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Cowen Digital hired a new lead for its European and Asian operations as the firm sticks to its ambitious digital asset plans and takes advantage of crypto winter to scoop up talent.
Taylor Cable, former COO and head of institutional client trading at BCAM (Blockchain.com Asset Management) who previously worked at Moore Capital Management, joins as managing director, Cowen Digital Europe. Cable, based in London, will lead Cowen Digital’s European and Asian activities.
The digital arm of Cowen Inc. was launched in March with plans to expand to more than 100 people in its mission to allow institutional clients to secure, access and leverage cryptocurrencies in their portfolios. The unit has hired about 10 crypto natives and plans to forge ahead despite the industry-wide fallout from the recent collapse of FTX.
“Our game plan is the same: Provide institutional access to markets,” Drew Forman, head of Cowen Digital, said in an interview. “We’re still having conversations daily with entire teams at these massive asset managers about being ready to trade when they want to allocate. Those mandates are ones firms like us will win going forward.”
The firm has a “renewed” focus on risk management amid the fallout from the industry bankruptcies and layoffs, which Forman says have been a boon for Cowen Digital.
“We’re continuing to add where we can find talent and expand our products,” Forman said. “We never over-hired and the team is right-sized and we want to continue to be adding exceptional people like Taylor, the likes of which potentially wouldn’t have been in our reach if bitcoin continued rallying through $60,000.”
Recent layoffs have been made at crypto exchange Bitso, Argentina’s Lemon and Australia’s Swyftx.
And while the crypto industry find itself in a rough patch, Forman is confident good will come of it.
“Competitively, we will reemerge from this with better business practices, hopefully with a clearer regulatory landscape and fewer bad actors and what will come out of it is an infrastructure that the huge trillion-dollar asset managers can invest in,” Forman said.
© 2022 The Block Crypto, Inc. All Rights Reserved. This article is provided for informational purposes only. It is not offered or intended to be used as legal, tax, investment, financial, or other advice.
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Author: Christiana Loureiro
Bitcoin mining difficulty is down 7.2%, the biggest drop since July 2021, according to an update posted on BTC.com.
It’s the largest single step down since a nearly 28% plunge following China’s crackdown on mining in the summer of last year, which caused the network’s hashrate to plummet.
The most recent decrease reflects the tough mining economics companies have faced in the past few months as margins have tightened along with rising power costs and declining bitcoin prices. Conditions that have left some miners cash-strapped and buried in debt.
The significant change in difficulty — which refers to the complexity of the computational process used in mining — is likely due to unplugged machines, as noted by industry insiders last week.
A “difficulty drop is [the] result of miners shutting off machines that are no longer profitable,” said Jeff Burkey, VP of Business Development at Foundry, last week.
The industry could see difficulty drop further in coming months considering how unprofitable some machines are, said William Foxley, Compass Mining’s media and strategy director. More and more ASIC machines are flooding the market even as average prices have already crashed some 80% compared to last December, according to data from mining software firm Luxor.
Mining difficulty adjusts about every two weeks (or every 2,016 blocks) in sync with the network’s hashrate.
Ethan Vera, COO of Luxor, said last week a significant drop could give some breathing room to troubled miners that can “weather the hashprice environment with low-cost operations and high-efficiency machines.”
© 2022 The Block Crypto, Inc. All Rights Reserved. This article is provided for informational purposes only. It is not offered or intended to be used as legal, tax, investment, financial, or other advice.
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Author: Catarina Moura
Democrats of the House Financial Services Committee will hear from Securities and Exchange Commission Chair Gary Gensler in the lead-up to a hearing on FTX next week.
Gensler will speak at a Democratic members-only briefing on Tuesday. Senior staff for the Commodity Futures Trading Commission also briefed bipartisan staff for the committee earlier today, according to a calendar obtained by The Block and confirmed by a Democratic aide.
It’s unclear whether Gensler or his CFTC counterpart, Chair Rostin Behnam, will appear at next week’s hearing. Behnam already testified before the Senate Agriculture Committee on FTX and legislation to reform how his agency approaches digital assets, last week.
The SEC chair has called the collapse of FTX “part of a pattern” in the crypto industry, and Gensler figures to receive bipartisan questions over whether his agency could have done more to protect investors.
Consumer Financial Protection Bureau Director Rohit Chopra will also brief Democratic members on Wednesday, though the main focus of that discussion is expected to be a regular oversight hearing for the agency also scheduled for next week.
The CFPB under Chopra has been less active around digital assets, which mostly fall under the jurisdiction of the SEC and CFTC, but crypto lender Nexo recently announced that it plans to leave the U.S. in response to scrutiny from the CFPB. The bureau has also indicated lately that it could take a more active role in digital asset regulation.
The committee also wants to hear from embattled former FTX CEO Sam Bankman-Fried and has asked current FTX CEO John Ray III to testify. Bankman-Fried indicated he would not participate in next week’s hearing in a tweet over the weekend, while House Financial Services Committee Chair Maxine Waters, D-Calif., insisted earlier today that he participate.
A spokesperson for Waters did not immediately respond to a request for comment.
© 2022 The Block Crypto, Inc. All Rights Reserved. This article is provided for informational purposes only. It is not offered or intended to be used as legal, tax, investment, financial, or other advice.
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Author: Kollen Post
Silvergate Bank, which specializes in service to fintech and crypto clients including failed crypto exchange FTX and its sister hedge fund Alameda Research, published a letter from its CEO to reassure shareholders about its due diligence practices, risk management and reserves.
“Silvergate conducted significant due diligence on FTX and its related entities including Alameda Research, both during the onboarding process and through ongoing monitoring, in accordance with our risk management policies and procedures and the requirements outlined above,” CEO Alan Lane wrote. “And, as I’ve noted previously, if we detect activity that is unexpected or potentially concerning in any account, we conduct an investigation and, when required, confidentially file a suspicious activity report in accordance with federal regulation.”
The letter to investors also included affirmations of risk management and anti-money laundering compliance, as Lane said he sought to combat “misinformation … spread by short sellers and other opportunists” following the FTX collapse. The bank CEO added that customers “continue to have access to their U.S. dollar deposits when they need them and that the Silvergate Exchange Network (‘SEN’) has continued to operate uninterrupted throughout this period.”
A class-action lawsuit filed against the bank last week claims that the bank and its corporate officers “were complicit in and responsible” for fraudulent losses in the FTX collapse because Silvergate “knowingly or negligently permitted FTX to direct customer deposits to Alameda Research.”
Lane also touted Silvergate’s assets.
“In addition to the cash we carry on our balance sheet, our entire investment securities portfolio can be pledged for borrowings at the Federal Home Loan Bank, other financial institutions, and the Federal Reserve Discount Window — and can ultimately be sold should we need to generate liquidity to satisfy customer withdrawal request,” Lane said. “We intentionally carry cash and securities in excess of our digital asset related deposit liabilities.”
© 2022 The Block Crypto, Inc. All Rights Reserved. This article is provided for informational purposes only. It is not offered or intended to be used as legal, tax, investment, financial, or other advice.
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Author: Colin Wilhelm
Most bitcoin mining stocks tracked by The Block traded lower on Monday, with a couple of of firms seeing double-digit declines.
Bitcoin was trading at around $16,900 by market close, according to data from TradingView.
TeraWulf led the declines with shares falling 12.6%. It was followed by Marathon Digital Holdings (-11.1%), Hut 8 Mining (-8.8%) and Northern Data (-8.7% ).
Here’s how crypto mining companies performed on Monday, Dec. 5:
© 2022 The Block Crypto, Inc. All Rights Reserved. This article is provided for informational purposes only. It is not offered or intended to be used as legal, tax, investment, financial, or other advice.
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Author: Catarina Moura
Cryptocurrency prices traded down on Monday, with bitcoin slipping below $17,000. Crypto-related stocks fell across the board, with declines lead by Silvergate.
Bitcoin was trading at $16,932 shortly after 4:00 p.m. EST on Monday, according to TradingView data. The leading cryptocurrency by market cap dropped 1% over the past 24 hours.
Ether was trading at $1,256, down 1.7% over the past 24 hours. Binance’s BNB experienced a slightly less severe sell-off, dropping by 1.5%. Dogecoin slipped 2.8%, while fellow dog-themed memecoin Shiba Inu bucked the downward trend by adding 0.3%.
Litecoin also fought the declines, rising 3.7% over the past day.
Crypto stocks
U.S. indices were in the red today, with the S&P 500 closing down 1.8% and the Nasdaq 100 dropping 1.7%.
Silvergate has come under pressure over the past few weeks since it revealed exposure to FTX and BlockFi following both firms’ bankruptcy filings.
© 2022 The Block Crypto, Inc. All Rights Reserved. This article is provided for informational purposes only. It is not offered or intended to be used as legal, tax, investment, financial, or other advice.
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Author: Adam Morgan McCarthy
The U.S. Federal Trade Commission is looking into several unnamed crypto firms over allegations of deceptive or misleading advertising, the agency told Boomberg News.
A spokesperson for the regulator confirmed it was investigating “possible misconduct concerning digital assets” but didn’t provide any further details.
Regulators have called for increased scrutiny of crypto companies in the wake of the collapse of the FTX exchange.
In October, the Securities and Exchange Commission charged Kim Kardashian with unlawfully touting a crypto security, saying she didn’t disclose payment received for the promotion of EthereumMax’s token. She agreed to pay $1.3 million in penalties and said she would work with the SEC on its ongoing investigation.
© 2022 The Block Crypto, Inc. All Rights Reserved. This article is provided for informational purposes only. It is not offered or intended to be used as legal, tax, investment, financial, or other advice.
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Author: Larry DiTore
Rep. Maxine Waters, D-Calif., is not buying Sam Bankman-Fried’s excuse for not testifying next week about the collapse of the FTX crypto exchange at a hearing before the House Financial Services Committee.
“Based on your role as CEO and your media interviews over the past few weeks, it’s clear to us that the information you have thus far is sufficient for testimony,” Waters, who chairs the committee, tweeted at Bankman-Fried from both her account and the committee’s, referring to a series of interviews the disgraced crypto mogul has held with media outlets including The Block over the past week.
Bankman-Fried said yesterday that he’d be willing to testify only “once I have finished learning and reviewing what happened.” He mentioned that that might not occur in time for hearing scheduled on Dec. 13.
As FTX and sister trading firm Alameda Research fell into disarray last month amid a plunge in the value of a native token and a customer run on deposits, both chambers of Congress announced hearings to investigate. The question of whether Bankman-Fried, who has testified at congressional hearings before the collapse of the exchange, would make another appearance continues to linger.
© 2022 The Block Crypto, Inc. All Rights Reserved. This article is provided for informational purposes only. It is not offered or intended to be used as legal, tax, investment, financial, or other advice.
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Author: Kollen Post
The domino effect of companies embroiled in a crypto-lending liquidity crunch that followed the collapse of FTX continues, with Nexus Mutual now seeking to divest from the Maple Finance M11 Credit wETH pool.
As it stands, Nexus looks to lose roughly $3 million from its investment position with Maple Finance. The loss may have been minimized due to Nexus having deployed to the wETH pool. Investors in Maple’s USDC pool saw as much as an 80% depletion in funds.
“We are extremely disappointed with Orthogonal Trading, given the allegations of financial misrepresentation. Due to this, Nexus Mutual expects a loss of 2461 ETH (15.8% of our investment in Maple) on the Orthogonal loans. We support M11 Credit and Maple in pursuing the appropriate legal action to maximize recovery,” Nexus Mutual told The Block in a statement.
Nexus is seeking to recover some 15,348 ETH it previously deployed to the M11 wETH pool in an effort to see returns on its digital currency reserves, Etherscan records show.
“We have initiated the process to withdraw available funds. There is a mandatory 10-day waiting period. We expect to recover the majority of the capital deployed into Maple,” Nexus said.
The M11 Credit arm of Maple Finance that underwrites DeFi contracts and manages the protocol’s wrapped ETH encountered a critical issue after it came to light Orthogonal Trading funds were tied up with FTX, and that the company would default on $36 million in loans on Maple Finance. Orthogonal’s default represented roughly 30% of loans on Maple’s platform.
Regarding the Orthogonal nonpayment, Nexus Mutual’s daily operations and capacity to pay claims remain unaffected, according to the company. “Our current understanding is that the Auros loans have a high expected recovery rate and the Flow Traders loans are unimpacted,” Nexus said.
© 2022 The Block Crypto, Inc. All Rights Reserved. This article is provided for informational purposes only. It is not offered or intended to be used as legal, tax, investment, financial, or other advice.
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Author: Jeremy Nation
