assets

Taurus starts credit tokenization as an asset class for German SMEs

Blockchain tokenization provides an alternative means for SMEs to raise capital and liquidity while building diversified investment opportunities.

Teylor, a German-based fintech firm specializing in digitizing small business loans, has joined forces with digital asset infrastructure provider Taurus to turn small and medium enterprise (SME) loans into tokenized assets and provide tokenholders with monthly cashflows.

In the partnership, Teylor originates and manages SME loans through its Teylor credit platform. By tokenizing part of this credit portfolio on the Taurus infrastructure and TDX-regulated marketplace, professional private debt investors could participate in the returns through a secure blockchain-based secondary market.

Blockchain tokenization provides an alternative means for SMEs to raise capital and build liquidity while building diversified investment opportunities. In 2021, Italy’s Azimut group tokenized its first portfolio of loans to Italian SMEs through Sygnum Bank.

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US accounting standards board rules will reflect institutional crypto assets’ fair value

The U.S. FASB has decided that crypto assets will be represented at their fair value in accounting beginning late next year.

Crypto companies and institutions holding crypto assets will be able to record the value of their crypto more realistically under accounting rule changes in the United States. 

The Financial Accounting Standards Board (FASB) finalized the new rules on Dec. 13. The FASB is the organization that sets accounting and reporting standards for the U.S. Generally Accepted Accounting Principles (GAAP). GAAP-standard financial reports are required from companies that trade on public markets in the United States.

Related: New crypto accounting guidelines could ‘smooth the way’ for adoption

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Iota's ShimmerEVM joins Fireblocks, targets demand for assets tokenization

The Iota Foundation wants to capitalize on institutional demand for real-world assets tokenization, which reached $342 billion in September, according to VanEck data.

Open-source blockchain developer Iota has taken another step to meet institutional demand for asset tokenization by integrating its Shimmer EVM-compatible chain with Fireblocks.

Data from VanEck Research shows the total market capitalization for tokenized real-world assets (RWA) reached $342 billion in September, despite the bear market and the crypto industry headwinds. According to Dominik Schiener, co-founder of Iota, the network is building infrastructure and solutions to address the escalating demand for RWA tokenization.

“We can expect many large institutional investors and financial institutions to give their public support for digital assets in 2024. With clear regulations and newfound public support through these institutions and the imminent ETFs, we are well on our way to make institutional investors the dominant market participants,” noted Schiener.

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Iota’s ShimmerEVM joins Fireblocks, targets demand for assets tokenization

The Iota Foundation wants to capitalize on institutional demand for real-world asset tokenization, which reached $342 billion in September.

Open-source blockchain developer Iota has taken another step to meet institutional demand for asset tokenization by integrating its Shimmer Ethereum Virtual Machine (EVM)-compatible chain with Fireblocks.

Data from VanEck Research shows the total market capitalization for tokenized real-world assets (RWA) reached $342 billion in September despite the bear market and the crypto industry’s headwinds. According to Dominik Schiener, co-founder of Iota, the network is building infrastructure and solutions to address the escalating demand for real-world asset (RWA) tokenization.

“We can expect many large institutional investors and financial institutions to give their public support for digital assets in 2024. With clear regulations and newfound public support through these institutions and the imminent ETFs, we are well on our way to make institutional investors the dominant market participants,” noted Schiener.

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Paxful CEO announces 88% of accounts unfrozen, $4.4M in funds remaining

“I gave up my title as CEO to unfreeze these accounts and am also in danger of being in contempt of court,” said Ray Youssef.

The CEO of peer-to-peer crypto marketplace Paxful has announced the unfreezing of 88% of previously frozen user accounts more than a week after suspending operations.

In an April 16 Twitter thread, Paxful CEO Ray Youssef said roughly $4.4 million in frozen funds remained on the platform after staff had unfrozen 88% of existing accounts. According to Youssef, the unfreezing of accounts had been accomplished “with no engineers or compliance folks,” claiming all remaining frozen funds were “in the hands of” United States financial regulators.

Youssef said though roughly 3% of total user funds were still frozen, he had made the unfreezing his “final act” as Paxful’s CEO:

“I gave up my title as CEO to unfreeze these accounts and am also in danger of being in contempt of court,” wrote Youssef. “That is what I did besides alot of sleepless nights. Nothing more I can do but sleep well tonight. Integrity trumps risk.”

Related: Paxful shutdown hits Nigeria harder than the rest of the world — Here’s why

The “contempt of court” claim was likely related to ongoing litigation between Youssef and Paxful co-founder Artur Schaback, who helped launch the platform in 2015. Schaback claimed in court the company had been involved in the misappropriation of funds, money laundering and evasion of U.S. sanctions. Youssef told Cointelegraph at the time the allegations were “ridiculous.”

The announcement followed the suspension of operations for Paxful users on April 4. At the time, Youssef said there had been some “key staff departures,” citing “regulatory challenges” the platform was facing. The CEO had already authorized refunds for Earn program users affected by the collapse of Celsius months prior.

Magazine: Journeys in Blockchain: Ray Youssef of Paxful

Polygon to help fight NFT scams with Web3 infra protocol partnership

Polygon partners with Wakweli, a Web3 infrastructure protocol that issues certificates of authenticity for NFTs to certify originality.

Wakweli, a Web3 infrastructure protocol that issues certificates of authenticity for nonfungible tokens (NFT), has officially partnered with layer-2 scaling platform Polygon to make NFT authentication possible.

The partnership between Polygon and Wakweli means all digital assets on Polygon will be compatible with Wakweli’s certification system. According to the announcement, every NFT project holder on the Polygon chain can request authenticity certificates for each asset. The collaboration generally aims to enhance the security of the digital ecosystem.

In response to the cost of the certificate authentication for users, Antoine Sarraute, co-founder of Wakweli, told Cointelegraph that staking WAKU — Wakweli’s utility token — is necessary to create a certificate request. The amount to stake in a request is dependent on and linked to the level of trust needed for each case.

The partnership agreement negotiations between the two companies began in August 2022, with the final details of the agreement concluded this March.

Wakweli’s testnet will be available in April and can be used with Polygon’s Mumbai testnet. Alpha testing with Polygon’s mainnet will begin in Q2 2023, with general mainnet compatibility is expected to be ready by Q3 2023.

By providing a medium for detecting counterfeit NFTs, the partnership between the two companies has unlocked a definitive way to fight these scam attempts, thereby creating more trust in the thriving ecosystem, Sarraute explained. 

Related: Polygon’s ‘holy grail’ Ethereum-scaling zkEVM beta hits mainnet

The Wakweli platform and application programming interface will offer developers access to advanced use case scenarios, including automatically generating certification requests when minting or accessing more detailed certification information.

In the past month, the Polygon Foundation has also collaborated with the South Korean multinational conglomerate Lotte Group to showcase the company’s NFT projects.

Polygon has gained significant traction through partnerships with major brands such as Starbucks and Adidas, leading to increased adoption of the network among cryptocurrency users. 

Magazine: Justin Sun vs. SEC, Do Kwon arrested, 180M player game taps Polygon: Asia Express

FTX debtors agree to $95M sale of stake in Mysten Labs

The proposed purchase price of the Mysten Labs shares was roughly 95% of the amount FTX Ventures invested as part of a $300-million funding round in September 2022.

The debtors for defunct crypto exchange FTX have approved an agreement that would sell its preferred stock in Mysten Labs, the company behind the Sui blockchain.

In a March 22 filing in the United States Bankruptcy Court in the District of Delaware, FTX debtors proposed a deal in which Mysten Labs and the company would agree to a mutual release of claims. As part of the agreement, the debtors planned to sell roughly $95 million worth of preferred stock back to Mysten in addition to $1 million in SUI tokens.

“The Debtors carefully considered and analyzed the offer as set forth in the Agreement in comparison to its other options and concluded that a sale of the Interests will result in obtaining maximum value for the Interests, and is in the best interests of the Debtors’ estates and creditors,” the filing says. “The Purchase Price is equal to approximately 95% of the amount FTX Ventures had originally invested in the Preferred Stock of Purchaser-Subject Company, plus 100% of the amount Sellers paid for the SUI Token Warrants.”

Related: FTX debtors report $11.6B in claims, $4.8B in assets, with many crypto holdings ‘undetermined’

The deal is seemingly subject to court approval as well as the possibility of other bids on the stock before being finalized. FTX Ventures acquired the stock as part of a $300 million funding round with Mysten announced in September 2022. The investment also came prior to FTX filing for Chapter 11 bankruptcy in November.

Debtors in the FTX bankruptcy case also announced on March 22  that they planned to recover $460 million of user funds from venture capital firm Modulo Capital. The filing alleged the investment from Alameda Research was at the direction of former FTX CEO Sam Bankman-Fried and a misappropriation of funds. Bankman-Fried faces multiple counts in federal court related to alleged fraud during his time as CEO and has pled not guilty to all charges.

Magazine: Can you trust crypto exchanges after the collapse of FTX?

Crypto.com gets MVP preparatory license from Dubai regulator

After completing the preparatory stage and obtaining an operational license in Dubai, Crypto.com plans to provide a comprehensive range of institutional services in compliance with regulatory requirements.

Crypto.com announced it has obtained a minimal viable product (MVP) preparatory license from Dubai’s Virtual Asset Regulatory Authority (VARA).

This preparatory phase operations license came after the exchange obtained provisional approval from the Dubai regulator in 2022. In the preparatory stage, the MVP license allows the exchange to fulfill the conditions to operate within set VARA rules. The rules outline that no company may carry out, or appear to, any virtual asset activity through promotions and offers in Dubai unless it is authorized and licensed by VARA.

Dubai’s VARA was established in March 2022 and is in charge of regulating, supervising and overseeing virtual assets and virtual asset activities in all zones across the Emirate of Dubai, including special development zones and free zones, but excluding the Dubai International Financial Centre.

In its preparatory stage, the MVP phase allows approved licensees to fulfill all pre-conditions required to undertake MVP market operations under the VARA regime. Once the license is operational, Crypto.com can offer spot and derivatives instruments of virtual assets. The offerings can include exchange services, brokerage, margin or leverage trading and over-the-counter offerings around settlements for institutional investors.

According to the announcement, Crypto.com was granted the MVP preparatory license following a thorough review of the exchange. The review included key personnel, governance procedures, Anti-Money Laundering and Countering the Financing of Terrorism capabilities, Know Your Customer policies and procedures, ultimate beneficial owner policies and procedures, compliance practices, and cross-border safety measures.

Related: Dubai to Abu Dhabi: How NFTs are used in the UAE

VARA CEO Henson Orser explained that VARA’s regulatory approach would be beneficial in forming a robust and resilient ecosystem that will provide a superior virtual asset market with secure international operations. He concluded that including companies such as Crypto.com would advance its mission of establishing a progressive, forward-thinking regulatory framework.

Recently, Crypto.com has been expanding its presence globally. The exchange is authorized and licensed in most major markets, including the United Kingdom, France, Italy and several others. It also received a payment institution license in Brazil.

Earlier, Binance gained an MVP license as the exchange changed its operational strategies and secured several regulatory licenses.

Real-world assets tokenization lacks infrastructure, not just regulation

Assets tokenization has been held back by lack of infrastructure and regulatory standards worldwide.

The next generation of securities and asset tokenization has been held back by a lack of infrastructure and regulatory standards worldwide, according to BlackRock’s Larry Fink. The merger between decentralized finance (DeFi) and traditional assets, however, has been held back by a lack of infrastructure and regulatory standards worldwide, according to sources Cointelegraph recently spoke with. 

“There simply haven’t been good institutional-grade systems for these companies to get involved. Obviously, they’re not going to just run their whole system using a regular blockchain wallet and centralized exchanges,” said Colin Butler, global head of institutional capital at Polygon.

Tokenization is a path to fractionalization, allowing multiple people to own a portion of an asset that would previously have to have been sold as a whole with a higher value. Big Four firm PwC predicts global assets under management to reach $145.4 trillion by 2025, a massive market expected to welcome more investors and, thus, improve assets’ liquidity through tokenization.

Institutional investors — those managing this capital across the world — are seeking “services that work well with what they’re already doing, that are easy to implement, flexible and upgradeable,” said Butler.

Polygon said it has been working with many of those global players. In January, investment firm Hamilton Lane announced the first of three tokenized funds backed by Polygon, bringing part of its $824 billion in assets under management on-chain. By tokenizing its flagship Equity Opportunities Fund, Hamilton Lane was able to lower the minimum required investment from an average of $5 million to $20,000.

Another example is JPMorgan. In November, the American giant executed its first cross-border DeFi transaction on a public blockchain. The initiative was part of a pilot program exploring DeFi potential for wholesale funding markets. The trade was also performed on the Polygon network.

Despite recent progress in integrating DeFi into traditional markets, the lack of clarity regarding regulation continues to keep many from embracing emerging technologies. One major question about this topic is: What are securities? The United States Securities and Exchange Commission has been asserting through enforcement actions that the definition may apply to a broader range of assets and services than many crypto firms expected. As Butler asked:

“If you tokenize a security, does the digital token become a security itself, or just represent one?” 

Jez Mohideen, co-founder and CEO of Laser Digital — the crypto arm of Japanese banking giant Nomura — believes the lack of regulation is affecting digital asset risk management, as it prevents firms from effectively separating units and business models.

“More regulation is especially necessary in certain parts of businesses — for example, making sure capital is looked after by individuals with fiduciary responsibilities. As more and more regulatory enforcement of this nature comes into play, there will be an increasing amount of institutional interest,” he told Cointelegraph.

FTX debtors report $11.6B in claims, $4.8B in assets, with many crypto holdings ‘undetermined’

The presentation reported $25 million in donations — political and otherwise — from three of the FTX silos, but added “limited information” was available on crypto donations.

The debtors in FTX’s bankruptcy case have reported that the various company silos had more than $4 billion in scheduled assets as of November 2022, but said they were still investigating the firm’s crypto holdings.

In a March 17 filing with the United States Bankruptcy Court for the District of Delaware, FTX debtors submitted a presentation to the committee of unsecured creditors on its statement of financial affairs, which also detailed the scheduled assets and claims of the company. According to the filing, the West Realm Shires silo — which includes FTX US and Ledger X — FTX.com, Alameda Research and FTX Ventures had roughly $4.8 billion in scheduled assets and $11.6 billion in scheduled claims.

The data was based on petitioning financials from the four silos in November 2022. According to the report, Alameda held the majority of the scheduled assets at roughly $2.6 billion but ​​had “potentially material claims that have been filed as undetermined.” FTX.com had more than $11.2 billion in scheduled claims, but claims from FTX Ventures were undetermined.

Much of the data surrounding cryptocurrency holdings or transactions in the debtors’ report was not available. The presentation reported $25 million in donations — political and otherwise — from three of the silos, but added that “limited information” was available on crypto donations.

Of the crypto-collateralized loans — largely in FTX Token (FTT) — made by the FTX companies, debtors reported more than 53 million tokens, including Bitcoin (BTC), Ether (ETH), XRP (XRP), and USD Coin (USDC). However, they said that “additional tracing of wallet and blockchain activity remains an ongoing matter.”

An investigation into crypto transactions as part of payments to FTX company insiders was also reported to be “ongoing.” Former CEO Sam Bankman-Fried received more than $2.2 billion of the payments. 

Related: FTX influencers face $1B class-action lawsuit over alleged crypto fraud promotion

FTX’s bankruptcy case has been ongoing since the firm filed for Chapter 11 protection in November 2022. In addition, Bankman-Fried faces both criminal and civil cases for his involvement in alleged fraudulent activities at the company.