Katherine Ross

“It is time” for <a href="https://blockworks.co/tag/blockfi">BlockFi</a> creditors to know what BlockFi was and who former CEO “Zac Prince truly is,” BlockFi’s Official Committee of Unsecured Creditors said in a new court filing.&nbsp;



The UCC is pushing for the court to either appoint a Chapter 11 trustee, terminate the exclusivity periods for the debtors or convert the cases to Chapter 7 proceedings.&nbsp;



Voyager, Celsius and even FTX customers understand the majority of what happened to the respective companies through the collapses. However, the UCC argues, BlockFi customers do not yet have a clear understanding of <a href="https://blockworks.co/news/blockfi-bankruptcy-exit-plan">what happened which is “facilitating case mischief.”</a>



$16 million per month is being burned on BlockFi’s cases, according to the filing.



A Chapter 11 trustee is necessary, the UCC says, because “the Investigative Report reveals, in great detail, that BlockFi (Mr. Prince in particular) perpetrated a fraud on customers.”



Read More: <a href="https://blockworks.co/news/how-blockfi-went-from-tech-unicorn-to-crypto-burnout">How BlockFi Went From Tech Unicorn to Crypto Burnout</a>



BlockFi’s debtors also “broke their own promises to customers by liquidating nearly $240 million in customers’ crypto.”



However, the Court could also open up the plan exclusivity. The UCC claims that BlockFi took too long to propose a plan — with the cases lasting seven months, with <a href="https://blockworks.co/news/blockfi-reorganization-plan-approval">two plans “dead on arrival.”</a>



The UCC also claims that the debtors “resorted to their illegal and utterly cockamamie solicitation (smear) campaign a month ago” which “spread lies” to the customer base — spanning over 600,000 investors — and skirted the UCC.



And, finally, the court could convert the case to a Chapter 7 case. 



A Chapter 7 would allow for the liquidation of a “debtor’s nonexempt property and the distribution of the proceeds to creditors,” <a href="https://www.uscourts.gov/services-forms/bankruptcy/bankruptcy-basics/chapter-7-bankruptcy-basics">according</a> to the US courts. 



UCC says that mediations have now failed, and both the debtors and the UCC are “at a complete standstill” and the debtors “shill” for the insiders — which would include Prince.



This is not the first time that the <a href="https://blockworks.co/news/blockfi-halts-plan-to-return-crypto">debtors and creditors have had public disagreements</a>. In February, debtors accused the creditors of being “divorced from reality” and the creditors accused the debtors of throwing a “temper tantrum.”



Last week, the <a href="https://blockworks.co/news/sec-foregoes-blockfi-penalty">SEC announced that it would</a> “forego” the $30 million penalty from BlockFi until investors have been repaid. The bankrupt lender <a href="https://blockworks.co/news/blockfi-customer-withdrawals-summer">plans to open up customer withdrawals</a> sometime this summer. 



BlockFi <a href="https://blockworks.co/news/blockfi-files-for-bankruptcy">filed for bankruptcy in November of last year</a> after FTX collapsed.



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BlockFi’s UCC claims former CEO Zac Prince ‘personally profited’ from company

Michael Bodley

In its latest foray into the cryptocurrency industry, asset management giant Franklin Templeton is exploring the world of blockchain private equity.



An SEC filing on Tuesday registered the Franklin Templeton Blockchain Fund II with the US financial regulator — one key indicator that the firm is looking to raise institutional capital for the new commingled vehicle.&nbsp;



Franklin Templeton representatives designated the vehicle as a private equity fund with the SEC. This is a separate categorization from a liquid cryptocurrency hedge fund setup, for instance. The private equity fund also differs from a blockchain-focused venture capital vehicle, which <a href="https://blockworks.co/news/franklin-templeton-prepping-blockchain-fund">the asset manager previously established</a> in the fourth quarter of 2021.



A spokesperson for Franklin Templeton declined to comment on Wednesday, citing private placement regulations.&nbsp;



This is the latest move into institutional crypto products by the firm’s institutional investment arm. Its <a href="https://blockworks.co/news/franklin-templeton-preps-first-institutional-crypto-accounts">crypto separately managed account (SMA) push</a> started taking shape in the fourth quarter of 2022.&nbsp;



Franklin Templeton, which oversees some $1.4 trillion in assets under management, has also gotten involved in other crypto-related products, including <a href="https://blockworks.co/news/stellar-foundation-head-bullish-stablecoin-law">its money-market fund that taps the Stellar blockchain’s tech stack</a>. More recently, the asset manager moved to tokenize one of its funds on Polygon, The Defiant <a href="https://thedefiant.io/templeton-money-fund-polygon">reported</a>. 



Specific strategy details and fundraising aspirations of the private equity-focused Franklin Templeton Blockchain Fund II remain under wraps. However, the SEC filing indicates that the vehicle imposes a $100,000 minimum on its investors.&nbsp;



Interest in industry private equity plays more broadly appears to be holding strong on the heels of <a href="https://blockworks.co/news/10t-tapiero-launching-crypto-firm">a number of substantial new raises earlier this year</a>.&nbsp;



Generally speaking, limited partners in private equity investments often exceed minimum investment amounts in their contributions. However, the six-figure minimum investment for Franklin Templeton Blockchain Fund II is relatively modest compared to traditional asset classes in conventional private equity.



That said, cryptocurrency market capitalizations and related private investment opportunities point to opportunities to deploy relatively small sums of capital for potentially outsized returns, industry participants say.&nbsp;



Franklin Templeton’s fund, according to the filing, is not intended to remain open for longer than a 12 month period.&nbsp;



It comes as crypto markets, on the whole, have continued to mark a 2023 upswing.



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Blockchain Private Equity Fund Franklin Templeton’s Latest Crypto Ambition

Sebastian Sinclair

Bitcoin sprung to life Wednesday, pushing the majority of holders into profit — and propelling traders into the green across derivative and spot cryptocurrency plays.



Digital assets’ direction has been pivoting with regulation in the works, digital asset services firm Bit0oda told Blockworks. It&#8217;s not the only factor at play. 



“On the long-term path toward realizing crypto’s long-term potential, the crypto ecosystem could see regulatory volatility through 2023,” the firm said in a statement.&nbsp;



Not to mention that earnings season has slowed with the February Federal Reserve meeting fading into the rearview mirror. And then there’s the matter of trader chatter kicking up around Hong Kong’s move to bring crypto service providers into the same regulatory fold as traditional financial players.  



<figure class="wp-block-embed is-type-rich is-provider-twitter wp-block-embed-twitter"><div class="wp-block-embed__wrapper">
<blockquote class="twitter-tweet" data-width="550" data-dnt="true">On June 1st, 2023, Hong Kong will officially make crypto purchase &amp; sell, trading, fully legal for all of its citizens Expect a huge influx of big money from the East Asian currency based stablecoin coming out of HK will be a certainty as well&mdash; Crypto熊猫 (@NoodleofBinance) <a href="https://twitter.com/NoodleofBinance/status/1625941125487017989?ref_src=twsrc%5Etfw">February 15, 2023</a></blockquote><script async src="https://platform.twitter.com/widgets.js" charset="utf-8"></script>
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Bullish sentiment related to Hong Kong and spreading appears to be based on publicly available information from December. Hong Kong regulators have <a href="https://www.coindesk.com/policy/2023/01/11/hong-kong-to-propose-approved-set-of-crypto-tokens-for-retail-trading-reuters/" target="_blank" rel="noreferrer noopener">rolled</a> out a <a href="https://www.coindesk.com/consensus-magazine/2023/01/25/asia-crypto-regulation/" target="_blank" rel="noreferrer noopener">number</a> of other crypto initiatives — including a<a href="https://blockworks.co/news/hong-kong-contemplates-ban-on-algorithmic-stablecoins"> proposal to ban algorithmic stablecoins</a>. That centered on the government’s legislative <a href="https://www.info.gov.hk/gia/general/202301/09/P2023010900250.htm" target="_blank" rel="noreferrer noopener">framework</a>, slated to take effect June 1, which seeks to allow certain crypto service providers under the same <a href="https://www.cr.gov.hk/en/publications/docs/es32022262516-e.pdf" target="_blank" rel="noreferrer noopener">regulatory</a> umbrella as banks.&nbsp;&nbsp;



It comes as US-based Interactive Brokers has <a href="https://www.coindesk.com/business/2023/02/15/interactive-brokers-rolls-out-btc-eth-trading-to-professional-investors-in-hong-kong/" target="_blank" rel="noreferrer noopener">moved</a> to team up with crypto exchange OSL Digital Securities in a joint Hong Kong crypto push.&nbsp; Regional bitcoin flows from North America to Eastern Asia rose to $7.7 million over a seven-day average, indicating some traders had begun to move assets from region to region, Chanalysis <a href="https://markets.chainalysis.com/?range=30&amp;asset=BTC#demand-exchange-flows" target="_blank" rel="noreferrer noopener">data</a> show.



The industry’s total market cap spiked 6.8% on Wednesday alone, according to <a href="https://www.coingecko.com/en/global-charts" target="_blank" rel="noreferrer noopener">CoinGecko</a> data — from around $1.07 billion to $1.15 billion on the day.



<h3 class="wp-block-heading">Options, options</h3>



There’s also been a significant increase in aggregate open interest following the release of the US CPI data this week, according to Toby Chapple, head of trading at Zerocap of Australia.&nbsp;



<a href="https://blockworks.co/price/btc">BTC’s</a> open interest alone has risen by over $1 billion from $7.5 billion to $8.5 billion.



<figure class="wp-block-image"><img decoding="async" src="https://lh6.googleusercontent.com/dAxLzdazapXQrznSh-8GNpMvQDAw4MhquI5SXC44PqhCXaAdbZE1Nw2lzBZxwOEtmBQxTD6etSIl-ulENT1Lqi9TWGeMN5cRfZ_Lbj8vGS_RFWWrYHUNRflJ-Bl-q5_sZxOjgvjInHXl89Hp4OT3mNA" alt=""/></figure>



“The most telling market dynamic is the inverted put-call skew in the options market,” Chapple told Blockworks. “The seven-day calls option implied volatility vs put option is showing a very large swing to call buying, implying that the market has swung very hard to a bullish stance by market participants.”



According to data from <a href="https://markets.chainalysis.com/?range=30&amp;asset=BTC#demand-exchange-flows" target="_blank" rel="noreferrer noopener">Chainalysis</a>, BTC&#8217;s total flows recorded its highest one-day increase in over 70 days, surging from 85,800 BTC to around 139,400 BTC.&nbsp;



Data from crypto intelligence firm <a href="https://app.intotheblock.com/coin/DOGE/deep-dive?group=all&amp;chart=all" target="_blank" rel="noreferrer noopener">IntoTheBlock</a> show, of roughly 29.2 million wallet addresses holding the asset, around 66% are in the money. Just 22% of those addresses are posting losses.



A majority bought in at an average of $18,800 — good for an increase of around 30% to bitcoin’s current floor.&nbsp;



Trade volume across all assets rose to $120 billion — the highest point in more than six days — data provided by <a href="https://sigdev.thetie.io/coins" target="_blank" rel="noreferrer noopener">TheTie</a> show.



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As Traders Eye Hong Kong’s Crypto Moves, Bitcoin Breaks Above $24K

John Gilbert

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<h2 class="wp-block-heading">Introducing Reserve</h2>



<iframe loading="lazy" width="560" height="315" src="https://www.youtube.com/embed/JOy0wCVhnwM" title="YouTube video player" frameborder="0" allow="accelerometer; autoplay; clipboard-write; encrypted-media; gyroscope; picture-in-picture" allowfullscreen=""></iframe>



<h2 class="wp-block-heading">Series Table of Contents</h2>



Part 1:&nbsp;<a href="https://blockworks.co/news/how-broken-monetary-policy-fuels-instability">What’s broken</a> Why unstable money isn’t safe for the world and how to understand monetary policy Part 2:&nbsp;<a href="https://blockworks.co/news/the-investors-guide-to-stablecoins">What are people doing today about it?</a> A dive deep into the types of monetary policy alternatives that stablecoins offer Part 3:&nbsp;<a href="https://blockworks.co/news/what-is-an-inflation-hedge-finding-stability-in-todays-market">What is the right way forward?</a> A guide to the various inflation hedging tactics and how they can be used in stablecoins Part 4:&nbsp;<a href="https://blockworks.co/news/what-it-takes-to-tokenize-the-world">What will the future look like?</a> A look at how tokenization will change the stablecoin ecosystem About our sponsor:&nbsp;<a href="https://blockworks.co/news/about-our-sponsor-reserve">Reserve</a> A video explaining the Reserve Protocol



<h2 class="wp-block-heading">The protocol and services</h2>
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The <a href="https://reserve.org/">Reserve protocol</a> is a self-service, permissionless factory where anyone can build, deploy and govern their own asset-backed stablecoins (RTokens), which can be integrated within DeFi and real world commerce.



Their long-term goal is to create non-inflationary currencies that remains stable both month-to-month as well as century-to-century. In addition to their protocol, Reserve also launched a pay app called the <a href="https://reserve.org/en/app/about_app/">Reserve App</a>. It is a user-friendly way for ordinary people to buy RTokens with their local currencies and use them in locally. More than $300m a month is transacted on the platform, mainly real people and companies using Reserve to escape inflation.

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