Daily Digest - 21 February 2023

Headlines

▌FTX Japan will resume crypto and fiat withdrawals on February 21

FTX’s Japanese subsidiary, FTX Japan, will resume cryptocurrency and fiat withdrawals on February 21. FTX Japan said in a statement that withdrawals will be processed through the Liquid Japan web platform. FTX acquired Liquid in 2022. Customers who own assets on the exchange must confirm their balances. Users without a Liquid Japan account will need to open one in order to withdraw assets. FTX Japan said it has contacted all users with funds on the platform. Those users have been told to opt out of the program, the company said. FTX Japan urges users to be aware that this process can be slow given the number of pending requests.

Policies

▌EU calls for fast-track cryptocurrency capital rules for banks

The executive branch of the European Union stated that if Europe wants to avoid missing the globally agreed deadline, it must quickly implement capital rules for banks holding encrypted assets in the European Union's pending banking law. It is reported that the global Basel Committee composed of banking regulators in the world's major financial centers has set a January 2025 deadline for the implementation of banks' capital requirements for stablecoins and encrypted assets such as bitcoin. Basel standards apply in legal form in the EU, and the delay could mean banks have to wait longer to enter the crypto market, as separate EU rules on trading crypto assets come into force in 2024. To implement Basel’s cryptocurrency rules, the EU could propose a new law, or expand the banking law it is now finalizing, as requested by the European Parliament.

Cryptocurrency

▌Meitu: Cryptocurrency confirmed impairment loss of about 285 million yuan

Meitu announced on the Hong Kong Stock Exchange that since the purchase of the cryptocurrency, the group has not purchased or sold any cryptocurrency according to the cryptocurrency investment plan. According to the International Financial Reporting Standards, the Group expects to recognize an impairment loss of approximately RMB 285 million for the purchased cryptocurrencies in the Group's upcoming annual results for the year ending December 31, 2022. The impairment loss of purchased cryptocurrencies has offset the impact on the net profit of the Group from the fair value gains of some of the Group's financial assets measured at fair value through profit or loss.

▌Informed sources: FTX bankruptcy claim sold for 20% on private off-exchange market

A person familiar with the matter said that distressed asset funds can buy FTX bankruptcy claims at a price of up to 20% in the private over-the-counter (OTC) market. FTX now owes $3.1 billion to the 50 largest creditors. Some open bankruptcy markets value distressed FTX assets trading at around 16% of the face value of claims. Up to $27 million in individual claims are listed for sale on Xclaim, a platform for trading crypto claims. An anonymous FTX creditor said that the pricing in the private OTC market is similar, with distressed asset funds buying between 15% and 20% of the face value of the claim. “They buy with the expectation that they will get the money in five years. If these funds end up with 25% of the money in five years, it’s not a good deal because the annual returns are only about 5%. I think, many of these companies are expected to recover funds equivalent to 50% of the face value of the claim."

▌Data: Blur's transaction volume on the Ethereum chain reached 460 million US dollars in the past week, surpassing OpenSea to rank first in the weekly transaction list

According to data from DappRadar, Blur generated $460 million worth of Ethereum NFT transactions in the past seven days, an increase of 361% month-on-month. At the same time, OpenSea’s transaction volume increased by 12% during this period to $107 million, and the third NFT market is X2Y2, which only traded $11 million in the same period. According to data from CryptoSlam, Blur has promoted the total transaction volume of NFT on the Ethereum chain to increase by 155% in a single week. The NFT project with the largest transaction volume (in the whole market) in the past week is the NFT plot in the Yuga Labs metaverse game Otherside, which generated about $63 million in transactions, up 318% week-on-week.

▌BIS: FTX, Terra collapse hits retail crypto investors in emerging economies hardest

The Bank for International Settlements said in a report released on Monday that although most users of encrypted applications around the world suffered losses from holding Bitcoin after the collapse of the Terra ecosystem and the FTX exchange last year, the majority of users outside major economies of investors were hit hardest. According to the report, more than $450 billion disappeared from the cryptocurrency market after Terra collapsed in May 2022, and another $200 billion was lost after FTX went bankrupt in November. By December 2022, the median investor will have lost $431, or nearly half of the $900 they've invested since downloading the app. Notably, this percentage is even higher in several emerging market economies such as Brazil, India, Pakistan, Thailand, and Turkey, where more than four out of five users would will lose money.