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CoinDesk Crypto

Q1 2021 Industry Trends: Institutional Interest in ETH Ramps Up

CoinDesk Crypto
5 years 6 months ago

Ether (ETH) had an outstanding first quarter in terms of performance, doubling in market capitalization and reaching a new all-time high price. Riding that momentum, ether prices have continued to soar, albeit in smaller daily increments, to reach several new all-time highs of close to $2,100 in recent days. 

What is equally noteworthy about ether’s performance this past quarter, outside of its price gains, is the institutional attention the crypto asset seems to be attracting and the market tools that have launched to support its trading as a derivatives product. 

On Feb. 8, the world’s largest financial derivatives exchange, the Chicago Mercantile Exchange, launched ether futures, opening the door for institutional and accredited investors in the U.S. to take leveraged directional bets on ETH and hedge against spot market positions. 

Related: Thailand’s Fourth Largest Bank by Assets Exploring DeFi Offering: Report

Read more: CME Ethereum Futures, Explained

Then, digital asset merchant bank Galaxy Digital launched an Ethereum fund for institutional investors and businesses wanting to invest in ether without buying or holding any of the underlying asset. Called the “Galaxy Institutional Ethereum Fund,” this product launched on Feb. 19 has raised $32 million as of March. 

More recently, on March 25, staking-as-a-service provider Staked introduced an ETH investment product known as the “Staked ETH Trust.” It gives accredited investors exposure on the price of ether as well as rewards earned on Ethereum 2.0.

Then there’s Ethereum 2.0, a parallel blockchain running alongside Ethereum that issues small amounts of ETH to network stakeholders known as “validators.” Protocol developers envision merging the two networks over the next couple of years. 

Gauging market sophistication

Related: Daniel Loeb’s $17B Hedge Fund Invests in Crypto Through Coinbase

As the number of investment products for ether has grown in Q1 2021, so, too, has the size and activity of the ether derivatives market as a whole. 

The ether options market, while less mature than the bitcoin options market, has grown rapidly nonetheless over the past three months. Aggregate open interest for ether options products on non-U.S. regulated exchanges reached all-time highs of $3 billion at the end of Q1 2021, compared to a mere $27 million at the end of the previous quarter.

Because options markets tend to develop after futures markets start to mature, it’s an area of trading that should be watched to see if deep-pocketed, institutional players jump into the ether investment waters.

Read more: Crypto Options Trading, Explained

For now, ether’s derivatives markets are much smaller and thinner than those of bitcoin but they are maturing rapidly. This is evidenced by the growth of ETH derivatives trading volumes and open interest in Q1 2021, as well as new investment products launched in the same period for institutions and accredited investors. 

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Market Wrap: Bitcoin Near $60K as Coinbase Listing Stirs Fresh Crypto Hype

CoinDesk Crypto
5 years 6 months ago
  • Bitcoin (BTC) trading around $60,120.82 as of 20:00 UTC (4 p.m. ET). Climbing 0.68% over the previous 24 hours.
  • Bitcoin’s 24-hour range: $59,428.21-$61,219.72 (CoinDesk 20)
  • BTC trades between its 10-hour and 50-hour averages on the hourly chart, a sideways signal for market technicians.

Bitcoin surged early Monday to a four-week high of $61,219.72. Analysts said the largest cryptocurrency might have gotten a boost from the hoopla surrounding U.S. exchange giant Coinbase’s coming direct stock listing Wednesday.

In cryptocurrency circles, the “Coinbase effect” is when a digital token gets a price pump after getting listed on the cryptocurrency exchange. But bitcoin might get the benefit of a different type of “Coinbase effect” – if newbie investors, spurred by mainstream press coverage of the stock listing, decide to put money into cryptocurrencies. 

“The Coinbase hype within crypto, in terms of valuation and its domino effect on other markets” means Wednesday’s direct listing might become “a key catalyst event,” Singapore-based crypto quant firm QCP Capital wrote Monday on its Telegram channel.

Related: Thailand’s Fourth Largest Bank by Assets Exploring DeFi Offering: Report

The cryptocurrency analysis and data site IntoTheBlock wrote in a newsletter last week that “anticipation” of the Coinbase stock listing “has contributed to broader risk-on sentiment throughout crypto.” A week ago, the market value of all cryptocurrencies surpassed $2 trillion for the first time. 

QCP noted that bitcoin prices, despite doubling so far this year, have underperformed the Standard & Poor’s 500 Index of large U.S. stocks in the past month, so a successful Coinbase listing might lead to a reversal.

Cryptocurrency analysts also are studying a key blockchain data metric that’s seen as bullish: bitcoin’s liquid supply changes.

According to the analyst Willy Woo, more bitcoins are turning from liquid status to illiquid, meaning they’re getting withdrawn and locked away into long-term holding patterns.

Related: Daniel Loeb’s $17B Hedge Fund Invests in Crypto Through Coinbase

That means there might be less supply to go around for new bitcoin buyers, potentially offsetting what appears to have been a recent slackening of demand.

On the other hand, CoinDesk reported that net inflows to digital asset investment products declined last week by $23 million to $83 million. 

Bitcoin’s market dominance at the same time dropped to around 55.6%, the lowest level since April 2019 – potentially an indication that more investors have shifted their focus to  alternative cryptocurrencies (altcoins).

Ether and altcoins
  • Ether (ETH) trading around $2,144.59 as of 20:00 UTC (4 p.m. ET). Climbing 0.04% over the previous 24 hours.
  • Ether’s 24-hour range: $2,103.67-$2,199.87 (CoinDesk 20)
  • Ether trades between its 10-hour and 50-hour averages on the hourly chart, a sideways signal for market technicians.

Ether hit a new all-time high price at $2,199.87 during trading hours in Asia Monday, but exchange tokens including Binance’s BNB and Uniswap’s UNI stole the thunder with staggering double-digit percentage gains.

BNB was up more than 15% in the past 24 hours, while UNI was up more than 20%, according to Messari.

The exchange tokens’ rally in the past month is a “spillover” from Coinbase’s listing, according to QCP, which warned that the fuss surrounding the event could lead to “too much short-term froth” in the crypto market.

Binance, the biggest crypto exchange in the world by trading volume, announced on Monday it is now offering a zero-commission tokenized stock trading service to its users, with prices settled in Binance’s own U.S. dollar-linked stablecoin, Binance USD (BUSD).

Other digital assets on the CoinDesk 20 are mixed. Notable winners as of 20:00 UTC (4:00 p.m. ET): 

Notable losers:

Other markets

Equities:

  • Asia’s Nikkei 225 closed in the red 0.77%.
  • The FTSE 100 in Europe was down by 0.39%.
  • The S&P 500 in the United States closed in red 0.02%.

Commodities:

  • Crude oil (WTI): +0.66% to $59.71/barrel.
  • Gold: -0.7% to $1732.08/ounce.

Treasurys:

  • The 10-year U.S. Treasury bond yield climbed Monday to 1.672%.
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How the Coveted ‘COIN’ Ticker Found Its Way to Coinbase

CoinDesk Crypto
5 years 6 months ago

When Malcolm Palle, chairman of London-listed blockchain investment firm Coinsilium, saw that Coinbase was to begin trading on Nasdaq using the stock ticker “COIN,” it came as something of a surprise.

Back in 2015, Coinsilium became one of the first crypto-focused companies to go public, and the stock now trades on London-based Aquis Exchange (formerly NEX) – using the ticker symbol AQSE: COIN.

Palle says he remains “relatively sanguine” about Coinbase taking the ticker, but added that conversations with the folks at Aquis, and also contacts at the London Stock Exchange, have left him wondering if this was merely overlooked by Coinbase and Nasdaq, and if any resulting confusion will end up being his problem.

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“What we would have expected to happen would have been for checks to be made from their end,” Palle said in an interview. “So either they did their checks and they didn’t find us, which I find unbelievable, or they didn’t do their checks and just thought, ‘It’s available on Nasdaq, so we’ll take it.’ Or they did their checks, found us and decided it doesn’t matter, for whatever reason.”

Coinbase declined to comment.

Leaving aside the shades of David and Goliath this situation invites, there are cases where the same tickers exist in different jurisdictions, but not many. Underlying the ticker symbol is the International Securities Identification Number (ISIN), the code that uniquely identifies a specific stock. Where the potential for confusion really arises is with media coverage, not to mention the proliferation of social media, said Palle.

Coinsilium, now Coinbase

Coinsilium has been a stalwart of the London crypto community since the early days. The firm is recognized in the U.K. through the “COIN” ticker, but when it joined the OTCQB Market in the U.S. in October 2020, its shares were cross-traded under the ticker “CINGF.”

Related: Daniel Loeb’s $17B Hedge Fund Invests in Crypto Through Coinbase

Palle pointed out Coinsilium’s holdings have grown from $5 million last year to around $25 million in recent months, and the company is busily pumping out news using the COIN tag in its releases.  

“It’s one thing to say there’s a moribund company using the ticker and we’ll never hear from them again. It’s another thing to say we’re going to use that ticker but there’s also a ticker that belongs to a dynamic trading company that’s pumping out news,” Palle said, adding: 

“We’re not going to shy away from using the ticker symbol COIN in all our releases.”

Nasdaq declined to comment.

The Gemini angle

London-listed Coinsilium is not the only firm to have coveted the famous ticker symbol. 

In July 2014, Gemini co-founders Cameron and Tyler Winklevoss updated their exchange-traded fund (ETF) application, so that it would trade on the Nasdaq under the symbol “COIN.”

Even when the twins later switched venues for the proposed EFT from Nasdaq to BATS Global Markets, the shares were to be listed under the “COIN” symbol.

Back in 2014, Cameron Winklevoss told CoinDesk in an interview that “identifying the ticker symbol and the exchange are two major events that further demonstrate that we are moving forward as expected.” (Hindsight, etc.)

Gemini declined to comment.

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Canaan Plunges as Inventory Issues Slashed Q4 Bitcoin Mining Machine Sales

CoinDesk Crypto
5 years 6 months ago

Talk about a bad time to not have product to sell.

Shares of bitcoin mining machine maker Canaan (Nasdaq: CAN) plummeted after the company reported a 75% drop in Q4 revenue on Monday as supply-chain issues prevented the company from capitalizing on a roaring bull market and a resulting surge in demand for mining machines.

“The outbreak of COVID-19 caused supply chain disruptions and thus negatively impacted our revenues in the fourth quarter,” according to CEO Nangen Zhang.

For the Q4, the Hangzhou-based firm posted Q4 revenue of $5.9 million, down from $24 million in Q3 of the same year.  Total computing power sold was 0.2 million Thash/s, representing a year-over-year decrease of 93.1% from 2.9 million.

The market didn’t respond kindly to the report, with American Depositary Receipts of the maker of ASIC mining machines dropping 34.2%, down $6.41, to 12.25 in recent trading.

The company’s adjusted loss, however, narrowed to $11.2 million from $28.6 million as the company reported drops in R&D expense, selling & marketing costs, and general and administrative costs.

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Looking ahead, the mining machine maker said it already had $174 million of contracted orders with $66 million of cash advance from customers as of Dec. 31, 2020. The company forecasts at least $61 million in revenue for the ongoing Q1.

Canaan’s supply hangup comes at a time when demand from mining farms couldn’t be higher. North American mining firms Marathon Patent Group and Blockcap, for example, are entering 2021 with aggressive plans to expand their hashrates as much as ten fold into 2022. Both Blockcap and Marathon purchased their machines from Canaan rival, Bitmain.

As CoinDesk previously reported, the demand has sent prices for machinery soaring on secondary markets.

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Digital Asset Fund Inflows Declined Last Week as Bitcoin Prices Stagnated

CoinDesk Crypto
5 years 6 months ago

Net inflows to digital asset investment products declined by about $23 million last week to $83 million, though a recent bout of profit taking appears to have subsided, according to a new report by CoinShares, a digital asset investment firm.

  • “As is often the case when bitcoin prices make new highs, prices typically range trade in conjunction with a round of profit taking. Recently we have witnessed a similar profit-taking round (minor outflows) following all-time highs in mid-March 2021,” wrote CoinShares.
  • “This now looks to have run its course, with the minor outflows over the last month gradually diminishing.”
  • Last week was the first week of no outflows across funds since mid-February.
  • Bitcoin (BTC) prices were mostly stagnant last week, stuck in a range between roughly $55,000 and $60,000, unable to break through the all-time high around $61,700 reached in mid-March.
  • Bitcoin-focused funds received most inflows in the seven days through April 9, totaling $55 million, while Ethereum products attracted $22 million. Multi-asset digital investment products saw inflows of $8 million last week, the most since February.
  • Rising inflows outside of bitcoin products coupled with Ethereum’s rise in popularity “indicate investors are beginning to turn their focus onto alternative digital assets,” according to CoinShares.
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Rap Icon Nas Could Net $100M When Coinbase Lists on Nasdaq

CoinDesk Crypto
5 years 6 months ago

U.S. rapper Nasir Jones (better known by his stage name Nas) is among the fortunate few to have made early investments in Coinbase, the cryptocurrency exchange expected to reach over $100 billion in valuation when its COIN stock lists on Wednesday.

Jones’ investment firm, QueensBridge Venture Partners, got into Coinbase’s Series B round back in 2013 when it raised $25 million. Around that time Coinbase was valued at about $143 million, according to PitchBook.

The Nas news shows just how far Coinbase’s public listing will ripple across the world of venture capital, with everyone from Wall Street veterans to A-list celebrities all standing to win big when the chips fall this week. 

Related: There’s Certified Fair Trade Coffee, so How About Certified & Persistent NFTs?

QueensBridge, which was also a backer of Robinhood in 2013, and later Lyft and Dropbox, makes early stage investments of between $100,000 and $500,000, according to Jones’ QueensBridge co-founder Anthony Saleh.

Dividing the firm’s $100,000–$500,000 stake by the share price at the time of Coinbase’s Series B ($1.00676) points to QueensBridge owning around 99,329 shares on the low end or 496,642 on the high end, according to an analysis by CoinDesk.

At the price that Coinbase shares last traded on private secondary markets – $350 per share – Jones’ firm would have a pot of somewhere between $34.76 million and $173.8 million. If Coinbase shares trade at investment bank DA Davidson’s new price target of $440, QueensBridge could see the value of its Coinbase stake rise to $43.7 million and $218.5 million, respectively.

Saleh and Jones did not return requests for comment. Coinbase declined to comment. 

Related: Canaan Plunges as Inventory Issues Slashed Q4 Bitcoin Mining Machine Sales

But a source familiar with the matter confirmed QueensBridge remains on the Coinbase cap table.

The source added that Jones is a friend of Ben Horowitz, co-founder of Silicon Valley venture giant Andreessen Horowitz (a16z), one of Coinbase’s main backers, who may have told the musician the then-fledgling bitcoin exchange was a promising investment. QueensBridge had raised a $10 million fund in 2012, according to “A-List Angels” author Zack O’Malley Greenburg.

In addition to the well-picked startups QueensBridge backed between 2012 and 2014, Jones and co. reportedly bagged around $40 million in 2018 after Amazon acquired the doorbell company Ring.

As well as the Menlo Park mafia of close-knit crypto VCs, Coinbase pulled in some interesting early investors back in the day, including the likes of the endowment fund of Duke University (Coinbase co-founder Fred Ehrsam’s alma mater) and angels like former Reuters CEO Tom Glocer and former Citigroup CEO Vikram Pandit.

Saleh, now a general partner at VC firm WndrCo, let his feelings about the upcoming Coinbase listing be known in a recent tweet.

Nate DiCamillo contributed reporting.

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Telegram Is Nearly Done Paying Back TON Investors, Eyes IPO Next

CoinDesk Crypto
5 years 6 months ago

Messaging app Telegram is close to fully repaying investors in its TON blockchain effort nearly a year after settling allegations it violated U.S. securities law in raising over $1 billion for the project. Its next step might be an initial public offering (IPO).

On Monday, Russian newspaper Vedomosti reported that Telegram is preparing to launch an IPO in 2023, aiming for a $30 million to $50 million valuation, according to a source close to the company’s team. The IPO will benefit the buyers of Telegram’s bonds, which the company sold in February to raise $1 billion.

The debt sale, in turn, came right in time for earlier Telegram investors’ pay day, as the company is closing the book on its $1.7 billion token sale three years ago. According to Russian publication The Bell, Telegram started to pay back the last investors who didn’t withdraw their investments right away in 2020.

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Two sources familiar with the token sale confirmed to CoinDesk that the process had started. According to one of them, non-American investors lent Telegram $500 million to $600 million back in 2019 following the news the company no longer planned to launch TON.

The ICO that went awry

Last May, Telegram announced it discontinued the work on its TON (Telegram Open Network) blockchain project. The project started in 2018 with much fanfare, secretly raising $1.7 billion from qualified investors and pledging to develop a proof-of-stake blockchain with a native token. Telegram planned to build TON into the messaging app, potentially exposing some 200 million (at the time) Telegram users to TON’s native crypto token, gram.

The project attracted prominent investors from all over the world, including funds Sequoia, Ribbit Capital and Lightspeed Ventures, plus Russian oligarch Roman Abramovich and former Russian government member Mikhail Abyzov.

However, right before the planned launch in October 2019, the U.S. Securities and Exchange Commission (SEC) sued Telegram, saying the company had been struggling financially and was planning to issue unregistered securities disguised as utility tokens to fund its operations. The legal battle essentially lead to Telegram shutting down the project in May 2020 after striking a settlement with the SEC and agreeing to pay $18.5 million in penalties and return the money it raised.

Related: Canaan Plunges as Inventory Issues Slashed Q4 Bitcoin Mining Machine Sales

The project was open source and later launched independently without Telegram’s involvement, at least officially.

After shutting down TON, Telegram offered investors to either take 72% of their money back right away or lend the funds to Telegram for one year and get back 110% in 2021 – the latter, however, was not available to U.S. investors. Back in 2019, some investors hoped that at some point they could get paid back in Telegram’s equity (and invested in TON as a proxy for Telegram’s equity), they told CoinDesk, but Telegram quickly made clear that splitting ownership was not on the table.

“Telegram may need to sell some equity later to get the money to repay the loan, but repayment in equity was not offered as an option,” Telegram’s spokesperson told CoinDesk at that time in an email. Apparently, instead of the equity sale, Telegram ended up doing a bond sale to pay back gram token buyers.

The IPO will be a different situation compared to Telegram giving out equity to TON investors back in 2020, a source close to the project told CoinDesk. The difference is that the IPO, supposedly, will give shareholders less control over Telegram. Telegram founder Pavel Durov is said to be famously allergic to the idea of sharing Telegram ownership with anyone after the dramatic fallout with shareholders of its previous project, the social network Vk.com.

“If you let in investors with a big share and active attitude, they would obviously try to control the company,” the source said.

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BitRiver Is Selling Tokens to Build More Bitcoin Mining Farms in Siberia

CoinDesk Crypto
5 years 6 months ago

BitRiver, a key player in the Russian cryptocurrency mining market, aims to raise up to $35 million by selling tokens that entitles holders to space in its data centers.

The company, which operates several mining farms in Siberia for 150 megawatts in total, would use the proceeds from the sale to open more such facilities. The token runs on the Ethereum blockchain, the main launchpad for fundraising tokens since the heady days of the 2017 initial coin offering (ICO) boom. 

While ICOs have largely faded, BitRiver’s token offering, announced Monday, is one of several to hit the market this year tied to the mining sector. 

Related: There’s Certified Fair Trade Coffee, so How About Certified & Persistent NFTs?

In late March, Blockstream launched a token representing the value of hash power at Blockstream’s mining facility and offered buyers an indirect exposure to bitcoin. Tau Protocol recently launched a token pegged to bitcoin hashrate and backed by Genesis Mining, Binance Pool, Atlas Mining and others.

BitRiver, however, takes a different approach. Instead of indirect exposure to bitcoin, it offers clients a form of tokenized contracts for mining services, with a bonus income in tokens.

“It’s a utility token and it ideally fits our goal: to raise funds from people who will be using our future infrastructure,” BitRiver CEO Igor Runets told CoinDesk.  

More farms in Siberia

BitRiver, registered in Gibraltar but with a home base in Siberia, operates so-called mining hotels, or data centers for miners who place their ASICs there. Clients pay for the units of power their equipment uses to mine crypto, with the price including other expenses like machine maintenance. 

Related: Canaan Plunges as Inventory Issues Slashed Q4 Bitcoin Mining Machine Sales

The demand for BitRiver’s services has been significantly exceeding the company’s capacity, Runets said. In addition to the main data center in Bratsk, the company has several smaller venues that together comprise 50 more megawatts, but that’s still much less than prospective clients want, Runets said.

“We now see demand for 400 megawatts of power,” he said. “It’s a huge amount of construction work. We’re now looking to buy more land, buildings [and] start to build more data centers.”

Investments for that, as Runets expects, will come from the token sale. BitRiver is aiming to sell 100 million tokens for more than $35 million. 

The demand for BitRiver’s services comes mostly from Asia, Runets said, especially from China, South Korea and Japan. BitRiver even opened an office in Seoul earlier in April to cater to that region, and the token sale will be on the Korean exchange Bithumb. 

Growing demand has been also coming from Persian Gulf countries, namely Qatar, Saudi Arabia and UAE, Runets said: “Over the recent months, the market there has been growing, people have a lot of money to invest, and the surging price of bitcoin drew attention [to mining].”

Some of the expansion has been ongoing. BitRiver recently founded a joint venture with a Russian hydropower giant En+ to build a new mining venue of 10 megawatts. According to Runets, that farm is now operational. 

Another venue, of 100 more megawatts, is currently under construction in the special economic zone of Buryatia, Russia’s East Siberian region on the border with Mongolia. In the neighboring Krasnoyarsk region, BitRiver will arrange another venue using the building of an electric boiler now rarely in use, with a ready-to-use capacity of about 82 megawatt, the token sale white paper said (read the white paper at the bottom of this story).     

Read also: Bitcoin Mining Farms Are Flourishing on the Ruins of Soviet Industry in Siberia                                                                                                                                                                                   

Mining tokenomics

The BTR token sale is set to go live on April 19 on Bithumb. BitRiver is planning to sell 100 million tokens with a price starting at 35 cents. Each token would provide a buyer with an allocation of 1 watt of power for a full year. Given that there is on average 720 hours in a month and 8,640 hours in a year, one kilowatt-hour would cost 4 cents to a token holder.

Token holders will be able to get their ASICs installed and serviced in BitRiver’s warehouse in three months upon purchase. Users will also be able to pay up to 10% of their bills to BitRiver in tokens, and have their ASICs repaired for free in that case. 

The company will also pay bonus tokens to the token holders, at a rate of 10% per year, using its own stash of 65 million tokens that won’t go into public circulation. In another step to make BTR attractive, BitRiver promises to buy back all the tokens by April 12, 2026, at the nominal value of 0.3504 USD per token.

BitRiver is not limiting the offer geographically, unlike many token issuers that would wall off American users to avoid running afoul of the U.S. regulators such as the Securities and Exchange Commission (SEC). Blockstream, for example, restricted its token sale to non-U.S. qualified investors. 

Runets explained that, as BitRiver isn’t selling the tokens directly, it’s up to Bithumb to run due-diligence on potential buyers. 

Crypto regulations in Russia have been in flux recently, with a crypto taxation bill currently awaiting passage in the national parliament. The uncertainty led many of BitRiver’s clients in Russia to establish foreign legal entities and operate through them, Runets said. 

However, when asked about potential regulatory risks for a large-scale mining farm construction, he sounded moderately optimistic: “We don’t see any prerequisites for an all-out ban,” he said. 

Read also: Over 50% of Binance’s Russian Customers Believe Crypto Can Replace Bank Deposits 

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Square-Led COPA Sues Craig Wright Over Bitcoin White Paper Copyright Claims

CoinDesk Crypto
5 years 6 months ago

If you send out enough cease-and-desist orders, it’s likely you’ll get a lawsuit in return. That appears to be the case with nChain Chief Scientist Craig Wright and his legal crusade to block people within and without the cryptocurrency community from hosting the Bitcoin white paper. 

The Cryptocurrency Open Patent Alliance (COPA) is filing a lawsuit against Wright in the U.K. over his copyright claims to the Bitcoin white paper. The Alliance was formed in September 2020 and founded by Square to pool patents and preserve the industry’s open-source spirit.

Wright’s representatives sent Square a cease-and-desist notice dated Jan. 21, 2021, demanding that Square stop hosting the white paper on its site. At the time, COPA sent back a legal response on behalf of Square, which boiled down to this: Prove you’re Satoshi Nakamoto, the creator of the white paper first. 

Related: There’s Certified Fair Trade Coffee, so How About Certified & Persistent NFTs?

It does not appear Wright responded with the requested proof by the Feb. 19 deadline COPA set. 

“COPA is about truly empowering the crypto community with innovation and removing blockers to innovation,” said a spokesperson on behalf of the COPA board. “This is not the last thing we’re going to take up on behalf of the community.”

The complaint asks the court to resolve the question as to whether Craig Wright has copyright ownership rights over the Bitcoin white paper.

Pursuing a legal case on behalf of the cryptocurrency community is the first instance of COPA throwing its money and weight behind a cause that has plagued the space for years, and it could have widespread ramifications. If a court rules that Wright does not have ownership rights over the Bitcoin white paper, it would be a serious blow to his legal argument that he is Satoshi Nakamoto. 

Wright’s long legal trail

Related: Canaan Plunges as Inventory Issues Slashed Q4 Bitcoin Mining Machine Sales

Wright, notorious for having an itchy legal finger, had sent his latest round of cease-and-desist orders to Bitcoin core developers, causing the Bitcoin white paper to be taken down from Bitcoincore.org, a “canonical repository for the Bitcoin software and educational resources like Satoshi’s 10-page thesis,” CoinDesk wrote at the time. 

Regardless of whether they’re accurate or not, legal claims take time, energy and, importantly, finances to contest. 

COPA is stepping in on behalf of the community to protect those small parties, particularly Bitcoin developers, who are essential to the community but don’t have a ton of resources, according to a spokesperson for the COPA board familiar with the matter. 

Beyond that, in late February Wright also filed a lawsuit demanding Bitcoin developers give him access to stolen Mt. Gox funds. As CoinDesk reported at the time “even though Bitcoin Core contributors have no control over the network’s wallets, Wright wants Bitcoin’s developers to hand him the keys.”

Following Wright’s initial filings against Bitcoin core developers, but prior to the paper being removed, a number of companies, including Square Crypto, crypto venture fund Paradigm, policy think-tank Coin Center and Facebook stablecoin subsidiary Novi, among others, decided to host it themselves. The action was meant to be a sign of solidarity.

The letter accompanying COPA’s response laid out a number of simple questions for Wright’s representatives to answer regarding his claims. These included the general basis of the claim, where he was when he wrote the white paper, what dates he wrote it and what copyright laws apply, among a number of others. 

Wright has a long legal paper trail of using the law to try and silence his critics and even filed a copyright claim in May 2019 with the U.S. Copyright Office over the original Bitcoin code and the Satoshi white paper. 

None of his legal attempts to assert he is Bitcoin creator Satoshi Nakamoto have been successful. 

The new COPA board

The board of COPA, which helps determine the organization’s actions and will guide the course of the lawsuit, is also being updated. 

Ultimately, COPA will have a nine-person board representative of the entire community, with three spots reserved for independent members. Thus far, two board members represent member organizations: Brittany Cuthbert, senior counsel at Coinbase, and most recently Kirupa Pushparaj, deputy general counsel at Square. 

Four more board members from COPA organizations will be added in the future.

Three additional independent members will round out the COPA board. These included Steve Lee, Square Crypto lead; Dan Robinson, research partner at Paradigm; and Jerry Brito, executive director of Coin Center.

CoinDesk can also report Pushparaj will also be appointed the board chairman.

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Ant Group to Become Financial Holding Company as Part of Alibaba Settlement: Report

CoinDesk Crypto
5 years 6 months ago

The People’s Bank of China (PBoC) confirmed Monday that Jack Ma’s giant Ant Group will restructure as a financial holdings company.

  • Ant Group whose $37 billion initial public offering (IPO) was suspended by China’s regulators in November, will restructure as a financial holding company, according to a CNBC report. 
  • The terms of the restructuring are expected to curb Ant Group’s profitability and valuation.
  • Two days ago, Chinese regulators hit Alibaba with a $2.8 billion fine as part of its anti-monopoly investigation of the tech giant, claiming the company had abused its market dominance. The restructuring of Ant Group is part of the terms of the settlement of those claims, CNBC said.
  • The PBoC said that under a “comprehensive and feasible restructuring plan” Ant Group would cut the “improper” linkage with payments services including AliPay, Jiebei, and Huabei, said the report.
  • In February, it emerged Chinese regulators had agreed on a restructuring plan with Ant Group that would combine all its business segments, including its blockchain arm, into a financial holding company, according to a Bloomberg report citing people familiar with the matter.
  • Ant Group is known for its major subsidiaries including Alipay and Kakao, but it also has a blockchain arm offering services based on its own AntChain technology.
  • The outspoken billionaire Jack Ma is the founder of Alibaba and its affiliate Ant Group, and has been keeping a low profile since October when he publicly criticized China’s financial system and its state-dominated banking sector at a Shanghai event.
  • Recently, PBoC Digital Currency Research Institute director Mu Changchun has been openly discussing the central bank’s own digital currency and the need to address privacy issues, stating “a completely anonymous central bank digital currency is not feasible” as it would violate anti-money laundering regulations.

Read more: Jack Ma’s Ant Group, 3 Other Digital Banks Get OK to Operate in Singapore

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Zcash Announces ‘Halo Arc’ and Timeline for Protocol Privacy Update

CoinDesk Crypto
5 years 6 months ago

Electric Coin Company (ECC) has announced the next suite of upgrades to privacy coin Zcash – Halo Arc. 

Halo Arc includes updates to Zcashd (Zcash’s consensus node), an ECC wallet prototype and the ECC wallet software development kits (SDKs). The wallet will enable shielded-by-default transactions, something that is merely optional for Zcash right now. 

Previously planned for release this summer, Halo Arc will now launch on Oct. 1, 2021, in coordination with the activation of Zcash’s Network Upgrade 5 (NU5). NU5 will be the first mainnet activation of the Halo proving system, furthering the development of zero-knowledge-proof cryptography.

Related: There’s Certified Fair Trade Coffee, so How About Certified & Persistent NFTs?

The October protocol upgrade will also introduce unified addresses, a feature that creates a single Zcash address that is compatible across all Zcash value pools, including shielded and transparent ones, so that users no longer have to juggle multiple address types. At present, protocol upgrades at times required new address formats. 

Eliminating Zcash’s trusted setup

Halo is a “trustless recursive” version of zero-knowledge proofs that allows greater scalability and removes the controversial “trusted setups” involved. 

A trusted setup creates a secret number, and a derivative of that number is used by the Zcash protocol. This number is created in multiple parts by multiple actors. They all must then destroy what’s known as “cryptographic toxic waste” without revealing what it was. A trusted setup would have had to occur at each hard fork.

But if no one destroys that waste, possibly through intentional planning, or if the secret number is figured out, then it would provide a fundamental flaw in the protocol and even let the individual or individuals that discovered it to create zcash arbitrarily and without anyone’s knowledge. 

Related: Canaan Plunges as Inventory Issues Slashed Q4 Bitcoin Mining Machine Sales

“This is all built on top of Halo, which will usher in a new era of zero-knowledge cryptography and means, for this first release, increased confidence in the money supply by removing the trusted setup necessary for current zero-knowledge proving systems,” said Josh Swihart, ECC’s Vice President of Growth.

Halo Arc and wallets

Halo Arc includes a number of products, but the most tangible takeaway for users will be the ability to ensure that their transactions are private, right from the outset.

“With Halo Arc, we’re making it easy for wallets to support shielded Zcash by default,” said Swihart. “Users of supporting wallets will be able to give counterparties a single address and know that funds will be sent to their shielded address, regardless of whether the sender supports shielded addresses.”

In addition to the automatic shielding feature that’s part of the NU5-compatible wallet SDKs, Halo Arc also includes auto-migration. This allows wallets to move funds to the most modern shielded pool supported by the wallet. This feature will also make it easier to deprecate (or recommend against using) older pools.

Halo Arc also includes “improved note management” according to a blog post announcing the release. This will reduce the time users need to wait between sending transactions, so they’ll be able to send one transaction immediately after another.

Going forward, ECC will bundle upgrades, products and features into regular releases, rather than relying on intermittent or one-off instances.

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Litecoin ETC to List on Deutsche Boerse

CoinDesk Crypto
5 years 6 months ago

London-based ETC Group announced Monday it will list a physical litecoin exchange-traded commodity (ETC) on Deutsche Boerse’s Xetra market, based in Frankfurt, on April 14. 

  • The new “ETC Group Physical Litecoin ETC” product will be a central counterparty cleared exchange-traded product (ETP) and will track the price of the litecoin cryptocurrency.
  • The litecoin ETC goes live on Wednesday and will trade under the ticker “ELTC” and have a management fee of 2%. The product is marketed and distributed by HANetf.
  • “Litecoin has grown by 342% in the past 12 months and is the ninth-largest cryptocurrency by market capitalization at $14.6 billion with growing interest from institutional and retail investors,” said Bradley Duke, CEO of ETC Group.
  • Earlier this month, asset manager CoinShares launched a new physically backed litecoin ETP on the Swiss SIX exchange.
  • In March, the ETC Group listed a Physical Ethereum ETC on Deutsche Boerse’s Xetra market which tracks the price of ether.

Read more: CoinShares Launches Litecoin ETP

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ConsenSys Project Virtue Poker Raises $5M Ahead of Mainnet Launch

CoinDesk Crypto
5 years 6 months ago

Decentralized gambling platform Virtue Poker has raised $5 million in a strategic investment round.

  • Ethereum-based Virtue Poker plans to conduct an initial DEX offering (IDO) ahead of its mainnet launch in May, the startup announced Monday.
  • The project was incubated by blockchain developer ConsenSys and counts Pantera Capital and DFG Group among its backers.
  • Virtue Poker claims to be the only blockchain-based company to be licensed by the Malta’s gambling regulator.
  • The platform aims to use smart contracts and sidechain infrastructure to bring greater transparency to online gambling with regard to withdrawals and other functions.
  • According to ConsenSys founder Joe Lubin, Virtue Poker “legitimizes the use of this technology in the industry.”
  • “I’ve been working with the Virtue Poker team for nearly three years, watching them build a next-generation poker platform,” poker pro Phil Ivey said in a press release.
  • It’s among a crop of startups exploring gambling use cases on the blockchain, including a casino in Decentraland hiring real-life workers to staff virtual tables.
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Circle Brings on Former Libra Vice Chair Dante Disparte in Potential Blow to Facebook Stablecoin Effort

CoinDesk Crypto
5 years 6 months ago

Dante Disparte, the former vice chair of the Facebook-initiated Diem Association, has joined payments startup Circle as its new chief strategy officer and head of global policy.

It’s unclear when Disparte, who was a part of the diem stablecoin project since its origin in June 2019 (when it was referred to as libra) left the initiative, but his LinkedIn profile said he joined Circle in April 2021. Circle CEO Jeremy Allaire announced the hire on Monday in a blog post.

“The standards that we’ve helped bring into the world are taking on a new life, as dollar stablecoins become one of the most critical new infrastructures of the internet and commerce. This technical innovation converges with heightened regulatory and policy maker focus,” Allaire wrote.

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Disparte is only the latest high-profile Diem executive to leave the project, which has faced strong regulatory headwinds since it was first announced. Morgan Beller, one of the other Facebook employees who spearheaded Libra, joined venture capital firm NFX in September.

Meanwhile, David Marcus, the Facebook executive running its Novi wallet subsidiary, was placed in charge of the social media giant’s new “Facebook Financial” wing, which has been tasked with integrating payments into its different messaging applications.

Christine Smedley, who ran communications around Novi for Facebook, joined Robinhood last year as its chief marketing officer.

Allaire said in Monday’s blog post that Disparte would be part of Circle’s global expansion effort.

Related: Litecoin ETC to List on Deutsche Boerse

In an opinion piece submitted to the Diplomatic Courier, Disparte wrote, “Designing first principles into digital financial services and importing sound monetary policy and market conduct from independent central banks into stablecoins and trusted digital currencies, like USDC (now used by some of the most exacting and trusted financial institutions in the world), are adding crucial optionality, competition and reach to today’s financial services.”

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Galaxy Digital Files for US Bitcoin ETF

CoinDesk Crypto
5 years 6 months ago

Mike Novogratz-led Galaxy Digital has filed with U.S. regulators for a bitcoin exchange-traded fund (ETF).

  • If greenlit, it’d be the first such investment vehicle to get U.S. approval; the Securities and Exchange Commission (SEC) has swatted away dozens of applications in recent years.
  • As of this month, the SEC is reviewing two applications, and companies have filed another six. These other six applications (including Galaxy’s) still need exchange partners to file their corresponding forms before the SEC can begin its review.
  • In North America, Canada has taken the lead on bitcoin ETFs.
  • Galaxy is the sub-adviser to the CI Galaxy Bitcoin ETF, which currently has $190 million in assets after launching last month.
  • A Galaxy Digital spokeswoman declined to comment on the latest filing citing SEC rules.
  • Galaxy is publically listed on the Toronto Stock Exchange and is in the process of obtaining a U.S. listing.
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MicroStrategy Says Some of Its Board Directors to Be Paid in Bitcoin

CoinDesk Crypto
5 years 6 months ago

MicroStrategy, the business intelligence firm that has made bitcoin its main treasury reserve, said its non-employee board members will now be compensated in bitcoin.

  • In an 8-K filing with the U.S. Securities and Exchange Commission on Monday, MicroStrategy said that from April 11 onward non-employee directors on its board will receive all fees for their service in bitcoin instead of cash.
  • In making the announcement, the firm’s board cited its “commitment to bitcoin.”
  • Under this new arrangement, at the time of payment, the fees will be converted from U.S. dollars into bitcoin and then deposited into the digital wallet of the director.
  • On April 5 MicroStrategy, purchased about 253 more BTC for $15 million in cash, bringing its total holdings to about 91,579 BTC.

Read more: Forget Buying the Dip, MicroStrategy Buys $15M of Bitcoins as It Nears the All-Time High

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Social Token Platform Rally Raises $22M in RLY Sale on CoinList

CoinDesk Crypto
5 years 6 months ago

Rally, an Ethereum-based platform that mints “social tokens” for online creators to flex their crypto clout, last week raised over $22 million through a token sale on distribution platform CoinList.

Initiated by community vote, the RLY token sale garnered more than 40,000 participants, a record for CoinList, organizers Mike Zajko and Alex Topchishvili told CoinDesk. They said it was the first time CoinList conducted a sale for a liquid token.

The big numbers highlight how social tokens, which are cryptocurrencies that support online communities, are growing in prominence as a means for influencers – especially Twitch streamers – to connect with their fans. The RLY rally comes weeks after a wallet hack sent social tokens on rival platform Roll spiraling. 

Related: Asian DeFi Picks Up Steam; Hong Kong Scammers Use Crypto as Bait

Rally lets influencers create fan engagement tokens that sometimes unlock loyalty perks, like behind-the-scenes access or limited edition swag. Most of Rally’s top “Creator Coins” are live-streaming gamers with the occasional musical act thrown in. The platform had 95 creators on board at press time.

It is unusual for a live protocol with a circulating supply to pursue a token sale; CoinList had never done it before. But Rally community members began debating the idea in late February and ultimately voted to hold the distribution event through CoinList.

Rally founder Kevin Chou told CoinDesk the project didn’t do the sale for the money. Rather, it was angling to raise its profile and boost the number of people personally involved.

“Really, very few people had heard about Rally” before the token sale, Chou said, pointing to Etherscan records that indicated just 1,500 prior token holders.

Related: Litecoin ETC to List on Deutsche Boerse

“The token sale has allowed us to add another 44,000 people to the project,” Chou said.

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Stellar Foundation Implements Protocol Upgrade Following Node Outage

CoinDesk Crypto
5 years 6 months ago

The Stellar Development Foundation has executed a protocol upgrade to its network after an issue was detected that caused several nodes to go dark.

According to a blog post Thursday, an outage on April 6 caused non-validating Horizon nodes and validating nodes, including those run by the Stellar Development Foundation, to go offline for a short while.

An upgrade was introduced April 10 after it was reported that certain organizations had difficulty recovering network access. The new Protocol 16 upgrade is said to have fixed the issue, which was affecting multiple nodes but did not affect the stability of the network; there were enough validators to process transactions.

Related: Asian DeFi Picks Up Steam; Hong Kong Scammers Use Crypto as Bait

A company FAQ explains that the Stellar Foundation’s validator nodes had ceased processing ledgers while the public Horizon instance stopped recording them. “For a brief period of time it was unable to serve requests or submit transactions to the network,” the FAQ reads.

To rectify the issue, the foundation said engineers worked on a fix and rolled out a patch later in the day. Two days later, Stellar Core v16.0.0 was released and voted on by network validators, resulting in the upgrade.

“All affected nodes should be able to upgrade to Protocol-16 compatible software and restore network access,” said the foundation.

See also: Stellar Development Foundation Invests $5M in Crypto Payments Firm Wyre

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Bitcoin Dominance at 2-Year Low as XRP, Binance’s BNB Rally

CoinDesk Crypto
5 years 6 months ago

Bitcoin’s share of total cryptocurrency market value has fallen to its lowest level in two years after strong rallies from some of the industry’s biggest altcoins, including XRP and binance coin.

The market dominance of bitcoin, or the largest cryptocurrency’s value as a share of the overall market, has dropped to about 55%, the lowest since April 2019, according to cryptocurrency research firms Messari and CoinGecko. That’s down from about 70% at the start of the year.

The decline iwas driven in recent weeks by powerful rallies in the likes of binance coin (BNB) and XRP (XRP), since bitcoin’s market value has held steady at around $1 trillion or slightly above. The trend offers a reminder of just how much money is flowing these days into digital assets beyond bitcoin, even as the big exchange Coinbase prepares this week for a public stock listing aimed at traditional-market investors.

Related: Asian DeFi Picks Up Steam; Hong Kong Scammers Use Crypto as Bait

The largest cryptocurrency’s price has doubled this year to about $60,000, but other tokens have surged by many multiples. BNB, a utility token used on Binance’s platforms, has jumped 22% in the past 24 hours, leaving the price up 15-fold in 2021, for a market value of about $90 billion.

XRP, the digital token used in Ripple Labs’ payment network, doubled in the seven days through Sunday, its best weekly performance in more than three years. The market value is between $50 billion and $140 billion, depending on how one calculates it.

Meanwhile, ether (ETH), the native cryptocurrency of the Ethereum blockchain and the second-biggest overall, recently climbed to a new all-time near $2,200, according to CoinDesk 20 data. It has a market capitalization of about $250 billion, as prices nearly tripled this year.

Filecoin (FIL) has climbed seven-fold this year to a market cap around $11 billion, and theta token (THETA) has surged six-fold to about $12 billion. Even dogecoin (DOGE), which was launched in 2013 as little more than a joke, has seen its price increase 12-fold this year, for a market value of about $9 billion.

Related: Litecoin ETC to List on Deutsche Boerse

See also: Bitcoin Price Shoots Past $60K, Ether Hits New All-Time High in Early Saturday Trading

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