Andreessen to Open London Office for Crypto Startups Amid Scrutiny in U.S. (WSJ)
Andreessen Horowitz is trying a new approach to crypto after a bruising year in the sector. The famed venture-capital firm, known for its investments in Skype and Coinbase, is opening its first international office in London in the fall to back crypto startups based in the U.K., bucking a broader retrenchment taking place across the volatile sector. Andreessen crypto general partner Chris Dixon said the regulatory landscape in the country promises a clearer path for crypto companies than in the U.S., where government agencies including the Securities and Exchange Commission have ratcheted up investigations into some of the firm’s largest portfolio companies and taken a tougher public stance against the industry.
BlackRock's iShares Files Paperwork for Spot Bitcoin ETF (CoinDesk)
The iShares unit of fund management giant BlackRock (BLK) filed paperwork Thursday afternoon with the U.S. Securities and Exchange Commission (SEC) for the formation of a spot bitcoin (BTC) ETF. To be named the iShares Bitcoin Trust, the fund's assets are to "consist primarily of bitcoin held by a custodian on behalf of the Trust," according to the filing. That custodian will by crypto exchange Coinbase (COIN), said the filing. CoinDesk earlier on Thursday reported on BlackRock's intention to soon file for a bitcoin ETF.
Tether Says New York Handed Over Financial Documents to CoinDesk (The Block)
Stablecoin issuer Tether said Thursday that New York's Attorney General has provided information about the company's business that was gathered in the course of a 2021 settlement with the state to crypto media publication CoinDesk. In February 2021, the NYAG agreed with Tether to cease activity with those living in New York and pay $18.5 million in fines. The investigation found that Tether at times lacked banking access and that its stablecoin was not always backed 1:1 with cash.
Abra Accused in Texas of Securities Fraud, Misleading Investors (Bloomberg)
Crypto trading platform Abra was accused of securities fraud by a Texas regulator that filed an emergency cease and desist order against the company and Chief Executive Officer Bill Barhydt. The Texas State Securities Board alleged that Abra misled investors through sales of its Abra Earn and Abra Boost crypto interest accounts, according to a filing Thursday. The regulator said the company secretly transferred assets to Binance Holdings Ltd., which was sued last week by the US Securities and Exchange Commission and accused of running an unregistered crypto exchange.
Blockchain Association Wants to Know More About Sec’s Interactions With Prometheum (The Block)
The Blockchain Association said Thursday that it filed a Freedom of Information Act request with the U.S. Securities and Exchange Commission, soliciting details about the regulator's interactions with a little-known crypto exchange called Prometheum amid a flurry of speculation on Crypto Twitter. "This whole story — Prometheum's ATS, its CEO's testimony in Congress — makes no sense," Blockchain Association chief policy officer Jake Chervinsky said on Twitter. "Something fishy is going on here."
Coinbase Spends $45.5 Million to Buy Back Some of Its Debt (The Block)
Coinbase has reduced its debt through a recent debt repurchasing. The firm bought back $64.5 million worth of their Convertible Senior Notes, a type of debt that can be exchanged into a set amount of the issuer's shares, at a 29% discount, according to a company release. These notes were originally due in 2026. The firm spent around $45.5 million in cash for the repurchase, which constituted 0.5% of the notes. Coinbase expects the repurchase to close on or near June 20, 2023, in which the company will have about a $1.37 billion principal amount on outstanding notes.
SEC Wants Four Months to Potentially Respond to Coinbase’s Request for Rulemaking (The Block)
The US Securities and Exchange Commission (SEC) said it anticipates it will take 120 days to potentially respond to Coinbase's request for rulemaking on digital asset trading. The agency said it has not decided whether it will respond to the exchange's request and downplayed its demand for a faster response, claiming it might be due to the "weakness" of its claim. In a document filed in the United States Court of Appeals for the Third Circuit, it maintained that the petition should be denied.
Two Crypto Platforms Halt Withdrawals in an Echo of the Sector’s 2022 Woes (Bloomberg)
Two South Korea-linked crypto platforms halted withdrawals in the space of 24 hours, a reminder of the ongoing risks in the digital-asset sector following a spate of blowups sparked by a market rout last year. One of them, Delio, said the temporary suspension took effect on Wednesday and blamed 'market volatility and increased confusion' triggered by the suspension of withdrawals and deposits at the other outfit, Haru Invest.
Tether De-pegs as Curve 3POOL Becomes Imbalanced (The Block)
Tether's stablecoin, USDT, has de-pegged slightly as Curve's 3Pool — one of the top pools for stablecoin trading in decentralized finance — became heavily imbalanced. The ideal balance of the Curve 3Pool should be 33.33% for each of its three stablecoins — USDT, USDC and DAI — but USDT's balance has increased to over 70%. That means traders are selling a lot of USDT for DAI or USDC, which has led to USDT de-pegging to $0.997.
Gauntlet Advises Aave Community to Freeze CRV Tokens in Response to Loan by Curve Finance Founder (The Block)
Gauntlet, a project specializing in DeFi risk management, issued guidance to the governing body of the lending platform, Aave. It proposed to "freeze" Curve DAO tokens on Aave v2 and adjusting the loan-to-value ratio for CRV to zero. The recommendation was made in response to a large CRV loan taken by a wallet address tied to Michael Egorov, the founder of Curve Finance. Gauntlet serves as a contributor to Aave, focusing on strengthening the security of the platform.
Binance Emergency Fund Dwindles as SEC Takes Aim at the Crypto Exchange (WSJ)
Binance, the world’s largest crypto exchange, set up an emergency fund in 2018 to reassure customers their digital assets would be safe. Now that federal regulators have zeroed in on Binance, its rainy day fund has fallen in value by 11%. The fund was valued at nearly $950 million at the start of the month, according to blockchain addresses that Binance says hold the assets. After the Securities and Exchange Commission sued Binance last week, it fell to some $840 million. The fund—dubbed the secure asset fund for users, or SAFU for short—is meant to cover losses from hacks or other compromises of Binance’s systems. Changpeng Zhao, Binance’s founder, has also mentioned it in times of stress to give comfort to users, including when rival FTX collapsed. It holds a combination of bitcoin, dollar-pegged cryptocurrencies and a coin created by Binance, BNB.
Why Binance Tells Staff Not to Talk About Its Offices (The Block)
Binance, which at at one time boasted more than 8,000 employees, describes itself as a “remote-first” company. But it has offices dotted all over the world — and a policy that forbids staff from talking about them. The crypto exchange operator, which is currently embroiled in a battle with regulators in the U.S., has penned blog posts about its setup ever since the outbreak of the Covid-19 pandemic in 2020. The company said at the time that remote work has been the reality for “most of its journey.”
Binance.US, SEC Working on Deal to Avoid Full Asset Freeze (Bloomberg)
Binance.US and the Securities and Exchange Commission agreed to work on a deal that avoids a total asset freeze at the cryptocurrency trading platform, which the regulator has accused of operating illegally. US District Judge Amy Berman Jackson said Tuesday the two sides ‘aren’t that far apart’ on ways to protect billions of dollars in customer funds without shutting the exchange down while the SEC’s lawsuit proceeds. She referred them to a magistrate judge to work on a compromise agreement.
Prime Trust Unit Banq Files for Bankruptcy (CoinDesk)
Banq, a subsidiary of embattled crypto custodian Prime Trust, has filed for bankruptcy in a U.S. bankruptcy court in the district of Nevada. In the bankruptcy filing, the company cited approximately $17.72 million in assets against $5.4 million in liabilities. This comes as Banq’s parent, Prime Trust, works to close an acquisition deal with BitGo after facing a financial crisis as a result of the Celsius bankruptcy. Meanwhile, TrueUSD, which has a banking relationship with Banq’s parent Prime Trust, said that its pause in stablecoin mints and redemptions has to do with “Prime Trust's bandwidth issues”.
North Korea’s Lazarus Group Reemerges With New $100 Million Crypto Hack (The Block)
Blockchain forensics firm Elliptic said Tuesday that losses suffered by Atomic Wallet users from an apparent hack have risen to more than $100 million. The wallet provider on June 3 acknowledged receiving reports that some wallets had been compromised and said less than 1% of its active users had been affected. It has yet to provide an additional update. Elliptic, which tracked over 5,500 wallets believed to have been targeted in the attack, said that the North Korean hacking association Lazarus Group was responsible in what would be its first major crypto theft since the $100 million exploit of the Horizon Bridge a year ago.
Uniswap Labs Releases Draft Code for ‘Entirely New’ Version of Uniswap (The Block)
Uniswap Labs released draft code for V4, a brand new version of the protocol with architecture that will allow for much more customization. The new design will be more efficient, with initial results suggesting it will reduce the cost of creating pools by 99%. It will also let developers choose their own tradeoffs, allowing them to build minimalistic pools that are cheaper to use. But the biggest change is that it creates a much broader playing ground for developers to build their own pools with their rules — potentially leading to much more experimentation.
Apple Will Remove Damus App Unless It Drops Bitcoin Tipping Feature (The Block)
Apple has warned the creators of the decentralized social media app Damus that it will remove the app from its platform if it doesn't issue an update to stay compliant with its policies. "To ensure there is no interruption of the availability of your app on the App Store, please submit an update within 14 days of the date of this message," Apple told Damus, according to a tweet by the project today. "If we do not receive an update compliant with the App Store Review Guidelines within 14 days, your app will be removed from sale."
Tether Mints 1 Billion of USDT on Ethereum to Support Chain Swaps (The Block)
Tether, the largest stablecoin issuer, has minted 1 billion USDT tokens on the Ethereum blockchain as part of its "inventory replenish." While some perceive the minting of new USDT as a catalyst for increased crypto demand, Tether CTO Paolo Ardoino told The Block that new USDT tokens are minted to support chain swap functions.
How Are Stablecoins Faring? These Charts Will Tell You (WSJ)
Prices of bitcoin and other major cryptocurrencies are rebounding this year, thanks in part to investors’ increased risk appetite. Things get more complicated when it comes to stablecoins. They are a type of cryptocurrency and, as their name suggests, their price is supposed to stay steady, often at $1. Crypto traders use them to store value on crypto trading platforms while they buy and sell more volatile cryptocurrencies. It doesn’t always work that way. Major stablecoins have slipped off their dollar pegs over the past year or two, and some have collapsed completely. USD Coin, issued by Circle Internet Financial, briefly slipped below the dollar after the March collapse of one of its bankers, Silicon Valley Bank.
Republican Lawmakers Take Shot at SEC’s Gensler With Proposal to Oust Him (The Block)
Republican lawmakers took a shot at the U.S. Securities and Exchange Commission Chair Gary Gensler on Monday, announcing proposed legislation that would seek to remove him. But they'd need bi-partisan support for it to pass the Senate. House Majority Whip Tom Emmer, R-Minn., a longtime proponent of digital assets, joined the introduction of Rep. Warren Davidson's so-called "SEC Stabilization Act" that aims to restructure the Securities and Exchange Commission and remove Gary Gensler as Chair.
Cardano Developer IOG Restructures to Venture Studio Model, Lays Off Some Staff (CoinDesk)
Cardano developer Input Output Global (IOG) has laid off an unspecified number of employees as the company restructures into a “venture studio” with a smaller core business model, IOG and Cardano co-founder Charles Hoskinson told CoinDesk. “IOG has been restructuring into a venture studio where its core is smaller and it has many spin-offs,” Hoskinson said. He added, “As we move into this new business model, we’ve consolidated and eliminated groups that are redundant or not relevant to the new model.” The new venture studio model will have a number of spinoffs, including a wallet division, Lace; an identity framework, Prism; and Cardano-related infrastructures.
Blockchain-Based Marketplace for Compute Power Gensyn Raises $43 Million (The Block)
London-based Gensyn, a blockchain-based marketplace protocol connecting buyers and sellers of compute power, today announced a $43 million Series A fundraise. A16z Crypto led the round, alongside CoinFund, Canonical Crypto, Protocol Labs, Eden Block, Maven 11 and various angel investors. No valuation was disclosed. The backdrop to the mammoth Series A raise, as pointed out in a press release, is the AI boom driven by ChaptGPT’s success and the subsequent spike in demand it has driven for GPUs, the compute processors that enable such systems to absorb information.
SEC Clampdown Spurs $4B Deposit Flight From Binance, Coinbase and Binance.US (CoinDesk)
U.S. Securities and Exchange Commission (SEC) lawsuits against Binance, Binance.US and Coinbase have spurred the exodus of some $4 billion of deposits from the crypto exchange giants, according to blockchain data. The three exchanges suffered a combined net outflow of $3.1 billion via the Ethereum network and $864 million in bitcoin (BTC) between Monday and Thursday, data from blockchain analytics firms Nansen and Glassnode shows. Net outflow means withdrawals outpaced incoming deposits. The exchanges processed withdrawals in an orderly fashion through the week.
CFTC Wins Lawsuit Against Ooki DAO (CoinDesk)
A federal judge has sided with the U.S. Commodity Futures Trading Commission (CFTC) in a lawsuit alleging decentralized autonomous organization (DAO) Ooki DAO offered unregistered commodities, quashing an industry-wide perception that decentralized finance (DeFi) actors are immune to regulatory scrutiny. U.S. District Judge William H. Orrick ruled on Thursday that Ooki DAO operated an illegal trading platform and unlawfully acted as an unregistered futures commission merchant (FCM), granting the CFTC a default judgment. He ordered the organization to pay $643,542 in penalty, to permanently cease its operations and shut down its website.
Elizabeth Warren Wants Another DOJ Investigation Into Binance, Binance US (Decrypt)
Senators Elizabeth Warren (D-MA) and Chris Van Hollen (D-MD) have sent a letter to U.S. Attorney General Merrick Garland to ask that the Department of Justice (DOJ) investigate Binance for allegedly lying to lawmakers. The letter claims that Binance and Binance.US “may have also made a series of false statements to Congress” by saying they were separate entities and that Binance.US prioritized regulatory compliance. Both senators urged the DOJ to conduct a “rapid and thorough” investigation on the matter.
Turkish Investors Looking for Haven Turn to Stablecoin Tether (Bloomberg)
People in Turkey are running to the crypto market as a haven against the collapsing lira currency. Local demand for Tether, a dollar-backed stablecoin, surged in early May ahead of elections and has remained high since a win for President Recep Tayyip Erdogan rattled markets. While there’s been a global crackdown on the asset class and falling prices for the biggest tokens, the lira has fared even worse, breaching historic lows in recent days.