Tag: Economic News

By Medha Singh and Lisa Pauline Mattackal

(Reuters) – Beleaguered bitcoin miners are finally feeling the spring sunshine after a cold, hard crypto winter.

The power-hungry companies that pump new bitcoin into circulation have been thrown a lifeline by the cryptocurrency’s rally to above $30,000 this year, which has conspired with falling electricity prices to boost their profitability.

The 30-day average of mining revenues has risen to $27.34 million a day, the highest level since last June, according to data from Blockchain.com.

That’s a relief for miners that struggled to service large debt burdens as revenues languished between $15 million and $21 million for most of the second half of 2022. They’re still some way off a peak of $61.2 million hit in November 2021, though.

“Many public miners were on the brink of bankruptcy at the end of last year. At the current bitcoin price, these companies’ cash flows have substantially improved and most of them should have no problem paying their obligations,” said Jaran Mellerud, analyst at bitcoin mining services company Luxor.

Miners’ debt-to-equity ratios now look much healthier, said Mellerud, adding that many companies had restructured and paid down debt over the past few months.

Marathon Digital Holdings’ debt-to-equity ratio has dropped to 0.5 from 2 since the start of this year, for example, while Greenidge Generation Holdings’ has dropped to 5.8 from 11.7, according to data from Luxor.

The spring thaw has seen investors flock back to publicly traded crypto mining companies; Among the biggest players, Marathon and Riot Platforms have seen their share price more than triple this year, while the Valkyrie Bitcoin Miners ETF is up 162% and Greenidge has gained 137%. But they’ve all still lost money since early 2022.

Bitcoin mining is the process by which a network of computers validates a block of transactions on the blockchain. Miners are rewarded with bitcoin for completing a block, competing against other miners by solving intricate maths puzzles with energy-intensive computing systems, meaning electricity comprises a significant chunk of their operating costs.

Declines in power prices, particularly in the U.S., have eased pressure on company margins, according to analysts at BTIG, who said the electricity cost for producing one bitcoin has fallen about 40% from the end of last year.

That means that despite both the computing power available on the network and mining difficulty rising steadily to new all time highs – meaning it should take more power to mine one block – the 30-day average cost-per-transaction for miners has fallen to its lowest level since September, Blockchain.com data showed.

 

(Graphic: Robust growth in revenue – https://www.reuters.com/graphics/FINTECH-CRYPTO/WEEKLY/klpygmobapg/chart.png)

 

OUT OF THE WOODS?

Miners can’t get too cozy though, given their fortunes are tied to bitcoin’s capricious price trajectory.

“If we see bitcoin top out and consolidate, the run-up in miners may do the same, we expect to see more volatility as we head into summer,” said Kevin Kelly, head of research at Delphi Digital, although he sees a favorable environment for crypto persisting through 2023, compared with last year.

Despite improvements in their balance sheets, many miners still have plenty of debt to pay down and are still struggling, said Luxor’s Mellerud.

“The bitcoin price increase has bought these companies time, but it would be detrimental for these companies if it were to fall back down to $20,000,” he said.

Most companies are focusing on debt reduction rather than spending on new equipment, BTIG said, even as the estimated cost of new mining rigs has dropped around 69% since the end of 2021.

There are some exceptions however, with CleanSpark taking advantage of falling prices to purchase of 45,000 new mining rigs, which would nearly double its computing power.

A rapid rise in power prices or a fast fall in bitcoin could usher in a new cold spell. For now though, the sun is shining.

“I don’t think we’re completely out of the woods, but I think the worst is behind us,” said Marcus Sotiriou, analyst at digital asset broker GlobalBlock..

 

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

By Herbert Lash and Harry Robertson

NEW YORK/LONDON (Reuters) – The dollar rose on Monday after New York state factory activity in April increased for the first time in five months, helping bolster expectations the Federal Reserve will raise interest rates in May.

Also bolstering the dollar was a report showing confidence among U.S. single-family homebuilders improved for a fourth straight month in April.

The dollar index, a measures of the currency against six major peers, rose 0.413% after the Empire State Manufacturing index shot to 10.8 from -24.6 in March, far higher than expectations of -18 in a Reuters poll of 35 economists.

The new orders index rose 47 points to 25.1, while the shipments index added 37 points to 23.9, substantial increases after they had declined in recent months, the New York Fed said.

“It’s the best reading since last July with a big jump in orders and has taken the dollar higher on this,” said Marc Chandler, chief market strategist at Bannockburn Global Forex in New York.

“The economy still looks like it’s growing above what the Fed says is its speed limit,” he said. “The market is under-estimating chances of another hike after May. Now the market says the Fed is going to cut later, but I think that the economy is showing itself to be resilient.”

GRAPHIC: Empire State https://www.reuters.com/graphics/USA-STOCKS/zdvxdawervx/empirestate.png

Futures trading showed the probability of the Fed raising its lending rate to a range of 5.00%-5.25% when policymakers conclude a two-day meeting on May 3 rose to 88.7% from 78% on Friday, CME Group’s FedWatch Tool showed.

Fed funds futures also showed that expectations the Fed will start cutting rates later this year were pushed back to November from September, with a smaller cut now anticipated.

The outlook of U.S. interest rates relative to the monetary policies and economies of other countries can boost or erode the dollar’s value.

The euro slid 0.66% to $1.0926 after hitting a one-year high of $1.108 on Friday. Traders expect further interest rate hikes from the European Central Bank as last month’s banking crisis fears have faded.

The yen weakened 0.45% at 134.40 per dollar as the Bank of Japan stuck to its easy-money policies, helping the greenback rise to its highest level since March 15.

“The dollar has bounced back but also we’ve had comments from the Bank of Japan indicating that there is no real reason for them to pull back from their ultra easy policy,” said Jane Foley, head of FX strategy at Rabobank.

New Bank of Japan Governor Kazuo Ueda last week made clear that the country would remain a “dovish” outlier by keeping interest rates at ultra-low levels for the time being.

GRAPHIC: Dollar hits one-month high against yen https://www.reuters.com/graphics/GLOBAL-FOREX/jnpwylzabpw/chart.png

Sterling was last trading at $1.2374, down 0.31% on the day.

The Mexican peso lost 0.11% versus the dollar to trade at 18.04, while the Canadian dollar fell 0.25% versus the greenback to 1.34 per dollar.

(Reporting by Herbert Lash, additional reporting by Harry Robertson in London; Editing by Muralikumar Anantharaman, Mark Potter and Andrea Ricci)

By Chris Prentice and John McCrank

NEW YORK (Reuters) – The head of the U.S. Securities and Exchange Commission (SEC) plans to defend its rulemaking and policing of market misconduct at a Tuesday hearing led by Republican lawmakers who have accused it of overstepping its authority.

Having won control of the House of Representatives last year, Republicans now have a pulpit to try to constrain President Joe Biden’s administrative oversight of key financial issues. Some in the finance industry have joined in the criticism, saying the SEC is going too far in its reforms and not taking time for industry feedback.

But SEC Chair Gary Gensler, who has helmed the agency since April 2021, underscored the agency’s rulemaking work as “grounded in legal authorities granted by Congress” in testimony prepared for Tuesday’s House Financial Services Committee hearing.

The SEC has proposed a stock market overhaul and laid out plans to require companies to disclose climate-related risks, among numerous other reforms.

“Forsaking investor protection puts real people’s life savings at risk. The goal is to protect our ‘clients’: U.S. investors,” he said in the prepared remarks.

But the U.S. Chamber of Commerce, which represents businesses, in a letter last week said the agency’s rulemaking under Gensler is “torrential, disjointed and rushed.”

Republican SEC Commissioner Hester Peirce has also criticized the agency’s agenda and engagement with industry.

“Today’s Commission treats the notice-and-comment rulemaking process not as a conversation, but as a threat,” she said at a public meeting to discuss a proposed reform that could usher in major change for cryptocurrency firms.

The SEC has also actively policed market misconduct, levying record penalties in the last fiscal year.

Progressive lawmakers and investor advocates have praised the SEC and pushed for Congress to give the agency more resources.

The “SEC is making significant progress in its mission to protect investors and maintain fair, orderly, and efficient markets,” Stephen Hall, legal director and securities specialist at Better Markets, said in a statement.

(Reporting by Chris Prentice; Editing by Aurora Ellis)

By Jody Godoy

(Reuters) – Celebrities who promoted FTX, including NFL quarterback Tom Brady and comedian Larry David, said an investor lawsuit seeking damages in the wake of the cryptocurrency exchange’s collapse should be dismissed.

The proposed class action in Miami alleges that FTX yield-bearing accounts were unregistered securities that were unlawfully sold in the United States, which required the promoters to disclose the compensation they received.

The lawsuit seeks damages from FTX founder Sam Bankman-Fried alongside several celebrities who promoted FTX including David, the creator of TV shows “Seinfeld” and “Curb Your Enthusiasm.” It also seeks damages from a National Basketball Association team that promoted FTX, the Golden State Warriors.

The celebrities and the Warriors said in court papers filed on Friday that they had never pitched the accounts at issue in the case and did not cause the investors’ losses.

They said that under the investors’ theory, “actors in any brokerage ad would be liable for selling any security that an individual user later purchased using the brokerage’s services.”

“That’s nonsense,” the celebrities said.

A lawyer for the investors did not immediately reply to a request for comment.

David starred in a commercial for FTX that aired during the 2022 Super Bowl in which he portrayed fictional characters dismissing important innovations throughout history and ended with the message “Don’t Miss Out on Crypto.”

Bankman-Fried argued in court papers that the case against him should be paused while he fights criminal charges in New York. The investors did not oppose the request, he said.

Prosecutors have charged Bankman-Fried, 31, with stealing billions of dollars in FTX customer funds to plug losses at Alameda Research, and making tens of millions of dollars in illegal political donations to buy influence in Washington, D.C. He has pleaded not guilty.

The case is Garrison v. Bankman-Fried et al., No. 22-23753, U.S. District Court, Southern District Of Florida.

(Reporting by Jody Godoy in New York; Editing by Matthew Lewis)

(Reuters) – The U.S. Securities and Exchange Commission charged cryptocurrency exchange Bittrex Inc and its former CEO with operating an unregistered national securities exchange, broker and clearing agency.

The SEC also charged Bittrex’s foreign affiliate, Bittrex Global GmbH, for failing to register as a national securities exchange in connection with its operation of a single shared order book along with Bittrex.

(Reporting by Hannah Lang in Washington, Editing by Franklin Paul)

By Chris Prentice

NEW YORK (Reuters) – The U.S. Securities and Exchange Commission (SEC) on Friday will weigh reopening a 2022 proposal that would expand the definition of an “exchange” following pushback from the cryptocurrency industry which fears being ensnared.

The commissioners are expected to take a rare public vote on whether to ask for more comments from the public on the plan. Crypto firms have questioned whether the changes would cover their industry, including decentralized finance, or DeFi, platforms.

The regulator’s January 2022 proposal would expand the definition of an exchange to include platforms that use “communication protocols” such as request-for-quote systems. The change, if adopted, is expected to capture many more venues beyond traditional exchanges that bring together orders from multiple buyers and sellers in a marketplace.

Typically, commissioners would decide behind-the-scenes if extending a public comment period is necessary.

The proposal has stoked already rising tensions between the crypto industry and the SEC. Crypto firms, which have complained about the SEC’s failure to provide regulatory certainty for their industry, said the proposal was vague and would give the SEC a tool to pull Defi platforms within its oversight.

Some DeFi platforms may fall under the proposed definition, but others may already be considered exchanges by the existing definition, SEC officials said this week.

The officials estimated about dozen crypto firms would fall under the expanded definition, but declined to provide any more specifics about which firms.

“Make no mistake: many crypto trading platforms already come under the current definition of an exchange,” SEC Chair Gary Gensler said in prepared remarks published on Friday.

Most crypto trading platforms meet that definition, regardless of whether they call themselves decentralized, Gensler said.

The SEC plans to give more information on what trading systems for crypto securities would be included in the proposed definition.

(Reporting by Chris Prentice; Additional reporting by Hannah Lang; Editing by Sharon Singleton)

TOKYO (Reuters) – Following the Bank of Japan’s launch this month of a pilot programme to test the use of a digital yen, the Ministry of Finance plans to convene a meeting of experts on April 21 to discuss the way forward.

The nine experts, who include academics, economists, a lawyer and a consumer group representative, will meet regularly, and compile a report by the end of this year.

Central banks around the world have scrambled to develop digital currencies to modernize financial systems and facilitate domestic and cross-border payments.

But Japan remains undecided on whether to issue a central bank digital currency (CBDC), and the BOJ has said the pilot programme may last for several years.

“We understand the BOJ’s study is making a steady headway,” a finance ministry official told reporters. “However, we have not at all decided on whether Japan will issue a CBDC.”

The BOJ and Financial Services Agency will attend the panel sessions as observers.

(Reporting by Tetsushi Kajimoto; Editing by Simon Cameron-Moore)

By Elizabeth Howcroft

LONDON (Reuters) – Cryptocurrency investors are facing delays to withdraw funds deposited on the Ethereum blockchain after its major software upgrade, highlighting persistent headaches for Ethereum which aims to have the technology widely used for instant payments.

The software upgrade, known as “Shapella,” was set to unlock more than $30 billion worth of ether, the second-biggest cryptocurrency, which investors had deposited on the Ethereum blockchain in return for interest.

Until Wednesday’s upgrade, investors could not withdraw funds they had deposited via this method, known as “staking”, on the Ethereum blockchain.

As of Thursday, ether worth around $1.4 billion was stuck in a withdrawal queue, blockchain data firm Nansen said.

The delays are an example of the limits in the transactions that Ethereum can process, highlighting its potential shortcomings as it strives to become a widely-used financial infrastructure. 

The Ethereum Foundation, a body that speaks for the network, did not immediately comment.

    The delays are due to limits in the amount of transactions the blockchain can process, Nansen analyst Martin Lee told Reuters via email. It can process approximately 1,800 validator withdrawals, or 57,600 ether worth of exits per day, he said – that’s approximately $115 million.

The limits on validator withdrawals were in place for security reasons, Lee said.

“In an extreme scenario, if there’s no limits, and a large majority of validators exit, the Ethereum network would be vulnerable to attacks and bad actors,” he said.

Ethereum has grown popular for offshoots of the crypto market such as so-called decentralised finance or NFTs, but it has yet to become used in mainstream payments, finance or commerce.

The major Binance exchange said users would be able to withdraw their ether from its staking product from April 19, and that it may take “15 days to several weeks” to process these transactions.

“Due to the processing limitations on the Ethereum network, Binance will set a daily ETH redemption quota for each Binance user,” Binance said on its website.

Nansen’s Lee said the backlog will likely take weeks to clear, after which depending on what the average daily “unstaking” amount is, it would take just hours or a couple of days.

(Reporting by Elizabeth Howcroft, editing by Tom Wilson and Emelia Sithole-Matarise)

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

https://fingfx.thomsonreuters.com/gfx/mkt/dwvkdjjkkpm/Screenshot%202023-04-13%20082159.png

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

https://www.reuters.com/graphics/FINTECH-CRYPTO/WEEKLY/xmvjkjlmxpr/chart.png

‘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)