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Wemade’s native token, wemix, will be delisted from top South Korean exchanges next month, despite assurances from the gaming company about the way it has distributed the token.

Members of the Digital Asset Exchange Alliance (DAXA) — a group made up of South Korean crypto exchanges Upbeat, Bithumb, Coinone, Korbit and Gopax — will take wemix off their books on Dec. 8, a little over a month since they issued an investment warning against the token.

DAXA is concerned the wemix team distributed far more tokens than it stated in a plan submitted to members, according to a notice posted on Upbit’s website. It also accused the company of providing insufficient or misleading information to investors.

DAXA initially gave the wemix team a period starting from the issuance of the warning on Oct. 27 to rectify the situation and address concerns, which the company pledged to do by clarifying information and improving its reporting systems.

Even with nearly a month to work things out, the two sides have seemingly failed to come to an understanding. DAXA said it still found errors in the data submitted during this period.

An ‘unreasonable’ decision

The wemix team slammed the decision as “unreasonable” shortly after its release. It claims the foundation that manages the wemix supply has not circulated a single token more than it has officially announced, and never circulated or sold wemix without prior disclosure.

“Their decision suggests that errors of the past are deemed irrevocable and are the main cause for termination of transaction support. The wemix team strongly believes this to be the result of an irrational approach in resolving the situation,” it said in a statement.

The decision is a blow to an established company trying to carve out a new business in web3. While Wemade has been making games since the early 2000s, including the Legend of Mir series, it’s only started to explore blockchain technology recently. In October, it launched a stablecoin and its wemix mainnet. 

To help with its web3 project, the company also raised a funding round in November, securing $46 million from Microsoft’s investment arm M2 and South Korean firms Shinhan Asset Management and Kiwoom Securities. It’s the third blockchain-related company that Microsoft has invested in. 

As for the wemix token, which it considers “the very essence and the heart of our platform-driven and service-oriented mega-ecosystem,” the repercussions of the DAXA announcement have been swift. Its value has dropped almost 70% since the announcement to around $0.49. 

Source: CoinMarketCap

© 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.

t3rn, a Polkadot-based blockchain interoperability protocol that aims to facilitate cross-chain transactions, has raised $6.5 million in a strategic funding round.

Polychain Capital led the round, with Huobi Ventures, Figment Capital, Blockchange Ventures, Lemniscap and others participating, t3rn announced Thursday. The funding was secured via a simple agreement for future tokens (SAFT), t3rn founder and CTO Maciej Baj told The Block.

t3rn started in 2020 to offer cross-chain transactions across Polkadot’s ecosystem and beyond. Baj said t3rn is under development as a parachain in the Polkadot ecosystem. He added that it will soon be launched on mainnet, supporting blockchains across consensus mechanisms and programming languages, including Ethereum Virtual Machine, Solidity and Ink.

“t3rn is the fail-safe multichain protocol,” Baj claimed. “It is the answer to the many issues we have been seeing in bridges, such as hacks and exploits.”

The fail-safe aspect is enabled by two mechanisms, explained Jacob Kowalewski, t3rn’s chief strategy officer. The first is an “optimistic approach,” he said. With this approach, transactions are verified only on the Circuit — t3rn’s blockchain — and not on the target blockchain, where the funds will end up. This results in cheaper transaction fees.

The other mechanism to enable fail-safe execution is the “escrow approach,” he said, meaning transactions are submitted and escrowed but technically can be reversed until the final commit signal is given on the target chain. He said that should a reverse signal be given, everything reverts back to an initial state.

“We’re targeting going live as a Polkadot parachain in Q1 next year,” Kowalewski said.

There are currently 18 people working for t3rn in its two offices in Berlin and Lisbon, Baj said. With the fresh capital in hand, t3rn plans to add more staff to the engineering function and continue building its protocol.

The strategic funding round, which began in March and closed in September, brings t3rn’s total funding to date to around $8 million. Last year, the project raised $1.35 million in a seed round.

The decentralized finance vertical of the crypto industry has started getting venture capital injections after a long lull period. Earlier this week, Cosmos-based DeFi protocol Onomy raised $10 million in a private token funding round.

© 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.

Blockchain research and development firm Proximity Labs and three decentralized exchanges on the Near Protocol blockchain — Orderly Network, Spin, and Tonic — have announced a $10 million developer fund.

The fund will provide grants and investments to new developer teams that build on top of Orderly, Spin, or Tonic, which are decentralized trading protocols that rely on virtual order books. These projects offer trading experience akin to centralized exchanges, using the Near blockchain as the settlement layer. New projects can plug into these protocols and use the liquidity they offer for their own tools, such as decentralized exchange aggregators.

The protocols raised funds and deployed on Near in quick succession earlier this year. Orderly Network raised $20 million in June. Spin, which runs a perpetual trading exchange on Near, raised $3.5 million in February. In April, Tonic raised $5 million prior to its launch.

Proximity Labs said the $10 million fund will derive from the treasuries of the four contributors. In addition to capital in the form of grants and investments, Proximity will also offer advisory services and developer support, it added.

Kendall Cole, Director at Proximity Labs, said the fund is aimed at further strengthening the decentralized trading ecosystem on Near in light of the fall of centralized exchange giant FTX.

“At Proximity, we believe the recent events highlight the necessity of a robust and highly performant orderbook DEX economy for a truly decentralized future. This $10 million fund encourages talented teams from any ecosystem to build on Near,” Cole 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.

Crypto prices were relatively unchanged after rising ahead of the Federal Reserve minutes yesterday. 

Bitcoin was trading at $16,538, according to CoinGecko. Ether was changing hands for $1,195. Both tokens had perked ahead of the release on Wednesday before paring gains. Cryptocurrencies, including altcoins, then traded higher after 8 p.m. ET. 

Grayscale’s GBTC discount was trading below -40%. The bitcoin trust hit an all-time low discount to NAV of 45% on Monday. The structured product has lifted each day since, despite fears that sister firm Genesis could declare bankruptcy without emergency funding.  

Thanksgiving hours

With markets closed for the holidays, trading on Wall Street takes a breather today. Markets are open on Black Friday, finishing up at 1 p.m. Eastern. Bond markets in the U.S. are following the same holiday hours. 

© 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.

The developers behind Akula, an Ethereum client implementation, have decided to scrap the project because they cannot compete with a newly announced rival project that has similar features and is run by a well-known crypto VC firm.

Akula is a high-performance Ethereum client written in Rust. Ethereum clients are software applications that allow nodes to read blocks on the network and interact with smart contracts. Ethereum core developer Artem Vorotnikov began building the project as an open-source client implementation in 2021 with a small team of developers.

Only this development work is now at an end, according to an announcement issued on Wednesday. The developers will no longer maintain or run the project, but the code remains available because it’s open source. The announcement cited the emergence of an identical node client by a team with access to better funding but did not name the project.

“Sadly, we cannot outcompete multibillion VCs who copy-paste our architecture and code,” said Vorotnikov in a tweet on Wednesday.

This rival project is believed to be Reth, a Rust-based Ethereum client run by the crypto VC outfit Paradigm. Vorotnikov shared screenshots showing Paradigm’s CTO Georgios Konstantopoulos asking highly detailed questions about Akula. At the time, Vorotnikov asked what Paradigm was building, assuming it would be built on Akala, but received no response.

After that conversation, the developers of Akula heard that Paradigm was indeed working on its own project. In response, they decided to discontinue work on Akula because they figured the competitor would quickly match and surpass it. “We do not see how Akula will be able to attract future funding from grants (and this is how it is funded now), and consequently, it does not make sense to spend our scarce resources on it,” the announcement stated.

Vorotnikov added that he will take a step back from Ethereum development for the foreseeable future. He had also been contributing to Erigon, an Ethereum client written in Go.

Following Akula’s statement, Konstantopoulos announced Reth and provided some core details about it. He claimed Reth is not a copy or a rewrite of any other client implementation, adding, “Reth does not include code from any existing client but stands on the shoulders of giants including Geth, Erigon and Akula.”

© 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.

The European Parliament passed a vote on the Digital Decade policy program, which will help businesses and public services digitalize their work and promises support for a “pan-European blockchain-based infrastructure.”

The plenary meeting vote passed by 529 to 22 on Thursday, with 25 abstentions. 

The policy file sets ambitions for the European Union to achieve digitization goals for 2030. It outlines large-scale, so-called “multi-country projects” to achieve the targets covering topics such as building common data infrastructure, beefing up on high-performance computing, rolling out 5G internet corridors and investing in blockchain and web3 solutions. 

The European Blockchain Service Infrastructure is a cross-border initiative involving all EU member states together with Norway and Liechtenstein, as well as Ukraine as an observer. The EBSI “is already subject to a cooperation between the European Commission and the European Blockchain Partnership,” an EU Commission spokesperson told The Block in an email. 

The favorable vote on the Digital Decade file could mean increased support for the EBSI in the coming years. 

The European Blockchain Partnership and the ESBI were set up by the European Commission in 2018, with an overlapping objective of developing and delivering blockchain-based public services across the EU. 

“The EBSI aims to support cross border public services leveraging the technology in an eco-friendly way,” an EU Commission spokesperson added. “It uses blockchain in a permissioned way with an EU governance provided by the EBP.”

Multi-country projects will be able to pool investments from the EU’s existing funding resources, like the €724 billion ($753 billion) pot of loans and grants of the Recovery and Resilience Facility. EU member states and private entities will also be able to support or invest in projects.

© 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.

Barely a month into his new role, Blair Halliday was just finding his feet at crypto exchange Kraken when the spectacular collapse of rival FTX shook the industry to its foundations. 

Kraken announced in October that Halliday had joined from Gemini, another exchange, to run its UK operations and expand in the region. Now, Halliday is also having to navigate a reckoning for centralized exchanges after FTX filed for Chapter 11 bankruptcy protection this month amid reports of billions in missing client funds.

“Regardless of the state of things as they currently are, joining Kraken was a terrific opportunity for me and remains one that I’m particularly proud and excited about,” Halliday said in an interview. “Whether you asked me this now or several weeks back, the song remains the same.” 

“Whilst the industry is recoiling from the FTX collapse and the subsequent fallout from that, personally I remain extraordinarily bullish on two fronts. I am extraordinarily bullish about Kraken, Kraken remains [in] an extraordinarily strong position,” he added. 

Show me the assets

Kraken is one of crypto’s oldest exchanges, having been founded in 2011. And Halliday — a crypto and financial services veteran who has worked in compliance roles at Circle and JPMorgan as well as spending 14 years at UK bank NatWest — is optimistic on its ability to shore up consumer confidence.

With crypto exchanges scrambling to produce proof-of-reserves audits in an effort to increase transparency, Halliday pointed out that Kraken was the first to introduce such an audit, back in 2014. 

And earlier this year, Kraken announced that accounting firm Armanino would conduct semi-annual proof-of-reserve audits, enabling customers to prove their bitcoin and ether balances were backed by real assets. Kraken expanded the audit to several other crypto assets in August. 

Armanino was reportedly responsible for auditing FTX’s 2021 financial results — although not its reserves.

Kraken’s most recent proof-of-reserves audit covered around 65% of assets, Halliday said. To further prop up client confidence, he said he wants to bring this closer to 100% in future.

No silver bullet

Proof of reserves has its challenges, however. It’s simply a snapshot of assets at a point in time, which creates opportunities for manipulation. 

Reserves are just one facet of many interconnected financial metrics, said Wayne Trench, CEO of exchange OSL, in a recent interview with The Block. They don’t reveal audited fiat reserves, client and company liabilities, company loans and a lot of other information required to verify a firm’s financial health, he added. 

Halliday concurred. “Proof of reserves isn’t the silver bullet. It’s part of the arsenal of ensuring that the consumers and institutions get additional comfort.”

Other components in the arsenal include having a strong customer service model and securing relevant regulatory approvals, Halliday said. 

“Whilst there’s a lot to be done, we’re confident that we’re helping to show the way forward,” Halliday said. 

A big part of Kraken’s plans and top of Halliday’s agenda is getting this message across to consumers through marketing and brand awareness with various roll outs planned for the coming weeks and into the new year. 

“We’re not going to move enormously away from what we are as an institution, which is talking about the importance of security, talking about giving access to education and all that good stuff.” 

Halliday was also excited to talk up Kraken’s presence in the UK, one its largest markets by trading volume.

“We have over 350 people here, it is a really important part of our plan to continue our growth,” Halliday said. “And we’re looking forward to introducing marketing, which no doubt some of that will have a UK play but also be about Kraken’s global mission and crypto.” 

Keeping its own counsel

While Kraken could look to leverage FTX’s collapse to bolster growth through hiring or M&A deals, the exchange is keeping quiet for now. 

Kraken is continuing to focus on key hires this year and into next, Halliday said. The company currently has over 3,400 employees across 75 countries.

“The desire and the willingness to invest remains there,” Halliday said. “And where we need those hires, we will absolutely do them and I’m looking forward to bringing more talented people into the crypto UK family.” 

Likewise, the exchange is open to investing in growing its operations in Europe where there isn’t an existing presence, Halliday said. 

“There might not necessarily have been a whole bunch of headline acquisitions, I think it would also be fair to say that we keep our counsel on that,” Halliday said. “And it’s not necessarily [something] we go public with, which is maybe in contrast to certain other firms.” 

© 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.

Ethereum-focused software company ConsenSys collects IP addresses and wallet address information of those who access Ethereum wallet MetaMask via the blockchain infrastructure service Infura. That’s according to its updated privacy policy.

ConsenSys owns both MetaMask and Infura. Infura runs blockchain nodes on behalf of wallets and individuals. When someone makes a blockchain transaction via their MetaMask wallet, it defaults to Infura, which broadcasts the transaction to the Ethereum blockchain. MetaMask connects to Infura through what’s called a remote call procedure service (RPC).

“When you use Infura as your default RPC provider in MetaMask, Infura will collect your IP address and your Ethereum wallet address when you send a transaction,” ConsenSys said.

ConsenSys added that if users accessed MetaMask with alternative RPC providers like Ankr, Alchemy and others, the firm would not collect such data. Still, it pointed out that third-party RPC providers may collect such data if they want to.

The concern is that companies collecting both on-chain data, like blockchain addresses and transactions, and off-chain data, like IP addresses, could be able to identify individuals and reduce the amount of privacy available on the network.

Yet MetaMask Founder Dan Finlay said on Twitter that he understands MetaMask is not using IP addresses even if they are being temporarily stored. “I think we can get this fixed soon,” he said.

Earlier this year, ConsenSys raised $450 million in a series D round that closed at a $7 billion valuation, making it one of the largest players in the crypto space. The blockchain firm is led by Joseph Lubin, who played a role in the launch of Ethereum.

© 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.

Crypto lending platform Hodlnaut is under police investigation in Singapore for alleged fraud and cheating three months after freezing client withdrawals and filing for protection from creditors. 

Hodlnaut and its leaders are suspected of making “false representations relating to the company’s exposure to a certain digital token,” according to a police statement on Wednesday.  

The beleaguered company has seen a series of liquidity crises and legal complications. Earlier in November, it turned out the Singapore-based crypto lender held assets worth $13.1 million on the collapsed FTX exchange.

Hodlnaut filed for protection against creditors in the Singapore High Court in August after having to halt withdrawals following a liquidity crisis. Hodlnaut reported $193 million financial shortfall in court following the crash of the TerraUSD stablecoin, which broke from its peg to the U.S. dollar in May.

Holdnaut was one of a several crypto firms forced to halt customer withdrawals following TerraUSD’s collapse and the implosion of crypto hedge fund Three Arrows Capital earlier this year. Vauld, which is also based in Singapore, is stuck in a similar situation, as is South Asian crypto exchange Zipmex.

The investigation comes as Singapore’s financial regulator looks to tighten consumer protection rules. The Monetary Authority of Singapore proposed to “adopt a risk-focused approach” to regulating crypto activity last month.

© 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.

Crypto exchange operator Binance is aiming to amass around $1 billion for its recently announced “industry recovery fund.”

CEO Changpeng “CZ” Zhao discussed the plan on Bloomberg Television on Thursday, and a Binance spokesperson later confirmed it in a message to The Block. “If that’s not enough we can allocate more,” Zhao said.

He first announced the fund last week to help mitigate fallout stemming from FTX’s collapse. The fund will target projects which are otherwise strong, but facing a liquidity crisis.

Binance will follow a “loose structure” for the fund where different industry players can contribute as they wish, Zhao said. Contributors will have to send funds to a blockchain address that the public can view, he added. A detailed blog post about the fund is expected to be published soon.

The crypto industry is reeling under pressure from the collapse of FTX, the exchange formerly run by Sam Bankman-Fried. Zhao’s tweets highlighting concerns about the health of FTX, a rival, and its sister firm Alameda Research earlier this month helped spur both firms’ collapse. Zhao said today that he tweeted “too late” about FTX’s problems. 

“I think as an industry we let FTX got too big before we started questioning some of those things,” Zhao said. “So I’m taking the approach where we ask questions much earlier. It does not mean any attacks on any of our industry peers. We just want to get more transparency and more scrutiny into the industry.”

Zhao also raised concerns about rival Coinbase in the Bloomberg interview. He said Coinbase’s financials are not on a blockchain, “which is actually the most transparent way to display information.” Zhao’s comments came in response to a now-deleted tweet where he questioned Coinbase Custody’s bitcoin holdings. 

Zhao had referenced a Yahoo Finance article that said that “Coinbase Custody holds 635,000 BTC on behalf of Grayscale.” He added in the tweet, “4 months ago, Coinbase (I assume exchange) has less than 600K,” with a link to a 4-month-old article from Bitcoinist. Zhao had also clarified he was simply quoting “news reports” and not making any claims of his own. But his tweet was misinterpreted by observers in the crypto community and he ultimately deleted it, Zhao said today.

After FTX’s downfall, there will be “a little bit” more contagion, but the overall industry is “fine,” Zhao said.

Meanwhile, early on Nov. 24, crypto exchange Bybit also announced the launch of a $100 million support its market maker clients. “The fund will offer a helping hand to Bybit’s dedicated institutional clients with a maximum of up to $10 million per client available and is intended to support the industry as the fallout from recent events continues,” Bybit 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.