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3AC Co-founders Unveil New Exchange, LocalBitcoins to Shut Down BTC Trading Services and More



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Su Zhu, one of the co-founders of the failed crypto hedge fund Three Arrows Capital (3AC) on Thursday, confirmed on Twitter the news of the launch of Open Exchange (OPNX), whose offerings scope entails trapped user crypto funds. The disgraced crypto-preneur added in the post accompanying the official  announcement from the platform that the waitlist is currently open, giving access to an avenue for claims trading and derivatives. The newly unveiled exchange will use the FLEX token to realize its tokenomics model. Zhu said plans to build the platform arose following consultation with creditors and other key figures, including Coinflex CEO Mark Lamb, who endorsed the idea.

3AC execs launch crypto claims exchange as LocalBitcoins winds down operations

The OPNX platform – the first public marketplace for crypto claims – is backed by Kyle Davies, the other co-founder of Singapore-based 3AC, which declared bankruptcy last year. As reported earlier, the trio previously sought to raise as much as $25 million to launch a new exchange dubbed GTX, targeting the crypto claims market estimated to be worth over $20 billion. The idea drew heavy backlash from the crypto community, who expressed their disapproval of the move.

In other exchange news today, Finland-based Bitcoin exchange LocalBitcoins notified users that it is shutting down after a decade of facilitating peer-to-peer transactions. The exchange cited the harsh conditions bred by the bear market as the reason for halting services after a ten-year run which the team behind said it was proud to have been in operation. Though it primarily focused on Bitcoin in its initial days, the platform started introducing support for other alts in 2021. Along with the closure announcement, the company shared a timeline for the progressive suspension of exchange activities, with trading being halted by Feb 16. Users will still be allowed to withdraw their assets after the date until February 2024.

The P2P trading platform's shutdown is the latest blow to the crypto sector on the back of mounting regulatory pressure in several jurisdictions around the world.

Binance suspends USD withdrawals and deposits via banks

Earlier this week, Binance, the world's largest cryptocurrency exchange, notified users that it had paused all deposits and withdrawals in USD via bank transfers. The crypto exchange said it is working to reinstate the feature as soon as possible. The pause doesn't affect alternative funding methods, including Google Pay, Apple Pay, credit cards, and bank transfers in other fiat currencies such as Euros. The Binance.US team separately confirmed that its customers remained unaffected by the interruption of dollar withdrawals and deposits.

Binance CEO Changpeng Zhao said via Twitter that only a small section of Binance customers, the 0.01% of monthly active users who leverage the cash transfer option, were impacted. Nevertheless, he acknowledged that this situation presented a bad experience. Zhao noted that while some banks are stepping back from supporting crypto, others are entering the market, insisting on the need to continue developing for the long term, despite the setbacks from last year's events.

Signature Bank is retreating from the crypto scene

The dicey landscape ensuing the bankruptcy of the FTX exchange compelled Signature Bank to reduce its crypto exposure and shed off as much as $10 billion in customer deposits. Banking groups have lately been hesitant to conduct business with crypto firms amid warnings from regulators who pledged to monitor institutions that choose to work with these firms. Market regulatory bodies have especially shown keenness to prevent any potential risks posed by crypto from affecting the traditional banking system. The Federal Reserve Board, the Office of the Comptroller of the Currency (OCC), and the Federal Deposit Insurance Corporation (FDIC) have all warned of significant risks in engaging with crypto.

Coinbase CEO remarks rekindle staking conversation as a means of preserving innovation

In a lengthy post shared on Twitter late Wednesday, Coinbase exchange CEO Brian Armstrong expressed concerns about the US Securities and Exchange Commission seeking to scrap crypto staking to retailers. Armstrong went into detail on how a ‘rumored' move to abolish centralized Ethereum staking providers would stifle innovation, adding that the current approach to regulation is flawed. Ethereum staking has been a trending subject in the lead-up to the Shanghai upgrade, with liquid staking tokens like Lido benefiting the most from the narrative.

Cardano founder Charles Hoskinson also offered his views on the matter, specifically describing Ethereum staking as ‘problematic'.

” Temporarily giving up your assets to someone else to have them get a return looks a lot like regulated products […] It's sad that all proof of stake protocols might get lumped together due to a fundamental misunderstanding about the actual facts of operation and design. It's like comparing three-mile Island to a modern 4th generation nuclear reactor because they both use the word fission, the Cardano founder wrote.

Hoskinson's response came as no surprise, given the mathematician and programmer has a track record of taking jabs at Ethereum. Following the Merge completion, which saw the mainnet switch to a proof-of-stake consensus mechanism, Hoskinson said that Ethereum shouldn't be viewed as the ‘standard' PoS blockchain ecosystem.

To learn more about the two networks, check out our Ethereum vs. Cardano guide

Coinbase NFT pauses artist drops to focus on other areas within the project

Last week in a separate development, the NFT marketplace of Coinbase exchange shared an update notifying artists it has halted drops. Coinbase NFT shared in a clarification tweet that it was pausing new drops by artists on the platform. The platform denied claims that it was shutting down following news first flagged by Jessica Yatrofsky, a then Coinbase Partner who said she had received communication from the platform to indicate she could no longer release her XX GEN project.

Responding to the alert, Coinbase NFT said it was refocusing efforts on other areas within its project and not closing shop entirely. While NFT trading has taken a hit over the past several months, the Coinbase NFT marketplace has particularly been dry. From more than 1,000 daily NFT sales during the peak days of June and nearly 600 daily unique users, Coinbase NFT now averages less than 20 NFT sales each day, and the number of unique buyers has not been more than 50 on any day this year.

WeTransfer stages foray into NFT space following a partnership with Minima

In other NFT news, File hosting giant WeTransfer conveyed this week that it has delved into Web3 in an announcement also revealing a partnership with layer one blockchain platform Minima to introduce NFTs to its digital file-sharing network. This collaboration will allow users to mint digital collectibles directly from their mobile devices as Minima's blockchain peer-to-peer network is optimized for mobile use – a Minima node can run autonomously in the background. With the offering currently in its testnet phase, the NFT capabilities will be available in 180 countries when it launches next month.

Testing the potential of NFTs

Minima utilizes its native Minima token for peer-to-peer transfers on its lightweight layer one platform without the need for intermediaries. The partnership with the freemium model file-sharing platform will enable consumers to share digital assets and earn revenue in a more streamlined manner. The collaboration also aims to demonstrate the potential of NFT technology and its practical use within the crypto industry and other digital applications.

Minima CEO Hugo Feiler termed the collaboration as one that gives the layer one chain an immediate presence in the digital art industry, attracting NFT artists who can earn royalties from selling their digital artwork. Feiler added that the partnership aims to support the growth and progression of creativity in a digital era increasingly focused on ensuring individuals maintain ownership and control over their creations.

Feiler contends the partnership will also serve as a pilot to exhibit the viability of widespread adoption of NFT technology. WeTransfer now joins the ranks of other hosting providers like Google and AWS in powering blockchain-based operations on the cloud. The platform facilitates the transfer of large files, and recipients do not necessarily need an account to access the document. This likely means the platform is set up with the necessary infrastructure to seamlessly integrate to offer users the privacy they expect from blockchain technology.

Revolut Bank customers can now stake Ether and ADA in their crypto wallets

Concerns around staking in the US have made the subject a heated debate. It doesn't help that financial institutions in the US, like BankProv and Signature Bank, have been taking measures geared towards reducing their exposure to crypto. Meanwhile, Revolut Bank wants to give its European customers enhanced utilities for their crypto assets. The neo-banking platform, which gained full approval from the UK Financial Conduct Authority (FCA) to offer crypto services last September, has announced plans to empower its customers in the country and the European Economic Area with the ability to stake their crypto.

Customers could earn yields as high as 11.65% or as low as 2.99%, but the rewards are not guaranteed. The official announcement further detailed that the digital bank would support the locking of crypto in wallets for specific assets, including Ethereum, Polkadot, Cardano, and Tezos, with the minimum staking period varying per token. The staking functionality will debut this week in an initial soft testing phase, a rollout that will enable Revolut app users to earn passive income from their crypto holdings.

To learn more about Polkadot or Tezos, check out our Investing in Polkadot and Investing in Tezos guides.

Deeper into crypto

Crypto General Manager at Revolut Emil Urmanshin explained that staking is a crucial first step in the bank's 2023 roadmap, explaining that it means enhanced usability of users' crypto assets beyond just support for deposit and withdrawal transactions. Revolut's adoption of crypto has been a gradual evolution, starting with the introduction of trading capabilities for its user base in November 2017 – it has since provided trading services for nearly 100 various crypto tokens and assets.

Later in 2021, the London-based fintech firm started allowing customers to transfer their crypto assets to external wallets and platforms. Since October last year, they have been able to spend their crypto using their Revolut debit cards. To further support its user base, Revolut has been running an educational program focused on the fundamental principles of blockchain and cryptocurrencies and incentivized by free crypto. The program rolled out in July 2022 and received a remarkable response, with over a million users completing the course in its inaugural month.

Sam is a financial content specialist with a keen interest in the blockchain space. He has worked with several firms and media outlets in the Finance and Cybersecurity fields.