Top crypto derivatives exchange BitMEX has been amid an operations shakeup following indictments from regulators in the U.S. In the latest change, the firm has appointed a new CEO as it hopes to stabilize its operations going forward.
Meet Alexander Hoptner
Earlier today, 100x Group, the parent company of crypto derivatives exchange BitMEX, has announced that Alexander Hoptner, a German stock exchange expert, will be its new CEO. Hoptner is the former German stock exchange Borse Stuttgart GmbH, and he will take his new position from January 2021.
Along with his new role, Hoptner will also join the company’s board of directors, reporting directly to the board’s chairman, David Wong. He is taking over from the company’s interim chief executive, Vivien Khoo, who was promoted from chief operations officer in an emergency.
Speaking on his new appointment, Hoptner explained that he was excited to join 100x Group. He praised the founders’ audacity and boldness, explaining that he bought into their vision to improve millions’ lives through cryptocurrencies.
The new CEO also highlighted that he would focus on developing a company that is regulatory-compliant and innovative. With a focus on fairness for retail and institutional investors, Hoptner appears to be looking to build better relations with regulators across the board.
A New-Look BitMEX
The new hire follows a string of changes that the company has made since it was indited by two federal agencies in the United States. The first charge came in mid-October, with the Department of Justice accusing four of the company’s executives – former CEO Arthur Hayes, Gregory Dwyer, Ben Delo, and Samuel Reed – of deliberately targeting U.S.-based traders despite not being licensed to operate in the country.
BitMEX also faced charges of implementing subpar anti-money laundering (AML) and know-your-customer (KYC) security policies. The Justice Department added that by doing this, the firm was knowingly enabling criminals and fraudsters to launder their cash through its platform.
The same day, the Commodity Futures Trading Commission (CFTC) filed a complaint with the Southern District of New York, alleging that BitMEX had illegally offered leverage to American traders. The CFTC highlighted that the exchange’s leverage had amounted to over $1 trillion since its inception in 2014.
The CFTC additionally alleged that the executives had violated the Bank Secrecy Act. It sought civil penalties, disgorgement, injunctions against future violations, and even permanent trading bans for them all. A conviction could also see them spend five years in prison and pay up to $250,000 in fines.
Since then, BitMEX has cleaned house. In the days following the indictments, 100x Group fired Hayes, Reed, and Delo. Dwyer, the company’s Head of Business Development, was placed on indefinite leave. However, there’s a low probability that he would return anytime soon.
The exchange also announced this month that it had partnered with compliance and software firm Eventus Systems to improve its AML transaction and trade surveillance capabilities. The announcement claimed that BitMEX would integrate Eventus’ Validus technology into its infrastructure to provide a “safe and secure trading environment” for users.
Strategists at BTIG are convinced that Bitcoin has finally “come off age” and will be making an upward price movement in the future. Now, they are setting a $50,000 price target on the premier cryptocurrency by the end of 2021.
Bitcoin’s journey to the moon
Bitcoin has been reaching new highs towards the end of the year. According to Coin Metrics, the cryptocurrency topped its 2017 highs of $19,000. The price movement of the coin has constantly gone northward. After it reached the $19,000-mark last week, it took a small backward tilt to $17,000 before eventually reaching highs over the weekend.
However, the 2020 bull market is very different from the 2017 market. The 2017 bull market was a result of frenzied trading as the crypto asset grew into a bubble that eventually popped in 2018. However, this time, the price rise is fueled by increased investments in the cryptocurrency from institutional investors. Moreover, governments and major investors, especially in China, are also showing more interest in the digital coin.
Other bullish predictions
BTIG is not the only bullish prediction in the cryptocurrency space. Other analysts are also giving their bullish predictions about the cryptocurrency for 2021. Citibank analyst Tom Fitzpatrick has an even more mind-boggling view. He recently wrote a note in which he detailed how Bitcoin could hit $318,000 by the end of 2021.
Most predictions are taking better crypto adoption as one of the primary reasons behind this goal. The growing number of crypto transactions on Square and PayPal’s interest in digital currencies is showing a real-world use case for Bitcoin which will make it a part of everyday life. Fitzpatrick also suggests that looking at the movement of Bitcoin between 2010 and 2011, it is possible that the same trajectory repeats in 2021 as well. The impact of the coronavirus and the actions taken by the US Federal Reserve will play an important role in this.
LoanScan suggests that around $89 million was liquidated on the crypto lending platform Compound in the past 24 hours after the price of DAI was increased on Coinbase Pro.
Third larger COMP farmer liquidates
According to Nansen CEO Alex Svanevik, the $89 million liquidation includes $46 million from the third larger COMP farmer. He said,
“My understanding is that the DAI price on Coinbase was driven up to a premium of around 30%. Compound’s oracle uses Coinbase for pricing data. This caused liquidations as the value of the loans exceeded collateralization-ratio thresholds.”
He added that Compound worked in the way it should ideally have. However, there will be questions about the oracle.
What is Compound?
Compound is a crypto lending platform that lets users lend crypto assets to each other. It has grown to become the third-largest DeFi platform and has over $1.55 billion locked in its smart contracts. Users need to put collateral for their lending whose value is higher than the amount of borrowing. The loans are issued on the Ethereum blockchain. If the Ethereum network considers that the assets have been undercollateralized, it liquidates the loan.
The blockchain doesn’t know the current price of the coins. Therefore, it uses oracles to fetch live prices. A malicious actor may have manipulated DAI price on Coinbase Pro, which tricked the blockchain into believing that the price of the coin has gone up to $1.30. The blockchain then liquidated the loans.
According to Svanevik, a $100 loan could have gotten liquidated because the price of DAI was fixed at $1 (it is a stablecoin). With prices rising to $1.30, the loan is now valued at $130. If the user has collateralized their positions at up to $125, then it will get liquidated on the blockchain.
Chainlink co-founder Sergey Nazarov criticized the use of centralized oracles that depend on pricing from a single exchange for any activity. He said that this usage is exposing users to multiple risks.
Curve Finance, one of the top decentralized finance (DeFi ) projects of the year, has confirmed a $3 million payout to holders of its governance tokens. Following a week-long voting period, the decentralized exchange (DEX) platform has reached a consensus on allocating administrative fees.
As the voting log shows, the process ended in favor of governance token holders. As such, these holders are set to receive about $2.63 million in fees. The fees were accrued before the vote opened. As Curve Finance chief executive Michael Egorov told CoinDesk, they will be dispersing the funds every week following the initial payout.
Curve has been one of the star participants of the 2020 DeFi rally. It is currently the sixth-largest DeFi protocol on the market with about $884 million in locked assets, per data from DeFi Pulse.
However, the service also owes its impressive run to its focus on decentralization. The vote on allocating admin fees is part of Curve’s work to ensure that all community members have a voice. To vote, users will need to stake CRV tokens to Curve’s voting contract, which will then supply them with veCRV. So far, veCRV holders have earned half of all trading fees on Curve – the other half goes to liquidity providers.
Curve Finance in an Evolving DeFi Market
Now that Curve appears to have sorted out its fee distribution mechanism, the service can now focus on maintaining its rally. The DeFi market has been particularly active this year, with protocols posting upticks in their user numbers.
Last month saw a bit of a drop in the market, with assets locked falling and many DeFi tokens dropping in value. However, metrics remain strong. Data from Dune Analytics shows that there are now 860,000 DeFi user addresses, increasing about 1,000 percent over the same period last year.
Even in October, when the DeFi rally halted, user numbers increased, as Dune Analytics’ numbers showed the month saw a 40 percent surge in user count, with the metric moving from 555,000 to 755,000.
The strongest gainers include lending protocol Compound and DEX Dydx. Both increased their user numbers by 250 percent and 50 percent, respectively, over the past month. Compound has lost its position as the industry’s top lending protocol to Maker, but its growth of 135,000 new users shows that it could be making a run for the top spot soon enough.
As for Curve, it still has Uniswap to contend with when it comes to top decentralized exchanges. Dune Analytics’ data shows that Uniswap holds 63.6 percent of all DEX trades, with Curve coming in a distant second in 12.2 percent. SushiSwap and Ox have 8.64 percent and 7 percent of volumes, respectively, meaning that just four DEXs hold over 90 percent of all exchange volumes.
A new web series has been released by the Ukrainian Ministry of Digital Transformation, of all things. This series is dedicated to the education of the country’s citizens regarding blockchain technology, cryptocurrencies, and Bitcoin (BTC) in particular.
The Big Push For Crypto Literacy
The show itself saw its premiere on Wednesday, and was developed with collaborations with firms like Hacken, Binance, and Crystal Blockchain. The entire series itself stands as part of the “Diia.Digital Education” program enacted by the government of Ukraine.
The show itself boasts eight episodes, ranging from 6 to 12 minutes in length. The show itself sets out to explain the fundamentals of blockchain technology and cryptocurrencies. Andriy Onistrat, a former banker and now an entrepreneur, stands as the host of the show, with the main idea behind it being to interview various guests that work within the blockchain industry.
Questions Both Easy And Difficult
The first episode is already out, and publicly available on YouTube. The episode focuses on introducing cryptocurrencies as a concept, highlighting the unstoppable, permissionless transaction ledger behind it. The concept of supply auditability were given special considerations.
Onistrat compared this to the National Bank of Ukraine, who could always print out the Hryvnia to increase the supply, highlighting how this isn’t so easy for cryptocurrencies. The first guest of the series was Ivan Paskar, which stands as the Marketing Manager for Binance’s Ukrainian operations. Paskar gave an explanation regarding Bitcoin and how it maintains an auditable, immutable supply.
The pair discussed more complicated ideas, as well, going into some detail regarding smart contracts, Ethereum, and decentralized exchanges. While the show itself is developed to be friendly to beginners, Onistrat threw in some more complicated questions, as well. A prime example would be the conflicting ideas within centralized crypto exchanges.
Cryptocurrencies were built originally on the ideals of freedom and decentralization, but as the world started to adopt and regulate it, identification requirements and traceability have become a new norm. Onistrat asked Paskar these questions.
Ukraine Working Hard For New Digital Age
Should viewers completely go through all the episodes in this series, they will receive a certificate of completion. While not particularly useful, the initiative itself is sound, as the Ukrainian government is making a hard push to increase the digital literacy within its country.
The Ministry already boasts a number of informative shows: One is dedicated on how to be a YouTube blogger, while the other is titled “Digital Lessons for Teachers.”