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Germany’s business groups alarmed over land border controls impacting economy

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Germany’s business groups are raising the alarm over fears that the country’s newly reintroduced land border controls could impact the economy.

The country’s Chamber of Commerce and Industry says companies are experiencing delays, which is especially problematic for time-sensitive goods such as food.

However, it’s not just the movement of products that is of concern, but of people.

The Chamber of Commerce in Frankfurt Oder, a border town near Poland, is advocating that workers coming into Germany pass through the checks more quickly with special government certificates.

“We have seen and experienced with the enterprises in our region that they are now having problems commuting,” said Daniel Felscher, a consultant at the Chamber of Commerce and Industry Ostbrandenburg.

“Also regarding the traffic of goods between the borders and especially with the workforce that Germany relies on in specific economic areas, we have to have those commuters, and we cannot lose them because we need them.”

Frank Huster, the managing director of the Federal Association for Freight Forwarding and Logistics (DSLV), told Euronews that his organisation was especially concerned about whether other European countries would bring back border checks.

Huster urged Germany to implement the green lanes policy that was in place during the pandemic, which allowed freight vehicles to pass through border crossings quickly.

“Road checks when entering Germany could also delay many trucks crossing the border. This also affects cross-border commuters who work in German logistics facilities. Restrictions on the free movement of persons can therefore also mean delays and cost increases for the economy,” Huster said.

“A return to barriers in Europe would be disastrous for the free movement of goods and the internal market.”

Extra checks to increase recession risk?

The extra border checks were put in place last month after the so-called Islamic State group claimed responsibility for an attack at a festival where three people were stabbed to death.

The interior ministry says the checks are meant to decrease irregular migration and stop criminals.

“We want to reduce irregular migration further, stop migrant smugglers and criminals, and detect Islamists before they can do any harm,” said Nancy Faeser.

“We continue to work closely with our neighbouring countries. We want to make sure that border control measures affect cross-border commuters and people living in the border regions, as well as businesses and commerce, as little as possible.”

The credit insurer Allianz Trade said it expected delays could decrease trade and increase the risk of a recession.

“The additional waiting times at the borders are also likely to increase transport and goods costs for imports by around 1.7% (services: 1.5%) and thus reduce both the overall trade volume and competitiveness, which is already at a low level for German manufacturers,” Allianz Trade stated in an email to Euronews.

“The temporary border controls could furthermore trigger a chain reaction: trade could lose up to €1.1 billion per year in the worst case. As a result, recession risks could increase further and possibly lead to economic losses in gross domestic product (GDP) of up to around €11.5 billion.”

Related
  • Could Germany’s new border controls end up getting revoked by Brussels?
  • Germany reinstates land border checks for six months in much-criticised move

An association representing Germany’s transport and logistics industry has also warned the checks could end up increasing costs for companies, leading to higher prices for consumers.

“There could be traffic jams or there could be delays, which will increase the cost for our truck companies, and they will have problems with driving and rest time, and they have to get higher prices for the transport solution, and this is a big problem,” said Dirk Engelhardt, the CEO of the Federal Association of Road Haulage, Logistics, and Disposal (BGL).

The group says if such delays happen, it will lobby the European Commission to set up special lanes so that most trucks can bypass the controls and to focus on tougher external border checks.

Ripple Plans ‘Cross-Appeal’ in SEC Case

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Ripple Labs will file a cross-appeal in its ongoing case against the U.S. Securities and Exchange Commission, the company announced Thursday, as part of an effort to maintain its legal defenses as the SEC’s own appeal in the case winds its way through an appeals court.

The SEC filed a notice of appeal earlier this month in its long-running case against Ripple, which the regulator first sued in December 2020. Ripple’s cross-appeal is intended to ensure that the company preserves its points and arguments in the case, Chief Legal Officer Stuart Alderoty told CoinDesk, though he did not go into detail on what the company may argue in its motion.

“We’re really doing that to make sure that we leave nothing on the table, including the argument that there cannot be an investment contract without there being the essential rights and obligations found in a contract,” he said.

District Judge Analisa Torres ruled in July 2023 that Ripple’s programmatic sales of XRP to exchanges, which in turn sold the token to retail customers, did not violate federal securities laws. Under her ruling, XRP is not deemed to be a security.

Like the SEC’s filing last week, Ripple’s initial filing is just a notice that it will submit a more comprehensive argument in the future. Alderoty said the two parties would have to fill out a form in the coming weeks laying out “a fairly high level description” of their arguments, but neither the regulator nor the company would get into the specifics until their opening briefs are filed.

The SEC’s brief may come near the end of January, while Ripple’s opening brief – which would be combined with its opposition to the SEC’s brief – would come sometime after that, he said.

“I don’t think that folks who are paying attention should be much distracted by these efforts to create confusion, because I think the judge got it right, and I think they should welcome the opportunity for the court of appeals to roll on this issue and finally, bring the clarity that we need,” Alderoty said about the appeals court taking up the case – though, he added, the U.S. “really needs a policy solution” from legislators rather than court rulings.

“Short of that, and while we don’t have one, it’s going to be up to the courts, and we’re willing to continue to fight that fight and collect victories and bring clarity to the industry through the litigation process,” he said.

Binance, FalconX and the Curious Case of 1.35M Missing Solana Tokens

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A brokerage firm has a few key jobs. One involves holding assets for clients and keeping track of who owns what.

FalconX, a cryptocurrency prime brokerage, apparently failed to do that for years with a pile of 1.35 million solana (SOL) tokens, now worth about $190 million, that it’d had in its possession since 2021.

Then, Binance, the largest crypto exchange and a key liquidity partner of FalconX, recently came forward as the rightful owner and asked for its SOL back.

It’s unclear exactly how FalconX was unable to keep track of the crypto and how Binance itself seems to have lost track of the money for years. But the situation raises questions about accounting systems and controls.

‘Reconciliation anomaly’

Around the time the trove of mystery SOL appeared in FalconX’s coffers, the value of the tokens lingered at around $20 to $30; not long after the collapse of FTX in late 2022, SOL sank under $10. At those prices, even 1.35 million Solana tokens are chump change to Binance, which has over $110 billion of assets in reserve and services over 90 million customers worldwide.

FalconX, when contacted by CoinDesk, confirmed that there had been “a reconciliation anomaly” involving solana tokens. The company reconciled its books against all exchanges, clients and partners, and no one showed records of a transaction, according to a FalconX spokesperson.

Binance, when contacted by CoinDesk, said its customers were never at risk of losing money as a result of the situation. Binance would’ve simply absorbed the loss itself if the 1.35 million tokens had never been found.

To earn money on the assets they’re in charge of hanging onto, prime brokerage firms like FalconX typically put assets to work, using them as collateral, or for lending or arbitrage opportunities. But that did not happen in this case as the assets were held in safekeeping, a FalconX spokesperson said.

Not long after CoinDesk came asking questions about the lost and found solana tokens, the companies responded via a joint statement, saying the assets in question were being returned to Binance and that the matter was now fully resolved.

“Binance and FalconX continue to operate business as usual,” the firms said in an email.

‘Weaker control environment’

Mysterious transactions and reconciliation head-scratchers happen in traditional finance, too, but crypto could be uniquely prone to a situation of this sort, where assets go unclaimed for years, inflating hugely in value in that time. Of course, crypto is a new area of finance, running on rapidly evolving infrastructure, which is home to highly volatile assets.

Speaking broadly, big auditing firms like PwC agree the relatively young crypto space is potentially susceptible to such reconciliation issues. “Mainly I would say the unregulated space is where things are less mature and there is a weaker control environment,” said Peter Brewin, a partner at PwC Hong Kong who specializes in digital assets, Web3 and the metaverse with a focus on tax and regulation.

FalconX, which was established in 2018 and valued at $8 billion at the time of a mid-2022 funding round, offers institutional customers a dashboard to manage portfolios and connect to a range of crypto exchanges, custodians, market makers and prop shops. Altogether, the brokerage handles over 100 million transactions a month, using a complex system of omnibus and subaccounts.

Binance recently made a move to close a VIP fees loophole used by prime brokerage firms, citing a lack of transparency in the way these firms structure their client accounts.

In the wake of FTX’s collapse, crypto trading firms have been focused on keeping critical functions in safely segregated structures, as Anatoly Crachilov, CEO and founding partner of Nickel Digital Asset Management, points out.

“Trading venues running matching engines do not hold assets, while custodians safeguard client assets, with market value further validated and reported by an independent fund administrator,” Crachilov said in an email.

Crypto Investors Mostly DCA Into Their Coins, Finds Kraken

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For the vast majority of crypto investors, dollar-cost averaging (DCA) appears to be a must.

That’s according to a recent survey by US crypto exchange Kraken, which found that 83% of crypto investors have used dollar-cost averaging in the past to acquire their coins, with 59% of respondents stating it was their primary investment strategy.

“Dollar-cost averaging has survived as a strategy for the 75 years since the idea was first popularized, and I’d argue that’s for good reason,” Mark Greenberg, global head of asset growth and management at Kraken, told CoinDesk.

“As participants in the survey noted, dollar-cost averaging can help remove emotion from decisions and focus on long-term outlooks,” Greenberg said. “That’s especially critical in rapidly evolving technologies and markets like cryptocurrencies.”

Often called DCA for short, dollar-cost averaging is an investment strategy that entails acquiring exposure to an asset over a period of time across multiple purchases, instead of buying everything at once.

Hedging against volatility

The survey, conducted with 1,109 crypto investors and published on October 7, found that crypto investors privileged dollar-cost averaging for a variety of reasons.

Forty-six percent of respondents said the strategy helped them hedge against market volatility, while 24% of them said it encouraged consistent investment habits and 12% said it removed emotions from their decision-making process.

Perspective on the matter changes depending on one’s income: investors making less than $50,000 a year said the most significant benefit of dollar-cost averaging was the encouragement of consistent investment habits, but those making over $50,000 had more interest in reducing the impacts of market volatility.

“This difference might indicate that lower-income investors need more support with investment decisions, including maintaining regular contributions and sticking to a trading decision without emotional influence,” the report said.

“Lower-income investors most often choose riskier strategies like trying to time the market,” the report added, noting that respondents making less than $75,000 tend to prefer that strategy instead of dollar-cost averaging, whereas the vast majority of respondents making more than $150,000 privileged the more cautious route.

Higher income individuals also usually double-down on dollar-cost averaging when the market drops, whereas lower-income investors can just as likely stop trading for a while, or cut losses and sell.

Almost 74% of crypto investors keep a closer eye on markets than traditional investors usually do, the survey found. Surprisingly, that tends to be especially true of older investors — 66% of those between the ages of 45 and 60 reported checking crypto significantly more frequently than traditional markets, whereas only 33% of investors in their twenties said the same.

Solana Is ‘Richly Valued’ Versus Ether, But Could Still Outperform If Trump Gets Elected: Standard Chartered

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Solana (SOL) looks overvalued compared to Ethereum (ETH) based on several metrics, but each token’s relative performance to each other and bitcoin (BTC) depends heavily on who will be the next president of the U.S., a Tuesday report by Standard Chartered Bank said.

Led by Geoff Kendrick, the global head of digital assets research, the bank’s analysts expect more accommodating crypto regulations and higher chances of approval for spot-based solana ETFs if Donald Trump gets elected, while a Kamala Harris-led administration could weigh on smaller, riskier cryptocurrencies.

That being said, the team forecasts SOL to be the top performer of the three in a Trump administration, followed by ether and then bitcoin (BTC). Under Harris expect the opposite, said StanChart, with bitcoin leading ETH and SOL bringing up the rear.

The bank’s analysts, however, remain bullish on crypto no matter who wins the November election, seeing ETH rallying to $7,000 by the end of 2025 under Harris and $10,000 under Trump. The bank previously had a year-end 2025 ETH price target of $14,000.

Bitcoin could surge to $200,000 during the same period, regardless of who gets elected, the report said.

Solana overvalued versus ETH

Ethereum has been the dominant layer-1 network for blockchain applications, but Solana’s increasing blockchain activity and SOL’s rapid price surge convinced many crypto observers that a change in leadership is due.

While crypto valuations aren’t standardized as in traditional assets, Standard Chartered analysts noted several metrics that showed SOL being overvalued compared to ETH.

SOL’s ratio of market capitalization versus network fee revenues is 250, more than double than ETH’s 121. Solana’s supply grows around 5.5% annually, while ETH’s token inflation rate stands around 0.5% a year, they added. Higher inflation means that SOL’s real staking yield is 1%, compared to ETH’s 2.3%. Meanwhile, 38% of all established developers in the blockchain industry work on the Ethereum ecosystem, with Solana claiming a 9% share.

“SOL valuation metrics suggest the market is pricing in a very bright growth future for Solana, with a 100-400x increase in throughput expected,” said Kendrick. “Such valuations would be easier to justify under a Trump administration than a Harris one,” he added.

In order to uphold its current valuation, Solana will need to claim dominance in multiple crypto sectors with high traffic such as finance, consumer and decentralized physical infrastructure (DePIN) and activate the Firedancer client that allows increased efficiency, the report said.

Five U.S. States Reach Settlement With GS Partners, Investors to Get Full Refunds

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Teksas Eyalet Menkul Değerler Konseyi’nin (TSSB) pazartesi günü yaptığı duyuruya nazaran, Dubai’deki bir gökdelende yapılan tokenleştirilmiş yatırımlar da dahil olmak üzere çeşitli kripto yatırım planlarının gerisindeki Avrupa operasyonu olan GS Partners ile beş ABD eyaleti, yatırımcılara paralarının %100’ünü geri verecek bir uzlaşma mutabakatına vardı.

Tez edilen planın tam boyutu bilinmiyor, lakin operasyonun kendisi, Teksas’ın öncülüğündeki bir küme eyalet menkul değer düzenleyicisinin GS Partners’ın sahibi Josip Heit ve şirketlerini soruşturmaya başlamasından bir ay evvel, geçen Eylül prestijiyle 1 milyar dolarlık satış yaptığını argüman etti. Kasım ortasından itibaren, 10 ABD eyaletindeki ve bir Kanada eyaletindeki düzenleyiciler, Heit ve şirketlerine karşı dolandırıcılık teziyle yaptırım hareketleri başlattı ve menkul değer satışını derhal durdurmalarını emretti.

GS Partners, eski profesyonel boksör Floyd Mayweather dahil olmak üzere bir tanıtımcı ve ünlü sözcüler ağı kullanarak potansiyel yatırımcılara çıkarlı getiriler vaat eden çeşitli kripto ile ilgili yatırımlar satan artık faaliyette olmayan çok düzeyli bir pazarlama planıdır. Bu yatırımlar ortasında sanal arazi modülleri ve eski “Lydian World” meta cihanında bir pay havuzu, teze nazaran altın takviyeli bir kripto token ve Dubai’deki bir gökdelenin tokenleştirilmiş paylarını temsil ettiği argüman edilen kuponlar yer alıyordu.

Yatırımcılara, her biri 36 katlı kulenin bir inç karesini temsil eden kuponların – “görkemli bir gökdelen… çölün rüzgarlarından ilham alan ve yakıcı güneşin altında parıldarken ihtişam saçan” olarak tanımlandı – ünitelerin kiralanmasından pasif gelir elde etmelerine imkan sağlayacağı söylendi. GS Partners 175 milyon dolarlık satış amaçlarına ulaşamayınca, kuponların kıymeti neredeyse sıfıra düştü.

Teksas, Alabama, Arizona, Arkansas ve Georgia eyaletlerinin Heit ve şirketleriyle vardığı uzlaşma muahedesinin bir kesimi olarak, GS Partners’a karşı açılan tüm tüzel davalar sonuçlandırıldı ve soruşturmalar düşürüldü. Bunun karşılığında GS Partners, müşterilerinin uzlaşmaya varılan eyaletlerde yaptıkları yatırımların tamamını iade edecek.

Texas Eyalet Menkul Değerler Heyeti’nde Uygulama Müdürü olan Joe Rotunda, CoinDesk’e yaptığı açıklamada, müşterilerin paralarını geri almanın kurumları için bir öncelik olduğunu söyledi.

“Sadece maddi mali yardım sağlamakla kalmayıp, %100 mali yardım sağlamak hayli sıra dışıdır,” dedi. “Bu, eyalet düzenleyicileri olarak her vakit konuştuğumuz bir şeydir – bu fırsatlar ortaya çıktığında, onları değerlendirmeliyiz.”

Yerleşen eyaletlerdeki düzenleyiciler, kurumlarına ödenecek mali cezaları takip etme yetkilerinden feragat ettiler. Sivil para cezaları birçok eyalet ve federal uygulama aksiyonunun ortak bir sonucudur, fakat Rotunda kurumunun önceliğinin Teksaslı yatırımcılar olduğunu söyledi.

“Bu yalnızca bir öncelik sorunu. Önceliğimiz müşteriler için kurtarma sağlamaktı,” dedi Rotunda. “Varlıklarını alıp para cezası olarak devlete gönderme fikri nitekim midemi bulandırıyor… Bu yüzden, müşteri mevduatlarının %100’ünü geri alma fırsatı manasına geliyorsa, dolandırıcılık tezlerini memnuniyetle reddettik.”

Uzlaşma muahedesi, katılmayan eyaletlerin yahut federal düzenleyicilerin Heit ve şirketleri hakkında hukuksal yahut cezai soruşturmalar başlatmasını engellemiyor.

Pazartesi günü beyaz ayakkabı hukuk firması Quinn Emanuel’deki avukatları tarafından yayınlanan bir basın açıklamasında Heit, muahedeyi memnuniyetle karşıladığını belirterek şunları ekledi: “Talep süreci boyunca tüm uygun müşterilere geri ödeme yapmaya kararlıyız. Müşterilerimiz her vakit evvel gelir. Markayı, prestijimizi ve müşterilerimizi korumak en büyük önceliğimizdir.”

Rotunda, AlixPartners LP tarafından yönetilen talep sürecinin Ekim ayında açılmasını ve 90 gün sürmesini beklediğini söyledi. Heit ve şirketleri, mutabakatlarının bir modülü olarak AlixPartners’ın fiyatlarının maliyetini karşılayacak.

Rotunda, “Teksas’ta, bu davanın hukuk sistemimizde hızlandırılması için hakikaten çabalasak bile, müvekkillerin varlıklarını iade etmelerine kadar mahkemede kanıt sunabileceğimiz noktaya bile gelemeyiz” dedi.

Crypto Exec Pushing for Industry Support of Kamala Harris for President

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The former CEO of crypto platform Uphold, J.P. Thieriot, is trying to drum up crypto support for Vice President Kamala Harris as she pursues the Democratic nomination in the presidential election, arguing that former President Donald Trump is offering empty promises to the industry and Harris is signaling a new openness.

Trump, the Republican nominee in the 2024 race, has quickly become the crypto favorite, garnering big-money support from industry leaders as he adopts enthusiastic cheering for the digital assets sector (which he’d looked on with open skepticism until recently). But Thieriot said there seems to be “a real opportunity to help shape the Harris campaign’s position on crypto.”

“Of course, she’s going to have to do some stuff to gain trust, but she has signaled she’d like a chance,” said Thieriot, who said he still retains a stake in Uphold and is building a new crypto trading operation, in an interview. “It would be crazy to not engage on that.”

He said he wrote a strategy paper with a wider group, which included crypto lawyers who he declined to name. They shared that document with Harris’ campaign this week and are awaiting a response.

“We would argue that crypto is this electoral cycle’s foremost interstate swing issue,” said the strategy paper, which was reviewed by CoinDesk. “Trump has already moved to try to capture this space, and raised significant capital, essentially offering vague platitudes and no meaningful policy commitments.”

The paper suggested an opening crypto fundraiser in San Francisco and predicted that Harris could garner endorsements from prominents crypto figures and potentially earn tens of millions in campaign donations from the industry. Thieriot said he’s setting up a website, and the effort can be contacted at info@crypto4kamala.co.

Industry support has most loudly gravitated toward Trump, who spoke at the recent Bitcoin 2024 conference in Nashville, Tenn., and who says he’ll put a stop to the government resistance to cryptocurrency typified by the actions of Securities and Exchange Commission Chair Gary Gensler and the opposition of Sen. Elizabeth Warren (D-Mass.).

Despite President Joe Biden’s appointment of Gensler and ongoing support of his oversight of the cryptocurrency sector, “Kamala has, I think, an opportunity at a clean slate,” Thieriot said. The strategy he and the other supporters have in mind: She makes it clear her administration will work with the industry and support clear rules for it, and she shows openness for a friendlier chief at the SEC.

Thieriot isn’t alone among crypto insiders now favoring Harris. Tonya Evans, a prominent crypto law professor and board member of the Digital Currency Group, argued that Harris offers a chance for a new course that differs from the Gensler/Warren views that have dominated this administration. Evans is involved in a group of decentralized finance leaders favoring the vice president, which has scheduled a Thursday organizational meeting.

Some of the most recent national polling shows Harris with a slight lead over Trump, though the candidates remain nearly even.

Bitcoin Miner Marathon’s Shares Tumble After Revenue Unexpectedly Misses Wall Street’s Estimates

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The shares of bitcoin miner Marathon Digital (MARA) fell as much as 8% on Thursday post-market trading after the company’s second quarter revenue missed Wall Street’s expectations. The shares have recouped some of their losses since then.

Marathon reported revenue of $145.1 million versus an estimate of $157.9 million, according to FactSet data. The company’s sales took a hit in the second quarter due to several operational challenges which hindered its ability to mine bitcoin as well as recent halving weighing on the mining sector, Marathon said in its earnings release.

“During the second quarter of 2024, our BTC production was impacted by unexpected equipment failures and transmission line maintenance at the Ellendale site operated by Applied Digital, increased global hash rate, and the April halving event,” said Fred Thiel, the firm’s CEO, in a statement.

However, Marathon said that the issues have since been remedied and the company reached an all-time high mining power of 31.5 exahash per second (EH/s) in the second quarter.

The miner also said that its second quarter adjusted EBITDA swung to a loss of $85.1 million from a gain of $35.8 million in the previous year, mainly due to unfavorable fair value adjustments of its digital assets and lower BTC being mined in the quarter.

Despite the challenges, the miner continues to see reaching hashrate of 50 EH/s by the year-end and plans to growth it further next year.

Marathon sold 51% of the bitcoin it mined in the second quarter to fund its operating costs. However, it recently announced that it bought $100 million worth of bitcoin in the open market and re-adopted strategy to fully hold all BTC in its balance sheet. The miner now holds more than 20,000 BTC in its balance sheet.

“During the quarter, we organized the internal structure of the business to better align with our growth opportunities, sharpen our strategic focus, bolster accountability, and accelerate our speed and agility as we scale,” said Thiel.