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Bank of New York Mellon (BNY Mellon), the oldest bank in America, is enabling customers to custody digital assets alongside traditional investments on the same platform, according to a report from the Wall Street Journal. 

The bank won approval from New York’s financial regulator in the fall and can start receiving “select customers” bitcoin and ether this week, according to the report. 

Founded by Alexander Hamilton in 1784, BNY Mellon is the world’s biggest custody bank with over $43 trillion in assets under custody.  

The bank told the Journal that it is the first of the eight systemically important US banks to allow customers to use one custody platform for both its traditional and crypto holdings. 

BNY first unveiled its plans to custody digital assets for investment firms in February 2021. It has since integrated its crypto custody business into its core accounting platform, said the report. 

The platform goes live with select investment-fund firms this week. The bank is exploring expanding crypto custody to additional clients based on regulatory approvals, the report said. 

The bank is using software developed with Fireblocks to store the keys required to access and transfer digital assets. 

Fidelity was one of the first traditional financial institutions to enter the crypto custody space. The firm has been providing crypto services since 2018 through Fidelity Digital Assets. 

Banking giants JPMorgan and Citi are also exploring crypto custody services. Last year, the US Office of the Comptroller of the Currency allowed national savings banks and federal savings associations to offer crypto custody services to their customers. 

The Block contacted BNY Mellon 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.

Google and Coinbase revealed plans for a strategic partnership which would allow select customers to pay for cloud services using crypto from early 2023.

The new program will use Coinbase’s commerce product. In turn, Coinbase will use Google Cloud to process blockchain data, while also using its fiber-optic network to improve its global reach, according to a release. 

Initially crypto payments will be available to companies working in the web3 space, with a limited number of cryptocurrencies available. Coinbase’s commerce platform already integrates into several platforms, notably Shopify. 

Blockchain developers will also be able to use Google’s BigQuery crypto public datasets. These will be powered by Coinbase’s cloud nodes — which aim to streamline the building process for decentralized applications. 

Google will use Coinbase Prime for its institutional crypto services, such as custody and reporting. In August the world’s largest asset manager, BlackRock, also chose Coinbase Prime for its institutional offering.

Google Cloud’s aim is to make it frictionless for customers to take advantage of its services, Thomas Kurian, CEO of Google Cloud said in the release.

© 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.

Collectors who purchased NFTs from Vault by CNN were left in the lurch after the news provider suddenly decided to wind down the project.

CNN said Vault originally launched as a six-week experiment — which some in the community claimed was news to them — but that support and engagement from the community allowed it to expand into something larger. However, it will now no longer develop or maintain that community.

“There goes my CNN Vault investment, never would have guessed CNN as a company pulling a rug,” said user MM81 in the Vault by CNN Discord server.

Rug pulls are a scam where creators hype up tokens or NFT collections before abandoning the project and running off with investors’ money. While CNN remains in communication with NFT holders and hasn’t “rug pulled” in this sense, holders nevertheless feel blindsided. The project’s roadmap includes new features up until the end of Q4 2022, including exclusive perks and events for collectors.

Vault by CNN launched in the summer of 2021 as a marketplace selling NFT versions of the news organization’s reports on notable events such as space shuttle launches and presidential elections. It also sold art inspired by news events.

In April, Press Gazette estimated Vault by CNN had made $324,000 from the 28 highest-priced NFT runs on the marketplace before fees, though CNN declined to comment to the outlet on its financials.

Collectors will get some of those funds back, but not enough to end talk on the Discord server of lawyering up. Discord moderator and Vault by CNN core team member Jason confirmed a partial refund would be paid in FLOW tokens or Stablecoins.

“We are currently working out the details, but expect the distribution amount to be roughly 20% of the original mint price for each Vault NFT owned,” he said.

In response to whether the images and video in the NFTs stored on the InterPlanetary File System (IPFS) protocol would remain, he added that the collection would “live on.” CNN will continue to operate the Vault Marketplace and the Discord server will stay open until distributions are processed.

The Block contacted CNN for comment but had not heard back by press time. 

© 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.

A group of Bitcoin companies including Spiral and Braiins is taking action to promote the adoption of Stratum V2, which would be an upgrade on the current protocol miners use to communicate with pools.

They are also launching an open-source version of that protocol Tuesday, which will be available for testing immediately. The update from Stratum V1 would improve security for miners and for the network, make communication more efficient and help further decentralize the network.

“Miners know the benefits of upgrading to Stratum V2 very well, but pushing the entire mining industry over some of the remaining development and adoption hurdles is a big task,” said Jan Čapek, co-founder of Braiins.

The upgrade is a necessary step to “support further growth in hashrate” as well as an increase in pooled mining, a joint statement from Braiins and Spiral said.

The push to see it through comes at a time when mining difficulty has jumped 13.55 % to an all-time high.

“Stratum V1’s poor documentation has resulted in several interpretations and implementations, leading to mistakes and complexity,” a Galaxy report from August said. The company laid out the ways in which the network could benefit from Stratum V2, in another post from February.

“Working for industry-wide adoption of the upgraded Stratum protocol is one of the most important developments in improving the decentralization and censorship resistance of Bitcoin’s architecture,” said Steve Lee, lead at Spiral.

The open-source Stratum V2 reference implementation (SRI) will allow anyone to run the upgraded protocol or “use it to guide their own development of a separate compatible implementation for Stratum V2,” the joint statement said.

There will be a “more robust version of the same SRI” coming in early November and it will “support additional functionality.”

“This group will also ensure that all Stratum V2 projects can interact with each other based on the protocol standards,” the statement 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.

Ethereum has become deflationary for the first time since The Merge as its new supply growth fell to -0.12% in the last seven days, according to estimates from ultrasound.money — a direct result of Ethereum’s average gas fees spiking to between 20 and 30 gwei, which has driven down new ETH issuance.

After Ethereum’s transition from a proof-of-work consensus mechanism to proof-of-stake on Sept.15, the rate of new ETH creation dropped nearly 90% as a result of validator rewards being significantly smaller than the miner rewards previously issued under the old proof-of-work mechanism. 

Given a portion of fees for processing Ethereum transactions is burned, the overall supply growth was expected to become deflationary whenever the gas fee is above the 15.3 gwei mark — the point at which more ETH is burned than rewarded to validators, leading to decreasing rewards every subsequent block.

XEN raising Ethereum gas fees

While average gas fees had remained low for some time after The Merge, they suddenly soared last week with the launch of a new staking crypto token called XEN. This token can be minted for free by any Ethereum user and then staked for more rewards. 

As users have continued to claim more and more tokens, the project’s smart contract has consumed large amounts of gas on Ethereum. Over the last seven days, the minting of XEN has burned almost 3700 ether ($4.8 million), the highest among all Ethereum apps, according to data from ultrasound.money. “ETH is turning deflationary again thanks solely to a token named XEN, which has consumed half of all Ethereum blockspace over the last day,” Ethereum developer foobar noted on Monday.

Still, analysts have pointed out that, while the XEN token is causing ETH to become deflationary, XEN may have suspicious tokenomics — which some say has “Ponzi-like” properties. 

“This new Ponzi was just deployed and it’s free to mint the token, and people are minting it, driving the gas prices up. I don’t care what it is but this is the cause of it [Ethereum’s deflation],” EthHub co-founder Anthony Sassano said in a video referring to activity surrounding the XEN token. “Now that we are above the 15.3 gwei barrier, it’s deflationary and you start seeing the supply come down,” he added.

© 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 app store Magic Square is in constant fundraising mode, despite the bear market.  

To date, the early-stage startup has raised $4 million at a $75 million valuation, all from token rounds, Andrey Nayman, co-founder and CEO of Magic Square, told The Block in an interview. 

The startup first closed an oversubscribed $3 million seed round co-led by Binance and Republic Capital in July. Since then, Huobi Global, Gate.io and most recently Crypto.com have joined the cap table as strategic investors. 

So, why does Nayman keep raising funds? “The answer is very simple: uncertainty,” Nayman said. “Because I don’t know when the crypto winter is over, so it’s very important for us to be sustainable.” 

The fundraising isn’t stopping with Crypto.com’s contribution. Magic Square plans to raise an additional $4.4 million at a $120 million valuation in another strategic token round, Nayman said.

“We’re raising more from strategic partners that can assist us to grow, assist us to build the brand promise,” he added. “For us, the perfect timing to raise money is when you can, not when you need.” 

What is Magic Square?

Magic Square is a one-year-old platform that wants to help the crypto industry garner one billion users with improved discovery tools. 

Users can use Magic Square’s Magic Store desktop application to easily find new crypto projects and applications. 

“YouTube is a discovery channel, the app store is a discovery channel,” Nayman said. “In the crypto space, somehow people think that exchanges are discovery channels. They are not. They are good for tokens, liquidity but not for the discovery of the product.” 

There are currently 40 people working to build what Magic Square hopes will be a decentralized community.

To get listed on the store, apps and projects must go through a community validation process, which includes a review of the project’s litepaper, audit reports and more. This process is managed by Magic Square validators. 

Why so many strategic investors?

Backers of Magic Square include Binance, GSR, Republic Capital, Gravity Ventures, and more recently strategic investors Crypto.com, Huobi Global, and Gate.io. 

The strategic investors play a vital role in helping build out the discovery platform by enabling partnerships with portfolio companies. 

“This is something that was really helpful for us to grow our community, because we barely invested any budget on marketing or to promote the product,” Michael Landsberger, Magic Square’s COO, said. 

Around 95% of the projects on the platform came from an introduction by one of the company’s investors, Landsberger said. 

Plotting a Series A

All the funding raised by Magic Square so far has been secured via token sales. Pure token sales are becoming a less favored fundraising method in crypto, with investors instead choosing equity plus token warrant structures, due to regulatory fears and depressed token markets. 

Despite raising funds via tokens, Magic Square won’t be launching the token on exchanges until market conditions improve.

After the Token Generation Event (TGE), which will occur alongside the launch of the live version of the Magic Store, the startup will look to secure a Series A round that will involve selling equity to investors, Nayman said. 

A public beta version of the Magic Store is expected to launch by the end of this year. 

© 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.

A Bitcoin developer created and executed a complex transaction on the Bitcoin blockchain that brought down a large chunk of the Lightning Network on Oct. 9.

The Lightning Network is a layer built on top of Bitcoin that’s designed to handle high amounts of low-value transfers. It is still in the experimental phase, and those running Lightning nodes also have to run Bitcoin nodes.

The transaction was a multi-sig payment, where multiple cryptographic keys are used to sign a single transaction. Normally, these kinds of transactions have a handful of participants. In this case, Bitmatrix Founder Burak Keceli decided to test the boundaries of what is possible. He created a 998 out of 999 multi-sig — where 998 keys had to be used to sign the transaction out of a possible 999. The transaction went through and only cost the developer $4.82 in transaction fees (which is relatively cheap, considering the complexity).

The transaction caused problems for the Lightning Network. Many users complained that they were unable to stay in sync with the network, making it inaccessible for these users via their own nodes. This was due to a bug in the parsing library of an implementation of Bitcoin called btcd. It was mistakenly still checking a limit from an old version of the code.

The bug has now been fixed among Lightning node implementations.

© 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.

Solana NFT platform Metaplex (MPLX) has seen the value of its native token decline significantly following the announcement of a second airdrop.

The MPLX token, which had maintained an average price of $0.35 over the past fortnight, has fallen to $0.12 today. This 60% decline came after the project announced it was releasing a second airdrop of its token.

The Metaplex Foundation held its first airdrop in September, rewarding creators who used the project’s tools to launch their NFT collections on Solana. Some members of the community pushed for an extension of the airdrop to reward collectors. This matter was brought to a vote before the DAO but those in support couldn’t muster enough votes to meet the required quorum.

On Tuesday, the Metaplex Foundation announced that — irrespective of the failed vote — it would release 40 million MPLX tokens to reward collectors. This second airdrop rewarded collectors who minted at least five NFTs using the earliest version of the Metaplex minting module.

The second airdrop has already started. Data from the project’s website shows that 10.8 million MPLX tokens have been claimed across the two airdrops.

These tokens confer governance rights to the holders meaning that owners of the token can use them to vote on matters within the DAO.

© 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 Coinbase announced Monday that it received a license from the Monetary Authority of Singapore (MAS) as it plans to expand in Asia.

The license — an in-principle approval as a major payments institution — allows Coinbase to offer regulated digital payment token (DPT) products and services in the city-state. Coinbase said in a statement that gaining the license “is an important step, as we plan to launch our full suite of retail, institutional and ecosystem products.” 

Coinbase is now one of over a dozen crypto firms that have received licenses in Singapore, including Paxos, Crypto.com and DBS Vickers — the brokerage run by Singapore’s largest bank DBS. Licensed firms are required to comply with anti-money laundering (AML) and counter-financing of terrorism (CFT) requirements for providing crypto services. Coinbase rival Binance pulled out of Singapore after withdrawing its licensing application in late 2021. 

Notably, in-principle approvals are not final. A Paxos spokesperson recently told The Block that the in-principle license allows the company to continue its Singapore operations, while final approval requires further work with regulators and passing an exam.

Coinbase considers Singapore the hub for institutional business in Asia. The firm said Singapore is the top financial center in Asia and the third in the world after New York and London, and is keen to serve institutional clients, including banks and asset managers, as they show increasing interest in investing directly in digital assets.

Coinbase reportedly already employs 100 people in Singapore, with product engineers forming the largest chunk of those staff. Coinbase’s venture unit has also invested in over 15 Singapore-based crypto startups in the past three years and plans to continue backing the local ecosystem.

“Singapore plays a critical regulatory and commercial role in APAC and beyond, and serves as our global talent hub; we are excited to continue investing and building for the crypto economy here,” said Coinbase.

© 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.

LayerZero, a cross-chain application platform, confirmed it will be integrating with the Aptos blockchain when it launches towards the end of 2022. 

This integration will further improve security, user experience, and enable next-gen applications on Aptos, Aptos Labs said on Twitter. These next-gen applications revolve around being cross-chain, meaning that they operate across multiple blockchains.  

For users, operating across multiple blockchains is an unfriendly user-experience. Yet Aptos said operating across blockchains is critical for web3 adoption, and LayerZero supports that through its safeguards and emphasis on user experience. 

LayerZero claimed there are over 20 of the largest Aptos applications building on the LayerZero developer network, meaning they are tapping into the possibilities of building a cross-chain compatible application.  

Aptos received $350 million in funding this year and has been attracting developers from Solana – the fifth-largest chain by TVL — over to its network. 

© 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.