Robinhood announces new COO to lead crypto trading desk

With the company’s crypto business expanding significantly, Robinhood has appointed a chief operating officer to lead its cryptocurrency operations.

Retail trading app Robinhood has appointed Christine Brown as the chief operating officer of its crypto division.

The company announced the appointment a statement on its website on Thursday. Brown, who is the current vice president of operations at Robinhood Markets, will now also oversee Robinhood Crypto following the appointment.

Commenting on her new role, Brown expressed excitement at pivoting from traditional finance to the crypto space. “I couldn’t be more excited to lead our crypto operations, help our teams build amazing products, and deliver a great experience for our customers,” the exec added.

According to the announcement, Brown’s appointment will help accelerate the growth of Robinhood Crypto. As previously reported by Cointelegraph, over 6 million new customers bought crypto on the platform within the first two months of 2021 — more than 15 times the 2020 average.

By the end of Q1 2021, Robinhood revealed that 9.5 million customers traded crypto on its platform. This figure marks a 500% increase in the figures recorded for Q4 2020.

Indeed, Robinhood says its crypto business has grown three-fold in 2021 with CEO Vlad Tenev stating plans for further expansions back in March. At the time, Tenev also expressed plans to add more trading pairs as well as the possibility of creating a cryptocurrency wallet.

Presently, the retail trading app lists Bitcoin (BTC), Ether (ETH), Litecoin (LTC), Bitcoin Cash (BCH), Bitcoin SV (BSV), Dogecoin (DOGE) and Ethereum Classic (ETC) on its crypto trading catalog.

Robinhood’s crypto business growth has come amid an apparent wave of interest in financial literacy. Trading apps offered by Robinhood and American exchange giant Coinbase are seeing more downloads on smartphone app stores than popular social media platforms like TikTok.

Seoul government seizes $22M worth of crypto from tax evaders

The City of Seoul becomes the first city in South Korea to confiscate cryptocurrencies owned by tax delinquents.

The city government of South Korea’s capital Seoul has announced the seizure of cryptocurrencies worth 25 billion won ($22 million) from individuals and company heads.

According to a report by The Korea Times, the confiscated crypto came from people identified as tax delinquents by the city’s tax collection agency.

As part of the investigation, the Seoul office of the National Tax Service identified 1,566 individuals and company heads with overdue taxes. The NTS office in Seoul then proceeded to seize $22 million in virtual currencies held by 676 of them in three crypto exchanges.

With mandatory real-name crypto trading in South Korea, government agencies can requisition customer trading details from cryptocurrency exchanges. Businesses also have to comply with strict crypto transaction reporting requirements or see their executives face jail time.

According to the NTS, the 676 individuals owed about $25 million in taxes and that since the seizure, 118 of them have remitted over $1 million to the government.

In a statement quoted by The Korea Times, the city government revealed that the tax delinquents have urged the government not to liquidate the confiscated crypto, adding:

“We believe the taxpayers expect the value of their cryptocurrencies to increase further due to the recent spike in the price of cryptocurrencies and have determined they will gain more from paying their delinquent taxes and having the seizure released.”

Bitcoin (BTC) accounted for 19%, the largest proportion of the $22 million in crypto seized by the government. Other popular tokens include DragonVein and XRP at 16% each with Ether (ETH) constituting a tenth of the total sum of the confiscated virtual currencies.

As previously reported by Cointelegraph, the NTS had revealed plans to deepen its probe on individuals and corporations looking to evade taxes by hiding their assets in crypto. At the time, the tax agency stated that it would target people with over $8,800 in tax defaults.

Meanwhile, South Korea’s cryptocurrency tax law is set to come into effect in January 2022. The tax regime will see a 20% levy on crypto trading capital gains above $2,300.

Another UK bank serves anti-crypto notice to customers

U.K. commercial bank NatWest says it does not want to do business with clients and customers who deal in crypto.

Corporate clients of NatWest may soon lose their banking relationship with the United Kingdom-based lender amid recent negative cryptocurrency-related policy statements.

According to a report by The Guardian, Morten Friis, the head of the bank’s risk committee, has revealed that NatWest will refuse service to business customers that accept cryptocurrency payments.

Friis made the bank’s position known during Wednesday’s shareholder event, stating:

“We have no appetite for dealing with customers, whether taking them on as new clients or having an ongoing relationship with people, whose main business is backed by an exchange for cryptocurrencies, or otherwise transacting in cryptocurrencies as their main activity.”

Friis’ comments echo similar sentiments recently attributed to HSBC, another U.K. bank, that used identical statements in announcing its decision to bar customers from buying MicroStrategy stock. HSBC’s anti-crypto stance also saw the bank refuse to allow account holders to deposit profits from cryptocurrency exchanges earlier in the year.

According to Friis, the bank’s decision is borne out of the need to proceed cautiously with cryptocurrencies, given the emerging nature of the industry’s regulatory landscape. The NatWest board member added that the bank will continue to monitor the evolution of cryptocurrency regulations from the U.K. Financial Conduct Authority.

Back in March, the FCA mandated all U.K. crypto firms to begin submitting yearly financial crimes reports.

Meanwhile, the NatWest executive’s comments could have significant implications for corporate clients like WeWork and Tesla that have announced plans to accept crypto payments.

In addition to withholding banking services to corporate clients involved in crypto, Friis also stated that NatWest will increase its financial crimes scrutiny for personal account holders dealing in cryptocurrencies.

Friis pointed to the money laundering and illicit financial activities as justification for its increased security checks on individual clients engaging in crypto activities.

However, numerous studies notably show that criminal activities only constitute a minute proportion of global cryptocurrency commerce.

Congress passes digital asset innovation act to clarify crypto regulations

U.S. financial regulators will now work together to create modalities for clear-cut crypto regulations in America.

The U.S. House of Representatives on Tuesday passed H.R. 1602 — the Eliminate Barriers to Innovation Act — introduced by Congressman Patrick McHenry (R-NC).

H.R. 1602 was among six bipartisan financial services-related bills passed by Congress on Tuesday with the McHenry-sponsored legislation focusing on regulatory clarity for cryptocurrencies.

Introduced back in March, the bill seeks to clarify the roles of agencies like the Securities and Exchange Commission and the Commodity Futures Trading Commission in the policing of cryptocurrencies in the U.S.

The bill also seeks to answer the ongoing debate of whether crypto tokens are securities or commodities.

Addressing the floor of the House during the passage of the bill, Representative McHenry remarked:

“[This bill] requires the Securities and Exchange Commission and the Commodity Futures Trading Commission to establish a working group focused on digital assets. This is the first step in opening up the dialogue between our regulators and market participants and move to needed clarity.”

Following the approval of the bill, Congress now has 90 days to establish the working group among participants from the SEC, CFTC, and the private sector.

The private sector participants will draw from fintech and financial services companies as well as small and medium scale enterprises and academia.

Once constituted, the working group will have a year to issue a report analyzing the current crypto regulatory climate. The panel’s work will also focus on matters like crypto custody, cybersecurity, private key management, and investor protection concerns.

The patchwork nature of crypto regulations in the U.S. continues to be a source of some frustration among industry stakeholders in the country. Some industry insiders have argued that the U.S. was at risk of losing ground in the emerging digital economy due to the lack of regulatory clarity for digital assets.

Earlier in April, Goldman Sachs CEO David Solomon predicted a big evolution for crypto regulations in the U.S.

Simple steps to safeguard your wallet from unlimited ERC-20 allowance risks

The funds in your ERC-20 wallet could be at risk if you continue to grant unlimited approvals to decentralized applications.

Participating in the decentralized finance space often necessitates the need to grant projects certain permissions to spend tokens from one’s own wallet.

These permissions — called ERC-20 allowances — help to simplify the smart contract interaction processes that allow users to send funds to a contract while simultaneously calling a state change function.

However, malicious actors can utilize this allowance to drain funds from an unsuspecting trader. To understand this risk vector, it is perhaps important to explain how ERC-20 allowance permission works.

Upon first interacting with a new DeFi project, traders need to allow the decentralized application the access to spend funds — usually Ether (ETH) or a stablecoin like Tether (USDT) — from their wallets.

This allowance is often unlimited to eliminate the need for future approval steps by the trader when executing subsequent transactions. Under normal operating conditions, the DeFi project will only spend the specified amount set by the trader.

However, abnormal operating conditions can emerge as has been seen on numerous occasions in the DeFi space. Smart contract bugs like the kind suffered by Bancor back in June 2020 can expose this vulnerability and drain funds from user wallets.

During the 2020 DeFi mania, rogue actors also exploited this vulnerability to steal funds from unsuspecting traders. One such example was the UniCats where the project developers themselves stole Uniswap (UNI) tokens from their users.

One useful practice traders can adopt is to review their existing allowances on their wallets. Platforms like revoke.cash and approved.zone can be used to identify ERC allowances associated with an address as well as options to revoke or lower such allowances.

Another method that can be used is during the initial first interaction stage where instead of unlimited, traders can select custom spend limits on their MetaMask wallets when approving spend limits for new tokens.

With ERC-20 the de facto standard for the DeFi space, users will still have to contend with the unlimited allowance risk. However, traders can adopt these useful practices to minimize the dangers associated with this potential vulnerability.

DMCC strikes deal to build blockchain-based precious metals refinery in Dubai

The precious metals refined on the site will be tokenized and traded on the DMCC Gold Exchange platform.

Dubai Multi Commodities Centre — a free trade zone established by the Dubai Government — has signed a sale and purchase agreement with REIT Development to construct a 100,000 square foot precious metals refinery.

According to a DMCC release on Wednesday, the precious metal refinery and storage facility will be the largest in the Gulf Cooperation Council and will reportedly be powered by blockchain technology.

Located in the high brow Jumeirah Lake Towers area, the facility will refine and store precious metals like gold, silver, rhodium, palladium and platinum among others.

These precious metals will also provide backing for asset-collateralized stablecoins like GoldCoin, SilverCoin, RhodiumCoin, PalladiumCoin and PlatinumCoin, to mention a few.

The stablecoins will run on the Ethereum network and will reportedly be pegged to the current value of one gram of the corresponding precious metal.

According to the announcement, the precious metals-backed stablecoins will be available for trading on the DMCC’s gold exchange platform.

Construction work on the proposed facility is scheduled to be completed before the end of 2022 with the DMCC stating that the complex will further strengthen its position in the global precious metal markets.

According to Mike De Vries, chief operation officer REIT Development, blockchain will disrupt the precious metals industry, adding:

“Blockchain technology can enable more transparent and accurate tracking of precious metals, ensuring there is no ‘dirty gold’ in circulation and illicit trades […] We believe that by 2025 every precious metals refinery and storage facility will be in the blockchain.”

REIT Development’s planned blockchain-based precious metal refinery in the JLT area is the latest example of the broad-based adoption of the novel technology in Dubai and the United Arab Emirates.

Earlier in April, Cointelegraph reported that the city’s economic department was looking to deploy its corporate Know Your Customer project to cover the entire UAE.

WeWork to accept crypto payments and hold them on its balance sheet

The coworking firm is the latest to see crypto as a suitable asset for its corporate treasury.

Coworking space giant WeWork is the latest company to announce plans to hold cryptocurrencies on its balance sheet.

The SoftBank-owned commercial real estate firm announced its plans via a statement on Tuesday. WeWork’s crypto balance sheet will come from the company adopting cryptocurrencies as a payment method.

According to the announcement, WeWork has partnered with crypto payment service platform BitPay to accept digital currency payments for its workspaces.

WeWork will reportedly accept Bitcoin (BTC), Ether (ETH) and stablecoins USD Coin (USDC) and Paxos (PAX).

The company’s crypto adoption drive also includes paying landlords and other partners with cryptocurrencies as well via a partnership with United States-based exchange Coinbase.

WeWork’s announcement also revealed that Coinbase will become the first WeWork tenant to pay for its services with cryptocurrencies.

For WeWork CEO Sandeep Mathrani, the decision to adopt crypto payments ties in with the company’s increased patronage by fintech startups. “It only makes sense for us to expand on the optionality we provide by adding cryptocurrency as an accepted form of payment for our members,” Mathrani added.

SoftBank CEO and WeWork chairman Marcelo Claure echoed Mathrani’s comments, adding:

“When we think about the workplace of the future and business, we have to consider cryptocurrency a central part of that conversation. Cryptocurrency helps build a stronger global economy, and WeWork’s announcement demonstrates the company’s commitment not only to innovation but also to being a globally focused business.”

WeWork reportedly lost $3.2 billion in 2020, as the coronavirus pandemic triggered a massive decline in occupancy rates. The losses posted in 2020 followed a $3.5-billion loss for 2019.

Indeed, WeWork’s losses for 2019 were projected to contribute a significant proportion of SoftBank’s $12.5-billion loss as reported by Cointelegraph back in April 2020.

Gaming giant Ubisoft to become corporate baker on Tezos network

Popular French video game publisher Ubisoft is set to become a validator node on the Tezos ecosystem.

Ubisoft, the video game studio behind popular titles such as Assassin’s Creed, Prince of Persia and the Tom Clancy series, will become a corporate Tezos baker, or validator node.

In a statement issued on Tuesday, Ubisoft announced its partnership with Tezos-backed Nomadic Labs that will see the latter creating a validator node on the Tezos network.

As a Tezos baker, Ubisoft via its Strategic Innovation Lab will join the group of validator nodes that authenticate and add transaction blocks to the network.

Bakers also distribute rewards earned from validating transactions to wallets that have delegated their staked Tezos (XTZ).

According to the announcement, the move to become a Tezos baker is part of Ubisoft’s broader plans of exploring the opportunities provided by novel technologies like blockchain. 

Following the announcement, the video game company will be added to the list of 277 bakers on the Tezos network.

Commenting on the company’s decision to run a validator node on the Tezos network, Nicolas Pouard, blockchain initiative director at Ubisoft, stated:

“Ubisoft believes that blockchain has the potential to bring new possibilities to players and developers alike, and this new collaboration will allow us to pursue our innovation efforts with an ecosystem that aligns with our environmental-friendly approach thanks to its proof-of-stake consensus algorithm.”

Indeed, Tezos is not the first blockchain project to attract Ubisoft’s attention in the area of transaction authentication. As previously reported by Cointelegraph, Ubisoft became a block producer on the UOS Network back in January 2020.

With emerging developments at the intersection of blockchain and gaming, Ubisoft has been reportedly exploring adoption cases for novel technology in gaming to remain competitive in the industry.

Blockchain Association executive debunks rumored crypto crackdown by Treasury

A United States blockchain lobbying group executive says there is not any danger of a crypto crackdown in the country.

Kristin Smith, executive director of the Blockchain Association has dismissed fears that the United States Department of the Treasury was close to cracking down on Bitcoin (BTC) and cryptocurrencies.

Indeed, rumors of the Treasury bringing money laundering charges against some financial institutions using cryptocurrencies began circulating on social media over the weekend.

The report emerged during a period of massive selloffs in the crypto space with the market capitalization dropping over $240 million as Bitcoin slid to $52,000.

In an interview with CNBC, Smith debunked the reports, stating that it was the Department of Justice’s remit to charge companies with money laundering.

Janet Yellen, the secretary of the U.S. Treasury is a noted crypto critic who in February characterized the apparent misuse of cryptocurrencies for illegal activities as a growing concern.

Meanwhile, several studies show the criminal usage of cryptocurrencies accounts for a minute proportion of global crypto commerce. Indeed, Michael Morell, a former acting director of the Central Intelligence Agency recently published a paper showing that the broad generalization of virtual currencies as conduits for criminal financing was exaggerated.

Morell’s paper also concluded that blockchain forensic tools are sufficiently robust to detect illicit crypto transactions.

Commenting on the efforts by crypto stakeholders to remedy the disinformation in Washington regarding the industry, Smith remarked that several market actors are contributing more resources in positive lobbying efforts on the Hill.

Earlier in April, prominent organizations in the cryptocurrency space like Coinbase and Square announced a new lobbying initiative dubbed the Crypto Council for Innovation. Apart from the Blockchain Association, other groups like Coin Center are also pushing for sensible virtual currency regulations in America.

For Smith, events like the Coinbase listing on Nasdaq offer proof of the growing market validation for the crypto industry, a phenomenon that authorities in Washington can hardly overlook.

UK government establishes central bank digital currency task force

The United Kingdom is the latest country to begin exploring the possibility of creating a central bank digital currency.

Her Majesty’s Treasury and the Bank of England have begun preliminary central bank digital currency studies that could result in the creation of a national digital currency.

In a document published by HM Treasury, the exchequer announced the creation of a CBDC taskforce in collaboration with the U.K.’s central bank.

Jon Cunliffe, deputy governor of the Bank of England and Katharine Braddick, director general of financial services at HM Treasury will co-chair the task force.

According to the terms of reference document, the task force will synergize the efforts of all relevant statutory bodies in the U.K. regarding CBDC development.

As part of its duties, the task force will explore preliminary issues associated with the design, implementation, and operation of a CBDC in the U.K. The task force will also interface with stakeholders across academia, fintech and other relevant industries to identify the technological hurdles involved in creating a sovereign digital currency.

The joint HM Treasury and BoE task force will also monitor CBDC-related developments on the international scene especially as other nations are actively exploring their own central bank digital currency projects.

According to a BoE press release issued on Monday, the central bank will also run its own internal CBDC unit headed by Jon Cunliffe.

The establishment of the task force is yet another indication of the U.K. government’s focus on digital currencies and fintech in the aftermath of Brexit. In November 2020, Rishi Sunak, chancellor of the Exchequer said that Brexit offered an opportunity for the U.K. to revamp its financial services sector.

Since Brexit, Sunak has overseen a significant policy shift towards harnessing novel fintech innovations like CBDC and stablecoins. As previously reported by Cointelegraph, U.K. financial services minister John Glen has identified stablecoin regulations as the major focus of the government in the area of cryptocurrency regulations.

According to a report by Reuters, the U.K.’s financial market focus is also extending towards distributed ledger technology firms. Speaking during a financial industry conference on Monday, Sunak announced that the government plans to establish a fintech sandbox for blockchain startups.

Bitcoin on balance sheet attracts negative attention from anti-crypto banks

Having over 90,000 BTC on the balance sheet could see a company’s stock blacklisted by banks that remain crypto detractors.

MicroStrategy’s continuous Bitcoin acquisition has drawn the ire of investment banking giant HSBC. Despite being one of the largest business intelligence firms in the world, HSBC has stated that MicroStrategy is now a “virtual currency product,” a designation akin to the pseudo-Bitcoin exchange-traded fund status attached to the company on account of its sizable Bitcoin (BTC) balance sheet.

Since August 2020, MicroStrategy has embarked on a Bitcoin acquisition spree and now holds more than $5 billion worth of BTC. Michael Saylor, the company’s CEO, has also become an outspoken Bitcoin proponent. Saylor’s Bitcoin evangelism has included attempts to encourage other publicly listed firms to add BTC to their balance sheet. Indeed, some other companies in the United States have emulated Saylor’s Bitcoin adoption.

With corporate Bitcoin adoption becoming commonplace, the conversation appears to be shifting toward life and annuity companies and sovereign wealth funds to see where the next wave of institutional BTC investment will emerge. However, for legacy players like HSBC, Bitcoin and cryptocurrencies, in general, remain anathema even if the actions taken thus far appear to be arguably arbitrary.

HSBC blacklists MicroStrategy stock

HSBC blacklisted MicroStrategy’s stock, preventing customers of the bank’s online retail trading platform in Canada from acquiring the company’s shares. While HSBC did not respond to Cointelegraph’s request for confirmation on the report, the bank has publicly verified the news using similar statements contained in the original message shared by customers on Twitter.

In the message sent to HSBC InvestDirect customers who already hold MicroStrategy (MSTR) stock, the bank revealed that additional MSTR purchases will no longer be possible on the platform. The communique stated that such customers could hold their current MicroStrategy stock balances or sell their shares.

According to HSBC, the blacklisting was in line with the bank’s crypto restrictions enacted back in 2018. An excerpt from the bank’s policy as contained in the message to HSBC InvestDirect, or HIDC, customers reads: “HIDC will not participate in facilitating (buy and/or exchange) product relating to virtual currencies, or products related to or referencing to the performance of virtual currency.”

Reacting to the news, Stuart Hoegner, general counsel at crypto exchange platform Bitfinex, told Cointelegraph that the decision was a “regressive step” in the context of the growing appeal of cryptocurrencies in the mainstream arena, adding:

“Instead of refusing to participate in products relating to virtual currencies, HSBC should instead focus on delivering optimal services to its customers, many of whom pay high fees and interest rate charges on the bank’s loans and credit card products. In fact, it is blockchain technology’s capacity — by virtue of removing intermediaries — that can enhance levels of inclusion, accessibility and transparency in financial products.”

Making sense of it all

In singling out MicroStrategy, HSBC referred to the company as a “virtual currency product,” hence its decision to prevent customers from buying MSTR. However, HDIC lists shares of several companies with significant cryptocurrency involvement including Tesla, Square and Hut 8 Mining, to mention a few.

Elon Musk’s electric vehicle manufacturing giant, Tesla, acquired about $1.5 billion worth of Bitcoin back in February. Hut 8 is a Bitcoin mining establishment, while Square operates Cash App, an avenue for buying BTC that also contributes greatly to Square’s revenue bottom line.

Unlike MicroStrategy, which only holds Bitcoin on its balance sheet while still carrying out its function as a business intelligence firm, some of the tradable stocks on the HDIC platform belong to companies, like Hut 8, that derive value directly from cryptocurrencies.

Commenting on the lack of clarity in HSBC’s decision, Jeffrey Wang, head of Americas at crypto finance provider Amber Group, told Cointelegraph: “It’s a very slippery slope for HSBC. Will they publish a clear set of defined rules for what they deem to be companies that derive value from virtual currencies?”

He questioned further: “Why haven’t they also put this trading restriction on other companies that have publicly disclosed holdings of Bitcoin like Tesla? Will they block trading in Coinbase?” As an HDIC customer, Wang also expressed displeasure at the uneven application of HSBC’s anti-crypto policies, adding:

“I think this is HSBC overstepping its reach on its retail brokerage offering. If a company is lawfully listed on the Nasdaq and is in compliance with any regulatory requirements, the decision to buy this stock should be left up to the end-user and not the brokerage.”

HSBC’s ban on MicroStrategy stock trading becomes even more bizarre, given that customers can still buy exchange-traded funds that contain MSTR on the platform. Indeed. According to ETF.com, 88 ETFs hold MicroStrategy shares.

The MSTR blacklisting is hardly the first negative consequence of MicroStrategy’s Bitcoin investment push. In December 2020, Citibank downgraded the company’s stock citing MicroStrategy’s “disproportionate” focus on BTC.

New layers of legitimacy

HSBC’s action puts the bank firmly in the corner of legacy financial institutions still averse to Bitcoin and cryptocurrency innovation. The move offers the latest indication of the bank’s repudiation of digital currencies following efforts to block customers from repatriating crypto trading profits from exchanges to their bank accounts earlier in the year.

Meanwhile, several major players in the traditional finance arena are increasingly becoming more exposed to Bitcoin and cryptocurrencies as the novel technology gains new layers of legitimacy. From offering custody services for digital currencies to establishing digital asset exchange platforms, banks across the United States, Europe and Asia are showing a greater appetite for digital currencies.

For Wang of Amber Group, HSBC is holding fast to a shrinking position of being a banking institution that remains averse to cryptocurrencies, telling Cointelegraph:

“I think HSBC will be in the tiny minority — if not the only brokerage — that will restrict its retail investors from buying shares in publicly traded and regulated companies due to exposure to virtual currencies.”

Recently, European investment banking giant Société Générale issued a tokenized security representing one of its structure products — investment packages linked to assets and derivatives — on the Tezos blockchain. The news marked a third consecutive year of a blockchain-related financial product being issued.

In a message to Cointelegraph, Jean-Marc Stenger, managing director of digital capital markets at Société Générale and head of its fintech startup subsidiary, SG Forge, remarked that crypto companies will challenge legacy finance players that are slow to adapt to the emerging digital financial landscape. Rather than advocate for eschewing digital assets, Stenger identified the advantages held by traditional finance in real-world asset-based tokenization, adding:

“Traditional financial institutions know how to structure regulated digital assets and how to cope with related requirements (investors protection, rules for markets integrity, compliance, KYC, continuity plans). But more importantly, they have origination and distribution capabilities and day-to-day business relationships with their clients.”

While Société Générale’s digital asset offerings are not tied to cryptocurrencies, major U.S. investment banks such as Goldman Sachs and Morgan Stanley are looking to offer their clients exposure to Bitcoin funds.

Amid the continued influx of institutional actors into the Bitcoin space, the question of whether governments will invest in BTC is likely becoming a matter of “when” and not “if.” With insurance companies and pension funds dipping their toes in the Bitcoin pool, sovereign wealth funds appear to be not too far behind.

Nigeria’s SEC says central bank’s crypto ban disrupted the market

The Securities and Exchange Commission of Nigeria says it is working with the central bank to create a legal framework for cryptos and digital assets.

Lamido Yuguda, the director-general of Nigeria’s Securities and Exchange Commission has said the central bank’s crypto ban has caused significant disruptions to the market.

According to a report by The Guardian, the SEC director-general made this assertion known during a press conference organized after the meeting of the Capital Market Committee on Thursday.

As previously reported by Cointelegraph, the Central Bank of Nigeria barred commercial banks from servicing crypto exchanges back in February.

According to Yuguda, the Commission has been forced to pause its planned cryptocurrency regulatory framework announced in September 2020.

The SEC director-general also maintained that the suspension of the Commission’s crypto regulatory plans will remain in place until exchanges can operate bank accounts in the country.

As part of his address, the SEC chief maintained that the Commission was working with the CBN to create an optimal regulatory regime for cryptocurrencies in the country. According to Yuguda, the crypto ban aside, the SEC continues to make strides in supporting the growth of fintech in Nigeria.

Following the CBN crypto ban, cryptocurrency buying and selling is only possible via peer-to-peer channels leading to massive premiums on virtual currency prices. In March, the central bank governor remarked that the CBN was not against crypto trading in the country but that such transactions cannot occur through commercial banks.

In a previous statement shared with Cointelegraph, crypto exchange platform Lumo reacted to the CBN ban stating that “blanket bans push people underground,” adding:

“Pushing people underground also makes it easier for scammers to exploit Nigerians, and we are already seeing Bitcoin trade at huge premiums in the country as a result of the ban. Other companies have made the choice to find workarounds that are less visible for regulators – for example, Peer-2-Peer (P2P) trading. Our view is that P2P trading would go against the spirit of the CBN’s directive.”

Meanwhile, Nigeria’s vice president, Yemi Osinbajo has previously called on regulators to adopt a nuanced approach to regulating crypto and blockchain. According to the vice president, cryptocurrency will challenge traditional finance in the coming years.

One of Europe’s largest investment banks issues security token on Tezos

Société Générale continues its crypto and blockchain experimentation by issuing a tokenized security on the Tezos network.

European financial behemoth Société Générale has issued a security token on the Tezos blockchain.

According to an announcement on Thursday, the move constitutes the first tokenized asset offered by Société Générale.

The bank stated that the security token offering was a significant milestone in the efforts to begin full-spectrum cryptocurrency market operations by 2022.

Société Générale, through its subsidiary, Société Générale – Forge, reportedly plans to issue tokenized securities that can be integrated with legacy banking systems. Apart from asset tokenization, the bank’s crypto foray will also include exchange and custody services for institutional clients. The bank stated:

“This new experimentation, performed in accordance with best market practices, demonstrates the legal, regulatory and operational feasibility of issuing more complex financial instruments (structured products) on public blockchain.”

The maiden security token issuance marks the third consecutive year of crypto and blockchain adoption developments from the stables of Société Générale.

Back in 2019, the bank, via its specialized credit institution Société Générale SFH, issued a 100-million euro bond as a tokenized security on Ethereum.

In May 2020, SFH and SG Forge, together with the Banque de France, issued a tokenized 40-million-euro bond, settled using an experimental central bank digital currency.

Indeed, Société Générale is one of the financial institutions tapped by France’s central bank to conduct its experimental central bank digital currency pilot study.

Earlier in April, Société Générale was among a group of global banks hired by the European Investment Bank to utilize blockchain in digital bond issuance.

While the European Union is yet to arrive at definitive regulations for crypto and blockchain, Société Générale is one of many financial institutions in the region experimenting with the novel technology.

COIN recap: Comparing Coinbase’s first day to other major public listings

From price volatility to becoming the most valuable U.S. exchange, here is how well Coinbase’s first day of trading tracks with other companies.

American crypto exchange giant Coinbase went public on Wednesday with a direct listing on Nasdaq.

The company’s performance on day one has been hailed as being positive overall, with Coinbase becoming the most valuable exchange in the United States ahead of legacy players such as the Chicago Mercantile Exchange.

Coinbase’s first day of trading was seen by market commentators as a watershed moment for the crypto space, but how does its performance compare with that of other major companies to go public in the last decade?

Trading under the ticker “COIN,” Coinbase stock opened at $381, which. as expected, was significantly higher than the $250 pre-listing reference price.

COIN reached a price high of $429.54 before slipping to $310.44 on a rocky and volatile first day. Coinbase stock closed out on the first day of trading at $328.28.

In terms of valuation, Coinbase is currently sitting on $85.8 billion in diluted market capitalization. This figure puts the company more than $10 billion ahead of the CME — the second-most-valuable exchange in America.

Coinbase’s listing on the Nasdaq was arguably a major win for the stock exchange, much like Facebook almost a decade ago.

Back in May 2012, the social media giant went public via an initial public offering on Nasdaq. Like Coinbase, Facebook’s first trading day saw volatile stock price action as the listing coincided with a downward slide in the U.S. stock market.

An 18% rally in Facebook stock price on the back of initial enthusiasm soon gave way to a massive drop. At closeout on day one, FB was trading only $0.23 above its IPO price.

While Facebook failed to pop, Airbnb, another major Nasdaq listing, got off to a flying start on its first trading day back in December 2020. The holiday rental behemoth saw its stock price surge over 110% at closeout on day one.

Chinese investors reboot Iranian Bitcoin mining facility

A Chinese-Iranian Bitcoin mining facility is set to resume operations after being forced to shut down earlier in the year.

After four months of closure, Iran’s largest Bitcoin mining facility is set to resume its operations.

According to a report by IranWire, the decision to restart operations at the Bitcoin mining farm was due to massive financing put up by Chinese backers.

Located in Rafsanjan, a city in the Kerman Province of Southeast Iran, the Bitcoin (BTC) mining farm was at the center of controversy earlier in 2021.

Back in January, the authorities in the province ordered the closure of the mining hub amid sweeping electricity blackouts in Iran.

Indeed, the Rafsanjan Bitcoin mining center reportedly consumes 175 megawatt-hour of electricity — almost a third of the total power allocated to crypto miners in Iran. Established back in 2019, the BTC mining farm is reportedly the largest data center in the Middle East.

Addressing the city council on Wednesday, Rafsanjan representative Hossein Jalali argued that the huge investments in the Bitcoin mining center “should not be lost.”

However, residents are reportedly concerned that the reopening is proceeding without any efforts to mitigate the electricity outage problems.

The Rafsanjan facility is one of many Chinese-backed Bitcoin mining facilities in Iran, especially in the Southeast special economic zone.

Chinese money flowing into Iranian Bitcoin mining operations appears somewhat along the margins of the economic relationship between both nations under the aegis of the “25-year contract.”

Stricter electricity consumption laws are reportedly forcing Chinese miners out of some of the major crypto mining hubs in the country. Iran likely offers an alternative for such enterprises given the country’s cheap electricity costs.

Meanwhile, some Iranian Bitcoin miners say the presence of Chinese Bitcoin miners is making the endeavor much less profitable for local ventures.

As previously reported by Cointelegraph, Iran’s growing crypto mining scene has been blamed for the worsening in air quality across major cities in the country.

Coinbase’s COIN stock trading on Nasdaq is off to a rocky start

Early price action from the Coinbase stock listing on the Nasdaq reveals volatile reaction from traders.

Trading has already begun on Coinbase’s COIN stock on the Nasdaq after weeks of anticipation following the U.S. exchange giant’s direct listing announcement.

COIN began trading significantly higher than the $250 reference stock price assigned by Nasdaq prior to the market open, rising quickly to around $430. The price fell sharply within the first few minutes of trading however, and sits at $381 at time of publication.

Even so, COIN is up about 55%, putting the U.S. crypto exchange giant’s valuation at just under $100 billion.

Enthusiasm for COIN exposure is also evident among crypto traders judging from the preliminary volume figures from Binance and FTX.

Both crypto exchanges are offering users access to Coinbase stock traded against stablecoins. Pre-IPO tokenized stock price for Coinbase on FTX has crashed from $643 down to $410 at time of publication.

As previously reported by Cointelegraph, market commentators have remarked that the Coinbase listing on Nasdaq represents a “watershed” moment for the crypto market as a whole. Indeed, there is even talk that COIN could rival Bitcoin (BTC) in terms of popularity within and outside the cryptocurrency space.

Meanwhile, the current bullish advance in the crypto space has continued for another day with the total market capitalization surging 4% in the last 24 hours.

Dubai’s economic department to roll out blockchain-based corporate KYC

Dubai’s Department of Economic Development wants to accelerate the total adoption of UAE KYC — the national Know Your Customer standard running on blockchain technology.

Dubai’s Department of Economic Development, or “Dubai Economy,” and the Dubai International Financial Centre are working to expand their Know Your Customer platform to financial institutions across the United Arab Emirates.

The DIFC made the planned project expansion known via an announcement published on its website on April 6.

According to the communique, both organizations have signed an agreement to put the necessary modalities in place to extend the KYC platform across the UAE.

The project was first announced back in February 2020, with 120 companies onboarded as of July 2020, according to a Cointelegraph report at the time.

The DIFC said that the blockchain-based KYC platform now holds close to half of all electronic KYC records in the UAE.

Commenting on the need to accelerate the adoption of the blockchain KYC system, the DIFC stated that the platform will enable more efficient sharing of verified KYC data among licensing authorities.

For Abdulla Hassan, CEO corporate sector, Dubai Economy, UAE Dubai is an integral part of efforts by the government to position the country as a viable global investment destination:

“Following its launch in 2020, the platform has become increasingly crucial not only in simplifying the procedures for opening bank accounts for investors but also in enabling banks to digitally receive verified KYC data. This initiative has a positive impact in attracting business and on the global ease of doing business ranking of Dubai and the UAE.”

The blockchain KYC consortium is one of many examples of the positive stance adopted by the Emirati government in dealing with crypto and blockchain technology.

Earlier in April, UAE Minister of Economy Abdulla Bin Touq Al Marri identified crypto and asset tokenization as being integral to the country’s plans of doubling the size of its economy within the next decade.

Meanwhile, Dubai’s financial regulators are already working on crypto regulations, with members of the public recently given a 30-day window to comment on the proposed cryptocurrency laws.

Nvidia triples revenue forecast for crypto mining GPU sales

The California chipmaker says Q1 financials for fiscal 2022 are on track to surpass initial estimates with demand for crypto mining graphics cards on the rise.

Nvidia says the positive performance of its various market segments has seen the company revise its initial forecasts for Q1 of fiscal 2022.

The company made this known during its annual investor day on Monday revealing total revenue for Q1 is already tracking above the $5.30 billion forecast included in its previous end-of-year earnings call.

This positive market performance has also extended to Nvidia’s graphics processing unit, or GPU, sector with the company raising its Q1 revenue estimate for its cryptocurrency mining processor, or CMP, product three-fold to $150 million.

Indeed, as previously reported by Cointelegraph, Nvidia had set its initial forecast for crypto miner sales for Q1 at $50 million back in February.

According to Nvidia’s press release, surging demand is at the heart of its optimistic outlook with Colette Kress, executive vice president and chief financial officer of the chipmaker adding:

“Overall demand remains very strong and continues to exceed supply while our channel inventories remain quite lean. We expect demand to continue to exceed supply for much of this year. We believe we will have sufficient supply to support sequential growth beyond Q1.”

Nvidia’s three-fold increase in revenue estimates for its CMP product are yet another indication of the surging demand for crypto mining hardware. In March, cryptocurrency mining firm Hut 8 announced the purchase of $30 million worth of Nvidia GPU hardware.

The Hut 8 order alone filled 60% of Nvidia’s initial CMP estimate, and it is perhaps unsurprising to see the company up its outlook for the rest of Q1 of fiscal 2022.

Soaring demand for Nvidia GPUs has also meant shortages for gamers with resellers electing to transact with miners ready to pay significant premiums to acquire the company’s hardware.

South Korean crypto traders are pivoting to ‘smaller cap’ altcoins

Bitcoin trading activity in South Korea has reportedly dipped amid rising interest in smaller altcoins.

South Korea’s “big four” crypto exchanges — Bithumb, Korbit, Upbit and Coinone — are showing a marked cooling off in Bitcoin (BTC) enthusiasm.

Meanwhile, altcoins are now accounting for the highest 24-hour trading volume according to data from multiple market aggregators.

Apart from XRP, which is often popular among crypto traders in Asia, altcoins with smaller market capitalizations are leading the way in terms of trading volume on the big four.

Data from crypto research outfit Messari shows Ravencoin (RVN), Near Protocol (NEAR) and New Kind of Network (NKN) as the three top-traded cryptos by volume on the Upbit exchange.

NKN’s volume surge on South Korean exchanges is indicative of the altcoin pivot seemingly gaining a foothold among crypto traders in the country.

As previously reported by Cointelegraph, NKN saw a 1,400% surge between March 8 and April 6, with the token up 83-fold year-to-date as of the time of writing.

CoinMarketCap’s exchange data shows XRP as the number-one traded altcoin across all of the big four crypto exchanges in South Korea. Indeed, the top 10 trading volume figures across the four exchanges are dominated by smaller-cap tokens such as MileVerse (MVC) and Chiliz (CHZ).

Compared to a snapshot of the CHZ trading volume on Upbit back in January, the social token’s 24-hour activity has grown from under $5 million to over $730 million in April. The smaller-cap altcoins dominating trading activity on South Korean exchange platforms have increased by an average of 3,000%.

This scramble for altcoins capable of delivering “face-melting” gains has led to a decline in Bitcoin trading volume across South Korean exchanges. BTC volume is down between 30% and40% across the big four.

Bitcoin is currently experiencing another round of positive price action and has set a new all-time high above $62,000. BTC is trading at an average of $71,200 across the South Korean big four with the Kimchi premium at about 13% as of the time of writing.

ConsenSys-backed poker platform secures $5M investment

The injection of additional funding will be used to facilitate Virtue Poker’s mainnet launch slated for May 2021.

Ethereum infrastructure firm ConsenSys and venture capital fund Pantera Capital have led a group of investors in a $5-million funding round for Virtue Poker, according to an announcement on Monday.

Other participants in the strategic investment round included blockchain investment outfit DFG and FunFair founder Jez San.

Virtue Poker, an Ethereum-based decentralized poker platform, was founded back in 2016 within the ConsenSys suite of blockchain projects. Back in 2020, the company secured a B2C — Gaming Service License from the Malta Gaming Authority.

The $5-million investment will be used to bootstrap the mainnet launch of the blockchain poker platform scheduled for May 2021. The mainnet launch comes after four years of development and two years of beta testing.

According to Ryan Gittleson, CEO of Virtue Poker, the company’s status as a licensed operator provides a suitable platform to challenge legacy providers for players. According to Gittleson, Virtue Poker will lead the charge to make crypto wagering mainstream.

Commenting on the $5-million funding round and the plans to release the mainnet platform, ConsenSys founder Joe Lubin remarked:

“I’m excited to see the Virtue Poker team realize its mission in bringing transparency and trust to the online poker industry. By working with regulators in becoming the first licensed blockchain-based platform, Virtue Poker legitimizes the use of this technology in the industry long-term going forward.”

Poker legend Phil Ivey, an ambassador for the company, also commented on the project’s progress, stating that Virtue Poker will play a “major part” in the future of poker.

Poker and the crypto space have a storied history with Bitcoin (BTC) creator Satoshi Nakamoto, which includes scraps of code for an online poker game in the first iteration of the Bitcoin code.

Back in April 2020, crypto charity outfit The Giving Block partnered with many industry stakeholders to organize an online poker game to raise funds for nonprofits helping to combat the coronavirus.

Galaxy Digital submits Bitcoin ETF application with SEC

Mike Novogratz’s Galaxy Digital is the latest Bitcoin exchange-traded fund applicant in the United States.

Galaxy Digital has submitted a Bitcoin (BTC) exchange-traded fu filing with the United States Securities and Exchange Commission.

According to the form S-1 published by the SEC on Monday, the Galaxy Bitcoin ETF — if approved — will trade on the NYSE Arca exchange, with the Bloomberg Galaxy Bitcoin index tapped as the pricing mechanism.

Detailing the price mechanism for the prospective Bitcoin ETF, the filing reads:

“The end-of-day Index price is calculated using the Bloomberg Crypto Price Fixings (‘CFIX’) mid-price for bitcoin. CFIX is based on pricing provided by the Bloomberg Generic Price (‘BGN’) using Bloomberg’s data, technology and distribution platforms, and is made broadly available to the investment community with the objective of providing cryptocurrency fixings that are reliable, representative, and transparent.”

As previously reported by Cointelegraph, Galaxy Digital, via its financial services subsidiary, launched a Bitcoin ETF product in the Canadian market back in March.

Galaxy’s Bitcoin ETF filing did not list any custodian or administrator. The filing document also did not provide details of the trustee beyond the organization being a “Delaware trust company.”

The Bitcoin ETF filing by Galaxy Digital comes on the heels of a similar application by Fidelity back in March.

The SEC is yet to approve any Bitcoin ETF, with the previous leadership citing volatility and price manipulation concerns.

Meanwhile, the SEC has less than two weeks to deliver its initial response to VanEck’s Bitcoin ETF filing following the commission’s acknowledgment of the submission back in mid-March.

Canaan reports $33M net loss for 2020 despite bullish Bitcoin price action

The Bitcoin miner manufacturer saw its year-on-year revenue tumble amid supply chain disruptions and a global chip shortage.

Bitcoin’s bullish 2020 closeout was not enough to prevent Canaan from incurring a net loss in 2020.

According to the company’s unaudited financial report for Q4 2020, the Bitcoin (BTC) miner maker’s net loss for 2020 was about $33 million. However, Canaan’s 2020 net loss is significantly lower than the $148 million recorded in 2019.

Indeed, the reduction in net loss for Canaan was a common theme across the company’s quarterly performance in 2020. As previously reported by Cointelegraph, significant growth in gross margin on the sale of mining rigs helped the company lessen its year-on-year net loss by over 90% in Q2 2020.

As part of the report issued on Monday, Canaan revealed that its 2020 net revenue amounted to about $68.6 million — a 66% decline from the revenue figures in the 2019 financials.

The marked revenue decline also meant Canaan’s year-on-year gross profit took a steep tumble falling from $79 million in 2019 to under $6 million in 2020.

However, despite the drop in net revenue, Canaan said the trend will reverse in 2021, with the company forecasting a $61-million net revenue target for Q1 2021.

Like other Chinese miners, Canaan’s crypto mining inventory is on backorder amid the ongoing global semiconductor shortage.

According to Canaan CEO Nancheng Zhang, the volume of pre-orders for the company’s Bitcoin mining hardware will drive revenue growth, stating:

“Although the outbreak of COVID-19 caused supply chain disruptions and thus negatively impacted our revenues in the fourth quarter of 2020, our market leadership has enabled us to attain $174 million contracted orders with $66 million of cash advance from customers as of December 31, 2020, thus laying a solid foundation for substantial revenue growth for 2021.”

At the time of writing, the stock price of the Nasdaq-listed Canaan is about 50% down from its 2021 high attained a month ago. Despite the drop, Canaan is still up 179% year-to-date.

Major Thai bank experimenting with decentralized finance

Kasikornbank has identified asset-backed DeFi as having the potential to create economic value for Thailand.

Kasikornbank, or KBank, one of Thailand’s largest banks has begun experimenting with DeFi services as part of its business expansion plan.

According to a report by Bangkok Post, the bank’s DeFi exploration is being spearheaded by Kbank’s tech subsidiary Kasikorn Business Technology Group, or KBTG.

Commenting on KBank’s DeFi plans, KBTG chairman Ruangroj Poonpol said:

“DeFi is a key exploration for KBank Group this year […] The project is being explored through KBTG under the second phase of the company's digital transformation programme.”

According to Poonpol, DeFi could hold the key to improving financial inclusion for people in Thailand via access to innovative financial services, adding, “With this asset-backed form, DeFi could also create economic value for Thailand.”

Asset-backed DeFi comes with regulatory hurdles given its interaction with real-world assets. Indeed, industry participants like MakerDAO’s Rune Christensen have already begun clamoring for engagement between DeFi stakeholders and regulators if decentralized finance is to continue its transition to the mainstream arena.

With DeFi adoption in the cards, KBank is looking to expand its presence in Southeast Asia especially in countries like Vietnam where about two-thirds of the population remains unbanked.

KBank’s DeFi foray is coming on the heels of the bank’s dominance in the country’s digital banking arena. The second-largest Thai lender by assets reportedly accounts for 40% of the nation’s digital banking transactions as is the largest mobile banking platform in Thailand with over 16 million users on its app.

Apart from its planned DeFi experimentation, KBank also has a history of crypto and blockchain adoption in Thailand. Back in September 2018, the bank joined Visa’s blockchain-based B2B solution for cross-border payment transactions.

KBank, via its KBTG subsidiary, also operates a digital trading platform in collaboration with the Stock Exchange of Thailand.

VC funds bullish on crypto, increase investment in blockchain startups

Funding for crypto and blockchain startups is not slowing in 2021 as VC funds appear keen to enjoy the exponential growth potential.

Venture capital funding for crypto and blockchain startups looks set to break records in 2021. As previously reported by Cointelegraph, crypto firms received more funding in the first quarter of 2021 than the whole of 2020.

Indeed, three companies in the market attracted $1.1 billion from backers in Q1 202 — a third of the total funding for crypto and blockchain firms reported in 2018. With the current bullish enthusiasm in the crypto space, VC funding appetite for blockchain startups might continue throughout the year.

This early-stage funding frenzy also appears to be spreading to the retail side with initial decentralized exchange offerings regularly becoming oversubscribed. As such, the native tokens of IDO launchpads are now some of the best-performing in the cryptocurrency space.

Blockchain private equity funding by the numbers

In Q1 2021, 129 crypto and blockchain startups received about $2.6 billion in funding, according to a Bloomberg report culled from data by business analytics firm CB Insights. This figure is already $300 million more than the total funding for such companies in the whole of 2020.

Crypto wallet provider Blockchain.com, lending outfit BlockFi and blockchain game studio Dapper Labs accounted for almost half of the $2.6 billion funding received by startups in the industry in Q1 2021. At the end of March, Dapper Labs announced a $305-million investment from sports stars and other celebrities amid growth in the sale of NBA Top Shot nonfungible tokens.

VC funding for crypto and blockchain startups in the United States has eclipsed the numbers recorded in other regions since the emergence of the crypto space, according to the recently published “Blockchain Venture Capital Report” by Cointelegraph Research. This trend is despite the lack of regularity clarity for the market in the country.

According to Jehan Chu, founder of Hong Kong-based VC investment firm Kenetic, the regulatory climate in the U.S. has done little to dissuade private equity funding for blockchain startups, telling Cointelegraph:

“Nothing is more compelling than peer pressure from the likes of Michael Saylor, Elon Musk and the stampede of institutional money charging into the market. VCs must have a position or a view on crypto, or risk missing the biggest market opportunity in a generation.”

The potential for outsized returns continues to be a driving force behind increased equity investments in crypto startups both for blockchain and mainstream VC funds. In its recently published “Blockchain Venture Capital Report,” Cointelegraph Research revealed that blockchain private equity has outperformed traditional private equity across one-, three- and five-year horizons.

Indeed, blockchain private equity performance has proven itself to be largely uncorrelated with the mainstream asset class. This trend offers some form of assurance for VC funds looking to diversify their early-stage investment portfolios.

Commenting on the basic investment thesis for VC funds in the blockchain space, Xinshu Dong, a partner at VC firm IOSG Ventures, told Cointelegraph: “Crypto is a very attractive direction with not just unparalleled growth potential but also quite promising validation, especially in the past few months from the buy-in from U.S. institutions.”

Given the marked increase in funding for crypto startups in Q1 2021, the proportion of blockchain-focused VC funding to the overall market might be set for a trend reversal. After almost peaking at 2% during the 2017 bull run, blockchain private equity fell to less than 1% of the global VC market as of the end of 2020.

This decrease can be attributed in part to the trends that emerged post-2018 bear market and the ongoing coronavirus pandemic. According to data from Cointelegraph Research, blockchain-focused VC funding dropped by 13% between 2019 and 2020, while traditional equity funding increased by 18% during the same period.

Driving force behind increased crypto funding in 2021

Since its emergence, the crypto landscape has been likened to the early days of the internet market in the 1990s and early 2000s. Where the internet boom led to the initiation and subsequent rise of sectors like e-commerce and social media, the blockchain space has been touted to drive innovations such as decentralized finance and the decentralized web.

Legacy brands that were dismissive of the promise of the then young internet space saw the rise of e-commerce and online merchants challenge the primacy of these brick-and-mortar firms in the retail arena. Social media also grew to arguably eclipse the reach of print and broadcast media as web-based services disrupted several industries.

With blockchain touted as having similar global business process disruption capabilities, several notable participants in the mainstream arena appear keen to interact with the emerging technology. This appetite for backing players in the novel arena appears even more apparent among VC firms with Dong telling Cointelegraph: “It’s an opportunity of a generation that VCs can hardly miss.”

The token economy associated with blockchain startups also offers early backers the opportunity to acquire cryptocurrencies that could appreciate in value within a short period. Even with vesting schedules that mandate a significant lock-up of these tokens for VC funds, the gains often outsize their initial equity investment.

DeFi interest and early-stage investments

Decentralized finance’s rise to prominence has offered significant expansions to the crypto market through activities like staking and protocol governance. According to Baek Kim, director of investments at VC fund Hashed: “The most important part of the crypto VC investments is that this is also an entry ticket to participate in crypto networks as a shareholder.” He added further:

“Crypto portfolios allow for investors to participate and contribute to the ecosystem in a much more engaging way than the traditional equity investments — through staking, node operations, governance proposals, liquidity bootstrapping and many more. VC participation in crypto and blockchain projects means you can be part of this paradigm shift not just as an investor but as a participant.”

This growing appetite for blockchain startups is not restricted to established players in the still-nascent crypto space. New projects, especially those in the DeFi space, are also enjoying significant interest from private equity firms looking to be early backers of the next DeFi bluechip.

In a conversation with Cointelegraph, Rob Weir, chief operating officer of upcoming DeFi platform Jigstack, attracting investments from VC funds was the easiest part of the private equity funding process. According to Weir, new blockchain projects need to consider issues such as vesting schedules and implications of token-represented equity on future price action for their native “coins.”

Weir said that balancing these key issues is essential for new projects in determining how to allocate tokens to private and public funding, adding: “VCs require a significant amount of token represented equity and consolidate a large portion of what would become selling pressure. If they deliver on their promises then they are well worth the upfront sacrifice.” He further added that “community-oriented raises leave you resource shy and carry other inherent risks.”

Early-stage backing by retail investors is also another growing trend in 2021, especially amid the gains enjoyed by projects bootstrapped on IDO launchpads. Launchpad platforms often utilize a tiered subscription package that allows holders of their native coins to gain access to project token allocations before the public listing.

According to data from cryptocurrency aggregator CryptoDiffer, the top 10 launchpad platforms in the market have recorded average returns on investment ranging between 11.3% and 68.2% thus far in 2021.

HSBC reportedly blacklists MicroStrategy’s stock for investing in Bitcoin

The investment banking giant now reportedly classifies MicroStrategy as a “virtual currency product.”

Buying MicroStrategy stock (MSTR) is reportedly no longer possible for HSBC customers on the bank’s online trading platform — HSBC InvestDirect, or HIDC.

According to a supposed message from the bank to its customers, HSBC has directed users that already own MicroStrategy stock not to buy additional shares.

Twitter user Camiam claimed to have received such a message from the banking giant on March 29:

The MSTR blacklisting appears to be part of the bank’s amended user policy prohibiting users from interacting with cryptocurrencies with an excerpt from the message reading:

“HIDC will not participate in facilitating (buy and/or exchange) product relating to virtual currencies, or products related to or referencing to the performance of virtual currency.”

According to the alleged HSBC communique, MicroStrategy is a virtual currency product hence the reason for the blacklisting.

MicroStrategy, a business intelligence and software firm, has pioneered Bitcoin (BTC) adoption among publicly-listed companies in the United States.

Since first adding Bitcoin to its balance sheet back in August 2020, the Fortune 500 company now holds over 90,000 BTC currently valued at about $5.26 billion.

The blacklisting MSTR is only the latest in HSBC’s recent anti-crypto moves. Earlier in the year, the world’s sixth-largest bank also reportedly blocked customers from moving profits from crypto exchanges to their bank accounts.

Despite banning users from buying MicroStrategy stock, reports of similar prohibitions are yet to emerge for other companies with Bitcoin investment interests.

Indeed, companies with significant Bitcoin investments like Tesla, Hut 8 Mining, and Square to mention a few are still listed on the HIDC trading catalog.

HSBC becomes the latest bank to react negatively to MicroStrategy’s Bitcoin involvement. Back in December 2020, Citibank downgraded MSTR over the company’s “disproportionate” focus on the largest cryptocurrency by market capitalization.

MicroStrategy's Bitcoin investment initially seem to trigger a positive run for the company's stock price reaching a 21-year high above $1,200 back in early February. MSTR has since struggled and is now almost 50% down from its 2021 peak.

Neither HSBC nor MicroStrategy immediately replied to Cointelegraph’s request for comments.

Crypto wagering for online sports betting now legal in Wyoming

The bill already signed into law legalizes online sports betting in the state with bookmakers permitted to accept cryptocurrency deposits from bettors.

Wyoming has passed a new law legalizing online sports betting in the state with gamblers able to fund their accounts with bookmakers using cryptocurrencies.

Governor Mark Gordon signed House Bill 133 into law on Monday, with new guidelines expected to take effect from Sept. 1. The move sees Wyoming becoming the second state in the United States to permit online sports betting.

As part of the bill, the state’s legislature recognized crypto as suitable means of making deposits into online sports betting accounts.

According to the definitions under Article 1 of the legislation, cryptos, as well as digital and virtual currencies, qualify as cash equivalents — i.e., approved assets convertible to cash for use in online sports wagering.

Apart from cryptos, bettors can also utilize travelers’ checks, cashier’s checks, money orders and credit cards, among others, to fund their accounts with online sports betting bookmakers.

Prospective online sports betting licensees will, however, have to offer online wagering services in at least three U.S. jurisdictions to receive permits from Wyoming regulators, according to the provisions of the bill.

The inclusion of cryptos as approved cash equivalent is the latest example of Wyoming’s liberal policies toward cryptocurrencies.

Indeed, Wyoming is the first state in the U.S. to allow crypto deposits for online gambling. Meanwhile, British bookmakers have been allowed to accept cryptocurrency payments on their platforms since 2016.

With its friendly stance toward cryptocurrencies, Wyoming has been touted as having a significant chance of challenging Delaware’s business incorporation dominance. Since 2018, crypto tokens have been exempted from securities regulations in Wyoming.

Back in February, Caitlin Long, CEO of digital bank Avanti Financial Group, said that blockchain firms were becoming more alive to the crypto incorporation advantages offered by Wyoming over Delaware.

Riot Blockchain is set to acquire a Texas data facility for $650M

The $650 million deal sees Riot Blockchain acquiring a major data center owned by Northern Data AG, one of its competitors.

Riot Blockchain is continuing its Bitcoin (BTC) mining expansion efforts. Reports suggest that the U.S.-based miner is set to purchase Whinstone US Inc, currently owned by Northern Data.

The planned purchase was announced via a press release by Riot Blockchain on Thursday, with the U.S. Bitcoin miner paying $80 million in cash. The remainder will come from the sale of about 12% of its stock to Northern DAG.

Whinstone reportedly operates the single largest Bitcoin mining facility in the United States. Based in Texas, Whinstone’s data center reportedly has a total capacity of 750 megawatts with an additional 300 MW expansion currently in the works.

Indeed, upon the completion of the transaction, Riot Blockchain is expected to become the largest publicly traded Bitcoin mining enterprise in North America based on operating capacity metrics.

For Riot Blockchain, the Whinstone acquisition offers an opportunity for the company to upscale its Bitcoin mining capacity. According to Riot CEO Jason Les, the path forward for the Bitcoin miner is one that involves increasing U.S. participation in the global BTC mining landscape.

In its own announcement of the deal, Northern Data revealed that the Whinstone sale to Riot Blockchain will not negatively impact its earnings before interest, taxes, depreciation, and amortization. According to the Northern DAG communique, the company’s profitable multisite strategy means that all previous EBITDA guidance for fiscal 2021 remains unchanged.

The planned $650 Whinstone acquisition comes on the heels of numerous inventory expansions by the U.S. Bitcoin miner. Indeed, Cointelegraph recently reported that Riot Blockchain purchased 42,000 Antminer rigs from Bitmain for about $138 million.

Riot Blockchain has been pursuing a capacity expansion agenda in recent times with its hashing power growing almost six-fold in 2020. The company’s efforts are indicative of the larger push by Bitcoin miners based in North America to challenge China’s BTC hash rate dominance.

Atari creates new blockchain division amid leadership shuffle

The video game giant says the new blockchain division will focus on leveraging the novel tech for decentralized gaming.

Atari has announced the creation of a new blockchain division as part of an organizational shuffle within the company.

In a press statement issued on Tuesday, the gaming behemoth revealed the creation of two new divisions — Atari Gaming and Atari Blockchain.

The former will focus on continuing the developmental work on Atari’s catalog of popular retro gaming titles as well as the rebooted VCS consoles.

As part of the announcement, Atari also revealed that current CEO Frédéric Chesnais will head the Atari Blockchain division while Wade J. Rosen will take over as the new company chief executive. Before the announcement, Rosen was the chairman of Atari's board of directors.

For Atari Blockchain, the communique revealed that the new division will focus on tapping the emerging opportunities at the intersection of gaming and blockchain technology. With an estimated 2.7 billion gamers across the world, the gaming industry is often identified as being primed for blockchain disruption.

According to the announcement, Atari Blockchain will work on integrating the Atari Token (ATRI) within the company’s gaming ecosystem. This planned integration will reportedly cover Atari-based blockchain games as well as the digital token economy in the VCS.

Atari Blockchain will also be responsible for leading the company’s involvement in the non-fungible token space.

Atari launched its ATRI token back in November 2020 after raising about $1.5 million in a private sale round. Even before launching its token, Atari has been involved in the crypto and blockchain space. In 2018, its holding company Atari SA announced plans to invest in cryptocurrencies.

The gaming giant responsible for pioneering home video game consoles in the 1970s has also partnered with a few startups working within the blockchain gaming and NFT metaverse landscapes.

As previously reported by Cointelegraph, Atari partnered with blockchain gaming ecosystem Enjin in December 2020 to integrate the former’s iconic IP and licenses to the latter’s platform.

In March, Atari also partnered with Decentral Games to create a virtual casino.

Upbit investor stock price surges three-fold amid bullish crypto trading in South Korea

A minority investor in a major South Korean crypto exchange is currently the best performing stock in the country.

The effects of South Korea’s crypto frenzy seem to be spreading beyond the cryptocurrency market to affect stock prices in the country’s stock exchange.

According to a report by Bloomberg on Wednesday, Hanwha Investment & Securities Co. has seen its stock price almost triple since the start of the year.

Indeed, at the time of writing, Hanwha Investment is trading at 6,550 Korean won per share, which constitutes a 197% stock price gain year-to-date.

This almost-200% share price increase puts Hanwha Investment as the best performing of the companies in the Korea Composite Stock Price Index.

Hanwha Investment’s bullish share price growth is likely tied to the company’s crypto association. The financial investment service provider holds a minority stake in Dunamu — operators of the Upbit cryptocurrency exchange.

Upbit, along with Korbit, Bithumb and Coinone are collectively known as the “big four” crypto exchanges in South Korea, controlling a major share of the country’s cryptocurrency trading activity.

The crypto causality case for Hanwha Investment’s share price increase is also further strengthened by the performance of other Dunamu backers. Both Woori Tech and Kakao Corp have also posted significant stock price gains in recent times.

As previously reported by Cointelegraph, South Korean brokerage firm Mirae Asset Daewoo is tipping Kakao stock to increase significantly in 2021 on the back of crypto enthusiasm in the country.

Meanwhile, Dunamu is reportedly mulling a public listing in the United States, which could happen on the Nasdaq. Dunamu’s announcement coincided with Coinbase moving forward with its direct listing on Nasdaq, which triggered renewed enthusiasm for crypto stocks in South Korea.

Upbit’s upsurge in crypto trading activity has also seen its main banker K Bank recover from a tumultuous 2020 while announcing plans for a possible initial public offering in 2022. Massive crypto user onboarding by K Bank for trading on Upbit has seen the bank shake off the $89 million posted in 2019.

DeFi needs regulatory clarity to interface with ‘real-world’ finance, experts say

Decentralized finance protocols and regulatory agencies need to figure out DeFi regulations to enable the niche crypto market to integrate with real-world finance.

Rune Christensen, founder and CEO of DeFi bluechip MakerDAO, says the decentralized finance space is set to move from its current isolated bubble phase toward more integration with the broader financial landscape.

Christensen made this known during Tuesday’s plenary session “Behind the Decentralized Finance Hype” at the ongoing Global Technology Governance Summit organized by the World Economic Forum.

According to the MakerDAO CEO, DeFi protocols interacting with real-world assets, such as commercial real estate and trade financing, will require significant regulatory input, stating:

“The huge difference between the primordial soup of DeFi building and DeFi in the real world is that now you have to engage with regulation and laws.”

Indeed, the dematerialization of securities is an already existing example of the emerging asset tokenization trend. Countries like Germany and Switzerland have already created legal frameworks that allow tokenized securities to fall under the same regulatory compliance requirements as traditional investment instruments.

With regulatory agencies in the mix, Christensen acknowledged that DeFi’s entry into real-world financing might proceed significantly slower than the march of progress that took the niche market segment to a $100-billion valuation.

For Aušrinė Armonaitė, Lithuania’s minister of the economy and innovation, regulatory agencies need to adopt a “teach more, punish less” approach to dealing with frontier financial technologies like DeFi.

Speaking during the session, Armonaitė stated that regulators and government agencies should be alive to the uniqueness of the DeFi space even beyond fintech.

According to the Lithuanian minister, regulatory bodies need to engage in constructive dialogue with DeFi stakeholders to achieve middle-ground regulatory provisions that ensure investor protection while not stifling financial innovation.

DeFi regulations are increasingly becoming a topic of conversation among many stakeholders, with regulatory agencies reportedly looking toward policing the growing ecosystem.

Back in March, the Financial Action Task Force published an updated version of its draft guidelines for cryptos with significant implications for the DeFi space. The document likely signals the growing intent among regulators to implement Know Your Customer compliance protocols for DeFi platforms.