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CFTC’s Latest Crypto Primer Highlights DeFi, Governance

5 years 10 months ago

Decentralized finance (DeFi) and crypto governance are among a growing list of topics the Commodity Futures Trading Commission (CFTC) is watching in the digital asset space, the CFTC said in a new primer. 

The regulatory agency published the primer Thursday as part of an ongoing effort to understand and explain the crypto industry. The primer isn’t intended to create policy, but to inform or educate interested parties on digital asset derivatives and other financial technologies. 

Melissa Netram, director of LabCFTC and the Commission’s Chief Innovation Officer, told CoinDesk: 

Related: DeFi Startup Brings Corporate Lending Terms to Miners, Traders and Market Makers

“Digital assets are still very complex and one of the key points to mention is that there are so many regulators here in the U.S. that [oversee] digital assets,” she said. “It’s important for regulatory coordination.”

The space is still evolving rapidly, said Brian Trackman, senior counsel at LabCFTC. The division’s task is to track that evolution and ensure other groups within the CFTC are up to speed.

The 36-page document mentions decentralized finance, governance and markets as issues that warrant further study.

“It’s not meant to be an exclusive list, [but] some of the topics we hope there will be further conversation about,” said Trackman, the primer’s chief author. “Decentralized finance applications seem to multiply exponentially, [and] there’s the issue of governance whether in terms of DeFi or just bitcoin and ether and how they’ll evolve.”

Related: OKCoin Debuts CeFi-DeFi Mashup With Portal for Stablecoin Deposits

The agency’s last primer was published two years ago, and noted that smart contracts would be subject to financial laws within the U.S. The newest one is fairly broad, detailing derivatives products that fall within the agency’s purview and listing how the CFTC or other agencies can interact with the crypto industry.

LabCFTC met with industry participants ranging from “individuals with an idea to established large financial institutions” as it prepared the document, Trackman said. 

“In the scheme of things it’s small, comparatively,” Netram said of the CFTC’s studies of the digital asset space.“That being said, I think what our role is, is to continue to highlight the ever-growing and ever-changing market so that we’re ahead of the curve and we’re constantly addressing new technologies and new innovations,” Netram said.

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DeFi Startup Brings Corporate Lending Terms to Miners, Traders and Market Makers

5 years 10 months ago

Loan terms are about to get a lot better in decentralized finance (DeFi), at least for some.

“What we’re allowing is top institutions with solid balance sheets, sound reputations and strong cash flows soon being able to access capital-efficient finance, which enables further growth and adoption of crypto globally,” Sidney Powell, co-founder and CEO of Maple Finance, told CoinDesk in a phone call.

Maple Finance is a new firm out of Australia releasing a token-governed platform for institutional lending at extremely competitive collateralization terms and fixed rates that won’t change for borrowers in good standing. 

Related: CFTC’s Latest Crypto Primer Highlights DeFi, Governance

The firm has closed a $1.3 million seed round for its MPL governance token with Framework Ventures, FTX, Aave founder Stani Kulechov, Synthetix founder Kain Warwick, FBG, The LAO and others.

With over $15 billion in total value locked in DeFi as of this writing, it’s either time for fixed-rate, under-collateralized lending or it’s overdue. Maple is targeting the companies with a track record in the space such as funds that engage in trading, market makers and crypto-mining firms looking to expand operations.

The typical loan in DeFi requires significant over-collateralization, with users needing to constantly check to make sure their collateralization is topped up as market conditions change.

On Maple, a good firm would pay one rate for the life of the loan, could collateralize with as little as 40% of the loan’s value and the initial collateral deposit would not need to be revisited. 

Related: OKCoin Debuts CeFi-DeFi Mashup With Portal for Stablecoin Deposits

“With ours, it’s a set-it-and-forget-it solution,” Joe Flanagan, Maple’s other co-founder, said. “As long as you remain a paying borrower and meeting your obligations there will be no further calls on your collateral.”

First pool

Maple is able to offer better terms based on the reputation of borrowers. It will make offers only to institutional customers.

That said, Flannagan noted, as this market matures and evolves, Maple would definitely be interested in serving crypto-native organizations, such as decentralized autonomous organizations (DAOs) that don’t have traditional legal structures. That “expands the addressable market for Maple,” he said.

Maple intends to be everywhere the industry goes. “We’re building a capital market in the crypto space,” Powell said.

Maple will be organized by pools, with each pool managed by a “Pool Delegate” who will make decisions about loans in that pool. Pools will specialize in certain areas where the delegate has expertise, such as a region of the world, a category of borrower or a risk profile.

Its first pool will be small, to demonstrate the model. It will have between $10 million and $15 million in funds available for lending, with loans in the $1 million to 2 million range. Maple will initially aim for a pool with a diverse array of borrowers, but all well-established and carefully selected.

One or two pools will be co-managed by Maple Finance and its first Pool Delegate, Orthogonal Trading, a crypto firm, also out of Australia, starting in the first quarter of 2021.

Liquidity mining

Maple Finance will be a DeFi platform like others, governed by its MPL token and offering opportunities for yield from anyone on Ethereum.

While it will be more cautious than other DeFi projects about to whom it makes loans, providing liquidity to Maple will be open to anyone who wants to get in. 

Once the first pool opens, it will be open to participation from across Ethereum up to the maximum amount that a pool ultimately sets. That capital will then be deployed to make the loans.

“We assume it will be a combination of both individuals and degens and institutions and corporates,” Flanagan said.

Additionally, those liquidity providers will earn MPL tokens under a liquidity mining scheme whose precise terms have not yet been worked out.

The total supply of MPL tokens will be fixed at 10 million, with approximately 30% going to liquidity mining.

MPL governs the network and earns a modest return from its fees. MPL holders have the opportunity to increase their returns by staking but will also bear the brunt of losses in the pool if a borrower defaults. 

“Our intent is not for the token to be considered a security,” Powell said, noting Maple is taking advice on legal matters. There are no plans currently to shut out U.S. residents from holding the MPL token.

While Maple’s offering is likely to be attractive to traders in the space, it will be particularly interesting to see if bitcoin miners take advantage of it. “We would be interested in financing miners for their capital expenditures to expand their operations,” Powell said.

If that happens, that will be an early example of value moving about in blockchain-verified bits that has funded the acquisition of equipment built out of atoms in the analog world, which seems like a milestone on the way to somewhere.

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Binance Labs Leads $12M Funding Round for Multi-Asset Wallet Developer MATH

5 years 10 months ago

MATH, the company behind MathWallet, has raised $12 million in a Series B funding round led by Binance Labs, the investment arm of the popular crypto exchange.

  • NGC Ventures, Capital6 Eagle and Amber Group co-led the round.
  • According to a blog post Thursday, the investment will enable MATH to accelerate product updates for its wallet, grow its ecosystem of decentralized apps (dapps) and connect more widely in the global market
  • With over 54 cryptocurrencies supported, Eric Yu, co-founder and CTO of MathWallet, claimed the product “is currently the crypto wallet supporting the most public chains.”
  • MathWallet secured a $7.8 million series A+ funding round led by Alameda Research and Multicoin Capital in November.
  • Binance Labs said MathWallet is one of the first crypto wallets to support Binance Smart Chain, the company’s alternative to Ethereum.
  • MATH’s “comprehensive coverage of public blockchains and their early support for and cooperation with the Binance Smart Chain were instrumental in our investment decision,” said Wei Zhou, head of Binance Labs.

See also: Binance Expects to Earn From $800M to $1B This Year, CEO Says: Report

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Bitcoin Chatter on Twitter Nears Highest Level in 3 Years Amid Price Surge

5 years 10 months ago

The number of tweets about bitcoin reached its highest level since mid-January 2018 on Wednesday, according to social media data collected by The TIE, with over 92,000 tweets posted.

The recent surge in bitcoin-related Twitter content comes as the leading cryptocurrency surged past $23,000 yesterday, reaching an intra-day high just below the $24,000 mark.

Jan. 17, 2018, was the last time this many bitcoin tweets were sent in a single day, after bitcoin’s price started crashing from its then-all-time high just below $20,000.

Related: Guggenheim CIO Says Bitcoin ‘Should Be Worth’ $400,000

Throughout much of 2020, the bitcoin rally has been dominated by a narrative focused on institutional investors allocating large amounts of capital to the cryptocurrency, including Stanley Druckenmiller and Guggenheim’s Scott Minerd.

But near-record levels of Twitter activity is one signal that retail bitcoin investors are not being left behind.

“There has been a lot of talk that bitcoin’s latest bull run is fueled by Wall Street jumping on board, but if yesterday is any indication it’s the everyman who is fueling the conversation, specifically on Twitter,” according to Aubrey Strobel, communications director for bitcoin rewards startup Lolli.

Tweetstorm

According to data from The TIE, it wasn’t just high-volume tweeters driving the uptick. The number of unique Twitter accounts tweeting about bitcoin also surged, with roughly 50,000 users engaging in the bitcoin conversation Wednesday, the most since before Christmas 2017.

Related: Bitcoin Mining Stocks Soar as BTC Blows Past $20K

Strobel’s company runs one of the most popular corporate bitcoin Twitter accounts, and she told CoinDesk Lolli is seeing a surge in interaction with its content as “retail investors are finding every opportunity to own bitcoin.”

Other indications of strong retail participation come from the use of consumer-focused bitcoin products, like record buying volume on Square’s (SQ) Cash App along with strong demand for new services like PayPal’s (PYPL) cryptocurrency features. 

Commenting on the surge in social media activity, Messari bitcoin analyst Ryan Watkins told CoinDesk, “Institutions may be leading the charge this time around, but retail is definitely not sitting on the sidelines.”

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Robinhood Pays SEC $65M to Settle Allegations It Misled Customers

5 years 10 months ago

The U.S. Securities and Exchange Commission (SEC) Thursday charged stock trading app Robinhood Financial with misleading customers on the source of its revenue and failing to secure them the best possible trades.

  • Robinhood, which offers commission-free trading, could afford to do so because its “largest revenue stream” came from the trading firms paying Robinhood to handle execution.
  • This “payment for order flow” partnership was not disclosed to customers, SEC alleged. And it came at the cost of best execution.
  • “The order finds that Robinhood provided inferior trade prices that in aggregate deprived customers of $34.1 million even after taking into account the savings from not paying a commission,” the SEC said.
  • Robinhood settled the SEC charges with a $65 million penalty.
  • In a separate action Wednesday, Massachusetts state regulators hit Robinhood with allegations of “aggressive marketing” tactics.
Read more: Robinhood Faces Legal Action from US Regulator Over ‘Aggressive Marketing’: WSJ Related Stories
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First Mover: Geek-Fest Turns Relevant as Bitcoin Passes $21K, $22K, $23K

5 years 10 months ago

Bitcoin (BTC) was higher for a sixth straight day, carrying through after surging 9.9% Wednesday to surpass $20,000 for the first time in the cryptocurrency’s 11-year history. 

“We are expecting this inertia to generate ripple effects going into the end of the year as momentum continues to skew bitcoin to the upside,” Lennard Neo, head of research for the digital-asset products issuer Stack Funds, wrote Thursday in a report.  

Here’s a brief recap of CoinDesk’s coverage of the rally past $20K:

Related: Bitcoin Drops Nearly 7% After Setting New Record High of $23,770

In traditional markets, European stocks gained on vaccine hopes and the British pound climbed as officials predicted a Brexit deal soon. U.S. stock futures pointed to a higher open as Congressional leaders hashed out a $900 billion stimulus bill. The dollar slumped after Wednesday’s Federal Reserve meeting disappointed some investors who were expecting a more dovish outcome. Gold strengthened 0.7% to $1,878 an ounce. 

For those keeping track, bitcoin is now up 217% in 2020, roughly 14 times this year’s gains in the Standard & Poor’s 500 Index of U.S. stocks. Gold is up 24%.  

Market Moves

(Editor’s note: This is the fourth installment of First Mover’s recap of how the bitcoin market evolved over the course of 2020 and what it means for the future. Today we cover the month of May, when the Bitcoin blockchain underwent its once-every-four-years “halving.” Outlandishly high price predictions for the cryptocurrency failed to materialize, but the network’s programmed reduction in the pace of new bitcoin issuance set up a stark contrast with Federal Reserve money-printing, measured in the trillions of dollars.) 

In early 2020, before the devastating economic toll of the coronavirus became clear to investors, the main narrative in the bitcoin market was the upcoming “halving” – an arcane, once-every-four years occurrence that takes place on the underlying blockchain network. 

Related: Bitcoin Sailing in Uncharted Waters as Price Crosses $22K for First Time

Since the Bitcoin blockchain was invented only 11 years ago, it would just be the third halving in history. It was very technical, but the whole process was hard-coded into the network’s underlying programming, and the basics went something like this: At a certain point in May, the pace of new issuance of bitcoin by the blockchain would get cut in half, to about 6.25 bitcoins every 10 minutes or so from the 12.5-bitcoin average clip that had prevailed over the recent four-year period.

Generally speaking, few surprises were expected, with all the details stipulated in advance. But that was sort of the point: Under the cryptocurrency’s design, things were supposed to run like clockwork, giving humans little leeway to intervene based on subjectivity or politics.

These were no ordinary times. In the prior months, the deep economic toll of the coronavirus had sent global markets reeling, dragging down bitcoin prices from a high of about $10,500 in February to as low as $3,850 by mid-March. Then, as the Federal Reserve and other global authorities started pumping trillions of dollars into the financial system, asset prices shot back up, and by April bitcoin traded as high as $9,485.    

Cryptocurrency market analysts talked up the halving as a potential catalyst for a price rally; one German bank went so far as to predict that bitcoin could shoot to $90,000 or higher. 

“Look for prices to attempt the $10,000 level on speculative buzz leading into the halving,” Jehan Chu, co-founder and managing partner at Hong Kong-based blockchain investment and trading firm Kenetic Capital, told CoinDesk in late April. 

CoinDesk even built its own “Bitcoin Block Reward Halving Countdown” to mark the estimated time and date of the big event. With everything going on in the world, the halving took on the feel of a geek-fest for crypto insiders. The suspense came mainly from watching the price charts: Would the halving drive bitcoin prices to the moon?

As it turned out, the halving came on May 11 and proved anticlimactic by pretty much all accounts. Industry executives on a CoinDesk halving-countdown talk show, held via Zoom, had to pass the time with technical discussions of the future potential of bitcoin mining computers and how much the network’s speed might accelerate over the next four years.  

When the blockchain network finally reached block number 630,000, the moment everyone was waiting for, someone posted a snippet of code on Twitter showing that the halving had indeed happened. There were some huzzahs all around, and everyone dropped out of the Zoom room.

“This is more of a holiday for the crypto community than anything else,” Mati Greenspan, of the foreign-exchange and cryptocurrency research firm Quantum Economics, wrote in a note to clients. 

Over the course of the month, prices never climbed much above $9,000. 

“We are seeing buy-the-rumor, sell-the-fact at work,” Russell Shor, a senior market specialist at the foreign-exchange and cryptocurrency-trading firm FXCM, said in emailed comments.

Underneath the deflating buzz, though, was an epiphany: The blockchain network was working exactly as designed, and not even the worst economic crisis since the Great Depression had thrown it off course. 

What’s more, the reduction in the pace of bitcoin issuance provided a sharp contrast with the monetary policies pursued by the Federal Reserve and other major central banks. 

The human central bankers, to their credit, were doing all they could to keep the world’s financial system from collapsing. But the dynamic meant that bitcoin, with its hard-coded and ever-diminishing supply curve, might serve investors as a bulwark against debasement of the U.S. dollar and other currencies. 

To underscore the point, the Chinese bitcoin-mining pool f2pool embedded a message into the blockchain record for data block No. 629,999: “NYTimes 09/Apr/2020 With $2.3T Injection, Fed’s Plan Far Exceeds 2008 Rescue.” It was a headline for a news article from the prior month, detailing a massive money-printing episode by the U.S. central bank. 

Coin Metrics, a cryptocurrency analysis firm, revisited the theme in a report earlier this week, illustrating how the blockchain’s quadrennial halvings might provide confidence to investors looking for an asset that isn’t subject to human discretion and qualitative judgments.

“Halvings will keep occurring every four years until the supply cap of 21 million bitcoin has been reached,” the analysts wrote. “This means we can project well into the future, and have clarity about what Bitcoin’s inflation rate will look like one, five or 10 years from now.” 

That might be easier, even, than trying to predict what Federal Reserve Chair Jerome Powell and his colleagues might do at their next meeting in January.  

– Bradley Keoun

Bitcoin Watch

Bitcoin surged to new record highs above $23,000 earlier on Thursday, before quickly falling back by over $1,500.

The cryptocurrency dropped from the all-time high of $23,770 to $22,185 in the roughly 30 minutes to 09:45 coordinated universal time (UTC), representing a 6.7% drop, according to the CoinDesk 20. 

The sudden pullback was backed by the highest hourly sell volume since Nov. 26 and suggests uptrend fatigue. The cryptocurrency could consolidate in the broad range of $20,000 to $24,000 in the short-term.  The derivatives market and on-chain activity suggest scope for a continuation of the rally.

While the average level of funding rate on bitcoin perpetual futures across major exchanges has risen from 0.005% to 0.036%, it remains well below the high of 0.093% seen before the Nov. 24 price drop. Calculated every eight hours, the funding rate reflects the cost of holding long positions. It is positive (or longs pay shorts) when perpetuals trade at a premium to the spot price. As such, a very high funding rate is widely considered a sign of leverage being excessively skewed to the bullish side, or overbought conditions.

In other words, leverage isn’t skewed too bullish, which could mean the cryptocurrency has scope to rally further. 

Further, there are few signs of large investors looking to book profits, with prices easily rallying to record highs above $23,000. At press time, there were roughly 2,400,000 coins held on exchanges. That’s the lowest since August 2018, according to data source Glassnode, and suggests investors aren’t preparing for a sell-off. 

– Omkar Godbole

Read More: Bitcoin Drops Nearly 7% After Setting New Record High of $23,770

What’s Hot

CME announces plans to launch ether futures in February (CoinDesk) 

Ruffer Investment confirms massive bitcoin buy of $744M (CoinDesk) 

Paxos raises $142M Series C funding following PayPal deal, OCC bank charter application (CoinDesk) 

San Francisco-based cryptocurrency exchange OKCoin now allows users to invest in decentralized finance (DeFi) applications without paying gas fees (CoinDesk)  

Kraken exchange plans to integrate bitcoin’s Lightning Network in 2021 (CoinDesk) 

American Express VC unit invests in FalconX cryptocurrency trading platform (CoinDesk) 

Austrian cryptocurrency trading platform Bitpanda sets up new tech hub in Poland, allocates €10M ($12.2M) to fund the center, with goal of creating 300 jobs (CoinDesk) 

Hedge fund One River, backed by Alan Howard’s Brevan Howard Asset Management, emerges as bitcoin buyer with $1B goal, Bloomberg says (CoinDesk)   

Analogs The latest on the economy and traditional finance

Federal Reserve keeps interest rates unchanged, adds qualitative guidance on pace of money-printing (CoinDesk) 

U.S. Congressional leaders near agreement to add new round of $1,200 stimulus checks to proposed $900B relief package (Washington Post) 

Fifty years of tax cuts for rich didn’t trick down, study says (Bloomberg) 

Switzerland, Vietnam labeled as currency manipulators by U.S. Treasury (Washington Post) 

Some members of U.S. Treasury advisory group advocate allowing big asset managers to buy government bonds directly from the Federal Reserve Bank of New York, to add trillions of dollars more in liquidity to the market (Reuters) 

Goldman Sachs analysts see 10-year U.S. Treasury yields rising to 1.5% by mid-2021, from about 0.9% now (Reuters) 

“Nothing is more reassuring to an investor than the knowledge that central banks, with much deeper pockets, will buy the securities they own,” Allianz’s Mohamed El-Erian writes in op-ed (FT) 

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Global Stablecoins Could Eventually Become Reserve Currencies: IMF Paper

5 years 10 months ago

Private stablecoins such as Libra (now rebranded as Diem) could emerge as international reserve currencies, according to an International Monetary Fund (IMF) report.

  • Titled “Reserve Currencies in an Evolving International Monetary System,” the departmental paper looks at shifts in the global monetary system and factors that might influence the U.S. dollar’s role as the dominant reserve currency, including new payments systems and digital currency.
  • While their study concluded overall that the dollar is safe for now, the authors said the reserve currency landscape would likely shift.
  • They posited that private digital currencies could “emerge as important international currencies,” with Libra/Diem possibly becoming the first example of a global stablecoin.
  • Global stablecoins (or GSCs) could also increase the demand for reserve fiat currencies they’re backed by, according to the paper.
  • “But GSCs do not need to be backed by existing fiat reserve currencies and could themselves attain reserve currency status,” the authors write. “It is also conceivable that more than one global stablecoin could become a reserve asset.”
  • The paper theorizes that rather than be differentiated by macroeconomic factors, digital currency competition would differentiate along network lines and by users.
  • And while digital currency “may cut across borders in ways that existing currencies do not,” different regulatory frameworks might lead to increased fragmentation, said the IMF.

See also: IMF, World Bank, G20 Countries to Create Central Bank Digital Currency Rules

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US Bitcoin Mining Firm Core Scientific to Triple Capacity With Massive 59,000-Machine Order

5 years 10 months ago

U.S. blockchain and AI infrastructure provider Core Scientific has expanded its fleet of state-of-the-art crypto miners to over 77,000, comprising the largest-ever grouping of Bitmain Antminer S19 rigs outside of China.

Core Scientific, which offers a mix of hosted crypto-mining and data-science computation, ordered the miners earlier this year. The company announced Thursday it has now procured an additional 59,000 S19 and S19 Pro Antminers. 

The new order will bring the total computational power hosted with Core Scientific to 7.26 exahash per second (EH/s) while using approximately 250mW of electricity, said Taras Kulyk, the firm’s senior VP of blockchain development.

Related: What Is Proof-of-Work?

“We are truly a global player with this order, which is a magnitude of scale larger than anything that’s been done in North America today” said Kulyk.

One of Core scientific’s closest U.S. rivals, Nasdaq-listed Marathon, recently announced it was buying some 10,000 Antminers, which will bring the firm’s total hashrate to 2.56 EH/s.

The new units will be spread across Core Scientific’s existing facilities in North Carolina, Georgia and Kentucky, Kulyk said. A large chunk of the energy consumed by the miners will be renewable power. Core Scientific’s facilities cover over 100 acres and the firm is now looking for more space to house the new rigs.

Core Scientific’s bullish news comes as the price of bitcoin hits all-time highs and the stocks of listed crypto mining companies surge upward. (Core Scientific remains privately held.)

Read more: Bitcoin Mining Stocks Soar as BTC Blows Past $20K

Related: WEF, Mining Giants Develop Blockchain Platform for Tracking Carbon Emissions

While the U.S. hashrate is certainly on the increase, China far and away dominates crypto mining with around 65% of global hashpower. According to Cambridge Centre for Alternative Finance, U.S. and Canada combined account for just 8.5% of the pie. But North America has more publicly traded mining companies than anywhere else and a muscular reach towards institutional investors. 

Recently, Core Scientific announced a deal with Digital Currency Group mining subsidiary Foundry to receive some $23 million in financing to build out mining equipment for Core and its clients. (Digital Currency Group is also the owner of CoinDesk.)

That said, today’s blockbuster order of Antminers is separate from the Foundry financing deal, Kulyk said. “The Foundry deal was actually done in the second quarter of 2020,” he added.

A further coup for Core Scientific happened back in September when it became Bitmain’s “cooperative repair center” for mining equipment in North America. That’s a big deal because it saves having to box up tons of computers and ship them to China. 

“When you have 77,000 units, to have to unpack and ship them somewhere else for repair is a direct impact to your bottom line,” said Kulyk.

Bitmain is experiencing a spike in demand for the latest Antminers, which are sold out until July 2021.

“There’s absolutely a massive supply crunch right now,“ Kulyk said. “We are oversubscribed, even with this order.”

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Salvation Army Now Accepts Bitcoin, Ether Donations in US

5 years 10 months ago

The Salvation Army Western Territory is now accepting bitcoin and ethereum donations across the U.S.

  • Announced Thursday, the charity has partnered with cryptocurrency giving platform Engiven for the new donation options.
  • Over a century old, the Salvation Army is an international charity and church that is known for its network of thrift stores. Funds collected go towards its emergency relief efforts and ongoing programs such as shelters and hospitals.
  • When making a donation, if a zip code is provided, the cryptocurrency would then go toward financing their local Salvation Army programs, according to the announcement.
  • Salvation Army said it expects a busy period ahead and plans to serve up to 155% more people with holiday assistance this year, making fundraising activities important.
  • The ongoing coronavirus pandemic and its economic effects will also mean more families and individuals are facing unemployment and financial hardships this holiday season.
  • “There is no gold at the end of the rainbow, but with the rise in popularity and value of bitcoin it certainly could feel like it to some crypto investors,” said Lt. Colonel Kyle Smith, Salvation Army Western secretary of communication.
  • “I believe the crypto community cares and could make a big difference in The Salvation Army’s efforts to help those struggling in communities across our country,” Smith added.

See also: Charity Turns Down Bitcoin Donation From Darkside Hackers

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Mining Market NiceHash Refunds Users 4,640 Bitcoin Lost in 2017 Hack

5 years 10 months ago

Mining marketplace NiceHash has fully reimbursed users who were affected by the loss of 4,640 bitcoin in a late 2017 security breach.

  • For the past three years, the Slovenia-based mining company has “regularly waived profits” to make its customers whole, according to a letter from CEO Martin Skorjanc, published Thursday.
  • “We do not regret it, as it heralds the beginning of a new era of growth and development for us,” he wrote.
  • The criminals who executed the breach are still unknown, Skorjanc said, calling the incident “the largest theft in Slovenian history.”
  • The bitcoin are worth $104,629,328 at press time prices, according to CoinDesk 20 data. At the time of the breach, they would have had a value of around $55 million
  • The hashpower renting marketplace disclosed the hack on social media in December 2017, saying that a “security breach involving NiceHash website” resulted in a loss of funds, as CoinDesk reported at the time.
  • In the aftermath, Skorjanc said many people told NiceHash it was time to shut up shop. “But we didn’t listen to them, he wrote.

See also: CEO of DeFi Insurer Nexus Mutual Hacked for $8M in NXM Tokens

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Musician Sells NFT Token Bringing Royalty Rights for $26K in Crypto

5 years 10 months ago

Blockchain platform Rocki has announced its first auction of a non-fungible token (NFT) bringing the buyer rights to royalty income from music – one that raised over $26,000 for the artist.

  • Announced Thursday, Israeli-born and Malta-based progressive house musician Guy J sold the income rights a track dubbed “Cotton Eyes” on the Rocki platform through the sale of an ERC-721 standard NFT.
  • The token was auctioned using decentralized auction protocol Bounce.finance and sold for 40 ether.
  • As the name suggests, non-fungible tokens are those which, unlike cryptocurrencies, can be given unique characteristics.
  • Another token Rocki will issue – an ERC-1155 standard NFT – will bring purchasers “exclusive listening privileges.”
  • Rocki CEO and co-founder Bjorn Niclas said there have been more than 30,000 tracks uploaded by thousands of independent artists as the platform prepares to launch in beta.
  • The company further said streaming platforms like Spotify typically give independent artists “only pocket change for their work.”
  • As such, Rocki is well-positioned to become “the preferred streaming service for all genres of independent artists,” according to the announcement.

See also: Lil Yachty Collectible Fetches $16K in Latest String of High-Profile NFT Auctions

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Paxos, Firm Powering PayPal’s Crypto Service, Raises $142M

5 years 10 months ago

Paxos has raised a fresh $142 million to facilitate the mainstream adoption of digital assets.

“We think that opportunity is now, our investors think it is, too,” Paxos co-founder and CEO Charles Cascarilla told CoinDesk in an interview. “We want to really be able to put the pedal to the metal to make sure that we take advantage of that.”

The Series C round was led by Declaration Partners, which is backed by the family office of Carlyle Group co-founder David Rubenstein. Also joining the round were Peter Thiel’s Mithril Capital, newly formed Alua Capital and PayPal Ventures. Notably, PayPal’s new bitcoin offering is powered by Paxos’ crypto brokerage service. 

Related: How Israeli VCs Are Doubling Down on DeFi Startups

“We want to make sure that we’re aligned as we grow together,” Cascarilla said of PayPal’s investment.

Read more: Charles Cascarilla: PayPal Whisperer

Paxos has now raised over $240 million to date. Cascarilla did not disclose the company’s current valuation.

“We are not a unicorn, that’s what I will say,” he said.

The Series C will accelerate the firm’s efforts to provide blockchain and cryptocurrency infrastructure solutions to a wide range of financial institutions, Cascarilla wrote in a draft blog post shared with CoinDesk. In addition to PayPal, Paxos’ big-name clients include Credit Suisse, Societe Generale and Revolut.

Related: Bloccelerate VC Raises $12M Fund to Bet on Enterprise Blockchain Adoption

The raise will also fund a significant hiring push for the 130-person company.

“We want to double the size of our team, expand our current product solutions and build new products that enterprises need,” Cascarilla wrote.

Earlier this month, Paxos submitted an application to the U.S. Office of the Comptroller of the Currency to become a federally regulated bank. The New York-based firm already has a trust charter and a number of other regulatory certifications.

With institutional adoption seen as a leading driver of bitcoin’s emerging bull run, Cascarilla said his firm’s emphasis on infrastructure is starting to make sense to outside observers.

“We invested for this moment. And now we want to invest even more,” he said.

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Paxos Raises $142M Series C Following PayPal Deal, OCC Bank Charter Application

5 years 10 months ago

Paxos has raised a fresh $142 million to facilitate the mainstream adoption of digital assets.

“We think that opportunity is now, our investors think it is too,” Paxos co-founder and CEO Charles Cascarilla told CoinDesk in an interview. “We want to really be able to put the pedal to the metal to make sure that we take advantage of that.”

The Series C round was led by Declaration Partners, which is backed by the family office of Carlyle Group co-founder David Rubenstein. Also joining the round were Peter Thiel’s Mithril Capital, newly formed Alua Capital and PayPal Ventures. Notably, PayPal’s new bitcoin offering is powered by Paxos’ crypto brokerage service. 

Related: How Israeli VCs Are Doubling Down on DeFi Startups

“We want to make sure that we’re aligned as we grow together,” Cascarilla said of PayPal’s investment.

Read more: Charles Cascarilla: PayPal Whisperer

Paxos has now raised over $240 million to date. Cascarilla did not disclose the company’s current valuation.

“We are not a unicorn, that’s what I will say,” he said.

The Series C will accelerate the firm’s efforts to provide blockchain and cryptocurrency infrastructure solutions to a wide range of financial institutions, Cascarilla wrote in a draft blog post shared with CoinDesk. In addition to PayPal, Paxos’ big-name clients include Credit Suisse, Societe Generale and Revolut.

Related: Bloccelerate VC Raises $12M Fund to Bet on Enterprise Blockchain Adoption

The raise will also fund a significant hiring push for the 130-person company.

“We want to double the size of our team, expand our current product solutions and build new products that enterprises need,” Cascarilla wrote.

Earlier this month, Paxos submitted an application to the U.S. Office of the Comptroller of the Currency to become a federally regulated bank. The New York-based firm already has a trust charter and a number of other regulatory certifications.

With institutional adoption seen as a leading driver of bitcoin’s emerging bull run, Cascarilla said his firm’s emphasis on infrastructure is starting to make sense to outside observers.

“We invested for this moment. And now we want to invest even more,” he said.

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Above $100: Litecoin Hits Highest Price Since Summer 2019

5 years 10 months ago

Litecoin’s price reached three figures for the first time in 16 months earlier on Thursday.

  • The seventh-largest cryptocurrency by market value soared to $103.19, its highest since Aug. 5, 2019, according to CoinDesk 20 data.
  • Back then, litecoin had undergone its second mining reward halving, a programmed in supply cut repeated every four years to keep inflation under control.
  • The cryptocurrency has rallied by more than 20% in the past 24 hours and is up nearly 150% year to date.
  • Bitcoin’s sharp rally from $19,500 to a record price of $23,770 seen in the past 24 hours looks to have put a bid under litecoin and other top cryptocurrencies such as ether, XRP, chainlink, and stellar.
  • Litecoin is still down at least 75% from its record high of $375 registered on Dec. 19, 2017, according to data source Messari.
  • If bitcoin‘s rally stalls, we may see a rotation of money into the relatively undervalued alternative cryptocurrencies.
  • Litecoin’s multi-week narrowing price range has ended with a bullish breakout.
  • Immediate resistance is seen at $107 (Aug. 5 high).

Also read: The Big Banks Positioned to Ride Bitcoin’s Bull Run 

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Bitcoin Drops Nearly 7% After Setting New Record High of $23,770

5 years 10 months ago

Bitcoin surged to new record highs above $23,000 earlier on Thursday, before quickly falling back by over $1,500.

The cryptocurrency dropped from the all-time high of $23,770 to $22,185 in the roughly 30 minutes to 09:45 UTC – a 6.67% drop, according to the CoinDesk 20. Prices rose by more than $2,000 to reach new record highs above $23,700 in the first nine hours of the day (UTC).

At the press time price of $22,560, bitcoin is still up 14.37% on a 24-hour basis.

Related: Above $100: Litecoin Hits Highest Price Since Summer 2019

The rally is still looking solid, despite the recent losses. The derivatives market is showing no signs of overheating and on-chain data shows strong holding sentiment.

While the average level of the bitcoin perpetual futures’ “funding rate” across major exchanges has risen from 0.005% to 0.036%, it remains well below the high of 0.093% seen before the Nov. 24 price drop. In other words, leverage isn’t skewed too bullish and the cryptocurrency has scope to rally further.

Calculated every eight hours, the funding rate reflects the cost of holding long positions. It is positive (or longs pay shorts) when perpetuals trade at a premium to the spot price. As such, a very high funding rate is widely considered a sign of leverage being excessively skewed to the bullish side, or overbought conditions.

Further, there are no signs of large investors looking to book profits, with prices easily rallying to record highs above $23,000. At press time, there are roughly 2,400,000 coins held on exchanges. That’s the lowest since August 2018, according to data source Glassnode, and suggests investors aren’t preparing for a sell off.

Related: Bitcoin Sailing in Uncharted Waters as Price Crosses $22K for First Time

Investors generally move coins from their wallets to exchanges when they plan to liquidate their holdings and take profit.

In a sign of strong holding sentiment, exchange balances have declined by over 15% this year, taking the sell-side liquidity off the market.

Traders, however, should keep an eye on spot market volumes, as liquidity may dry over the Christmas holidays. That could produce wild swings on either side.

Patrick Heusser, head of trading at Zurich-based crypto Broker AG, told CoinDesk that the move above $20,000 needs to be backed by continued growth in trading volumes.

“In terms of spot volume, we have not yet hit the amount we saw in November (but, we do have another 13 days to go). With holidays around, it doesn’t look like December volume would top November’s tally,” Heusser said, adding that would be the first warning of bull fatigue.

Also read: New to Bitcoin? Stay Safe and Avoid These Common Scams

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American Express Invests in Institutional Trading Platform FalconX

5 years 10 months ago

American Express is taking a stake in the white-hot cryptocurrency industry, investing in institutional trading platform FalconX.

  • FalconX announced Wednesday that American Express Ventures made the investment as an extension of a fundraise earlier this year, but did not disclose an amount.
  • In May, FalconX revealed that it had raised $17 million in a seed round led by Accel – which has stakes in Facebook and Slack.
  • Coinbase Ventures, Flybridge Capital Partners, Lightspeed Venture Partners, Fenbushi Capital, and Avon Ventures also participated at the time.
  • “Amex Ventures invests in startups as a way to better understand emerging areas of the payments ecosystem, and we are pleased to support FalconX as it continues to drive innovation in the digital asset space, including digital currencies,”  said Harshul Sanghi, global head of Amex Ventures. 
  • Since the May round, FalconX said it has experienced revenue growth of 350% and transaction volumes have tripled to about $3 billion on a monthly basis. It now has 250 institutional clients.

See also: Accel, Coinbase Join $17M Funding Rounds for Institutional Crypto Trading Firm FalconX

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Crypto Exchange Bitpanda to Double Workforce With €10M Tech Hub Launch

5 years 10 months ago

Bitpanda, an Austria-based cryptocurrency trading platform, is setting up a new tech hub in Poland in its bid to become one of the crypto industry’s biggest firms

According to a Wednesday tweet from Bitpanda co-CEO and co-founder Paul Klanschek, the brokerage will provide €10 million (US$12.2 million) to fund the technology and innovation center in Krakow, Poland.

The move will see the creation of around 300 new jobs, adding to the brokerage’s already existing 280 strong workforce, the report said.

Related: Raiffeisen Bank Bringing Blockchain Interoperability to Its Stablecoin Project

The new team of people will be led by Bitpanda chief technology officer Christian Trummer, under whom the hub aims to support a move into stocks and exchange traded funds.

In a report from Polish financial news source Money.pl, Eric Demuth, also co-CEO and co-founder, said that the company chose the city of Krakov, rather than the nation of Poland. “The key was not specific cost or tax preferences, but access to qualified employees, universities, and the possibility of creating a technological ecosystem,” he said.

“I’m confident that we will be able to attract the most skilled professionals from the whole region,” Trummer said. “From backend developers, software, machine learning and QA engineers to product owners and scrum masters.”

The brokerage recently completed a $52 million Series A funding round led by PayPal co-founder Peter Thiel’s Valar Ventures to help scale the company with the onboarding of new employees and fund a range of new products.

Related: Bitpanda Raises $52M Series A Led by Peter Thiel’s Valar Ventures

The platform offers trading in a range of cryptocurrencies and precious metals against six fiat currencies.

“Our goal is to remove barriers to individual investments, educate users and become the first-choice investment platform,” Trummer said.

Editor’s note: Some quotes have been translated from Polish and edited for clarity.

See also: Bitpanda Raises $52M Series A Led by Peter Thiel’s Valar Ventures

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Bitcoin Sailing in Uncharted Waters as Price Crosses $22K for First Time

5 years 10 months ago

Bitcoin is heading north having blown past two price hurdles to reach another record all-time high.

At around 2:40 UTC Thursday, the price of the world’s first cryptocurrency rose above $22,000 for the first time, having anchored at around $21,300 for a few hours during the early Asia trading hours, according to Bitstamp data.

The price of the bellwether cryptocurrency is changing hands for around $22,150 as of press time.

Related: Coinbase CEO Pens Words of Caution to Crypto Newcomers

Bitcoin has ranged between $19,316 and $22,181 over a 24-hour period and appears seaworthy as statements about its price reaching six figures have ramped up in recent weeks.

The weather appears clear for bitcoin, according to analysts, who say a period of profit-taking is not yet on the horizon.

“$22,000 is a green flag on the way to the next psychological level at $25,000 and I would expect rapid movement and high volatility under the $25,000 range before year’s end,” said Kenetic Capital CEO Jehan Chu. “As top managers like Guggenheim Partners and Alan Howard take major positions and force investors to justify not allocating to bitcoin, $22,000 is the ultimate lagging indicator of institutional interest.”

Read more: Stampede of Bitcoin Buyers Pushed BTC Past $20K, Exchange Data Shows

Related: What Is Proof-of-Work?

Sell orders above $22,000 appear nowhere in sight, according to CryptoQuant CEO Ki Young Ju, who spoke with CoinDesk via Telegram.

“Looking at order books on major exchanges, I can’t find huge sell walls above $22,000 for now. Sell walls above $22,000 are so thin compared to $20,000 resistance,” said Ju. “It’s easy to break I would say.”

Bitcoin’s sister ship, ether, has risen to $650 – new heights not seen since May 2018. The fourth-largest cryptocurrency by market cap, XRP, is changing hands for around $0.57.

In traditional markets, the S&P 500 Index is up 0.18% while the Dow Jones Industrial Average closed in the red, down 0.15% on the day.

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Coinbase CEO Pens Words of Caution to Crypto Newcomers

5 years 10 months ago

Coinbase CEO Brian Armstrong provided words of warning to new entrants of cryptocurrency amid bitcoin’s latest climb to fresh all-time highs.

In a Medium blog post on Wednesday, the CEO of the leading cryptocurrency exchange said he and his company take a “long-term view of the market” while emphasizing that cryptocurrency investing was “not without risk.”

“While we’re always excited to see increased interest in crypto, it’s also important to point out that this is not only a time of high volumes but also price volatility,” Armstrong wrote. “The market can move in either direction much faster than equity markets.”

Related: Bitcoin Sailing in Uncharted Waters as Price Crosses $22K for First Time

Armstrong also cautioned investors who might be focusing on short-term speculation and encouraged his customers to “seek out resources” and consult financial experts in order to obtain a better understanding.

The CEO also alluded to Coinbase’s multiple bitcoin’s price this year as the exchange has struggled to keep up with a flood of traders looking to capitalize on bitcoin’s high volatility.

“Although we may occasionally fall short, we will always do our best to address our shortcomings and transparently communicate any information that our customers need to confidently manage their accounts and make informed trading decisions.”

See also: Coinbase Brokered MicroStrategy’s $425M Bitcoin Purchase, Exchange Says

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Lil Yachty Collectible Fetches $16K in Latest String of High-Profile NFT Auctions

5 years 10 months ago

Continuing a trend of splashy non-fungible token (NFT) auctions in recent days, rapper Lil Yachty has sold a digital collectible for $16,050.

The lucky winner is “westcoastbill” – a user who appears to have sniped Tyler Winklevoss by $50 at the last minute. Winklevoss, a “bitcoin billionaire,” is the owner of the NFT marketplace on which the “YachtyCoin” was auctioned.

The NFT auction on Nifty Gateway follows a Lil Yachty social token sale on Fyooz last week that raised approximately $276,000 for the Atlanta-born rapper.

Related: Market Wrap: Bitcoin Pushes Past $19.2K; Ether at 3% of BTC Price

A Nifty Gateway spokesperson confirmed that Wednesday’s winning bid went to Bill Lee, a general partner at early-stage VC firm Craft Ventures.

Gemini acquired Nifty Gateway in late 2019 with Tyler Winklevoss saying in a statement at the time, “We believe that both real-world and digital collectibles will migrate onto blockchains in the form of nifties.” NFTs are provably unique digital collectibles whose provenance is tracked on the blockchain, typically Ethereum.

Earlier this week, digital artist Beeple sold a collection of NFTs on Nifty Gateway for a whopping $3.5 million. A Sean Lennon piece recently sold for $3,000.

Such are the prerogatives of the crypto-rich.

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