CoinDesk Crypto

Business intelligence firm MicroStrategy, which has essentially linked its fate to the performance of bitcoin, announced it has bought another $10 million of the largest cryptocurrency.

The company’s shares closed at $645.66 Thursday and are down 0.88% in Friday pre-market trading.

• MicroStrategy said it bought about 205 BTC for $10 million in cash, at an average price of about $48,888.
• The company said that as of Friday it now holds about 91,064 BTC that were bought at a combined purchase price of $2.196 billion for an average per coin price of $24,119.
• While MicroStrategy’s crypto investment is still about twice what it paid for it, BTC is more than $10,000 off its all-time high set last month. The company’s shares have lost roughly half their value in that same time frame.

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Singapore-based cryptocurrency exchange Bybit announced Friday it will cease providing its services to customers from the U.K. following a regulatory ban.

In a blog post, Bybit said it will no longer be providing its services following the Financial Conduct Authority’s (FCA) ban on crypto derivatives.

“If you are either a U.K. resident or citizen, please close all your positions and withdraw all account balances by 8 a.m. UTC [3 a.m. ET], March 31, 2021. Thereafter, customers located in or are residents of the U.K. will be restricted from accessing or performing any trading activities on Bybit.”

Bybit Blog

Related: Binance Pledges New Controls After 99% ‘Flash Crash’ in Polkadot Futures

The move comes after the FCA ban on the sale of derivatives and exchange-traded notes came into effect on Jan. 6, after the financial regulator said it considers the products to be too high risk for retail consumers.

Read more: Bybit Enables Two-Way Margin Trading With Perpetual Contracts Quoted in Tether

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Cipher Mining Technologies, a newly formed U.S.-based bitcoin mining operation formed from bitcoin mining hardware giant Bitfury Top HoldCo, and Good Works Acquisition (Nasdaq: GWAC) a special purpose acquisition company, said they’ve agreed to merge.

• The combined company has an enterprise value of $2.0 billion, according to the release.
• The combined company is expected to receive $595 million in gross cash proceeds from a combination of cash from a $425 million fully committed stock PIPE, including a $50 million investment in-kind from Bitfury, and $170 million in cash held in Good Works’ trust account from its initial public offering in October 2020.
• ,The fully committed PIPE investment is secured with anchor investors, including Fidelity Management & Research Company and Counterpoint Global (Morgan Stanley).
• The combined company has planned mining capacity of 745MW by the end of 2025 and industry leading cost of energy of approximately 2.7c/kWh, the companies said.

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XRP market participants, including crypto trading platforms, discussed the cryptocurrency’s regulatory status with the U.S. Securities and Exchange Commission (SEC) prior to listing the asset, Ripple said in a new filing Thursday night.

The payments and remittances startup closely associated with the XRP cryptocurrency filed its response to an amended SEC complaint alleging it violated federal securities laws on Thursday night, continuing to deny each of the regulatory agency’s claims in a paragraph-by-paragraph rebuttal reminiscent of the tactic messaging platform Kik used when it faced the SEC two years ago. 

Much of the response resembled Ripple’s first answer, filed at the end of January, to the SEC’s original complaint, which the regulator brought at the end of 2020. The SEC filed an amended complaint in mid-February, 

Related: Binance Pledges New Controls After 99% ‘Flash Crash’ in Polkadot Futures

As it had in January, Ripple said it reserved the right to file a motion to dismiss the complaint at a future point. 

In its new response, the San Francisco-based startup continued arguing that XRP is not a security and that it had not violated federal law in selling XRP over the past eight years. Many of the new additions to the response addressed statements the SEC added about documents the regulator believes support its case that Ripple should have known its sales may have been securities transactions.

The new response also leaned more heavily on claims that crypto trading platforms discussed whether to list XRP with the SEC in previous years. One unnamed company, referred to as “Platform A,” reportedly “evaluated XRP’s regulatory status in light of prior SEC guidance and actions.”

“Platform A met with SEC staff in the Division of Corporation Finance and Division of Trading and Markets, including at least one senior SEC staff member who previously met with Ripple on multiple occasions during investigation-related meetings in 2018, about the legal status of XRP and sought guidance on whether the SEC staff considered XRP a security,” the response said. 

Related: How Bitcoin Could Be Affected by February’s Positive Jobs Report

While Ripple did not name the platform, Coinbase is perhaps the most prominent U.S.-based crypto exchange that listed XRP in early 2019.

Ripple said the unnamed platform was not told the SEC considered XRP to be a security, and listed the asset after that conversation. 

Coinbase has since suspended trading due to the ongoing SEC suit, alongside numerous other exchanges operating in the U.S. Ripple claimed this cost XRP holders roughly $15 billion over the past few months.

The price of XRP plunged dramatically after the suit was first announced by Ripple, dropping from near 60 cents to around 27 cents. It has since breached the 60 cent level again, and was trading closer to 45 cents as of press time.

Ripple CEO Brad Garlinghouse and Board Chairman Chris Larsen are both named as defendants, and both told District Judge Analisa Torres of the Southern District of New York that they may file to dismiss the charges against them as individuals in a pair of letters dated March 3.

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Embattled cryptocurrency exchange BitMEX’s new CEO said the firm is planning to add spot trading, brokerage, and custody services to its offerings.

• Alexander Hoptner, who joined the exchange in December, said Thursday he is planning on transforming the exchange and expanding business operations by adding three news services, according to a Bloomberg report. 
• Prior to joining the firm, Hoptner worked for the German exchange Börse Stuttgart. In his new role, he plans to transform the crypto firm by amending relationships with regulators and expanding business operations from spot trading to brokerage and custody services.
• “I was coming from the regulated and classical world. I have a lot of touchpoints with the regulators already…Now I’m working on the crypto side and bringing the crypto side to the regulated world,” said Hoptner. 
• BitMEX announced Thursday the appointment of auditing veteran Stephan Lutz as its new chief financial officer who will take charge of financial growth, business expansion, and profitability.
• In October 2020, the U.S. Commodity Futures Trading Commission and federal prosecutors charged BitMEX with facilitating unregistered trading and other violations.
• As reported by CoinDesk Wednesday, BitMEX founder and former CEO Arthur Hayes, who is currently in Singapore, could surrender to U.S. authorities next month.
• Hoptner declined to comment on the criminal charges against the BitMEX co-founders, said the publication.

Read more: BitMEX Founder Arthur Hayes May Surrender to US Law Enforcement Next Month

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While bitcoin can suffer deeper drawdowns due to traditional market instability, its broader bullish trend would remain valid as long as historically strong chart support is held intact.

“The 21-week SMA (Simple Moving Average) is the level to defend for the bulls,” trader and technical analyst Michaël van de Poppe told CoinDesk. “The bias remains bullish as long as the SMA support is intact.”

An SMA is an arithmetic moving average calculated by adding recent prices and dividing the tally by the number of periods. SMAs are trend-following, lagging indicators and often act as support and resistance levels.

Related: Binance Pledges New Controls After 99% ‘Flash Crash’ in Polkadot Futures

The 21-week SMA acted as a price floor during the previous bull market, as seen below.

The cryptocurrency repeatedly found dip demand (marked by arrows) around the 21-week SMA throughout the rally from $300 to $19,783 seen in the October 2015-December 2017 period.

If history is a guide, deeper pullbacks, if any, could run out of steam around the 21-week SMA this year. The technical line is currently located at $32,240, while bitcoin is changing hands near $46,500.

A continued rise in the U.S. Treasury yields could push the dollar higher, sending bitcoin toward the SMA support.

Related: How Bitcoin Could Be Affected by February’s Positive Jobs Report

One cannot rule out that possibility as Federal Reserve’s President Jerome Powell defied expectations on Thursday by expressing little concern regarding the recent spike in yields. That has left the doors open for a further rally in yields and an extension of last week’s risk aversion.

The dollar strengthened, while bitcoin and stocks fell in the seven days to Feb. 28, as the U.S. 10-year yield surged to a 12-month high of 1.6% and investors priced in higher odds of an early unwinding of the Federal Reserve stimulus.

The yield remains elevated near 1.6% at press time, and the dollar index is hovering at a three-month high of 92.00. Also, European stocks and the U.S. stock futures are flashing red.

Both bitcoin and stocks may find some relief later today if the U.S. nonfarm payrolls data due at 13:30 UTC paints a gloomy picture of the labor market, sending yields lower.

Also read: Market Wrap: Bitcoin Falls to $48K as Fed’s Powell Makes No New Promises; Ether Drops

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Investment bank Goldman Sachs has conducted a client survey on digital assets and findings show positive sentiment toward the future of cryptocurrency investing.

• The survey results showed that out of 280 respondents, 40% have exposure to cryptocurrencies and 54% predict the price of bitcoin will between $40,000 to $100,000. News of the survey was first reported by The Block.
• Other key takeaways include 61% of respondents expect their digital assets to increase in the next 12-24 months and 32% were most interested in prime brokerage for physical or spot to gain exposure to cryptocurrencies.
• Looking ahead, 22% of respondents predict the price of bitcoin will be over $100,000 in 12 months while 34% believe regulation and mandate permissions are the greatest hurdles to start allocating for the digital assets sector.
• On March 1, reports emerged that Goldman Sachs is relaunching its cryptocurrency trading desk after a three-year hiatus and plans to once again support bitcoin futures trading, a source familiar with the matter confirmed to CoinDesk.

Read more: Gold and Bitcoin Won’t ‘Cannibalize’ Each Other: Goldman Sachs Analysts

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A Swedish man has pled guilty to charges of securities fraud, wire fraud and money laundering that defrauded upwards of 3,500 victims of more than $16 million in crypto.

• Roger Nils-Jones Karlsson, 45, communicated with his victims encouraging their investment in various fictitious schemes, according to an announcement by the Department of Justice Thursday.
• Karlsson directed his victims to make their investments using cryptocurrencies such as bitcoin and has admitted to defrauding no fewer than 3,575 victims of more than $16 million between November 2012 and June 2019.
• Operating under several aliases, Karlsson used the website of his company Eastern Metal Securities to advertise investment in a “Pre Funded Reversed Pension Plan” at $98 per share where investors would receive payout of 1.15 kg of gold per share.
• Karlsson’s arrest in Thailand in June 2019 was followed by his extradition to the United States and his indictment the following month.
• The charges of fraud and money laundering each carry a maximum penalty of 20 years imprisonment and fines of up to $250,000 and $500,000 respectively.

See also: Crypto Crime Siphoned Off Nearly $10.5B in 2020: Research

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• Market Wrap: Bitcoin Falls to $48K as Fed’s Powell Makes No New Promises; Ether Drops

THE TAKEAWAY:

• Bitcoin (BTC) trading around $48,204 as of 21:15 UTC (4:15 p.m. ET). Declining 4.5% over the previous 24 hours.
• Bitcoin’s 24-hour range: $47,578-$51,781 (CoinDesk 20)

Bitcoin’s price fell by the most in a week after U.S. Federal Reserve Chair Jerome Powell acknowledged he “would be concerned” by tightening financial conditions because rising U.S. government-bond yields put upward pressure on borrowing costs.

The comments might signal more hesitation in providing fresh monetary stimulus. Bitcoin prices quadrupled last year and have rallied 66% this year on speculation the cryptocurrency could serve as an inflation hedge in the face of trillions of dollars of money printing by central banks around the world.

Related: Kaiko Research: Monthly Market Report February 2021

As of press time, bitcoin was changing hands around $48,204, down about 4.5% over the past 24 hours.

Powell said in a question-and-answer session with the Wall Street Journal he doesn’t expect higher inflation to persist and that the central bank is still “a long way from our goals” of an economic recovery and lower unemployment.

The yield on the 10-year U.S. Treasury note climbed on Thursday above 1.5% as disappointment spread among some traders in traditional markets who had bet the Fed might provide specifics on how to tamp down long-term interest rates, according to Bloomberg News.

For bitcoin traders who have been betting the cryptocurrency’s price is a good hedge against potential currency debasement, Powell’s comments offered few signs the Fed plans new dovish actions. Such moves might include expanding the U.S. central bank’s $120 billion-a-month bond-purchasing program.

Related: CoinDesk Report: The Investment Case for Crypto

“Powell did not deliver,” the cryptocurrency trader Alex Kruger tweeted. “Basically repeated his usual dovish lines.”

Stocks were lower on Thursday, also potentially reflecting dimmed expectations of more stimulus that might boost the equities market.

Ether falls with bitcoin

Ether (ETH), the second-largest cryptocurrency by market value, fell by 2.5% to $1,528.

For the past week, prices have remained in a narrow range between roughly $1,420 and $1,570.

The cryptocurrency is still well off its all-time-high price around $2,036.

Other markets

Digital assets on the CoinDesk 20 are mostly green Tuesday. Notable winners as of 21:15 UTC (4:15 p.m. ET):

• XRP (XRP) + 4.8%
• kyber network (KNC) + 4.0%

Notable losers:

• cosmos (ATOM) + 9.9%
• cardano (ADA) + 9.7%

Equities:

• S&P 500 -1.3%
• FTSE 100 -0.4%
• Nikkei 225 -2.1%

Bonds:

• U.S. Treasury 10-year yield +0.054 percentage point to 1.55%

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A federal district court in California dismissed claims that Nvidia misled investors about revenue from cryptocurrency mining.

• Some Nvidia investors alleged the graphics processing unit company’s statements were false or misleading regarding how much revenue growth was due to sales related to cryptocurrency mining.
• The three-year-old lawsuit claimed Nvidia misrepresented $1 billion in revenue from sales to cryptocurrency miners.
• But the federal district court ruled insufficient proof was offered to show the company misled investors. According to court documents, the court said the “allegations do not plausibly suggest that Defendants acted with at least deliberate or conscious recklessness.”
• The court dismissed the case given the insufficient proof even after investors were previously given opportunity to add additional evidence of misleading or false statements.
• “Plaintiffs largely reiterate their previous arguments,” the court said. “The Court’s previous ruling – that it is not sufficient to allege that gaming was Defendants’ core business – stands.”
• In its Q4 earnings, Nvidia attributed 2%-6% of its quarterly revenue to cryptocurrency miners, per CoinDesk reporting, which it called a “relatively small portion” of its total $5 billion in revenue.

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Bitcoin’s price fell by the most in a week after Federal Reserve Chair Jerome Powell acknowledged he “would be concerned” by tightening financial conditions, as rising U.S. government-bond yields put upward pressure on borrowing costs.

The comments might signal more hesitation in providing fresh monetary stimulus. Bitcoin prices quadrupled last year and have rallied 66% this year on speculation the cryptocurrency could serve as an inflation hedge in the face of trillions of dollars of money printing by central banks around the world.

As of press time, bitcoin was changing hands around $48,336, down about 4% on the day.

Related: Nvidia Defeats Lawsuit Over Alleged Misrepresentation of Revenue From Crypto Miners

Powell said in a question-and-answer session with the Wall Street Journal he doesn’t expect higher inflation to persist and that the central bank is still “a long way from our goals” of an economic recovery and lower unemployment.

The yield on 10-year U.S. Treasury note climbed on Thursday above 1.5%, as disappointment spread among some traders in traditional markets who had bet the Fed might provide specifics on how to tamp down long-term interest rates, according to Bloomberg News.

For bitcoin traders who have been betting the cryptocurrency’s price is a good hedge against potential currency debasement, Powell’s comments offered few signs the Fed plans new dovish actions. Such moves might include expanding the U.S. central bank’s $120 billion-a-month bond-purchasing program.

“Powell did not deliver,” the cryptocurrency trader Alex Kruger tweeted. “Basically repeated his usual dovish lines.”

Related: Dapps Don’t Care About Your Feelings

Stocks were lower on Thursday, also potentially reflecting dimmed expectations of more stimulus that might boost the equities market.

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The security committee for Kava Labs, the company behind a new-generation DeFi platform, has halted the chain to address an inflation bug that over distributes yield farming rewards in its latest release.

• Kava 5, the software version containing the bug, was released this week.
• The platform’s safety committee shut down the Kava-5 chain at block 459. Kava Labs is planning to replay the state and determine the source of the error. 
• “User funds are not affected. A fix is currently being worked on. Will update shortly” a Kava Labs tweet reads.
• According to Messari, the “high severity bug” was paying out liquidity providers on the platform “well above expected values.”
• These specific payouts are timelocked, the post explains, so they could not be sent to exchanges, just claimed by their users.
• A patch is forthcoming.
• Kava is a blockchain built on the Tendermint consensus algorithm and is also a participant in the Cosmos blockchain interoperability project.
• The Binance-backed chain went live last year and offers yield farming applications similar to those found in Ethereum’s DeFi ecosystem.
  

Kava Labs has not yet responded to CoinDesk’s request for comment.

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Cryptocurrencies are currently in their biggest bull market in history

Anyone who has been following the crypto market over the last year or so would have definitely come across the term decentralized finance (or ‘DeFi’ for short). But what does the concept really entail?

Dogecoin (DOGE), the Shiba Inu-represented cryptocurrency, is heading to the National Basketball Association.

• The Dallas Mavericks will soon be accepting the meme-based cryptocurrency as part of an agreement with crypto payment services provider BitPay, which is rolling out the coin as a payment option for merchants and consumers.
• It’s the second big piece of news for the canine cryptocurrency this week. On Tuesday, ATM provider CoinFlip announced DOGE can now be purchased with cash across its 1,800-machine network.
• And while one would be forgiven for thinking the deal might not be as big a deal for the Mavericks, which began accepting bitcoin as a method of payment for almost two years, you wouldn’t know it from the tone of the announcement:
• “The Mavericks have decided to accept dogecoin as payment for Mavs tickets and merchandise for one very important, earth-shattering reason: Because we can!” Mark Cuban, the team’s billionaire owner, barked in the press release.
• It’s not Cuban’s first DOGE show, either. Early last month, Cuban tweeted he’d bought some DOGE in order for his son to teach him about the crypto markets.
• “For those of you who would like to learn more about dogecoin we strongly encourage you to talk to your teenagers who are on TikTok and ask them about it. They will be able to explain it all to you,” Cuban said.
• That BitPay, the largest provider of crypto payment services in the world, is now offering it as a form of payment continues the remarkable resurgence of DOGE, which had basically played dead for all of 2020, trading at times for less than half a cent.
• In just a few short months, the meme-based crypto has gone from mutt to best in show.
• The interest in the cryptocurrency began when people ranging from Tesla CEO Elon Musk to Snoop Dogg adopted DOGE as a pet cause.
• Soon the coin captured the imagination of the crypto-buying public and occasionally has surpassed vastly larger bitcoin as the most mentioned cryptocurrency on Twitter.
• Year to date, DOGE has risen about 1,000%, trading about five cents at press time and now has a market cap of more than $6 billion. Earlier in the year, it was above $10 billion.
• Overall, it’s been quite the tale and judging by the day’s BitPay news, DOGE still may have a ways to run.

UPDATE (March 4, 22:40 UTC): Adds context of ATM agreement.

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Dogecoin (DOGE), the Shiba Inu-represented cryptocurrency, is heading to the National Basketball Association.

• The Dallas Mavericks, will soon be accepting the meme-based cryptocurrency as part of an agreement with crypto payment services provider BitPay, which is rolling out the coin as a payment option for merchants and consumers.
• The Mavs are no stranger to crypto, having accepted bitcoin as a method of payment for almost two years.
• “The Mavericks have decided to accept Dogecoin as payment for Mavs tickets and merchandise for one very important, earth shattering reason, because we can!” Mark Cuban, the team’s billionaire owner, barked in a press release.
• It’s not Cuban’s first DOGE show. Early last month, Cuban tweeted he’d bought some DOGE for his son to teach him about the markets.
• “For those of you who would like to learn more about Dogecoin we strongly encourage you to talk to your teenagers who are on TikTok and ask them about it. They will be able to explain it all to you,” Cuban said.
• That BitPay, the largest provider of crypto payment services in the world, is now offering it as a form of payment continues the remarkable recent rise of DOGE, which had basically played dead for all of 2020, trading at times for less than half a cent.
• In just a few short months, however, the meme-based crypto has gone from mutt to best in show.
• The interest in the cryptocurrency began when people ranging from Tesla CEO Elon Musk to Snoop Dogg adopted DOGE as a pet cause.
• Soon the coin captured the imagination of the crypto-buying public and occasionally has surpassed vastly larger bitcoin as the most mentioned cryptocurrency on Twitter.
• Year to date, DOGE has risen about 1,000%, trading about five cents at press time and now has a market cap of more than $6 billion. Earlier in the year, it was above $10 billion.
• Overall, it’s been quite the tale and judging by the day’s BitPay news, DOGE still may have a ways to run.

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• Dapps Don’t Care About Your Feelings
• Bitcoin Isn’t Acting Like Stocks, Stocks Are Acting Like Bitcoin
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Freshman U.S. Senator Cynthia Lummis (R-Wyo.) called President Joe Biden the “legitimate U.S. president” on CoinDesk TV’s “First Mover” program Thursday morning.

• While Lummis acknowledged Biden’s electoral college victory in December, Thursday’s statement seems to be her most forceful acknowledgement that he is the legitimate U.S. president.
• Lummis was among the eight Senate Republicans who voted on Jan. 6 to overturn President Biden’s election victory.
• At the time, she framed her dissent as taking a stance against alleged irregularities in Pennsylvania’s election administration.

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OKCoin’s support for Bitcoin’s Lightning Network is officially live, and the exchange is christening the integration by giving a developer grant to one of Bitcoin’s most active Lightning contributors.

The exchange’s users can now deposit and withdraw bitcoin using the Lightning Network, a network which operates independently from Bitcoin’s mainnet to facilitate instant, low-fee transactions.

OKCoin announced their plans to integrate the scaling solution at the end of January, citing a need to offer users a lower cost option for moving bitcoin in the face of rising on-chain fees.

Related: NFTs, DAOs and the New Creator Economy

“From the business side of things, we’ll be focusing on working with different partners in the space to bring Lightning Network utility to our customers,” Hong Fang, CEO of OKCoin, told CoinDesk, adding that the next step is to open up enough channels with other well-connect Lightning service providers to amp up the exchange’s Lightning liquidity.

OKCoin’s Bitcoin developer grant

Fang told CoinDesk that the developer grant to Antoine Riard is “very much in line with what we’ve been doing with previous grants.”

Riard is a prolific Lightning developer whose current work focuses on security and designing Lightning developer tools. The undisclosed sum is intended to support his work for 12 months.

OKCoin chose to sponsor Riard’s work because they believe that the Lightning Network’s security still requires some tender-love-and-care, something he is focusing on. Riard told CoinDesk that he will work on fixes to vulnerabilities that affect payment channel closes and other attack vectors, as well as conducting new research on Lightning Network fault tolerance and fine tuning his Lightning development software kit. 

Related: Senator Lummis Calls Biden ‘Legitimate’ US President

“We wanted to sponsor a lightning network, on one hand because we are supporting the network, but on the other because Lightning is advanced but it still needs a lot of development. Security questions have been raised and Antoine is one of the developers who is working on this full time,” Fang told CoinDesk.

For later grants, Fang told CoinDesk that the exchange will likely look outside technical development and put money into research and new user onboarding. 

The proliferation of Bitcoin-related grants has risen in step with bitcoin’s bull market, and more of the donors behind these grants have turned attention to research and education rather than than solely to technical development.

Just this week, the Human Rights Foundation split $70k among four recipients. One of these went to independent reporter Janine for her privacy-focused newsletter, while another went to the Blockchain Commons for an activist internship.

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Brian Armstrong of Coinbase, Sam Bankman-Fried of FTX and Zhao Changpeng of Binance have topped a Chinese ranking of blockchain billionaires.

According to Hurun Report’s 2020 Global Rich List, released Tuesday, there are 17 blockchain billionaires – individuals whose wealth is predominantly derived from cryptocurrency exchanges, investors or miners – 11 of whom were new additions in 2020.

Brian Armstrong CEO of Coinbase heads the list with a stated net worth of $11.5 billion ahead of the crypto exchange’s public listing expected to be valued at $100 billion.

Related: Bitcoin News Roundup for March 4, 2021

CEO of FTX Sam Bankman-Fried ($10 billion), and CEO of Binance Zhao Changpeng ($8 billion) follow in second and third places.

Other notable entries include the Winklevoss twins tied in seventh place ($2.8 billion) and Michael Saylor, co-founder of MicroStrategy, ($2.4 billion) who shares ninth place with Matthew Roszak, co-founder of Bloq.

Conspicuous by his absence, Bitcoin founder Satoshi Nakamoto ought to top the list with an estimated wealth of $50 billion, though cannot be included as his identity is not known, Hurun said.

This figure would in fact win Nakamoto a place in the top 25 of Hurun’s overall Rich List, headed by Tesla CEO and crypto tweeter Elon Musk ($197 billion), Amazon founder Jess Bezos ($189 billion) and LVMH CEO Bernard Arnault ($114 billion).

Related: OKCoin Toasts Its Bitcoin Lightning Network Launch With New Developer Grant

See also: Coinbase CEO Armstrong’s Net Worth Is Between $7B and $15B: Report

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Crypto insurance startup Unslashed Finance has raised a $2 million seed funding round, the company announced Thursday, including investment from Lemniscap, P2P Capital, Bitscale Capital and ChainLayer. 

Crypto asset insurance of one sort of another is a fast-growing space, with major insurance broker Aon announcing a pilot this week that looks at risks associated with the booming decentralized finance (DeFi) space. 

Launched in January 2021, Unslashed designs decentralized insurance products that players in the crypto industry can purchase to cover the various risks they might encounter. That could be a DeFi lending platform going bankrupt, for example, or cover against the penalties incurred if a set of nodes has unexpected downtime. It might also include more esoteric risks like stablecoins losing their peg, smart-contract oracle failures and so on. 

Related: Bitcoin News Roundup for March 4, 2021

Similar to some other decentralized insurance products, crypto holders or investors are invited to underwrite the risk by depositing capital and earning premiums. Currently, those investors can earn between 4% and 5% yield on the crypto they deposit with Unslashed. 

Policy mix

The startup’s first product, called the Spartan Bucket, comprises a diversified mix of crypto risks and therefore qualifies as “low risk,” according to Unslashed founder Marouane Hajji. The first bucket currently contains seven policies but will eventually house 24, at which time the yield will be between 15% and 20%, Hajji said.  

“We’re taking a lot of different policies, representing a lot of different risks that have low correlation or that are uncorrelated,” said Hajji. “A smart contract hack of Compound, for example, and the slashing event of Lido; those two risks are really uncorrelated.”

British Virgin Islands-based Unslashed’s insurance offering is entirely unregulated, like the blockchain platforms it covers. The policy guidelines are clearly set out, said Hajji, and there is a maximum amount of exposure that the capital suppliers can have for one policy.  

Related: OKCoin Toasts Its Bitcoin Lightning Network Launch With New Developer Grant

As it stands, Unslashed says it has sold over $400 million worth of cover and collected $90 million in capital deposits. The firm is yet to make any payouts. Hajji explained it does use a decentralized “court,” in the form of Kleros, an Ethereum-based dispute resolution system.  

In addition to selling staking cover to hosting service Lido, Unslashed says it has provided cover to crypto hedge funds such as Techemy Capital, to cover risks relating to DeFi stalwarts like Uniswap, Compound, ParaSwap and Kyber.

“This first structured insurance product is low risk and we are expected to pay out once every two or three years with this one,” Hajji said. “But we are going to have another one that is going to be way more risky. Obviously, the yield collateral suppliers are going to receive will be much higher.”

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