing, Ripple, Ripple Labs, Sale Hearing, Sam Bankman-Fried, Southern District of New York

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What do you think about the finalized dates of Celsius’ asset sale? Let us know what you think about this subject in the comments section below.

Jamie Redman

Jamie Redman is the News Lead at Bitcoin.com News and a financial tech journalist living in Florida. Redman has been an active member of the cryptocurrency community since 2011. He has a passion for Bitcoin, open-source code, and decentralized applications. Since September 2015, Redman has written more than 6,000 articles for Bitcoin.com News about the disruptive protocols emerging today.

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Image Credits: Shutterstock, Pixabay, Wiki Commons

Disclaimer: This article is for informational purposes only. It is not a direct offer or solicitation of an offer to buy or sell, or a recommendation or endorsement of any products, services, or companies. Bitcoin.com does not provide investment, tax, legal, or accounting advice. Neither the company nor the author is responsible, directly or indirectly, for any damage or loss caused or alleged to be caused by or in connection with the use of or reliance on any content, goods or services mentioned in this article.

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FTX will pay fair market value for Celsius, SBF says

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FTX will pay fair market value for Celsius, SBF says

FTX will pay fair market value for Celsius, SBF says Oluwapelumi Adejumo · 7 hours ago · 2 min read

A Celsius investor Simon Dixon argued that FTX aims to purchase Celsius’ asset cheaply.

2 min read

Updated: October 3, 2022 at 10:54 am

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Cover art/illustration via CryptoSlate

FTX CEO Sam Bankman-Fried said his firm would pay a “fair market price” for Celsius’ assets if it gets involved in the bankrupt lender acquisition process in an Oct. 2 tweet.

to be clear — in Voyager, our bids are generally determined by fair market price, no discounts; goal isn’t to make money buying assets at cents on the dollar, it’s to pay $1 on the $1 and get the $1 back to customers.

If we were to get involved in Celsius, it would be the same.

— SBF (@SBF_FTX) October 2, 2022

Celsius investors wary of FTX purchase

Simon Dixon, the CEO of BnkToTheFuture, has expressed concerns over the possibility of Celsius assets being purchased by FTX.

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Right now @SBF_FTX is raising finance at a $32Billion valuation in order to buy the assets that @Mashinsky scammed from us. What do you think he is pitching to his investors? “I’m about to get billions of $$$ of assets for cents on the dollar. Do you want in?” It’s OUR Assets! https://t.co/PqokxhIblf

— Simon Dixon (Beware Impersonators) (@SimonDixonTwitt) October 2, 2022

According to Dixon, FTX is raising funds at a $32 billion valuation to fund its purchase of Celsius assets. He continued that SBF’s pitch to investors would be “I’m about to get billions of $$$ of assets for cents on the dollar. Do you want in?”

Dixon stated that the chances of Celsius creditors being made whole becomes slimmer if an external investor like FTX buys the company. Instead, he argues that “only creditors can make other creditors whole.”

3/7) Only creditors can make other creditors whole. Only regulators can agree on a compliant structure. Only #Celsius can put forward a plan in exclusivity. Only @CelsiusUcc can force alternative. Only judge can sign off. Only creditors can vote. Only examiner can prove crime. pic.twitter.com/wkFyTEw85O

— Simon Dixon (Beware Impersonators) (@SimonDixonTwitt) October 2, 2022

Dixon said:

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“There are voluntary leaders of creditor interest groups that can co-ordinate best recovery for their interests – Loans, Custody, Earn, Mining, Token – it’s not my plan that wins, it’s not Celsius plan that wins, it’s creditors plan that wins.”

SBF, however, responded that if his firm were to purchase Celsius’ assets, the goal would be “to pay $1 on the $1 and get the $1 back to customers.”

Reports revealed that FTX had walked away from a deal to acquire Celius earlier because of a $2 billion hole in its balance sheet.

Meanwhile, FTX has not provided information on Voyager’s customers’ fate since it completed the acquisition of the bankrupt company.

Regulators move against Celius’s plan to sell stablecoins

The US Department of Justice objected to Celsius’ request to reopen its withdrawals and sell its stablecoins in a Sept. 30 court filing.

According to the DOJ, it is important to have a clear idea of Celsius’ finances before the court makes such a decision. State regulators in Texas and Vermont also objected to the Celsius motion, saying the bankrupt firm may seize the opportunity to reopen its illegal operations in their states.

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Meanwhile, the court has approved Shoba Pillay’s appointment as an independent examiner to provide a full report on Celsius’ assets and liabilities.

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Alex Mashinsky

Celsius founder Alex Mashinsky withdrew $10M weeks before bankruptcy – FT

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Celsius founder Alex Mashinsky withdrew $10M weeks before bankruptcy – FT

Celsius founder Alex Mashinsky withdrew $10M weeks before bankruptcy – FT Oluwapelumi Adejumo · 49 mins ago · 2 min read

A spokesperson for Mashinsky said the withdrawals were made for tax payments.

2 min read

Updated: October 3, 2022 at 9:52 am

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Cover art/illustration via CryptoSlate

Celsius Network’s founder Alex Mashinsky reportedly withdrew $10 million from the struggling crypto lender a few weeks before the firm froze its customer funds and filed for bankruptcy, the Financial Times reported on October 2.

According to the report, the withdrawals happened in May, around the same period when the broader market was still reeling from the Terra ecosystem’s implosion.

Details of this transaction, alongside other transactions, would be submitted to the court by the embattled firm in the coming days.

The FT report stated that Mashinsky’s Celsius withdrawal raises questions about whether he knew the firm would be unable to meet its obligations to its customers at the time.

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Mashinsky claims withdrawal was for tax payment

A spokesperson for Mashinsky who spoke to FT said that the withdrawals were made to offset “state and federal taxes.” He continued that “(Mashinsky) consistently deposited cryptocurrency in amounts that totaled what he withdrew in May.”

The spokesperson further revealed that Mashinsky and his family still had $44 million worth of crypto frozen on the platform.

Meanwhile, there is a possibility that the former CEO could be forced to return the funds. Payments by bankrupt companies 90 days before their declaration could be reversed for the benefit of all creditors under United States laws.

Mashinsky had faced several criticisms for promoting false information about the safety of users’ funds when the crypto lender was on the brink of bankruptcy.

Mashinsky resigned his position as CEO on September 27, saying his role as CEO became a distraction while apologizing for the “difficult financial circumstances.”

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Investor claims Mashinsky asked him to invest more

Simon Dixon, BnkToTheFuture’s CEO, stated that Mashinsky told him “everything was fine” while urging him to “invest more clients’ retirement funds.”

“Celsius Network founder withdrew $10mn ahead of bankruptcy” – you told me everything was fine @Mashinsky & I should invest more of our clients retirement funds. You even broke your silence to blame me for your lying, stealing & cheating. Insider clawbacks please. https://t.co/xP4vW6QCtr

— Simon Dixon (Beware Impersonators) (@SimonDixonTwitt) October 2, 2022

Dixon also stated that he wants “insider clawback.” According to Wikipedia, a clawback refers to any money or benefits that have been given out but are required to be returned because exceptionalial circumstances or events.

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