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Itaú Asset, the investment fund arm of Latin America’s largest bank by AUM, is offering a physically backed crypto ETF listed in Brazil. 

Via a partnership with Mike Novogratz’s Galaxy Digital, the IT Now Bloomberg Galaxy Bitcoin ETF will start trading as markets open today on Brazil’s B3 stock exchange, according to a news release. It will begin by offering investors exposure to bitcoin, and later develop so that investors can access other strategies in the digital asset space. 

“We aim to offer the best solutions to our clients to meet their investment needs in a diversified way and with an international scope,” said the head of strategy at Itaú Asset, Renato Eid Tucci. “This partnership combines the solidity and credibility that we have built over more than 60 years at Itaú Asset with the strength and expertise of Galaxy as one of the most experienced players in the global digital asset space.”

Itaú Unibanco’s partnership with Galaxy comes amid fluctuations in the crypto ETF space. Last week, it was reported that three Australian crypto exchange-traded funds intend to delist their offerings amid a slump in asset prices. This followed an October report outlining how Hong Kong regulators have detailed the basic requirements that exchange-traded fund managers must meet to list crypto products, including ETFs, in the city.

Galaxy Digital is one of the crypto companies that has disclosed exposure to FTX amid the crypto’s exchange’s ongoing crisis. 

© 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 platform reported a $1.54 billion impairment in the third quarter after its majority stakeholder, Intercontinental Exchange (ICE), brought down its investment from $1.5 billion in June to about $400 million in September, is above the $1.4 billion expected.

Bakkt’s revenue for the third quarter was $12.9 million, up 41% from the year previous, but missing the $14.1 million average analyst estimate compiled by FactSet. 

“We are pleased with the momentum we are building with net revenue up 41% year-over-year and digital asset conversion volumes up 73% year-over-year,” CEO Gavin Michael said. 

The report shows $60 million in operating expenses, excluding the impairment charges, twice the nearly $30 million reported in the same period a year prior. 

Spun out of Intercontinental Exchange in 2018, Bakkt provides back-end infrastructure for a variety of financial services companies that offer bitcoin and loyalty reward points services. This report marks the end of the first fiscal year since the company went public in 2021 via a SPAC on the New York Stock Exchange. 

Last week it was revealed Bakkt is set to acquire Apex Crypto from Apex Fintech Solutions for up to $200 million. The acquisition is being viewed as an effort to bolster its cryptocurrency product.

© 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.

Bitcoin miner Hut 8 missed third-quarter estimates with $23.7 million in net losses compared to the estimated $19.4 million.

Revenue of $31.7 million compared to the $36.3 million average analyst estimate, data compiled by FactSet show. Computing operations revenue totaled $4.4 million. The company increased the number of digital assets mined to 982 from 905 a year earlier.

The installation of new miners brought Hut 8’s operating capacity to 3.07 EH/s as of Sept. 30, an increase of 10% in hashrate compared to the previous quarter.

Results come as miners struggle with sinking bitcoin prices, high energy costs and increasing difficulty in mining.

“We continue to mine at modest costs despite fluctuating power prices, increasing network difficulty, and sustained pressure on the price of bitcoin,” Hut 8 CEO Jaime Leverton said.

“Our conservative approach to managing our balance sheet continues to be paramount for us at Hut 8,” said CFO Shane Downey. “We improved our mining capacity by 10% while reducing the average cost to mine each bitcoin by 29%, when compared to the second quarter of 2022. We remain steadfastly committed to effectively managing capital in today’s challenging environment and believe we are well positioned to deliver shareholder value in 2023 and beyond.”

Hut 8 has managed to hold on to its bitcoin, which now total 8,388, unlike many other companies in the space which have sold a majority of their reserves in order to pay down debt.

© 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.

Hong Kong’s financial supervisor, the Securities and Futures Commission, granted Hash Blockchain, a member of the HashKey Group, full licensing to provide crypto asset trading services. This allows the firm to operate a virtual asset trading platform, according to a news release sent to The Block. Hash Blockchain will host a crypto trading platform.

The digital asset-focused financial firm is the second crypto service provider in Hong Kong to secure a full set of digital asset licenses, after completing a period of probation that began in April when it received an in-principle license. Investment holding company BC Group’s OSL digital asset platform earned a full package in 2020. 

The licensing follows the Financial Services and the Treasury Bureau’s previously announced intention of developing Hong Kong into an international crypto hub.

“The Government, in conjunction with the financial regulators, are working towards providing a facilitating environment for promoting sustainable and responsible development of the [virtual asset] sector in Hong Kong,” an official statement said on Oct. 31.

“We are ready to calibrate our legal and regulatory regime as part of our effort to provide the aforesaid facilitating environment having regard to the evolving nature and innovative approach of VA,” the statement added.

“We are delighted to have received the licenses given the backdrop of this positive announcement,” Michael Lee, executive president of the HashKey Group, said in the news release. “This enables us to provide regulated and compliant virtual asset trading services as we continue to help build the financial, technological and service infrastructure to facilitate and contribute to the rapid growth and the long-term development of the ecosystem.”

HashKey’s venture arm, HashKey Capital, got permission from Hong Kong authorities in September to manage a portfolio of digital assets.

More recently, HashKey Capital also received a license from Singapore’s Monetary Authority to operate there.

© 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 world’s largest cryptocurrency exchange, Binance, has released the addresses of its hot and cold wallets and will share details about its financial situation.

The move is part of Binance’s ongoing commitment to transparency and fostering trust in the ecosystem, the company said in a blog post.

It provided a snapshot of its current holdings that include about 475,000 Bitcoin, 4.8 million Ether, 17.6 billion USDT, 21.7 billion BUSD, 601 million USDC and 58 million BNB. Its Secure Asset Fund for Users, which it created in 2018 as an emergency insurance fund to protect users, holds a further $1 billion.

“This is a starting point while we work to create a Merkle tree POF that we will share with the community in the next few weeks. Our objective is to allow users of our platform to be aware and make informed decisions that are aligned with their financial goals,” the company said.

The announcement follows moves to reassure customers by other exchanges in the wake of FTX’s liquidity crisis. Binance itself backed out of acquiring the struggling company after reviewing its financials.

On Nov. 8, Binance CEO Changpeng “CZ” Zhao said the company would start a Proof of Reserves audit system accessible to the public.

CEO of Crypto.com Kris Marszalek said he believes “it should be necessary for crypto platforms to publicly share proof of reserves.”

OKX and Kucoin also said they plan to release information about their reserves in the coming weeks.

© 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.

Troubled Singapore-based crypto lender Hodlnaut held assets worth $13.1 million (S$18.4 million) as of October 25 on the collapsed cryptocurrency exchange FTX. It is unclear whether Hodlnaut’s managers moved funds away from FTX before operations were halted.

The lender under judicial protection also held assets on other centralized exchanges such as Deribit, Binance, OKX and Tokenize for a total of $18.3 million (S$25.7 million), according to court documents dated October 25. Its share on FTX was more than 70% of its holding on centralized exchanges. 

We have reached out to Hodlnaut and will update this article should we hear back.

From one liquidity crisis to another

In August, Hodlnaut halted withdrawals amid a liquidity crisis. It later emerged that it had a nearly $200 million financial shortfall in a court affidavit filed. 

In particular, the document shows that Hodlnaut parked some $317 million in UST, the failed stablecoin, in the Anchor Protocol on Terra as a way to pass high yields through to its customers. In May, Terra’s stablecoin UST sharply de-pegged from the dollar, inflicting losses of $189.7 million on Hodlnaut, per the affidavit. 

On Tuesday, FTX halted withdrawals amid a liquidity crisis. That day, FTX said that it had agreed to an acquisition by rival Binance. Yesterday, that acquisition fell through after Binance reviewed FTX’s financials.

© 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.

USDT, the stablecoin issued by Tether, has fallen 1% below its peg to the U.S. dollar today amid ongoing market turmoil. 

The largest stablecoin on the market fell to $0.9911 today, according to data via TradingView. It has seen a 0.68% decrease in the past hour.

USDT:USD chart by TradingView

Crypto prices more broadly have also come under pressure this week. Speculators are monitoring the rapidly developing story of crypto exchange FTX and its downfall.

Alameda Research borrowed 250,000 USDT on Aave this morning, which it moved to Curve an hour ago. The following Etherscan address is associated with Alameda and shows the recent transaction. Traders are speculating that the firm might be shorting the asset, although it’s unclear what its overall trading position is, looking solely at on-chain data.

At the same time, Curve’s stablecoin pool is getting unbalanced. The large majority — some 82% — of the pool is in USDT, resulting in less liquidity for other stablecoins. This will have been caused by traders swapping USDT for other stablecoins.

Tether CTO Paolo Ardoino said this morning that $700 million worth of redemptions had been processed in the last 24 hours. “No issues. We keep going,” he tweeted.

How did we get here?

Sam Bankman-Fried’s exchange came under scrutiny last week when a balance sheet relating to Alameda Research — a trading shop he also owns — was leaked. The balance sheet showed significant liabilities and holdings of FTT, FTX’s exchange token. 

Selling pressure from Binance of FTT over the weekend put increasing pressure on FTX and its trading arm. By Tuesday, Binance had agreed to acquire the struggling exchange — but the deal was off by Wednesday after a review of FTX’s finances.

© 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 crypto industry needs to raise its standards in the wake of the implosion of Sam Bankman-Fried’s cryptocurrency exchange FTX.

That’s according to fellow exchange Kraken’s CEO and co-founder Jesse Powell, who hit out at “clowns” in the industry who sell out their customers.

“Our good, trusting nature makes us easy targets for con artists. Some even tell us straight up that they’re here for profits, not crypto, and we praise them for their honesty. Yet we’re surprised when they turn out to be who they said they are. We need to raise our standards,” he said in a tweet thread.

Kraken is one of several companies with exposure to FTX. It holds about 9,000 FTT, the native token of FTX. Amber Group, Crypto.com, Galaxy Digital, Multicoin Capital, Selling Capital, Sequoia Capital and Wintermute have also released statements detailing their exposure to the company.

Powell, who is due to step down as Kraken’s CEO early next year, and the company itself have both emphasized that the firm is not “affected materially” by recent FTX news, but Powell said that for the sector at large, “the damage here is huge.”

FTX ran into trouble at the start of this month following reports that Sam Bankman-Fried’s trading firm held significant amounts of FTT, raising concerns about the relationship between the two companies.

A few days later, crypto exchange Binance said it would liquidate its FTT holdings. Binance then signed a non-binding letter of intent to buy the rival exchange. Yesterday, after seeing FTX’s financials, it backed out of the deal.

“An exchange implosion of this magnitude is a gift to bitcoin haters all over the world. It’s the excuse they were waiting for to justify whatever attack they’ve been keeping in their back pocket,” Powell 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.

The Grayscale Bitcoin Trust (GBTC), which has been trading at a discount since the beginning of 2021, hit a record low on Wednesday.

GBTC is currently trading at a discount of  -40.7%, its lowest point ever, according to The Block’s data dashboard. The discount represents the market price of GBTC shares, which are more than 40% lower than its net asset value, or NAV.

GBTC hit a previous all-time low on Sept. 26, when it reached -35.3%. The discount narrowed in September as crypto prices traded down. 

In July, GBTC’s discount hit a low of -34% ahead of the SEC’s ruling on whether it could be converted to a spot bitcoin ETF. 

Crypto markets — and related equities — have been roiled this week by the public downfall of FTX. Sam Bankman-Fried’s exchange came under increasing pressure last week when a report from CoinDesk showed Alameda, Bankman-Fried’s trading shop, had $8 billion in liabilities — including $7.4 billion in loans.

On Sunday, Binance’s CZ said his firm would sell its FTT holdings, the FTX exchange token. Alameda CEO Caroline Ellison stepped in on Twitter, offering to purchase the tokens from Binance for $22. Markets reacted negatively, and the price of FTT plummeted. Shortly after, CZ confirmed Binance made a significant transfer of FTT.

In the days since, FTX’s inability to operate without fresh capital has come to light. Binance stepped in ostensibly to acquire the exchange, but following initial due diligence, backed away from the deal. 

Markets are wrought with uncertainty and prices continue to fall. Bitcoin was trading at $16,661 at the time of writing, according to TradingView. The leading cryptocurrency by market cap had been above $21,000 earlier on Sunday. It traded below $16,000 on Wednesday.

BTCUSD chart by TradingView

© 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.

FTX chief Sam Bankman-Fried transferred at least $4 billion in FTX funds to Alameda Research, including native toke FTT and shares in Robinhood, according to Reuters.

The transfers were made after Alameda, Bankman-Fried’s trading firm, suffered losses from deals in May and June, including a loan agreement with Voyager Digital, Reuters said, citing people close to the subject. These funds included customer deposits, according to the report.

Bankman-Fried didn’t inform other FTX executives about the transfer of funds to Alameda because he was afraid of leaks, Reuters said. 

Crypto exchange FTX has suffered a spectacular fall from grace this week after Changpeng Zhao, the CEO of larger rival Binance, said he would begin selling off holdings of  FTX’s exchange token, FTT. After seeing a flood of client withdrawals, FTX announced on Tuesday it would sell its non-U.S. assets to Binance. That deal then fell apart on Wednesday after Binance walked away. 

After all this, FTX is once again looking to raise money, according to a Slack message shared by Bankman-Fried to his staff on Thursday seen by The Block.

Reuters also gave details on the two exchanges’ past financial dealings. In 2019, Zhao bought a 20% stake in FTX for about $100 million. After their relationship soured, Bankman-Fried bought back the stake for about $2 billion in July 2021, according to the report.  

Spokespersons for FTX and Binance didn’t immediately respond to requests for comment from The Block. Reuters said the exchanges didn’t respond to its requests 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.