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An Instagram creator known for posting videos of himself handing out cash pleaded guilty to fraud charges after he was accused of scamming $8 million from investors, the Department of Justice announced.

Jebara Igbara, known online as “Jay Mazini,” could face up to 20 years in jail when sentenced. He was charged with wire fraud, wire fraud conspiracy and money laundering. 

Officials claim that Igbara, a 27-year-old who lives in New Jersey, was operating a Ponzi scheme and used investor money for personal expenses and gambling. Igbara was accused of defrauding members of the Muslim-American community in New York by soliciting funds for investments in stock, electronics resale, and coronavirus-related personal protective equipment.

The Department of Justice said that Igbara would post on social media that he was willing to pay above-market prices for cryptocurrencies. He would then send victims altered images of wire transfer confirmations but never actually sent payment. Instead, Igbara was “merely stealing the cryptocurrency sent by his victim,” to pay his investors, officials say.

“The defendant has admitted to leveraging his Instagram popularity to prey upon innocent investors and steal at least $8 million of their hard-earned money,” said Breon Peace, the U.S. Attorney for the Eastern District of New York.  “This office is committed to bringing scammers to justice.”

© 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.

Quick Take

• November 1, 2022 MicroStrategy filed Q3’22 earnings after the bell 
• Reported total revenue of $125.4mm, a +2.7% and (2.1%) change QoQ and YoY, respectively 
• Shares currently trade at $248.23 as of November 2, 2022 market close
• Annual interest expense increased from ~$9.8mm to ~$12.7mm on BTC Backed Debt
• 301 BTC acquired from Q2’22 to Q3’22

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Robinhood reported a third-quarter net loss of $175 million, beating the analyst consensus estimate of a $311 million loss, according to FactSet data. Shares rose more than 4% in after-hours trading.

The retail investing platform’s adjusted earnings before interest, taxes, depreciation and amortization (EBITDA) was back in the black this quarter, totaling $47 million. This beat analysts’ estimate of negative $48 million, according to FactSet data.  It was also an improvement from negative $80 million in the second quarter. 

Meanwhile, the platform’s monthly active users decreased by 1.8 million to 12.2 million in September from the prior month, while net revenue rose 14% from the second quarter to $361 million.

Crypto transaction revenue declined 12% to $51 million compared with the previous quarter, missing an estimate of $58 million and down from $58 million in the second quarter.

Overall, Robinhood’s transaction revenue was up 3% from the second quarter to $361 million, compared with $202 million in the second quarter. 

Earlier this year the New York Department of Financial Services hit Robinhood’s crypto division with a $30 million fine, and the firm has twice announced layoffs this year.

The retail investing platform launched its own crypto wallet at the end of the quarter, as exchanges jostle for dwindling volumes. 

Robinhood Wallet, a standalone app on the Apple Store, lets users trade and swap crypto without network fees. The app initially launched with Polygon support but will support multiple networks in the future, according to Robinhood.

© 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.

Coinbase’s chief product officer departed as the exchange restructured its product team.

Surojit Chatterjee stepped down on Oct. 28 as part of a reorganization that will split Coinbase’s product talent into four divisions, according to a filing with the Securities and Exchange Commission.

The product team — responsible for building out institutional and retail products — will be reconfigured into four divisions, with four directors reporting directly to CEO Brian Armstrong, who will take a more hands-on approach with the products.

The more focused groups are expected to allow the firm to work more nimbly and make quicker decisions, though it’s unclear if there will be significant cost savings.

Chatterjee’s departure is the latest among a spate of exits in the crypto industry, including those from Celsius Network and Voyager Digital, which continue to pick up the pieces after declaring bankruptcy in July. The CEO and founder of crypto exchange Kraken, as well as the CEOs of MicroStrategy, Genesis and Alameda Research, also left their posts in recent months as crypto prices have cratered.

“We’re empowering leaders within the company to make better decisions, faster, and to innovate more agilely,” company spokesman Elliott Suthers said. “These leaders will be closer to their products and our customers, which is critical in creating the type of user experiences that will drive the next evolution of the cryptoeconomy.”

The news comes a day ahead of third-quarter earnings and amid a brutal period for crypto exchanges, which rely heavily on trading-fee revenue to turn a profit. Crypto exchange in October volumes fell to the lowest levels since Dec. 2020, despite a slight uptick in cryptocurrency prices. Last month, Coinbase turned over $47 billion in total trading volumes, down from $149 billion in the year prior, according to The Block’s data dashboard.

Coinbase veteran Max Branzburg will head up consumer including products such as its NFT platform and wallet, while former Goldman Sachs managing director Gregor Tusar will lead Coinbase’s institutional products, which spans institutional custody and prime brokerage. Meanwhile, Will Robinson and Manish Gupta will handle the firm’s developer-focused products and infrastructure, respectively.

Chatterjee—who joined Coinbase in 2020 from Google —will serve as an advisor to the firm until February.

Elsewhere, other firms have announced layoffs and executive departures including Alexander Höptner’s departure from Bitmex last week, which was followed by the firm cutting 30% of its staff yesterday. Digital Currency Group promoted Mark Murphy to president yesterday, amid a restructuring. 

Against this market backdrop, Wall Street analysts have lost faith in Coinbase, with the average price target falling from an all-time high of $426 per share in Nov. 2021 to $93 per share on Oct. 29, according to FactSet data.

However, a speedier Coinbase could be a welcome sign for analysts, who have called out the firm in past reports.

In an August earnings call, KBW’s Kyle Voigt asked if the firm felt pressured by fast-moving competitors who weren’t afraid to explore new product lines. 

© 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.

Quick Take

• Rapid Insights provide a deeper analysis of the current crypto landscape in a timely fashion.
• As part of its latest protocol update, LooksRare has jumped on the bandwagon of royalty circumvention.
• Unable to ignore the mounting competitive pressure any longer, it has attempted to create a silver bullet that would equally satisfy traders and creators.
• However, the strategic shift has failed to materialize as a breakthrough success thus far.

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members of The Block Research.
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Crypto markets whipsawed alongside traditional counterparts after Federal Reserve Chair Jerome Powell said it’s premature to think about pausing rate hikes, even after the Federal Open Market Committee indicated its latest rate hike signaled a possible end in sight.

The ultimate level of rates will be higher than previously expected, Powell said after the announcement of the latest 75-basis point hike. That said, the rate of increases may begin to slow as soon as December.

It’s “very premature to be thinking about pausing,” Powell said at a press conference following the rate decision. “Incoming data since our last meeting suggests that the ultimate level of interest rates will be higher than previously expected.”

Bitcoin initially traded higher following the rate decision but dropped 1.8% after his statement. Bitcoin was trading at $20,495 at the time of writing, according to data via Coinbase. 

Ether also whipsawed, albeit more modestly. 

The hike was in line with expectations, but many speculators were looking for something else in the FOMC’s release — namely, signs of a pivot. The FOMC said it anticipates ongoing increases in the target range will be appropriate to return to 2% inflation.

Crucially, the Fed said it would consider various factors concerning future hikes, including “the cumulative tightening of monetary policy, the lags with which monetary policy affects economic activity and inflation, and economic and financial developments.”

© 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 mining data center operator Iris Energy Limited may soon be in default on more than $100 million in debt and is looking to refinance that obligation.

Payments on two groups of financed bitcoin miners operated by Iris Energy fell beyond the capacity of the income the miners currently provide, in what may become a standoff with lenders.

The miners in question are financed to the tune of $103 million, an amount that lenders may declare immediately due if a payment is not made by a prior arranged Nov. 8 deadline. It is a payment that Iris is not expected to make, according to a filing with the Securities and Exchange Commission (SEC), which showed the miners generate $2 million BTC a month, insufficient to offset a monthly $7 million financing payment.

Iris is in talks with lenders to restructure the financing, however if the terms of the debt are not modified, a default will occur. Lenders may seize mining equipment to recoup the debt, which may affect ongoing operations, the company said.

Iris reported it still has $53 million in reserves, and that a portion of the company’s miners and data center capacity and development pipeline remain unaffected by the financing arrangements.

Iris indicated that if an equipment foreclosure occurs it may seek third-party data hosting and self-mining opportunities.

© 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 U.S. Federal Reserve has raised the federal funds rate by 75 basis points, marking a 15-year high.

Wednesday’s interest rate decision was largely expected with traders pricing in a rise of 75 basis points ahead of time.

The Fed aims to achieve maximum employment and inflation at a rate of 2% over the longer run, as previously stated. In an effort to reach these goals, the Federal Open Market Committee (FOMC) raised the target range for the federal funds rate to 3.75-4%. 

The move was largely expected with traders pricing in the decision ahead of time. All eyes are on a potential Fed pivot at the Dec. 14 meeting. 

“The Committee anticipates that ongoing increases in the target range will be appropriate in order to attain a stance of monetary policy that is sufficiently restrictive to return inflation to 2 percent over time,” the Fed said, notably adding:

“In determining the pace of future increases in the target range, the Committee will take into account the cumulative tightening of monetary policy, the lags with which monetary policy affects economic activity and inflation, and economic and financial developments.”

Bitcoin’s price whipsawed on the news, trading above $20,650.

© 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.

Hollywood juggernaut Warner Bros. Discovery is diving even deeper into the world of crypto behind another iconic brand: Game of Thrones.

The media conglomerate, which owns the premium cable channel HBO and streaming service HBO Max, announced it will be releasing a collection of NFT avatars christened “Game of Thrones: Build Your Realm.”

The move is the latest in a flurry of other initiatives aimed at enticing massive fandoms accustomed to shelling out cash for the latest round of branded collectibles.

While NBA Top Shot was the pioneer, the NFL and other sports leagues have either launched or plan to launch NFT collectibles of their own. Warner Bros. Discovery itself is no stranger to dabbling in NFTs, having announced other projects utilizing famous franchises like The Lord of the Rings, DC Comics and Looney Tunes.

“Our goal, as always, with the fans is to create new ways for them to interact with the stories and characters they love,” Josh Hackbarth, head of NFT commercial development for Warner Bros. Discovery, said in a statement announcing the Game of Thrones collection.

The initial release will begin in December.

Warner Bros. Discovery partnered with the fan-focused, digital asset platform Nifty’s and non-fungible token creator Daz 3D, to manage the NFT launch.

CEO and Co-Founder of Nifty’s Jeff Marsilio said in a statement that the NFT series “will allow fans of the franchise to connect in ways they never have before.”

© 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.

More than 1,000 Solana validators currently are offline causing more than one-fifth of the Solana stake that secures the network to be delinquent

The downtime is because Hetzner, a cloud service provider, has blocked all Solana network activity on its servers.

Data from the RockawayX infrastructure dashboard show the Solana network delinquent stake ratio at 22% — the highest since May. This ratio refers to the percentage of the Solana stake that is currently delinquent.

A Solana stake becomes delinquent when the validator that the stake was delegated to goes offline. At this point, the validators and the delegator do not earn rewards.

Hetzner was already contemplating a ban on crypto node operators, according to a previous report by The Block. The company’s terms of service state that crypto activity is prohibited. At the time, the company’s attention was focused on Ethereum node operators as it was host to about 16% of all Ethereum hosting nodes. This number has since fallen to 12%.

Now, it appears that Hetzner has taken action against Solana validators. Hetzner did not immediately respond to The Block’s request for comments on the matter.

The Solana network seems to be unaffected despite having 22% of the network’s security vote offline. The Solana status page is not showing any outages, as of the time of reporting. The network has previously suffered numerous network outages.

Delegators and validators affected by Hetzner’s move will have to find suitable alternatives to resume earning staking rewards. Solana Labs co-founder Anatoly Yakovenko called on network participants to move their stake elsewhere.

© 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.