CoinDesk Crypto

Canadian augmented reality (AR) company NexTech AR is jumping on the crypto bandwagon with plans to use its treasury funds to buy $2 million of bitcoin for “capital diversification.”

• Announced Tuesday, the AR company said it plans on making an initial investment of $2 million in bitcoin and may add more in 2021.
• As of Sept. 30, the company had C$16.39 million (US$12.79 million) cash on hand, making the investment roughly 15.6% of its available cash, assuming the $2 million investment is in U.S. dollars. An email to NexTech seeking clarification wasn’t immediately answered.
• “Our investment in bitcoin is part of our new capital diversification and allocation strategy with the intent to maximize long-term value for our shareholders,” said NexTech CEO Evan Gappelberg in a statement.
• Gappelberg said the investment reflects his belief that bitcoin is a long-term store of value with more long-term appreciation potential than holding cash, which is currently yielding 0.06%.
• The CEO described bitcoin as a “digital version of gold,” which has a total market capitalization of $10 trillion versus bitcoin’s total market capitalization of $500 billion.
• Gappelberg is the latest CEO to use company treasury funds to buy bitcoin. Most prominent among these is MicroStrategy (NASDAQ: MSTR) CEO Michael Saylor, who has spent $1.125 billion on bitcoin to date.

Read more: Nasdaq-Listed Canadian Firm to Invest Over $1M in Bitcoin

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• India Mulls Imposing 18% Tax on Bitcoin Transactions

Cryptocurrency exchange OKEx has introduced real-time settlement for the trading of derivatives on its platform including futures, options and swaps, allowing users to make withdrawals at any time.

• OKEx said the real-time settlement function will only be available with the trading of the ADA/USD swap today at 8 a.m. UTC.
• Prior to the offering, transactions were usually settled at 4 p.m. UTC settlement period daily. This update will allow OKEx users to withdraw their profits at any time, said the exchange.
• OKEx said the function will then be rolled out to other major currency pairs and financial instruments on the platform over the coming months.

Read more: OKEx Bitcoin Mining Pool Shows Signs of Life After Precipitous Hashrate Drop

• OKCoin to Suspend XRP Trading and Deposits on Jan. 4
• Bitcoin Whales Buy Low, Sell High; Retail Investors Chase Rallies: Data
• Airbnb Pre-IPO Derivatives Contract Listed on Crypto Exchange FTX
• OKEx Bitcoin Mining Pool Shows Signs of Life After Precipitous Hashrate Drop

The city council of Lebrija has created a virtual currency, elio, that can only be used for payments made to small and medium-sized businesses, according to a report by Diario de Sevilla.

• Lebrija has created the virtual currency to support economic activity during the COVID-19 pandemic, according to the report.
• One Elio is equivalent to one euro and almost 600 families will receive between €20 (US$24.50) and €200 ($244.96), which can only be spent in local businesses using an app.
• The deadline to use the elio was Dec. 31 but, according to the report, this has been extended until March 31, 2021.

Read more: Spain’s Second-Largest Bank Will Soon Launch Crypto Services: Sources

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The Indian government is considering a bitcoin transaction tax that would add $1 billion in revenue a year, a move some industry participants said is a sign of the government’s growing comfort with cryptocurrencies.

A proposal put forward to the Central Board of Indirect Taxes & Customs (CBIC) by the Central Economic Intelligence Bureau (CEIB) would categorize bitcoin as an intangible asset and impose an 18% goods and services (GST) tax on bitcoin transactions, according to The Times of India. The proposal also suggests treating bitcoin as current assets and charging GST on margins made in trading.

An 18% GST on the estimated annual value of all bitcoin transactions of INR 40,000 crore (roughly $5.5 billion) would yield INR 7,200 crore or $1 billion in tax revenue.

Related: Market Wrap: Bitcoin Hovers Around $27K While ETH/BTC Pair Goes Bullish

Prominent India-based crypto exchanges say a potential tax structure would bode well for the ecosystem. “Government mulling a tax structure is a sign of better understanding of this novel asset class and we are hopeful that this would lead to more positive news going forward,” Sumit Gupta, CEO of Mumbai-based crypto exchange CoinDCX said in a WhatsApp chat. “Regarding the tax rate, and structure is something that we’ll wait and watch, but this is definitely a positive sign.”

Nischal Shetty, CEO of the Binance-owned WazirX exchange, echoed similar sentiments and added that clarity on the tax front could pave the way for increased Indian institutional participation in the bitcoin market. WazirX and Bangalore-based exchange Bitbns said that they are already paying GST on trading fees. “The GST amount paid has grown 500% in the last few months,” Gaurav Dahake, founder and CEO of Bangalore-based exchange Bitbns, told CoinDesk.

Trading volumes on exchanges catering to India-based clients have been rising ever since the Supreme Court quashed the Reserve Bank of India’s (central bank) banking ban on cryptocurrencies in March. While the Indian government does not consider bitcoin legal tender, simply holding cryptocurrencies is not illegal or banned. 

Also read: India’s Banks Are Once More Serving Crypto Traders and Exchanges

• Lending Platform Vauld Raises $2M to Grow Into a Full Crypto Bank
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• The Rise of the Bitcoin Class

Publicly traded digital-asset brokerage Voyager Digital (OTC: VYGYF) was forced to take its system offline on Monday after a cyberattack compromised the exchange system.

• In a series of tweets, the Canada-based firm apologized and informed customers its domain name system (DNS) server was compromised but has since been recovered.
• “Unfortunately, I was faced with a tough choice today. We were alerted by our tracking system, and we decided to take the system offline. Safety and security of customer assets and information is paramount. I appreciate all the support of the community as we work through this,” tweeted Steve Ehrlich, co-founder, and CEO of Voyager.
• Voyager reassured its customers that no funds or personal information were compromised but warned it will take 24 hours to get its app back online again.

Read more: Voyager Digital Revenue Rises Over 1,000% on Increased Crypto Adoption

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Coinbase said it will suspend trading of XRP, the cryptocurrency the U.S. Securities and Exchange Commission sued Ripple Labs in regards to last week claiming it is really a security.

Coinbase first listed XRP on its retail-facing platforms in February 2019. Starting now, XRP trading “will move into limit only,” Coinbase wrote. It will be fully suspended on Tuesday, Jan. 19, 2021, at 1 p.m. ET.

“We will continue to monitor legal developments related to XRP and update our customers as more information becomes available,” Paul Grewal, Coinbase’s chief legal officer, wrote in a blog post shared in advance with CoinDesk.

Related: SEC Disapproves BOX Security’s Request to Report Stock Trading Data on Ethereum Blockchain

Coinbase said users’ XRP wallets will “remain available for receive and withdraw functionality after the trading suspension.”

Notably, the exchange said it will still support an upcoming airdrop of Spark tokens to XRP holders. XRP will still be supported by Coinbase Custody and in the self-custodial Coinbase Wallet.

Coinbase declined to comment beyond its written statement.

The price of XRP on Coinbase tanked from $0.28 to $0.24 within the first 20 minutes of the announcement. Since the announcement of the SEC’s lawsuit last week, the price of XRP has fallen by more than 50%.

Related: OKCoin to Suspend XRP Trading and Deposits on Jan. 4

For Coinbase, the reason for dropping XRP as a traded asset was simple: As the company seeks to go public, being a platform for something that’s potentially a security would mean adding more paperwork simply so it could be legally allowed to let retail customers buy and sell a single cryptocurrency.

The SEC claimed last week that XRP is a security, and that Ripple has been selling it without registering or seeking an exemption for seven years, raising $1.3 billion in the process. The legal battle itself is just beginning, and litigation might take years if Ripple fights the charge in court, as it has indicated it would.

Coinbase is now the biggest exchange to act on XRP and could serve as a bellwether for other platforms. On Friday, Bitstamp announced it would halt XRP trading and deposits for all U.S. customers on Jan. 8.

Similarly San Francisco-based OKCoin announced its XRP suspension earlier Monday, effective Jan. 4.

Exchanges that continue to list XRP without registering as a securities exchange with the SEC face potential consequences down the line, including possible enforcement actions. However, should Ripple prevail in its defense, Coinbase can likely re-list XRP fairly easily.

Alex Kruger, a trader and analyst, said, “Crypto exchanges are unregistered with the SEC (by choice, as registering carries on many burdens and increased costs) and thus it is in their best interest to not offer trading of securities. It is for their protection, not their customers’.”

Gabriel Shapiro, an attorney with Belcher, Smolen & Van Loo LLP, told CoinDesk last week that the question of whether exchanges should delist is a complicated one, with both business and legal considerations. 

UPDATE (Dec. 28, 23:35 UTC): Adds XRP price reaction.

• SEC Obtains Emergency Asset Freeze Against Virgil Capital
• XRP Is a Crypto Asset in Japan, Not a Security, Ripple Partner SBI Claims

Bitcoin has mostly traded in a tight, low-volume range Monday while some profit-taking from bitcoin into ether is appearing on the ETH/BTC charts.

• Bitcoin (BTC) trading around $26,822 as of 21:00 UTC (4 p.m. ET). Gaining 2.3% over the previous 24 hours.
• Bitcoin’s 24-hour range: $25,759- $27,447 (CoinDesk 20)
• BTC very near its 10-hour and 50-hour moving averages on the hourly chart, a sideways signal for market technicians.

Bitcoin’s price action has stagnated Monday, trading in a $27,000-$27,200 range for many hours, according to CoinDesk 20 data. The lack of movement follows a Sunday when bitcoin cracked an all-time high of $28,352, fueled by a bull run sparked on Dec. 25. 

A bit of a respite is par for the course, according to over-the-counter trader Alessandro Andreotti. “I think it’s just a minor retracement, a little pause after a week of all-time highs,” Andreotti told CoinDesk. “BTC is definitely still in bullish territory.”

Related: Whale Sightings Become Scarce, Removing Downward Pressure on Bitcoin: Analyst

Read More: Whale Sightings Become Scarce, Removing Downward Pressure on Bitcoin

After Sunday’s run that saw over $4 billion in volume on major CoinDesk 20 exchanges, Monday’s spot trading tally is much lower, at $1.8 billion as of press time. “Given the speed of the rise yesterday, especially after the last few days’ rally, a slight contraction is normal,” said David Lifchitz, chief investment officer of quant trading firm ExoAlpha. 

“Bitcoin continues on its strong upwards path with more retail investors now moving into bitcoin over the holiday break,” noted Jason Lau, chief operating officer of San Francisco-based cryptocurrency exchange OKCoin. However, flat spot volume may not be a trend heading into next year, according to Lau. “With the [U.S. economic] stimulus package being signed, the appeal of bitcoin as a store of value could continue into 2021.”

In the derivatives space, futures liquidations have helped to fuel bitcoin’s recent price run. This is evident in the number of liquidations – the equivalent of a margin call in traditional markets – on BitMEX. Over the past three days more than $116 million in liquidations occurred, with shorts being favored as buy liquidations hit $65 million. 

Related: The Rise of the Bitcoin Class

“At this stage there is a clear lack of sellers as all the leveraged shorts are liquidated,” quant trading firm QCP Capital wrote in its Monday investor note. “The bull story remains clear: Growing institutional adoption of BTC is driving price higher and is feeding the retail FOMO, which then extends across all of crypto.”

Other analysts agree with QCP that bitcoin’s price push is allowing other cryptocurrencies, particularly ether, to start getting more attention. “I think the BTC price slowdown is giving some breath for the altcoin season,” said Misha Alefirenko, founder of crypto market maker VelvetFormula. The ether futures market is trending back up after a record-high $2.2 billion in open interest lost some steam after Dec. 19. 

However, the news CME will be getting into the ether futures game is a positive sign for continued institutional interest in crypto, according to OKCoin’s Lau.

“Ethereum has maintained the upwards trajectory alongside bitcoin, reaching its highest levels since May 2018,” said Lau. The CME Ethereum futures offering in February, “could have a huge impact by exposing [ether] to more institutional investors.”

Ether (ETH), the second-largest cryptocurrency by market capitalization, was up Monday, trading around $732 and climbing 8% in 24 hours as of 21:00 UTC (4:00 p.m. ET).

Read More: Cover Protocol Attack Perpetrated by ‘White Hat,’ Funds Returned

The ETH/BTC trading pair, a common offering on most exchanges, has suddenly gone bullish Monday after a long bearish cycle. This pair indicates the strength of ether versus bitcoin. The bullish signal on the hourly charts, including a spike in volume on Coinbase, suggests traders are selling bitcoin for ether.

Some profit-taking from bitcoin into ether is the main culprit, according to Vishal Shah, an options trader and founder of derivatives venue Alpha5.  “I think it’s the spillover effects of BTC exhaustion,” Shah told CoinDesk. He also added it is likely hardcore crypto traders ekeing out more gains in this bull cycle pushing the ETH/BTC hourly chart up. “This entire rally has been born of bitcoin, so [its] hard to see it simply shift gears. And if it does, it’s probably not the same ilk of investor.”

Digital assets on the CoinDesk 20 are mostly green Monday. Notable winners as of 21:00 UTC (4:00 p.m. ET):

• cosmos (ATOM) + 9%
• cardano (ADA) + 8.5%
• bitcoin cash (BCH) + 7%

One notable loser:

• xrp (XRP) – 1.9%

Equities:

• Asia’s Nikkei 225 ended the day climbing 0.74% as investors exuded optimism amid fresh U.S. stimulus and the administration of coronavirus vaccines.
• The FTSE 100 in Europe closed flat, in the green 0.10% as traders weighed a Brexit trade deal approval from U.K. lawmakers this week.
• The S&P 500 in the United States gained 0.80% as investors were in buying mode after President Trump signed the $900 billion coronavirus stimulus package into law.

Read More: XRP Is a Crypto Asset in Japan, Not a Security, Ripple Partner SBI Claims

Commodities:

• Oil was down 1.3%. Price per barrel of West Texas Intermediate crude: $47.66.
• Gold was in the red 0.33% and at $1,872 as of press time.

Treasurys:

• The 10-year U.S. Treasury bond yield was down Monday dipping to 0.928 and in the red 0.18%.

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In a notice filed by the Securities and Exchange Commission Monday, the U.S. regulator declined to approve a rule change for tZero-backed BOX Exchange Inc., which intended to offer blockchain-based stock trade reporting.

• The proposal intended to have National Market System (NMS) stocks use BOX’s blockchain trading venue, also known as Boston Security Token Exchange LLC (BSTX).
• BOX initially filed the proposal Feb. 28, with multiple amendments added later. The exchange is a joint venture with tZero and began participating in security token offerings (STOs), blockchain-based security instruments, in 2018.
• The firm proposed using the Ethereum blockchain for recording and publishing end-of-day securities ownership balances, but did not specify how it would surveil and report transactions for compliance.
• The SEC’s major concern: Inaccurate information being published to the blockchain, as BSTX intended to use an “omnibus wallet” for non-BSTX stock transaction data, which the regulator feared could not stay up to date.

• Coinbase to Suspend XRP Trading Following SEC Suit Against Ripple
• SEC Obtains Emergency Asset Freeze Against Virgil Capital
• XRP Is a Crypto Asset in Japan, Not a Security, Ripple Partner SBI Claims
• Institutions Will Start Buying Ether in 2021, Messari Analyst Says

OKCoin said Monday it will suspend XRP trading and deposits on its crypto exchange, effective on Jan. 4, 2021.

The exchange specified two key dates along the suspension timeline. “At 3 a.m. UTC time on January 4, the exchange’s users who have borrowed from the XRP/USD margin pair (including borrowing XRP and U.S. dollars) are required to return the borrowed value before this time at 3 a.m. UTC time on Jan. 4,” the exchange said. “Delays will trigger a liquidation by our systems to close the loan contracts.”

At 3 a.m. UTC on Jan. 5, XRP’s spot trading, margin trading and deposits will be suspended until further notice, according to the exchange.

Related: Coinbase to Suspend XRP Trading Following SEC Suit Against Ripple

“It is likely that this situation will take time to reach a resolution. We will proactively inform our customers when we have information that may change our position,” OKCoin said in the statement.

OKCoin became the latest exchange to delist XRP because of the U.S. Securities and Exchange Commission’s recent filing against Ripple Labs, alleging XRP is a security.

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Singapore-based lending platform Vauld raised $2 million, led by Pantera Capital, to grow into a full crypto bank. Other investors include Coinbase Ventures, LuneX Ventures and individual investors including Robert Leshner of Compound Finance.

This is part of a larger story of crypto firms seeking their own banking charters to operate as crypto-native banks. Recently, stablecoin issuer and crypto services firm Paxos and crypto payments firm BitPay filed to become federally regulated banks in the U.S.

So far, Vauld has established a foothold in India, where a favorable ruling from the courts earlier this year has unleashed a flood of crypto activity.

Related: Swiss Crypto Bank SEBA Raises $22.5M to Fuel Growth

“Hiring is the focus of the hour in the Indian market,” Vauld co-founder and CTO Sanju Sony Kurian said in a statement.

The company, formerly known as Bank of Hodlers, will use the funds to expand from lending and borrowing to become a holistic banking platform that also includes payments and trading. Vauld also seeks to broaden its presence in Europe and the U.S. 

“We see institutional capital come into the crypto space with the expectation of banking integrations to complement crypto credit offerings,” CEO Darshan Bathija said in a statement.

The company’s immediate aims include implementing an over-the-counter (OTC) desk, fiat and crypto order books, and debit and credit cards for multiple countries. The goal is for users to do all their banking on a blockchain.

Related: India’s Leading Bitcoin Exchange Raises $13.9M From Block.One, Coinbase Ventures

Vauld intends to expand licensing across international crypto hubs including Singapore and the U.K. in the next 24 months. Bathija told CoinDesk via Telegram his company is also looking at Wyoming following the precedent of Kraken Financial and Avanti Financial.

This comes after a year in which two banking charters were approved by the Wyoming State Banking Board, granting Kraken and Avanti official status as chartered banks in the state. Vauld sees higher demand for banking functionalities for crypto assets.

Bathija said most regulators want businesses to first prove they have the governance structure to operate in full compliance, given how new crypto companies are in general. They urge companies to get lending and money transmission licenses first and “wait for a year until we start applying for the banking license,” he said.

Since its earlier investment of $500,000 from LuneX Ventures and a few angel investors in June, Vauld saw 950% growth, according to the company. Bathija said that is a “clear indication that yield products are valued and expected both in the U.S. and abroad.” 

Investor Paul Veradittakit, partner at Pantera Capital, said in a press release his firm is excited about “Vauld’s vision to make cryptocurrencies the preferred instrument of banking by making it simple to use and interoperable with the current banking infrastructure.”

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Cover Protocol announced it’s exploring launching a new COVER token through a snapshot after its current one was abused in a minting attack by a “white hat” hacker on Monday morning.

The hacker, which could be an individual or a small group, claimed responsibility for an exploit in the decentralized finance (DeFi) insurance project, tricking the protocol into minting 40 quintillion COVER tokens. The hacker cashed out the tokens in other cryptocurrencies including ether, DAI and WBTC but later gave all the funds back to the protocol.

“The 4350 ETH that has been returned by the attacker will also be handled through a snapshot to the LP token holders. We are still investigating,” according to the project’s Twitter account urging its users not to buy any COVER tokens now.

Related: Who Insures the Insurer? Cover Protocol Attack Exposes DeFi’s Promise and Peril

Read more: Who Insures the Insurer? Cover Protocol Attack Exposes DeFi’s Promise and Peril

The development team behind Cover Protocol, which recently merged with Yearn Finance, is still investigating how exactly the hacker exploited its system. Sorawit Suriyakarn, chief technology officer at Band Protocol, said the attack appears to be related to a bug in the smart contract, where memory and storage were used incorrectly.

COVER token’s price has been on a wild ride over the last day, plummeting by over 75% to $177 on news of the hack before partially rebounding to over $240 after the hacker announced they’d returned the funds.

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The U.S. Securities and Exchange Commission (SEC) said it obtained an order imposing an asset freeze and other emergency relief against Virgil Capital LLC and its affiliated companies in connection with an alleged securities fraud relating to Virgil Capital’s flagship cryptocurrency trading fund, Virgil Sigma Fund LP.

• Stefan Qin, the 23-year-old founder of Virgil Capital, has been accused by the SEC of “fabricated records” for failing to redeem $3.5 million in investments and attempting to withdraw $1.7 million in investor funds to pay off Chinese loan sharks, the SEC said.
• The defendants were alleged of misleading investors to believe their money was being used solely for cryptocurrency trading via a proprietary algorithm, while Qin and the entities used the proceeds for personal purposes or for other undisclosed high-risk investments since at least 2018.
• The investors have not been able to get redemptions from Virgil Sigma Fund as early as July and they were told their interests had been transferred to another fund, the VQR Multistrategy Fund LP, which was essentially controlled by Qin as well. However, no such transfers have occurred and the redemptions remain outstanding, according to the SEC complaint.
• The commission also alleges that Qin is actively attempting to misappropriate assets from the VQR Fund and to raise new investments in the Sigma Fund.

• Coinbase to Suspend XRP Trading Following SEC Suit Against Ripple
• SEC Disapproves BOX Security’s Request to Report Stock Trading Data on Ethereum Blockchain
• XRP Is a Crypto Asset in Japan, Not a Security, Ripple Partner SBI Claims
• Bitstamp to Halt XRP Trading, Deposits in US Due to SEC Lawsuit

Bitcoin has been declared dead or dying roughly 390 times since 2010. But this year it’s dying much less frequently. 

In 2020, bitcoin has been reported dead or dying only 11 times, per a list of these faux obituaries maintained by a Singapore-based website called 99 Bitcoins. 

Bitcoin’s yearly “obituary” count hasn’t been so low since 2012, three years after bitcoin launched. The team behind the website confirmed to CoinDesk the list is actively maintained to date.

Related: Coinbase Awards Its First Round of Bitcoin Developer Grants

The sharp decrease in obituaries correlates with bitcoin’s record-breaking price action this year after breaking its 2017 all-time high in November with a total year-to-date gain of over 270%.

In the past, it was “in vogue to publicly dismiss or even shame those who believed in bitcoin’s value proposition,” said Kevin Kelly, global macro strategy lead at Delphi Digital and former equity analyst at Bloomberg, in a direct message with CoinDesk.

But now the game has changed.

“Mass retail speculation and viral memes have been swapped for family offices and world-class macro investors,” Kelly said.

Related: Bitcoin Price Caps Best Week in 20 Months With 23% Gain

Bitcoin’s quickly-growing cadre of institutional buyers includes giants MassMutual and Guggenheim. And their sizable investments – combined with signs of rekindled retail interest – make announcing the bellwether cryptocurrency’s death increasingly difficult.

In a December bitcoin report, Kelly’s research team wrote, “Institutional investors have not only turned net long since September, but also the magnitude of their net exposure, measured in BTC, has increased relative to prior periods as well.” 

Curiously, authors of disingenuous bitcoin “obituaries” have overlooked both times when the network actually has “died,” according to Pierre Rochard, Kraken’s lead bitcoin strategist. 

In 2010, an inflation bug briefly enabled anyone using the network to create an infinite amount of bitcoins, which, for many intents and purposes, caused the network to die, Rochard said. In 2013, bitcoin “died” a second time when a flawed version of its source code unexpectedly caused the block size limit to increase.

“In both cases bitcoin was promptly resurrected by the collective will of its users,” Rochard said. To save the network, bitcoin nodes reverted to an older version of the software in 2013 and rewound the blockchain back to a point before the inflation bug in 2010. 

“Few critics understand what happened when bitcoin actually died, twice,” Rochard told CoinDesk in an email.

In the aftermath of these incidents, bitcoin’s “robust” fundamentals and “rapid adoption” have created market conditions with multiple “parabolic revaluations,” Rochard said, increasing both its adoption and the attention paid to its technical strength, leaving skeptics with little room for continued death pronouncements. 

As bitcoin lives on, “the career risk is no longer from embracing bitcoin,” according to Kelly. “It’s from failing to give [bitcoin] the time and respect it deserves.”

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Nasdaq-listed bitcoin mining company Riot Blockchain (RIOT) reached a $1.08 billion market capitalization Monday after surging nearly 13% in early trading hours.

• Shares of the Castle Rock, Colo.-based firm have gained over 1,250% in 2020, currently trading hands above $16.
• Over the same period, bitcoin gained nearly 280%.
• Riot has issued nearly 17 million shares since November, with a total of 67.5 million shares outstanding, according to data collected by ycharts.com.
• Riot has aggressively expanded the size and sophistication of its mining operations in 2020, including a planned pilot project in Texas to test water immersion cooling technology in addition to purchasing over 31,000 new ASIC mining machines this year, per CoinDesk’s prior reporting.
• Riot shares opened Monday nearly 18% higher than the Thursday close on Christmas Eve.
• Riot pivoted its business model from biotech to bitcoin mining in October 2017 when the company’s value was less than $50 million.
• Riot did not immediately respond to a comment request from CoinDesk.

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A lack of whales with bitcoin (BTC) aplenty to sell may be clearing the way for the price of the leading cryptocurrency to rise further, according to CryptoQuant Chief Executive Ki Young Ju.

• Fewer “whales” – bitcoin holders possessing large balances – are depositing bitcoin (BTC) onto exchanges the past few days, according to CryptoQuant, a crypto market data aggregator.
• CryptoQuant’s “Exchange Whale Ratio,” which is calculated by dividing top 10 bitcoin inflow transactions in an hour by total BTC exchange inflows, has dropped below 85%.
• From Dec. 8-22, the ratio stayed above 85% as whales were likely profit-taking during the bull run, which reached a price zenith of $28,352 Sunday according to CoinDesk 20 data.
• Some market exhaustion is expected, according to Young Ju, but he expects institutions to pick up some of the slack.
• “I think this bull run will continue as institutional investors keep buying and Exchange Whale Ratio keeps below 85%,” Young Ju noted on Twitter.

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Not everyone is turning their backs on XRP, the embattled asset associated with San Francisco-based Ripple Labs.

• Japan-based financial services company SBI Holdings released a statement Monday saying under Japanese law XRP is a “cryptocurrency asset.”
• The statement arrives after the U.S. Securities and Exchange Commission last week sued Ripple Labs claiming it made a $1.3 billion profit selling XRP to retail investors while failing to register the cryptocurrency as a security in the U.S.
• SBI referenced a research article by Sadakazu Osaki of the Nomura Research Institute indicating under Japanese law XRP is a “cryptocurrency asset” and it is not a security in Japan.
• CoinDesk reported in October Ripple intended to invest in SBI’s MoneyTap blockchain-based payments subsidiary, which planned to used the RippleNet technology to lower Japanese transfer costs.
• Many cryptocurrency companies are backing away from XRP around the world, including Bitwise in the United States, Bitstamp in Europe and Hong Kong trading platform OSL.
• “SBI is putting lipstick on a pig to try and minimize the damage to its reputation in Japan from the Ripple lawsuit,” said Joel Edgerton, chief operating officer of BitFlyer USA, a cryptocurrency exchange that also has a strong presence in Japan. “SBI is an aggressive player in the Japanese financial industry and it is working to buy the pieces required to make it a leader in Japanese crypto,” Edgerton added. “However, it has many other regulated businesses that will not want any negative reputation impact.”

• Coinbase to Suspend XRP Trading Following SEC Suit Against Ripple
• SEC Disapproves BOX Security’s Request to Report Stock Trading Data on Ethereum Blockchain
• SEC Obtains Emergency Asset Freeze Against Virgil Capital
• Bitstamp to Halt XRP Trading, Deposits in US Due to SEC Lawsuit

The decentralized finance (DeFi) insurance project Cover Protocol was hacked earlier Monday in an infinite printing scheme, causing the price of the COVER token to plunge. Hours later, Grap.Finance, a “white hat hacker” claimed responsibility for the attack via their Twitter account, saying all funds had been returned.

The exploiter has cashed out over $4 million including about 1,400 ether, one million DAI and 90 WBTC. The attacker earlier created 40 quintillion COVER tokens and sold $5 million worth of them on Monday morning. More than $3 million has been returned.

The price of COVER has plummeted to $177 by over 75% over the last 24-hour period, according to the data from CoinGecko.

Related: Who Insures the Insurer? Cover Protocol Attack Exposes DeFi’s Promise and Peril

Cover Protocol later announced it was exploring launching a new token through a snapshot “before the minting exploit was abused.”

“The 4350 ETH that has been returned by the attacker will also be handled through a snapshot to the LP token holders. We are still investigating,” according to the project’s Twitter account, which urged users not to buy any COVER tokens now.

Sorawit Suriyakarn, chief technology officer at Band Protocol, said the exploit’s approach appears to be relatively new and was not spotted in any recent attacks.

“The attack does 4 things: 1. Deposit LP tokens to Blacksmith contract 2. Withdraw *almost* all LP tokens to inflate ‘accRewardsPerToken’ 3. Deposit LP tokens again (this is the interesting bit) 4. Claim COVER rewards and trick the contract to mint quintillion of $COVER tokens,” Suriyakarn said in his tweet.

Related: Cover Protocol May Launch New Token Following Attack

The hacker tricked the protocol into minting new tokens as rewards by exploiting a bug in the smart contract Solidity, which involves using memory and storage incorrectly in the programming language.

The Cover DeFi protocol, designed as an insurance product that could help users reduce smart contract failure-related risks, merged with Yearn.Finance a month ago.

This story is developing and will be updated

Update: This story was updated with new information about Cover’s latest announcement at 16:25 UTC.

• DeFi Christmas: DEX Aggregator 1inch Launches Governance Token to Take On Uniswap
• Here Comes the Open Lending Era

Nasdaq-listed Marathon Patent Group (MARA), one of the largest enterprise bitcoin mining companies in North America, announced its pre-order purchase of 70,000 Antminer S-19 ASIC miners from Bitmain for $170 million, more than tripling the size of Marathon’s fleet.

• “This purchase is the largest order in dollar terms as well as the single largest order for S-19 ASIC miners that Bitmain has ever received,” said Marathon Chairman and CEO Merrick Okamoto.
• Marathon said it sees receiving an initial batch of 7,000 S-19 miners in July 2021 and the final shipment in December 2021.
• Marathon said its mining fleet will include more than 103,000 machines after this latest order has been received and deployed with a total mining capacity of 10.36 exahashes per second (EH/s).  
• Shares of Marathon opened Monday trading nearly 30% higher than their Friday close, trading hands just below $14. But some gains were given back as the share price dipped roughly 5% around 15:30 UTC.
• The monster order comes after a holiday weekend in which the price of bitcoin hit a succession of new all-time highs.

Update (Dec. 28, 15:43 UTC): Updated with Marathon stock prices.

• Bitcoin Mining Company Riot Blockchain Passes $1B in Market Cap
• Mining Firm Bitfarms Set to Reach 1.2 EH/s Hashrate, Deploy 3,000 New Machines
• Riot Purchases Additional 15,000 Mining Machines From Bitmain
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The Israeli Tax Authority (ITA) is now requiring residents to disclose their cryptocurrency holdings for taxation purposes, according to a Globes report. 

• According to the report, dozens of Israelis who own digital currencies have recently received notification from the ITA telling them they must fully disclose their assets for tax purposes.
• The ITA requested data from cryptocurrency exchanges in Israel and outside of the country in order to obtain the data and information regarding the accounts held by Israelis.
• For the information the tax authority applied EU Common Reporting Standards regulations and the Foreign Account Tax Compliance Act which shared U.S. Internal Revenue Service data with Israel, the report said.
• The ITA states investors in digital currencies are subject to a 25% capital gains tax, as long as their activity does not turn into a commercial enterprise.

Read more: How Israeli VCs Are Doubling Down on DeFi Startups

• Coinbase Ditches US Customer Tax Form That Set Off False Alarms at IRS
• IRS Again Warns Crypto Investors They Under-Reported Gains
• PayPal’s Crypto Offering May Be ‘a Huge Headache’ for Taxpayers
• Coinbase Reportedly Warns Some UK Users It’s Handing Their Details to the Taxman

The world’s largest asset manager BlackRock is seeking to hire a vice president, blockchain lead to help build and execute strategies and “drive demand” for the company’s crypto and crypto-related offerings.

• BlackRock, which has $6.84 trillion assets under management, has posted a job vacancy for a New York-based VP blockchain lead to help with the valuation of crypto assets.
• According to the post, the applicant must have at least a year’s experience in the technological foundations of blockchain technology including cryptographic hash functions, distributed network consensus mechanisms, and public-private key cryptography.
• Candidates should be able to “devise and articulate fundamental valuation methodologies for crypto-assets; evaluate game theory and decentralizing governance models associated with blockchain technology,” said the listing.
• Recently BlackRock CEO Larry Fink made some bullish comments on bitcoin, stating it has “caught the attention” of many people and that the nascent cryptocurrency asset class can possibly “evolve” into a global market asset.

Read more: BlackRock’s Fink Says Bitcoin Can Possibly ‘Evolve’ Into Global Asset

• Ford Finds Using Blockchain With Hybrid Vehicles Can Help Cut Air Pollution in Cities
• Germany Legalizes Electronic Securities on the Blockchain
• Crypto Finance AG Hires SIX Group Exec to Lead Brokerage Business
• Bloccelerate VC Raises $12M Fund to Bet on Enterprise Blockchain Adoption