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OpenSea CFO leaves less than one year after joining

OpenSea CFO Brian Roberts has left the NFT marketplace company less than a year after he joined, according to his LinkedIn update posted on Friday. 

Roberts, the former CFO at the ride-sharing giant Lyft, joined OpenSea last December as the company’s first finance employee and built the finance team from the ground up, his LinkedIn update said. He will be staying on as an adviser to the company.

Roberts’ departure comes amid something of a crypto industry exodus. Several executives have left crypto firms in recent weeks. Earlier this week, The Block reported that FTX’s head of OTC and institutional sales Jonathan Cheesman had quietly left the firm. Last month, FTX.US president Brett Harrison stepped back to an advisory role. In the same month, Kraken CEO Jesse Powell stepped down to make way for incoming CEO David Ripley. Bitcoin investment services firm NYDIG’s CEO Robert Gutmann and president Yan Zhao also left the company last week.

Reasons behind the moves may vary, but they all come amid difficult market conditions. Bitcoin’s price has declined more than 70% from last November’s all-time highs of around $69,000 to about $19,500 today.

NFT trading volumes have also declined sharply in recent months. Last month, there was a drop of about 18% in trading volume on Ethereum-based NFT marketplaces to $504 million, according to data from The Block Research.

OpenSea, the largest NFT marketplace, saw its volumes drop more than 30% last month. Roberts said in his LinkedIn update that he remained “incredibly bullish on web3 and especially OpenSea.”

“The company is heads down building and I assure you, the best is yet to come,” he added.

OpenSea is backed by high-profile investors, including Paradigm and Coatue. Earlier this year, the company raised $300 million in a Series C funding round at a $13.3 billion valuation. Shortly after the fundraise, OpenSea acquired crypto wallet firm Dharma Labs, and in April this year, it acquired NFT aggregator Gem.

Roberts said in his LinkedIn profile that helped OpenSea close the fundraise and the two acquisitions.

OpenSea did not immediately respond to The Block’s request for comment on Roberts’ departure.

© 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: Yogita Khatri

Celsius creditors face fallout from U.S. bankruptcy disclosure process

Celsius filed a trove of documents this week containing users’ names and information about certain transactions, setting off a wave of concern among some creditors, despite the disclosure of such information being an expected part of the Chapter 11 bankruptcy process.

Transparency has been at the heart of the Chapter 11 case, with creditors calling for more insight into the company’s financials and its executives in the lead-up to the firm’s collapse. Now, some creditors are finding that the transparency baked into the bankruptcy process has drawbacks for crypto users.

More than 14,000 pages of documents hit the docket this week in the form of financial statements and schedules. That included a statement of assets and liabilities, which contains the names of creditors and the amounts they’re set to claim from Celsius. Also included are statements of financial affairs, which contain the transactions that occurred on the platform in the past 90 days with usernames, dates and the transactions on those dates. Those documents allow insight into financial moves made by executives in the lead-up to the firm’s collapse, and they also reveal the moves of customers.

Some worried that data breaches or leaks from other firms combined with the now-public information from Celsius could leave users vulnerable to doxxing, hacks or other cyber threats. There are merits to those concerns, said Beth Bisbee, director of investigation solutions at Chainalysis.

“It definitely does highlight the concern of connecting off-chain data to on-chain data when breaches occur to centralized platforms providing services to decentralized networks.”

While there may be real threats, they may be the trade-off for an open and transparent bankruptcy process.

Attempts to redact

When the filings hit the docket, some speculated counsel had made a mistake by publicly revealing the names of users or engaged in some kind of leak. However, a squabble over the issue had already played out in recent hearings, one that saw the creditor committee and Celsius argue the names should be redacted to protect customer identities and touching on many of the concerns that users would express once the information became public. The government representative in the case pushed back. Ultimately, Chief Bankruptcy Judge Martin Glenn disagreed, compelling Celsius to include the information in the final filings.

Glenn had made it clear as early as Sept. 1 that while he was willing to redact address information in the financial schedules, he was reluctant to redact names.

“I’m not going to allow anonymous proofs of claim, I can tell you right now,” Glenn said during the Sept. 1 hearing in the U.S. Bankruptcy Court for the Southern District of New York. He would hear arguments on the issue multiple times before handing down his opinion on Sept. 28.

In most bankruptcy processes, creditors must be identifiable in order to make claims to the estate. To claim funds, creditors have to prove the funds belong to them and they are who they say they are. A transparent process usually means disclosing who your creditors are and how much you owe them, according to Rick Hyman, a partner at Crowell & Moring, who has represented a number of lenders in Chapter 11 proceedings.

“It’s a fundamental principle of U.S. bankruptcy law that there is full disclosure,” Hyman said. “Full disclosure includes not just information that is essential to the debtors’ operations, but also to the identity of the creditors.”

Still, creditors usually take the form of businesses claiming money from the estate rather than a platform’s customers. Hyman said this issue of identity is uncommon in bankruptcy cases.

To address that issue, Celsius’ counsel filed a motion to redact customer names in this case in early August, arguing the disclosure could leave customers open to cyber threats. “The Debtor’s ability to continue to protect customers’ personal information is critical to maintaining their customers’ continued safety, loyalty, and business,” the filing said.

“Furthermore, like many individuals who invest in cryptocurrencies, the Debtors’ customers are particularly concerned with the security and privacy of their personally identifiable information because disclosure of such information could potentially result in a customer becoming the target of identity theft, blackmail, harassment, stalking, and doxing,” Celsius’ counsel argued in the August filing.

The creditor committee filed its support for Celsius’ motion on Sept. 12, after the government’s Office of the U.S. Trustee filed an objection to the request. In that objection, the government argued that disclosure is the backbone of the bankruptcy process since it provides the necessary transparency to evaluate the business and foster communication between parties.

However, Celsius may have had plans for an alternative mode of identifying creditors. During one hearing, Celsius’ counsel said it intended to propose a new process of making a claim in later filings that would lay out the claims process. At that time, the firm’s lawyers told the judge that the process could include issuing a string of characters to customers that they could use to identify their claim in the public documents. However, they’d never get to formally file that plan.

Naming names

While Glenn was amenable to redacting address information to protect customers, his order ultimately wouldn’t allow for the redaction of names, saying Celsius hadn’t proved there was significant danger to naming account holders and the names couldn’t be redacted under a statute protecting commercial information.

“Identifying the individual account holders by name, without physical and email addresses, is insufficient information to expose customers to risks of identity theft or personal danger,” according to his opinion accompanying the order. “Sealing information such as that sought by the Debtors from public disclosure risks transforming the open and transparent bankruptcy process into something very different, which the Court is loath to do without a strong showing of real and not speculative risks.”

In the hours after the filings hit the docket, Celsius and the creditor committee tweeted that they did attempt to redact the information and value customer privacy.

“Moving forward @CelsiusUcc will continue to work to protect account holder privacy in light of the recent court-ordered disclosure of account holder names and balances,” the creditor committee tweeted.

© 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: Aislinn Keely

Three biggest crypto stories from the past week

The past week in crypto was eventful with news across beats, especially on the policy side. The U.S. Securities and Exchange Commission (SEC) fined and settled with Kim Kardashian for a crypto promotion. The European Council passed the European Union’s (EU’s) landmark Markets in Crypto-Assets (MiCA) bill. The EU also banned crypto payments from Russia in a new sanctions package. And finally, bankrupt crypto lender Celsius set dates for the auction of its assets. Here’s a quick recap of the three biggest crypto stories from the past week.

Kim Kardashian’s SEC settlement

Kim Kardashian hit the headlines last week when the SEC announced a fine and settlement with her for allegedly failing to disclose income related to her promotion of the EthereumMax (EMAX) token. The reality TV star-turned-business mogul had earned $250,000 for publishing a post to her Instagram account about EMAX tokens.

SEC Chair Gary Gensler said the Kardashian case is a reminder that when celebrities endorse investment opportunities, it doesn’t mean those investment products are suitable for all investors.

As part of her settlement, Kardashian agreed not to promote any “crypto asset securities” for three years. The SEC’s investigation into EthereumMax is ongoing.

While the SEC settlement ends Kardashian’s case with the government, it may complicate a class action lawsuit that seeks damages from her, other celebrities and executives of EthereumMax, The Block reported on Friday.

The class action lawsuit was filed in January by Ryan Huegrich on behalf of all investors who purchased EMAX tokens between May 14 and June 17 of 2021, claiming executives and promoters of EthereumMax made false or misleading statements through social media and other promotions. Among those promoters are Kardashian, boxer Floyd Mayweather Jr. and former NBA player Paul Pierce, all of whom have filed motions to dismiss the case against them.

But Kardashian’s settlement with the SEC gives “instant credibility” to the plaintiff’s claims in the class action lawsuit case, Curtis Miner, an attorney at Colson Hicks Eidson, told The Block.

Other attorneys agreed, though they declined to go on-record regarding the case.

EU’s MiCA bill and ban on crypto payments from Russia

The past week saw two significant policy developments in Europe. The EU’s landmark Markets in Crypto-Assets (MiCA) bill passed in the European Council on Wednesday. A day later, the EU banned crypto payments from Russia in a new sanctions package.

The MiCA bill sets out to bring the issuance of cryptocurrencies under the wing of institutional regulation and establishes a first-time regime for crypto-asset service providers across the EU’s member states. The bill will need to pass an additional vote in the European Parliament next week. If approved, laws will be in place at the start of 2024 at the earliest.

As for the EU’s Russia crypto ban, it slashed the previous cap of €10,000 on crypto payments from Russia to nil. The sanctions package responds to recent referenda in Russian-occupied regions in Ukraine.

As part of the fresh EU sanctions against Russia, NFT company Dapper Labs issued warnings to users who have “connections” to Russia that funds held in their account-based crypto wallets have been frozen, according to emails seen by The Block.

The correspondence, which apologizes for “any inconvenience,” states that clients will be able to view their NFTs but will not be able to sell or transfer them to other wallets. The letter cites the EU’s recent financial sanctions against Russia for its invasion of Ukraine in February.

Celsius’s auction of its assets

Bankrupt crypto lender Celsius set a timeline for the auction of its assets. It will have a final bid deadline of Oct. 17 at 4 p.m. Eastern Time — with an auction, if necessary, on Oct. 20 at 10 a.m. ET. A sale hearing will be held on Nov. 1 at 11 a.m. ET.

A large number of participants is expected to attend the sale hearing. It remains to be seen who emerges as the highest and best bid for Celsius’s assets.

Amid the bankruptcy proceedings, Celsius co-founder Daniel Leon resigned this week, a few days after the firm’s founder and CEO, Alex Mashinsky, departed. New court filings showed that Leon and Mashinsky withdrew more than $1o million in cryptocurrency before the company froze client withdrawals and ultimately declared bankruptcy.

This past week, Celsius also disclosed the names and trading history of its platform’s users in the latest court filing. The huge data leak could let anyone connect the named users with their previously anonymous cryptocurrency wallets and see their crypto holdings and other transaction information. What’s also potentially damaging about this information is the way it could identify high-value cryptocurrency owners. While home addresses were not revealed, this information can be found separately — and many crypto users already had that data publicly leaked via the Ledger data breach.

© 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: Yogita Khatri

Moody’s executives say new EU MiCA regulations could unleash stablecoin innovation

Restrictions in new EU regulations could potentially serve as a booster to stablecoin innovations in Europe, Moody’s Global Head of DeFi and Digital Assets Fabian Astic told The Block in an exclusive interview.

European representatives recently voted to formalize Markets in Crypto Assets (MiCA) regulatory guidelines. Although over the past weeks various revisions of Europe’s national MiCA frameworks offered differing positions over stablecoin regulation, ultimately, restrictions on non euro-backed stablecoins made their way into the regulatory guidance. The regulations introduced a €200 million (just under $194 million) cap on transactions-per-day non Euro-backed stablecoins. 

With a final vote on the new legislation expected on Oct. 10, executives from global bond credit rating and research firm Moody’s Investors Service, provided The Block perspective on the forthcoming stipulations in an exclusive interview.

As MiCA’s earliest implementation expected in 2024, participants would have just two years to boost euro-denominated stablecoins in the region, potentially making a euro-backed coin a key player in the global crypto and DeFi space, according to Astic. But without enough euro-backed stablecoins, progress may slow down as a vast majority of today’s stablecoins are U.S dollar-backed, he warned.

Although a number of widely utilized dollar-backed stablecoins are engineered and deployed by web3 providers outside of the banking sector, existing traditional finance players entering the space bring with them an existing history of compliance and consumer protections that regulators may favor, Moody’s Head of DeFi and Digital Assets Strategy Rajeev Bamra said.

“The deployment of non-euro denominated stablecoins is important because it can either fuel the European DeFi ecosystem or it can be a real obstacle,” said Astic. “It would really depend on whether European market participants are ready to fuel the market with more euro-denominated stablecoins between now and the official implementation date.” 

With additional regulatory guidance, opportunities will come for known stablecoin issuers to enter the playing field as well, Bamra said. “If there is a regulatory framework or legal framework in place like the one in the EU, and then we know there are article proposals in the U.S., then that may or should potentially open up the window for all these big major stablecoins like the USDC and similar ones,” he said.

For now developers may be stifled by uncertainties over legalities or tax efficiency, according to Astic, who said that frameworks are a useful catalyst for innovation.

In terms of regulators, Bamra said, it can be a difficult challenge to promote an “atmosphere that is fair and equitable in order to encourage innovation.” The primary goals of legislation, he said, should prioritize ease of access to financial services and “ensure that society benefits from increased technological efficiency.”

© 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

Coatue loses two more partners, including one who led firm’s crypto investments: The Information

Investment manager Coatue, with over $73 billion in assets under management, has reportedly lost two more general partners in recent months.

Luca Schmid left the firm in August and Sebastian Duesterhoeft departed a month after, The Information reported on Friday, citing a person familiar with the matter.

Schmid plans to work with Checkout.com’s founder and CEO Guillaume Pousaz to start a family office to make investments in fintech startups, and Duesterhoeft is set to join Lightspeed Venture Partners as a partner, according to the report.

Notably, Schmid led some of Coatue’s top crypto and fintech investments, including Chainalysis, Fireblocks, Dune Analytics, Checkout.com, Chime and N26, according to his LinkedIn profile. Duesterhoeft, on the other hand, led the firm’s tech investments, including Airtable, Snowflake and Snyk, his LinkedIn account indicates.

Schmid and Duesterhoeft are the latest executives to depart Coatue. Last week, The Information reported that Matt Mazzeo, general partner at Coatue, left the firm to start his own investment fund focused on backing early-stage startups. Mazzeo’s deals at Coatue reportedly included NFT marketplace giant OpenSea.

Coatue was founded in 1999 by brothers Philippe and Thomas Laffont as a hedge fund. It became one of the most active tech investors during the recent boom. Earlier this year, The Block Research mapped out Coatue’s crypto investments and found out that the New York-based firm had invested in at least 14 crypto startups, including Alchemy, Bitmain, CertiK, Dapper Labs and MoonPay.

© 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: Yogita Khatri

Fidenza artist Tyler Hobbs has a new idea: buy now, mint later NFTs

Some people don’t like generative art because they see less value in things created at random by a computer than they do in the more deliberate strokes of talented humans.  

Those people really aren’t going to like the latest project from Tyler Hobbs, one of the superstars of the genre. It’s almost as if he designed it to troll them.  

QQL, the project in question, dropped on Sept. 28. At 14 ETH each (or about $19,000 at current prices), sales of QQL’s “mint pass tokens” raised a cool $17 million.   

The passes give holders the right to mint one of the 999 pieces of generative art that will ultimately make up the QQL collection. By toying with knobs and dials, holders can manipulate the algorithm created by Hobbs and his co-conspirator Dandelion Wist to produce a QQL that they themselves have had a hand in designing. Interested observers can also do that for free, though their creations will not be considered part of the QQL canon.  

“The collector is who gets to decide what pieces actually make it into the final set of 999 that represent the project,” said Hobbs in an interview over Zoom. “Any piece of artwork that makes it into the official set is something that somebody believes really deeply in.” 

It must boggle the minds of critics. These pieces aren’t simply the spawn of machine entropy, they in fact pair that with the whims of collectors — most of whom probably aren’t artists, let alone masters.  

Hobbs said he’s had people express the view that QQLs, because of their collaborative design, may not sell for as much as, say, Fidenzas — his smash-hit collection that has recorded individual sales of more than $3 million.  

“But sales price is not really the primary metric that I was interested in for this project, so that didn’t really matter too much to me,” he said. The way the auctioning off of mint passes worked seems to support the claim.  

Bidders took part in a Dutch auction with rebates, meaning everybody paid the lowest clearing price of 14 ether — even those who had bid higher than that. Through this process, 900 mint passes were up for grabs, with another 99 reserved for Hobbs and Dandelion, promotion, charitable causes and a competition. Nobody got special treatment, Hobbs said. The economic design even set aside something for collectors in the form of a 2% kickback on any future sales of their NFT.  

“We really want them [QQL holders] to be recognized for their contribution. Many of these people have spent many, many hours actually deeply involved with the algorithm, exploring it and developing their taste before they mint,” Hobbs said.  

Buy now, mint later 

The rise of generative art has been difficult to disentangle from a corresponding surge in speculative NFT investment. It seems as though Hobbs sees the QQL model as a kind of antidote.    

Typically, after a big generative art drop, interested parties can pore over the range of outputs — the pieces — produced by the algorithm in question. In the past, this has led to a frenzied period of trading that has pumped up prices on marketplaces like OpenSea, if only briefly.  

In the case of QQL, five days after the auction, a mere 103 pieces out of the available 999 had been minted. Mint passes are changing hands on NFT marketplaces, but most of the art that will in time make up the collection doesn’t exist yet. The collection was designed so that mint passes never expire, meaning holders have till kingdom come to realize their NFTs.   

“We expect to see minting continue for years or decades,” Hobbs said. “I wouldn’t be surprised if somebody mints a QQL after both myself and Dandelion are dead.” 

When they do start to emerge in greater numbers, how will they look? As with all collections, there will be a range of outputs within the stylistic confines of the algorithm. The main difference here is the influence of mint pass holders. Some are hoping to craft aesthetically pleasing abstract art. Others have taken an interest in outputs that “happen to resemble actual objects,” such as landscapes, cityscapes, or even animals, Hobbs said.  

Silly though it sounds, this is something of an obsession among NFT hoarders. One of the priciest ever purchases of a piece of generative art was the 1,800 ether ($5.8 million at the time) shelled out for Dmitri Cherniak’s Ringers #879, a goose-shaped image that caught the eye of the ill-fated crypto hedge fund Three Arrows Capital.  

“The algorithm is in no way designed to produce those things in particular, so the fact that they come out is a really interesting, odd occurrence — quite a rare one. But some people get really excited by that and that’s what they choose to highlight with their mint,” Hobbs said.  

Such standout pieces are sometimes referred to as “grails” in crypto culture, and they were front-of-mind for Hobbs and Dandelion — co-founder of the generative art marketplace Archipelago — when the pair were designing QQL’s algorithm.  

“Both of us really felt that this was the best part of generative art and something we could really aim for, and QQL was really based around the idea of maximizing the potential for that to happen and that to be appreciated,” Hobbs said. It is a somewhat contradictory thought: that an algorithm that spits out random patterns could be primed to produce more grails. More to the point, if it accomplished this, would those more commonplace pieces still be considered grails? In the case of QQL, more than any other collection, time will tell.  

The focus on grail production also begs the question: What inspired Hobbs and Dandelion to create QQL? Generative artists take inspiration from multiple sources while working on their algorithms, Hobbs said. He mentioned the work of Mondrian and Kandinsky, as well as that of his fellow generative artists — likening the process to creating an album.  

A royal tiff 

It is not the first time that comparisons between QQL and the music industry have been drawn. Last week, NFT platform X2Y2 struck out at Hobbs and Dandelion for blocking QQL holders from interacting with its marketplace. “When someone else can decide where you can transfer your NFT, you are not the real owners anymore,” X2Y2 said in a Twitter thread. “Sounds familiar? Yes, this is exactly what happens in the music industry — you don’t own the mp3s lying on your hard drive.” 

Hobbs said that he and Dandelion shut out X2Y2 because it offers users lower fees by doing away with royalties due to artists on secondary sales of their work. “The artist royalty on secondary sales is one of the single most positive changes for artists in this art market. It’s a really big differentiator from the traditional art world,” said Hobbs, adding that he does not feel the X2Y2 block infringes on the rights of QQL owners, because they can still transfer their NFTs “whenever they want.”  

The tiff is a telling reminder of how financialized the generative art movement has become. There is potentially big money to be made in the sector and even trading shops like GSR, founded by former Goldman Sachs executives, sense it. The crypto market maker has set up a new division this year to try to turn a profit from flipping NFT collections algorithmically.  

The $17 million raised from the QQL auction will be split between Hobbs and his team of five at Anticlassic Studios LLC; Dandelion and Dandelion’s business Archipelago, which helped design the smart contracts behind QQL; the Dutch auction, the project’s website and the interface used to manipulate the algorithm. 

For now, though, Hobbs seems content with his life as an artist — albeit a financially secure one, to say the least.  

“After Fidenza, that was enough to essentially guarantee that I could continue to work as an artist for as long as I wanted, even if I was never able to sell anything again,” he said. 

A QQL created (for free) by The Block.

© 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: Ryan Weeks

Flashbots co-founder steps down after disagreements with team over censorship

Stephane Gosselin, co-founder of Flashbots, last month resigned from the maximal extracted value (MEV)  service following disagreements with the team, he announced on Twitter.

For a diverse and competitive MEV ecosystem, it is crucial to preserve censorship resistance,  Gosselin said in a statement. Gosselin also said he was proud of what the project had achieved.

“In the short term, I am hopeful that validators will avoid connecting to relays that perform censorship. Blockspace suppliers putting economic pressure against censorship will go a long way to making sure it does not become ubiquitous.” Gosselin told The Block via direct message on Twitter.

Since The Merge a relative consolidation of Ethereum validators on popular staking pools that use Flashbots relays occurred. The MEV provider’s decision to ignore transactions from sanctioned mixing service Tornado cash has drawn criticism that Flashbots is enabling censorship on the blockchain.

Concerns over the apparent censorship prompted a response from Flashbots Product Lead Robert Miller, who said the company is exploring ways to reduce dominance, and has open-sourced its code.

Gosselin described how Flashbots makes markets more efficient in a Season 4 episode of The Scoop.

L

 
 
 

© 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

Huobi will be acquired by Hong Kong-based About Capital Management

Huobi will sell a majority stake to Hong Kong-based investment company About Capital Management, Huobi announced in a blog post.

As the change in ownership occurs, there will be no impact on the exchange’s core operations, and Huobi said it will focus on international business expansion. This includes the creation of a global strategic advisory board led by “leading industry figures,” as well as the formation and capital infusion of a risk provision fund, the Asia-based exchange said.

Financial terms of the deal were not disclosed.

In late August, rumors that FTX founder and CEO Sam Bankman-Fried would purchase the exchange were laid to rest when he confirmed no such plans existed.

Huobi’s exchange token, HT, rose in response to the news, currently trading around $4.42.

HT trading view

© 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

Greenidge reshuffles executive ranks, expects further losses in Q3

Greenidge Generation is reshuffling its leadership roster. Jeffrey Kirt left his role atop the Bitcoin mining company, with two executives from forestry products company Millar Western replacing him.

Kirt, the loss-making miner’s chief executive since March of last year, left the company today. He will be replaced by David Anderson, who most recently was CEO of Millar Western. Scott MacKenzie, currently Millar Western’s vice president of corporate development, will be Greenidge’s chief strategy officer. Both begin their roles at Greenidge on Oct. 8.

“We’ve become a public company, strengthened our management team and workforce, significantly improved our fleet efficiency, expanded our geographic footprint and identified several new opportunities for strategic growth,” Kirt said in a statement.

“I am pleased to pass the baton now to Dave and Scott, whose extensive experience in successfully running and improving commodities businesses, executing capital projects and delivering reliable, low-cost power generation will serve Greenidge well.”

Greenidge listed on the NASDAQ exchange in September 2021. The company has not been immune to the turmoil afflicting the Bitcoin mining industry. Greenidge in August said it would pause its planned expansion in Texas due to the “sudden change in mining economics” to focus instead on its sites in New York and South Carolina. Greenidge reported a $108 million second-quarter loss.

Earlier this month, Greenidge said it planned to raise as much as $23 million in a stock offering. Greenidge expects to report a third-quarter net loss of $22 million on $29 million in revenue. Of that, $18 million in revenue is expected to accrue from bitcoin mining, with power generation accounting for a further $4 million. The company mined 866 bitcoins in the third quarter, it said in a statement announcing its leadership change. 

© 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: Madhu Unnikrishnan

U.S., Brazil authorities break up $768 million alleged crypto crime ring

Authorities in the U.S. and Brazil have broken up a crypto fraud ring in Curitiba, Brazil allegedly responsible for moving up to 4 billion reais ($768 million) worth of transactions as it misled investors about crypto products that turned out to largely worthless. 

“The U.S. investigation revealed that the organization allegedly deceived investors in over a dozen countries by falsely claiming that they had developed fully functioning, cutting-edge cryptocurrency-related financial products,” an Oct. 6 press release issued by U.S. Immigration and Customs Enforcement (ICE) stated. “In reality, the organization is suspected of advertising fraudulent partnerships and licenses that were used to dupe victims into investing millions into cryptocurrencies minted by the suspects. The cryptocurrencies eventually held little to no value.”

The fraud ring is led by “a 37-year old Brazilian national and former U.S. resident,” the ICE statement said. Brazilian police have named Francisley Valdevino da Silva as being the alleged leader of the crime ring, local news outlets including G1 reported

The investigation showed that the operation allegedly deceived “thousands of victims” through offering services that promised monthly returns of up to 20% of the amount they invested, Brazil’s federal police said in its statement.

Brazil’s federal police issued 20 search and seizure warrants as part of an investigation known as Operation Poyais, according to an Oct. 6 statement from the law enforcement organization. About 100 police officers took part in issuing these warrants and seizing property, along with employees of Brazil’s Federal Reserve. 

“The violations include international money laundering, operating a criminal enterprise, fraud, and crimes against the national financial system,” the ICE statement read.

Operation Poyais began in January 2022 when the fraud ring’s leader moved from the U.S. to Brazil, ICE said in its statement. However, Brazil’s police force noted that suspicions about the organization’s involvement with financial crimes date back to 2016.

Cryptocurrency-related pyramid schemes have taken hold in Brazil in the past few years. Police seized nearly $28 million in crypto related to one of the most high-profile operations in August 2021.

© 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: Kristin Majcher


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