Sam Altman’s Worldcoin Offers New Crypto as Part of Eyeball Scanning Venture
Sam Altman, the co-founder of a new startup called Worldcoin, is planning to introduce a new type of cryptocurrency that offers a higher level of security and transparency.
CoinDesk Crypto
Berners-Lee NFT Sells for $5.4M at Sotheby’s
Tim Berners-Lee, the British computer scientist and inventor of the World Wide Web, put some source code up for auction as a non-fungible token (NFT) earlier this month.
Someone bought it for $5.4 million.
Sotheby’s announced Wednesday that the NFT attracted a total of 51 bids. A Sotheby’s spokesperson told CoinDesk the buyer is anonymous. “At this time we can’t confirm if they will pay in fiat or crypto,” they said.
Related: Twitter Gives Away 140 NFTs Through Rarible
Proceeds from the sale will go toward charitable initiatives supported by the Berners-Lee family, Sotheby’s said.
UPDATE (June 30, 19:48 UTC): Adds comment from a Sotheby’s spokesperson.
Related StoriesSoros Fund Management Is Said to Be Trading Bitcoin: Report
Soros Fund Management has cleared its traders to actively trade bitcoin, TheStreet reported, citing two people with knowledge of the matter.
- The approval to trade the leading cryptocurrency was given by CIO Dawn Fitzpatrick, TheStreet said.
This story is developing and will be updated.
Related StoriesBitcoin Options Open Interest Hits 2021 Low as Frenzy Cools, or Maybe It’s Soccer
The bitcoin options-trading boom that saw traders make ambitious bullish bets early this year has cooled in the wake of the recent price sell-off and subsequent consolidation.
“After the large June expiry, open interest has dropped to levels last seen at the end of 2020,” Luuk Strijers, chief commercial officer at Deribit, the world’s largest options exchange by open interest and trading volume, said. “Open interest and volume have declined in both the dollar and bitcoin terms in recent weeks due to overall bearish sentiment caused by China’s regulatory crackdown and other factors.”
Open interest in bitcoin options listed on Deribit, or the number of open positions, fell to almost 120,000 BTC on Monday, the lowest level since October. The tally peaked near 250,000 BTC in late March. On Deribit, one option contract represents one BTC.
Related: BlockFi Rate Cut on Bitcoin Deposits Leaves Rivals Scratching Heads
The nominal value has more than halved to $4 billion, also the lowest since late 2020. Other exchanges like OKEx, Chicago Mercantile Exchange (CME), LedgerX, Huobi, bit.com and Huobi have registered a similar drop in open interest.
Open interest reached a record high of nearly $15 billion during the height of the bull market in mid-April and has been falling since in nominal and bitcoin terms. The cryptocurrency peaked above $64,800 in mid-April and recently hit five-month lows below $30,000.
The data highlights that though options are mainly hedging instruments, they were widely used for speculation during the bull run.
“This is more like a correction in the open interest just like there has been a correction in bitcoin’s price,” Martin Cheung, an options trader from Pulsar Trading Capital, told CoinDesk in a Telegram chat. “Price volatility has come off sharply, so we are now seeing less demand for options, which are hedging instruments.”
Related: Market Wrap: Bitcoin Outperforms Top Cryptocurrencies in June
Bitcoin’s one-month implied volatility has declined to near 90% from the high of 153% observed on May 23, according to data firm Skew.
Options are derivative contracts that give the purchaser the right but not the obligation to buy or sell the underlying asset, in this case, bitcoin, at a predetermined price on or before a specific date. A call option gives the right to buy, and a put option gives the right to sell.
Traders often take upside (calls) or downside (puts) protection based on their spot or futures market exposure when price turbulence is high. When volatility drops, however, the existing hedges are often squared off, and traders are less likely to take new hedges.
Hedging, or speculationOften, particularly during a strong bull or bear run, options are used for speculation. For instance, traders piled into the deep out-of-the-money (OTM) call option at $80,000 strike in March and April in hopes that the rally would continue through the seasonally strong second quarter. That lifted open interest.
However, the cryptocurrency crashed in May and has been restricted mainly to a range of $30,000 to $40,000 this month. The downdraft may have forced traders to reassess their bullish expectations.
“When markets become range bound, there is less demand for hedging,” Shilliang Tang, chief investment officer of LedgerPrime, a $130 million crypto hedge fund, said in a Telegram chat. “Also, there is less call buying as funds adjust expectations amid consolidation and absence of a V-shaped recovery.”
LedgerPrime bought deep OTM calls in the first quarter as the bullish momentum was quite strong and switched to “carry trading” – buying spot and shorting futures – in the second quarter. As of last week, its quant fund was up 78% year to date, versus bitcoin’s 22% gain.
Also read: How One Fund Used the Carry Trade to Beat Bitcoin
According to some observers, the slowdown in the options market is a sign the price sell-off has crowded out a significant chunk of retail participation.
“It’s likely those new to crypto are licking their wounds now, and with no strong market narrative except the potential ether fork,” Chris Dick, a quant trader at B2C2, said in a Telegram chat. “There is little catalyst for retail to re-enter the market.”
Soccer absorbing the attentionAccording to Gary Pike, a trader at B2C2, retail traders with holdings under water may be less inclined to take additional risk, especially with summer in full swing and the distraction of sports.
“Soccer tournaments are continuing worldwide and drawing more attention away from retail crypto trading,” Pike said, adding that he’s confident that activity will pick up.
“The catalyst will come, and volumes will return to exchanges, if not from an event, then due to traditional players resuming after the summer break,” Dick said.
While retail activity may have cooled, institutional participation on Deribit remains strong.
“We are seeing growing interest in institutional on-boarding and a pickup in block trading volumes,” Deribit’s Strijers said, adding that it shows institutional demand is still strong. A block trade is the one involving large number of securities and is negotiated privately over the counter or outside of the open market for that security.
According to LedgerPrime’s Tang, there is still ample demand from options yield generation/harvesting strategies, which seek to benefit from a prolonged price consolidation.
Related StoriesThere’s a ‘Clearance Sale’ on Bitcoin, but Institutions Aren’t Rushing In
At the beginning of the year, the dominant narrative permeating cryptocurrency markets was that institutions were going to add large swaths of bitcoin to their assets. Big, established investors from hedge funds to Wall Street mainstays and blue-chip companies would be quick to jump on the bandwagon.
Now, as bitcoin (BTC) trades close to half of the all-time high of almost $65,000 reached in April, things are starting to look slightly different: Despite what looks like a clearance sale on the cryptocurrency, data shows that institutions have shown a reluctance to take advantage of the bargain, apparently rattled by the same concerns that have pushed prices down.
Bitcoin “whale” addresses – those holding 1,000 BTC or more – tumbled to about 2,150 in May from almost 2,500 in February, according to the blockchain-analysis firm Coin Metrics. Since then, the number has languished around that lower level.
Related: BlockFi Rate Cut on Bitcoin Deposits Leaves Rivals Scratching Heads
Glassnode, another blockchain analysis firm, noted in a report on Monday that a stagnation in the balance of bitcoins held on the cryptocurrency exchange Coinbase offers another view of the same dynamic.
CoinDesk reported last week that open positions in bitcoin futures had tumbled by 59% from an April 13 peak, an indication that institutional investors are being cautious.
“Institutional demand appears to remain somewhat lackluster,” Glassnode wrote in its Monday report.
The latest data might show why bitcoin has been stuck between $30,000 and $40,000 for the past month, after prices had risen over the past year partly on the expectation that a wave of new buyers was set to come in.
Related: Market Wrap: Bitcoin Outperforms Top Cryptocurrencies in June
Signs continue to mount that institutions are preparing to pounce: The likes of BlackRock, Goldman Sachs, Morgan Stanley and JPMorgan are on the list of traditional financial institutions that have set up bitcoin funds and services in the past few months or that have acknowledged considering a move into cryptocurrency. On Tuesday, financial services firm TP ICAP announced it is launching a crypto-trading platform alongside the financial heavyweights Fidelity Investments and Standard Chartered.
But nagging concerns over bitcoin’s potential environmental harm, a regulatory crackdown on bitcoin trading and mining in China and, more recently, a decline in the underlying blockchain network’s computational power appear to have given big investors pause.
Another worry is the possibility that the U.S. Federal Reserve may tighten its monetary policy in an effort to fight inflation. The prospect of fast-rising consumer prices after trillions of dollars of central bank stimulus had been a key source of demand for bitcoin, because the cryptocurrency, with its hard-coded limits on new issuance, has been cast as a steady bulwark against dollar debasement.
Cryptocurrency industry executives say they see few signs that investors are going away or liquidating en masse:
- “Despite there being a sign in the recent bear market that investors are scared off, we don’t see massive outflow from institutional users,” said Lennix Lai, director of financial markets at the cryptocurrency exchange OKEx.
- “We speak to institutional investors every day. They are still allocating funds, in record sizes,” said Jeff Dorman, chief investment officer at Arca Funds, a cryptocurrency investment firm.
- “We are on-boarding a large group of institutional firms, various hedge funds and asset managers. We see the level of interest from the traditional finance space only increasing,” said Luuk Strijers, chief commercial officer at Deribit, a crypto derivatives trading platform.
Then there are the corporations.
At the beginning of the year, MicroStrategy was the first U.S. corporation to invest its dollarized treasury in bitcoin, and CEO Michael Saylor has since been viewed as an influential presence to emerge from corporate America among the bitcoin community.
MicroStrategy’s investment kindled speculation that other big companies might follow suit. Guesses at the time pointed to Twitter, Tesla, Apple, Warren Buffett’s Berkshire Hathaway and even the burger chain Wendy’s.
MicroStrategy has kept up its buying, saying earlier this month that it is borrowing $500 million to purchase more bitcoin. And some small companies are still “active” in moving toward bitcoin, said John Todaro, vice president of crypto asset and blockchain research at Needham & Co.
But few additional big corporate buyers have materialized.
Bitcoin adoption announcements have “appeared to slow for larger companies,” Todaro said.
Related StoriesBitcoin Hashrate Stabilizes After China Crackdown
The Bitcoin hashrate has stabilized after falling for 10 straight days, and industry experts are speculating that the worst fallout from China’s recent mining crackdown might be over.
Bitcoin’s seven-day average hashrate stood at 90.6 EH/s on Tuesday, up slightly from 90.5 EH/s on Monday. The number is still down by roughly half from the peak rate reached in mid-May, according to data from Glassnode.
The majority of the reduction stemmed from China’s move to shut down cryptocurrency mining operations in the country, with a little bit from Iran, according to Sam Doctor, chief strategy officer at BitOoda, a digital asset financial services platform.
Related: BlockFi Rate Cut on Bitcoin Deposits Leaves Rivals Scratching Heads
“We believe there isn’t much active hashrate left in China,” Doctor said in an email to CoinDesk. “What is left is probably not mining openly, and may continue until either they get shut down or they can get equipment out of China and find an alternative place to move them.”
Meanwhile, the mean block time for bitcoin, which measures the length of time it takes to create a new block, has fallen back to 16 minutes, after it surged to 23 minutes on Sunday, the highest level since 2010, according to Glassnode.
Though block time fluctuates naturally, the rise in block time could be a result of Chinese miners shutting down their current operations, according to several mining sites. As the hash power declines, it takes longer for miners to solve the puzzles and create a new block.
Bitcoin, which is designed to have a target block time of 10 minutes, will see its difficulty level reduced when the block times are greater than expected.
Related: Market Wrap: Bitcoin Outperforms Top Cryptocurrencies in June
Several data providers estimate the mining difficulty could plunge by up to 25% at the next reset, likely on July 5, which would be the largest drop in bitcoin’s history.
Related StoriesPrediction Markets Put Eric Adams’ NYC Mayoral Bid at 50-50 After ‘Dummy Ballot’ Snafu
Prediction markets are signaling that front-runner Eric Adams’ chances of becoming the next mayor of New York City have dropped to around 50% following a vote-counting snafu in the Democratic primary.
On PredictIt, perhaps the best-known prediction market, the price to bet on an Adams victory had dropped to 53 cents from 89 cents in the last 24 hours as of midday Eastern time.
The contract settles at $1, so the price indicates the market now thinks the retired police officer and Brooklyn borough president has a 53% probability of running the largest U.S. city.
Related: Blockchain Caucus Co-Chair Says Crypto ‘Backdoor’ Is Key to Unmasking Bad Actors: Report
Meanwhile, on Polymarket, a decentralized prediction market build on Ethereum sidechain Polygon, betting on an Adams win in the Democratic primary has slipped to 43 cents from 81 cents over the same 24-hour period.
The change in market signals reflects confusion and uncertainty after the city Board of Elections rescinded a tally of primary votes on Tuesday, citing an unspecified “discrepancy.” The board later said it had included 135,000 “dummy ballots” in the count.
This is the first time in decades the city has used ranked-choice voting, in which New Yorkers may vote for multiple candidates, ranked by preference, rather than just one.
How prediction markets workIn prediction markets, investors bet on the outcomes of real-world events, from elections to sports matches.
Related: State of Crypto: Inside the NRCC’s Plan to Accept Crypto Donations
Proponents tout these markets as a way to induce experts to express what they really think will happen, since there is money on the line, at a time when public trust in pundits and other authorities is eroding.
Whoever wins the Democratic primary will face Republican nominee Curtis Sliwa, best known for leading the 1980s vigilante group Guardian Angels, in the general election on Nov. 2.
On PredictIt, Sliwa shares are trading at 3 cents, speaking to New York’s strongly Democratic voter advantage. Former Sanitation Department official Kathryn Garcia is trading at 46 cents.
UPDATE (May 30, 15:60 UTC): Corrects figure in third paragraph, adds links throughout.
Related StoriesBinance Reinstates Withdrawals for UK Clients: Report
Cryptocurrency exchange Binance is once again operating in the U.K. after the Financial Conduct Authority (FCA) said the firm is not allowed to undertake any regulated activities without prior written approval.
- Customers said Tuesday they couldn’t make deposits or withdrawals in pound sterling from Binance’s Faster Payments network, three days after the FCA cracked down on the exchange. At the time, Binance said the move would not have an impact on the services offered on its website.
- Binance said on Wednesday that sterling withdrawals from its platform had been reactivated and users are able to buy digital coins with debit and credit cards, according to a Reuters report.
Read more: Binance Pulls Out of Ontario Following Actions Against Other Crypto Exchanges
Related StoriesDecentralized Investing Platform Syndicate Raises $800K From 100 Investors
Decentralized investing platform Syndicate is decentralizing its investor base.
Some 100 investors have pitched in a total of $800,000 in a funding round that includes some of the biggest names in crypto – Balaji Srinivasan, Jeremy Allaire, Meltem Demirors and dozens more. Earlier this year, the platform raised $1 million in a seed round led by IDEO CoLab Ventures.
“Syndicate’s community raise is an important first step in democratizing our own platform and making Syndicate community-owned,” co-founders Will Papper and Ian Lee wrote.
Related: Curve DAO Contemplates Its Intellectual Property
The platform, which is still in private beta, aims to democratize investing by making it easier for people to spin up decentralized autonomous organizations (DAOs). DAOs are basically shared bank accounts on the blockchain with tools meant to facilitate group decision-making.
So far, Syndicate has launched six DAOs, including Audacity and the Komorebi Collective, which both provide venture capital to underrepresented founders in the crypto space.
Syndicate’s small but mighty approach to fundraising stands in stark contrast to the ongoing wave of institutional investment in decentralized finance (DeFi). It also speaks to the growing momentum of DAOs in the DeFi ecosystem.
DAO dogfoodingThe community raise was done through a special-purpose DAO on Syndicate’s platform. Lee confirmed the investments were equity investments in Syndicate.
Related: 2 Ethereum Projects Are Officially Merging; ‘Keanu’ Aims for August Launch
Lee told CoinDesk in an interview that the round was capped at 100 investors who were invited to invest after being a part of the Syndicate community for months. Contributors to the fund included notable crypto investors, entrepreneurs, professors and even a WallStreetBets moderator. (Note: It also included former CoinDesker Joon Ian Wong and Nathaniel Whittemore, host of CoinDesk’s The Breakdown podcast.)
“Syndicate is such a cool project because it gets us closer to a world of truly decentralized finance,” Wong told CoinDesk via Telegram. “It’s unlocking new ways for people to back the projects they truly care about.”
Lee said Syndicate’s investors also include members of the organization’s Discord group that previously purchased non-fungible tokens (NFTs) to commemorate the launch of various Syndicate DAOs. Some of these NFTs were purchased for as little as $100, which Lee said was important to the company to ensure equitable access to investing in Syndicate.
“We believe that investing is really, really powerful. It shapes what gets built in the world, by whom, and for whom, and where. At the same time, existing investment structures and models reinforce, in our opinion, inequality,” Lee told CoinDesk, adding:
“To solve that, we need to democratize that investment capability. We’re going to do that in a progressive and responsible way by working with aligned investors and communities.”
Lee said Syndicate expects to begin rolling out its private beta in stages beginning in the next several weeks.
Here’s the full list of investors as provided by Syndicate:
Alana Podrx, CEO, Eve Wealth
Alex Masmej, CEO, Showtime
Alexis Gauba, Co-Founder, Opyn
Ameer Suhayb Carter, Mint Fund
Anastasia Andrianova, CEO, Akropolis
Andrew Steinwold, Managing Partner, Sfermion
Aya Kantorovich, FalconX
Baek Kim, Hashed
Balaji Srinivasan, ex Coinbase, ex Earn, ex a16z
Beryl Li, Co-Founder, Yield Guild
Blake West, Co-Founder, Goldfinch
Bo Shao, Co-Founder, Evolve
Bobby Ong, Co-Founder, CoinGecko
Brian Flynn, CEO, Rabbithole
Calvin Liu, Compound, Divergence
Carlos Gomes, Forefront, Mint Fund
Christy Choi, ex Binance
Colleen Sullivan, CEO, CMT Digital
Cooper Turley, Audius, Variant
Courtney Chow, Battery, ex IDEO CoLab
Cuy Sheffield, Visa
Dave Kim, Program Officer, Bill & Melinda Gates Foundation
Derek Hsue, Co-Founder, Reverie
Do Kwon, Founder, Terra
Driss
Erik Syvertsen, GC, AngelList
Erikan Obotetukudo, Founder, Audacity
Gabby Dizon, Co-Founder, Yield Guild
George Lambeth, Divergence, Balancer
Illia Polosukhin, Co-Founder, NEAR
Jacob Horne, Founder, Zora
Jake Chervinsky, GC, Compound, Variant
James Foley, Co-Founder, Cowri
James Young, CEO, Abridged, Collab.Land
Jason Choi, Spartan Group, Blockcrunch
Jazear Brooks, Co-Founder, Sifchain
Jean-Cedric
Jeff Garzik, Co-Founder, Vesper
Jeff Morris Jr., Chapter One, ex Tinder
Jeremy Allaire, CEO, Circle
Jess Sloss, SeedClub
Joon Ian Wong, ex CoinDesk
Joris Delanoue, Co-Founder, Fairmint
Joyce Yang, Founder, Global Coin Ventures
Julia Lipton, Founder, Awesome People Ventures
Justin Ridgely, BlockFi
Justine Humenansky, Playground, Fiat Lux DAO
Kaito, Bspeak!
Kazufumi
Kenny White, Founder, Cowri
Kevin Chou, Founder, Rally, Forte, Kabam, Gen.G
Kevin Nielsen, CEO, Boardroom
“Fully Allocated”, Default
Kieran Warwick, Founder, Illuvium
Kinsa Durst, Republic
Kristie Huang, Komorebi, she256
Larry Sukernik, Co-Founder, Reverie
Leighton Cusack, Co-Founder, PoolTogether, PleasrDAO
Li Jin, Founder, Atelier Ventures
Luis Cuende, Co-Founder, Aragon
Mark Roszak, Founder, 1121 Law
Matthew Roszak, Co-Founder, Vesper
Meltem Demirors, Chief Strategy Officer, CoinShares
Micah Johnson, Creator, Aku
Mike Sall, CEO, Goldfinch
Mike Zajko, CoinList, Free Company
Mildred Idada, Founder, Open Web Collective
Min Teo, Ethereal Ventures, ConsenSys Mesh
Morgan Beller, NFX, ex Libra, ex a16z
Nathalie McGrath, ex Coinbase
Nathan McCauley, CEO, Anchorage
Nathaniel Whittemore
Nitya Subramanian, Celo
Noah Jessop, Co-Founder, Nine Realms
Patrick Chang, Founder, Dispersion
Prabhakar Reddy, Co-Founder, FalconX, ex Accel
Rahul Vohra, CEO, Superhuman
Raj Gokal, COO, Solana
Ramon Recuero, Founder, Babylon
Regan Bozman, Dove Mountain Partners, ex-Coinlist
Rene Reinsberg, Celo
Robbie Bent, Ethereum Foundation
Ryan Selkis, CEO, Messari
Sasha (Aliaksandr) Hudzilin, NEAR
Scott Moore, Co-Founder, Gitcoin
Sebastian Delgado, Co-Founder, Fei
Sina Habibian, Ethereum Foundation
Sriram Krishnan, Advisor, Calm, ex Tinder, ex Spotify
Stani Kulechov, CEO, Aave
Steve Blank, Professor, Stanford University
Steve Weinstein, Professor, Stanford University
Thibauld Favre, CEO, Fairmint
Todd Goldberg
Tom Bedecarre, Stanford University, ex AKQA
Tyler Ward, Co-Founder, Barnbridge
Vanessa Slavich, Celo
wsbmod, Wall Street Bets
Xochitl Cazador, Celo, she256
Zack Seward contributed reporting.
Related StoriesTwitter Gives Away 140 NFTs Through Rarible
Twitter is giving away 140 non-fungible tokens (NFTs) through the marketplace Rarible.
- The social-media platform shared a series of tweets featuring a number of different images with the Twitter logo and a Tamagotchi virtual pet.
- In March, CEO Jack Dorsey called attention to a tokenized version of his first tweet on the NFT platform Valuables selling for $2.9 million.
- NFTs are digital assets that represent a wide range of unique tangible and intangible items, from collectible sports cards to virtual real estate and even digital sneakers.
- Last week, Rarible announced it had raised fresh capital to hire new employees and launch an additional marketplace on the Flow blockchain, home to Dapper Labs’ smash hit, NBA Top Shot.
Read more: Bidding Reaches $2.5M as Twitter’s Dorsey Highlights NFT Version of First-Ever Tweet
Related StoriesHut 8 Buys $44M Worth of Mining Machines to Double Its Hashrate
Canadian crypto-mining company Hut 8 Mining will almost double its hashrate by the end of the year with the purchase of 11,090 new mining machines for $44 million, the company said in a press release today.
The purchase comes on the heels of a $82 million round of fundraising that the company said would help expand its crypto mining capacity.
The machines are MicroBT M30S, M30S+ and M31S models from Hong Kong-based SuperAcme Technology. They are expected to be delivered in October and fully deployed by December.
Related: China Crypto Crackdown: Calendar Offers Clue as to ‘Why Now?’
The extra capacity is set to push Hut 8’s hashrate to 2.5 exahashes per second (EH/s), increasing Hut 8’s current average production of 6.5 to 7.5 bitcoins mined a day to 14 to 16 bitcoins a day. One exahash per second means a machine can compute one quintillion calculations per second. A quintillion is a number followed by 18 zeros.
Related StoriesHut 8 Buys $44M Worth of Miners, Doubling Its Hashrate
Canadian crypto-mining company Hut 8 Mining will almost double its hashrate by the end of the year with the purchase of 11,090 new miners for $44.4 million, the company said in a press release today.
The purchase comes on the heels of a $82 million fundraise that the company said would help expand its crypto mining capacity.
The machines are MicroBT M30S, M30S+, and M31S miners from Hong Kong-based SuperAcme Technology. They’re expected to be delivered in October and fully deployed by December.
Related: Hut 8 Adds Over 500 Bitcoin to Balance Sheet in 3 Months
The extra capacity is set to push Hut 8’s hashrate to 2.5 exahashes per second (EH/s), increasing Hut 8’s current average production from 6.5-7.5 bitcoins mined a day to 14-16 bitcoins a day.
Related StoriesTZero to Digitize and Trade $18M of Equity in Real-Estate Crowdfunder NYCE
Security token trading platform tZERO is to digitize and trade around $18 million worth of equity in real-estate crowdfunding company NYCE.
- The equity will be digitized once issued in NYCE’s upcoming Regulation A+ offering, subject to regulatory approval, an announcement Wednesday said.
- NYCE was co-founded by the Danish soccer player, FC Barcelona forward Martin Braithwaite and holds $260 million in assets under management through its real-estate portfolio.
- TZero will support the secondary trading of NYCE’s digital securities through its smart-contract technology.
- Subject to due diligence, tZERO expects to trade NYCE shares through its broker-dealer subsidiary tZERO ATS.
FATF Report on Extreme Right Financing Highlights Cryptocurrency Use
The Financial Action Task Force (FATF), a global anti-money laundering watchdog, has released a report on the ways extreme right-wing groups are financed, which includes a section on cryptocurrency.
The FATF’s report, titled “Ethnically or Racially Motivated Terrorism Financing,” points out that virtual assets like bitcoin have been used by extremists who have been gradually shut out of traditional payment platforms, in the same way extreme right wing (ERW) groups have been blocked from social media.
The report highlights that some ERW groups have switched to “so-called ‘privacy coins,’ i.e. VAs [virtual assets] that allow a user to maintain total anonymity when making blockchain transactions.”
Related: Mexico’s Finance Minister Confirms Cryptos Are Banned From Financial System
It’s worth noting that the blockchains underpinning virtual assets, even end-to-end encrypted varieties, leave some record of transactions – as opposed to cash, the preferred medium of exchange for criminals and terrorists.
It’s also worth noting that other unconventional funding vehicles merit scrutiny:
“There has been plenty of interest in VAs from different ERW groups and individuals looking for anonymity, especially after being removed from mainstream payment platforms,” the report states, adding:
“ERW actors that feel more security-conscious and desire a greater level of secrecy, often choose VAs. However, notably there is limited information on the volume of funds being transferred in this way.
Related: US Crypto Giants Build First Version of FATF-Compliant ‘Travel Rule’ Tool
The FATF report goes on to list examples, such as one far-right organization in South Africa that created its own stablecoin that operates on a 1:1 ratio with the South African rand (ZAR).
“The stablecoin, managed by an application styled PayApp, enables the group to use digital money as cash,” said the FATF report. “The transactional data lasts 24 hours and thereafter is untraceable.”
FATF said bank statement analysis on the South African extremist group showed that the organization raised ZAR 268,000 ($17,469) in funds.
Other examples included Scandinavian ERW group Nordisk Styrke, which only gives cryptocurrency addresses on the organization’s donations page.
A financial investigation into the terror attack perpetrated by the Christchurch mosque shooter in New Zealand in March 2019 found that he had made use of virtual assets to transfer funds, the FATF report said.
Read the full report:
Related StoriesKaty Perry Launches NFTs, Acquires Stake in Theta Labs
American pop singer and songwriter Katy Perry is launching non-fungible tokens (NFTs) for fans and has acquired a stake in the blockchain video-delivery network Theta Labs.
- Perry’s NFTs will celebrate her “Play” residency that starts December 2021 at the Resorts World Las Vegas hotel and are in collaboration with Theta Labs.
- The singer who is known for her hit pop songs “Dark Horse” and “Roar” will have a minority interest in Theta Labs, alongside her talent agency, Creative Artists Agency, which is also one of Theta’s enterprise validators.
- The NFTs will commemorate Perry’s events and fans can register for the first drop at Katy.ThetaDrop.com starting today.
- Perry said she is both excited and curious about the launch.
- “I can’t wait to dive in with the Theta team on all the exciting and memorable creative pieces, so my fans can own a special moment of my residency that’s both a digital collectible as well as an IRL experience,” said Perry.
Algorand Gets Cozy With Crypto Custodian Copper
U.K.-based cryptocurrency custodian Copper has been appointed to provide the safekeeping of assets on the Algrorand blockchain.
Copper, which harnesses a cryptographic key sharding technology called multi-party computation (MPC), will be supporting Algorand’s native token, ALGO, as well as Algorand Standard Assets (ASAs), the tokenized representation of other asset types on the proof-of-stake blockchain.
Crypto custodians are adept at adding support for new tokens and coins, and Copper is no exception. Meanwhile, Algorand is supported by a range of specialist custodians such as Coinbase Custody and BitGo.
Related: Coinbase Receives Crypto Custody License From German Regulator BaFin
But the current pairing is a deeper partnership: Algorand is looking beyond Copper’s safe-keeping provisions to explore the custodian’s ClearLoop system of instant asset exchange and settlement, for example.
“Copper adds a layer of speed that you wouldn’t be able to find outside of their network, and of course this is right up Algorand’s alley of being extremely fast, secure and efficient,” David Markley, Algorand’s director of business solutions, said in an interview.
Founded in 2017 by Turing Award–winning MIT professor Silvio Micali, Algorand now has some 700 organizations building on the blockchain and some serious money behind it, including a $100 million Algorand ecosystem fund launched earlier this month by Arrington Capital.
As well as looking after ALGO tokens, which may include those used for staking on Algorand, Copper will be charged with looking after the 4.5 million ASA assets represented on the chain.
Exotic assetsRelated: Security Audit Firm Raises $5.3M From Funds Investing in Polkadot, Cardano Blockchains
What can be thought of as the base layer of digital dollar equivalents, Algorand ASAs include a clutch of well-known stablecoins such as USDC and USDT, as well as Canadian dollar, Swiss franc stablecoins and Mexican peso to be added shortly, said Markley. One layer up from stablecoins, things get more exotic, he added.
“We have tokenized real estate via a handful of firms that have tokenized either home equity or individual homes and represented those on Algorand’s blockchain,” he said. “We’ve also got a long list of partnerships with firms like Securitize and Tokensoft and the other security token issuers. And since the beginning of this year, we’ve seen a proliferation of NFTs.”
It’s a plum assignment for London-based Copper, which last month closed a $50 million Series B funding round. Tyler Kenyon, Copper’s chief marketing officer, said that over the past year the two firms kept bumping into each other at events and sharing their like-minded views.
“A partnership with Algorand felt like a natural choice,” said Kenyon. “Enabling the ASA standard in our custody application means that when those projects are ready we can make an ultra smooth onboarding process for them.”
Related StoriesCrypto Trading Firm Valkyrie Raises $10M to Drive Bitcoin ETF Hopes
Crypto asset manager Valkyrie Investments has raised $10 million in a Series A funding found from an interesting roster of backers.
Precept Capital Management, XBTO, 10X Capital and UTXO Management headlined the fundraise but it also included Tron founder Justin Sun, Litecoin founder Charlie Lee and former Major League Baseball pitcher C.J. Wilson.
Valkyrie is well known in crypto as one of a handful of U.S. companies waiting patiently in line for a bitcoin exchange-traded fund (ETF) to be approved by the Securities and Exchange Commission (SEC).
Related: Blockware Raises $25M to Expand Bitcoin Mining Operations in Kentucky
The funding will help drive Valkyrie’s three business lines, said the firm’s chief investment officer, Steven McClurg:
- a trust or separately managed account (SMA) offering designed for institutional investors;
- the ETF division;
- and a hedge fund business.
This translates into expanding the Valkyrie presence in Nashville, including hiring additional research, compliance and marketing staff, according to a press release. There are also plans to expand the firm’s presence in Asia.
‘Absolutely insane’A few days ago, the SEC said it would delay a decision on Valkyrie’s ETF application, having pushed back on a similar application from VanEck Bitcoin Trust the week before.
“Never in my career in financial services have I seen anything like this, where there’s 13 applications for the same ETF product,” McClurg said in an interview. “It’s absolutely insane.”
Related StoriesSingapore Crypto Exchange Considers IPO After 500% Trading Growth: Report
Crypto exchange Coinhako is considering an initial public offering after seeing January-May trading volume 500% higher than for the whole of 2020.
- The Singapore-based company predicts volume will top $7 billion by the end of 2021, according to a report by Forkast on Tuesday.
- The exchange has over 300,000 registered users in the city-state, with an average of 150,000 active each month.
- Coinhako, which was launched in 2014 with backing from venture capitalist Tim Draper, is considering an IPO, Forkast said.
- “Given how the crypto markets in the U.S. and Europe have developed, we believe it is only a matter of time that the crypto industry in this part of the world will likewise take off,” Coinhako CEO Yusho Liu said.
Ripple Hires Mastercard’s Sendi Young as European Managing Director
Ripple, the digital currency issuer behind the XRP token, has hired Mastercard executive Sendi Young as managing director of its European operations.
- In a blog post, Ripple said Young will oversee strategy, including the expansion of its network technology, RippleNet.
- Prior to joining Ripple, Young spent five years at Mastercard with responsibility for driving strategy, commercialization, bank-fintech partnerships and business development.
- “As adoption of crypto and blockchain grows, more financial institutions, payment service providers and small businesses are turning to trusted players in the space to prepare them for a crypto-enabled future,” said Asheesh Birla, general manager of RippleNet.
- Ripple said the European market is a critical one for the company. It has experienced “tremendous” transaction and customer growth in the region, and a quarter of its current customers are based in Europe.
Read more: Ripple Proposes Adding Federated Sidechains
Related StoriesBlockware Raises $25M to Expand Bitcoin Mining Operations in Kentucky
Blockware has raised $25 million as North American bitcoin mining looks to seize the moment.
Blockware founder and CEO Michael Stoltzner declined to name entities involved in the funding round, but told CoinDesk the list of investors included several “prominent” individuals and crypto funds. This round brings Blockware’s total capital raised to date to $32 million since its launch in 2019.
The money will be used to purchase 14,000 mining rigs over the next two years, which Blockware has sourced from both Bitmain and the open market. The company will use 8,000 of the rigs to build out its new mining facility in Paducah, Ky., and will sell 6,000 rigs to other U.S.-based bitcoin mining operations.
Related: Crypto Trading Firm Valkyrie Raises $10M to Drive Bitcoin ETF Hopes
Stoltzner said he chose Paducah for Blockware’s first large-scale mining facility because the city had everything he was looking for: friendly government officials, plenty of skilled and unskilled labor, and most importantly, cheap energy.
The Paducah facility will be built on land that is 100 yards from the Big Rivers Electric-operated energy source that will power Blockware’s rigs.
The Chinese government’s crackdown on mining operations has caused many to shut down, and bitcoin’s hashrate has plummeted in response. The situation has caused many in the crypto community to call for a more global, decentralized mining structure to reduce the network’s reliance on Chinese miners. Miners have also been under increased scrutiny in recent months as bitcoin’s sustainability debate, led by unofficial crypto figureheads like Elon Musk, rages on.
Power mixStoltzner said the company chose to source power from Big Rivers Electric because the company used a mix of renewable and non-renewable sources, including hydroelectric, wind and coal.
Related: China’s Bitcoin Mining Crackdown Is a Boon for Miners Elsewhere
“Kentucky is the largest coal-producing state in the country,” Stoltzner said. “That’s the resource they have. It’s a tough argument, and people in Kentucky feel different about that argument than people in California.”
Stoltzner said Blockware is working on a program to purchase carbon offsets and is in the early stages of joining the Michael Saylor-led Bitcoin Mining Council.
According to Stoltzner, Blockware’s smaller-scale mining operations in upstate New York, Washington and Newfoundland, Canada, are almost completely run on hydroelectric power.
Ensuring the sustainability of North American bitcoin mining is part of Stoltzner’s larger stated goal of increasing the bitcoin hashrate in North America, which currently only accounts for an estimated 10% of the hashrate worldwide.
Bitcoin must be mined domestically in order to fully go mainstream in North America, Stoltzner said.
“What we’ve seen coming out of China and Eastern Europe – that’s not helping to legitimize bitcoin in the industry,” Stoltzner said. “I believe that companies operating out of the United States are very much legitimizing crypto and bitcoin. It’s got to happen out of the United States.”
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