Daily Crypto News Digest

Tokonomo Daily Crypto News Digest – August 1st

MicroStrategy Incurs a $24 Million Charge in Q2 Due to Its Significant Bitcoin Acquisition Worth Billions

MicroStrategy (MSTR) has recorded a $24.1 million impairment charge for its bitcoin (BTC) holdings during the second quarter, as indicated by its latest earnings report.
This figure is in contrast to the $917.8 million impairment charge in the same quarter last year and an $18.9 million charge in the previous quarter.

The impairment charge on the company’s digital assets reflects the decrease in the value of Bitcoin compared to its acquisition cost.

According to prevailing accounting regulations, the value of digital assets, including cryptocurrencies, is initially recorded at their purchase cost and is adjusted only in case of impairment or decline.
Any increase in value is not reported unless the asset is sold. Bitcoin’s price started the second quarter at approximately $28,500 and concluded at around $30,400.

Andrew Kang, the Chief Financial Officer, remarked, “As of July 31, 2023, our bitcoin holdings have risen to 152,800 bitcoins.
The second quarter saw the most substantial increase in a single quarter since Q2 2021, with the addition of 12,333 bitcoins.
We efficiently raised capital through our at-the-market equity program and utilized operational cash to augment our bitcoin holdings, all against a backdrop of growing institutional interest, advancements in accounting transparency, and ongoing regulatory clarity for bitcoin.”

Between April 29 and June 27, the company acquired 12,333 bitcoins for $347 million in cash, and an additional 467 BTC were procured for $14.4 million in July, as reported by executive chairman Michael Saylor via a tweet.

While bitcoin prices have surged by approximately 76% this year, MicroStrategy’s shares have more than tripled.
The total value of its 152,800 bitcoins is estimated at around $4.5 billion.

In terms of overall financial performance, MSTR disclosed revenue of $120.4 million, falling short of analyst projections of $123.1 million in revenue.
Following this announcement, MSTR shares experienced a 1% decline, settling at $430 during after-hours trading on Tuesday.

FTX Intends to Resume Its Cryptocurrency Exchange Services For Customers on a Global Scale

The defunct cryptocurrency exchange FTX has put forth a proposal to categorize its creditors into distinct groups based on their claims.
It has also outlined a potential avenue for one group of claimants to relaunch the FTX exchange in collaboration with third-party investors, provided that the group agrees to such an arrangement.

The filing, posted on Monday night U.S. time, organizes the claimants into several different classes.
The initial category consists of claimants from FTX.com’s offshore exchange, referred to as “dotcom customers.”
Subsequent categories include customers of the U.S. exchange (“U.S. customers”), customers of the NFT exchange, general unsecured claims, secured claims, and subordinated claims.
The latter includes obligations such as taxes and penalties.

The hierarchy of these claims will be established according to a “waterfall priorities” system, and each class will receive a proportionate distribution from the remaining pool of assets after the preceding class has been satisfied.
The specific sequence of distributions will be determined through negotiations involving stakeholders.

Participants falling under the Dotcom claimants category, which comprises former FTX.com customers, have the option to combine their resources to establish an “offshore exchange company” or a revitalized platform that would not be accessible within the U.S.
The document suggests that instead of receiving a cash payout, the Debtors may choose to provide non-cash consideration to the Dotcom Customer Pool, such as equity securities, tokens, or other interests in the new Offshore Exchange Company, or the right to invest in such equity securities, tokens, or interests.

Hints of potential relaunches for FTX have been alluded to previously, with interim CEO John Ray III’s May billings making reference to an “FTX restart” or a “2.0 reboot.”

Notably, the proposed restructuring plan does not include provisions for holders of FTT (FTX’s native token).

The Security and Exchange Commission (SEC) had classified the token as a security in a December complaint against FTX co-founder Gary Wang and former Alameda Research CEO Caroline Ellison.
According to the document, “No Holder of an FTT Claim shall receive any Distributions on account of its FTT Claim.
On and after the Effective Date, all FTT Claims shall be canceled, released, and extinguished and shall be of no further force and effect, whether surrendered for cancelation or otherwise.”

GameStop Announces The Removal of Crypto Wallets, Citing Concerns Over ‘Regulatory Uncertainty’

Prominent video game retailer GameStop (GME) has revealed its intention to discontinue support for crypto wallets, citing concerns about the uncertain regulatory landscape within the United States.

This decision comes merely a year after the company introduced this service.

In response to the intricate regulatory environment surrounding cryptocurrencies, GameStop has opted to withdraw its iOS and Chrome Extension wallets from the market by November 1, 2023, as detailed on its official website.
Users will retain access until October 1.

Launched roughly twelve months ago, these wallets facilitated users in managing both cryptocurrencies and non-fungible tokens (NFTs) across decentralized applications, while also enabling transactions on GameStop’s NFT marketplace.

Notably, the company underwent workforce reductions in December, which included a number of software engineers involved in the development of its crypto wallet.

This strategic move arrives amidst a backdrop of heightened regulatory scrutiny and legislative actions targeting cryptocurrency-related enterprises in the United States. Notably, industry giants like Coinbase and Binance have faced legal action from the Securities and Exchange Commission (SEC).
Further evidence of this regulatory push was the decision by the popular trading platform Robinhood (HOOD) to delist tokens categorized as securities in recent SEC lawsuits.

Given the escalating regulatory pressures within the United States, numerous companies have chosen to shift their focus overseas, where they can conduct their business with more clarity until regulatory frameworks in the region are better defined.

Binance Japan Commences User Onboarding

Binance Japan, a subsidiary of Binance, is set to commence the process of enrolling users within Japan on its freshly launched platform.
The exchange had received a cautionary notice from regulators about its unauthorized operation within the country two years prior.

Starting from August 14, existing customers based in Japan will have the option to transition to the local subsidiary.
This migration will grant users access to spot trading, earnings products, and a marketplace for non-fungible tokens (NFTs).
Notably, they will have the opportunity to engage in trading 34 different tokens, including the previously unavailable Binance Smart Chain’s native token, BNB.

In a noteworthy move, Binance acquired the regulated cryptocurrency exchange Sakura Exchange BitCoin (SEBC) in November of the preceding year.

Coinbase (COIN) and Kraken have both ceased their operations in the country in recent months, attributing their decisions to prevailing “market conditions.”
During the WebX conference held in Tokyo last week, Japan’s policymakers hinted at the development of additional policies related to the Web3 realm.

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