Digital Digest July

Babel Finance Lost $280 Million in Proprietary Trading

Babel Finance, a troubled Hong Kong-based crypto lender that suspended withdrawals last month, lost $280 million in proprietary trading activities with customer funds, according to a report by The Block that cited a restructuring proposal deck.

The firm lost around 8,000 BTC and 56,000 ETH in June with a combined market value of around $280 million. It was due to the liquidation triggered by the cryptocurrency market downturn as the company did not hedge its positions.

“In that volatile week of June when BTC fell precipitously from 30k to 20k, unhedged positions in [proprietary trading] accounts chalked up significant losses, directly leading to forced liquidation of multiple Trading Accounts and wiped out ~8,000 BTC and ~56,000 ETH,” the deck stated.

It further elaborated that a proprietary trading team of Babel operated several trading accounts that were not controlled or monitored by the company’s trading department. Moreover, these accounts did not have any trading mandate or risk controls, and neither reported profit nor losses.

Trades under these accounts were not recorded by Babel’s systems due to the lack of support for term sheets. On top of that, these accounts uncapped access to the company’s cryptocurrency wallets.

Sergei Gruzin Becomes Head of Business Development Asia at Tools for Brokers

Tools for Brokers, one of the prominent technology providers for hedge funds and retail brokers, recently announced that the company has appointed Sergei Gruzin as its Head of Business Development Asia to expand its presence in the growing APAC region.

In an official press release shared with Finance Magnates, Tools for Brokers noted that the company witnessed strong growth in the first half of 2022. With the appointment of Gruzin, Tools for Brokers is planning to meet the growing demand for new technology-driven products across the Asian markets

Gruzin joined Tools for Brokers in 2017. During the last few years, the newly appointed Head of Business Development Asia worked in different global offices of Tool for Brokers, including Cyprus, Russia, the UK, Thailand and now Singapore.

Commenting on the promotion, Ivan Egorov, the Global Head of Sales at Tools for Brokers, said: “My sincere congratulations to Sergei, who has played a major role in expanding our company’s presence and developing strong relationships with our clients and partners all over the world. We’re looking forward to continuing our expansion in the APAC region led by Sergei in his new role.”

CySEC Withdraws CIF License of Sharelink Securities & Financial Services

The Cyprus Securities and Exchange Commission (CySEC) announced on Tuesday the withdrawal of the Cyprus Investment Firm (CIF) license of Sharelink Securities & Financial Services Ltd.

It came after the company decided to 'expressly renounce' the license.

Sharelink Securities & Financial Services was operating on the CIF since mid-2003. The company offered to the provision of local and international financial services and investment banking. In addition, it offered stockbroking, proprietary trading of securities, asset management, private equity and other ancillary services.

Last year, the investment banking team of Sharelink broke off and joined Prudens Group, establishing a new corporate finance arm there.

For offering brokerage and online trading, Sharelink partnered with Argus Stockbrokers, another CySEC-regulated financial service firm. Sharelink is operating as a tied agent of Argus.

Solarisbank Announces Rebrand, Expands Operations

European fintech platform Solarisbank has recently announced that the company has changed its name to ‘Solaris’. The company noted that the rebrand represents its evolution. Amid the latest global expansion activities, the fintech platform has been able to grow its team to over 750 employees.

The latest announcement from Solaris came almost one year after the fintech firm raised EUR 190 million in an oversubscribed Series D investment round. Following the funding round in July 2021, Solaris received a valuation of EUR 1.4 billion.

Solaris achieved a combined net revenue of more than 100 million euros in 2021. Headquartered in Berlin, the fintech firm has a presence in Europe and India. Roland Folz, the Group CEO of Solaris, believes that the company has a dynamic ecosystem.

“Driven by the vision of creating a world where financial services seamlessly sync with life, the name Solaris symbolizes for us in its purest form the energy that powers us to make this dream a reality. Today, Solaris is a dynamic and constantly evolving ecosystem that grows with and simultaneously influences the market over the years,” Folz said.

Tesla Dumps 75% of Bitcoin Holdings in Second Quarter

Tesla, one of the largest institutional holders of Bitcoin, confirmed yesterday that the company has sold almost 75% of its BTC holdings in the second quarter of 2022. According to the quarterly report, Tesla dumped its Bitcoin reserves for nearly $936 million in cash.

In February 2021, Tesla entered the list of the world’s largest public-listed Bitcoin holders after the company purchased $1.5 billion worth of cryptocurrency. However, Elon Musk, the CEO of Tesla, has criticized BTC and other digital currencies in the past few months due to high energy consumption in crypto mining.

In May 2021, Bitcoin saw a dip of almost 20% after Musk called the world’s most valuable digital asset a highly centralized cryptocurrency. The latest dump by Tesla indicates a major change in the company’s overall crypto strategy.

“Quarter-end cash, cash equivalents and short-term marketable securities increased sequentially by $902M to $18.9B in Q2, driven mainly by the free cash flow of $621M, partially offset by debt repayments of $402M. As of the end of Q2, we have converted approximately 75% of our Bitcoin purchases into fiat currency. Conversions in Q2 added $936M of cash to our balance sheet,” Tesla highlighted in its recent report.