Coinz.com

By Huw Jones

LONDON (Reuters) – Britain’s financial watchdog finalised tougher rules on Monday for advertising high risk products, such as peer-to-peer loans and the mini-bonds sold by investment firm London Capital & Finance (LCF), whose collapse led to a government bailout of investors.

The Financial Conduct Authority (FCA) said firms approving and issuing marketing material must have “appropriate expertise” and conduct better checks for ensuring that customers understood the risks involved.

“Firms also need to use clearer and more prominent risk warnings and certain incentives to invest, such as ‘refer a friend bonuses’, are now banned,” the FCA said in a statement, referring to giveaways for customers who introduce new clients.

The FCA wants to make it harder to sell high risk products, which also include other types of speculative illiquid securities, unlisted equity and debt, crowdfunding, and unregulated collective investment schemes.

“This follows concerns that a significant number of people who invest in high-risk products do not view losing money as a risk of investing and invest without understanding the risks involved,” the FCA said in a statement.

These investments came under the spotlight after LCF collapsed in 2019, leaving 11,600 investors in mini-bonds facing losses of up to 237 million pounds.

An independent report said the FCA had failed to supervise LCF properly, triggering a revamp to become a more “assertive” watchdog. Last week it said it would impose a tougher “consumer duty” on firms to crack down on mis-selling.

The new rules, being rolled out over six months, will not apply to cryptoassets until a law has been approved to bring the sector under the regulatory net, the FCA said.

The FCA and Bank of England have repeatedly warned that investors in crypto must be ready to lose every penny.

“Where we see products being marketed that don’t contain the right risk warnings or are unclear, unfair or misleading, we will act,” said Sarah Pritchard, the FCA’s executive director for markets.

The watchdog also launched a public consultation on widening the range of retail investors who can invest in long term asset funds.

(Reporting by Huw Jones)

(Reuters) – Bitcoin rose 3.36% to $24,584.24 at 1707 GMT on Saturday, adding $798.93 to its previous close.

Bitcoin, the world’s biggest, best-known cryptocurrency, is up 39.7% from the year’s low of $17,592.78, hit on June 18.

Ether, the coin linked to the ethereum blockchain network,rose 0.61 % to $1,734.08 on Saturday, adding $10.46 to its previous close.

(Reporting by Rhea Binoy in Bengaluru; editing by Jonathan Oatis)

(Reuters) – People can pay for a slushie with crypto in the streets of “Bitcoin Valley,” a project in the Honduran tourist enclave of Santa Lucia through which the country has entered the digital currency trend.

The small town in the mountains, 20 minutes from the capital Tegucigalpa, has become a bitcoin city.

Owners of businesses big and small in Santa Lucia are adapting to handle cryptocurrencies as payment, hoping to attract more tourism.

“It will open more opportunities and attract more people who want to use this currency,” said Cesar Andino, manager of Los Robles shopping square.

The “Bitcoin Valley” project targets 60 businesses to initially get trained and adopt cryptocurrencies to market their products and services, expecting to spread these practices to more enterprises and nearby areas.

The initiative was jointly developed by the Blockchain Honduras organization, the Guatemalan cryptocurrency exchange consortium Coincaex, the Technological University of Honduras and Santa Lucia’s municipality.

Ruben Carbajal Velazquez, professor at the Technological University, said “Santa Lucia’s community will be educated to use and manage cryptocurrencies, implementing them in different businesses in the region and generating crypto-tourism.”

While some Latin American countries are exploring cryptocurrencies’ potential, there are risks.

In September 2021, El Salvador adopted bitcoin as legal tender having its own ‘Bitcoin Beach’ in the surfing hotspot town of El Zonte.

The Central American country’s bet on bitcoin was hampered by the crypto market downturn and skepticism from multilateral lenders and ratings agencies. Its publicly disclosed holdings of $105 million are now worth about $57 million.

To deal with volatility, the Honduran “Bitcoin Valley” will “enable merchants to receive instant payments in the local currency, eliminating cryptocurrencies fluctuation risks,” said Leonardo Paguada, founder of the Block Chain Honduras organization.

Critics of bitcoin’s expansion have warned that these kind of operations may fuel money laundering and financial instability while enhancing the digital gap, as poorer parts of society may struggle to access the technology.

(Reporting by Rodolfo Penaroja and Aida Pelaez-Fernandez; Editing by David Gregorio)

WASHINGTON (Reuters) – A U.S. banking regulator is urging banks dealing with cryptocurrency companies that they need to make sure customers know which of their funds will be insured by the government in case of collapse, and which have no safety net.

The Federal Deposit Insurance Corporation (FDIC) said Friday it is concerned consumers may be confused about how safe their money may be when placed in crypto assets, particularly in cases where firms offer a mix of uninsured crypto products alongside insured bank deposit products.

In a new advisory, the FDIC said banks need to make sure any crypto firms they partner with do not overstate the reach of deposit insurance. The push comes as broad turmoil in the crypto market has led to the collapse of some high-profile firms, including one regulators publicly chastised yesterday for overstating deposit insurance coverage.

“Inaccurate representations about deposit insurance by non-banks, including crypto companies, may confuse the non-bank’s customers and cause those customers to mistakenly believe they are protected against any type of loss,” the FDIC advisory stated.

On Thursday, the FDIC and Federal Reserve issued a cease and desist order against now-bankrupt crypto firm Voyager Digital, charging the company misled customers to believe funds invested in the brokerage would be guaranteed by the government.

Specifically, the FDIC said banks need to make clear to the public that deposit insurance only covers insured banks in case of collapse, and that protection does not extend to the failure of any nonbank partners, which can include crypto custodians, exchanges, and wallet providers.

(Reporting by Pete Schroeder; Editing by David Holmes)

By Lisa Pauline Mattackal

(Reuters) – Investors and policymakers should welcome the Federal Reserve’s changing tack to provide less definitive signals on forward guidance, even as markets scramble to guess the U.S. central bank’s next policy moves, two former Fed officials said.

“The kind of guidance we’ve seen in the past … creates an expectation that’s unrealistic,” Dennis Lockhart, former president of the Atlanta Federal Reserve, told the Reuters Global Markets Forum (GMF) on Thursday.

“I think it’s better to embrace the uncertainty and understand that (the Fed) is navigating and figuring it out as they go along,” he said.

Jeremy Stein, a former member of the Fed’s Board of Governors, told GMF that overly specific guidance limits the central bank’s flexibility at a time when the trajectory of inflation and economic growth remains uncertain.

“The big question is how far are we going to have to (hike interest rates) in a year? We don’t really know. Giving the market a false sense of certainty doesn’t really help,” said Stein, currently a professor at Harvard University.

After the Fed raised interest rates by 75 basis points on Wednesday, Chair Jerome Powell avoided signaling the size of subsequent rate hikes. Other central banks have similarly emphasised a meeting-by-meeting “data-driven” approach.

Market focus on the “next meeting” often risks missing the more important angle of how high rates will head in the long-term, and their impact on financial conditions, Stein said.

Lockhart believes that while the probability is low, a 100-basis-point rate hike is on the table at the Fed’s September meeting. Both he and Stein were sceptical about inflation waning quickly.

Unemployment skyrocketed during the Great Financial Crisis in 2008 along with a fairly limited decline in price rises, Stein said, adding that a replay of this scenario could test the Fed’s resolve to bring inflation back near their 2% target.

(Join GMF, a chat room hosted on Refinitiv Messenger: https://refini.tv/33uoFoQ https://refini.tv/33uoFoQ))

(Reporting by Lisa Pauline Mattackal in Bengaluru; Additional reporting by Nishara Pathikkal in Bengaluru; Editing by Divya Chowdhury and Kim Coghill)

By Hannah Lang

(Reuters) – Cryptocurrencies have been hard hit by fears interest rate hikes will end the era of cheap money, with the world’s largest digital asset, bitcoin, down more than 56% from this year’s high. Several crypto companies have filed for bankruptcy or have been forced to look for emergency capital infusions.

THREE ARROWS CAPITAL

Singapore-based crypto hedge fund Three Arrows Capital (3AC) filed for Chapter 15 bankruptcy on July 1.

Once a formidable player in the digital asset space, the downfall of 3AC appeared to stem from the firm’s bet on the Terra ecosystem, which was behind failed stablecoin terraUSD. That token lost nearly all of its value in May, shaving almost half a trillion dollars off the crypto market.

High-leveraged, 3AC was unable to meet margin calls from counterparties it had borrowed from. Consequently, crypto lenders BlockFi and Genesis Trading liquidated their positions with the firm. According to court filings, 3AC’s creditors claim they are owed more than $2.8 billion.

CELSIUS NETWORK

New Jersey-based crypto lender Celsius suspended withdrawals on June 12 and a month later filed for Chapter 11 bankruptcy, listing a $1.19 billion deficit on its balance sheet. It had been valued at $3.25 billion in a funding round in October.

Celsius stumbled on complex investments in the wholesale digital asset market. The company had attracted retail investors by promising annual returns as high as 18.6%, but struggled to meet redemptions as crypto prices slumped.

In its first bankruptcy hearing, Celsius lawyers said that its bitcoin mining operations could provide a way for the company to repay customers.

Meanwhile, several state regulators are investigating Celsius’ decision to suspend customer withdrawals, Reuters reported.

VOYAGER

Crypto lender Voyager Digital, also based in New Jersey, had been a rising crypto star, reaching a $3.74 billion market cap last year. But the collapse of 3AC dealt a major blow to Voyager, which was heavily exposed to the hedge fund. Voyager has filed claims of more than $650 million against 3AC.

Voyager filed for Chapter 11 bankruptcy on July 6, reporting that it had $110 million worth of cash and crypto assets on hand. Since then, the U.S. Federal Deposit Insurance Corp has confirmed that it is probing Voyager’s marketing of deposit accounts for cryptocurrency purchases, which the company had advertised as being FDIC-insured.

Crypto exchange FTX and Alameda Research, both founded by billionaire Sam Bankman-Fried, offered to purchase all of Voyager’s digital assets and loans, except its loans to 3AC, and enable Voyager customers to withdraw their assets from an FTX account. However, Voyager rebuffed that offer in a court filing as a “low-ball bid.”

VAULD

Singapore-based crypto lender Vauld on July 8 filed with a Singapore court for protection against its creditors, after suspending withdrawals days earlier. The company owes $402 million to its creditors, according to a report from The Block.

Vauld is backed by billionaire investor Peter Thiel’s Valar Ventures, Pantera Capital and Coinbase Ventures.

In a July 11 blog post, Vauld said it is discussing a possible sale to London-based crypto lender Nexo while at the same time exploring potential restructuring options.

BLOCKFI

Facing an increase in withdrawals and a hit from 3AC, crypto lender BlockFi signed a deal July 1 with FTX that provides BlockFi with a $400 million revolving credit facility, and includes an option that enables FTX to buy the company for up to $240 million.

BlockFi was hard hit by the crypto crash, and implemented multiple cost-cutting measures in June, including slashing its headcount by 20% and cutting executive compensation. The company was valued at $3 billion in a funding round last year.

(Reporting by Hannah Lang in Washington; Editing by Michelle Price and Lisa Shumaker)

By Huw Jones and Elizabeth Howcroft

LONDON (Reuters) – Britain should create a new category of private property law for digital assets like cryptocurrencies which are being used to make payments or represent other assets, independent body the Law Commission proposed on Thursday.

Authorities around the world are taking steps to regulate the crypto asset sector, which has grown rapidly and been labelled a “Wild West” by European Union lawmakers.

Cryptocurrencies, such as bitcoin, surged in price in 2020 and 2021, but have fallen sharply this year. NFTs – blockchain-based assets which represent digital files such as images, have also proliferated rapidly.

Rishi Sunak said in April, when he was finance minister, that he wanted to make Britain a global hub for crypto asset technology. He asked the Law Commission to review whether current laws can accommodate digital assets.

The Commission said on Thursday many digital assets, such as non-fungible tokens or NFTs, do not fit easily into current private property law.

“Our proposals aim to create a strong legal framework that offers greater consistency and protection for users and promotes an environment that is able to encourage further technological innovation,” said Sarah Green, the Law Commissioner for commercial and common law.

The Commission proposed adding a third “data objects” category to the existing “things in possession”, or tangible assets like gold, and “things in action”, such as debt or shares in a company, categories of personal property.

To come under the new category, a digital asset must be composed of electronic data and meet other criteria, such as only being used by one person at a time, the Commission proposed in a paper put out to public consultation.

“Property rights matter because, unlike, say, contractual rights, they can be asserted against anyone, not just the other person to the contract,” said Jason Rix, counsel and commercial litigation lawyer at Allen & Overy law firm.

Last week Britain set out a draft law giving its regulators powers over the use of stablecoins in payments, with a further consultation on regulating other types of crypto assets due later this year.

(Reporting by Huw Jones and Elizabeth Howcroft, editing by Jane Merriman and Frank Jack Daniel)

(Reuters) – Bitcoin rose 6.85% to $22,717.05 at 22:05 GMT on Wednesday, adding $1,457.27 to its previous close.

Bitcoin, the world’s biggest and best-known cryptocurrency, is up 29.1% from the year’s low of $17,592.78 on June 18.

Ether, the coin linked to the ethereum blockchain network, rose 11.39% to $1,614.99 on Wednesday, adding $165.15 to its previous close.

(Reporting by Akanksha Khushi in Bengaluru; Editing by Chris Reese)

(Reuters) – Cryptocurrency exchange Kraken is under federal investigation for potential violation of U.S. sanctions by allowing users in Iran and elsewhere to buy and sell digital tokens, the New York Times reported, citing five people with knowledge of the matter.

The U.S. Treasury Department’s Office of Foreign Assets Control has been investigating Kraken since 2019 and is expected to impose a fine, according to the report. (https://nyti.ms/3PBTVaN)

Kraken said it does not comment on specific discussions with regulators.

Privately held Kraken is the latest cryptocurrency company to come under regulatory scrutiny, as the rapidly growing industry gets caught in the crosshairs of the federal government.

(Reporting by Mehnaz Yasmin in Bengaluru; Editing by Anil D’Silva)

(Reuters) – The U.S. Securities and Exchange Commission (SEC) is investigating whether Coinbase Global Inc improperly let Americans trade digital assets that should have been registered as securities, Bloomberg News reported on Monday.

A Coinbase spokesperson told Reuters the company does not list securities on its platform, while the regulator declined to comment on the report.

The company’s legal head Paul Grewal said Coinbase will engage with the SEC on the matter. “We are confident that our rigorous diligence process — a process the SEC has already reviewed — keeps securities off our platform,” Grewal said.

The SEC’s scrutiny has increased ever since the crypto trading platform expanded the number of tokens in which it offers trading, Bloomberg report said, citing two sources. (https://bloom.bg/3OyXrBk)

The probe by the SEC’s enforcement unit predates its investigation into an alleged insider trading scheme that was revealed last week.

In the first insider trading case involving cryptocurrency, U.S. prosecutors had charged Ishan Wahi, a former product manager at Coinbase, for sharing confidential information about forthcoming announcements of new cryptocurrency assets that Coinbase would allow users to trade through its exchange.

In related civil charges, the regulator alleged that Wahi’s brother Nikhil Wahi and their friend Sameer Ramani purchased and sold at least 25 crypto assets for a profit, nine of which the agency identified as securities.

The SEC had declined to confirm at the time whether it would pursue action against Coinbase for listing the tokens deemed securities in the complaint.

The cryptocurrency platform has previously asked the regulator to develop rules that work for digital asset securities.

(Reporting by Jaiveer Shekhawat, Jahnavi Nidumolu and Nivedita Hazra in Bengaluru; Editing by Sherry Jacob-Phillips and Arun Koyyur)

By Tom Wilson, Medha Singh and Lisa Pauline Mattackal

(Reuters) – It’s not all doom and gloom.

Even as the crypto sector shivers in the bleak winter, venture capitalists are pouring money into digital currency and blockchain startups at a pace that’s set to outstrip last year’s record.

In the first half of the year, VCs bet $17.5 billion on such firms, according to data from PitchBook. That puts investment on course to top the record $26.9 billion raised last year, a warmer and happier time for bitcoin and co.

“The current market conditions – I don’t think they faze investors,” said Roderik van der Graf, founder of Hong Kong investment firm Lemniscap, which focuses on crypto and blockchain. “The capital available is massive.”

VC funds offer financing to young companies they believe have strong growth prospects. The data suggests a solid faith in the future of crypto and blockchain tech, despite a bruising six months for the industry.

A double whammy of macroeconomic headwinds and blow-ups at major projects this year have seen bitcoin plummet about 65% from its November record of $69,000, with the overall value of the crypto market tumbling by two-thirds to $1 trillion.

Companies have shuddered as prices fall, with major U.S. exchange Coinbase Global and NFT platform OpenSea among those to lay off hundreds of workers.

Yet some VCs are shrugging off the gloom, with many deploying substantial war chests as their faith in the underlying tech behind crypto coins remains strong.

Though not all investors are so bullish in the face of the crypto carnage, not by any means.

David Siemer, CEO of California crypto management firm Wave Financial, said there were signs of a pullback from the sky-high valuations of crypto firms last year.

“This will get a lot worse – we’re a couple of months into this cycle. In the last cycle the pain for those looking for funding was about 12 months.”

(Graphics: https://graphics.reuters.com/FINTECH-CRYPTO/WEEKLY/lbvgnedljpq/chart.png)

AMERICAN HOTSPOT

North America, long the hotspot for VC deals, has again been the focus of activity with about $11.4 billion in the six months to June, versus $15.6 billion for the whole of last year.

The numbers contrast with general VC activity in United States, where deals fell to $144.2 billion in the first half from $158.2 billion in the same period last year as macro conditions and market turmoil chill investment.

Rumi Morales, director of investments at Digital Currency Group, a major American VC, said the data reflected increasingly robust faith in the crypto and blockchain sector.

“There used to be existential risk being in the space – that the whole industry was just going to go away, it was all a dream. That is not the case anymore.”

Adoption of crypto as an investment tool mushroomed last year, with the use of blockchain also gaining ground – even if the revolutionary changes from the technology promised to industries such as finance and commodities remain elusive.

Among the mega U.S. crypto deals in 2022: $400 million raised by the U.S. arm of crypto exchange FTX in January; a $450 million fundraising round by blockchain developer ConsenSys in March; and $400 million raised by stablecoin issuer Circle a month later.

Activity is strong in Europe too, with $2.2 billion of VC investment in the first half of the year.

Lisbon-based Fedi, an app designed to help people receive, hold and spend bitcoin, said this month it had raised $4.2 million in seed financing.

“Within seven days we had all of the investment commitments,” Obi Nwosu, one of its founders, told Reuters. “And within less than a month and a half we had the initial fundraise target in the bank. Done.”

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

(Reuters) – Tesla Inc has increased its capital spending plan by $1 billion, the electric automaker said in a regulatory filing on Monday that also disclosed a second subpoena related to Chief Executive Elon Musk’s go-private tweets in 2018.

The company now expects to spend between $6 billion and $8 billion this year and each of the next two years, up from its previous expenditure plan of $5 billion-$7 billion, as it looks to ramp up production at its new facilities in Texas and Berlin.

Musk had last month said the factories are “losing billions of dollars” as they struggle to raise output due to a shortage of batteries and China port issues.

Meanwhile, the latest subpoena by the U.S. Securities and Exchange Commission (SEC) on June 13, has sought information about compliance with Musk’s settlement with the regulator in 2018.

Musk had settled a lawsuit by the SEC over his go-private tweets by agreeing to let the company’s lawyers pre-approve tweets with material information about the company.

The company said it will cooperate with the government authorities. The SEC declined to comment. The regulator had first subpoenaed Tesla in November related to the settlement.

The world’s richest person, who calls himself a “free speech absolutist”, had in March said his “funding secured” tweet was truthful, likening himself to rapper Eminem in seeking to throw out his 2018 agreement with the SEC.

In June, he also appealed a judge’s refusal to end the agreement.

The latest subpoena comes as Musk prepares for a legal showdown in October with Twitter for dropping his $44-billion offer to buy the social media company.

In June, the regulator had questioned Musk over a tweet in which he raised doubts over his acquisition of Twitter due to concerns over the number of fake users and spam accounts.

Separately, Tesla’s filing said it converted about 75% of its bitcoin holdings into fiat currency, gaining $64 million in the process, while recording an impairment charge of $170 million in the first six months of 2022.

As of June 30, the fair market value of its digital assets was worth $222 million, it said in the filing. (https://bit.ly/3S1k4Bq)

(Reporting by Akash Sriram in Bengaluru; Editing by Arun Koyyur)

(Reuters) – Bankrupt crypto lender Voyager Digital said a recent joint proposal from FTX and Alameda Ventures was a “low-ball bid dressed up as a white knight rescue” and alleged the plan would disrupt its bankruptcy process.

Under the partial bailout plan announced on Friday, crypto trading firm Alameda would purchase all of Voyager’s digital assets and digital asset loans, except the loans to bankrupt crypto hedge fund Three Arrows Capital.

Voyager’s customers could then receive some of those funds if they chose to open an account with crypto exchange FTX. Such customers could either withdraw the cash balance immediately or use it to make purchases on FTX’s platform.

Voyager, in a court filing dated July 24, said the proposal was “designed to generate publicity for itself rather than value for Voyager’s customers”.

“We submitted what we think is a generous proposal – we aren’t taking fees on this, just letting customers get their remaining assets back promptly,” Sam Bankman-Fried, the founder of FTX and Alameda, said in an emailed statement.

“It appears that Voyager’s consultants are attempting to stall out the process, increasing their fees,” Bankman-Fried added.

Voyager did not respond to a request seeking additional comment.

The company filed for Chapter 11 bankruptcy earlier this month. In June, it had signed an agreement with Alameda for a revolving line of credit.

(Reporting by Niket Nishant in Bengaluru; Editing by Maju Samuel)

BANGKOK (Reuters) – Thailand’s Securities and Exchange Commission said on Monday it was working with law enforcement to look into potential losses among the public after the crypto exchange Zipmex temporarily suspended withdrawals last week.

The SEC said in a statement it was asking impacted users of Zipmex to submit information via an online forum on how they had been affected by the problems at the platform.

The Southeast Asia-focused crypto exchange, which operates in Thailand, Indonesia, Singapore and Australia, suspended withdrawals last Wednesday.

Withdrawals resumed on the same the evening in Thailand and later on in other countries, except for transfers from one investment product, which the company later said had exposure worth $53 million in crypto lenders, Babel Finance and Celsius.

Celsius and Babel Finance are among several crypto players that have fallen into difficulties in recent months.

A Zipmex spokesperson said it was fully complying with SEC requests and has been actively speaking to government agencies.

The announcement comes as crypto trading in Thailand has slowed and after Thai lender SCB X Pcl said https://classic.set.or.th/set/pdfnews.do?newsId=16572373881420&sequence=2022082576 it was extending the due diligence period for its $537 million acquisition of Thai crypto exchange, Butkub.

Zipmex is the latest crypto firm to be face difficulties following a sharp sell off in markets that started in May with the collapse of two paired tokens, Luna and TerraUSD.

Zipmex holds a digital asset exchange and a digital asset broker license, the SEC website https://www.sec.or.th/en/pages/shortcut/digitalasset.aspx shows. At the weekend, the company said in a Facebook post https://www.facebook.com/zipmexasia/posts/pfbid0mwHXPYA2oMRgeRJvNLmDUvVinSDqywW1J6eSUAuR7ZNbZWgS8HC9TNp5rsSoxthyl it was exploring a deal with an “interested party.”

(Reporting by Chayut Setboonsarng; Editing by Ed Davies)

By Savio Shetty and Divya Chowdhury

MUMBAI (Reuters) – The Reserve Bank of India (RBI) is justified in using the country’s foreign exchange reserves to smooth out volatility in the rupee’s moves against the dollar, a member of the Economic Advisory Council said on Monday.

“I think that the RBI is correct to use the FX reserves to smooth movement in the INR/USD… There is no point targeting a INR/USD level when USD is appreciating against all other majors,” Sanjeev Sanyal told the Reuters Global Markets Forum (GMF) in an interview.

“Longer term, we need to maintain overall macro-stability and allow the cycle to play itself out,” said Sanyal, who was previously India’s chief economic adviser.

The Council he now sits on advises Prime Minister Narendra Modi and his government on economic policy.

The Indian rupee has fallen around 7.4% against the dollar year-to-date, to trade near a record low of 80.0650.

The dollar has risen about 11.2% against a basket of currencies as markets brace for more U.S. interest rate hikes amid surging inflationary pressures and signs a weakening global economy.

Sanyal also said India’s inflation was almost entirely imported and, as an oil importer, something it could do little in the short term to control. Global oil and other energy costs have spiked this year, driven higher by the impact of the war in Ukraine and broader supply chain issues. [O/R]

Sanyal said he believed India’s current account deficit was in a comfortable position and, asked if a curb on non-essential imports was being considered, added: “The government will respond flexibly to the situation as it evolves.”

Sanyal also said India was treating crypto instruments as assets not currencies, and that their regulation would need global coordination.

(The Reuters Global Markets Forum is a chat room hosted on the Refinitiv Messenger. Join GMF: https://refini.tv/33uoFoQ)

(Reporting by Savio Shetty, Divya Chowdhury, Swati Bhat in Mumbai and Aftab Ahmed in New Delhi; editing by John Stonestreet)

SEOUL (Reuters) – North Korea on Saturday condemned remarks by a senior White House official about Pyongyang’s cyberattack capabilities and said it would continue to stand against what it called U.S. aggression towards it.

A Foreign Ministry spokesperson said that branding North Korea as a “group of criminals” revealed the true nature of Washington’s hostile policy towards North Korea.

Anne Neuberger, the U.S. deputy national security advisor for cyber and emerging technology, reportedly said on Wednesday that the North Koreans were a criminal syndicate pursuing revenue “in the guise of a country”.

North Korea is widely believed to have thousands of trained hackers and stealing of cryptocurrencies has become a major source of funding for the sanctions-hit country and its weapons programmes.

“After all, the U.S. administration has revealed the true picture of its most vile hostile policy, once covered under the veil of ‘dialogue with no strings attached’ and ‘diplomatic engagement’,” state news agency KCNA said, citing the foreign ministry spokesperson.

“In a similar fashion, the DPRK will face off the U.S., the world’s one and only group of criminals.”

(Reporting by Cynthia Kim, Editing by Angus MacSwan)

WASHINGTON (Reuters) – The U.S. Securities and Exchange Commission is working to get some so-called cryptolending companies properly registered if they operate more as an investment firm, the head of the federal regulator told CNBC in an interview on Thursday.

SEC Chairman Gary Gensler also said it was up to large financial institutions to decide whether they want to include crypto options in their portfolios for clients, but that the risks of crypto tokens need to be made public.

(Reporting by Susan Heavey)

By Hyunjoo Jin and Nivedita Balu

(Reuters) – Tesla Inc on Wednesday reported a higher-than-expected quarterly profit as a string of price increases on its best-selling electric vehicles helped offset production challenges caused by COVID-19 lockdowns in China.

Chief Executive Elon Musk said he expects inflation will begin to ease by the end of the year, and he told a conference call that Tesla does not have a demand problem.

He dismissed the idea that global economic problems were hurting interest in Tesla, despite vehicle prices’ rising to what he called “embarrassing levels.” The U.S. price of Tesla’s Model Y long-range version, now $65,990, is up more than 30% since the start of 2021.

The company promised a “record-breaking second half” to the year and reiterated its goal of 50% average annual growth in vehicle deliveries over a multi-year horizon, but did not give specific targets for 2022 deliveries.

Shares of Tesla were up about 1% in after-hours trade. The shares are down about 40% from their peak in November.

Tesla’s China factory ended the second quarter with a record monthly production level. Musk said new factories in Berlin and Texas aimed to produce 5,000 cars a week by the end of the year, adding that Berlin produced 1,000 cars a week in June.

Musk previously had said the new factories were “gigantic money furnaces” and that he had “a super bad feeling about the economy.”

“We are prepared for near-term margin headwinds due to (new) challenges with ramping new production, particularly in Berlin,” Morgan Stanley said in a report after Tesla’s earnings announcement.

Executives acknowledged some continuing tightness in supplies of older-generation microchips, but said there were no major problems in supplies of chips and batteries barring unforeseen COVID-related shutdowns.

The EV maker posted an adjusted profit of $2.27 per share for the quarter versus analysts’ consensus estimates of $1.81.

Its automotive gross margin fell to 27.9%, down from a year earlier and the preceding quarter, amid inflationary pressure.

“Tesla’s solid quarter is the latest sign that it has done an outstanding job navigating through global supply chain and logistics challenges, weathering the storm better than most legacy automakers,” said Jesse Cohen, senior analyst at Investing.com

BITCOIN TO CASH

Tesla said it has converted approximately 75% of its bitcoin purchases into fiat currency, which added $936 million of cash to its balance sheet. Musk on the conference call said the sale was made to increase liquidity when Tesla was uncertain about how long the COVID-19 lockdown in China would continue. Tesla has not sold any of its holdings of the Dogecoin cryptocurrency.

“This should be not taken as some verdict on bitcoin,” he said, adding that Tesla is open to increasing its cryptocurrency holdings in the future.

Musk had said in May last year that Tesla would not sell its bitcoin.

“The bitcoin losses point out an important part of the Tesla investment case – its eccentric owner. While Musk’s impressive innovation has served the company well, his personal flair is starting to raise governance questions,” said Laura Hoy, analyst at Hargreaves Lansdown.

Total revenue fell to $16.93 billion in the second quarter from $18.76 billion a quarter earlier, ending Tesla’s streak of posting record revenue in recent quarters.

Analysts were expecting revenue of $17.10 billion, according to IBES data from Refinitiv.

(Reporting by Hyunjoo Jin in San Francisco and Nivedita Balu in Bengaluru; Editing by Anil D’Silva, Peter Henderson, Matthew Lewis and Leslie Adler)

By Hannah Lang

NEW YORK (Reuters) – Bitcoin rebounded after a brief sell-off late on Wednesday sparked by news that electric carmaker Tesla Inc had sold about 75% of its holdings of the virtual token.

Tesla Chief Executive Elon Musk cited concerns about his company’s “overall liquidity” as the reason for the sale.

The world’s largest cryptocurrency was last up 1.04% at $23,494.57, after sliding as much as 0.5% to $23,268.92 on the news.

Tesla sold $936 million worth of bitcoin in the second quarter, more than a year after the company bought $1.5 billion of the cryptocurrency at the peak of its massive growth and popularity.

Musk has been an outspoken supporter of cryptocurrencies. His statements on the future of crypto and disclosures about his ownership of digital assets often boost the price of dogecoin and bitcoin.

On Tesla’s earnings call, Musk said the primary reason for the sale was uncertainty about lockdowns due to COVID-19 in China, which have created production challenges for the company.

“It was important for us to maximize our cash position,” Musk said. “We are certainly open to increasing our bitcoin holdings in future, so this should not be taken as some verdict on bitcoin. It’s just that we were concerned about overall liquidity for the company.”

Musk added that Tesla did not sell any of its dogecoin, a meme-based cryptocurrency that he has touted.

Tesla accepted bitcoin as payment for less than two months before stopping in May 2021. Musk has said the company could resume accepting bitcoin once it conducts due diligence on the amount of renewable energy it takes to mine the currency.

Bitcoin has been in recovery mode so far this week, in line with the stock market, as investors appear more optimistic about the U.S. Federal Reserve’s ability to rein in decades-high inflation.

(Reporting by Hannah Lang, Gertrude Chavez-Dreyfuss and Nivedita Balu; Editing by Marguerita Choy, Richard Pullin and Richard Chang)