Category: News

By Harry Robertson and Ankur Banerjee

LONDON/SINGAPORE (Reuters) – The dollar fell to a two-month low on Thursday after data showed U.S. inflation slowed sharply in March, bolstering speculation the Federal Reserve’s rate hiking campaign is either already finished or will be by May.

As the dollar slipped, the euro rose to within a whisker of a one-year high, with traders betting the European Central Bank’s (ECB) fight against inflation still has a way to go.

Figures released on Wednesday showed U.S. consumer price index (CPI) inflation came it at 5% year-on-year in March, down from 6% in February.

Core inflation – which strips out volatile food and energy prices – picked up to 5.6%, from 5.5% the previous month.

The dollar dropped after the data was released and weakened further on Thursday, helping the euro rise to a two-month high of $1.1032 – just off the one-year peak of $1.1034 touched in early February. The euro was last up 0.2% at $1.101.

The dollar index, which measures the greenback against six major peers, fell to 101.2, its lowest since the start of February. It was on track for its fifth straight weekly drop and last stood 0.15% lower at 101.33.

“We have seen a dramatic swing in interest differentials in favour of the euro,” said Ben Laidler, global markets strategist at eToro.

“The combination of falling U.S. inflation and rising recession risks have driven expectations of three Fed interest rate cuts this year compared to further hikes from the still-hawkish ECB.”

GRAPHIC – Dollar index

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WATCH BOND YIELDS

Expectations that interest rates and bond yields will stay high in the euro zone but fall in the U.S. is making the euro look more attractive, analysts said.

Minutes from the Fed’s March meeting, also released on Wednesday, showed several officials considered pausing rate hikes after the failure of Silicon Valley Bank. The Fed ended up hiking by 25 basis points (bps) to a range of 4.75% to 5%.

Yet ECB officials look set to keep raising rates. Sources told Reuters that the consensus is converging on a 25 bps increase in May, although some more “hawkish” rate-setters such as Austria’s Robert Holzmann are pushing for 50 bps. The main interest rate currently stands at 3%.

Euro zone bond yields rose sharply on Wednesday, narrowing the gap between German and U.S. 10-year borrowing costs to its smallest in two years.

The dollar was little changed against Japan’s yen at 133.19, after falling 0.39% in the previous session.

New Bank of Japan Governor Kazuo Ueda on Wednesday indicated he was concerned about tightening monetary policy too early and failing to push inflation sustainably to 2%.

Britain’s pound hit a 10-month high of $1.253. It was last up 0.2% at $1.251, on track for its third straight daily gain.

Data on Thursday showed the British economy stagnated in February as strikes by public sector workers hit output.

Meanwhile, the dollar fell to a 26-month low against the Swiss franc at 0.8898. The franc is traditionally seen as a safe haven at times of stress.

John Hardy, head of FX strategy at Saxo Bank, said he expected the dollar to grind lower from here as inflation cools and the economy slows.

“It encourages dollar weakness, as long as we don’t get a major recession or a major reheating,” Hardy said. “Nothing massive, we’re just looking for an extension of the weakness.”

Pricing in derivatives markets shows traders think there’s a roughly 70% chance the Fed will raise rates by 25 bps again in May, and a 30% chance it does nothing. They expect rates to fall to around 4.375% by the end of the year.

By contrast, traders expect the ECB’s main interest rate to peak at around 3.7% by November.

(Reporting by Harry Robertson and Ankur Banarjee; Editing by David Holmes and Mark Potter)

(Reuters) – Trading and investing platform eToro said on Thursday it has partnered with Elon Musk-led Twitter to let users access real-time prices for cryptocurrencies, stocks and others assets.

The trading data will be available through Twitter’s Cashtags feature, which was launched in 2012 and allows users to interact with content around an asset by inserting a dollar sign in front of the ticker.

Twitter users were earlier able to view real-time trading data from markets-charting platform TradingView, but only on some assets such as the S&P 500 index and shares of certain companies such as Tesla.

Now, they can click through to eToro’s platform to see information about the asset, with an added option to invest.

Since acquiring Twitter for $44 billion in late October, Musk has brought about a series of changes to the microblogging website, including rolling out a subscription-based plan for verified users and executing mass layoffs.

(Reporting by Akash Sriram in Bengaluru; Editing by Devika Syamnath)

(Reuters) – Bankrupt crypto exchange FTX has recovered over $7.3 billion in cash and crypto assets, an increase of more than $800 million since January, the company’s attorney said on Wednesday at a U.S. bankruptcy court hearing.

(Reporting by Dietrich Knauth; Editing by Chris Reese)

By Tom Wilson

(Reuters) – The software that underpins the second-biggest crypto coin ether is due for a software upgrade on Wednesday that will give investors access to more than $30 billion of the digital tokens.

Known as Shapella, the latest upgrade to the Ethereum blockchain will enable investors to redeem an offshoot of ether tokens that they have deposited in return for interest on the blockchain network over the past three years.

Such so-called “staked ether” tokens currently account for about 15% of all ether tokens, according to data firm Dune Analytics, and are worth some $31 billion.

The upgrade is due for around 2230 GMT, according to a tweet by Tim Beiko of the Ethereum Foundation, a body that speaks for the Ethereum network.

The changes will likely lead to heightened volatility for ether, investors have predicted.

Some believe that widespread redemptions could lead to a wave of selling, in turn weighing on the price of ether, whose market value of about $230 billion is topped only by bitcoin.

“The release of this previously unrealised investment may lead to significant downward price pressure if it is immediately liquidated,” Deutsche Bank analysts said in a note.

In its last significant upgrade, Ethereum in September drastically reduced its energy usage – a move proponents said would give Ethereum an advantage as it seeks to surpass bitcoin.

But ether has continued to lag its larger rival, gaining just under 60% this year versus a more than 80% jump for bitcoin.

After trillions of dollars were wiped from the crypto market in a bruising 2022, the sector has rallied in 2023 on expectations that central bank interest rate hikes are slowing.

Ethereum has grown popular in so-called decentralised finance applications, which offer financial services while avoiding traditional industry gatekeepers such as banks.

It remains, however, little used in mainstream commerce or finance.

(Reporting by Tom Wilson in London; editing by Jason Neely)

SINGAPORE (Reuters) – The U.S. arm of cryptocurrency exchange Binance said it will remove digital asset tokens TRON and Spell from its trading platform, sending the prices of both down sharply on Wednesday.

Binance.US said the move was the result of a periodic review and that factors it regularly considers can include trading volume and liquidity, changes in a token’s risk profile or evidence of fraud or unethical conduct, among others.

The TRON token fell nearly 5% against the U.S. dollar after the announcement, which was posted on Twitter and the Binance.US website, while the much smaller Spell token fell more than 5%, based on data from CoinMarketCap.

The two tokens will be de-listed on April 18, Binance.US said. Withdrawals of both will remain open, but trading and deposits will close.

Justin Sun, founder of the TRON token, told Reuters in a text message that the impact would be “relatively small”.

“Binance.US trading volume is less than $1 million per day. TRX’s current trading volume is $400 million,” said Sun, using the token’s ticker symbol. Sun was accused of fraud by the U.S. Securities and Exchange Commission (SEC) last month.

Sun has previously said the SEC’s “complaint lacks merit”, and that the SEC’s framework for regulating digital assets “is still in its infancy and is in need of further development”.

Reuters was not immediately able to contact Spell representatives.

(Reporting by Kanjyik Ghosh in Bangalore and Rae Wee and Chen Lin in Singapore; Editing by Christopher Cushing)

By Leika Kihara

(Reuters) – Group of Seven (G7) advanced economies will consider how best to help developing countries introduce central bank digital currencies (CBDC) consistent with appropriate international standards, Japan’s top currency diplomat Masato Kanda said on Tuesday.

The move will be among key themes of G7 discussions that Japan chairs this year, as part of efforts to address challenges the global community face from fast-moving digital technology, he said.

“We have to address risks from the development of CBDC by ensuring factors such as appropriate transparency and sound governance,” Kanda, vice finance minister for international affairs, told a seminar in Washington.

“As a priority of this year, the G7 will consider how best to help developing countries introduce CBDC consistent with appropriate standards, including the G7 public policy principle for retail CBDC,” he said.

Outside the G7, China has been leading the pack on issuing a digital currency. G7 central banks have set common standards toward issuing CBDCs as some proceed with experiments.

Kanda said the rapid innovation of digital technology provides various benefits but also fresh challenges such as cyber-security, the spread of misinformation, social and political divides, and the risk of destabilising financial markets.

The collapse of crypto exchange FTX last year “was a serious wake-up call” for policymakers to create regulation across borders, he said.

“For crypto assets, there are a bit of diverging views among countries. But consensus is definitely that we need more regulation, particularly after the FTX shock,” Kanda said.

Another priority of this year’s G7 talks will be to address debt vulnerabilities of some middle-income countries, said Kanda, who is among policymakers gathering in Washington for the spring International Monetary Fund (IMF) meetings this week.

Kanda said it might be “a bit difficult” to see concrete results for countries like Zambia, Ghana and Ethiopia, when asked what the accomplishments for debt talks could be this week.

“For Sri Lanka, hopefully we can have progress,” with a plan to launch a creditor’s committee on Thursday initiated by Japan, France and G20 chair India, Kanda said.

(Reporting by Leika Kihara in Tokyo; Editing by Jamie Freed)

By Luc Cohen

NEW YORK (Reuters) – A former Deutsche Bank AG investment banker has been charged in an indictment unsealed on Tuesday with misappropriating funds from investors who he wooed with promises of big returns from cryptocurrency trading.

Rashawn Russell, 27, of Brooklyn, solicited investments from friends and colleagues but used the funds for gambling and other personal expenses, federal prosecutors said.

According to the indictment, Russell told prospective investors that he was a licensed broker who worked in investment banking and could help them earn large and sometimes guaranteed returns from R3, a cryptocurrency fund he claimed to run.

Prosecutors said Russell transferred some funds into a trading account but siphoned the rest, and sent fake documentation to investors about how their money was doing.

Russell, arrested on Monday in Brooklyn after being charged in a sealed indictment last Thursday, faces one count of wire fraud for a scheme that prosecutors said ran from November 2020 through August 2022. A lawyer for Russell did not immediately respond to a request for comment.

According to the indictment, Russell was an investment banker from July 2018 through November 2021 at a financial institution that was not identified in the document. His LinkedIn profile states that he became a Deutsche Bank investment banking analyst in July 2018 and was promoted to associate in July 2020.

U.S. prosecutors and regulators have been working to crack down on fraud involving digital assets.

“Russell turned the demand for cryptocurrency investments into a scheme to defraud numerous investors,” Breon Peace, the U.S. attorney in Brooklyn, said in a statement.

Deutsche Bank said in a statement that while it would not comment on an ongoing legal proceeding, it “regularly supports law enforcement and regulatory oversight efforts, including appropriately responding to and cooperating with authorized investigations and proceedings.”

(Reporting by Luc Cohen in New York; Editing by Will Dunham)

By Medha Singh and Lisa Pauline Mattackal

(Reuters) – Investors are finally set to gain access to more than $33 billion of ether this week under a planned revamp of the blockchain.

A new software upgrade to the Ethereum blockchain, dubbed Shapella, will let market players redeem their “staked ether” – coins they have deposited and locked up on the network over the past three years in return for interest.

About 15% of all ether is staked, totaling $33.73 billion in market value, according to data from Dune Analytics.

Up to 1.1 million ether will be ready for withdrawals in the week following the revamp of the blockchain, estimated Sreejith Das, CEO at Attestant, a company that facilitates the staking of ether. That would be worth nearly $2 billion, based on the latest ether price of about $1,860.

Traders hunting an edge are now trying to figure out how this sudden ether windfall might hit prices. It’s difficult to judge though, said Robert Quartly-Janeiro, chief strategy officer at crypto exchange Bitrue.

“The only thing certain is that the Shanghai hard fork will bring about some short-term volatility,” he added.

Some corners of the market are worried that unlocking staked coins could lead to massive withdrawals and a wave of selling, which could push prices rapidly lower.

Yet only about 29% of all ether staked by volume is currently in profit in dollar terms, which would mean most would be sold at a loss, according to Bundeep Rangar, CEO of blockchain investment firm Fineqia International.

“It seems unlikely, therefore, that much of the staked ether will be sold,” Rangar added.

GRAPHIC – Ether upgrades

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‘FINAL PIECE OF THE PUZZLE’

Shapella would mark the end of a long wait for investors who had opted to deposit ether in exchange for a yield since the staking project began in 2020.

Ethereum developers paved the way for this development with a major upgrade called the “Merge” last year, which ditched energy-intensive mining and moving to a “proof-of-stake” system where ether owners lock up 32 coins to check new records on the blockchain, earning new ether on top of their “staked” coins.

Until the planned revamp this week, investors looking to stake coins had to deposit a minimum of 32 ether at a time (worth $59,520 at current prices) for an indefinite period, a hefty sum beyond the reach of an average retail investor.

“Before Shanghai, a lot of people and institutions probably chose not to stake their ether because, once they did, it would have been locked up for an undefined period of time, which was risky,” said Dave Weisberger, CEO of digital assets trading platform CoinRoutes.

Following the upgrade, staked ether will no longer be locked up on the blockchain, so investors may be more willing to stake coins.

The market value of tokens behind projects like Lido Finance and Rocket Pool, some of the largest projects providing liquidity for crypto staking, have soared nearly six times to $2 billion and four times to $875 million respectively this year, according to CoinMarketCap, on expectations of further growth.

“It is likely that in the long term the amount of ether staked will increase, especially in comparison with the percentage of supply staked for other digital assets such as Solana, Mathic and Ada,” said Rangar at Fineqia.

So what manner of investors are likely to enter the market following the changes wrought by Shapella?

“It will be those institutions that have sat on the side lines, silently waiting for this final piece of the puzzle to be put in place, the ones that needed the ability to withdraw their ether before they were allowed to stake it,” said Das at Attestant.

(Reporting by Medha Singh and Lisa Pauline Mattackal in Bengaluru; Editing by Pravin Char)

By Rae Wee, Medha Singh and Hannah Lang

(Reuters) – Major cryptocurrency bitcoin breached the key $30,000 level for the first time in 10 months on Tuesday, adding to its steady gains as investors raised bets that the U.S. Federal Reserve will soon end its aggressive monetary tightening campaign.

Bitcoin peaked at $30,438 in Asian trade and was last up 1.96% at $30,233. It has gained nearly 6% since the start of the month, after rising 23% in March.

Investors are awaiting a U.S. inflation report on Wednesday to assess the Fed’s next steps after banking sector turmoil in March raised expectations that the central bank would let up on rate hikes to ease stress on the sector.

“The recent surge in bitcoin’s price is like a breath of fresh air after a long, cold crypto winter,” said Tim Frost, CEO of crypto yield platform Yield App.

“This renewed optimism could be attributed to an anticipated shift in the U.S. Federal Reserve’s monetary policy, which is expected to create a more stable, and hopefully predictable, environment.”

Boosting the case for rate hikes, however, Friday’s closely watched U.S. nonfarm payrolls (NFP) report showed employers maintained a strong pace of hiring in March, pointing to a still-resilient economy.

“There were some expectations of a potential miss on NFP on Friday, and that’s bolstered confidence coming into” the readout of U.S. consumer price index data, said Joseph Edwards, investment adviser at Enigma Securities.

GRAPHIC – Bitcoin and gold outperform S&P 500 since banking turmoil

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Crypto investment products attracted $57 million in inflows last week – albeit on low volume – with most of the money focused on bitcoin, digital asset manager CoinShares said on Monday. This brings digital asset flows back into positive territory for the year, the report showed.

“The market has done a great job at culling all leveraged participants in the past 18 months,” said Matthew Dibb, chief investment officer at Astronaut Capital, a Singapore-based crypto asset manager.

“If (bitcoin) can survive the week over $30,000, we are going higher.”

Ether, the second largest cryptocurrency, stood near last week’s roughly eight-month peak of $1,942.50. It was last up 1.56% to $1,915.56.

Crypto investors are eagerly anticipating a major revamp to the Ethereum blockchain on Wednesday that is set to allow them to gain access to more than $33 billion of ether currency.

The software upgrade, dubbed Shapella, will let market players redeem their “staked ether” – coins they have deposited and locked up on the network over the past three years in return for interest.

While Shapella is not likely to directly drive sell pressure on ether, volatility could be heightened around the event, Bank of America strategist Alkesh Shah said.

(Reporting by Rae Wee in Singapore and Medha Singh in Bengaluru and Hannah Lang in Washington; Editing by Vidya Ranganathan, Jamie Freed, Devika Syamnath and Richard Chang)

By Alun John and Kevin Buckland

LONDON (Reuters) – The dollar gave back the previous day’s advances against the euro and pound on Tuesday as traders turned their attention to U.S. inflation data due on Wednesday for signs of how close U.S. rates are to peaking.

The euro was up 0.52% at $1.0918 and the pound rose a similar amount to $1.2439 as most European markets returned from the long Easter weekend.

Both currencies over the break had slipped from their early April peaks after resilient U.S. labour market released Friday bolstered the case for a Federal Reserve rate hike next month, and also eased fears about a sharper U.S. economic slowdown.

“The Fed’s early May meeting is beginning to loom and the data on the way to that is very much the focus,” said Jane Foley, head of FX strategy at Rabobank.

She said the euro’s ability to jump clear of $1.09 would depend on the upcoming data and what it meant for U.S. interest rates.

“Bank earnings will also be important, they don’t often reach across to FX markets directly, but they might, given the recent jitters,” Foley added.

Tuesday’s moves were also affected by European markets’ reopening after the break, said Simon Harvey, head of FX analysis at Monex Europe, given the limited liquidity on Friday and Monday with most European markets closed.

He said algorithms trading currencies based on the difference between European and U.S. rates might have sold euros for dollars when U.S. Treasury yields rose after the jobs data while European bond markets were closed.

European bond yields rose sharply on Tuesday, catching up after the break. [GVD/EUR]

“There’s just that catch-up effect flushing through,” Harvey said.

The dollar also slid against the Japanese yen, dropping 0.4% to 133.03, having jumped 1.1% on Monday helped by new Bank of Japan Governor Kazuo Ueda, who vowed at his inauguration on Monday to stick with ultra-easy stimulus settings.

Traders now see roughly a two-thirds chance the Fed will raise rates by another quarter point on May 3, according to the CME’s Fedwatch tool.

The dollar also softened elsewhere, dropping 0.6% against the Swiss franc to 0.9041.

Bitcoin touched a fresh 10-month high at $30,438 on Tuesday before last fetching $30,140, after breaking free of recent ranges on Monday.

The digital token had been stuck between about $26,500 and $29,400 for the previous three weeks.

(Reporting by Alun John in London and Kevin Buckland in Tokyo; editing by Christina Fincher and Mark Heinrich)

(Reuters) – The U.S. arm of cryptocurrency exchange firm Binance has struggled to find a bank for its customers’ cash after the failure of Signature Bank last month, the Wall Street Journal reported on Saturday citing people familiar with the matter.

(Reporting by Akanksha Khushi in Bengaluru; Editing by Lisa Shumaker)

By Amanda Cooper and Gertrude Chavez-Dreyfuss

LONDON/NEW YORK (Reuters) – The dollar gained against most of its peers on Thursday in thin trading, as investors consolidated positions and pondered how pivotal U.S. jobs data coming out on a stock trading holiday might impact Federal Reserve policy and unleash a potentially volatile market reaction.

The U.S. stock market is closed on Good Friday and some European countries are shut on Monday as well.

The closely-watched U.S. non-farm payrolls report on Friday, when many markets around the world are closed, will follow disappointing manufacturing and services sector data from the Institute for Supply Management (ISM) and private employment figures on Wednesday.

“The market is consolidating here and I don’t think there’s much participation given the upcoming holiday. I’m still bearish on the dollar,” said Marc Chandler, chief market strategist, at Bannockburn Global Forex in New York.

“People saw that the dollar’s rally through early March was based on one leg and that was Fed policy. The Fed was leaning toward higher for longer and then the bank stress hit and since then in the last couple of weeks, the economic data has disappointed,” he added.

Thursday’s U.S. initial jobless claims added fuel to the slowing-economy mantra. The data incorporated revisions to previous numbers after the government updated the model it uses to adjust the series for seasonal fluctuations.

Initial claims for state unemployment benefits dropped 18,000 to a seasonally-adjusted 228,000 for the week ended April 1. But data for the prior week was revised to show 48,000 more applications received than previously reported.

In addition, the number of people receiving benefits after an initial week of aid, a proxy for hiring, rose 6,000 to 1.823 million during the week ending March 25.

“Today’s revisions brings claims more in line with what we would have expected to see given the anecdotal evidence of weakening conditions in the labor market,” wrote Tom Simons, U.S. economist, at Jefferies in New York in research note after the data.

While the slew of sluggish economic data has caused traders to scale back bets on how much longer U.S. rates would need to stay in restrictive territory, it has simultaneously reignited concerns about the risk of recession.

Economists polled by Reuters expect non-farm payrolls to have grown by 239,000 in March, following February’s 311,000 gain. The non-farm payrolls number has been far more prone to delivering upside surprises than misses in the last year or two.

For markets, this could make for a highly volatile session.

GRAPHIC – Surprise me

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In late morning trading, the U.S. dollar index, which hit a two-month low this week, thanks in part to a drop in Treasury yields, was up 0.1% at 101.96.

The dour U.S. economic signs have strengthened the view that the Fed will reverse course on rate increases,

U.S. rate futures markets are currently pricing in a roughly even chance of the Fed leaving rates unchanged at its next meeting, with multiple rate cuts being priced by the end of the year.

The Japanese yen, which has also some support from safe haven bids, fell against the dollar, which rose 0.4% to 131.79 yen.

Meanwhile, the risk-sensitive Australian and New Zealand dollars dropped 0.9% and 1.1%, respectively.

Sterling slid 0.3% to $1.2429, while the euro was little changed at $1.0917.

========================================================

Currency bid prices at 10:38AM (1438 GMT)

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

Previous Change

Session

Dollar index 101.9100 101.8700 +0.06% -1.527% +102.1300 +101.8100

Euro/Dollar $1.0917 $1.0908 +0.09% +1.89% +$1.0920 +$1.0885

Dollar/Yen 131.7750 131.3300 +0.35% +0.52% +131.9000 +130.7850

Euro/Yen 143.82 143.11 +0.50% +2.51% +143.8900 +142.5600

Dollar/Swiss 0.9050 0.9066 -0.14% -2.09% +0.9074 +0.9037

Sterling/Dollar $1.2434 $1.2463 -0.22% +2.82% +$1.2487 +$1.2413

Dollar/Canadian 1.3480 1.3457 +0.17% -0.51% +1.3505 +1.3447

Aussie/Dollar $0.6662 $0.6722 -0.91% -2.28% +$0.6725 +$0.6654

Euro/Swiss 0.9878 0.9888 -0.10% -0.17% +0.9890 +0.9852

Euro/Sterling 0.8779 0.8749 +0.34% -0.74% +0.8783 +0.8740

NZ $0.6248 $0.6317 -1.09% -1.60% +$0.6324 +$0.6240

Dollar/Dollar

Dollar/Norway 10.4350 10.4500 -0.08% +6.40% +10.4810 +10.4150

Euro/Norway 11.3882 11.3710 +0.15% +8.52% +11.4210 +11.3588

Dollar/Sweden 10.4315 10.3912 +0.34% +0.23% +10.4712 +10.3668

Euro/Sweden 11.3836 11.3449 +0.34% +2.10% +11.4055 +11.3450

(Reporting by Amanda Cooper in London and Gertrude Chavez-Dreyfuss in New York; Additional reporting by Rocky Swift in Tokyo and Rae Wee in Singapore; Editing by Jamie Freed, Christina Fincher, Chizu Nomiyama and Marguerita Choy)

By Elizabeth Howcroft

LONDON (Reuters) – The collapse of crypto exchange FTX and its grant-making body, the FTX Future Fund, has left some researchers at top universities without the funds they were promised and others trying to repay grants before they could be ordered to.

Launched in February 2022, the FTX Future Fund was part of the FTX Foundation, the philanthropic arm of Sam Bankman-Fried’s crypto empire which fell apart last year, in what U.S. prosecutors called an “epic” fraud.

Federal prosecutors in Manhattan have accused the FTX founder of stealing billions of dollars in customer funds to plug losses at his hedge fund, Alameda Research. He denies wrongdoing.

On Nov. 11, 2022 – the same day that FTX filed for bankruptcy – the team behind the fund announced via a blog post on an altruism forum that they had resigned and would be unlikely to honour their commitments to those awarded grants.

“We deeply regret the difficult, painful, and stressful position that many of you are now in,” the post by Nick Beckstead, Leopold Aschenbrenner, Avital Balwit, Ketan Ramakrishnan and William MacAskill said.

Beckstead, Aschenbrenner, Ramakrishnan and MacAskill did not respond to multiple attempts to contact them via LinkedIn, Twitter and email for this article. Balwit declined to comment.

Representatives for FTX also declined to comment and declined to say whether the FTX Foundation is included in the bankruptcy proceedings.

PhD student Korbinian Kettnaker told Reuters he has been forced to drop out of his studies in the philosophy of computer science at Britain’s University of Cambridge after his funding from FTX fell through.

The FTX Future Fund supported research into topics that “improve humanity’s long-term prospects” and was funded primarily by Bankman-Fried, according to a profile of its activities published on Twitter. It aimed to spend between $100 million and $1 billion in its first year, it said, without disclosing its endowment.

The fund had spent $132 million across 262 grants and investments as of June 2022, according to archived snapshots of its now-deleted website.

Announcements on the website indicate there were at least 20 researchers at top universities including Cornell, Princeton and Brown in the United States, and Cambridge in Britain, who received grants of more than $100,000 each. University-linked research projects received more than $13 million in total, according to Reuters calculations based on these announcements.

Cornell, Princeton, Brown and Cambridge did not respond to Reuters’ requests for comment.

TOLD TO LEAVE

Kettnaker began his PhD at the University of Cambridge in October, expected to take four years, having successfully applied for a Future Fund grant of $158,000 to pay his approximately 27,000 pounds ($33,620.40) annual tuition fee and yearly stipend of 18,000 pounds.

The grant hadn’t been paid by November but Kettnaker expected it to arrive in time for his first end-of-term bill.

When he saw news of FTX collapsing, he did not realise at first that it would affect his funding, he told Reuters.

“There was a surreal moment where this distant piece of world news and my life suddenly interlocked,” he said.

Kettnaker’s college gave him a deadline of Jan. 31 to find new funding. Unable to find any, he asked to have his place put on hold for the rest of the academic year and left on Feb. 1.

The university did not respond to a request for comment.

LAWYERING UP

Some students who had already received funding faced other problems, such as the ethical question of what to do with funding that might be related to the proceeds of alleged fraud or what to do if FTX demanded it back to pay creditors.

Under U.S. bankruptcy law, payments made within 90 days of a Chapter 11 bankruptcy filing could be subject to a “clawback order”, meaning researchers could be asked to hand back grants.

On Feb. 5, FTX said in a press release it was asking recipients of payments from the debtors in the FTX bankruptcy filing to return their funds by the end of the month, adding that it could take legal action against recipients if they do not return the money voluntarily.

FTX’s statement did not reference the FTX Future Fund specifically.

One FTX Future Fund beneficiary in the U.S., who asked not to be named, said they received a grant of more than $150,000. They are now trying to return the money but could not comment on the process.

The student told Reuters they believed there were hundreds of university students in receipt of funding in the $10,000 to $50,000 range, based on the numbers in online groups and forums.

Mark Felger, a lawyer at U.S. firm Cozen O’Connor, said he had been contacted by about a dozen people based in Europe and the United States who had received between $100,000 to $2 million from the FTX Future Fund.

“It’s really unclear at this early stage of the proceedings how aggressively the FTX trustee will pursue the smaller clawback claims,” he said.

FTX’s new CEO has said that his top priority is recovering assets to repay FTX customers, but Felger said none of the grant recipients he has spoken to have received formal demand letters.

“Many of the folks are going to sit tight for now and see how the case plays out,” he said, adding that FTX has two years from the date of the bankruptcy to file a clawback claim.

($1 = 0.8031 pounds)

(Reporting by Elizabeth Howcroft, editing by Sinead Cruise, Alexandra Hudson)

By Medha Singh and Lisa Pauline Mattackal

(Reuters) – Even as bitcoin flies high, investors are keeping their options open, judging by a record race to derivatives.

Open interest for bitcoin options and futures has spiked over the past month as fear has stalked global banking, hitting an all-time high of 433,540 contracts on March 23 on Deribit, a leading exchange for crypto-focused derivatives products.

In the 12 months preceding March, by contrast, open interest ranged between 150,000 and 300,000, referring to the number of contracts yet to be settled between buyers and sellers, which provides a measure of investor participation in a market.

Most options traders are betting on bitcoin prices jumping higher, with open interest in call options at 206,979 contracts on Deribit, more than double the bearish put options of 93,857.

In notional terms, open interest in bitcoin’s most recent peak at $12.24 billion on March 22 was the highest since mid-November when bitcoin was trading near $60,000, according to Deribit data.

“We’ve never seen this much activity before,” said Luuk Strijers, chief commercial officer at Deribit. “We have reached the same levels of open interest as 2021 at half the prices, which means we have doubled.”

Options contracts give their buyers the right, but not an obligation, to buy or sell an underlying asset at a fixed price in the future. Such contracts are not only used as a lower-risk, lower-reward alternative to actually buying bitcoin, but also as a way to hedge other bets, making it a better gauge of investor participation than an indicator of price expectations. 

(Graphic: Crypto options shine – https://www.reuters.com/graphics/FINTECH-CRYPTO/WEEKLY/jnvwyjmmovw/chart.png)

RELATIVE VALUE TRADES

Nonetheless, investors may have good reason to be bullish about the spot price of bitcoin, which has risen 69% in 2023 to about $28,020 making it one of the best-performing assets of the year.

Furthermore, bitcoin futures on the CME exchange are trading in “contango”, meaning future contract prices are trading higher than earlier ones, indicating investors expect prices to keep going up. Futures for April trade at $28,475 while the May contract trades at $28,645, data from the exchange showed. 

“This has set up the market for some interesting relative value trades where bitcoin can now be used as a funding or hedging instrument,” analysts at crypto investment firm Matrixport said.

Leo Mizuhara, CEO of digital assets management platform Hashnote, said the macro environment for bitcoin and other digital assets was turning more favorable given the Federal Reserve’s large liquidity injections to shore up the banking sector.

While the recent Fed actions could trickle through to crypto, overall liquidity in crypto spot markets still remains low, which could lead to sharp swings in prices, market participants cautioned. 

Bitcoin volatility is hovering around 66, below a peak of 96 hit during March’s banking turmoil but still higher than where it started 2023 at 58, according to data from CryptoCompare.

ETHER BREAKTHROUGH?

After an estimated $4 billion of bitcoin options expired at the end of first quarter on March 31, open interest had eased to $8.7 billion on Monday – still at levels not seen in the two years before March.

Investors are still also bullish on ether, judging by options trading. Open interest in ether on Deribit features 1.7 million call options versus 656,158 puts.

The spot price of ether has jumped 50% to $1,795 this year, while the Ethereum blockchain is preparing for another significant upgrade to the blockchain later in April, known as the Shanghai upgrade.

For the past two weeks, though, both ether and its big brother bitcoin have been eerily treading water, leaving investors to place bets on boom or bust.

“Bitcoin has ranged between $26,500 and $29,000 and ether between $1,700 and $1,850,” said Aakash Desai, an options trader at crypto liquidity provider B2C2.

“Breakthroughs in either direction could be interesting.”

(Reporting by Lisa Pauline Mattackal and Medha Singh in Bengaluru; Editing by Pravin Char)

(Reuters) – Dogecoin’s Shiba Inu dog replaced Twitter’s blue bird as the social media company’s logo on Monday, helping the meme coin add as much as $4 billion to its market value.

The token, born as a satire of a cryptocurrency frenzy in 2013 and has no fundamental use, on Tuesday surged to 10 cents around 1500 EST from 7 cents as Elon Musk indicated in a tweet he had delivered on his promise of changing the social media app’s logo to dogecoin’s dog.

With a market capitalization of $13.7 billion, dogecoin is now the seventh biggest cryptocurrency, according to data site CoinMarketCap.com. Its market value stood at around $10 billion before the news.

Musk, who is ranked the second-richest person in the world by Forbes, is a vocal proponent of cryptocurrencies and has heavily influenced prices for dogecoin and bitcoin in the past.

The Tesla boss on Friday asked a U.S. judge to throw out a $258 billion racketeering lawsuit accusing him of running a pyramid scheme to support dogecoin.

Dogecoin more than doubled in October after Musk, dubbed “the dogefather” by retail traders, sealed a $44 billion deal to take over Twitter.

Cryptocurrency exchange Binance, which invested $500 million into Musk’s buyout of Twitter, had said it was brainstorming strategies on how blockchain and crypto could be helpful to Twitter.

“A year later, Twitter has yet to announce any crypto specific initiatives,” said Stéphane Ouellette, Chief Executive at digital asset investment platform FRNT Financial.

“It remains to be seen whether the appearance of the DOGE logo is more than a joke.”

The shiba inu token, a spinoff of dogecoin which trades in fractions of cents, rose 5.6% to $0.000014 on Tuesday.

(This story has been corrected to change the day to Monday from Tuesday in paragraph 1)

(Reporting by Medha Singh in Bengaluru; Editing by Anil D’Silva)

By Anna-Catherine Brigida

BUENOS AIRES (Reuters) – Crypto exchange Binance, which has been sued by U.S. regulators, said on Tuesday it is expanding services in inflation-hit Argentina, allowing users to buy and sell digital currencies directly with local pesos.

The move allows Argentines to transfer pesos into a Binance account via a local partner, which can then be used to purchase cryptocurrency. Until now, Binance had operated in Argentina only as an intermediary platform to match crypto buyers and sellers.

“This launch has to do with the public demand that exists here,” Maximiliano Hinz, director for Binance in the Southern Cone, told Reuters in a written statement on Tuesday, adding that Argentina was a key market for the exchange.

He said local users could transfer pesos to a Binance account and see their balance reflected there in local currency, which would then be usable to buy crypto.

The expansion in Argentina, where annual inflation above 100% has made cryptocurrencies more attractive despite their volatility and risk, comes as Binance faces regulatory scrutiny in the U.S. and elsewhere.

The U.S. Commodity Futures Trading Commission (CFTC) late last month sued the firm and CEO Changpeng Zhao for operating what the regulator alleged were an “illegal” exchange and a “sham” compliance program.

Zhao, a China-born billionaire who moved to Canada at age 12, has called the CFTC’s complaint “unexpected and disappointing.”

As Binance has faced mounting scrutiny from regulators, the exchange has lost some banking partners needed for so-called on-ramp, off-ramp transactions to fiat currencies. Paysafe, which processed sterling payments, most recently withdrew in March.

Argentina does not regulate crypto exchanges, but the central bank has repeatedly warned about the risks of cryptocurrencies and markets regulator CNV is backing a bill to create a registry of providers offering virtual assets.

The South American country, which has strict capital controls that limit foreign currency exchange, was among the top 15 countries in the world for crypto adoption last year, according to the Chainalysis index.

“Argentine users know the crypto world,” Hinz said.

(Reporting by Anna-Catherine Brigida in Buenos Aires; Editing by Matthew Lewis)

By Chris Prentice

NEW YORK (Reuters) – The U.S. Securities and Exchange Commission is nearing a settlement with a former Coinbase Global Inc product manager in a landmark case of insider trading involving cryptocurrency, according to a court filing this week.

The SEC has reached “an agreement in principle” with Ishan Wahi to resolve its claims against him, the agency said in a court document filed on Monday.

Regulators have accused Wahi, his brother Nikhil Wahi and a close friend of reaping at least $1.1 million in illicit profits by using nonpublic information related to crypto listing announcements he obtained as an employee of Coinbase.

The case has drawn significant attention as one of the latest actions by a regulator that has grown increasingly aggressive on policing the crypto industry.

Last month, a trade group urged a judge to dismiss the matter, noting it could have wide-ranging consequences for the digital asset industry and harm crypto investors.

In its Monday filing, the SEC said it is also engaged in “good faith discussions” with Nikhil Wahi that may resolve the claims against him.

The Wahi brothers have both pleaded guilty to parallel criminal charges. In February, they asked a judge in Seattle to dismiss the SEC’s case, saying the charges represent an “abuse of power.”

Any settlement recommended by staff will need to be reviewed and approved by the SEC’s commissioners, “a process that can take a a number of weeks,” the regulator said.

A lawyer for the Ishan Wahi and a spokesperson for the SEC both declined to comment. A lawyer for Nikhil Wahi did not respond immediately to requests for comment.

(Reporting by Chris Prentice; Editing by Marguerita Choy)

By Andrew Chung and John Kruzel

WASHINGTON (Reuters) – The U.S. Supreme Court on Tuesday is set to hear a bid by cryptocurrency exchange Coinbase Global Inc to halt customer lawsuits, including by a user who sued after a scammer stole money from his account, as it pursues an effort to move the disputes out of courts and into private arbitration.

The justices are due to hear arguments in Coinbase’s appeal of lower court decisions letting the proposed class action lawsuits proceed while it presses its contention that the claims belong in arbitration.

Companies generally prefer to arbitrate claims because the process is cheaper and faster than litigation in court, which can be harder to fight and carries a greater risk of hefty damages awards.

Coinbase’s exchange allows users to transact in digital currencies such as bitcoin and ether. The company asserts that its user agreement requires disputes to be resolved through arbitration and that under a law called the Federal Arbitration Act, which governs dispute resolution proceedings through arbitration, action in trial courts must come to a halt when a denial of a request to compel arbitration is appealed.

One of the cases involves a California lawsuit by customer Abraham Bielski, who alleged that a scammer stole more than $30,000 from his Coinbase account in 2021. The suit accused the company of violating the Electronic Funds Transfer Act by not investigating or recrediting Bielski’s account.

In the other suit, former users accused the company of violating California’s false advertising law by duping them into paying to participate in a 2021 sweepstakes that offered prizes in dogecoin, a type of cryptocurrency.

In both cases, federal judges refused to force the claims into arbitration, as the company argued the user agreements required. While Coinbase immediately appealed those decisions, the San Francisco-based 9th U.S. Circuit Court of Appeals in 2022 refused the company’s requests to put further litigation on hold pending those appeals.

After Coinbase asked the Supreme Court to hear the case, a trial judge in the sweepstakes case halted those proceedings until the end of March.

Coinbase told the Supreme Court that allowing the cases to proceed in court when it might yet win the right to arbitrate the claims “defeats the purpose of arbitration.”

A ruling is due by the end of June.

(Reporting by Andrew Chung; Editing by Will Dunham)

By Lisa Pauline Mattackal and Medha Singh

(Reuters) – As crisis stalks the traditional world of stocks and bonds, bitcoin is suddenly looking like a safe haven.

The infamously volatile cryptocurrency seems positively hale and hearty, just as a banking meltdown drives markets into the arms of a recession.

    Bitcoin has risen 21% this month, while a choppy S&P 500 has lost 1.4% and gold has gained 8%.

“If you were going to describe an environment where there were successive bank runs because central banks are trying to fight inflation with fast rate increases, that is pretty close to as spot-on a thesis for owning bitcoin as you’ve ever heard,” said Stéphane Ouellette, CEO at digital asset investment platform FRNT Financial.

The cryptocurrency has, for now, severed its ties with stocks and bonds and tagged on to a rally in gold, fulfilling at least one part of creator Satoshi Nakamoto’s dream – that bitcoin can serve as a refuge for suffering investors.

Bitcoin’s 30-day correlation with the S&P 500 has slid to negative 0.12 over the past week, where a measure of 1 indicates the two assets are moving in lock step. 

A selloff in banks has wiped out hundreds of billions of dollars in market value and forced U.S. regulators to launch emergency measures. The past couple of weeks has seen Silicon Valley Bank and crypto lender Silvergate go under, while Credit Suisse has teetered on the brink.

Graphic: Bitcoin refuge amid chaos https://www.reuters.com/graphics/FINTECH-CRYPTO/WEEKLY/egvbyjaakpq/chart.png

‘RETURN TO CORE ETHOS’

Let’s not carried away, though. This is bitcoin.

“The bearish argument would be that these dynamics are temporary, and ultimately this rally is not going to sustain,” said Ouellette.

It remains to be seen if bitcoin’s bullishness will endure as attention shifts to the Federal Reserve’s policy meeting this week where the U.S. central bank must walk a fine line as it fights inflation and bank stresses.

Furthermore, the cryptocurrency’s allure hasn’t all been about safety.

The rapid price rise has forced some short-sellers to cut their bets and buy coin back. Data from Coinglass shows traders liquidated $300 million worth of crypto positions on Monday, with most of that total – $178.5 million – short positions.

Nonetheless, bitcoin is resurgent.

It now commands nearly 43% of the total crypto market, its highest share since last June, according to CoinMarketCap data, while the total cryptocurrency market’s capitalization has jumped 23% to $1.1 billion since March 10.

“We’re seeing a return to bitcoin’s core ethos, that of a financial asset independent from the opacity and meddling of the centralized financial system,” said Henry Elder, head of decentralized finance (DeFi) at digital asset investment manager Wave Digital Assets.

The mainstream bank crisis has also fueled some interest in DeFi, with the total value of tokens linked to such platforms rising to $49 billion from $43 billion over the past week, according to DappRadar. 

BITCOIN IN A BANK CRISIS

Not all areas of the digital world have been immune to the banking fallout, though. The no. 2 stablecoin Circle USD or USDC lost its 1:1 peg to the dollar after disclosing its reserves were parked at the shuttered Silicon Valley Bank.

As worries spread over USDC’s ability to maintain its peg, its market cap slid to $36.8 billion last Friday from $43.8 billion a week earlier, even as leading stablecoin Tether gained around $4 billion.

Market participants said some USDC withdrawals were likely reinvested in bitcoin as well, helping fuel the rally.

“It’s too soon to say that bitcoin has proven the narrative that it’s an alternative in a banking crisis,” cautioned Ed Hindi, Chief Investment Officer at Tyr Capital in Geneva.

But he added: “The rally we are currently witnessing in bitcoin will be looked back at as the point in time where its main property as a decentralized non-sovereign asset was stress tested.”

(Reporting by Medha Singh and Lisa Mattackal in Bengaluru; Editing by Vidya Ranganathan and Pravin Char)

(Reuters) – Cryptocurrency exchange Coinbase Global Inc said on Monday it has stopped support for Signature Bank’s digital payments platform Signet, more than a week after U.S. regulators took control of the bank.

The exchange said it was looking for a new technology provider or for more clarity on the outcome of Signet, which allowed real-time crypto-to-fiat currency transactions.

Coinbase’s users who relied on Signet will not be able to transact outside of traditional banking hours, the exchange said.

New York-based Signature was one of two major U.S. banks that collapsed earlier this month, triggering market turmoil on a scale similar to the global financial crisis 15 years ago.

Prior to its unraveling, the bank had been looking to shrink its footprint in the crypto space after the bankruptcy of FTX and troubles at peer Silvergate Bank, which also said it was winding down operations earlier this month.

On Sunday, a unit of New York Community Bancorp entered into an agreement with U.S. regulators to buy deposits and loans from Signature Bank.

(Reporting by Niket Nishant in Bengaluru; Editing by Shounak Dasgupta)