Category: Cryptocurrency

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OpenSea, the leading NFT marketplace, has recently received a Wells Notice from the U.S. Securities and Exchange Commission (SEC), indicating that the agency may take enforcement action against the company. This notice is generally a precursor to formal charges, giving the recipient a chance to respond before any official action is taken.

The SEC’s investigation focuses on whether certain NFTs (non-fungible tokens) offered by OpenSea should be classified as securities. If they are deemed to be securities, OpenSea could be accused of operating an unregistered securities exchange. This would have significant ramifications for the company and potentially the entire NFT market.

OpenSea’s potential legal troubles come amid increasing scrutiny of the broader crypto and NFT markets. Regulators around the world are grappling with how to classify and regulate these emerging digital assets. The SEC has been particularly active in this area, previously targeting other crypto-based platforms and projects.

Industry experts suggest that the outcome of this case could set a precedent for how NFTs are regulated in the future. If the SEC decides that NFTs are securities, other NFT marketplaces and platforms might also come under regulatory scrutiny. This could lead to increased compliance costs and potentially stifle innovation in the space.

Despite the looming legal challenges, OpenSea remains a dominant player in the NFT market. The platform has facilitated billions of dollars in transactions and attracted millions of users. Its success has also drawn significant investment, with the company valued at over $13 billion in its last funding round.

OpenSea has stated that it intends to cooperate fully with the SEC and is committed to ensuring that its platform complies with all applicable laws and regulations. The company has also emphasized its belief that NFTs represent a new and innovative way for artists and creators to monetize their work, and it hopes to continue supporting this burgeoning ecosystem.

The SEC’s focus on OpenSea highlights the broader regulatory challenges facing the crypto and NFT industries. As these markets continue to evolve, it is likely that regulatory bodies will play an increasingly central role in shaping their development. For now, all eyes are on OpenSea as it navigates this complex legal landscape.

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Bitcoin ETFs have recently seen a surge in popularity, attracting attention from major investors. These financial instruments offer a way to invest in Bitcoin without having to directly purchase and manage the cryptocurrency, which has been known for its volatility and security concerns.

One of the key drivers behind this trend is the growing acceptance of Bitcoin as a legitimate asset class. This shift in perception has been fueled by endorsements from prominent figures in the financial world. For instance, Morgan Stanley has allowed some of its wealthy clients access to Bitcoin funds, signaling a broader acceptance within the traditional financial sector.

Another significant factor is the regulatory environment. The U.S. Securities and Exchange Commission (SEC) has been more open to approving Bitcoin ETFs, providing a layer of legitimacy and security that individual Bitcoin investments lack. This regulatory support has made Bitcoin ETFs more attractive to institutional investors who require compliance and transparency.

One notable Bitcoin ETF is the one managed by Grayscale, which has seen substantial inflows. Grayscale’s Bitcoin Trust (OTC:GBTC) offers a way for investors to gain exposure to Bitcoin through a traditional investment vehicle. This has lowered the barrier to entry for many who are interested in Bitcoin but are wary of the complexities involved in direct investment.

Investors are also drawn to Bitcoin ETFs due to their potential for high returns. Bitcoin’s price has seen significant increases over the past few years, and many believe that it will continue to rise as adoption grows. ETFs provide a convenient way to capitalize on this potential without having to navigate the intricacies of cryptocurrency exchanges.

However, it’s important to note that Bitcoin ETFs are not without risks. The value of the ETF is closely tied to the price of Bitcoin, which is known for its extreme volatility. Investors should be prepared for significant price swings and should consider their risk tolerance before investing.

In conclusion, the rise of Bitcoin ETFs represents a significant development in the financial markets. As more institutional investors get involved and regulatory frameworks evolve, these investment vehicles are likely to become even more popular. For those looking to gain exposure to Bitcoin, ETFs offer a compelling option that combines the benefits of traditional investment structures with the growth potential of cryptocurrency.

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Goldman Sachs, one of the leading global investment banks, has made a significant move into the cryptocurrency market. According to a recent filing, the financial giant holds more than $400 million in Bitcoin Exchange-Traded Funds (ETFs). This investment marks a substantial shift in the bank’s strategy, showcasing its growing interest in the digital asset realm.

The filing detailed that Goldman Sachs has invested in several Bitcoin ETFs, which are funds that track the price of Bitcoin and allow investors to gain exposure to the cryptocurrency without directly owning it. These ETFs are becoming increasingly popular among institutional investors who seek to capitalize on the potential growth of Bitcoin while mitigating some of the risks associated with direct ownership.

Goldman Sachs’ foray into Bitcoin ETFs is part of its broader strategy to embrace digital assets. The bank has been gradually expanding its offerings in the cryptocurrency space, including providing Bitcoin futures trading and establishing a cryptocurrency trading desk. This move aligns with the increasing acceptance of cryptocurrencies by mainstream financial institutions and highlights the growing demand for crypto-related investment products.

In the filing, it was revealed that the majority of Goldman Sachs’ Bitcoin ETF holdings are concentrated in a few key funds. These include the Purpose Bitcoin ETF, the world’s first Bitcoin ETF launched in Canada, and the Galaxy Bitcoin ETF, which is managed by Galaxy Digital, a financial services firm dedicated to the digital asset and blockchain technology sectors. The Purpose Bitcoin ETF has been particularly popular since its inception, attracting significant inflows from institutional investors.

The investment in Bitcoin ETFs by Goldman Sachs is seen as a bullish signal for the cryptocurrency market. It suggests that the bank views Bitcoin as a viable long-term investment and is confident in the future growth potential of the digital currency. This move could pave the way for other major financial institutions to follow suit and increase their exposure to Bitcoin and other cryptocurrencies.

Moreover, Goldman Sachs’ involvement in Bitcoin ETFs could provide a boost to the overall market liquidity and stability. As more institutional investors enter the space, the market could become less volatile and more attractive to a broader range of investors. This increased participation could also lead to further development and innovation within the cryptocurrency industry.

Despite the positive implications, there are still challenges and risks associated with investing in Bitcoin ETFs. Regulatory uncertainty remains a significant hurdle, as governments and financial regulators around the world continue to grapple with how to effectively oversee and regulate the burgeoning cryptocurrency market. Additionally, the inherent volatility of Bitcoin and other cryptocurrencies poses risks to investors, requiring them to exercise caution and conduct thorough due diligence.

Nevertheless, Goldman Sachs’ substantial investment in Bitcoin ETFs represents a landmark moment for the cryptocurrency industry. It underscores the growing legitimacy and acceptance of digital assets within the traditional financial sector and signals a shift in how major financial institutions perceive and engage with cryptocurrencies.

As the adoption of Bitcoin ETFs continues to rise, it will be interesting to see how other major banks and financial institutions respond. Will they follow Goldman Sachs’ lead and increase their exposure to Bitcoin and other digital assets? Only time will tell, but one thing is certain: the cryptocurrency market is evolving rapidly, and the involvement of heavyweight financial players like Goldman Sachs is likely to accelerate its growth and maturation.

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Grayscale Investments, a prominent player in the digital currency investment space, has recently launched a new fund dedicated to investing in the MakerDAO token. This move marks a significant step in the company’s ongoing efforts to provide investors with diversified exposure to the growing decentralized finance (DeFi) sector.

The new fund aims to capitalize on the increasing interest in DeFi applications, which have gained substantial traction in recent years. MakerDAO, known for its stablecoin DAI and decentralized governance model, is at the forefront of this revolution. By launching a fund specifically for MakerDAO, Grayscale is positioning itself to attract investors who are eager to gain exposure to high-potential DeFi projects.

Michael Sonnenshein, CEO of Grayscale, expressed enthusiasm about the new fund, highlighting the importance of offering varied investment options in the rapidly evolving crypto landscape. He noted that MakerDAO’s innovative approach to decentralized finance aligns well with Grayscale’s mission to bring more transparency and accessibility to digital asset investments.

The MakerDAO token, MKR, plays a crucial role in the Maker ecosystem. It is used for governance, allowing token holders to vote on critical decisions that affect the protocol. Additionally, MKR is utilized to maintain the stability of DAI, MakerDAO’s decentralized stablecoin, which is pegged to the US dollar. The interplay between MKR and DAI is a unique aspect of MakerDAO, setting it apart from other DeFi projects.

Grayscale’s new fund is expected to draw interest from institutional and retail investors alike. Institutional investors, in particular, have been showing increased interest in the DeFi space, seeking opportunities that offer high returns and diversification benefits. The launch of this fund comes at a time when the DeFi market is experiencing robust growth, with total value locked (TVL) in DeFi protocols reaching all-time highs.

One of the key factors driving the success of MakerDAO is its strong community and decentralized governance model. Unlike traditional financial institutions, decisions within the MakerDAO ecosystem are made collectively by MKR token holders. This democratic approach ensures that the protocol remains aligned with the interests of its users and adapts to changing market conditions.

In addition to the new fund, Grayscale continues to explore other opportunities in the digital asset space. The company’s portfolio already includes funds for Bitcoin, Ethereum, and several other major cryptocurrencies. By expanding its offerings to include DeFi tokens like MakerDAO, Grayscale is demonstrating its commitment to staying ahead of market trends and providing investors with a comprehensive range of investment options.

For investors interested in the new MakerDAO fund, it is essential to understand the risks involved. As with any investment in digital assets, there are inherent risks, including market volatility, regulatory changes, and technological challenges. However, the potential rewards of investing in a leading DeFi project like MakerDAO may outweigh the risks for many investors.

In summary, Grayscale’s launch of a fund dedicated to the MakerDAO token represents a significant development in the world of digital asset investments. This move not only highlights the growing importance of DeFi but also underscores Grayscale’s role as a pioneer in the industry. As the DeFi market continues to evolve, Grayscale’s new fund is poised to offer investors a unique opportunity to participate in the future of finance.

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PARIS, Oct. 9, 2024 /PRNewswire/ — In this 29th Annual Report, Artprice by Artmarket presents and analyzes a denser-than-ever Contemporary and Ultra-Contemporary Art Market (see methodology at the end of the press release) with the opening of Frieze London this Wednesday, October 9, followed by Art Basel Paris on Friday, October 18, 2024.

Autumn is a busy period for the Contemporary Art Market, which is why Artprice publishes its essential Contemporary Art Market Annual Report in October. Among the key features of the report are of course the overall results from art auctions around the world and the AI data collected and processed by our proprietary AI, Intuitive Artmarket®. It also contains an identification of the main trends, a presentation of the top-selling artists with our famous Top 10, Top 100 and Top 500 rankings, a focus on a selection of hot Contemporary artists, breakdowns of the key art auction stats country by country, by different artistic mediums, and by different art movements, and, a focus on Ultra-Contemporary artists (under 40) highlighted the growing markets for works by women artists, for digital art and for NFTs.

Artprice’s Report on the Contemporary Art Market 2024 is available free of charge in French and English here:

According to thierry Ehrmann, Founder of Artprice and President of Artmarket.com: the Contemporary Art Market is no longer what it was in 2000. It has undergone profound structural change and has posted turnover growth of +1800% with works by many more Contemporary artists selling at auction (33,072 over the period 2023/24 versus 5,400 artists in 2000), and many more works being sold (132,380 today versus 12,000 in 2000). At the same time, it has expanded geographically, with 61 countries today having active art auction markets versus 39 in 2000. The Internet has of course accelerated the fluidification of ‘remote’ transactions, and today the Contemporary art market has established itself as the most dynamic and profitable segment of the entire 21st century art market.

A infinite field of possibilities for under $5,000

This past year set a new record for the volume of auction transactions involving Contemporary art works: more than 132,000 artworks changed hands. This growth has been driven by several factors including the globalization of demand and the digital online sales. At the heart of this dynamic is the segment of ‘affordable’ works, whose value remained under $5,000. It is here that supply and transactions have grown the fastest, posting a 6% growth in just one year.

In concrete terms, this price bracket accounted for 108,000 transactions (each acquired for under $5,000) representing 82% of the total number Contemporary art sales during the year. This affordable segment, often appealing to first-time buyers and discerning collectors alike, has experienced a remarkable and triply significant acceleration over the last decade.

The success of this market segment has been largely supported by emblematic figures of Contemporary art like Takashi Murakami, Damien Hirst and Jeff Koons as well as by world-renowned Street artists like Keith Haring, Banksy, Mr. Brainwash, KAWS, Shepard Fairey and Invader. Their editions, whether limited or produced in larger quantities, fuel this thriving segment.

I. CONTEMPORARY ART (artists born after 1945): Key figures 2023/24

–  $1.89 billion totaled over 12 months (July 1, 2023 – June 30, 2024)
–  Contemporary art represented 17% of the total global auction turnover from Fine Art and NFTs ($11.3 billion)
–  The 8^th best performance in the history of the Contemporary art market
–  Down 18% compared with the previous year ($2.3 billion), due to a further contraction in the number of transactions above the million-dollar threshold 
–  Turnover has multiplied by 18 since 2000/01 ($103 million hammered)

Evolution of the number of Contemporary artworks sold at auction by price range https://imgpublic.artprice.com/img/wp/sites/11/2024/10/image2-artprice-contemporary-works-sold-at-auction-by-price-range.png 

Denser transactions

–  New record of 132,380 lots sold over 12 months (+4%)
–  The number of transactions has multiplied by 10.5 since 2000/01 (12,500 lots sold)
–  Transactions above the million-dollar threshold dropped 23%
–  The unsold rate rose to 35.6%
–  The record price for a Contemporary work this past year was $46.5 million (Basquiat)
–  The average price of the lots sold was $14,300

Structure of the Contemporary Art market

14 Contemporary artworks fetched over $10 million.
224 fetched over $1 million.
57% (75,395 lots) of Contemporary artworks sold for under $1,000.
Paintings accounted for 73% of global Contemporary art auction turnover with sculptures accounting for 10% and drawings for 9%.
Auction turnover from prints (4%) was higher than from photography (3%).

Contemporary artists

33,072 Contemporary artists had at least one auction sale in 2023/24
10 artists accounted for 29% of Contemporary art sales turnover

Soft Power of the Contemporary art market

1^st –  the USA with $779 million in Contemporary art auction turnover.
2^nd –  China with $511 million.
3^rd –  the UK with $279 million.
4^th –  France with $63 million.
5^th –  Germany with $34 million.
Sotheby’s was the leading global vendor of Contemporary art generating $524 million (28% of total Contemporary art turnover).
Christie’s hammered $486 million (26%) and Phillips hammered $253 million (13%).
China Guardian was the leading Chinese auction operator with $57 million (3%).
Van Ham was the leading European auction operator with $9 million (0.5%)

Top 10 Contemporary artists by auction turnover 
(1^is July 2023 – June 30, 2024)

II. ULTRA-CONTEMPORARY ART (artists under 40):

$148 million from Ultra-Contemporary Art sold at auction worldwide in 2023/24.
7^th best year in the history of the Ultra-Contemporary art market.
In 24 years, sales revenue has multiplied 6.8 times (from $21.9 million in 2000/01).
Ultra-Contemporary art represented 8% of the Contemporary art market ($1.89 billion).
Ultra-Contemporary Art represented 1.3% of the total Fine Art and NFT market ($11.3 billion).
8,830 Ultra-Contemporary works sold in 2023/24.
The unsold rate was 36%, the same as for Contemporary art.

Structure of the Ultra-Contemporary art market

The average price of an Ultra-Contemporary work was $16,800.
Painting represented 85% of the turnover from Ultra-Contemporary art.
Drawing was the 2^nd largest medium in this segment: $8.9 million (6%).
NFTs accounted for (4%) and sculpture generated (3%).
Hong Kong hammered 20% of the U-C segment’s turnover, and Mainland China generated 9%.
The UK hammered 19% of the Ultra-Contemporary art market ($28 million),   

Diversity of the Ultra-Contemporary art market

3,122 artists under 40 had at least one auction in 2023/24.
7 women appeared in the Top 10 Ultra-Contemporary artists by auction turnover.
Jadé Fadojutimi (1993) dominated her generation with 22 lots fetching $14 million.
Matthew Wong (1984-2019) generated the highest bid: $4.2 million for Night 1 (2018) at Christie’s New York on November 7, 2023.

NFTs by Ultra-Contemporary artists

Ultra-Contemporary NFTs generated $5.6 million.
NFTs represented 4% of the Ultra-Contemporary art market
The top-selling NFT in 2023/24 was Tony Tafuro’s (1989): OMB Red Eye/Blue Eye/Green Eye/Orange Eye (2024) which fetched $441,000 at Christie’s in New York on April 16, 2023.

Top 10 artists under 40 by auction turnover 
(July 1, 2023 – June 30, 2024)

Return to pre-Covid levels, under the two billion dollar threshold

With a total of 1.888 billion dollars, the Contemporary art market returned to pre-pandemic levels, but was still above the average of the five years preceding the Covid crisis by $200 million.

In twenty years, the economic value of Contemporary Art has exploded, going from 169 million to 1.888 billion dollars, and the segment has become a key part of the global art  market, now representing 18% of its total value, compared with just 3% at the start of the 21st century.

This remarkable growth has not been limited to the soaring prices of emblematic artists like Jean-Michel Basquiat, Yoshitomo Nara or Jenny Saville. It has also been driven by a healthy densification of the market, with Contemporary works now representing 18% of the global Fine Art market.

Record volume of transactions

The number of Contemporary works sold at auction has more than doubled in ten years, thanks largely to the massive digitalization of art sales since the Covid crisis. This transformation has significantly expanded the market, with a spectacular +72% increase in transactions compared to the pre-Covid period. This growth has taken the total to a new record of over 132,000 transactions in twelve months. Generations X (44-59 year olds) and Y(24-43 year olds), who are increasingly bidding online via their smartphones, are key drivers of this dynamic.

Art, a safe haven in major crises

In conclusion, unlike the current economy, which has been impacted by the geopolitical and financial context, the art market is displaying relatively robust health, with records being hammered regularly in different countries and for works from all the artistic periods  during recent sales sessions. There have been no cancellations of classic and/or prestige cataloged sales for 2024 and 2025, which are the main indicators of the art market’s health.

The major auction houses and investors know very well that the art market is a safe haven. Uncertainty on the stock markets brings new funds and investments into the art market.

Artprice, for 25 years, has methodically analyzed the main crises of the 21st century facing the Art Market – the Nasdaq crash of 2000,  the 9/11 attacks in 2001, the Afghan war in 2001, the Iraq war in 2003, the subprime and CDS crisis in 2007, the negative rates period starting 2011, the Covid crisis in 2020, the Russia/Ukraine war, the sharp rise in interest rates and energy prices, the attacks of October 7 in Israel in 2023, the Near and Middle East conflict – the art market was significantly less impacted than the economy and financial markets.

The current period of major geopolitical unrest and the fear of a global economic crisis has clearly not got the better of the art market.

Methodology

This Report analyzes all public auctions of Fine Art (i.e. painting, drawing, sculpture, photography, print, video, installation, tapestry and NFTs, but excluding antiques, anonymous cultural goods and furniture). It covers the global auction results recorded by Artprice by Artmarket.com for works by artists born after 1945 (Contemporary Art), with a focus on artists aged under 40 (Ultra-contemporary Art), between July 1, 2023 and June 30, 2024.

All prices indicated in this Report refer to public auction results including buyers’ fees. All “$” symbols refer to the US dollar.

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Artmarket and its Artprice department were founded in 1997 by thierry Ehrmann, the company’s CEO. They are controlled by Groupe Serveur (created in 1987). cf. the certified biography from Who‘s Who In France©:

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Artmarket is a global player in the Art Market with, among other structures, its Artprice department, world leader in the accumulation, management and exploitation of historical and current art market information (the original documentary archives, codex manuscripts, annotated books and auction catalogs acquired over the years) in databanks containing over 30 million indices and auction results, covering more than 853,000 artists.

Artprice Images® allows unlimited access to the largest art market image bank in the world with no less than 181 million digital images of photographs or engraved reproductions of artworks from 1700 to the present day, commented by our art historians.

Artmarket, with its Artprice department, constantly enriches its databases from 7,200 auction houses and continuously publishes art market trends for the main agencies and press titles in the world in 119 countries and 9 languages.

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Artmarket.com makes available to its 9.3 million members (members log in) the advertisements posted by its Members, who now constitute the first global Standardized Marketplace® for buying and selling artworks at fixed or auction prices (auctions regulated by paragraphs 2 and 3 of Article L321.3 of France’s Commercial Code).

There is now a future for the Art Market with Artprice’s Intuitive Artmarket® AI.

Artmarket, with its Artprice department, has twice been awarded the State label “Innovative Company” by the French Public Investment Bank (BPI), which has supported the company in its project to consolidate its position as a global player in the art market.

Artprice by Artmarket publishes its 2024 Contemporary Art Market Report:

https://www.artprice.com/artprice-reports/the-contemporary-art-market-report-2024

See our 2023 Global Art Market Annual Report, published in March 2024 by Artprice by Artmarket: https://www.artprice.com/artprice-reports/the-art-market-in-2023

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whose head office is the famous Museum of Contemporary Art Abode of Chaos dixit The New York Times / La Demeure of Chaos:

https://issuu.com/demeureduchaos/docs/demeureduchaos-abodeofchaos-opus-ix-1999-2013

La Demeure du Chaos/Abode of Chaos – Total Work of Art and Singular Architecture. 
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Samsung Pay has expanded its crypto payments capabilities by partnering with Alchemy Pay, allowing users to transact with cryptocurrency at millions of merchants globally. This new partnership enables over 500,000 users of Alchemy Pay’s virtual cards to link their cards with Samsung Pay for seamless crypto payments both online and in-store. With Samsung Pay available in 24 countries across regions like Asia, Africa, Europe, and North America, this integration broadens access to crypto payments for a growing number of users worldwide.

A Major Step for Crypto Payments

The collaboration between Samsung Pay and Alchemy Pay marks a significant development in the growing adoption of crypto payments. Samsung Pay users can now leverage their digital assets for everyday transactions, from purchasing items online to shopping at physical stores. According to Alchemy Pay’s announcement on October 7, this integration is designed to be user-friendly, enabling cardholders to link their virtual cards to Samsung Pay by following a few simple steps within the app.

This partnership represents Samsung Pay’s second venture into the crypto space. The company first made waves in May 2020 when it collaborated with Swipe to enable the use of Visa Debit cards for crypto payments. With the addition of Alchemy Pay, Samsung Pay is strengthening its presence in the cryptocurrency payment sector, bringing digital currencies closer to mainstream adoption.

Alchemy Pay’s Expanding Ecosystem

While this integration with Samsung Pay is a notable advancement, Alchemy Pay has been making strides of its own. Earlier this year, the crypto payment processor expanded its reach by incorporating Google Pay into its virtual card service. It also integrated Apple Pay support for fiat-to-crypto purchases in January 2023. These moves are part of Alchemy Pay’s ongoing strategy to bridge the gap between cryptocurrency and traditional payment platforms, offering users more flexibility in how they manage and spend their digital assets.

With Samsung Pay now on board, Alchemy Pay’s virtual cardholders can use their crypto for payments across millions of global merchants, including popular platforms like Amazon, Netflix, eBay, and Apple Store. As Alchemy Pay continues to innovate and expand its services, it is becoming a crucial player in the drive to make crypto payments more accessible to everyday consumers.

The Growing Demand for Crypto Payments

Recent data highlights the increasing interest in using cryptocurrency for payments. According to an EY-Parthenon survey, 29% of crypto retail investors now use digital assets for payments, a 6% increase from 2022. The most popular use cases include online shopping, with 57% of respondents using crypto for e-commerce transactions, and paying friends and family, which 49% of respondents cited.

Interestingly, accredited investors show a greater appetite for crypto payments compared to non-accredited investors. Between August 2023 and July 2024, 69% of accredited investors used digital assets for payments, while only 28% of non-accredited investors did so. These figures demonstrate that while crypto payments are gaining traction, there is still significant room for growth, especially among non-accredited investors.

What’s Next for Samsung Pay and Alchemy Pay?

As Samsung Pay and Alchemy Pay deepen their partnership, both companies have ambitious plans for the future. Alchemy Pay is working to integrate additional digital payment platforms and expand compatibility with major card networks, including Visa, Mastercard, and American Express. These developments will further streamline the process for users to make crypto payments with their virtual cards, making digital assets more versatile and practical for everyday use.

Looking ahead, this partnership positions Samsung Pay and Alchemy Pay at the forefront of the crypto payments revolution, creating more opportunities for users to engage with cryptocurrency in their daily lives. With both companies actively expanding their services, the adoption of cryptocurrency for retail and online payments is expected to continue its upward trajectory.

Conclusion

The partnership between Samsung Pay and Alchemy Pay is a pivotal moment in the evolution of crypto payments, making it easier for consumers to use digital assets for a wide range of transactions. As more companies integrate cryptocurrency into their payment systems, the future of payments is becoming increasingly digital, bringing cryptocurrencies closer to mainstream adoption. For users looking to seamlessly incorporate their crypto holdings into everyday purchases, the collaboration between Samsung Pay and Alchemy Pay is a step in the right direction.

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FTX, once a major player in the cryptocurrency exchange industry, has received court approval for a bankruptcy plan that aims to repay customers using up to $16.5 billion in recovered assets. This development comes after FTX’s dramatic collapse in 2022, which followed revelations that its founder, Sam Bankman-Fried, had misappropriated customer funds. The FTX bankruptcy repayment plan is seen as a victory for creditors and customers who are eager to recover their losses.

Details of the Repayment Plan

The approved plan is structured around settlements with FTX customers, U.S. government agencies, and liquidators overseeing FTX’s operations outside the U.S. One of the key features of the plan is that customers who held $50,000 or less on the exchange will be repaid in full within 60 days of the plan’s effective date. In total, FTX expects to repay 98% of its customers.

FTX estimates that it will have between $14.7 billion and $16.5 billion available to repay creditors, enough to cover at least 118% of the value in customer accounts as of November 2022, when the company filed for bankruptcy. The company has recovered cash and crypto assets through settlements, asset sales, and an extensive process of rebuilding its financial records.

U.S. Government Agencies Agree to Prioritize Customers

In a significant move, U.S. government agencies like the Commodity Futures Trading Commission and the Internal Revenue Service have agreed to let FTX prioritize customer repayment over other claims, such as fines or tax debts. This agreement ensures that customers receive the bulk of FTX’s remaining assets, rather than seeing their funds go toward penalties or legal settlements.

This decision was made possible by FTX’s ability to recover substantial amounts of money through the sale of various assets, including investments in technology companies like Anthropic, a prominent artificial intelligence startup. These sales contributed to the billions of dollars FTX has recovered since its collapse.

Customer Reactions: A Mixed Bag

While the FTX bankruptcy repayment plan has been met with relief by some, not all customers are satisfied. The plan calculates repayment based on the value of assets at the time of the bankruptcy filing in November 2022, which has caused frustration among customers. For example, the price of Bitcoin has risen from $16,000 in 2022 to over $63,000 in 2024, leading some to feel that their repayments do not reflect current cryptocurrency values.

David Adler, a lawyer representing a group of objecting creditors, pointed out that many customers are disappointed that they won’t benefit from the rebound in crypto prices since FTX’s collapse. Customers are expected to receive a percentage of their original deposits in fiat currency or assets, rather than the actual cryptocurrency they originally held.

FTX has defended its plan, stating that repurchasing billions of dollars’ worth of cryptocurrencies would be “exorbitantly expensive.” Moreover, FTX’s financial adviser, Steve Coverick, testified that when FTX filed for bankruptcy, it held only 0.1% of the Bitcoin that customers believed they had deposited on the platform. As a result, returning crypto assets as-is is simply not feasible.

FTX’s Impact on the Crypto Industry

FTX’s collapse has sent shockwaves through the cryptocurrency industry. Once seen as a trailblazer in crypto exchanges, FTX’s downfall exposed the fragility of platforms that mix customer deposits with risky hedge fund bets. Sam Bankman-Fried, the company’s founder, was sentenced to 25 years in prison after being found guilty of fraud and conspiracy. He has since appealed the decision, but the case remains a cautionary tale for crypto investors.

Despite the fallout, FTX’s bankruptcy repayment plan is being hailed as a model for handling complex Chapter 11 proceedings. U.S. Judge John Dorsey, who presided over the bankruptcy court hearings, described FTX’s plan as a success story in recovering significant funds for customers in a remarkably short time.

Looking Forward

As FTX moves forward with its bankruptcy plan, many in the crypto community will be watching closely. While the repayment structure is not without its critics, it represents a significant step toward resolving one of the largest crypto collapses in history. FTX’s ability to repay most of its customers in full offers some hope for stability in an industry that has been rife with volatility.

The FTX collapse underscores the importance of regulatory oversight and transparency in cryptocurrency exchanges. As the FTX bankruptcy repayment process unfolds, the lessons learned will likely influence future regulations and the way investors interact with crypto platforms moving forward.

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DUBAI, UAE, Oct. 8, 2024 /PRNewswire/ — Ben Zhou, co-founder and CEO of Bybit, shared his candid views on crypto compliance, sensible AI deployments, and new growth drivers at TOKEN2049. Sharing the main stage with panelists from other leading exchanges, Ben addressed the growing pains of mainstreaming exchanges, and how they are adapting to meet increasing regulatory requirements at the annual premier crypto event, attended by over 30,000 participants and amplifying leading voices in the blockchain and crypto economy.

Advance Compliance: A Necessary Luxury

“Compliance is not cheap, but the penalties are more expensive. And it comes with not just monetary but also other consequences,” Ben Zhou, co-founder and CEO of Bybit remarked.

Steering the world’s second-largest cryptocurrency exchange by trading volume, Ben Zhou admitted Bybit was on the same learning curve as other major exchanges.

“We are not the first ones, and we have the opportunities to learn and adapt the business,” he said about the rapid changes in the compliance landscape, acknowledging that all exchanges including Bybit are ramping up their compliance efforts.

Only a year ago, exchanges used to place an amount limit on compliance checks; but Bybit has been taking a prudent approach of standardizing compliance and safety checks on practically transaction of any amount, after witnessing “what had happened in the industry,” he disclosed.

Compliance overhead has increased accordingly. “The operations are getting a lot heavier with a lot more manpower,” he said, adding that third-party tools such as Chainalysis have been useful in improving due diligence and KYC, adding costs but also efficiency.

At the time of writing, a team of over 50 risk experts operate Bybit’s AI-enhanced risk engine alongside a growing legal and compliance function comprising compliance officers of various specialities and in-house counsel.

Ben also took pride in crypto‘s contribution to improving compliance practices and raised the bar to make it harder for rogue actors to bypass sanctions. “In our industry, we have revolutionized how compliance has been done. For instance, someone trying to access our platform from a sanctioned address would be identified within minutes and the address would be blocked. The industry is revolutionizing the old ways of doing things in compliance,” he said.  

Incorporating AI Tools and Finding Growth

Bybit takes a “slightly different approach” to AI and recognizes the gap between the native interfaces and users’ demands.

“We don’t like to use APIs because retail users don’t understand them. Instead, we think about the user experience when they interact with exchanges: we use AI to make it a little easier with automation,” he explains.

In the fast-moving world of crypto, users seek not Wikipedia-style explanations of a newly listed token, but hard data and community feedback. Bybit uses AI as a co-pilot to produce a timely summary to break down data points and guide users doing their research to analysis, project background, and social noise. “Basically we look at which part of the process is mundane, and try to streamline it,” he said of the way Bybit deploys AI.

Ben also revealed the geography of growth as crypto continues to serve as a driver for financial inclusion. He commented on the fast-growing TON ecosystem and play-to-earn games, drawing in diverse user groups from Africa, India to parts of Eastern Europe, mapping out a new trend of onboarding users from emerging economies.

Crypto offers an engaging way to empower these communities, he said, where traditional financial infrastructure may fall short for retail users.

Themed “Exchanges at the Helm: Driving Crypto from Niche to Mainstream”, the panel was moderated by Michael Casey, Chairman of the Decentralized AI Society featuring prominent speakers including Ben Zhou at Bybit, Gracy Chen at Bitget, Vivien Lin at BingX, Sonia Shaw at Coin W and Alicia Kao at KuCoin.

#Bybit / #TheCryptoArk / #TOKEN2049

About Bybit

Bybit is one of the world’s top three crypto exchanges by trading volume with 50 million users. Established in 2018, it offers a professional platform where crypto investors and traders can find an ultra-fast matching engine, 24/7 customer service, and multilingual community support. Bybit is a proud partner of Formula One’s reigning Constructors’ and Drivers’ champions: the Oracle Red Bull Racing team.

For more details about Bybit, please visit Bybit Press.
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