CoinDesk Crypto

When India’s Supreme Court overturned the banking restrictions for crypto exchanges back in March, everything changed. 

Since then, Binance joined the Internet and Mobile Association of India (IAMAI), which played a key role in overturning the ban, and noted explosive growth via WazirX, the Indian exchange Binance acquired in 2019. A WazirX spokesperson told CoinDesk the exchange saw 150% more signups in many Indian cities from February to May 2020, which boosted local trading volumes by 66%.

“The Supreme Court’s positive verdict has surely helped in creating positivity around crypto in India,” the spokesperson said.

Related: Market Wrap: As Traditional Markets Rally, Bitcoin Gets Boring

Read more: Binance Joins Indian Tech Association That Helped Overturn Crypto Banking Ban

As part of that broader sentiment shift, prominent Indian economist Subhash Chandra Garg argued a “digital rupee will replace physical paper rupee as currency.” As the former executive director of the World Bank and former Indian finance secretary, Garg argued both that bitcoin is a global currency and that India should create a Central Bank Digital Currency (CBDC) that citizens can use with “digital wallets.” 

Even beyond India, entrepreneurs like London-based Pavel Matveev of Wirex Ltd. are eager to expand in India. 

“Last November we launched our product in eight countries across Southeast Asia, and we are hoping to launch in India this summer,” Matveev said in a phone interview. “The United Kingdom for example has a huge remittance flow from the UK to India. … [Indian demand for crypto] may be exhilarated by the COVID-19 situation.”

Related: Satoshi’s Unappreciated Marketing Genius, Feat. Dan Held

Read more: The Big Thing Holding Back India’s Crypto Boom

Beyond boosting exchanges and remittances, Matic Network co-founder Sandeep Nailwal said there’s been an uptick in the usage of decentralized applications (dapps). Within the first month of rolling out an Ethereum scaling solution, Nailwal said his startup garnered roughly 60 dapps and is currently in the process of onboarding another 60. 

“Especially with crypto, people are able to play games and earn money out of it. Real money games are becoming more popular,” he said during a video call. “We’re seeing a lot of applications [rely on us] because Ethereum is completely choked up.”

Nailwal added that there are more tech workers in India, with more than 1 billion people, than the entire populations of some countries. Especially in tech hubs like Bangalore, there are plenty of technically skilled people willing to overcome the UX challenges that hinder “mainstream” users. So far at least 15 of the dapps using Matic also hail from India, Nailwal said.

This may be the summer of Ethereum in India.

“You will start seeing a large number of Indian applications being used, proportionately,” Nailwal said about the rise of “India’s Silicon Valley,” Bangalore. 

While government blockchain projects explore issues like food distribution, Nailwal said he is participating in a monthlong ETHIndia virtual hackathon, along with a few hundred developers. The ETHIndia Community Telegram group has roughly 931 members.  

Plus, the Trump administration’s hostile approach to foreign worker visas may inspire some Indian workers to build their careers in India’s tech industry instead. As the global recession worsens, India is now home to millions of people with diaspora connections and the computer skills to use cryptocurrency. 

Unocoin exchange co-founder Sunny Ray said, now that a few of the Indian industry’s major legal battles were won in court, exchanges are coming “back from the dead.”

Read more: Indian Police Seize ATM Run By Crypto Exchange Unocoin

“Banking is back, the company is profitable again in less than two months, we’re hiring people back,” Ray said about Unocoin reopening and serving “thousands” of active monthly users again. In total, the exchange has roughly 400,000 users that completed the know-your-customer process. Now Indian traders are barely getting started. The local market is slowly ramping up. 

Unocoin co-founder Sathvik Vishwanath said the broader economic crisis has reduced expendable income and made Indians more conservative as unemployment spreads. According to the Centre for Monitoring Indian Economy, the unemployment rate last month was over 22%. Instead of pre-coiners flocking to crypto, Vishwanath expects this crisis could have a delayed impact of inspiring more crypto-novices and day traders that start treating crypto as an investment. 

Tech-savvy users may increase their crypto holdings, Vishwanath said, because any Indian household with expendable wealth is now thinking about diversification. 

Kashif Raza, a co-founder of the Indian news startup Crypto Kanoon, said, “people are finding crypto as an attractive proposition for hedging their risks, but still it is a long way [to go].” In the meantime, gold is often seen as the best way for Indian families to custody their own wealth. Indeed, the Indian gold market is booming and prices reached record highs in June. 

Read more: Geopolitical Crisis May Benefit Oil, Gold and CBDCs, Not Bitcoin

“One thing is clear post-COVID-19, that in both [urban and rural communities] gold is a perfect hedge during the crisis. The gold price has risen exponentially,” Raza said in an email. “There are many exchanges that have observed a spike in new registrations on their platform during the lockdown in India.”

So far, Raza said, Indians staying indoors are online searching for “new avenues of investment,” then finding crypto after gold. Indeed, Ashish Singhal, the Bangalore-based CEO of both the crypto wallet CRUXPay and the exchange Coinswitch.co, said he’s up to a total of 25,000 users since the coronavirus crisis began. More than half of the Indian users are women, he said. 

“The main cryptocurrencies are bitcoin and ether,” Singhal said during a call. “Exchanges like us need to do a big push to educate users. … A lot of people still believe cryptocurrency is banned in India.”

Women from India, who generally own gold jewelry as part of their wealth, are more likely to work in the tech industry than women from the United Kingdom or the United States. Across genders, Singhal said he’s seen a lot of enthusiasm, participation and “activities” around Ethereum.  

“Ethereum has its limits, but it’s an open platform to experiment,” Singhal said. “India is a very important market. Everyone understands that. We just need regulations to protect users, which will spark innovation.”

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A standard way to transact Bitcoin could be vulnerable to double-spending, new research has found. Blockchain sleuths at ZenGo, a wallet startup, have found a vulnerability that affected at least three major crypto wallets – Ledger Live, Edge and Breadwallet (BRD) – and potentially more. 

The bug, which the Tel Aviv-based firm calls BigSpender, allows a hacker to double spend a user’s funds and possibly prevent them from ever using their wallet again. It works by exploiting a flaw in Bitcoin’s replace-by-fee (RBF) function, a failsafe  that enables users to swap an unconfirmed transaction with one that has a higher fee. 

“[BigSpender] can lead to substantial financial losses and in some cases to make the victim’s wallet totally unusable with no way for the victim to protect themselves,” ZenGo CEO Ouriel Ohayon said in an email. “So this can be seen as a high severity attack.”

Related: Nomura-Backed Crypto Custody Venture Launches After 2 Years in the Works

Like other vulnerabilities found in Bitcoin’s core codebase, such as timelocked transactions, the RBF function has become a standard way for users to send value back and forth. It was pitched and accepted by the developer community as a way for Bitcoiners to circumvent slow confirmation times by paying more in fees. 

See also: Raphael Auer – The Security Trilemma and the Future of Bitcoin

From the outset, there were fears that the RBF function was not well supported by Bitcoin wallets, despite being integrated at Bitcoin’s protocol layer, the pseudonymous Bitcoin researcher 0xB10C said. “ZenGo shows that a user can be tricked into thinking he is receiving bitcoin when he is not. I believe this to be novel. I’ve at least not heard about it before,” he said. 

The firm tested nine different wallets including Ledger Live, Trust wallet, Exodus, Edge, Bread, Coinbase, Blockstream Green, Blockchain and Atomic Wallet. Of those tested, three were found to be vulnerable to the theoretical exploit. 

Related: Thailand to Raise $6.4M With Sale of Blockchain-Based Bonds

“We have not tested all the wallets but it could be that if three of the largest are implicated, more out there are too,” Ohayon said. ZenGo alerted the firms about its findings, and gave them 90 days to repair the vulnerability. 

Ledger and BRD have released code changes to prevent the attack from happening, and paid undisclosed big bounties to ZenGo, while Edge is currently undergoing a “significant refactor” that will address the issue, Edge’s CEO Paul Puey said in an email. 

The hack leverages a known vulnerability in how certain wallets treat Bitcoin’s RBF transactions, Peter Todd, Bitcoin developer and RBF’s architect, said.

How it works: Attackers send funds to their intended victim, and set fees low enough to nearly guarantee the transaction will not receive a confirmation. While the transaction is pending, the attacker cancels it. For vulnerable wallets, this pending transaction will be reflected as an increase in a user’s account balance, and therefore, possibly, lead some victims to erroneously believe the transaction has gone through, despite being cancelled. 

This discrepancy between a victim’s stated and actual balance could be exploited by malicious actors tricking people into providing goods or services without paying for them – except the minimal amount of fees spent. In this sense, the flaw is with a wallet’s UX and UI design.

If a hacker can trick a person into believing they received payment, while simultaneously maintaining control of the bitcoin, this is a double-spend, according to ZenGo’s researchers. 

“You have to decide what is the definition of a double-spend. Most people that aren’t trolls would say that a double-spend is when you have a confirmed transaction that is somehow invalidated and spent with a different confirmed transaction,” Jameson Lopp, CTO of custody startup Casa, said, denying the researchers’ claims. 

This attack, by its nature, takes advantage of the way wallets display unconfirmed transactions. In this sense, the attack – while fraudulent – isn’t breaking the way the Bitcoin code functions.  

“The whole point of the blockchain is to prevent the double-spend problem,” Lopp said. “It goes back to the original Satoshi white paper, which says the solution to double-spending is to have a distributed ledger that many people are checking.” 

The only thing you can rely on is transactions that have been mined

A general rule of thumb when transacting with Bitcoin is to never trust a transaction with less than six confirmations, 0xB10C said. This was a point repeated by a number of developers, including Todd, Lopp and BRD CTO Samuel Sutch. If this exploit goes through, at least some of the responsibility is on the victim. 

“The only thing you can rely on is transactions that have been mined,” Todd said.

In this sense, Sutch called BigSpender a “minor bug,” and “kind of contrived,” but also something worth fixing and paying a bug bounty for. BRD recently passed 5 million users, Sutch said. 

“More wallet developers need to know their users don’t know the distinctions under the hood,” Lopp siad. Many don’t even know the difference between confirmed and unconfirmed from a security standpoint. So the onus is on developers to build a better user experience so they cannot be confused and defrauded by things like this.”

To this end, Ledger updated the way the wallet displays RBF transactions, and added that if users are unsure “to check the status of a transaction” using a block explorer. “Such verification is not possible with your bank today,” Ledger’s CTO Charles Guillemet said over email.

Updating wallets to clearly display what is happening during a RBF transaction is well and good for everyone involved. However, ZenGo researchers found there is a second order attack, which follows the same scheme outlined above, which could permanently disable a wallet with or without the victim’s knowledge of the transaction. 

In this case, the attacker again artificially inflates a victim’s balance by sending repeated transactions to her wallet. This can be done without a victim’s consent. By canceling the transactions before confirmed, the victim’s stated wallet balance and actual funds are again decoupled, making their wallet unusable. Worse, the attack can affect multiple wallets at the same time. 

See also: Long-Festering DeFi Dapp Bug Still Not Fixed by Industry (Updated)

Essentially, it’s a denial of service (DoS) attack, preventing people from using their wallets.

“This also disables other kinds of sending attempts if the wallet’s coin selection algorithm chooses funds from this nonexistent transaction,” Ohayon said. These wallets are “bricked,” to use Sutch’s parlance. “It’s a huge inconvenience.”

Sutch said BRD made the vulnerability a top priority for the firm after it was alerted. Strangely, it managed to fix the bug while working an unrelated problem, he said. 

The issue ZenGo raises with its security research is not sequestered to the wallets the team tested. The vast majority of Bitcoin wallets are capable of receiving RBF transactions, and many of them are “resource constrained,” Sutch said, and are unable to provide a fix immediately.  

When enabling RBF functionality on Casa, Lopp said he configured the system to not display these types of transactions until confirmed, which is non-standard in the industry. “The default parameters would display these transactions,” he said.

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Bitcoin broke above $9,250 for the first time since Friday as the leading cryptocurrency continues to trade in a tight range just above $9,000 for several weeks. But cryptocurrency markets have stayed quiet as traders expect a big move. Bitcoin was trading hands around $9,250 as of 20:00 UTC (4 p.m. ET). 

• Bitcoin at $9,250 as of 20:00 UTC (4 p.m. ET), up 1.2% over 24 hours
• BTC trading range (past 24 hours): $9,000-$9,300
• Ether up 3% in trading, at around $232
• Bitcoin 30-day volatility continues to drop
• Decentralized exchange volume grows 70% in June

Ether, the second-largest cryptocurrency by market capitalization, gained 3%, trading around $232 as of 20:00 UTC (4 p.m. ET), according to Bitstamp.

Despite trading above $9,250, bitcoin is still stuck within a tight range of a few hundred dollars above $9,000. As a result, 30-day volatility continues to decline. In fact, bitcoin’s volatility reached its lowest mark since Feb. 23, according to Coin Metrics.

Related: Satoshi’s Unappreciated Marketing Genius, Feat. Dan Held

As bitcoin stagnates, traditional markets soar. Tesla made an all-time high Wednesday, climbing $1,134, up more than 6% from its daily open. Zoom also bounced back toward its all-time high of $262 after dropping Friday through Monday, up 3.6% from its Wednesday open. 

Why is bitcoin so quiet? There are simply “more eyeballs away from the crypto market and more towards traditional financial markets,” said Eliézer Ndinga, research associate at digital asset manager 21Shares. Many retail traders are using the popular retail equities trading platform Robinhood to speculate as traditional markets rally amid the on-going coronavirus pandemic. 

“Despite various efforts to boost institutional adoption, retail traders account for 96% of all exchanges’ transfers,” Ndinga added. For many of these traders, the stock market may be more interesting than cryptocurrency markets. 

Despite retail investors’ temporarily waning interest, institutional investors continue to develop the cryptocurrency market’s infrastructure. New York Digital Investments Group (NYDIG) raised $190 million from 24 investors for a new bitcoin fund, CoinDesk reported Wednesday. The New York-based asset manager, which has held a New York BitLicense since 2018, raised $140 million in May for a similar investment vehicle, the Bitcoin Yield Enhancement Fund. 

Related: Blockchain Tech Vendor Bison Trails Adds Ethereum 2.0 Support

Meanwhile, loyal cryptocurrency traders are increasingly keen to use decentralized exchanges. In June, aggregate volumes for these platforms grew 70% to a record high of over $1.5 billion.

This rapid growth carries some security concerns, however. Decentralized finance analyst Jack Purdy told CoinDesk the spike in trading volumes on these nascent platforms is “starting to become a bit worrisome” due to the fact that a variety of complex attack vectors still exist. 

• S&P 500 up 0.6% trading at $3,123
• FTSE 100 down 0.1% after recovering from a 1.7% afternoon dip
• Nikkei 225 down 1.25%
• Gold down 0.7% trading at $1,770

Stablecoin markets showed strength as USDC’s total circulating supply passed 1 billion tokens. Tether, the largest stablecoin, grew to $10.3 billion, according to data from Messari. 

Exchange tokens were mostly up Tuesday as the entire sector gained 2.4%, according to Messari. Some of the biggest gainers were kyber network (KNC) up 11.4% and binance coin (BNB) up 2.5%. All price changes were as of 20:00 UTC (4:00 p.m. ET).

• Decentralized Exchange Volumes Up 70% in June, Pass $1.5B
• Market Wrap: Crypto Market Eerily Quiet as Bitcoin Stuck Near $9K

The top Republican and Democrat on the Senate Banking Committee plan to introduce legislation this week that would direct the Government Accountability Office (GAO) to study virtual currency’s role in illicit online activity. 

• The language appears in a draft anti-money laundering amendment to the gargantuan National Defense Authorization Act, a must-pass bill that greenlights annual military spending. 
• “Although the use and trading of virtual currencies are legal practices, some terrorists and criminals, including international criminal organizations, seek to exploit vulnerabilities” through them, the amendment read.
• If the amendment is passed the GAO, a congressional watchdog agency, would have one year to report on how virtual currencies might be facilitating human- and drug-trafficking industries across online marketplaces.
• The office would study how virtual currency acts as a vehicle for laundering illicit funds into the U.S. banking system, as well as what, if anything, the federal government is doing to stop it.
• Whether the “immutability and traceability of virtual currencies” can help prosecute criminals would also be on GAO’s list of concerns. 
• As first reported by Bloomberg Law, committee Chairman Mike Crapo (R-Idaho) and Ranking Member Sherrod Brown (D-Ohio) agreed to the language with bipartisan support from the 25-member Senate committee.

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• Crypto Analytics Firm Elliptic to Tell US Congress Privacy Coins Need Stricter AML Rules

The top Republican and Democrat on the Senate Banking Committee plan to introduce legislation this week that would direct the Government Accountability Office (GAO) to study virtual currency’s role in illicit online activity. 

• The language appears in a draft anti-money laundering amendment to the gargantuan National Defense Authorization Act, a must-pass bill that greenlights annual military spending. 
• “Although the use and trading of virtual currencies are legal practices, some terrorists and criminals, including international criminal organizations, seek to exploit vulnerabilities” through them, the amendment read.
• If the amendment is passed the GAO, a congressional watchdog agency, would have one year to report on how virtual currencies might be facilitating human- and drug-trafficking industries across online marketplaces.
• The office would study how virtual currency acts as a vehicle for laundering illicit funds into the U.S. banking system, as well as what, if anything, the federal government is doing to stop it.
• Whether the “immutability and traceability of virtual currencies” can help prosecute criminals would also be on GAO’s list of concerns. 
• As first reported by Bloomberg Law, committee Chairman Mike Crapo (R-Idaho) and Ranking Member Sherrod Brown (D-Ohio) agreed to the language with bipartisan support from the 25-member Senate committee.

• Senate Banking Committee Remains Open to Idea of Digital Dollar in Tuesday’s Hearing
• Witnesses Will Vouch for Stablecoins, Digital Dollars in US Senate Hearing Tuesday
• The Overton Window Opens for a Digital Dollar
• Crypto Analytics Firm Elliptic to Tell US Congress Privacy Coins Need Stricter AML Rules

What’s in a name? The power to render someone mute.

Last week, Scott Alexander, the author of the influential rationalist blog Slate Star Codex (SSC), abruptly shut down (perhaps temporarily) his blog in advance of a New York Times (NYT) story on him and SSC that would include his real name. “Scott Alexander” is the pseudonym he has written under for years. As a practicing psychiatrist, he said, what amounts to “doxxing” him would damage his livelihood. In addition to professional repercussions, Alexander said in his final blog post explaining the situation that:

“..[S]ome people want to kill me or ruin my life, and I would prefer not to make it too easy. I’ve received various death threats. I had someone on an anti-psychiatry subreddit put out a bounty for any information that could take me down..”

Related: Cryptography Startup Brings Private Payment Channels to Tezos Blockchain

The NYT decision was based on a strict “real name” policy, Alexander wrote. 

The situation angered the blog’s fans, but also raises larger questions as to whether and when journalists should respect pseudonyms, who qualifies as a public figure and the impact reporting has on those who do not.

See also: Why CoinDesk Respects Pseudonymity: A Stand Against Doxxing

Perhaps the most recent high-profile example of this was in a Washington Post article describing what happened when a woman, not a public figure, showed up at a 2018 Halloween party thrown by a Washington Post cartoonist. She was dressed as journalist Megyn Kelly, but in blackface. When the woman told her employer about the upcoming article, she was fired. The decision to even proceed with an article, much less publish it, was controversial. People questioned the news value, including current and former Washington Post journalists, according to Ben Smith’s reporting in the New York Times. 

Related: Facebook, IoTeX, R3 Among New Members of Confidential Computing Consortium

Back to Scott Alexander: His post prompted CoinDesk Executive Editor Marc Hochstein to make our editorial policy clear: We will respect pseudonymity. 

As Hochstein writes, “We will respect the identity that has a reputation in our community unless there is an overwhelming public interest in unmasking it”. 

Following that post, CoinDesk’s Alyssa Hertig published an article on the many members of the cryptocurrency community who use pseudonyms, and use them for good reason. Engineer Kee Hinckley, one of those Hertig interviewed, put it best: 

“Here lies the huge irony in this discussion. Persistent pseudonyms aren’t ways to hide who you are. They provide a way to be who you are. You can finally talk about what you really believe; your real politics, your real problems, your real sexuality, your real family, your real self.”

See also: Many Bitcoin Developers Are Choosing to Use Pseudonyms – For Good Reason

I spoke with Scott Alexander via email about his experience, when it might be appropriate to unmask somebody, and whether writing under a pseudonym allowed him to explore ideas in more depth and candor. We respected his pseudonym. 

Give me some background on Slate Star Codex, and why you started it?

I started Slate Star Codex seven years ago. I previously had another blog under my real name, but I had a few bad job interviews where the interviewers hinted that I might not get the job because I was blogging. So I decided to delete it and start over with an anonymous blog.

What advice would you give to people writing on the internet today about operational security? How do you keep your identity private while also sharing your writing and thoughts?

I failed terribly at keeping my identity secret, because everyone who read my last blog knew I was the same person writing the new one. I survived this long because most people had goodwill and never translated this tacit knowledge into Google-able results.

Are there circumstances under which you believe it would be appropriate to unmask an online persona?

This is a tough question, but I place it in the same realm as other tough questions like, “Are there times when violence is appropriate?” or “Are there times when the government should suppress speech?” There might be, but it needs a higher burden of proof than just “I don’t like this person.”

Have you heard from the NYT since the conversation with [reporter] Cade [Metz] described in the farewell post?

No, but I know Cade is still interviewing people for the article, which I take to mean he’s still expecting to publish it.

How do you respond to the people who say, “Your real name is already out there”? I know the blog post addresses it but it’d be helpful for you to lay out for our audience.

There are a lot of people who have had naked pictures of them leaked online who would still be entirely justified not wanting those pictures in the New York Times. I admit my security has been bad. But so far most people who google my real name don’t find my blog. People who do the opposite can find my real name with a little Internet savviness and a minute or two, and maybe the extra difficulty just makes me feel more secure without really keeping me any safer. But that extra feeling of security is still important to me.

How has the ability to write under a pseudonym influenced your writing? Has it allowed you to explore ideas in more depth or candor?

I think so. In particular, I’ve written some frank things about psychiatry and about my experience in psychiatric residency that I wouldn’t have written if I knew my residency director could google my name and find it.

You’re known for enjoying pushing the Overton Window and questioning the wisdom of the mainstream. Some argue this leads some marginal folks to dangerous places or gives them permission to dig deeper into the internet’s darker corners. Is that a fair critique or how do you conceptualize/consider that portion of your audience? On the other hand, could you share some experiences of readers who were positively influenced by your work, such as how you’ve encouraged people to engage in Effective Altruism?

I try to avoid edginess for edginess’ sake, but sometimes I genuinely believe people are wrong about something. A couple of those times, time has proven me right. In general, I’m nervous about demanding people consider the effect their writing could have on the worst possible reader. I’m remembering someone who warned me that talking too much about the negatives of AI could lead people to assassinate AI researchers. By those standards, you can never talk about the negatives of anything. I think the duty of a writer is to tell the truth as they understand it, while being appropriately careful, and trying to urge consideration and multilateral action instead of violence. If you try any harder than that to optimize for having the exact right effect on terrible people, you’re writing propaganda.

Did you see an opportunity here to “Streisand Effect” your blog? I believe you have said in the past that traffic is down but that you’d also like to pivot out from your day job and do SSC-style work full time. So is there any fairness to a cynical view of your blog takedown as a way to relight the spark in the SSC community?

No, I didn’t do this, and would lose respect for anyone who did. I’m not sure what kind of evidence you want me to give. But if you want, you can confirm with Cade that I begged him, at great length, many times, over the course of days, not to use my real name in the article. I gave him a warning that I would delete the blog if he used my real name, in order to pressure him to reconsider, and I only deleted the blog after he refused.

“We do not comment on what we may or may not publish in the future,” said Danielle Rhoades Ha, vice president of Communications at the New York Times, in a statement sent to CoinDesk. “But when we report on newsworthy or influential figures, our goal is always to give readers all the accurate and relevant information we can.”

• Many Bitcoin Developers Are Choosing to Use Pseudonyms – For Good Reason
• Why CoinDesk Respects Pseudonymity: A Stand Against Doxxing

IOTA is addressing the technical feature that nuked the blockchain-like network for nearly two weeks earlier this year.

• The IOTA Foundation announced Wednesday it is doing away with the “coordinator” that previously validated the blockchain’s transactions.
• The new “coordinator-less” network, billed as IOTA 2.0, is meant to rival other smart-contract platforms such as Ethereum, EOS, Tron and Cardano.
• IOTA’s MIOTA token currently ranks as the 24th largest cryptocurrency by market cap, according to CoinGecko data, besting zcash (ZEC), cosmos (ATOM) and basic attention token (BAT), among others.
• IOTA’s new “Pollen” testnet will serve as a research testbed for a new “fast probabilistic consensus” mechanism.
• The IOTA Foundation claims the new network will support decentralized applications (dapps) and smart contracts that can transact without incurring fees.

Read more: IOTA Being Shut Off Is the Latest Chapter in an Absurdist History

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A federal appeals court on Tuesday affirmed a lower court’s denial of a motion to suppress evidence in a case that hinged on whether the Fourth Amendment of the U.S. Constitution protects Bitcoin blockchain records from warrantless search and seizure.

• The Fifth Circuit Court of Appeals in New Orleans rejected defendant Richard Gratkowski’s claims his blockchain and Coinbase-held bitcoin transaction records could not be used as evidence against him. Gratkowski, who was convicted and sentenced last year on child pornography charges, had paid for the material in bitcoin.
• Gratkowski based his motion to suppress that evidence on the Fourth Amendment’s prohibition of unreasonable search and seizure. He argued the government had violated his reasonable expectation of privacy in analyzing his Coinbase and on-chain transactions because it was done without a warrant.
• But the court effectively found that agents did not need a warrant to search those records. The court said the public nature of bitcoin’s permissionless blockchain undercuts any user’s claims to a reasonable expectation of privacy.
• “Granted, they enjoy a greater degree of privacy than those who use other money-transfer means, but it is well known that each bitcoin transaction is recorded in a publicly available blockchain,” the Fifth Circuit held.
• The court was skeptical of Gratkowski’s claims to privacy for his Coinbase records. He had compared those records to protected cell phone metadata, but the court said Gratkowski’s Coinbase records (and the blockchain records) are “more akin to bank records,” which are not protected under the Fourth Amendment.
• “Coinbase deals with virtual currency while traditional banks deal with physical currency. But both are subject to the Bank Secrecy Act as regulated financial institutions,” the Fifth Circuit held.
• That’s because of the “third-party doctrine,” said Drew Hinkes, a lawyer with Carlton Fields.
• “If a person voluntarily gives information to a third party, makes no effort to protect that information and the third party has a legitimate reason to retain that information” then the party providing that information has no legitimate expectation of privacy over that information, and that information may be obtained from that third party without a warrant, said Hinkes.
• The Fifth Circuit affirmed the lower court’s decision to deny Gratkowski’s motion to suppress the evidence.

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Blockchain technology firm Bison Trails announced its support for features of Eth2 ahead of Ethereum’s planned upgrade. 

• In an announcement on Monday, the firm said it would support features such as ETH staking and automatically managed validator notes on the upgraded blockchain. A founding member of the Facebook-led Libra Association, Bison Trails provides blockchain infrastructure services to firms. 
• Ethereum’s transition this fall will move the network from a proof-of-work consensus mechanism to a proof-of-stake one in order to improve scaling and reduce power requirements. Bison Trails said helping Eth2 launch was also an opportunity to secure the chain and earn staking rewards. 
• The firm noted its software would manage client infrastructure automatically, thereby removing the need to manually manage participation when network requirements change. 
• Bison Trails recently signed a deal with NEAR Protocol, the claimed “Ethereum Killer,” to host its validator set. 

See also: ConsenSys Spins Up Staking Service in Anticipation of Ethereum 2.0

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June trading volume on decentralized exchanges set a record high of $1.52 billion, up 70% from May, according to data from Dune Analytics. This double-digit percentage growth is simply “the continuation of a trend dating back to the end of [2019],” Jack Purdy, decentralized finance analyst at Messari, told CoinDesk. 

Curve and Uniswap control the largest amount of traded volume, recording $350 million and $446 million, respectively, in June. Both protocols are automated market makers that can also function as decentralized exchanges. Balancer, a similar platform, recorded $93 million in traded volume, up 2,460% from $3.6 million in May.

Significant growth can be partially attributed to the “proliferation of automated market makers,” according to Purdy. As a result, these markets offer greater liquidity for “the tail end of crypto assets” and even occasionally less order slippage than centralized exchanges, Purdy said.

Related: DeFi Platform Opyn Launches Put Options on Compound Token

In June, automated market makers grew by more than 170% while pure decentralized exchange platforms grew by only 10%.

Too much growth too quickly could be cause for concern, however, as decentralized exchanges still need time for continued development and stress testing. Recent increases in trading volume are “starting to become a bit worrisome,” Purdy said, adding that an “unnatural rush to deposit assets” into these exchanges is fueled, in part, by the “liquidity mining phenomenon.” 

Since January, aggregate decentralized exchange volumes, including automated market makers, have more than quadrupled from $276 million to $1.52 billion.

See also: Bitcoin’s Mining Difficulty Has Rarely Been This Static in a Decade

Related: Market Wrap: A Sea of Red Across Markets as Bitcoin Drops to $9.2K

Even though popular decentralized finance protocols may be “highly audited and deemed safe,” plenty of potential attack vectors still exist, Purdy said. A decentralized liquidity provider, Balancer, lost $500,000 in a sophisticated attack Monday, for example. 

The number and varieties of potential attacks only increase as decentralized finance protocols become more intertwined, Purdy said.

• FTX Is Building Lots of Sophisticated Markets Few Traders Use
• Ethereum Logged Its Busiest Week on Record

Correction (July 2, 03:00 UTC): An earlier version of this article misstated the timing of the Compound portfolio launch. Techemy plans to roll it out next week, and the yield farming feature is to come later in the year; neither is available yet. The article has also been updated to include additional details.

New Zealand-based investment firm Techemy Capital is preparing to launch a Compound investment portfolio, which would be comprised of proxies of stablecoins dai and USDC.

• The product, slated for launch next week, would allow holders to earn interest on decentralized lender Compound and, eventually, gain exposure to “yield farming.”
• The portfolio would begin to “yield farm” – borrow against itself to release free COMP tokens on users’ behalf, later this year
• Yield farming has turned into such a feeding frenzy that Compound changed the distribution model Tuesday to stop traders from gaming the system.
• At press time, COMP tokens traded at $214 after peaking at $350 just over a week ago, according to CoinGecko.
• Ahead of the Compound vehicle, Techemy already launched bitcoin– and ether-based investment portfolios.
• All three portfolios are built on Ethereum and are self-custodial, only available to accredited investors.
• Fran Strajnar, Techemy Capital’s executive chairman, told CoinDesk: “These initial products can maybe be viewed as a ‘mini ETF’ for now.”
• Techemy’s proprietary trading desk will actively manage the bitcoin and ether portfolios.
• Strajnar said Techemy was working with Japanese banks and asset managers to roll out a fully-fledged ETFs sometime in Q1 2021.
• Nexus Mutual is offering optional insurance against smart contract failure to investors in the portfolios, which are hosted on the TokenSets platform.
• Nexus’ business has been mushrooming lately, and it paid its first claim, demonstrating its wherewithal as an insurer against smart contract failures.

Read more: DeFi’s ‘Agricultural Revolution’ Has Ethereum Users Turning to Decentralized Exchanges

• Compound Changes COMP Distribution Rules Following ‘Yield Farming’ Frenzy
• DeFi’s ‘Agricultural Revolution’ Has Ethereum Users Turning to Decentralized Exchanges
• Blockchain Project Kyber Unveils Date for Planned ‘Katalyst’ Protocol Upgrade
• Hacker Drains $500K From DeFi Liquidity Provider Balancer

New Zealand-based investment firm Techemy Capital has created the Compound investment portfolio, which is comprised of proxies of stablecoins dai and USDC.

• The “mini-ETF” allows holders to earn interest on decentralized lender Compound and gain exposure to “yield farming.”
• The portfolio will “yield farm” – borrow against itself to release free COMP tokens on users’ behalf – sometime later this year.
• Yield farming has turned into such a feeding frenzy that Compound changed the distribution model Tuesday to stop traders from gaming the system.
• At press time, COMP tokens traded at $214 after peaking at $350 just over a week ago, according to CoinGecko.
• Alongside the Compound vehicle, Techemy also launched bitcoin– and ether-based investment portfolios.
• All three portfolios are built on Ethereum and are self-custodial, only available to accredited investors.
• Fran Strajnar, Techemy Capital’s executive chairman, told CoinDesk: “These initial products can maybe be viewed as a ‘mini ETF’ for now.”
• Techemy’s proprietary trading desk will actively manage the bitcoin and ether portfolios.
• Strajnar said Techemy was working with Japanese banks and asset managers to roll out a fully-fledged ETFs sometime in Q1 2021.

Read more: DeFi’s ‘Agricultural Revolution’ Has Ethereum Users Turning to Decentralized Exchanges

• Compound Changes COMP Distribution Rules Following ‘Yield Farming’ Frenzy
• DeFi’s ‘Agricultural Revolution’ Has Ethereum Users Turning to Decentralized Exchanges
• Blockchain Project Kyber Unveils Date for Planned ‘Katalyst’ Protocol Upgrade
• Hacker Drains $500K From DeFi Liquidity Provider Balancer

Cryptography firm Bolt Labs has launched a private payment solution, zkChannels, on Tezos. 

The startup is now working with Tezos developer groups Nomadic Labs and Metastate to implement the tech in the next network update. 

Similar to the Lightning Network, zkChannels is a payment channel for blockchains but with zero-knowledge proofs attached. A current problem with Lightning – a payment solution built on top of the Bitcoin blockchain – is that in certain settings, you can see other people’s de facto bank accounts, called funding channels. zkChannel hides that information from merchants.

Related: ‘I Failed Terribly at Keeping My Identity Secret’: Scott Alexander on the Value of Pseudonymity

“zkChannels is a chain-agnostic anonymous off-chain protocol that enables cheap and private value transfer between a customer and merchant,” Bolt Labs said in a blog post.

Lightning developers are working on similar concepts through different means with projects such as multi-part payments.

Bolt Labs was founded in 2018 by J. Ayo Akinyele with Zcash co-founders Ian Miers and Matthew Green. The privacy project raised $1.5 million in an April 2019 seed round joined by Lemniscap, Xpring and others in addition to numerous angel investors such as Zcash co-founder Zooko Wilcox.

Read more: Bolt Labs Raises $1.5 Million Seed Round to Boost Lightning Privacy

Related: DC Lawyers Can Now Accept Crypto for Legal Fees

Akinyele said the team built on top of Tezos to act as a testing ground of sorts for other blockchains. 

According to the firm’s announcement post:

We are also interested in building a cross-chain bridge via zkChannels for connecting Zcash or Bitcoin to Tezos, and provides censorship-resistance to decentralized finance (DeFi) applications.

Tezos raised $232 million in a 2017 initial coin offering (ICO), marketing itself as the “self-amending” ledger. That means the blockchain can conduct periodic code updates due to its hands-on governance procedures. For example, academic work detailing a possible selfish mining scheme led to a code patch mere weeks after the paper’s publication.

zkChannels is Bolt Labs’ first account-model implementation of its tech, Akinyele told CoinDesk. (Blockchains come in two flavors: the unspent transaction output (UTXO) model used by Bitcoin and the account model employed by Ethereum.) The firm also has private channel implementations for both Bitcoin and Zcash, with the latter still in development. 

Read more: Why Harvard Research on a Low-Profit Tezos Attack Matters for Proof-of-Stake

The use of a payment channel on a blockchain that barely breaks $100 in average daily fees – compared to the hundreds of thousands of dollars processed by Bitcoin and Ethereum daily – seems questionable. 

Indeed, as CoinDesk reported, 76% of Tezos transactions can be tied back to network validation, called “Baking,” or a coin “faucet” that spouts free XTZ.

Akinyele said Bolt Labs built zkChannels on Tezos over other candidates due to the blockchain’s malleable governance. Moreover, zkChannels is easier to implement on a more “pairing friendly” curve called BLS12-381 that Tezos is currently adding. Ethereum operates on another older elliptic curve model and will not support BLS until a network overhaul called Eth 2.0 is completed.

“We’re looking at the fact that Tezos is a new blockchain, but that has a lot of promise based on the building blocks it’s making available to developers,” Akinyele said.

• Facebook, IoTeX, R3 Among New Members of Confidential Computing Consortium
• Many Bitcoin Developers Are Choosing to Use Pseudonyms – For Good Reason

DeFi’s agricultural revolution is spurring growth in decentralized exchanges.

Meanwhile, the Bitcoin network experienced its lowest difficulty adjustment in 10 years, clocking a negligible change in mining difficulty today, while a novel legal strategy is bringing an initial coin offering project to court. Here’s the story:

You’re reading Blockchain Bites, the daily roundup of the most pivotal stories in blockchain and crypto news, and why they’re significant. You can subscribe to this and all of CoinDesk’s newsletters here. 

Related: First Mover: Crypto.com’s Chain Token Dominated Markets in June With 33% Gain

Breaking Down DeFi
Decentralized exchanges (DEXs) are growing due to a surge in decentralized finance (DeFi) activity. “Compound sparked the beginning of a new agricultural revolution where so-called yield farmers are siphoning volume through [automated market makers] instead of centralized exchanges. This isn’t ideological behavior – it’s the same CeFi users now shifting to DeFi because it’s more efficient and profit-maximizing,” said Ben Forman of Parafi Capital. That’s as the daily distribution of the Compound protocol’s COMP governance token is set to change, following a vote on a new proposal. The 2,880 COMP distributed to users every day will now be based on the dollar value of assets they have put in or borrowed from the system. Finally, DeFi protocol bXz announced a proposal to update its governance token, which would enable users to participate in the yield farming trend. (Decrypt)

Capital Raises
Japanese financial firm SBI Holdings will take a $30 million minority stake in institutional crypto trading platform B2C2 as the firms enter a strategic partnership, under which B2C2 will provide crypto liquidity for SBI, which is planning to grow its crypto offering to “millions of existing customers.” Meanwhile, New York Digital Investments Group (NYDIG) raised $190 million from 24 investors for another bitcoin fund. Meanwhile, Curv, a crypto security firm, has closed a $23 million Series A funding round from CommerzVentures, Coinbase Ventures, Digital Currency Group (CoinDesk’s parent), among others. 

Ethereum & Bitcoin Non-Developments
Ethereum Core developers decided Friday to postpone work on the protocol’s next hard fork, Berlin, until at least August in an effort to let people transition off Geth, a client or programming language used by an overwhelming majority of Ethereum coders. Elsewhere, Ethereum’s founder Vitalik Buterin said ZK-rollups may become “the dominant scaling paradigm for at least a couple of years,” or the main method by which Ethereum processes transactions, while developers work on building Eth 2.0, Decrypt reports. Finally, the Bitcoin network barely adjusted its difficulty level down 0.0033%, a percentage change small enough that it rounds down to zero. The negligible adjustment might be tied to the lack of new mining devices plugging in or any newly added computing power being offset by those that are squeezed out after Bitcoin’s halving.

Legal Precedents?
20,000 claimants are pursuing a class-action lawsuit against the micro-mobility platform Helbiz, after the company’s 2018 ICO. Most litigation involving token projects falls under securities law, however the plaintiffs are saying Helbiz built a platform but reneged on its promise to integrate HelbizCoin as the sole payment method. Elsewhere, lawyers working in Washington, D.C., can now accept crypto for providing legal services. Spain’s National Police arrested 33 people who allegedly sold illegal medications online and laundered at least part of their €3 million profit in virtual currency while, separately, Facebook scammers are targeting people at risk of suicide with fake poison pills and partially accepting payment in crypto. (BBC)

• Augur is launching a new version of its protocol next month.
• Deutsche Boerse has listed a Bitcoin ETP on Europe’s third-largest exchange.
• Fans have donated 300 BCH (~$60,000) after Stefan Molyneux was banned from YouTube. (Decrypt)
• U.K.’s financial watchdog estimates 3.86% of the nation owns cryptocurrencies. (The Block)
• Beijing is teeing up to become a blockchain hub. (The Block)

Related: Blockchain Bites: Digital Dollars, Ethereum’s Gas and ASX’s Blockchain ‘Lacks Clarity’

Alt-Season?
Credit card lender and wallet provider Crypto.com’s Chain (CRO) token surged 33% in June, dominating digital-asset markets as bitcoin, ether and XRP from Ripple all declined. The CRO token’s gains made it the top performer during the month among digital assets with a market value of at least $1 billion. The second-best performer, Unus Sed Leo (LEO), rose 6.4% in June, followed by Chainlink (LINK) with a 4.6% price increase. The worst performer was bitcoin SV (BSV), which tumbled 21%. 

Valuing Bitcoin
Nearly half of investors in a recent survey said a lack of fundamentals keeps them from participating. In a 30-minute webinar July 7, CoinDesk Research will explore one of the first and oldest unique data points to be developed by crypto asset analysts: Bitcoin Days Destroyed. 

We’ll be joined by Lucas Nuzzi, a veteran analyst and a network data expert at Coin Metrics. Lucas and CoinDesk Research will walk you through the structure of this unique financial metric and demonstrate some of its many applications. Sign up for the July 7 webinar “How to Value Bitcoin: Bitcoin Days Destroyed.” 

Money Printing
Frances Coppola, a CoinDesk columnist and freelance writer, thinks the Federal Reserve’s loose monetary policies are maintaining the U.S. dollar’s reserve status rather than inflating its value, and that’s a good thing. “Those who thought the Fed’s expansion of the monetary base would cause runaway inflation because banks would lend out the money have been proved wrong… So let the Fed continue pouring dollars into international financial markets. That’s how to ensure that the dollar remains king, and the U.S. economy remains the richest in the world,” she writes.

• Blockchain Bites: EY’s Auditing Slip and Bitcoin’s Long Line of Pseudonymous Developers
• First Mover: The Return of the Bitcoin Retail Investor (and Why That’s a Good Thing)

21Shares has replaced Kingdom Trust with Coinbase Custody as the main custodian for the assets underlying its bitcoin exchange-traded product (ETP.)

• Announced Wednesday, Coinbase Custody will secure assets used in 21Shares’ Bitcoin ETP in an offline storage solution.
• South Dakota-regulated Kingdom Trust had custodied the Bitcoin ETP since its launch in February 2019.
• 21Shares’ managing director Laurent Kssis told CoinDesk the firm plans to use Coinbase Custody for more ETPs, including some new ones, in the future.
• Coinbase Custody has been used, alongside Kingdom Trust, as the custody solution for the Bitwise Index since June 2019.
• CoinDesk has learned Coinbase, which is headquartered in San Francisco, may soon store other ETP assets that are currently in the vaults of Kingdom Trust.
• “There are other ETP providers in the pipeline, but they are not public yet so I won’t be able to share at this time,” said Jacelyn Sales, an external spokesperson for Coinbase Custody, to CoinDesk.
• The Bitcoin ETP is traded on SIX Swiss Exchange and Boerse Stuttgart and, starting Thursday, Deutsche Boerse – Europe’s third-largest stock exchange.

• Bitcoin ETP Listed on Europe’s Third-Largest Exchange
• Forget Bitcoin’s Volatility, BoA Says Unstable UK Pound Like an Emerging Market Currency
• This Liechtenstein Bank Can Now Custody Crypto
• Coinbase Custody Deleted Tweet That Could Explain Surge in Tether Addresses

The U.K. High Court has ordered crypto exchange GPay to be “wound up in the public interest.”

• In a statement Tuesday, the U.K. government said 108 clients had lost a total of just under £1.5 million ($1.9 million) using GPay.
• Although clients could deposit without completing know-your-customer (KYC) processes, GPay requested various identification documents to prevent clients from withdrawing funds.
• GPay also sold clients insurance to protect them against trading losses, but the exchange did not always pay out.
• GPay did not contest the dissolution order.
• David Hill, of the U.K. Insolvency Service, said: “GPay persuaded customers to part with substantial sums of money to invest in cryptocurrency trading. This was nothing but a scam as GPay tricked their clients to use their online platform under false pretences.”
• The U.K.’s financial watchdog warned in May 2018 that GPay, then CryptoPoint, was offering financial services without its permission.
• GPay faced its first dissolution order in November 2018, but this was discontinued in January 2019.
• GPay advertised itself extensively on social media and claimed, falsely, to be backed by Martin Lewis, the founder of MoneySavingExpert, a popular consumer finance website in the U.K.
• On the news, Lewis said: “I don’t know whether to dance a jig that these despicable scum have been shut down, or cry that they managed to take so many people’s money.”

• UK Financial Watchdog Warns Crypto Firms to Register Before End of June
• Binance Launching Crypto Exchange in the UK
• Indian Crypto Exchange CoinDCX Raises $2.5M From Polychain Capital, Coinbase Ventures
• Bidooh Founders Admit to Cloning Business for Rival Advertising Venture

Curv, a company that provides increased secrecy when it comes to holding crypto assets, has closed a $23 million Series A funding round. 

Announced Wednesday, the crypto custody tech provider, which uses a technique called multi-party computation (MPC), received investment from CommerzVentures, Coinbase Ventures, Digital Currency Group (DCG), Team8 and Digital Garage Lab Fund.

Curv closed a $6.5 million seed round in February of last year, which makes the total raised so far almost $30 million. Backing from the likes of CommerzVentures (the venture arm of German banking powerhouse Commerzbank and the main investor in the Series A) and Coinbase Ventures suggests MPC is popular with both the traditional and crypto space. 

Related: This Startup Is Forking Compound to Make Hiring More Efficient

“We are now one of the highest-funded custody technology companies, and have the largest funding to date for MPC,” said Curv CEO Itay Malinger. “It’s a strong signal that the market is looking at MPC, and that there’s still a lot of innovation to be made in the custody and security space.”

Read more: Custody Startup Curv Follows Crypto Demand Into Asia With New Hong Kong Office

Stepping back, blockchains are based on public key infrastructure (PKI), which means your identity is determined by a set of digits called a public key that allows you to receive funds. That public key is a mathematical function of another set of digits, a private key, which must be known in order to send funds.  

Instead of a single private key, MPC involves several parties each with different strings of numbers that interact using a protocol. The process creates a public key to receive funds, and a way to sign transactions in order to send funds. This latter part is kept distributed and separate at all times. 

Related: How Public Key Infrastructure Will Revolutionize Custody and Fund Management

“There is not any point in time or space where there will actually be a private key,” said Malinger. “MPC breaks that paradigm, so you don’t have additional layers of security like guards or cameras or World War II bunkers that can take 24 hours to get at.”

Curv is not alone in employing MPC. Other firms specializing in digital asset custody and using some form of the technology include GK8 out of Israel and Libra Association member Anchorage.

Malinger pointed out some other MPC custody firms in the market make use of hardware security modules (HSMs), while Curv would rather trust mathematics.

“Our approach is that trusting math is better than trusting an engineered piece of hardware,” Malinger said. “Math is the foundation of cryptography; hardware is an engineering effort, not a mathematical effort.”

Onerous service level agreements (SLAs) that come with some cold storage solutions may not be ideal for the fast-paced trading world. Curv has two models, explained Malinger, one in which the MPC secrets are online, and one where they are offline. This means the customer can decide how difficult it should be to move assets around. 

“You can say there must be 15 employees to approve a transaction, or you can say I want this hot wallet machine to approve transactions of up to $10,000. So you get much more flexibility and the ability to dictate how difficult it should be to move assets around,” Malinger said.

New York-based Curv, which has about 30 staff and an office in Tel Aviv, said the funding will partly go towards tX, an elite group of cryptographers and engineers who will use Curv’s keyless technology to push international growth.

Read more: Munich Re Insures Curv’s Crypto Wallet To the Tune of $50 Million

“Few areas within fintech are as exciting as digital assets. Tokens and coins are increasingly finding their way into asset managers’ books,” CommerzVentures managing partner Stefan Tirtey said in a statement. “Curv is unlocking this market with [its] industry-leading technology and we are happy and excited to partner with Itay, Dan [Yadlin] and their impressive team.”

Existing Curv customers include investment firm Franklin Templeton, trading platform eToro and Genesis Trading, owned by CoinDesk parent DCG. Asked if Coinbase might be the next exchange to start using Curv’s MPC tech, Malinger politely declined to comment.

“We are speaking to exchanges, and are also in advanced conversations with players on Wall Street and across the globe,” he said.

• Polychain Capital, Square Crypto’s Steve Lee Invest in Bitcoin Broker’s $5.7M Seed Round
• This Liechtenstein Bank Can Now Custody Crypto

Credit-card lender and wallet provider Crypto.com’s Chain (CRO) token surged 33% in June, dominating digital-asset markets as bitcoin, ether and XRP from Ripple all declined.

The CRO token’s gains made it the top performer during the month among digital assets with a market value of at least $1 billion, according to the data provider Messari.

You’re reading First Mover, CoinDesk’s daily markets newsletter. Assembled by the CoinDesk Markets Team, First Mover starts your day with the most up-to-date sentiment around crypto markets, which of course never close, putting in context every wild swing in bitcoin and more. We follow the money so you don’t have to. You can subscribe here.

Related: Blockchain Bites: Digital Dollars, Ethereum’s Gas and ASX’s Blockchain ‘Lacks Clarity’

The second-best performer, Unus Sed Leo (LEO), rose 6.4% in June, followed by Chainlink (LINK) with a 4.6% price increase. The worst performer was bitcoin SV (BSV), which tumbled 21%.   

Crypto.com has raised its profile partly through a “tremendous wave of marketing over the past several months,” John Todaro, head of currency research at the digital-asset firm TradeBlock, told First Mover in an email. 

Bitcoin (BTC), the oldest cryptocurrency and the largest by market value, fell 10% during the month, shaving its year-to-date return to 27%, as price volatility narrowed amid ongoing uncertainty about the future of the coronavirus and related stimulus packages.

Ether (ETH), the native token of the Ethereum blockchain, slid 9.3%, while XRP from Ripple lost 17%. 

Related: First Mover: Bitwise Calls $50K Bitcoin Price When Market Calm Finally Breaks

For the second quarter of 2020, bitcoin rose 42%, more than double the 18% gain during the period for the Dow Jones Industrial Average, which was the stock index’s best performance in more than three decades.  

Hong Kong-based Crypto.com raised $26.7 million in 2017 through a sale of its MCO tokens, which are paid out as rewards to credit-card customers.

The CRO tokens, airdropped to MCO holders starting in December 2018 and now traded on more than 20 exchanges, can be used for “cross-asset intermediary currency settlement for the native Crypto.com Chain,” according to the company’s website. 

Of course, smaller digital assets like CRO can be volatile. The token has a market capitalization of $2.2 billion, compared with bitcoin’s $169 billion and ethereum’s $25 billion, according to Messari. 

Crypto.com press officials didn’t comment for this story. 

Headed by CEO Kris Marszalek, the company launched a beta version of its own cryptocurrency exchange in November, following the shipping of the MCO Visa cards earlier in 2019. Crypto.com announced in May 2020 that it had started shipping credit cards in Europe.  

The company also has a payments app and cryptocurrency wallet (launched last month), and customers can earn interest-like rewards by staking bitcoin and other digital assets on its platform. 

“The company has aggressively pursued various lines of business which have attracted users, which then bleeds into its token,” Todaro wrote. 

Last month, Crypto.com sponsored a portion of CoinDesk’s Consensus 2020 virtual conference. And on Tuesday, the company’s website was advertising a “BTC Anniversary Special,” featuring bitcoin “at 50% off, with $2 million allocation!” (The promotion was due to end early Wednesday.)  

Earlier in June, the company announced it had obtained its own emoji on Twitter, which appears automatically when the #CRO hashtag is inserted into a tweet. The publication CoinTelegraph noted at the time that such branded hashtag services have reportedly cost upwards of $1 million. 

“The official Twitter handle does frequent giveaways, which draws in more followers and retail traders of its token,” Todaro said.

BTC: Price: $9,157 (BPI) | 24-Hr High: $9,196 | 24-Hr Low: $9,064

Trend: Bitcoin is moving in a tight price range, a sign a breakout – bullish or bearish – could be fast approaching.

• Since early May, bitcoin has traded strictly between $9,000 to $10,000. Attempts to move out of this price range have all but failed.
• After dipping to $9,000 last week, bitcoin has held at the $9,100 mark. Bitcoin’s price, unusually, has barely tracked $100 since Monday.
• Bitcoin’s volatility has fallen precipitously. Its ATR value – a price volatility metric – has dropped 50 points to 315 – the lowest since January.
• The market has seen this before. In December and early January, bitcoin was squeezed ever more tightly. It then jumped out of its $100 price range and ultimately peaked at over $10,000 by mid-February.
• While the market should expect an imminent breakout once more, there are few signs whether it will move above or below the current range.

• Bitcoin Still Up 27% This Year Despite Dismal June Performance
• Market Wrap: Bitcoin Traders Expect Big Move as Volatility Plummets

Cryptocurrency market data aggregator CoinGecko has updated its trust metric for exchanges, with Binance keeping its top slot in the rankings.

• The Singapore-based crypto firm said in a blog post Wednesday its new cybersecurity metric now forms 20% of its Trust Score for trading platforms.
• The Trust Score combines an exchange’s liquidity, web traffic, scale of operations, and now cybersecurity, together with its trading volume.
• The cybersecurity metric comes from Ukrainian security group Hacken. CEO Dyma Budorin said a growing number of “black hat hackers” targeted crypto exchanges.
• The top five exchanges as ranked by the firm’s algorithm are now: Binance, Coinbase Pro, Bithumb, Kraken and Bitstamp.
• CoinGecko first released its Trust Score in May 2019 and Binance has long ranked first. The new metric keeps it in pole position.
• CoinGecko COO, Bobby Ong told CoinDesk: “Binance was ranked first as it had the largest liquidity in many of the trading pairs amongst all the exchanges. Binance scores relatively well in this measure as well thus keeping its top position.”
• Rival crypto market data site CoinMarketCap was accused of bias earlier this year after it gave its new owner Binance a perfect score under its new exchange ranking system.
• CoinGecko will add additional metrics to its Trust Score, Ong said.

• BitMEX Owner HDR Appoints Former Bank of China Exec to Board
• To His Own Surprise, Crypto Volume Pumper’s Business Is Still Thriving
• Market Wrap: Bitcoin Traders Expect Big Move as Volatility Plummets
• Chinese Bitcoin Miner Producer Ebang Is Launching an Offshore Exchange

New York Digital Investments Group (NYDIG) raised $190 million from 24 investors for another bitcoin fund.

• The round of funding for the NYDIG Institututional Bitcoin Fund was disclosed to the Securities and Exchange Commission (SEC) Tuesday.
• NYDIG started raising for the Bitcoin Fund in 2018, according to the disclosure filing.
• The New York-based asset manager did not disclose the fund’s proposed net asset value or any other details.
• Last month, NYDIG raised $140 million for a similar investment vehicle, the Bitcoin Yield Enhancement Fund.
• The asset manager has held a New York BitLicense since 2018.
• Benjamin Lawsky, the former financial regulator who created New York’s BitLicense in 2015, joined NYDIG nearly a year before the bitcoin fund manager applied for, and received, that license.

• Vanguard Ran Its Digital Asset-Backed Securities Pilot in 40 Minutes
• Novogratz: Galaxy Digital Will ‘Suck’ if Bitcoin Fails to Become an Institutional Asset
• Binance Launching Crypto Exchange in the UK
• Custody Battle Pits Institutional Boomers Against Crypto Upstarts