FT Cryptofinance: Celsiuss Bankrott and the future of crypto

Hello and welcome to the first edition of the Financial Times Cryptofinance newsletter. My name is Scott Chipolina, correspondent for digital assets. I am here every Friday and bring you the information you need through the digital financial industry.

I will examine the most important crypto trends, inform them about the rapidly changing regulatory landscape, describe in detail how companies use innovations such as blockchain in their companies, and give them insights from managers in the industry. Do not expect too many updates this week about which coins have risen or fell - we will dive deep into the stories that are most important for investors.

Story of the week: Celsius is made from the crrypto overflower to the insolvency applicant

The fall of Celsius from the heights of the crypto industry in front of the US bankruptcy court emphasizes many of the most important challenges that the digital financial industry faces when the era of the slight money that has promoted its growth comes to an abrupt end.

The crypto loan based in the USA applied for insolvency protection according to Chapter 11 at the beginning of this week, since it

Celsius, which was founded in 2017, became one of the most famous crypto companies by offering an annualized interest rates of up to 18 percent. It was able to offer these returns-which are almost outrageous in the traditional financial world-by entering risky betting with the money of his inserts, as my colleagues Kadhim Shubber and Joshua Oliver described in detail this week in a must-read story. The strategy made it possible for her to achieve inflows in billions of bills during the crypto bull run, which was partially fueled by the race for returns, which was triggered by the economic stimulus programs of the central banks from the pandemic era.

The company's rise, which took place almost without supervision by the regulatory authorities, raised the attention of major investors. The Canadian pension fund manager Caisse de Dépôt et Placement du Québec and Westcap, a fund founded by the former Airbnb and Blackstone Manager Laurence Tosi, carried out a fundraising round in Celsius in October, which the group rated $ 3 billion.

Alexandre Synnett, Chief Technology Officer at CDPQ, told the Financial Times at the time, the investment signaled "the conviction we have in relation to blockchain technology".

Less than a year later, Celsius prevented customers from lifting funds from his platform after unrest had torn a hole into his finances on the cryptom market. Other crypto loans such as Vauld, a group that is supported by Coinbase and the investor Peter Thiel, have blocked returns in a similar way because the credit crisis on the market for digital assets intensified.

The problems of Celsius and his competitors bring a number of problems to light that could determine the path of the digital financial industry. How much responsibility should regulatory authorities have for the protection of consumers who use cryptoplatt forms? Should crypto tokens such as securities, raw materials or something completely different be monitored? Should mainstream fund managers deal with crypto?

The Lex-Column of the FT meant meant that Celsius' bankruptcy will raise important questions from lawyers, creditors and dishes about how exactly digital financial companies work.

The problems in the crypto industry also come in a time of larger market turbulence. What does the flight of investors from speculative assets for the digital financial industry mean as a whole and the thousands of crypto tokens that are currently circulating on the market?

I would like to hear from you. In your opinion, what are the most important topics and questions in digital finance? Send me an email to scott.chipolina@ft.com.

The highlights of the week

• Alan Howard, a media scandal hedge fund billionaire, builds an empire for digital assets in silence and has become an important force in the crypto risk capital in the USA and Europe.

• crypto investors should take the market crash as a “precaution”, to invest money in risky, non-regulated assets, and cannot expect any kind of rescue operation, said Europe's Supreme Securities Supervisory Authority.

• broker who offer stock trading and crypto exchanges that sell digital tokens make mutual progress among customers when the passion that retail volume has driven on the market.

• ft columnist Jemima Kelly argues that web3 is not about making the Internet more fairer or less susceptible to exploitation by greedy fat cats-it is actually the opposite. Since we are on this topic, they under no circumstances miss the Big Read of the FT whether the crypto crash will make the next web revolution fail.

• Popular non-fungibler token marketplace OpenSea announced that it plans to reduce 20 percent of its workforce, which the youngest represents in a very long series of crypto establishments.

SoundBite of the WEEK

The CEO of the Financial Conduct Authority, Nikhil Rathi, said that Great Britain and the USA may not be able to accept China's digital currency due to concerns about data protection and citizen data, reports FT, Owen Walker. China is a leader worldwide when building a state -supported digital currency, so it is worth keeping an eye on the development.

"There will be really important social questions about data protection. So I would be surprised if our responsibility - or actually [The Us] - were able to take over a approach to the data protection of citizens taken over by the Chinese model. I think our citizens have just have different expectations there."