United States-based cryptocurrency lending platform Celsius, which crashed and halted the withdrawal option amid the market crash in June, promised his willingness to partially return the money to customers. However, there is one quirk: as the company has filed a motion with the US Bankruptcy Court, its promise would only apply to custody and retention accounts and to custody assets worth $7,575 or less.
Community response to the motion has been mixed, with some creditors happy to recover at least some of the frozen funds, while some industry leaders criticized the platform’s management. The CEO of BnkToTheFuture.com, Simon Dixon drew attention to the fact that the potential $50 million release would not be that impressive, considering the $210 million in assets Celsius still has in custody. However, according to the company’s filing, the motion is merely a “first step forward, and not the last word, in efforts to return assets to customers.”
The benevolence of this step could also be questioned in light of a lawsuit, filed in the US Bankruptcy Court for the Southern District of New York a day earlier by an ad hoc group of 64 custodial account holders. The creditors seek to recover more than $22.5 million in cryptocurrency assets held collectively in the Celsius escrow facility, noting that Celsius’s earlier refusal to honor any withdrawal contradicts the “plain language of the debtors’ terms of use.” The company has a $1.2 billion gap on its balance sheet, with most of the liabilities owed to its users. Celsius filed for Chapter 11 bankruptcy in mid-July.
California takes a giant step forward in its licensing guidelines
Legislators in the California State Assembly passed the Digital Financial Assets Act, which will require digital asset exchanges and cryptocurrency businesses to be licensed by the State of California Department of Financial Protection and Innovation.. Once the bill gains Gov. Gavin Newsom’s signature, it will take effect January 1, 2025, effectively prohibiting any operation without such a license. California regulators have been actively policing the cryptocurrency space. In May, Newsom signed an executive order to align federal and state regulatory frameworks for blockchain.
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Paraguayan President Vetoes Cryptocurrency Regulation Law
The president of Paraguay, Mario Abdo Benítez, vetoed a bill that sought to recognize cryptocurrency mining as an industrial activity. The president argued that the high electricity consumption of mining could hamper the expansion of a sustainable national industry. The law was intended to promote crypto mining through the use of surplus electricity, and the Paraguayan Senate finally approved the proposal on July 14, recognizing crypto mining as an industrial activity. However, according to the presidential decree, given the strong increase in industrial investments in the country in recent years, the national industry could require the full amount of energy currently produced and available in the country.
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An Argentine Province Now Accepts Crypto for Taxes and Fees
In another shift towards widespread adoption of cryptocurrencies, in Argentina, citizens of the Mendoza province can now pay government fees and taxes using cryptocurrencies. The Mendoza Tax Administration presented the new cryptocurrency payment service as the fulfillment of the “strategic objective of modernization and innovation”, giving “taxpayers different means to comply with their tax obligations”. The service officially went live on August 24, but at this stage, it will only accept stablecoins like Tether (USDT) for tax payments.
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Investments in crypto assets are not regulated. They may not be suitable for retail investors and the full amount invested may be lost. The services or products offered are not aimed at or accessible to investors in Spain.