Author: Reuters

AMSTERDAM (Reuters) – Dutch authorities on Friday said they had arrested a 29-year-old man believed to be a developer for the crypto mixing service Tornado Cash, which the United States put on its sanctions list this week.

The U.S. sanctions announced on Monday followed allegations that Tornado Cash was helping conceal billions in capital flows, including for North Korean hackers.

By mixing cryptocurrencies, the online service makes it possible to conceal the origin or destination of digital payments, increasing their anonymity.

Tornado Cash is one of the largest crypto blenders identified as problematic by the U.S. Treasury.

The Dutch public prosecutor’s office for serious fraud, environmental crime and asset confiscation (FIOD) said Tornado was suspected of having laundered more than $7 billion worth of virtual currency since it was created in 2019.

Tornado Cash did not reply to a request for comment.

The FIOD said the man, who was not identified, was arrested in Amsterdam on Wednesday. He is believed to have helped facilitate criminal transactions, including “funds stolen through hacks by a group believed to be associated with North Korea.” He faces money laundering charges.

In June the Financial Advanced Cyber Team division of the FIOD started an criminal investigation into Tornado Cash, the statement said. It found Tornado Cash had been used to conceal large-scale criminal money flows, including from (online) thefts of cryptocurrencies.

Further arrests have not been ruled out, prosecutors said.

Monday’s move froze any U.S. assets of the crypto mixer and generally bars Americans from dealing with it.

(Reporting by Anthony Deutsch, Editing by Louise Heavens)

LONDON (Reuters) – British asset manager abrdn has bought a stake in digital assets exchange Archax, amid a wider push by investors into crypto-assets despite a recent plunge in value.

The stake, acquired for an undisclosed sum, gives abrdn a seat on the board at Archax and makes the asset manager its largest external shareholder, an abrdn spokesperson said.

Founded in 2018, Archax provides access to blockchain-based digital assets and became the first digital securities exchange to win regulatory approval from the Financial Conduct Authority, abrdn said in a statement.

“Blockchain technologies are inevitably going to form a big part of the future of financial markets,” abrdn Chief Executive Stephen Bird said.

The deal was first reported by the Financial Times.

Abrdn’s move reflects a wider surge in interest in digital assets from institutional investors.

The world’s biggest asset manager Blackrock launched a spot bitcoin private trust for institutional clients earlier this month, and has partnered with cryptocurrency exchange Coinbase to provide some of its services to clients.

Abrdn reported lower-than-expected profits earlier this week as turbulent markets dented its performance, and warned it would take longer to grow its revenues.

(Reporting by Iain Withers; editing by David Evans)

By Rae Wee and Vidya Ranganathan

SINGAPORE (Reuters) – The Japanese yen fell the most against a resurgent U.S. dollar on Friday, as a two-day rally in equities conceded to market expectations that the Fed will have to do a lot more to contain inflation.

That realisation followed speeches and statements from a bunch of Federal Reserve officials warning investors against being sanguine after this week’s slight softening in inflation numbers.

The latest was San Francisco Fed President Mary Daly, who said on Thursday that a 50 basis point interest rate hike in September “makes sense” given recent economic data including on inflation, but that she is open to a bigger rate hike if data warrants.

The Nasdaq and S&P 500 retreated on Thursday, despite fresh evidence of cooling inflation.

The dollar index rose 0.1% to 105.210, with the euro down to $1.0311.

The Japanese yen weakened 0.12% to 133.19 per dollar, while sterling was last trading at $1.2184, down 0.23% on the day.

The euro rose 0.05% against the yen at 137.340.

Even the kiwi, supported by expectations of a big rate rise in New Zealand next week, fell 0.16% versus the greenback to $0.643.

“The market will come to a realization that the FOMC has a lot more work to do and they will have to increase the funds rate to as high as 4% at the end of this year,” said Carol Kong, a Sydney-based senior associate for currency strategy and international economics at Commonwealth Bank of Australia.

“I do think there is some room for markets to revise higher again their expectation for the Fed funds rate, so that will help the U.S. dollar to push higher again and erase all the losses following the CPI and PPI figures that we got.”

Thursday’s data showed U.S. producer prices (PPI) unexpectedly fell in July amid a drop in the cost of energy products. That followed Wednesday’s surprise news that consumer prices (CPI) were unchanged in July due to a drop in gasoline prices.

While that data caused a relief rally in markets fearing the Fed’s super-charged tightening path, it was short-lived. Despite its recent bounce off mid-June lows, the tech-heavy Nasdaq is down about 18% so far this year.

The dollar index is still up 10% this year, rising alongside the 225 basis points of Fed rate rises since March.

Against the yen, it had fallen as far as 131.74 overnight, a one-week low, from Wednesday’s 135.30 peak. It was back at 133.245 on Friday.

US Treasury yields rose too, more at the longer end [US/], causing the inverted yield curve to be less so.

“It suggests scepticism from the bond market and taking a ‘one swallow doesn’t make a spring’ attitude,” analysts at Commerzbank wrote. “Inflation may have peaked but they may remain sticky and still too high for the Fed’s liking.”

In the world of cryptocurrencies, bitcoin was flat and last at $23,915.00.

(Editing by Sam Holmes)

By Elizabeth Howcroft

LONDON (Reuters) – Cryptocurrency derivatives trading on centralised exchanges rose to $3.12 trillion in July, a 13% monthly increase, researcher CryptoCompare said on Thursday, as crypto prices show signs of recovery from the recent market crash.

The derivatives market now makes up 69% of total crypto volumes, up from 66% in June, and helped push overall crypto volumes on exchanges to $4.51 trillion in July, CryptoCompare said.

Derivatives exchanges traded as much as $245 billion on July 29, 9.7% more than June’s top daily high of $223 billion.

But spot cryptocurrency trading edged lower to $1.39 trillion in July, a 1.3% monthly decline and the lowest since December 2020, CryptoCompare said.

The crypto market plunged in May and June as worries about high inflation and Federal Reserve interest rate hikes prompted investors to ditch risky assets. Following the collapse of a major pair of tokens, some cryptocurrency lenders froze customer withdrawals, and several crypto firms have cut jobs.

Prices have partly recovered, with bitcoin gaining 17% in July. At around $24,300, it is still a far cry from its all-time high of $69,000 in November.

“The rise in derivatives trading volume indicates an increase in speculative activity as traders believe there is room for further upside in this rally,” CryptoCompare said, noting that there is no U.S. Federal Reserve meeting in August.

Traders are also speculating on the upcoming Ethereum merge, CryptoCompare said, referring to an upgrade of the Ethereum network which is expected in September.

Ether has risen to around $1,900 from its June low of $880.

BinanceUSD – a stablecoin issued by crypto exchange Binance – became more prominent in July, CryptoCompare said, with spot volumes for bitcoin-to-BinanceUSD trades overtaking bitcoin-to-dollar for the first time.

Binance held on to the top spot among exchanges, with 54% of the market share, while Atom Asset Exchange (AAX) became the second largest, with volume rising 26.5% in July.

On Tuesday U.S. exchange Coinbase reported a larger-than-expected quarterly loss, with trading volumes having more than halved in the second quarter of 2022.

GRAPHIC: Bitcoin so far in 2022 (https://fingfx.thomsonreuters.com/gfx/mkt/gkplgolrovb/Bitcoin.png)

(Reporting by Elizabeth Howcroft; Editing by Richard Chang)

(This Aug. 9 stoy corrects spelling of name in paragraph 4)

By Tom Wilson and Medha Singh

(Reuters) – Another day, another hack – and another blockchain bridge burned.

When thieves stole an estimated $190 million from U.S. crypto firm Nomad last week, it was the seventh hack of 2022 to target an increasingly important cog in the crypto machine: Blockchain “bridges” – strings of code that help move crypto coins between different applications.

So far this year, hackers have stolen crypto worth some $1.2 billion from bridges, data from London-based blockchain analysis firm Elliptic shows, already more than double last year’s total.

“This is a war where the cybersecurity firm or the project can’t be a winner,” said Ronghui Gu, a professor of computer science at Columbia University in New York and co-founder of cybersecurity firm CertiK.

“We have to protect so many projects. For them (hackers) when they look at one project and there’s no bugs, they can simply move on to the next one, until they find a one weak point.”

At present, most digital tokens run on their own unique blockchain, essentially a public digital ledger that records crypto transactions. That risks projects using these coins becoming siloed, reducing their prospects for wide use.

Blockchain bridges aim to tear down these walls. Backers say they will play a fundamental role in “Web3” – the much-hyped vision of a digital future where crypto’s enmeshed in online life and commerce.

Yet bridges can be the weakest link.

The Nomad hack was the eighth-biggest crypto theft on record. Other thefts from bridges this year include a $615 million heist at Ronin, used in a popular online game, and a $320 million theft at Wormhole, used in so-called decentralised finance applications.

“Blockchain bridges are the most fertile ground for new vulnerabilities,” said Steve Bassi, co-founder and CEO of malware detector PolySwarm.

GRAPHIC: Crypto hacks (https://graphics.reuters.com/FINTECH-CRYPTO/WEEKLY/gdpzyoqlqvw/chart.png)

ACHILLES HEEL

Nomad and others companies that make blockchain bridge software have attracted backing.

Just five days before it was hacked, San Francisco-based Nomad said it had raised $22.4 million from investors including major exchange Coinbase Global. Nomad CEO and co-founder Pranay Mohan called its security model the “gold standard.”

Nomad did not respond to requests for comment.

It has said it is working with law enforcement agencies and a blockchain analysis firm to track the stolen funds. Late last week, it announced a bounty of up to 10% for the return of funds hacked from the bridge. It said on Saturday it had recovered over $32 million of the hacked funds so far.

“The most important thing in crypto is community, and our number one goal is restoring bridged user funds,” Mohan said. “We will treat any party who returns 90% or more of exploited funds as a white hats. We will not prosecute white hats,” he said, referring to so-called ethical hackers.

Several cyber security and blockchain experts told Reuters that the complexity of bridges meant they could represent an Achilles’ heel for projects and applications that used them.

“A reason why hackers have targeted these cross-chain bridges of late is because of the immense technical sophistication involved in creating these kinds of services,” said Ganesh Swami, CEO of blockchain data firm Covalent in Vancouver, which had some crypto stored on Nomad’s bridge when it was hacked.

For instance, some bridges create versions of crypto coins that make them compatible with different blockchains, holding the original coins in reserve. Others rely on smart contracts, complex covenants that execute deals automatically.

The code involved in all of these can contain bugs or other flaws, potentially leaving the door ajar for hackers.

BUG BOUNTIES

So how best to address the problem?

Some experts say audits of smart contracts could help to guard against cyber thefts, as well as “bug bounty” programmes that incentivise open-sourced reviews of smart contract code.

Others call for less concentration of control of the bridges by individual companies, something they say could bolster resiliency and transparency of code.

“Cross-chain bridges are an attractive target for hackers because they often leverage a centralized infrastructure, most of which lock up assets,” said Victor Young, founder and chief architect at U.S. blockchain firm Analog.

(Reporting by Tom Wilson in London and Medha Singh in Bengaluru; Editing by Pravin Char)

(Reuters) – BlackRock Inc, the world’s biggest asset manager, has launched a spot bitcoin private trust for institutional clients in the United States, according to a blog post on its website.

The trust will track the performance of bitcoin, offering direct exposure to the price of the digital currency, BlackRock said.

“Despite the steep downturn in the digital asset market, we are still seeing substantial interest from some institutional clients in how to efficiently and cost-effectively access these assets,” the company said.

The move comes a week after cryptocurrency exchange Coinbase Global Inc said it had partnered with BlackRock to provide its institutional clients with access to crypto trading and custody services.

The latest developments underscore how traditional institutions including pension funds, hedge funds and banks have been pushing into crypto assets lately, wagering the alternative asset class is here to stay.

Even as, the crypto sector has been battered by a slump in asset prices as investors fled risky assets amid geopolitical turmoil, inflation and worries of an impending recession.

(Reporting by Noor Zainab Hussain in Bengaluru)

By Andrea Shalal and Ivan Lyubysh-Kirdey

KYIV (Reuters) – Artists have painted brilliant sunflowers over heaps of burnt-out cars destroyed in Russia’s invasion of Ukraine – upsetting some locals who wonder if it is too soon to beautify the wreckage of war.

The group of painters from Ukraine and the United States say they plan to sell digital images of the work as non-fungible tokens (NFTs) and raise money for Ukrainian artists, rebuilding projects and other causes.

The cars were largely recovered in the city of Irpin, on the outskirts of the capital, from a bridge destroyed by Ukrainian forces to halt the advance of Russian tanks, Trek Kelly, a Los Angeles-based muralist who helped initiate the project, said.

City authorities had approved the work and assured the artists no one had died in the vehicles, he added.

One couple who owned one of the vehicles had thanked them “for repurposing these cars into something more beautiful,” Kelly told Reuters.

Others were less sure as they walked around the work this week on the main road leading into Irpin, where authorities say 200-300 civilians were killed by Russian attacks before the city was taken back by Ukrainian forces in late March.

Russia has denied targeting civilians in what it calls its “special military operation” in Ukraine.

“I understand the idea of the flowers showing hope for the future, and that Ukraine cannot be destroyed despite what the Russians tried to do here, but maybe it’s too soon,” said Casimir Kiendl, who originally hails from Wales but was living in Ukraine when the war started.

“The memories are still super fresh,” said Kyiv resident Yuliya Zaliubovska, who fled to France during the war and stopped for a look during a visit back in Ukraine on Wednesday.

Kelly and Olena Yanko – a Ukrainian artist involved in the project – said they respected the concerns, but hoped the site would become a place for reflection.

“Yes, there are people who didn’t understand us. They think that we are dancing on the graves of those who died,” Yanko said.

“But we want to show that … life will go on, we will win (the war) and we can beat the enemy, whether it’s with a paintbrush or with weapons.”

U.S. charity beautifyearth.org is accepting tax-deductible donations for the artists, and details will be posted soon on where to buy NFTs, Kelly said.

Other cities had already offered them sites for more murals with sunflowers, the Ukrainian national flower, he added.

“They want to beautify these distressed areas until they can be rebuilt so … there’s some brightness and colour and nature springing up out of the ruins in a type of rebirth.”

(Reporting by Andrea Shalal; additional reporting by Ivan Lyubysh-Kirdey; editing by Andrew Heavens)

SYDNEY (Reuters) – Nearly half of Australian retail investors owned cryptocurrency in late 2021 and more got their information from YouTube videos than from financial advisers, the securities watchdog said on Thursday, calling the data a “strong case for regulation”.

The Australian Securities and Investments Commission (ASIC) survey of 1,053 retail investors, conducted last November, found 44% reported holding cryptocurrency, making it the second most popular investment after Australian shares.

A quarter of the investors surveyed who held cryptocurrency said it was their only investment.

The data will add to pressure on Australia’s new Labor government to emphasise consumer protection as it takes over a years-long study, started under the previous conservative government, on whether and how to regulate the digital assets.

It also legitimises widely circulated statistics about high rates of Australian cryptocurrency ownership which last year were dismissed as “implausible” by a top central bank official.

The survey also showed 41% of respondents went to a social media outlet for investment information, with 20% naming Alphabet Inc’s Youtube and 11% naming Meta Platforms’ Facebook.

Just 13% gained their information from a financial adviser or broker, according to the survey.

“We are concerned about the number of people surveyed who reported investing in unregulated, volatile crypto-asset products,” ASIC Chair Joe Longo said in a statement.

“There are limited protections for crypto-asset investments given they have become increasingly mainstream and are heavily advertised and promoted. There is a strong case for regulation of crypto-assets to better protect investors.”

Since the survey, interest rate hikes have spurred investors to exit speculative assets, sending cryptocurrencies’ prices tumbling and sending some crypto-related businesses into bankruptcy.

The survey was conducted in the same month bitcoin and ether, the two most popular cryptocurrencies, hit record highs. Both have slid about two-thirds since then, while the Australian stock market is down about 6%.

(Reporting by Byron Kaye; Editing by Edwina Gibbs)

By Marcelo Rochabrun

LIMA (Reuters) – Binance, the world’s largest cryptocurrency exchange, is seeing a surge in clients due to rising inflation and a historically strong dollar that has depressed emerging market currencies, an executive told Reuters on Wednesday, without disclosing numbers.

“Now that we are seeing inflation ramping up worldwide, we are seeing that more and more people are seeking cryptocurrency, like bitcoin, as a way to protect themselves from inflation,” said Maximiliano Hinz, who heads Binance in Latin America, during an interview in Lima.

Hinz pointed to the example of Argentina, where annual inflation is at 90%. The country has grown into one of the company’s top markets, he said, together with Brazil and Mexico.

Argentina saw citizens pour savings into bitcoin this year despite a crash in cryptocurrency prices.

While El Salvador has made headlines for adopting bitcoin as legal tender, Hinz said other Latin American nations have yet to pass meaningful cryptocurrency legislation, although he does not necessarily consider that a bad thing for the company.

“Regulation is a framework, but it’s not always negative that something isn’t regulated,” he said. “If something isn’t banned, then it’s legal.”

Under President Nayib Bukele, El Salvador has made a massive bet on bitcoin, making it legal tender and buying more than $100 million worth of the cryptocurrency, which have lost about 50% of their value amid a broader cryptocurrency selloff this year.

(Reporting by Marcelo Rochabrun; Editing by Stephen Coates)

By Hannah Lang

(Reuters) – San Francisco-based blockchain payments company Ripple Labs Inc, which is embroiled in a high-profile battle with the U.S. securities regulator, is interested in potentially purchasing assets of bankrupt crypto lender Celsius Network, according to a company spokesperson.

“We are interested in learning about Celsius and its assets, and whether any could be relevant to our business,” the spokesperson said, declining to say if Ripple was interested in acquiring Celsius outright.

Ripple has continued to grow through the crypto market turmoil and “is actively looking for M&A opportunities to strategically scale the company,” the spokesperson said.

New Jersey-based Celsius froze withdrawals in June citing “extreme” market conditions and filed for bankruptcy in New York last month, listing a $1.19 billion deficit on its balance sheet.

Last week, lawyers for Ripple submitted filings to the bankruptcy court seeking to be represented in the proceedings. The court approved the filing earlier this week. Ripple is not among Celsius’ major creditors, Celsius’ bankruptcy filings show. Ripple provided the comment in response to Reuters’ queries regarding the court filings.

A lawyer approved to represent Ripple declined to comment. Celsius did not immediately respond to a request for comment.

Cryptocurrencies have had a rocky year, with the world’s largest, bitcoin, down nearly 70% from its all-time high of $69,000 in November. Markets were shaken by the collapse of the popular terraUSD and luna tokens in May, which caused widespread losses for several major industry players.

According to bankruptcy filings, Celsius’ assets include digital assets held in custody accounts, loans, a bitcoin mining business, the company’s own CEL token and bank cash and cryptocurrencies that Celsius has on hand.

Privately owned Ripple has not previously done any major deals. It was valued at around $15 billion following a private stock buyback in January, the company said, although industry valuations have fallen significantly during a cryptocurrency price crash over the past few months that helped topple Celsius and other cryptocurrency firms.

Ripple’s total sales of its cryptocurrency XRP, net of purchases, were $408.9 million in the second quarter, compared with $273.27 million in the first quarter, according to a report the company put out in July.

The company was sued by the U.S. Securities and Exchange Commission (SEC) in 2020 over XRP. The agency alleges that Ripple and its current and former chief executives have been conducting a $1.3 billion unregistered securities offering by selling XRP, which Ripple’s founders created in 2012.

Ripple and the executives have denied the allegations, and the company has argued that XRP has traded and been used as a digital currency.

(Reporting by Hannah Lang in Washington; Editing by Mark Porter, Josie Kao and Mark Potter)

HONG KONG (Reuters) – Hodlnaut, a Singapore-based crypto currency lender and borrower, has suspended withdrawals, swaps and deposits, the company said on Monday, the latest sign of stress in the cryptocurrency industry.

The crypto lender also said it would withdraw its application for a licence from the Monetary Authority of Singapore (MAS) to provide digital token payment services, for which it received in principle approval in March.

An MAS spokesperson said it had rescinded the approval following the request.

Hodlnaut said the move was “due to recent market conditions” and was “to focus on stabilising our liquidity and preserving assets”.

The company is the latest in a string of crypto players globally to run into difficulties following a sharp sell off in markets that started in May with the collapse of two paired tokens, Luna and TerraUSD.

Other high profile failures include U.S. crypto lender Celsius, and Singapore-based fund Three Arrows Capital, both of which filed for bankruptcy last month.

Hodlnaut was named as one of Celsius’ institutional clients, according to court filings https://cases.stretto.com/public/x191/11749/PLEADINGS/1174908052280000000011.pdf.

Singapore, a major centre for crypto and blockchain in Asia, has seen several crypto companies run into difficulties in recent months.

Vauld, a Singapore-based crypto lending and trading platform, suspended withdrawals in early July, and later that month, Zipmex, a Southeast Asia-focused crypto exchange, suspended withdrawals, though has since resumed them for some products.

“Digital payment token service providers licensed by MAS under the (Payment Services) Act are regulated for money laundering and terrorism financing risks as well as technology risks. They are not subject to risk-based capital or liquidity requirements, nor are they required to safeguard customer monies or digital tokens from insolvency risk,” said an MAS spokesperson.

They said this was a reason why “MAS has been continually reminding the general public that dealing in cryptocurrency is highly hazardous,” and added spillover to Singapore’s domestic financial system from the recent turmoil in the cryptocurrency market has been “very limited”

Hodlnaut did not respond to a request for comment.

(Reporting by Alun John in Hong Kong, Chen Lin in Singapore and Elizabeth Howcroft in London; Editing by Toby Chopra and Louise Heavens)

SYDNEY (Reuters) – Australia’s central bank on Tuesday said it was launching a one-year research programme into the case for a central bank digital currency (CBDC) in Australia, focusing on what potential economic benefits it might bring.

The Reserve Bank of Australia (RBA) is partnering with the Digital Finance Cooperative Research Centre (DFCRC), a government-backed industry group, in the program.

The project will seek to identify innovative use cases and business models that could be supported by the issuance of a CBDC, and better understand of some of its technological, legal and regulatory considerations.

It will involve the development of a limited-scale CBDC pilot that will operate in a ring-fenced environment and involve a pilot CBDC that is a real claim on the RBA.

Interested industry participants will be invited to develop specific use cases that demonstrate how a CBDC could be used to provide innovative and value-added payment and settlement services to households and businesses.

(Reporting by Wayne Cole; Editing by Sam Holmes)

BANGKOK (Reuters) – Crypto exchange Zipmex will release Ethereum and Bitcoin tokens from this week, a spokesperson said on Monday, allowing 60% of its customers to retrieve their digital assets after a suspension of withdrawals from its Z Wallet product.

The Singapore-based Zipmex, which also operates in Thailand, Australia and Indonesia, in July halted withdrawals from Z Wallet, which it said had $53 million worth of cryptocurrencies exposed to Babel Finance and Celsius.

Ethereum will be released on Thursday and Bitcoin on Aug. 16, the company said. Last week it allowed digital coins XRP, ADA and SOL to be withdrawn.

Zipmex late last month said it was in talks with investors for potential funding.

The Thai Securities Exchange Commission on Saturday said it was collecting further information on affected customers and was working with customer representatives on the issue.

(Reporting by Chayut Setboonsarng; Editing by Martin Petty)

(Reuters) – Shares of Jack Dorsey-led Block Inc, a digital payments firm that has bet big on bitcoin, declined nearly 7% in premarket trading on Friday after the company reported a loss in quarterly results on waning interest in cryptocurrencies.

The San Francisco, California-based company saw nearly $3.5 billion wiped off its market value by 6:20 a.m. ET. The stock has fallen more than 44% this year.

Block on Thursday reported a loss of 36 cents per share in the second quarter, compared with a profit of 40 cents last year, and said it had slowed hiring and would cut its 2022 investment target by $250 million.

“The act of cutting spend suggests SQ is bracing for potentially weaker growth,” JPMorgan analysts wrote in a note.

However, the brokerage maintained its “overweight” rating and $107 price target for the stock, citing underlying earnings potential from its buy now, pay-later business, which earned $150 million in gross profit in the quarter.

Investor enthusiasm over bitcoin and other digital currencies has ebbed this year, as red-hot inflation and the Federal Reserve’s tightening of monetary policy have led to a selloff in risky assets.

That has hurt companies such as Block, which rode the bitcoin frenzy to post robust earnings last year.

Block’s bitcoin gross profit – or what the company earns from the spread on buying and selling the cryptocurrency – plummeted 24% to $41 million in the quarter from $55 million a year earlier.

“Shares had rallied by almost 35% during the eight trading sessions prior to the print. The company likely would have needed to produce a nearly flawless report in order for that surge to continue,” according to analysts at BTIG.

Jefferies and RBC Capital Markets, however, raised their price targets, saying Block’s decision to cut costs would position it strongly to deal with a tough economic environment.

(Reporting by Niket Nishant in Bengaluru; Editing by Shinjini Ganguli)

By Michelle Nichols

UNITED NATIONS (Reuters) – North Korea made preparations for a nuclear test during the first six months of this year, according to an excerpt of a confidential United Nations report seen by Reuters on Thursday.

“Work at the Punggye-ri nuclear test site paves the way for additional nuclear tests for the development of nuclear weapons,” independent sanctions monitors reported to the U.N. Security Council North Korea sanctions committee.

“The DPRK continued to develop its capability for the production of fissile material at the Yongbyon site,” the monitors wrote, referring to North Korea’s formal name – the Democratic People’s Republic of Korea. Yongbyon is North Korea’s major nuclear facility, operating its first nuclear reactors.

North Korea’s U.N. mission in New York did not immediately respond to a request for comment on the U.N. report.

The United States has long been warning that North Korea is ready to carry out a seventh nuclear test and says it will again push to strengthen U.N. sanctions on Pyongyang if it takes place.

The U.N. monitors also said investigations had shown Pyongyang was to blame for stealing hundreds of millions of dollars worth of crypto assets in at least one major hack. The monitors have previously accused North Korea of carrying out cyber attacks to fund its nuclear and missile programs.

“Other cyber activity focusing on stealing information and more traditional means of obtaining information and materials of value to DPRK’s prohibited programmes, including WMD (weapons of mass destruction), continued,” the monitors wrote.

North Korea has for years been banned from conducting nuclear tests and ballistic missile launches by the U.N. Security Council, which has strengthened sanctions on Pyongyang over the years to try and cut off funding for those programs.

“DPRK made preparations at its nuclear test site, although it did not test a nuclear device. In the first half of 2022, the country continued the acceleration (which began in September 2021) of its missile programmes,” the monitors said.

They said North Korea launched 31 missiles combining ballistic and guidance technologies, including six intercontinental ballistic missile (ICBM) tests and two missiles that it explicitly described as ballistic weapons.

North Korea continued illicit imports of oil and exports of coal, evading sanctions, the monitors said.

International talks aimed at convincing North Korea to give up its nuclear and ballistic missile programs have largely stalled since 2019.

In recent years China and Russia have been pushing for an easing of sanctions on North Korea on humanitarian grounds – and in the hope Pyongyang can be convinced to return to negotiations.

The U.N. monitors reported that while challenging to assess accurately, “there can be little doubt that U.N. sanctions have unintentionally affected the humanitarian situation” in North Korea.

(Reporting by Michelle Nichols; Editing by Mary Milliken and Lincoln Feast)

(Reuters) – The U.S. Bankruptcy Court in New York has given crypto firm Voyager Digital Holdings Inc the approval to return $270 million in customer cash, the Wall Street Journal reported on Thursday.

Judge Michael Wiles, who is overseeing Voyager’s bankruptcy, ruled that the company provided “sufficient basis” to support its contention that customers should be allowed access to the custodial account held at Metropolitan Commercial Bank, the Journal said. (https://on.wsj.com/3SpvW09)

The company was not immediately available for comment.

Voyager, one of several firms to struggle in the wake of broad crypto market turmoil, filed for Chapter 11 last month.

In its bankruptcy filing, Voyager estimated that it had more than 100,000 creditors and between $1 billion and $10 billion in assets, as well as liabilities of the same value.

Last week, the company was ordered by the Federal Reserve and the Federal Deposit Insurance Corp (FDIC) to cease and desist from making “false and misleading” claims that its customers’ funds were protected by the government.

The regulators said that the company just had a deposit account at Metropolitan Commercial Bank, and customers investing via its platform had no FDIC insurance.

Crypto lenders like Voyager boomed during the COVID-19 pandemic, drawing depositors with high interest rates and easy access to loans rarely offered by traditional banks. However, the recent slump in crypto markets – sparked by the downfall of two major tokens in May – has hurt lenders.

(Reporting by Akanksha Khushi in Bengaluru; Editing by Maju Samuel)

By Lananh Nguyen

NEW YORK (Reuters) – The dollar weakened against most major currencies on Thursday as support from the Federal Reserve’s hawkish messaging subsided and investors turned their attention to a hotly anticipated U.S. jobs report.

The dollar extended losses following U.S. data that showed the number of Americans filing new claims for unemployment benefits increased last week.

Earlier on Thursday, the Bank of England raised interest rates by the most since 1995. The British pound initially weakened as the central bank warned that a long recession was on its way with inflation seeing topping 13% but it later gained some ground as the dollar fell.

The dollar index fell 0.704% to 105.720, while sterling was last trading at $1.2166, up 0.19% on the day. The euro was up 0.79% at $1.0244, and the Japanese yen strengthened 0.76% versus the greenback at 132.83 per dollar.

“There is a mentality now across markets that we know what’s coming in terms of monetary tightening,” said Juan Perez, director of trading at Monex USA in Washington. Investors are taking a view that “whatever downturn we’re facing in the next few months will be short-lived.”

Investors will get a key snapshot of how the U.S. economy is faring on Friday, when the Labor Department reports employment data for July. Signs that the U.S. job market continues to be robust will likely bolster expectations for more monetary policy tightening from the Fed.

Fed officials have continued to push back against the perception that U.S. interest rates were close to peaking. On Thursday, Cleveland Fed President Loretta Mester said the Fed should raise interest rates to above 4% to help bring inflation down and aim to keep tightening through the first half of next year.

Her comments followed those by San Francisco Fed President Mary Daly and Minneapolis Fed President Neel Kashkari who voiced their determination overnight to rein in high inflation.

The dollar’s strength has yet to peak, a Reuters poll released on Thursday showed. Of those polled, 70% thought the dollar had some room to rise further in this cycle, even after its index hit its highest level in two decades in July.

Money markets price in a 50 basis-point hike at the Fed’s September meeting, and a roughly 44% chance of another massive 75 bps increase. The Fed hiked rates by 75 basis points at its meeting in June and July. [FEDWATCH]

Currency bid prices at 4:28PM (2028 GMT)

(The story corrects YTD pct change values in table.)

Description RIC Last U.S. Close Pct Change YTD Pct High Bid Low Bid

Previous Change

Session

Dollar index 105.7400 106.4800 -0.68% 10.534% +106.5100 +105.6600

Euro/Dollar $1.0244 $1.0167 +0.76% -9.89% +$1.0254 +$1.0154

Dollar/Yen 132.9450 133.8500 -0.66% +15.50% +134.4150 +132.7700

Euro/Yen 136.20 136.08 +0.09% +4.51% +136.9200 +135.6500

Dollar/Swiss 0.9552 0.9604 -0.57% +4.69% +0.9622 +0.9545

Sterling/Dollar $1.2164 $1.2148 +0.13% -10.06% +$1.2196 +$1.2065

Dollar/Canadian 1.2864 1.2842 +0.18% +1.75% +1.2876 +1.2819

Aussie/Dollar $0.6969 $0.6952 +0.22% -4.15% +$0.6990 +$0.6936

Euro/Swiss 0.9784 0.9764 +0.20% -5.64% +0.9797 +0.9762

Euro/Sterling 0.8419 0.8368 +0.61% +0.23% +0.8437 +0.8358

NZ $0.6299 $0.6277 +0.34% -7.98% +$0.6315 +$0.6267

Dollar/Dollar

Dollar/Norway 9.7275 9.7130 +0.15% +10.42% +9.7680 +9.6890

Euro/Norway 9.9656 9.8747 +0.92% -0.47% +9.9750 +9.8665

Dollar/Sweden 10.1085 10.2127 -0.21% +12.09% +10.2256 +10.1050

Euro/Sweden 10.3558 10.3776 -0.21% +1.19% +10.3910 +10.3523

(Reporting by Lananh Nguyen)

By Medha Singh

(Reuters) – Retail investors find well-established stocks and bond markets to be more arcane than the wild world of cryptocurrencies, a survey by the World Economic Forum (WEF) showed on Thursday.

The privately-funded WEF’s survey, in collaboration with BNY Mellon and Accenture, showed that 29% of investors said they did not understand the nascent cryptocurrency market, whereas nearly 40% of investors noted that they didn’t understand stocks or bonds.

The survey also revealed that 70% of retail investors were under 45 years of age.

“With global adoption and trading volumes of crypto rising substantially over the last few years, there has been a lot of buzz about it, which is likely influencing investors’ product awareness,” said Meagan Andrews, investing lead at WEF.

“Less coverage of more traditional products, like stocks and bonds, may also have the opposite effect on awareness.”

The cryptocurrency market value ballooned to as much as $3 trillion last year, according to data platform CoinMarketCap.com, but it has lost nearly two-third of its value amid surging inflation and tightening financial conditions.

Crypto market’s peak, however, was miniscule in comparison to the $124.4 trillion global equity market and the even bigger $126.9 trillion bond market in 2021, according to the Securities Industry and Financial Markets Association.

The survey comes as retail investors become a force to be reckoned with, after they banded together on social media forums last year to drive eye-watering rallies in GameStop and squeezed bearish hedge funds.

A poll by Gallup published in May showed 58% of Americans said that they own stocks.

The WEF survey of more than 9,000 individuals across nine countries also revealed that a majority of investors were looking to build long-term wealth.

But, about 40% of those surveyed did not invest and said they did so because they didn’t know how to invest or found investing too confusing.

(Reporting by Medha Singh in Bengaluru; editing by Uttaresh.V)

(Reuters) – Shares in cryptocurrency exchange Coinbase Global Inc soared more than 16% on Thursday after it announced that it had partnered with BlackRock, the world’s largest asset manager, to provide its institutional clients with access to crypto trading and custody services. [nL1N2ZG1E4]

The agreement offers some positive news for the company which, like many in the crypto sector, has been battered by a slump in crypto asset prices as investors fled risky assets amid geopolitical turmoil, rising rates and worries of an impending recession.

Coinbase has been among the worst hit, with shares down over 60% so far this year.

The company’s institutional trading platform for crypto assets, Coinbase Prime, will provide crypto trading, custody, prime brokerage and reporting capabilities to institutional clients on BlackRock’s Aladdin, who are also clients of Coinbase.

Aladdin offers a suite of software tools designed to help institutional investors manage their portfolios.

The news underscores how traditional institutions including pension funds, hedge funds, and banks have been pushing into crypto assets over the past 18 months, wagering the alternative asset class is here to stay.

“Our institutional clients are increasingly interested in gaining exposure to digital asset markets and are focused on how to efficiently manage the operational lifecycle of these assets,” said Joseph Chalom, Global Head of Strategic Ecosystem Partnerships at BlackRock in a statement.

Coinbase has been building out its institutional client base via its Prime platform which services hedge funds, corporate treasuries and other financial institutions, it says.

Institutional trading volumes on Coinbase in the first quarter of 2022 were $235 billion compared with $74 billion for retail customers, its filings show. While that institutional volume was down compared with the previous three quarters, it was up just over 9% compared with the same quarter last year.

(Reporting by Manya Saini in Bengaluru and Michelle Price in Washington DC; Editing by Sriraj Kalluvila and Janet McBride)

By Manya Saini and Niket Nishant

(Reuters) – Wall Street has lowered earnings expectations for once high-flying fintechs Coinbase and Block, as a chill in the cryptocurrency market adds more pain to the companies already grappling with surging costs and rapidly rising rates.

Crypto exchange Coinbase is expected to report an adjusted loss in the second quarter, while Jack Dorsey-led payments company Block is likely to post a 70% drop in adjusted profit.

Coinbase, which has the biggest exposure to crypto volatility, has lost more than three quarters of its market capitalization this year.

“For Coinbase, this is going to be a very difficult 12 to 18 months,” said Dan Dolev, senior analyst, fintech equity research at Mizuho Securities USA.

Block, which changed its name from Square last year to better reflect its focus on blockchain, has lost over half of its market value amid the stock market rout this year.

THE CONTEXT

The cryptocurrency selloff has dragged down multiple companies in the sector, with some even seeking bankruptcy protection. Bitcoin, the largest cryptocurrency, has nearly halved in value in the first seven months of the year.

“There could be potential for double digit headcount reduction (at Coinbase) at some point because the cost is too high,” Dolev said.

Estimate cuts and competitive pressures are also contributing to the weakness in fintech stocks, according to Credit Suisse analysts.

The cryptocurrency sector may be slowly emerging from a bruising selloff, but they still have to contend with regulatory hurdles in the United States, the biggest market for such assets.

Online trading app Robinhood Markets Inc reported a 44% plunge in second-quarter earnings on Tuesday, a day earlier than expected, and said it would also cut 23% of its workforce.

THE FUNDAMENTALS

Company Refinitiv revenue estimates Refinitiv

per-share

profit/loss

estimate

Coinbase $830.5 million (down ~63% y-o-y) ($2.68)

Block $4.35 billion (down ~7% y-o-y) 16 cents

WALL STREET SENTIMENT

** Coinbase Global – 14 of 26 brokerages rate the stock “buy” or higher, 10 “hold” and two “sell”; their median PT is $91, down from $100 last month

** Block Inc – 37 of 50 brokerages rate the stock “buy” or higher, 11 “hold” and two “sell”; their median PT is $117, down from $140 last month

(Reporting by Manya Saini and Niket Nishant in Bengaluru; Editing by Anil D’Silva)