Hello, and welcome to the latest edition of Overbit Insights.
Our first story looks at the messy situation of cryptocurrency regulation and exchanges down under in Australia.
According to a report from The Guardian, Rew Yeo has no idea what happened to tens of millions of dollars in Bitcoin belonging to hundreds of ACX clients, but he is determined to find out.
Since being named administrator of Blockchain Global, the business that used to manage ACX, in mid-October, the veteran insolvency practitioner Yeo has been getting a crash course in all things crypto. Reports say that associated creditors, including ACX clients and Blockchain Global's directors and management, have come forward since Yeo's appointment, claiming they are owed close to $50 million.
Based on The Guardian's report, it appears ACX isn't the first Australian exchange for having stumbled into problems in a sector that is currently patchily regulated and often without investor protections.
Exchanges have been vulnerable to failure and theft worldwide; in 2014, the Japanese operation Mt Gox collapsed after someone stole 850,000 Bitcoins from it, and in 2016, hackers stole nearly 120,000 Bitcoins from the British Virgin Islands group Bitfinex, which managed to survive and still exists today.
The Morrison government stated this week that it intends to regulate exchanges at some point in the future. After an election must be conducted by May 21, 2022, the consultation process is expected to be completed by the middle of next year. Experts agree that licensing swaps are a good concept, but they must be accompanied by enforcement.
Victims of the collapse of ACX believe regulators, notably the Australian Securities and Investments Commission, have failed them. Court proceedings are set to proceed next week, with some of the affected investors pressing forward for around $13m of the $50m.
Closing out this week's edition of Overbit Weekly Insights, we take a look at Michael Saylor's recent takes on Bitcoin, according to Yahoo Finance.
In the interview, he stated, "The only genuine danger is a black swan — an unknown unknown." "Has it been hacked?" he said, dismissing some potential problems. It hasn't been hacked in any way. Is it on the verge of being outlawed? No, it will not be prohibited. Is it possible to duplicate it? We must have duplicated it a thousand times. "Every copy has been a failure."
Despite the optimistic view, Saylor did acknowledge the recent and potential future volatility: "It's not going to go up uniformly in a perfect, exponential curve, but I don't think we'll see a world where technology slows down and I don't think we're going to see a world where currencies don't keep inflating.". In so many words, Saylor thinks Bitcoin will continue its upward trajectory.
According to Saylor, MicroStrategy is still an enterprise software firm, but it has evolved into a digital property company. He stated that the two sides complement one another.
"As an operating company, we can generate cash flows and sweep those cash flows into Bitcoin. We can finance cash flows at low cost-to-capital and that's another benefit we have as an operating company… Our employees are happier, our customers are happier, our brand has accreted one hundred times since we assumed the Bitcoin strategy," he said.
Time will tell how fruitful Saylor and MicroStrategy's "Bitcoin strategy" will pay off, but the chief executive certainly appears confident in this Yahoo Finance interview.
That's all for this week. Thanks as always for reading Overbit Weekly Insights - have a great weekend!