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21/12/2022

Binace might go under

12/11/2022

According to Coinbase CEO Brian Armstrong, crypto markets require regulation to avoid more washouts like FTX.

IMPORTANT NOTES
According to Coinbase CEO Brian Armstrong, crypto regulation in the United States has been difficult to navigate, and regulators have so far failed to provide a workable framework for how these services can be offered in a safe, transparent manner.
This encourages crypto operations to establish themselves outside of the United States, where regulation and enforcement are frequently lax.

FTX, until recently one of the world's largest crypto exchanges, declared bankruptcy on Friday after revelations about its business practices resulted in a surge of customer withdrawals with insufficient funds to cover those withdrawals.

Coinbase has no material exposure to FTX, but I sympathize with everyone involved in the current situation. It's stressful in our industry any time there's the possibility of customer loss, and a lot of people are losing a lot of money as a result of FTX's problems.

It's also critical to understand why this happened — and what needs to change to prevent something like it from happening again.

The failure of FTX appears to be the result of risky, unethical business practices, such as conflicts of interest between closely related entities and decisions to lend customer assets without permission. These activities occur in traditional financial markets as well, and blockchain technology will make them easier to track and prosecute in the future.

Following this week's events, there are already calls for more regulation of the cryptocurrency industry, with tighter restrictions on access and innovation. The issue is that, thus far, US regulators have refused to provide clear, sensible crypto regulations that would protect retail investor.

It's also critical to understand why this happened — and what needs to change if we want to avoid it in the future. Crypto regulation in the United States has been difficult to navigate, and regulators have so far failed to provide a workable framework for how these services can be offered in a safe, transparent manner. This means that many crypto-based financial products, such as lending, margin trading, short selling, and other tools that are fully legal and regulated in traditional financial markets, are effectively prohibited in the United States. Entrepreneurial teams developing new decentralized products are hesitant to build outside of the United States for fear of being sued. They don't want to break the rules, and they don't know what the rules are right now.

Resulting in American consumers and advanced traders are active with risky, offshore platforms outside the jurisdiction — and protection — of U.S. regulators. Today, more than 95% of crypto trading is happening in overseas cyrpto exchanges.
FTX was able to do so in part because it is based in the Bahamas, a tiny island country with little regulatory oversight and ability to oversee financial services businesses. Did regulators compel FTX to behave in this manner? No. They did, however, create a situation in which FTX could take dangerous risks with no consequences.

Instead of establishing clear guidelines for crypto, US regulators have focused on regulation by enforcement, pursuing US-based companies for not following the rules without first defining those rules. Coinbase was accused of listing unregistered securities earlier this year by the SEC, which we strongly deny. It's bad for American competitiveness and bad for Americans who lose money when foreign firms fail.
All of this helps to explain why more stringent regulation would exacerbate the problem of crypto companies and users moving overseas. Instead, we need smarter regulation that protects consumers while also making the United States more appealing to crypto companies.

Despite the widespread belief that crypto companies do not want to be regulated, many, if not the majority, have been collaborating with policymakers for years. Those of us who care about the future of cryptocurrency want to see sensible regulation for centralized exchanges and custodians in the United States and other parts of the world.

Over the long-term, the crypto industry has an opportunity to build a better system utilizing decentralized finance and self-custodial wallets that don't rely depend on third parties such as exchanges. Instead, customers will be able to trust code and algorithms, and everything can be publicly audited in blockchain. Until that day , regulators must be establish clear rules that bring crypto back on-shore, encourage innovation, and protect consumers.

The United States has always taken pride in being at the forefront of new technologies and industries. Crypto's time has come, with over 200 million global crypto users and countries beginning to pilot digital currency programs and accept bitcoin as legal tender.

The United States now has a choice: lead by providing clear, business-friendly regulation, or risk losing a key driver of innovation and economic equality.

Coinbase's CEO and Cofounder is Brian Armstrong.

11/11/2022

According to a company statement posted on Twitter, Sam Bankman-cryptocurrency Fried's exchange FTX has filed for Chapter 11 bankruptcy in the United States. Bankman-Fried has also stepped down as CEO, and he has been replaced by John J. Ray III, though the outgoing CEO will remain on to help with the transition.

"The voluntary proceedings include Alameda Research, Bankman-crypto Fried's trading firm, and approximately 130 other affiliated companies.
The immediate relief of Chapter 11 is appropriate to provide the FTX Group the opportunity to assess its situation and develop a process to maximize recoveries for stakeholders," said the new FTX chief, Ray."
"The FTX Group has valuable assets that can only be effectively administered in an organized, joint process. I want to ensure every employee, customer, creditor, contract party, stockholder, investor, governmental authority and other stakeholder that we are going to conduct this effort with diligence, thoroughness and transparency," continued Ray.

He also stated that stakeholders should be aware that events have been fast-paced and that the new team has only recently been formed, and that they should review the materials filed on the docket of the proceedings in the coming days for more information.

It caps off a turbulent week for one of the industry's biggest names.

FTX went from a $32 billion valuation to bankruptcy in a matter of days, as liquidity dried up, customers demanded withdrawals, and rival exchange Binance ripped up its nonbinding agreement to buy the company. Sam Bankman-Fried, the founder of FTX, admitted on Thursday that he "f—-ed up

06/11/2022

Islamic finance is the method by which businesses and individuals raise capital in accordance with Sharia or Islamic law. It also refers to the types of investments that are permitted under this type of legislation. Islamic finance can be viewed as a distinct type of socially responsible investment. This branch of finance is still in its early stages. This article provides an overview to provide basic information and serve as a foundation for further research.
Islamic Banking in Perspective
Although Islamic finance dates back to the seventh century, it has only been formalized since the late 1960s. The tremendous oil wealth has fueled the resumption, interest in, and demand for Sharia-compliant products and practices.
side note :
The early Islamic caliphates owned better-developed market economies than the nations of Western Europe throughout the Middle Ages.
Risk sharing is fundamental to Islamic banking and finance. Understanding the role of risk-sharing in capital raising is critical. Simultaneously, Islamic finance requires the avoidance of riba (usury) and gharar (ambiguity or deception).
side note 1.1:
Riba, interest, or usury, strictly prohibited in Islam as dealing with Riba-based transactions means declaring war with Allah Almighty and His Messenger (Muhammad, peace be upon him) Sura-e-Al-Bakara (2:279). Islam is defined: as total submission to Allah Almighty without any condition.
Side note 1.2:
Gharar is ordinarily forbidden under Islam because there is a strict doctrine, of Islamic finance against transactions. Those are highly improbable or may cause any inequity or trickery against any of the parties. Some of the sales that are strictly forbidden listed below: (1) Sale of an unborn calf still in its mother's womb (2) Sale of a bird in the sky (3) Sale of a runaway cat (b) Gharar Yasir Gharar Yasir (minor gharar ) refers to a small amount of gharar which is halal, it is noticeable in almost all contracts.
According to Islamic law, lending with interest payments is a relationship that benefits the lender, who charges interest at the expense of the borrower. Money, according to Islamic law, is a tool for measuring value rather than an asset in and of itself. As a result, one should not be able to earn a living solely from money. Interest, known as riba, is a prohibited practice under Islamic law. It is haram, which means forbidden, usurious, and exploitative. Islamic banking, on the other hand, exists to further the socioeconomic goals of an Islamic community.
not that is not certain under some legal or physical position
So insurance is considered haram by most Islamic scholars, but in Islam, a third party saving you money in the event of an emergency is not, so the concept of takaful was developed. Takaful is a type of Islamic insurance in which members contribute money to a pool system to guarantee each other. Takaful insurance is based on Islamic religious law and covers health, life, and general insurance needs. Participants' claims are paid from the takaful fund.
The Islamic bank pools investors' money and assumes a share of the profits and losses. This process is agreed upon with the depositors. What does the bank invest in? A group of mutual funds screened for Sharia compliance has arisen. The filter parses company balance sheets to determine whether any sources of income to the corporation are prohibited. Companies holding too much debt or engaged in forbidden lines of business In addition to actively managed mutual funds, passive funds exist. They are based on such indexes as the Dow Jones (Islamic Market Index )and the FTSE
(*The Financial Times Stock Exchange (FTSE), now known as FTSE Russell Group, is a British financial organization that specializes in providing index offerings for the global financial markets.*)
(Global Islamic Index.)
Declining Balance Shared Equity
Declining balance shared equity calls for the bank and the investor to purchase the home jointly. It is commonly used to finance a home purchase. The bank gradually transfers its equity in the house to the individual homeowner, whose payments constitute the homeowner's equity.
Payment Plans (Murabaha)
An installment sale begins with an intermediary purchasing the home with a clear title. The intermediary investor then agrees with the prospective buyer on a sale price that includes some profit. The purchase can be made in one lump sum payment or in a series of deferred (installment) payments. This is an acceptable form of financing and should not be confused with an interest-bearing loan.
Leasing (Ijarah) (Ijarah)
Leasing, also known as Ijarah, is the sale of the right to use an object (usufruct) for a set period of time. One requirement is that the lessor retain ownership of the leased object for the duration of the lease. A lease variation, 'ijarah wa 'iqtina, calls for a lease to be written in which the lessor agrees to sell the leased object at the end of the lease at a predetermined residual value. Only the lessor is bound by this promise. The lessee is not required to buy the item.
Equities
Sharia law allows investment in company shares (common stock) as long as those companies do not engage in forbidden activities. Investment in companies may be in shares or by direct investment (private equity).
Islamic scholars have made some concessions on permissible companies, as most use debt either to address liquidity shortages (they borrow) or to invest excess cash (interest-bearing instruments). One set of filters excludes companies that hold interest-bearing debt, receive interest or other impure income, or trade debts for more than their face values. Further distillation of the screens above would exclude companies whose debt/total asset ratio equals or exceeds 33%. establishment
with "impure plus ,non-operating interest income" revenue equal to or greater than 5% would also be screened out. Finally, Islamic scholars would exclude firms whose accounts receivable/total assets equal or exceed 45%.

Fixed-Income
Retirees who want their investments to adhere to Islamic principles face a conundrum because fixed-income investments contain riba, which is prohibited. As a result, certain types of real estate investments may provide consistent retirement income while not violating Sharia law. These investments can be made directly or through a securitized vehicle, such as a diversified real estate fund.
The issuer will sell financial certificates to an investor group in a typical ijarah sukuk (leasing bond-equivalent). The group will own the certificates before renting them back to the issuer for a fixed rental fee. The rental return, like the interest rate on a conventional bond, can be fixed or floating and linked to a benchmark, such as the London Interbank Offered Rate (LIBOR). The issuer makes a legally binding promise to buy back the bonds at par value at a later date. Special purpose vehicles (SPVs) are frequently established to act as transaction intermediaries.

06/11/2022

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