Amazon NFT Initiative Coming Soon (Blockworks)
"Amazon is launching a digital assets enterprise, according to four sources familiar with the matter, who said that an NFT initiative is expected in the spring. Amazon has been shopping the digital collectibles effort to no shortage of power players in the industry, per multiple sources. Said to be among those entities are layer-1 blockchains, blockchain-based gaming startups and developers and digital asset exchanges. There’s a focus on blockchain-based gaming and related NFT applications, two sources said. One example in the works, per one source: getting Amazon customers to play crypto games and claim free NFTs in the process."
SEC Bats Down Ark’s and 21SHARES’ Second Bitcoin ETF Proposal (The Block)
"The Securities and Exchange Commission has rejected a spot bitcoin exchange-traded fund proposed by ARK Investment Management and 21Shares. The decision marks the second time ARK and 21Shares have attempted to get the Cboe BZX Exchange off the ground, only to be denied by the commission. The SEC rejected the initial proposal from the companies to establish a bitcoin ETF last April. “The commission concludes that BZX has not met its burden under the Exchange Act,” the SEC said in a statement that echoed prior rulings."
U.S. Securities Regulator Probes Investment Advisers Over Crypto Custody (Reuters)
"The U.S. Securities and Exchange Commission is probing registered investment advisers over whether they are meeting rules around custody of client crypto assets, three sources with knowledge of the inquiry told Reuters. The SEC has been questioning advisers' efforts to follow the agency's rules around custody of clients' digital assets for several months, but the probe has gathered pace in the wake of the blow-up of crypto exchange FTX, the sources said. They spoke on condition of anonymity as the inquiries are not public."
Moody’s Is Working on Scoring System for Crypto Stablecoins (Bloomberg)
"Moody’s Corp. is working on a scoring system for stablecoins, the crypto sector’s most traded tokens, as the asset class grows and faces increased scrutiny from regulators and investors. The system will include an analysis of up to 20 stablecoins based on the quality of attestations on the reserves backing them, according to a person familiar with the plans who asked not to be named discussing private information."
FTX Seeks Permission to Subpoena Sam Bankman-Fried, Family and Insiders (The Block)
"FTX bankruptcy lawyers are seeking permission to subpoena former CEO Sam Bankman-Fried, his family and top lieutenants at the collapsed crypto exchange, according to new court documents. “Certain insiders are currently cooperating with the debtors to provide important information. But others are not, and thus authorization to issue subpoenas to those with the missing information is critical to the debtors’ and committee’s recovery efforts,” lawyers for the FTX debtors and the official creditors committee wrote in a joint motion."
Bitcoin Options Exchange Deribit Looks to Relocate to Dubai (Bloomberg)
"Deribit, the world’s biggest Bitcoin and Ether options exchange, is making plans to relocate to Dubai as soon as the third quarter if authorities in the crypto-friendly emirate provide more clarity on regulations. The trading platform, which has been based in Panama since 2020, is preparing to open a Dubai office with about 10 people, a mix of core employees and local hires, David Dohmen, chief legal compliance and regulatory officer at Deribit, said in an interview. Some employees will continue to be based in Panama. Deribit’s Netherlands-based parent company and related subsidiaries currently employ 95 people globally, roughly double year-ago levels."
Injective Launches $150M Ecosystem Fund to Accelerate Interoperable Infra and DeFi Adoption (TechCrunch)
"Injective, a layer-1 blockchain focused on building financial applications, has launched a $150 million fund ecosystem initiative, the platform’s CEO and co-founder, Eric Chen, told TechCrunch. “We’ve seen a lot of ecosystem funds in the past do various things, but there isn’t really an established ecosystem fund for Injective and Cosmos as a whole,” Chen said. “We call it a venture consortium because they can get investments from there or direct institutions.” Injective was incubated by Binance Labs in 2018 and later backed by Jump Crypto, Pantera Capital and billionaire entrepreneur Mark Cuban. In the third quarter of 2022, it raised an institutional funding round from Brevan Howard and Jump. Its ecosystem works with decentralized applications (dApps) such as Coinbase, Figment, Pyth and Wormhole, to name a few."
Binance USD Stablecoin Sees $2B Reduction in a Month Amid Token Mismanagement (CoinDesk)
"Crypto exchange giant Binance’s BUSD stablecoin has extended its recent declines, amid mismanagement issues involving the exchange’s pegged tokens that surfaced earlier this month, and other debacles. BUSD’s circulating supply fell to $15.4 billion on Wednesday, paring down $1 billion over the past week and $2 billion in a month, according to cryptocurrency price tracker CoinGecko. The latest drop extended BUSD’s decline from $22 billion in early December when anxious users scrambled to withdraw funds from Binance after it botched a report about its digital asset reserves."
Court Docs: FTX Debtors, Bahamian Liquidators Object to U.S. Trustee’s Examiner Request (The Block)
"Allowing an examiner to investigate the FTX bankruptcy would “come at an enormous cost” and “provide no benefit” to creditors, lawyers for the troubled crypto exchange said in a court filing. The U.S. Trustee overseeing the FTX case asked a Delaware bankruptcy court to allow the appointment of a third-party examiner to look into the finances of FTX and its family of companies. Judge John Dorsey will consider the motion at a hearing on Feb. 6."
Elizabeth Warren Rallies Crypto Critics to Defend the Sec’s Record Post-FTX (The Block)
"Sen. Elizabeth Warren, D-Mass., pushed for tighter regulation on the crypto industry on Wednesday in an event hosted by the American Economic Liberties Project called "Confronting the Crypto Challenge: Learning From a Meltdown." “The solution starts with the SEC," said Warren, D-Mass., in her keynote. "The SEC has a long history of fighting exactly the battles that we now face.” The event assembled a who's who of Washington, D.C.'s most notable crypto critics, ranging from legal scholars to progressive policy wonks."
Binance Acknowledges Storing User Funds With Collateral in Error (Bloomberg)
"Binance Holdings Ltd., the world’s largest crypto platform, acknowledged that it mistakenly keeps collateral for some of the tokens it issues in the same wallet as exchange-customer funds. Reserves for almost half of the 94 coins that Binance issues, known as Binance-peg tokens or ‘B-Tokens,’ are currently stored in a single wallet called ‘Binance 8’ which also holds customer assets, according to listings visible on its website on Monday. The wallet contains significantly more tokens in reserve than would be required for the amount of B-Tokens that Binance has issued, indicating that collateral is being mixed with customers’ coins rather than being stored separately, as has been done for other Binance-peg tokens according to the company’s own guidelines."
NYDFS Reminds Crypto Custodians of Laws Prohibiting Commingling of Funds (The Block)
"New York Department of Financial Services (NYDFS) Superintendent Adrienne Harris reminded licensed crypto custodians in the state of their fiduciary duty to ensure customer funds are not commingled with their own assets. Harris, a proponent of the state’s BitLicense regime, issued the reminder in a regulatory guidance statement published on Monday. The guidance covered consumer protection concerns in the event of insolvency for licensed crypto custodians in the state. Monday’s regulatory note reiterated the NYDFS stance against the commingling of funds by crypto custody firms."
Investment Manager Wilshire Teams Up With Crypto Trading Firm FalconX to Develop Digital Asset Indexes (CoinDesk)
"Crypto trading firm FalconX has tapped private investment management firm Wilshire to provide digital asset indexes for its institutional clients. The two firms will work together on a set of single-coin, multicoin and thematic indexes for institutional investors with access to the crypto derivatives market, Wilshire said Tuesday. Both FalconX and Wilshire say the ultimate value in digital assets will be as a gateway to the tokenization of other assets."
Crypto Infrastructure Firm Blockstream Raises $125 Million to Expand Mining Services (The Block)
"Bitcoin miner and hosting provider Blockstream raised $125 million in a convertible note and secured loan financing round. The company will use the money to expand its institutional bitcoin mining colocation services at a time when others in the industry are struggling to keep afloat due to a prolonged decline in mining economics. "Demand for Blockstream’s hosting services remains high due to the company’s strong track record and substantial scale, coupled with an industry-wide shortage of available power capacity," the company said in a statement."
Quicknode Reaches $800 Million Valuation in Series B Round (The Block)
"QuickNode, a web3 infrastructure firm that provides blockchain development tools, reached an $800 million valuation in a $60 million Series B round. Dan Tapiero's 10T Holdings led the round, with Alexis Ohanian's Seven Seven Six, Tiger Global, Protocol Labs, QED Investors and others participating, QuickNode announced Tuesday. As part of the deal, Tapiero is joining QuickNode's board of directors, Alex Nabutovsky, CEO and co-founder of QuickNode, told The Block in an interview."
Crypto Lender Genesis Seeks Creditor Deal in Days or Mediator (Bloomberg)
"Crypto lender Genesis Global Holdco LLC will either have a deal in days with creditors owed about $3 billion, or it will ask the judge overseeing its bankruptcy to appoint a mediator to lead negotiations, the company said in court Monday. The talks have included Barry Silbert’s Digital Currency Group, which is Genesis’ parent and one of the company’s top borrowers, company attorney Sean O’Neal said during a court hearing held by video. Genesis holds more than $1.65 billion in claims against DCG, O’Neal said."
IRS, SEC Added to List of Creditors in Genesis Bankruptcy Filing (The Block)
"The Internal Revenue Service, the Securities and Exchange Commission and the U.S. Attorney’s office for the Southern District of New York were among some of the creditors listed in a court document filed Monday. Genesis Global Holdco filed for bankruptcy protection last week in the U.S. Bankruptcy Court for the Southern District of New York. When it filed for bankruptcy, the firm said it had more than $150 million in cash on hand to provide “ample liquidity” to support its business operations and facilitate the restructuring process."
Bankrupt Lender BlockFi to Sell Bitcoin Mining Machine-Backed Loans (Bloomberg)
"Bankrupt crypto lender BlockFi Inc. plans to sell about $160 million of loans backed by around 68,000 Bitcoin mining machines, according to two people familiar with the matter. The Jersey City, New Jersey-based company, which filed for protection from creditors in November, started on the bidding process for the loans last year, the people said. Some of the loans have already defaulted and appear to be undercollateralized given the current prices of Bitcoin mining equipment, according to the people. BlockFi didn’t immediately return a message seeking comment."
FBI: North Korean Hackers Behind $100 Million Horizon Bridge Theft (CoinDesk)
"A pair of North Korean hacker groups were behind the June theft of $100 million in crypto assets from Horizon Bridge, the Federal Bureau of Investigation (FBI) said in a Monday statement. Horizon Bridge, a service enabling crypto assets to be traded between the Harmony blockchain and other blockchains, was drained of ether (ETH), tether (USDT) and wrapped bitcoin (wBTC). The FBI said that the hackers – “cyber actors associated with the [Democratic People's Republic of Korea]” – relied on a malware campaign known as “TraderTraitor” in the Harmony attack."
Gemini is Laying Off More Staff, Citing ‘Bad Actors’ in Crypto Industry (The Information)
"Gemini, the crypto startup whose customers have been caught up in the Genesis bankruptcy, is laying off 10% of staff, according to an internal message viewed by The Information. It’s at least the third round of cuts at Gemini in the past eight months. Gemini President Cameron Winklevoss informed staff, known internally as “Astronauts,” of the latest layoffs in a message on Slack on Monday."
Feds Seize Almost $700 Million of FTX Assets in Sam Bankman-Fried Criminal Case (CNBC)
"Federal prosecutors seized nearly $700 million in cash and assets connected to Sam Bankman-Fried, primarily in the form of Robinhood shares that were owned by the FTX founder, a court filing revealed Friday. John Ray, who replaced Bankman-Fried as CEO to guide FTX’s restructuring, is trying to rescue funds that were lost by the crypto company’s depositors when the firm spiraled into bankruptcy in November. Bankman-Fried was arrested on criminal fraud charges in December and is released on a $250 million bond as he awaits trial."
Binance Says Signature Sets Transaction Minimum Amid Pullback (Bloomberg)
"Binance, the world’s largest cryptocurrency exchange, said Signature Bank will only handle user transactions of more than $100,000 as the bank decreases its exposure to digital-asset markets. “One of our fiat banking partners, Signature Bank, has advised that it will no longer support any of its crypto exchange customers with buying and selling amounts of less than 100,000 USD as of February 1, 2023. This is the case for all of their crypto exchange clients. As a result, some individual users may not be able to use SWIFT bank transfers to buy or sell crypto with/for USD for amounts less than 100,000 USD,” Binance said in a statement sent to Bloomberg News on Saturday."
Sullivan & Cromwell Gets Go-Ahead to Represent FTX in Bankruptcy Proceedings, Despite Controversy (CoinDesk)
"A bankruptcy court judge in Delaware has given New York law firm Sullivan & Cromwell the green light to continue representing FTX during its bankruptcy proceedings. The decision, issued on Friday morning by Judge John T. Dorsey, comes despite recent controversy about the white-shoe law firm having potential conflicts of interest that critics say should disqualify Sullivan & Cromwell from acting as debtors’ counsel."
SEC Charges Avraham Eisenberg for $116 Million Mango Markets Exploit (The Block)
"The U.S. Securities and Exchange Commission charged Avraham Eisenberg, who is known as Mango Avi, with orchestrating an attack on Mango Markets and draining $116 million from the crypto trading platform. The SEC said Eisenberg manipulated the MNGO token, a governance token that the SEC said was offered and sold as a security. Eisenberg was arrested and detained in Puerto Rico and will be transported to appear before the Southern District of New York."
Binance-Backed Chinese News Outlet Marsbit Has Sights on Coindesk (The Block)
"Wang Feng, founder of Chinese crypto news outlet Marsbit, said Marsbit is willing to work with other companies to buy crypto news outlet CoinDesk. “I believe in the future of the crypto industry, and I'm willing to do infrastructure services in a down-to-earth manner, no matter if it's trading or media," Wang said on Twitter. "Element Finance subsidiary Marsbit is willing to organize many well-known funds to cooperate to buy Coindesk, including its crypto media and all its Consensus conference business.” He added that he would be interested to speak to any investment funds or companies interested in partnering on this."