Three Arrows Capital Liquidators File $1.3 Billion Lawsuit Against Terraform Labs: A Comprehensive Overview

Posted on August 13, 2024August 13, 2024 by Arslan Butt

In a significant legal battle that underscores the fragility and high-stakes nature of the cryptocurrency market, the liquidators of the now-defunct cryptocurrency hedge fund, Three Arrows Capital (3AC), have filed a lawsuit against Terraform Labs, seeking a staggering $1.3 billion.

This legal action comes in the wake of immense losses suffered by 3AC following the catastrophic collapse of Terraform Labs‘ Terra network in 2022, an event that sent shockwaves through the entire digital asset ecosystem.

This article delves into the intricate details of the lawsuit, the events leading up to it, and the broader implications for the cryptocurrency industry.

By examining the key players, the nature of the allegations, and the potential repercussions, we aim to provide a thorough understanding of this unfolding drama.

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U.S. Department of Justice Considers Breaking Up Google into Smaller Companies

Posted on August 13, 2024 by Ignacio Teson

The move would mark Washington’s first attempt to dismantle a company for illegal monopolization since the failed efforts to break up Microsoft two decades ago.

A rare proposal to break up Google, a subsidiary of Alphabet, is among the options being considered by the U.S. Department of Justice after a landmark court ruling found the company had monopolized the online search market, according to sources familiar with the deliberations.

This initiative would be the first attempt by Washington to dismantle a company for illegal monopolization since the unsuccessful efforts to do so with Microsoft two decades ago. Less severe options include requiring Google to share more data with competitors and implementing measures to prevent the company from gaining an unfair advantage in artificial intelligence (AI) products.

Nevertheless, the government is likely to seek a ban on the type of exclusive contracts that were central to its case against Google. If the Department of Justice proceeds with a breakup plan, the most likely units for divestment would be Google’s Android operating system and its Chrome web browser.

Officials are also exploring the possibility of forcing a sale of AdWords, the platform Google uses to sell text-based advertising, according to one of the sources.

The Justice Department’s discussions have intensified following Judge Amit Mehta’s August 5 ruling that Google illegally monopolized the online search and search advertising markets. Google has stated that it will appeal the decision, but Mehta has ordered both parties to begin planning the second phase of the case, which will include the government’s proposals to restore competition, potentially including a request for a breakup.

Wall Street Rallies After PPI Data; Starbucks Shares Jump 23%

Posted on August 13, 2024 by Ignacio Teson

U.S. stock averages are rising, led by the Nasdaq, as investors respond to positive inflation figures in the world’s largest economy.

All three major Wall Street indices are trading with gains on Tuesday morning. U.S. stock averages are climbing, with the Nasdaq leading the way as investors react to encouraging inflation data.

The Dow Jones Industrial Average, comprising 30 major companies, is up 0.55% to 39,571.96 points, while the S&P 500, which tracks 500 stocks, has gained 1.09% to 5,402.7 points. The tech-heavy Nasdaq Composite has advanced 1.78% to 17,079.26 points.

The Producer Price Index (PPI) for final demand rose by 0.1% last month, following an unrevised 0.2% increase in June. Economists surveyed by Reuters had predicted a 0.2% rise, and today’s figure is boosting the markets.

[[SPX-graph]]

The producer price data precedes a key July inflation report in the United States, set to be released tomorrow, Wednesday, which could provide further insights into a potential interest rate cut by the Federal Reserve.

Among individual stocks, Starbucks stands out, with shares surging 23% following the announcement of CEO Laxman Narasimhan’s departure and the appointment of Brian Niccol, President of Chipotle Mexican Grill, as his successor.

By sector, the technology sector is leading gains with a 2% increase, driven by the PPI data, followed by consumer discretionary companies, which are up 0.93%. Within the Dow Jones, Intel (2.31%), Nike (2.3%), and Apple (1.88%) are leading the gains, while Johnson & Johnson is down (-1.79%).

Mexican Peso Strengthens Against the Dollar Ahead of Crucial U.S. Inflation Report

Posted on August 13, 2024 by Ignacio Teson

The market reacted to positive U.S. producer price data ahead of tomorrow’s key consumer inflation report.

The Mexican peso appreciated against the dollar on Tuesday, recovering ground and resuming its positive trend in a market that responded to favorable U.S. producer price data, released ahead of the upcoming consumer inflation report.

The exchange rate closed the day at 19.0017 pesos per dollar. Compared to Monday’s rate of 19.0844, based on data from the Bank of Mexico (Banxico), this represents a gain of 8.27 centavos, or 0.43%.

The dollar’s price fluctuated within a broad range, reaching a high of 19.1020 pesos and a low of 18.9095. The U.S. Dollar Index (DXY), which measures the greenback against six major currencies, fell by 0.54%, settling at 102.58 points.

[[USD/MXN-graph]]

The Producer Price Index (PPI) for final demand rose 0.1% last month, following an unrevised 0.2% increase in June. Economists polled by Reuters had forecast a 0.2% rise, and this figure boosted market sentiment.

Traders believe that easing inflationary pressures could persuade the Federal Reserve (Fed) to adopt a more dovish monetary stance and cut interest rates in September, helping alleviate recession fears.

“Today’s price report indicates that the disinflationary process remains on track, partly easing investors’ concerns about a sharp slowdown in the U.S. economy,” analysts observed. The peso is showing signs of recovery after U.S. price data pointed to a slowdown in inflation. Volatility favored the peso due to speculation surrounding the dollar.

Market participants are now eagerly awaiting tomorrow’s crucial U.S. Consumer Price Index (CPI) data, which could provide further clues to a market that sees a 100% probability of a rate cut in September, according to FedWatch, with only the magnitude in question.

Oil prices close lower as focus shifts to tensions in the Middle East.

Posted on August 13, 2024 by Ignacio Teson

The International Energy Agency (IEA) maintained its global oil demand growth forecast for 2024 but cut its estimate for 2025, citing the impact of weak Chinese consumption on economic growth.

Brent and U.S. crude futures fell on Tuesday, as markets perceived a lower risk of a broader war in the Middle East, given that Iran had not followed through on its threats to retaliate against Israel for the assassination of a Hamas official in Tehran.

Brent crude futures lost $1.61, or 1.96%, to settle at $80.69 per barrel, while U.S. West Texas Intermediate (WTI) crude fell $1.71, or 2.14%, to $78.35 per barrel. Markets had priced in an imminent Iranian attack on Israel within 24 to 48 hours. That has not happened, and the market is now removing that risk premium from crude prices.

Brent had risen over 3% on Monday after hitting a seven-month low of $76.30 the previous week.

[[USOIL-graph]]

The Organization of the Petroleum Exporting Countries (OPEC) cut its demand forecast for 2024 on Monday, despite the group’s and its allies’ (OPEC+) plans to increase production starting in October.

On Tuesday, the IEA held steady its global oil demand growth forecast for 2024 but reduced its estimate for 2025, again citing the impact of weak Chinese consumption on economic growth.

An escalation of the conflict in the Middle East could threaten crude supply from one of the world’s major producing regions, but a broader war seemed less likely as Iran suggested that the resumption of ceasefire talks with Hamas might prevent retaliatory actions.

We are witnessing the evaporation of the geopolitical risk premium.

B.C. Securities Commission Uncovers $13 Million Fraud by Crypto Trading Platform

Posted on August 13, 2024 by Arslan Butt

A panel from the British Columbia Securities Commission (BCSC) has uncovered a significant case of fraud involving a cryptocurrency trading platform and its owner, resulting in the misappropriation of approximately $13 million.

The platform, operating under the name ezBtc, was established by David Smillie, a former resident of B.C., who misled customers and diverted their assets for personal gain.

Misleading Promises and Misuse of Funds

According to the BCSC, Smillie assured customers that their bitcoins would be securely stored in “cold storage,” a method designed to keep digital assets offline and protected from cyber threats.

However, the panel’s investigation revealed that this promise was far from the truth. Between 2016 and 2019, about one-third of the cryptocurrency deposited by customers was funnelled into gambling websites or transferred to Smillie’s accounts on other trading platforms.

Forensic Analysis and Findings

The commission employed a forensic data analytics firm to trace the missing funds. Their findings were damning, showing that the cryptocurrency was swiftly redirected to Smillie’s accounts or gambling sites, rather than being securely stored as promised.

The BCSC’s panel concluded that Smillie had direct control over ezBtc’s operations and was fully responsible for the platform’s fraudulent activities.

Legal Proceedings and Next Steps

Despite the severity of the accusations, the company ezBtc was dissolved in 2022 and did not participate in the hearing.

While Smillie himself did not attend the proceedings, he was represented by legal counsel. The BCSC panel is now deliberating on appropriate sanctions, which could include significant monetary penalties or lifetime bans from market participation for Smillie.

Implications for the Crypto Industry

This case highlights the risks associated with unregulated cryptocurrency platforms and underscores the need for vigilant regulatory oversight.

The BCSC’s findings serve as a stark warning to both investors and operators within the digital asset space about the potential for fraud and the importance of transparency and trust in the burgeoning cryptocurrency market.

Bitcoin Price Dips Below $59K Amid Inflation Concerns and Economic Uncertainty

Posted on August 13, 2024 by Arslan Butt

Bitcoin’s price slipped below the $59,000 mark on Tuesday, continuing its lacklustre performance as global markets brace for key U.S. economic indicators.

The cryptocurrency market remains subdued, with limited risk appetite ahead of crucial data releases that could shape the near-term outlook for digital assets.

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Global Markets Reel from Japanese Yen Carry Trade Unwind

Posted on August 13, 2024 by Arslan Butt

Last Monday, global financial markets experienced a sharp selloff, driven largely by the unwinding of the Japanese yen carry trade. This event sent shockwaves through equities and digital assets, leading to significant losses across various markets.

The S&P Global Broad Market Index, which tracks over 14,000 stocks worldwide, suffered a 3.3% drop—the worst trading day in more than two years.

The Tokyo Stock Price Index (TOPIX) plummeted 20% in its most significant three-day loss ever, while the Bloomberg Galaxy Crypto Index saw a steep decline of 17.5%.

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Positive Day for Nasdaq and Stock Markets As Sentiment Improves

Posted on August 13, 2024August 13, 2024 by Skerdian Meta

US stock markets had a strong performance today, with Nasdaq climbing above 19,000 points again, largely driven by favorable PPI data. The Producer Price Index (PPI) came in below expectations, providing a positive boost to the main US indices. The Nasdaq led the charge, gaining over 400 points, or 2.38%, as investor sentiment turned optimistic on the back of encouraging economic data and no escalation in the Middle East.

Stock Markets Open Strong with Continued Gains

The US and European stock markets started the day with solid gains, continuing the positive momentum from the previous sessions. This upward trend reflects a temporary easing of risk aversion, suggesting a favorable market environment. Although the unwinding of carry trades has slowed, the market tone remains cautiously optimistic. However, investors are waiting for key US data over the next two days to gain more clarity on the market’s direction.

Technology Sector Leads the Market Rally

Today’s trading session showcased strong performances across multiple sectors, with technology companies at the forefront. Nvidia (NVDA) experienced an impressive surge of 3.50%, highlighting robust investor confidence in the tech industry. This rise indicates growing optimism about technological advancements and future opportunities. Major tech firms like Apple (AAPL) and Microsoft (MSFT) also followed suit, posting average gains of around 1%, reinforcing the sector’s positive outlook.

Nasdaq Live Chart

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Marathon Digital Announces $250M Private Note Sale to Buy More Bitcoins

Posted on August 13, 2024 by Arslan Butt

The price of a fresh $250 million offering of convertible senior notes has been made public by industry leader Marathon Digital Holdings, Inc

The 2.125% interest rate notes with a 2031 maturity date are slated for private sale to qualified institutional buyers, subject to Rule 144A of the Securities Act.

In addition to the $37.5 million in notes that were originally planned, the corporation has allowed the original purchasers to purchase an additional $50 million in notes.

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