ICYMI - Last week in crypto: Celsius, OptiFi and Nigeria's Virtual Free Trade Zone
Some good news from the Nigerian front.
Last week, Celsius users learnt that the bankrupt crypto firm will be allowed to unfreeze around $225m of their funds, however it was mayhem for OptiFi users as developers mistakenly locks up $660,000 in new upgrade. In other news, Nigeria announced a new partnership with Binance to create a blockchain project, and Muse makes history with their NFT Album sales.
Some Celsius Users May Be Allowed to Withdraw Crypto… But There's a Catch
Some Celsius customers may soon be able to breathe a sigh of relief.
Amidst bankruptcy, Celsius is attempting to recover customer assets kept in its Custody Program and Withhold Accounts, claiming that they do not properly belong to the company.
In the most recent stage of Celsius's bankruptcy proceedings, the crypto lending company requested the courts today for permission to unfreeze the funds of a restricted group of customers.
Celsius claims in the complaint that digital assets kept in its Custody Program and Withhold Accounts do not legally belong to Celsius and that it would be "fair and appropriate" for clients to be allowed to withdraw these money. These assets were worth approximately $210 million in the Custody Program and $15 million in Withhold Accounts as of August 29. The former is made up of approximately 58,300 deposits from clients, while the latter is made up of approximately 5,680 deposits.
The Southern District of New York's Bankruptcy Court has scheduled a hearing for October 6 at 10:00 a.m. EST to discuss the matter and possibly authorize the motion.
Celsius is a "CeFi" corporation, which means it is a centralized body that seeks to profit from the yield prospects discovered in DeFi protocols on behalf of its clients. Celsius, once one of the leading lending companies in the cryptocurrency industry, halted customer withdrawals in June, claiming "extreme market conditions." A month later, the company declared Chapter 11 bankruptcy, revealing a $1.2 billion hole on its balance sheet.
Customers were outraged by the firm's bankruptcy filing, with several claiming on social media that they had lost their life savings to the company. The attention brought on by Celsius's bankruptcy proceedings prompted reports that the company's CEO, Alex Mashinsky, had previously been trading Bitcoin with customer cash against the advice of experienced traders at the firm.
Solana DEX OptiFi Accidentally Shuts Itself Down, Locking Up $661,000
Decentralized option exchange OptiFi, a Solana blockchain project, came to an abrupt halt on Wednesday after its development team mistakenly shut down the mainnet and locked up coins during a planned upgrade.
Claiming it was an "honest mistake", OptiFi developers admitted that they made an expensive blunder in the upgrade.
OptiFi's development team said on their official Twitter account that they had inadvertently permanently halted the OptiFi mainnet program, locking up around $661,000 in USDC.
OptiFi is a decentralized exchange on Solana that allows users trade options. The post-mortem states that the team tried to upgrade the protocol on August 29 but gave up when the deployment took longer than anticipated. OptiFi had, however, already transferred slightly more than 17.2 SOL tokens (worth roughly $533 at the time of writing) to the newly constructed "buffer" account, they soon realized. To allow the retrieval of these tokens, the team attempted to shut down the OptiFi application. Although the maneuver was successful, an error message informed the team that the software had been permanently terminated when they tried to redeploy.
The command line "solana program close," which the developers used in an effort to retrieve the tokens, was identified as the cause in the post-mortem. However, "solana program close" has the consequence of closing the program permanently and irretrievably, which the OptiFi team obviously was unaware of. In order to alert developers to the irrevocable nature of the program close function, the developers pleaded with Solana developers to alter the documentation for Solana.
The OptiFi team claimed that 95% of the funds that were locked belonged to team members and that users would be compensated for all losses within two weeks. They added that the error had not harmed the OptiFi AMM contestants and that winners would still be announced on the 5th of September.
Michael Saylor and MicroStrategy Sued for Tax Fraud
Michael Saylor, a multi-billionaire Bitcoin whale, is being sued for tax fraud by the District of Columbia, where he now resides. The tweet was posted on Wednesday by D.C. Attorney General Karl Racine.
Michael Saylor was accused of evading tax on hundreds of millions in income over a decade. MicroStrategy stock dropped 5% as news of the charges broke.
“Today, we’re suing Michael Saylor – a billionaire tech executive who has lived in the District for more than a decade but has never paid any DC income taxes – for tax fraud,” Racine stated in a tweet.
Racine added that Washington D.C. was also suing MicroStrategy “for conspiring to help [Saylor] evade taxes he legally owes on hundreds of millions of dollars he’s earned while living in DC.”
In the crypto world, Michael Saylor is most well-known for his persistent, outspoken public support of Bitcoin. He routinely makes appearances at cryptocurrency conferences to promote the benefits of the market's dominant cryptocurrency and to entice participants to buy as much as they can.
Saylor demonstrates his sincerity in this regard by leading MicroStrategy, which has changed direction toward a Bitcoin accumulation plan from its original position as a provider of business analytics tools. Saylor resigned as CEO of MicroStrategy at the beginning of the month, but he remained chairman of the board. He also took on a significant executive position with a focus on "Bitcoin acquisition strategy and related Bitcoin advocacy initiatives."
Saylor and his firm, MicroStrategy have had issues with law enforcement in the past as well. The Securities and Exchange Commission filed civil allegations of accounting fraud against MicroStrategy in 2000 for falsifying the company's financial data for a period of two years. Saylor personally forfeited $8.2 million and paid an extra $350,000 in fines as part of the settlement for that case.
Shares of MicroStrategy fell 6% shortly after the lawsuit was reported.
Meta Expands NFT Integration to Facebook
NFTs will now be accessible on Facebook and Instagram, Meta announced last week.
Users of Facebook can now connect their cryptocurrency wallets to the service and share their NFTs, according to a recent announcement by Meta.
Facebook users will soon be able to connect their digital wallets to the platform in order to share their NFTs, according to the social media giant. In the past, Meta said that it would extend the scope of its Instagram NFT integration experiment to 100 nations across North and South America, the Middle East, and Asia-Pacific.
Even though the statement didn't clarify the wallets and blockchains it will support, Facebook's NFT integration will probably be the same as Instagram's. If so, only the blockchains Ethereum, Polygon, and Flow would be accepted, and the connectable wallets would be Rainbow, MetaMask, Trust Wallet, Coinbase Wallet, and Dapper Wallet.
Also, it was unclear from Meta whether the Facebook connection will be a pilot project or have a similar audience as the Instagram operation. Additionally, it was not stated whether or not Europe will be added to the list of approved continents or if connection with other significant NFT blockchains, such as Solana, was intended. Though the announcement also did not specify any charge structures, it would appear unlikely that any will be imposed if the Instagram NFT program is any indicator.
When changing its name to Meta last October from Facebook, the company said that it will create its own Metaverse. The move has been met with skepticism from the crypto community, with Ethereum creator Vitalik Buterin claiming that Meta’s plans would “misfire” as “it’s far too early to know what people actually want [from a metaverse].”
Nigeria Partners With Binance Crypto Exchange to Create a Virtual Free Zone
The Nigerian government has held early talks with cryptocurrency exchange Binance about establishing a special economic zone to support crypto and blockchain-related enterprises.
According to a Friday post from the Nigeria Export Processing Zones Organization (NEPZA), the authority has held preliminary discussions with Binance and technology infrastructure business Talent City about the proposed digital city, dubbed a "Virtual Free Zone."
The proposed zone, according to NEPZA managing director Adesoji Adesugba, will be a first in West Africa and will function similarly to Dubai's virtual zones, which are aimed to provide crypto-friendly rules, regulations, and tax advantages for crypto enterprises.
According to Triple A, Nigeria has one of the greatest rates of cryptocurrency adoption in the world, with over 22 million bitcoin owners.
Adesugba stated that the zone would assist expand Nigeria's digital economy and "enlarge employment opportunities" for Nigerian nationals, adding:
“Our goal is to engender a flourishing virtual free zone to take advantage of a near trillion dollar virtual economy in blockchains and digital economy.”
The preliminary plans were addressed in Dubai on Friday by Adesugba, Binance executive director Nadeem Ladki, Talent City CEO Luqman Edu, and NEPZA director Sikiru Lawal.
Adesugba went on to say that the move would be part of Nigeria's economic growth program, with the goal of driving crypto usage in the West African area even further.
“We seek to break new grounds to widen economic opportunities for our citizens in line with the mandate of the Authority, the directive of the Honorable Minister and the economic development agenda of President Muhammadu Buhari,” he said.
Crypto usage in Africa has increased in recent years, fueled by an insufficient financial infrastructure, unstable government policies, and inflation.
According to a new CoinGecko poll, Nigerians are the most crypto-obsessed people in the world, having searched the terms "cryptocurrency" and "purchase crypto" more than any of the other 14 countries examined.
Nigeria also introduced eNaira in October 2021, the country's first central bank digital currency (CBDC), which is now in its second phase and aims to drive financial inclusion by onboarding Nigeria's unbanked individuals.
Despite the new partnership with Binance on the implementation of the blockchain technology, it doesn't indicate if the West African nation will be lifting its ban on cryptocurrency transactions issued in 2020.
Muse Makes History as NFT Album Shoots to Top of U.K. Charts
By becoming the first band to have an NFT album reach No. 1 on the U.K. charts, Muse have made music history.
Along with streaming, downloads, vinyl, CDs, and cassettes, a limited-edition "digital pressing" of Will Of The People was made available.
However, claiming that this album's popularity is primarily due to the non-fungible tokens is a little misleading. The first week saw a total of 51,500 copies sold, which is greater than the combined sales of the other nine albums in the top 10 but only accounts for 1.96% of British sales.
Muse's success was all but guaranteed, not the least because they've previously had six #1 albums.
However, the fact that Aitch recently released a digital pressing does indicate that NFTs are gaining popularity in the music industry. The metaverse was a major theme at the MTV Video Music Awards last week, where Eminem and Snoop Dogg performed live with their Bored Apes.
Only 1,000 of Muse's "digital pressing" were made available worldwide, and they came with some very upscale extras.
The album's cover art differed from the covers that were sold separately, and the downloading edition of the album included high-quality FLAC files that were digitally autographed.
NFT albums just achieved eligibility for inclusion in the official charts for the United Kingdom; officials anticipate that they will continue to be a prominent part of the music business in the years to come.
Will Of The People was created after the band's record label requested that they issue a greatest hits CD, Matt Bellamy recently disclosed. Instead, they used brand-new songs to chronicle their career. Explaining why, the frontman told The Guardian:
"It seems a bit like the end when you do a greatest hits. And I just don't know if we've got enough hits. We're not really a pop group."
What are Muse's NFTs Worth?
It's undeniable that purchasing one of Muse's NFTs is more expensive than purchasing the album outright or streaming it on Spotify, but you might be surprised by how much these digital treasures are actually worth.
According to data from OpenSea, the floor price is currently 0.07 ETH, or around $108 at the time of writing.
The digital pressing was produced in conjunction with Serenade, which describes this format as "a new way to experience music that unites artists and fans through a collectible format," adding:
"Pressings include full length audio, artwork, inclusion in the intimate community of owners, as well as the option to redeem unlockable rewards."
Serenade claims to accept fiat payments in addition to cryptocurrency in order to reach as many music fans as possible. The company acknowledges that some NFTs are environmentally unfriendly, but claims to have taken steps to address these issues.
"Our NFTs are minted on the eco-friendly blockchain Polygon, the blockchain of choice by Twitter, Meta and Disney. Using Polygon allows us to proudly say that you would have to produce 197,000 pressings on Serenade to equal the carbon footprint of a single 12-inch record. That stat never gets old — unlike climate deniers."
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