Monatliches Archiv: Februar 2023

• MicroStrategy has raised $46.6 million through share sales since September.
• The company suggested the proceeds may be used to pay down debt, including its term loan with Silvergate Bank.
• Michael Saylor’s MicroStrategy had entered into an agreement with underwriter Cowen and Company in September for the sale of up to $500 million in common stock.

MicroStrategy Has Raised $46.6M Through Share Sales

MicroStrategy has raised $46.6 million via share sales since it entered an agreement with underwriter Cowen and Company in September for the sale of up to $500 million in common stock.

Use Of Proceeds

The company also updated its “use of proceeds” statement, saying money raised may also go towards repayment of debt, including its term loan with Silvergate Bank (SI). That loan – for $205 million and taken out in March 2022 – is a floating rate, and has thus gotten more expensive as the U.S. Federal Reserve has hiked short-term interest rates.

Silvergate Loan Maturity

The Silvergate loan matures in March 2025 and does have a prepayment penalty, but that penalty in March 2023 drops by half to just 0.25% of the principal balance being repaid.

Proceeds Used To Add To Bitcoin Holdings

MicroStrategy has previously mostly used proceeds from share sales to add to its bitcoin (BTC) holdings.

Michael Saylor Background

Michael Saylor is CoinDesk’s co-regional news chief, Americas and holds BTC and ETH above CoinDesk’s disclosure threshold of $1,000. He is Executive Chair at MicroStrategy which he lost big during the dot-com bubble crash but aims to rebound again through his investments into crypto assets such as Bitcoin (BTC).

• Kraken agreed to pay a $30m fine and shut down its crypto-staking service for US customers due to SEC charges of offering unregistered securities.
• The SEC announced that Payward Ventures, Inc. and Payward Trading Ltd., the registered companies that make up Kraken, will end staking services and programs.
• Former SEC Attorney Zachary Fallon discusses what this could mean for the future of SEC enforcement actions over the crypto industry.

Kraken Agrees to $30M Fine

Kraken has agreed to pay a $30 million fine and shut down its crypto-staking service for US customers due to charges from the Securities and Exchange Commission (SEC) of offering unregistered securities. The complaint alleges that Kraken had been touting an easy-to-use platform with benefits derived from their efforts on behalf of investors since at least 2019.

Payward Ventures & Payward Trading Affected

The SEC announced that Payward Ventures, Inc. and Payward Trading Ltd., the registered companies that make up Kraken, will end staking services and programs as part of the settlement agreement. Any assets staked by U.S. clients except for staked ether will be automatically unstaked, with ether being unstaked after Ethereum Network’s Shanghai upgrade takes effect.

Implications for Future Enforcement Actions

Former SEC Attorney Zachary Fallon has discussed potential implications this could have for future enforcement actions taken by the commission over the crypto industry in general terms such as clarification over who can offer securities versus who cannot or should not be able to.

CoinDesk Scoop Confirmed

The announcement confirms a CoinDesk scoop from earlier Thursday which reported on plans by Kraken to shutter its crypto staking-as-a-service platform in light of pending settlement by the regulator involving unregistered security offerings in violation of federal law.

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Bittrex Cuts 80 Jobs

• Seattle-based cryptocurrency exchange Bittrex is reducing its staff by more than 80 people due to the new economic environment.
• The market downturn triggered by multiple failures in the crypto ecosystem caused the company to reset their strategy and balance investments.
• This is part of a larger trend, with Coinbase, Gemini and other exchanges announcing layoffs as well.

Economic Impact on Crypto Exchanges

The recent economic downturn has had a massive impact on the crypto industry, leading to job losses across multiple exchanges and companies. According to CoinDesk, since April more than 29,000 jobs have been lost due to crypto industry instability. Bittrex has now joined this list with the announcement of cutting more than 80 personnel from various departments within the company.

Bittrex CEO’s Statement

In a leaked email on Twitter, Bittrex CEO Richie Lai told employees that they had been trying to reduce expenses and increase efficiencies but were unsuccessful due to „multiple failures in the crypto ecosystem“. He noted that this led to an „outright collapse“ which necessitated a resetting of strategy and balancing investments according to the new economic environment.

Other Exchanges Making Cuts

Bittrex is not alone in making such cuts; U.S.-based exchange Gemini announced a third round of layoffs in January while Coinbase said it would cut 20% of its workforce at around the same time. These developments point towards an increasingly uncertain future for many businesses operating in the crypto sector as market conditions remain volatile and unpredictable.

Conclusion

Overall, it appears that many businesses within the crypto space are struggling due to unfavorable market conditions and are having to make difficult decisions regarding staffing levels as a result. While this may be necessary for some companies‘ survival, it still creates an uncertain outlook for employees who may soon find themselves without work despite their best efforts.