CoinDesk Crypto

Coinbase is getting ready for the spotlight.

The cryptocurrency exchange based in San Francisco (but not) is voluntarily reporting its first-quarter earnings Tuesday at 4:30 p.m. ET ahead of a much-anticipated public listing on Nasdaq slated for April 14.

In advance of the COIN ticker going live, analysts are eager to discover Coinbase’s user growth numbers over the past quarter. 

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“We need to know what their assumption is about monthly active users and revenue per user,” James Friedman, senior fintech research analyst at Susquehanna International Group, told CoinDesk. “The bears will argue that this is a trading company … there are only 80 million stock brokerage accounts in the U.S. and 20% of those people trade less than once a year.”

The fourth quarter of 2020 was the first time Coinbase had as many active monthly users (2.8 million) as it did in the first quarter of 2018 (2.7 million), said Friedman. As of the close of 2020, the exchange touted 43 million registered users.

Since the bulk of the company’s transactional revenue comes from retail users, the most relevant financial metric to look out for will be how many verified users have made the jump to being monthly transacting users – users that have an account versus those that are trading regularly. 

The Coinbase-bitcoin connection

Coinbase noted several times in its prospectus that the company’s growth correlated with the price of bitcoin. According to CoinDesk Research, bitcoin had a 100% return in Q1 2020 and a market capitalization that surpassed $1 trillion for the first time in its history. 

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“We’re hoping to get a better picture of how bitcoin’s price is correlated to user growth,” Arca research analyst Alex Woodard said. 

With only 1,100 staffers at Coinbase, the firm’s margins are wide, even with Arca modeling a 50% increase in general administration/customer service costs in the first quarter.

“We’re [still] seeing an operating margin of 75%,” said Arca COO Michael Dershewitz. 

Beyond retail

One issue where the exchange has been tight-lipped is on future projections for the spread between institutional trading versus retail trading, Arca’s Woodard added. 

Coinbase will likely address its growth in prime brokerage and other subscription services that can serve the exchange in a bear market and how it plans to grow its international customer base, which is small compared to its U.S. user count. 

On the institutional side, Coinbase has confirmed that it serves MicroStrategy and One River – with others clients such as Tesla and hedge fund giant Paul Tudor Jones dribbling out in press reports.

Beyond Coinbase’s first-quarter earnings call, analysts will also struggle to determine what will drive the price of the Coinbase stock when it does list, Friedman said. 

If a bitcoin ETF is not approved by the time it lists, Coinbase’s stock could be seen as a proxy bitcoin ETF – similar to MicroStrategy’s stock. Therefore, the price of COIN stock could be decoupled from the business’ fundamentals. 

“If looking for synthetic exposure to bitcoin, it will probably be the purest play to do it outside of [Grayscale Bitcoin Trust],” Woodward said. “This is a much purer bet on crypto than a MicroStrategy.”

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Bitcoin’s hashrate – a way to measure the total power consumption and mining output of the network – has topped a new all-time high.

The current mean hashrate of the Bitcoin network is 179.4 exahashes per second, according to data from CoinMetrics.

Ethan Vera, the CTO of North American mining firm Luxor, told CoinDesk that the all-time high comes during a scramble for the semiconductor chips that power ASICs, along with a scramble for the machines themselves.

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“The run up in Bitcoin price paired with a shortage on ASIC chips has caused mining economics to turn favourably to miners, with many miners running at 85%+ mining margins,” he said.

“Miners are trying to get their hands on every machine possible, and even ASICs  launched in 2014 are profitable. All of Luxor’s clients have all of their rigs plugged in and hashing including their oldest machines. There is little to no idle hashrate out there.”

Building on Vera’s comments, the all-time high is partly driven by previously backordered ASIC shipments finally reaching their North American buyers. Bitcoin’s mining industry has enjoyed surging growth over the past year, as big players continue to finance bulk orders of ASIC miners to the tune of the tens of thousands of units.

This all-time high is partly driven by previously backordered ASIC shipments finally reaching their North American buyers. Bitcoin’s mining industry has enjoyed surging growth over the past year, as big players continue to finance bulk orders of ASIC miners to the tune of the tens of thousands of units.

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The hashrate high also comes in spite of Bitcoin’s recent 6% upwards difficulty adjustment (mining “difficulty” is a self-referencing score wherein 1 indicates the easiest mining conditions; Bitcoin’s current difficulty is 23.1 trillion). 

Bitcoin has fallen roughly 2% today and is trading just above $58,000.

Updated Tuesday, April 6, 2021, 21:05 UTC: Added a graph with Bitcoin’s hashrate.

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A popular bitcoin market indicator known as the “kimchi premium” is signaling a retail frenzy in South Korea historically observed when prices are peaking. 

But this time might be different, analysts say – possibly the result of the dramatic growth and maturation witnessed in cryptocurrency markets over the past few years.  

The kimchi premium represents the difference between bitcoin’s price on South Korean exchanges and the going rate on other global trading venues. The reasons for the discrepancy are complicated, but they ultimately stem from trading limitations unique to the country’s exchanges and the existence of domestic capital controls. 

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Historically, spikes in the Korean premium have taken the wind out of the bull runs, according to data tweeted by Arcane Research analyst Vetle Lunde. The metric peaked at 47% in January 2018 and 63% in May 2017, just prior to market corrections, but it’s also marked tops at minor price peaks at 6.5% in November 2018 and 8.5% in June 2019.  

Lately, the premium has risen to 18%, the highest since February 2018, according to data source CryptoQuant. 

And although bitcoin prices have doubled this year, the Korean spread shows no signs of peaking yet and it’s impossible to say whether the premium is about to reach a top, or if will continue increasing. Besides, South Korea is no longer the crypto heavyweight it was during the last major market cycle in 2017-18. 

“The Korean market contributed to 7.9% of the worldwide crypto trading volume in 2017,” Ki-Young Ju, CEO of the South Korea-based CryptoQuant, told CoinDesk in a Telegram chat.  “Now it accounts for less than 2%.” 

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“Hence, an eventual collapse of the premium is unlikely to have a significant impact on the broader market,” Ju said.

Bitcoin fell over 49% in one month after the kimchi premium peaked on Jan. 8, 2018, and remained in a bear market till the end of the year. The cryptocurrency suffered notable price drops following peak premiums observed in mid-November 2018 and at the end of January 2019.

And while the previous crypto fever in South Korea was primarily fueled by investors belonging to the age group of 20 to 30, the latest frenzy has seen equal participation from Koreans in their 40s and 50s, as discussed last month by The Diplomat, a magazine covering politics, society and culture in the Indo-Pacific region.

“Through cryptocurrency and stock market transactions, South Koreans – young and old – are actively seeking to secure steady streams of passive income,” The Diplomat said. “Increasingly after COVID-19, both of these age groups seem to be alarmed by fears of monetary inflation followed by the government’s stimulus packages, skyrocketing real estate prices, and stagnating wages in the extremely competitive job market.”

So the latest uptick in interest in cryptocurrencies in South Korea might be more sustainable, not just speculative fervor.

Still, a minor pullback cannot be ruled out. 

At press time, bitcoin was changing hands near $58,000, down 2% on the day. Prices have been restricted to a narrow range of $55,000 to $60,000 since the end of March.

What is Kimchi premium?

Executing a classic arbitrage strategy by buying bitcoin on western exchanges and selling the same on Korean exchanges at a relatively higher price is quite challenging. 

That’s because the Korean market is served by local exchanges that provide Korean won (KRW) fiat trading pairs, and local users do not trade cryptocurrencies using tether (USDT) or BTC most of the time, as per Binance Research. 

Therefore, a Korean wanting to “arb” the premium has to first buy a token with KRW that could be exchanged for USDT or other stablecoin, which then would be used to purchase bitcoin on a non-U.S. exchange. The tedious process doesn’t stop here. The bitcoin will have to be transferred back to Korean exchanges for liquidation.

“The relatively long transaction confirmation time, without hedging, leaves the arbitrageur exposed to price fluctuations during the transfer,” Binance research said in a Telegram message. 

Arbing the premium at currency prices looks even more challenging if we consider the country’s capital controls. “Ordinary investors in Korea are allowed to wire up to $50,000 to other countries per year,” CryptoQuant’s Ju said, adding that regulations prohibit Korean crypto exchanges from accepting overseas clients. 

Also read: Coinbase and Bakkt Are Behind Paul Tudor Jones’ Bitcoin Bets, SEC Documents Show

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Signal, the private messaging app that saw a 4,200% increase in downloads in January, is launching a payments feature using MobileCoin (MOB). Signal founder Moxie Marlinspike has been an adviser to the project since 2018.

The goal of MobileCoin, which is based on Stellar blockchain technology, is to be able to work efficiently on mobile devices while also protecting users’ privacy. The launch of MobileCoin on Signal has long been rumored, dating back to Facebook’s Libra launch in early 2019.

MobileCoin stands out from a pack of messenger-native crypto coins – namely in that it has launched. Telegram’s TON was nuked by U.S. regulators; Facebook’s Libra (now Diem) remains in a state of near-completion.

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At this time, the payment feature will only be available to users in the U.K., and only on iOS and Android. Desktop support is not included. 

“I’m terrified for Signal,” Matthew Green, a cryptographer at Johns Hopkins University who sits on the Zcash Foundation board told WIRED, adding: 

“Signal as an encrypted messaging product is really valuable. Speaking solely as a person who is really into encrypted messaging, it terrifies me that they’re going to take this really clean story of an encrypted messenger and mix it up with the nightmare of laws and regulations and vulnerability that is cryptocurrency.”

On the other hand, integrating privacy-oriented cryptocurrencies into relatively popular communications apps may give users an attractive onramp and interface to enter into the world of crypto.

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In a blog post announcing the launch of the feature in beta, the company said users can link a MobileCoin wallet to Signal, send funds, receive funds, keep track of their balances and review transaction histories.

“As always, our goal is to keep your data in your hands rather than ours; MobileCoin’s design means Signal does not have access to your balance, full transaction history, or funds,” Signal wrote. “You can also transfer your funds at any time if you want to switch to another app or service.”

MobileCoin is currently only trading on FTX. 

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Some of the nodes used to validate transactions on the Stellar Lumens blockchain went offline today, reportedly leading exchanges to halt withdrawals as certain transactions failed even as others got through.

Anton Cashchin, a managing partner at U.K.-based CEX exchange, sounded the alarm when he tweeted that “several validators” went offline, leading Binance, Bitfinex and Bitstamp to halt withdrawals.

Cashchin claimed that the outage disrupted transactions and exchange withdrawals, though Stellar issued a statement that “the Stellar network is still online, and transactions are continuing to be processed.”

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“Around 1:00 AM PDT, the Stellar Development Foundation’s validator nodes and the SDF’s public Horizon API instance went offline … SDF’s engineering team is working to determine the cause and to resolve the issue, in addition to working with all Tier 1 validators on the network,” Stellar’s blog reads.

According to public data at block explorer Stellar Expert, the network is still processing transactions, though not at a normal rate. A block which was validated around the time nodes fell off the network showed more than half of the submitted transactions as failed, but the network appears to have recovered as newly-processed blocks indicate no failed transactions

Stellarbeat takes the pulse of the network’s node count. At press time, the website showed that more than half of Stellar’s usually active nodes are currently down.

At 6:59 AM ET, Bitfinex CTO Paolo Ardoino tweeted that XLM withdrawal were paused.

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Stellar’s team responded to CoinDesk’s request for comment with its official statement. It clarified that XLM transactions are being processed and the network is still up.

Nevertheless, XLM, the coin that underpins the Stellar network, fell from $0.58 to $0.51 on the news.

Notably, Coinbase is reportedly using XLM as part of its rewards debit card, which offers either 1% back on bitcoin or 4% in XLM, according to the Wall Street Journal.

This is a developing story and will be updated.

Updated April 6, 2021, 17:54 UTC: This article and headline was updated to include information about failed transactions on the Stellar network.

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Michael Hlady, an associate at blockchain consulting firm Alchemist, pled guilty on Monday to conspiring to extort a startup company for millions of dollars in the cryptocurrency ether. He now faces up to 20 years in prison and a fine. 

According to a statement from the Department of Justice (DoJ), Hlady, who also goes by the name “Michael Peters,” appeared in federal court in Brooklyn and pled guilty before U.S. Chief District Court Judge Margo Brodie. 

Hlady and his co-conspirator, Steven Nerayoff, an early supporter of the Ethereum project and former advisor to Overstock’s tZero, allegedly issued threats to company executives, including threatening to destroy a startup if it did not agree to demands for additional funds and company tokens.  

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In 2019 both Nerayoff and Hlady were arrested by the Federal Bureau of Investigation (FBI). In contrast to Hlady’s plea, Nerayoff has entered a plea of “not guilty” to extortion charges and is awaiting trial.

The victim company was a mobile-based start-up that issued ether as loyalty rewards for generating user traffic to its clients’ products and to raise capital. The firm had planned to conduct an initial coin offering (ICO) in November 2017. 

Nerayoff’s firm was tapped to advise the startup in July 2017. According to the DOJ, he began demanding larger than contractually agreed-upon ethereum payouts for his help with the company’s ICO that coming fall. 

On March 28, 2018, Hlady sent a text message to a company executive stating, in part, “I promise I will destroy your community” if the startup did not comply with the demands. 

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See also: Ether Price Jumps to All-Time High Near $2,100

The company under threat transferred 10,000 ETH to Nerayoff.

Commenting on the case, acting U.S. Attorney Mark Lesko said both Nerayoff and Hlady “used strong-arm tactics to shake down a startup company of cryptocurrency” and thanked the FBI for their work on the case.

“This office and its law enforcement partners are committed to protecting businesses from extortion in whatever manner it is perpetrated,” said Lesko.

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Publicly traded Canadian tech firm Fortress Technologies will work with Great American Mining (GAM), a North American mining company that converts stranded gas into bitcoin mining power, to launch an Environmental, Social, and Governance (ESG) “green” mining venture.

Under the agreement, Fortress will invest $15 million in mining equipment through Great American Mining in the hopes of capturing 180 peta hashes a second (PH/s) in four months (Fortress currently produces roughly 20 PH/s). 

“I believe the future of Bitcoin mining will need to be environmentally conscious, seeking out stranded energy sources and repurposing waste and emitted gases to productively secure the Bitcoin blockchain, and that both investors as well as the Bitcoin mining community will place a premium on companies who pursue this kind of forward-thinking activity,” Fotress Chairman Roy Sebag said in a press release.

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“Our board felt that Great American Mining had the best operational team, and a practical solution in place, which lined up with our own vision for the future of Bitcoin mining,” Fortress CEO Aydin Kilic told CoinDesk.

In search of a “green” bitcoin

Discussion over Bitcoin’s energy consumption has resurfaced during the current market cycle, with some saying that new U.S. institutional investors will want “green” bitcoin that isn’t mined in sanctioned countries or China.

Still, those worried about the energy that Bitcoin consumes don’t always consider that 35-76% of Bitcoin energy appetite is fed by renewables, and almost all of these power sources lie outside major population centers where the power is “stranded” and couldn’t otherwise be used.

Great American Mining supplies oil and gas producers with mining rigs that convert otherwise flared or vented natural gas into hashpower. 

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If all the stranded gas in the U.S. were used for mining, then “all of the vented/flared gas in the U.S. converted to electrical power would yield approximately 7.4 GW (gigawatts), which in turn represents about 50-70% of the total power converted by the Bitcoin network currently,” the press release states.

Great American Mining and Fortress’ venture comes at a time when Bitcoin miners (especially in the U.S.) are receiving new shipments of hardware to rev up their hashrates. Marathon Patent Group, for example, plans to rollout more than 100,000 ASICs (application specific integrated circuits) by February 2022.

The surge in mining activity saw Bitcoin mining become more challenging than ever after the latest difficulty adjustment.

Updated Tuesday, April 6, 2021, 16:12 UTC: Additional comments from Fortress CEO Aydin Kilic and a change that corrects a misattributed quote.

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Cryptocurrency startup Atani has completed a $6.25 million seed funding round, the company announced Tuesday.

• The Madrid-based startup is a non-custodial platform offering trading and portfolio monitoring on 22 different exchanges, including Coinbase Pro, Binance and Bitstamp.
• The platform also provides a tax-reporting tool, which generates an automatic report valid in over 30 countries.
• The funding round was led by early Flywire investor JME Ventures and included participation from Conexo Ventures, Encomenda Smart Capital and Lanai Partners.
• The funding will be used to build out additional features for advanced users such as API trading.
• Atani’s total funding now sits at $7 million following $750,000 pre-seed funding in May 2019.

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A new coin has begun swimming in the privacy coin pool. Iron Fish ($IRON), which protects transactions using zk-SNARKs, is launching its public testnet today, the culmination of nearly two years of building. Anyone can now run and mine a full Iron Fish node.

With $5.3 million in funding behind it from the likes of Electric Capital, Slow Capital, Juan Benet and Balaji S. Srinivasan, Iron Fish is betting there is still a demand for privacy coins in a crowded market. 

An allusion to the power of cryptography to protect and defend, the name Iron Fish comes from the U.S. Navajo Code Talkers who, in World War II, used it as a codename for a submarine.

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“Iron Fish is a new privacy-focused cryptocurrency where every transaction is private, using the strongest privacy mechanism known today based on zero-knowledge proofs,” Elena Nadolinski, CEO of Iron Fish, told CoinDesk exclusively in an email. “As we continue to add features, Iron Fish will become a shielded layer for many assets, even ones on different chains, and provide a platform for true digital cash (via fully private stablecoins).”

Zero-knowledge proofs

Iron Fish uses zk-SNARKs, a type of zero-knowledge proof. A zero-knowledge proof (ZKP) is a cryptographic technique used to prove and verify a statement without revealing the underlying data. Essentially, zk-SNARKs shield Iron Fish users’ balances and user identities. 

“In Iron Fish, zero-knowledge proofs allow you to make a transaction without revealing your balance, or the recipient, or even who you are — instead, there’s a cryptographic proof accompanying an encrypted transaction that simply proves you have enough funds to cover it,” said Nadolinski. “In contrast, Bitcoin or Ethereum transactions are a permanent ledger of all your transactions in plaintext.” 

Iron Fish also uses the Sapling protocol, developed by Zcash, for constructing and verifying shielded transactions in the context of a blockchain.

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“I believe that over the next few years, zk-SNARKs and privacy technologies will unlock previously inconceivable design spaces,” said Jill Carlson, a principal at Slow Ventures. “Elena has a pragmatic vision for how to get there. Iron Fish promises to fill the digital cash void that crypto has so long promised to us.” 

Nadolinski said she wants developers, cryptographers and crypto enthusiasts to come join the Iron Fish discourse. This is in part why Iron Fish uses a modern, easily extensible codebase to whichg anyone can contribute, according to Nadolinski. Iron Fish uses Rust coding language for the cryptographic aspects and Typescript for everything else. 

“Iron Fish makes it easy for developers to work with zero-knowledge in crypto,” said former Coinbase CTO Balaji Srinivasan. “This is no small feat and due to Elena’s engineering prowess and that of her team.”

Why now?

There are already large privacy coin projects on the cryptocurrency scene, such as Monero and Zcash, as well as improvements being actively developed to make Bitcoin more private. 

Nadolinski said despite there being a huge demand for privacy, no privacy coin has “won” yet. 

In a blog post announcing the Iron Fish testnet launch, she notes that in 2021 alone, the private messaging app Signal saw installs skyrocket after Whatsapp announced changes to its terms of service around data use. Encrypted email service ProtonMail saw a threefold rise in usage and privacy-focused search engine DuckDuckGo’s growth has “become exponential.”

A page on the Iron Fish website compares its privacy features to other cryptocurrencies like zcash, grin and bitcoin. 

“Existing privacy coins all have drawbacks on privacy, accessibility or both,” said Nadolinksi.  “Iron Fish does not compromise on privacy, while [being] fully focused on making it accessible/easy to use and expanding it to support multiple assets and bridges to other chains, and provide a platform for true digital cash.”

Privacy coin delistings

Iron Fish also enters the scene amid a rash of privacy coins being delisted, but Nadolinski remains unconcerned. 

“We’re bringing the same expectations around financial privacy that you have in the analogous world to crypto,” she said. “Regulatory concern with privacy coins arises from the myth that law enforcement won’t be able to catch bad actors. But just like in the real world when law enforcement would go acquire records when a suspicion of a crime occurs (e.g. acquire bank records for an organization or individual), so can law enforcement go to an exchange or other crypto-issuing body and acquire ‘view keys’ for an account (which Iron FIsh supports).”

These “view keys” give the holder read-only access to all activity associated with that particular account. Iron Fish (and other privacy coins) also support encrypted memo fields facilitating compliance with the FATF rule (Travel Rule) for Virtual Asset Service Providers (VASPs) by allowing them to keep a record of information for the reason behind transfers.

Nadolinski stresses that, compared to other cryptocurrencies, privacy coins give users an experience more similar to the one they would have in the real world when it comes to privacy expectations.

“Privacy coins have a bad case of bad marketing, that they are something nefarious and only to be used for illegal activity, but that’s not true,” she said. “Take doors on houses or passwords for bank accounts, both of which are precautions most people take even though they might say they have nothing to hide.”

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COTI has received $500,000 from cFund, marking the first investment made by the venture fund backed by Cardano, the network behind the current seventh-largest cryptocurrency by market capitalization.

The $20 million cFund was launched in July of last year, a joint venture between Cardano builder IOHK and Los Angeles-based Wave Financial. The aim of the fund is to grow the Cardano ecosystem, which has not kept pace with the whopping growth of its native ADA token.

Both teams have worked together in the past, resulting in COTI creating the first version of ADA Pay in 2019. COTI will upgrade that for the Shelley mainnet, expected to be released on the Cardano network over the coming weeks, said COTI CEO Shahaf Bar-Geffen.

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The cryptocurrency space can be thought of as a collection of tribal factions with fiercely held allegiances. Cardano and ADA, created by Ethereum co-founder Charles Hoskinson, stands outside the crypto canon and has endured ribbing from Bitcoin and Ethereum supporters alike who claim nothing much is really being built on Cardano.  

“There are a lot of new chains out there like Polkadot and Binance Smart Chain and so on, and they all more or less target the same crypto audience to do DeFi better and all of that,” Bar-Geffen said, referring to the $51 billion decentralized finance sector. “Rather than just doing just another faster or better version of Ethereum with the same DeFi projects on top, Cardano is trying to work with governments, specifically in developing countries in Africa and South America.”

For his part, IOHK’s Hoskinson said in a statement that the COTI investment is a step towards deepening the relationship between the projects. 

“COTI has been a great partner across several projects already, and we plan to leverage their advanced fintech architecture to enable future finance applications on ADA,” Hoskinson said.

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Top auction house Sotheby’s, established in 1744 in London, has announced its first auction of non-fungible token (NFT)-based digital artworks, created by anonymous artist Pak, that “scrutinizes our understanding of value.”

Sotheby’s announced Monday “The Fungible” Collection by Pak will be taking place April 12-14 on Nifty Gateway, an NFT marketplace owned by Gemini, the cryptocurrency exchange founded by the Winklevoss brothers.

The creator of Archillect, an AI built to discover and share stimulating visual media, Pak has been active in digital art for over two decades. In December Pak was the first to earn $1 million for NFT art. 

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The auction house said the sale of Pak’s “Fungible Cubes” will be available at the starting price of $500 and collectors will be able to purchase as many cubes as they wish. The buyers of the fungible cubes will receive an NFT containing Pak’s artwork. 

The collection up for auction includes individual NFTs, each representing sets of A Cube (1), Five Cubes (5), Ten Cubes (10), Twenty Cubes (20), Fifty Cubes (50), Hundred Cubes (100), Five Hundred Cubes (500), Thousand Cubes (1,000). 

NFTs have fast become a craze with millions of dollars being spent on rare or desirable digital artworks. Last month, a piece of digital artwork or NFT by crypto artist Beeple was sold for a record $69.3 million by Sotheby’s rival auction house Christie’s.

In March, Sotheby’s CEO Charles Stewart told CNBC NFTs have “staying power.” The auction house decided to hold its first NFT art sale with Pak because it wanted to work with one of “the most established artists” in the space.

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Pak’s The Fungible Collection will “challenge us to rethink what we know about digital art and ownership,” and “scrutinizes our understanding of value,” said Sotheby’s.  

People may be able to right click save as a “jpeg” but how would they save as a digital performance?

Pak

“I see this collection as the first digitally native mindset of works that’s presented to the traditional art world through a global auction house,” said Pak in a statement released by Sotheby’s. 

“With this kind of a scale, I expect it to play a major cultural role in telling the narrative of the digital world to the traditional world in terms of the medium definition and value creation. People may be able to right click save as a ‘jpeg’ but how would they save as a digital performance?” 

For artists, it has been a challenging time, with many unable to resume activity due to the COVID-19 pandemic. In response, NFTs have seen growth by creating opportunities for struggling artists and their fans.

NFTs are cryptographic assets that can have variable features. They have been used to represent a wide range of unique tangible and intangible items, from art to collectible sports cards to virtual real estate and even digital sneakers.

According to data from Nonfungible.com, a site tracking NFT marketplaces, the industry had a market capitalization of $338 million at the end of 2020. 

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New York State-regulated Paxos Trust Company has used blockchain technology to achieve same-day settlement for a selection of U.S. equity trades, with the help of Credit Suisse and Instinet.

The trades occurred on March 4, at 11 a.m. ET and 3 p.m. ET and were settled at 4:30 p.m. ET, demonstrating the platform’s ability to enable same-day settlement for trades conducted throughout the day, the companies said. (In the legacy system, settlement can only occur the same day if trades are completed before 11 a.m. ET.)

This seemingly nerdy enterprise blockchain pilot looks much more important in light of the recent share-trading fiasco involving the Wall Street Bets movement, which saw trading platform Robinhood fall foul of the arcane infrastructure used to settle U.S. equities. 

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For a couple of years now, Paxos, Credit Suisse and Instinet have been advancing simplified settlement of trades using a blockchain. (Paxos Settlement Service is built using a homespun variant of Ethereum code.) Back in February 2020, the three firms claimed to have done the first live blockchain-based settlement of U.S. equities – although Patrick Byrne’s tZERO project had previously carried out a blockchain-based settlement of shares in Overstock.

The Paxos settlement platform operates under “No-Action Relief” from the Securities and Exchange Commission (SEC) – basically when the regulator accepts a commonsense approach to something which is not technically legal. Paxos will apply for full clearing-agency registration with the SEC, and hopes to secure registration in 2021, it said. 

“Settlement in U.S. equities is opaque and laden with unnecessary delays, capital costs and expenses,” said Paxos CEO Charles Cascarilla in a statement, adding:

“We are working hard to improve settlement for the benefit of all market participants. An upgraded settlement system can create safer, fairer and more open capital markets that foster innovation. Modern technology makes the risks of the current system obsolete while also enabling greater trading liquidity with greater ownership transparency.”

Related: Coinbase, Fidelity, Square Form Crypto Lobbying Group

The Paxos permissioned blockchain system is interoperable with the legacy clearing system and can facilitate settlement on any time cycle, Cascarilla said. Paxos also intends to run multilateral netting processes in real-time to ensure fast and transparent net settlement of transactions. 

“We’re excited to stress test same-day cycles on Paxos, because our long-term goal is to always offer our clients more choices, advanced technologies, and greater efficiencies in both their settlement processes as well as time horizons,” Luke Mauro, global head of operations at Instinet, said in a statement.

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Nifty’s Inc., a fledgling social media platform focused on the burgeoning non-fungible token (NFT) market, has hired a lawyer conversant in both financial technology and intellectual property law.

Olta Andoni has joined the Miami-based startup as chief legal officer, the company announced Tuesday. She is employee No. 5 at Nifty’s, which last month said it had raised pre-seed funding from Dallas Mavericks owner Mark Cuban, ConsenSys founder Joseph Lubin and a pseudonymous NFT investor known as 0xb1, along with a host of venture capital firms. (The size of the round was not disclosed.)

In her new role, Andoni will be navigating uncharted waters, given the novel and complex legal questions posed by NFTs in areas such as consumer protection, sanctions, money laundering, copyright and IP, securities, tax and counterfeiting law.

Related: In Europe, Football NFTs and Tokens Are No Fantasy

Roughly the digital equivalent of an autographed baseball card – valued for its uniqueness despite an abundance of similar items – these blockchain collectibles have been selling at auctions for as much as eight figures in dollar terms this year, propelled by the star power of artists and celebrities.

Andoni practiced IP law in the U.S. for six years, according to her LinkedIn bio. She then headed the blockchain practice at the Ziliak Law firm in the Chicago area for a year and for the last year worked as a fintech and IP attorney at Zlatkin Wong LLP.

“Olta has been a visible advocate for developing the NFT and broader blockchain universe in a responsible and durable way,” said Jeff Marsilio, CEO and co-founder of Nifty’s, in a statement.

The company said it aims to launch its platform, a sort of hub for NFT collectors and their communities, this spring.

Related: Coinbase, Fidelity, Square Form Crypto Lobbying Group

Read more:

On Covering the NFT Hype

How Bananas and Mortgages Can Explain the NFT Craze

How the Incoming Administration Can Fix Crypto Regulation

DeFi Is Just Like the ICO Boom and Regulators Are Circling

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A rally divorced from reality. A reader might not be blamed for thinking that, after looking at the payment-focused cryptocurrency XRP’s rally to a three-year high above $1 in the face of lingering regulatory concern. 

There’s more to it, according to some observers. The token might be getting price support from the XRP community, popularly known as the XRP Army, CoinDesk’s Ben Powers said during a panel discussion on CoinDesk TV Monday. 

In December, the U.S. Securities and Exchange Commission (SEC) filed a case against Ripple Inc., which uses XRP in its payments network, for raising $1.3 billion by selling the token in unregistered securities offerings. While there is no closure yet, the cryptocurrency has climbed to the highest level since March 2018, having erased December’s decline from roughly to $0.60 to $0.20 in recent weeks. 

Related: In Europe, Football NFTs and Tokens Are No Fantasy

The token’s price is still well off its January 2018 all-time high of $3.30, based on pricing from the cryptocurrency data provider Messari.

“They are still purchasing, they are still trading,” Powers said, referring to XRP’s devoted community. It goes back to the “tribalism of crypto. You know, like people have their camps, and they rep them hard.”

Many feared the cryptocurrency would miss the 2021 crypto bull run because of the shadow of the SEC probe. That pessimism likely stemmed from observers being overly U.S.-centric. 

“The SEC can take action, but these are currencies that go beyond just the reach of the U.S.,” Powers said. 

Related: Coinbase, Fidelity, Square Form Crypto Lobbying Group

Several major western crypto exchanges have suspended XRP trading due to regulatory concerns. However, XRP believers can still buy the cryptocurrency on other, less-regulated exchanges, or on Asia-oriented venues. 

Two of the top five XRP exchanges, as per the 24-hour trading volume – VCC and HBTC – are based in Singapore, while Bidesk is based in Australia. Binance, the world’s largest cryptocurrency exchange, does not fall under the purview of U.S. regulations. 

It’s quite clear the buying pressure is coming from outside the U.S. It validates cryptocurrencies’ appeal of being censorship resistant – one that governments cannot control. 

However, the XRP community’s tenacity and the price rally do not necessarily mean the cryptocurrency’s adoption as a payments mechanism will continue to grow. 

“The XRP army is not going to be dissuaded by an SEC enforcement, even if it means that Ripple and XRP could ultimately get iced out of a major financial market,” CoinDesk reporter Danny Nelson said on the panel. “That would presumably have a big impact on its usefulness to other businesses around the world.”

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After last Friday’s better-than-expected jobs report, eyes today will be on the Bureau of Labor Statistics Job Openings and Labor Turnover Survey (JOLTS) this morning and on the progress being made with President Biden’s proposed stimulus package. 

Grayscale Investments, the world’s largest digital asset manager, has added the Chainlink (LINK) cryptocurrency to its Digital Large Cap Fund, providing a possible tailwind to the coin.

• The native token of decentralized oracle network Chainlink fills the void left in the fund after the removal of XRP, the native token of Ripple Labs in the wake of that company’s being sued by the U.S. Securities and Exchange Commission.
• Chainlink’s oracles act as a bridge between cryptocurrency smart contracts and off-chain data feeds.
• Becoming a component of a popular fund often creates demand for an asset and thus its price. In the last 24 hours, the price of LINK is up 4.29% is currently trading at $32.25. It’s risen more than 190% this year, according to the CoinDesk 20.
• The Digital Large Cap Fund has assets under management (AUM) of $538.2 million, according to Grayscale.
• Private placement in the fund is only offered at certain times of the year and is currently closed. Grayscale is owned by Digital Currency Group, the parent of CoinDesk.

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Tharman Shanmugaratnam, chairman of the Monetary Authority of Singapore (MAS) said Monday that cryptocurrency is “certainly not suitable for retail investors” in response to a parliamentary question.

• Shanmugaratnam added that the crypto market in Singapore remains small when compared to shares and bonds. The combined peak daily trading volume of bitcoin (BTC), ether (ETH) and XRP (XRP) in 2020 was only 2% of the daily trading volume of securities on Singapore Exchange (SGX).
• The statement came days after Prime Minister Lee Hsien Loong was caught up in a token scam on blockchain social media platform BitClout.
• A profile appeared to have been set up using the Prime Minister’s name and photo without his knowledge or permission.
• According to a screenshot shared by Loong on Facebook last week, there were 27.3955 tokens created for the account priced at $357.85 each.
• One user had purchased $4.77 worth.
• Loong urged Singaporeans to “remain vigilant when dealing with cryptocurrency platforms” warning that they “won’t be protected by the laws administered by MAS” when dealing with unregulated firms.

See also: BitClout’s Alleged Leader Hit With Cease-and-Desist by Prominent Crypto Law Firm

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Bitcoin (BTC) traded lower during Asia hours as buyers took profit near the $59,000 resistance zone. But selling pressure was limited near $57,900 support. Momentum signals are neutral over the short-term as BTC continues to consolidate.

• The relative strength index (RSI) on the hourly chart signaled overbought conditions yesterday. This preceded a near 3% selloff during Asia hours.
• Buyers continue to defend rising support levels from the April 3 price low around $56,500.
• For now, BTC continues to trade above its 50-period volume weighted moving average on the hourly chart, which helps to define support and resistance levels during intraday price swings.  
• BTC has retraced roughly half of its near 6% selloff from April 1, although price action has been rangebound over the past month.
• “A consolidation phase is underway as overbought conditions are absorbed,” wrote Katie Stockton, managing partner of Fairlead Strategies. “A breach of the 50-day moving average near $54,000 would be a reason to manage risk of a pullback given the first major support is uncomfortably far below near $42,000.”

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Grayscale Investments DID NOT FILE to register a new trust for Microsoft-partnered Ethereum scaling project Nahmi, a spokeswoman for the world’s largest digital asset manager said.

• The filing with the State of Delaware indicated that a company named “Grayscale” had filed for a trust in a way that was identical to how Grayscale Investments had done for multiple other trusts.
• “We did not make that filing,” the spokeswoman said.
• As such, the filing may have been an attempt to pump the price of the project’s native token NII.
• According to CoinGecko, the price of NII has more than doubled in the last 24 hours to $0.01, with a 24-hour trading volume of $20.2 million.
• It appears at least one other trust filing with the name “Grayscale” may also be fraudulent.
• Grayscale is owned by Digital Currency Group, the parent company of CoinDesk.
• A call is being placed with the State of Delaware.
• CoinDesk regrets any confusion caused by the previous report.

See also: Grayscale Says It’s ‘100% Committed to Converting GBTC Into an ETF’

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Grayscale Investments, the world’s largest digital asset manager, filed April 1 to register a new trust for Microsoft-partnered Ethereum scaling project Nahmii.

• The registration was made by the Delaware Trust Company, Grayscale’s statutory trustee for the state.
• Filed with the Delaware corporate registry April 1, the registration indicates Grayscale is considering a trust based on the Nahmii project’s token as a future offering.
• Nahmii is an Ethereum-based second layer blockchain scaling platform that partnered with Microsoft in 2019 thereby offering its solutions on Microsoft’s cloud computing platform Azure.
• According to CoinGecko, the price of Nahmii’s native token NII has almost doubled in the last 24 hours to $0.01 with a 24-hour trading volume of $15.3 million.
• Grayscale is owned by Digital Currency Group, the parent company of CoinDesk.

See also: Grayscale Says It’s ‘100% Committed to Converting GBTC Into an ETF’

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