Author: Michelle Lazo

Injective, a blockchain platform originally built on Cosmos technology, experienced a meteoric rise with its INJ token escalating thirty-three times in value during 2023, only to face a sharp decline this year. In a strategic pivot, Injective is now set to broaden its scope by launching a layer-3 network within the Ethereum ecosystem, leveraging Arbitrum’s technology.

The new layer, named “inEVM,” is designed to be compatible with the Ethereum Virtual Machine  and aims to bridge three major blockchain networks: Ethereum, Cosmos, and Solana. The inEVM will utilize Arbitrum’s Orbit toolkit, which enables developers to create customizable chains while ensuring interoperability across different ecosystems.

This expansion could potentially rejuvenate interest in the INJ token, which outshone most of its peers last year, achieving a peak market capitalization exceeding $4 billion. Despite the general uptick in the crypto markets in 2024, with the CoinDesk 20 index climbing 25%, INJ has seen a nearly 30% decrease in its value.

According to Injective Labs, this initiative will not only facilitate the development within the Ethereum layer-2 space but also maintain Injective’s attributes of high speed and low transaction costs. Additionally, operations on the inEVM network will support the Injective ecosystem’s tokenomics through a mechanism that regularly burns a portion of all protocol fees.

Eric Chen, co-founder of Injective Labs, emphasized in a press release that the integration with Arbitrum is pivotal for enhancing blockchain networks and infrastructure. He highlighted the importance of interoperability in bridging the gaps among leading layer-1 platforms, thereby enabling a more fluid exchange of assets and liquidity across various blockchain ecosystems.

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FTX has announced that almost all its customers will be reimbursed, just under two years after the cryptocurrency exchange’s dramatic failure. In a recent court filing, FTX disclosed it owes creditors approximately $11.2 billion, but has between $14.5 billion and $16.3 billion available for distribution.

According to the documents submitted to the U.S. Bankruptcy Court for the District of Delaware, the plan not only covers full claims but also includes supplemental interest payments at a rate of 9%, assuming residual funds are available. This partial compensation might offer little solace to investors who suffered significant losses during the exchange’s collapse. When FTX filed for bankruptcy in November 2022, Bitcoin was valued at around $16,080. Since then, the price of Bitcoin has escalated to approximately $62,675, representing a substantial potential loss for those who might have retained their cryptocurrency investments.

Under the proposed plan, customers and creditors with claims up to $50,000 are set to receive about 118% of their claim value, covering nearly 98% of FTX customers. The ability to settle these claims comes from the successful liquidation of assets primarily associated with Alameda Research or FTX Ventures, as well as through litigation claims.

At its peak, FTX was the third-largest global cryptocurrency exchange. Its rapid downfall began with a financial crisis akin to a bank run, leading to bankruptcy filings in November 2022. Following the collapse, FTX’s founder and CEO Sam Bankman-Fried stepped down and was later sentenced to 25 years in prison in March for his role in the massive fraud at FTX.

The aftermath of the scandal also brought down several high-profile endorsements, including those from celebrities like Tom Brady and Stephen Curry. John Ray III, known for his work in the Enron bankruptcy, has since taken over as CEO of FTX, announcing plans to potentially revive the FTX.com exchange amidst exploring other strategic options.

Despite the controversy, FTX’s new management remains optimistic, with Ray expressing satisfaction over the proposed chapter 11 plan that would fully satisfy non-governmental creditor claims with additional interest.

Meanwhile, the saga of crypto mismanagement extends to Binance, the largest cryptocurrency exchange, whose former CEO Changpeng Zhao was recently sentenced to prison for allowing illicit activities through the platform. Binance had considered purchasing FTX just before its 2022 collapse but withdrew amid emerging financial issues.

The bankruptcy court is scheduled to review the FTX asset distribution plan on June 25, potentially turning a new page for the beleaguered exchange.

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British fintech giant Revolut has introduced a new crypto trading platform called Revolut X, tailored for retail customers in the U.K., signaling a deeper dive into digital assets. This move, highlighted in a recent blog post, solidifies Revolut’s commitment to the crypto industry, where it aims to cater to both novice and seasoned crypto investors.

With a user base of over 40 million, Revolut is among the world’s largest fintech firms and is now poised to compete with major crypto exchanges like Coinbase (NASDAQ:COIN) and Binance. The platform will offer trading options for over 100 tokens, with fees varying between zero to 0.09%. Trading on Revolut X requires having an existing Revolut account, allowing users to easily transfer funds between their Revolut X and standard Revolut retail accounts.

This development follows Revolut’s introduction of Revolut Ramp in March, a feature that enables direct crypto purchases through a partnership with MetaMask. According to Leonid Bashlykov, head of crypto exchange product at Revolut, the platform is designed to empower customers to expand their wealth across both fiat and crypto assets.

Fintech analyst Boaz Sobrado noted that Revolut’s profitability has closely aligned with its crypto operations, particularly during the crypto market’s bull run in 2021. He emphasized that the high margins in crypto trading are likely to continue boosting Revolut’s financial performance.

The launch aligns with recent regulations from the Financial Conduct Authority in the U.K., which introduced a mandatory 24-hour cooling-off period for crypto transactions, setting a barrier that favors larger, established companies like Revolut and Kraken over smaller or offshore entities.

The optimism surrounding Revolut X also ties into broader market dynamics. Since the U.S. approval of 10 spot Bitcoin exchange-traded funds on January 11, which now manage over $53 billion in assets, the crypto market has seen significant growth. Companies like BlackRock(NYSE:BLK) and Fidelity issuing crypto products have further expanded the investor base, enhancing market potential.

However, Revolut’s strengthening in the U.K. market contrasts with its recent retreat from the U.S. crypto market in August 2023 due to regulatory uncertainties, impacting only 1% of its users. Meanwhile, other fintech players like Robinhood (NASDAQ:HOOD)have also faced regulatory challenges in the U.S., with Robinhood receiving a Wells Notice from the SEC regarding its crypto operations.

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Robinhood (NASDAQ:HOOD) recently received a Wells Notice from the Securities and Exchange Commission, which was unexpected given the company’s conservative approach to cryptocurrency listings, according to a KBW research report released on Monday.

KBW highlighted that Robinhood offers a relatively modest selection of fifteen cryptocurrencies on its U.S. platform, in contrast to some competitors who list over two hundred digital assets. Analysts led by Kyle Voigt believe that Robinhood’s crypto operations in the U.S. will remain unchanged, and they anticipate the SEC will likely file a lawsuit in the coming months.

“Our preliminary assessment suggests that Robinhood would opt to contest the SEC in court and stands a better chance of prevailing than many of its U.S. peers, should they face similar challenges. This is due in part to Robinhood’s stringent listing criteria,” the KBW report stated.

Cryptocurrency trading accounts for 12% of Robinhood’s total revenue. KBW speculates that the SEC’s focus might be on a specific group of digital assets offered on the platform. From a revenue risk standpoint, the most critical scenario would be if the SEC decides to classify Ethereum as a security, since it represents approximately 25% of Robinhood’s crypto trading volume.

The brokerage maintains a market perform rating on Robinhood’s stock with a target price of $20. Following the news, Robinhood’s shares saw a slight increase, trading up by 1.3% early Tuesday, at around $18.

According to KBW, Robinhood shareholders may not receive a definitive resolution on the potential legal case until late 2025 at the earliest, drawing parallels to the ongoing regulatory proceedings against Coinbase (NASDAQ:COIN).

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MPCH, a provider of cryptographic storage solutions, has partnered with global specialty and property and casualty reinsurer Canopius to deliver enhanced insurance coverage for digital assets held in custody. This new collaboration seeks to bolster the security framework for digital assets by offering specialized custody insurance, further protecting against potential losses or damages to crypto assets that could render them irrecoverable.

MPCH utilizes advanced cryogenic cold storage solutions equipped with Sensitive Compartmented Information Facilities, custom Hardware Security Modules designed based on zero-trust and zero-knowledge principles, and Multi-Party Computation technology. Canopius brings its insurance expertise into the partnership, offering products that are tailored to address the unique risks associated with digital asset security.

Miles Parry, CEO of MPCH, commented on the partnership, stating, “Our collaboration with Canopius is a significant milestone in the evolution of security within the tokenized ecosystem. By combining our advanced cryptographic storage capabilities with Canopius’s robust insurance solutions, we are better equipped to protect sensitive digital assets and provide our clients with the confidence they need to operate in the digital world. Our aim is to deliver scalable, customized insurance solutions that effectively address the challenges of protecting private keys.”

This announcement follows Canopius’s recent initiative to enhance its cyber insurance offerings in collaboration with Group-IB, and the launch of a new insurance facility by Marsh in March, which provides up to $825 million in coverage for digital asset custodians globally, covering various custody solutions including both cold storage and other methods.

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