VISA, AWS and Stripe are all here in


 VISA, AWS and Stripe are all here.

plus some of the biggest local players and cross-border payments. Now by far, the biggest topic of the conference is the mass adoption of USD-pegged stablecoins in Africa. So we use stablecoins like Teda, USD, to move money from one place to another, so moving money from African continent out and even within Africa. One reason why stablecoins are so disruptive in Africa is the fact that there's virtually no access to dollars across the continent. So if you go to a bank and need to make an international payment, you can't really do that.

that the traditional financial infrastructure, in part because there is very little liquidity of local African currencies. What stable coins like USDC are doing is giving people access to dollar-denominated currency and yield for the first time ever. So we use stable coins really to make use, to help people do everyday things like money transfer or sending money across Africa, because at the moment, money transfer across Africa is very hard and at the same time very expensive.

and crypto technologies allows us to make it cheaper. The rates even better for every customer and accessibility as well. It comes straight to your app. You don't have to go get it in a bank or anywhere else. Stablecoins are also considered a safer store of value than local fiat currencies in some countries. And crucially, they provide a way for people to access dollars in order to do things like move money around the world. Another hot topic at the conference is how virtually all the big fintechs are using generative AI and credit scoring to evaluate prospective customers.

Bitcoin's recent and massive jump in price to levels not seen since the last full run in 2021. Not as big a focus for many people on the ground here because it's really all about getting access to USD in some capacity.

All right. Turning to crypto bankruptcies for our main story. 2022 was a year filled with crypto defaults. Now, more than a year later, some of those failed companies are restarting operations and gearing up to repay customers. So what does this mean for those who have yet to see reimbursements and as other bankruptcy proceedings linger? CryptoWorld spoke with experts to find out. Between 35 and 45 billion dollars of funds are still tied up in crypto bankruptcies. That's according to a February 15th estimate from Exclaim.\

Now, some of the companies that went under in the industry's 2022 meltdown are emerging from bankruptcy. All these different companies tied back to 3AC. And so when 3AC went bust, it really set a clock for the rest of them. There were two tough years. We had Terra Luna collapse. We had FTX. We had Celsius. So far this year.

Celsius exited bankruptcy and began repaying customers. Core Scientific relisted shares on the Nasdaq and lawyers representing FTX said they expect the exchange to repay creditors in full. Bankruptcy courts are challenged with untangling debt and assets in a relatively new industry. Then they face the difficult decision of whether to prioritize getting money back to creditors or rebuilding the existing business. Not many of them are really.

being successful in relaunching operations, FTX, there was a lot of discussions around whether the exchange component, which during its heyday was really regarded as a very good trading platform, whether that technology was valuable and worth restarting, because if it was, then you could give creditors another pathway to their money back. Bankruptcy's priority is to maximize the recovery and to keep the business intact, maybe in conflict.

It may be better to liquidate the company and get people their deposits back than it is to try to use those deposits to rebuild the company that nobody wants to do business with anymore. So if you're a customer who has money tied up in these companies exiting bankruptcy, what should you expect? In the U.S., the assets of the company are valued at the time of the bankruptcy. If you had one Bitcoin at FTX, you're going to think, well, I had one Bitcoin. I should be getting $50,000.

Really, what you'll get is $18,000. But because the prices of the assets have rallied so much, there's a better opportunity to cover all the customers for which there aren't the crypto deposits there. First, it's important to remember that not all creditors are treated equally in bankruptcy courts, and that's exacerbated by the unregulated nature of crypto. The difference really comes down to secured versus unsecured creditors.

 And they were told in some of the marketing promises, especially in Celsius's case, that it's almost the same thing as if you deposited your crypto and your savings and loan and local bank. Well, the bankruptcy court ruled, in fact, you made a loan and now you're left as a general unsecured creditor. That is very, very tough news to hundreds of thousands of customers who thought very differently. And it wasn't just Celsius. So BlockFi, for example.                

followed the Celsius rules. Add them two together, well north of a million customers found themselves not thinking that they were going to be unsecured creditors in a bankruptcy case, losing their savings, losing their deposits and being stuck at the bottom of a priority. Ladd are fighting for scraps at the bottom of a case, but that's in fact how it ended up. So when it's all said and done, how long should customers expect to wait before receiving their funds? This is really a process that's depended on how fast the courts move and how fast.

the regulatory agencies that are also involved move. So in the case of Celsius, there was an earlier plan to restart not only a mining operation, but also an operation that would run validators that could earn staking yields on tokens. The SEC got in the way and said, no, we don't want that. And because of that, it took a little bit longer. Crypto companies are also looking to unique ways to make customers whole. Celsius has restructured into a mining business as a way to repay debt.

FTX has looked to sell major crypto holdings to reach 100% repayment. Those asset sales have had an effect on the crypto market. Prolonged pressure on the Grayscale Bitcoin Trust as FTX sold its holdings weighed on Bitcoin's price for several days in January. Genesis has also been given the green light to offload over $1.3 billion of the product. FTX, which held massive amounts of Grayscale Bitcoin Trust product, now selling that

much more liquidity to do so via the new Bitcoin ETF. And no matter what, the crypto industry still has to deal with the issue of public trust, which has been damaged by the slew of failed businesses. The crypto industry has gone through four year cycles of what we call crypto winters and crypto summers. And as a company, you need to be able to weather that out. It's kind of hard when you've lost trust and you've lost so much money into a system for anybody wanting to provide capital or otherwise provide trust.

Post a Comment


Post a Comment (0)