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North Island Ventures is gazing up at the Cosmos.

The crypto-focused investment firm, which recently closed its second fund at $125 million, is “investing pretty heavily” in the Cosmos infrastructure service platform, which aims to become more interoperable, decentralized and secure in its newest incarnation with North Island’s backing. The strategy involves purchases of Cosmos’ native token, as well as investments in projects developing in the Cosmos ecosystem. 

North Island co-founder Travis Scher said developers have started to gravitate toward Cosmos “pretty heavily” over the last six months.

“The momentum around Cosmos is now very real,” Scher said in an interview. “The traction with end users is still fairly limited, but I think that Cosmos is building ahead of where the market is going.”

Cosmos is a blockchain network consisting of interoperable, application-specific blockchains. These chains can interact with one another using the Inter Blockchain Communication (IBC) protocol. The Cosmos Hub is an independent blockchain and is secured by validators who stake Cosmos’ native token called ATOM.

North Island’s second fund is nearly double the size of its predecessor, which closed in 2020 with a total of $70 million, and has made around 30 investments. The new fund is expected to be invested in 30 to 40 firms primarily in seed-stages.

“The fund is a bit bigger than the last fund primarily because the opportunity set in crypto is meaningfully larger than it was in 2020,” Scher said. “Back in 2020 there were only really two blockchains that had any usage or momentum at all. There was no interest or momentum in NFTs whatsoever. There was just budding momentum in the DeFi space.”

While crypto investment opportunities have multiplied since the firm’s first fund, Scher acknowledges that now isn’t exactly the best time to deploy the newly raised cash.

“We just experienced a bubble in crypto, so I think we are most certainly seeing a pullback in terms of investment dollars getting put to work,” Scher said. “Venture investing in crypto over the next 12 months will be meaningfully less than it was over the previous 12 months.”

© 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 next bitcoin mining difficulty update — likely to occur Monday — could be the biggest increase in over a year.

Mining pool Braiins, for instance, currently estimates that it will be around 12.5%, while Bitrawr places it between 11.3% and 12.5% and Luxor at 12.6%. BTC.com has a more conservative estimate of just under 9%. While numbers can still change, they all indicate a large uptick in difficulty. 

In the past week alone, bitcoin’s hash rate has grown by over 11%, currently standing close to 250 exahashes per second (EH/s) according to data from The Block Research.

“There are several factors contributing to the jump in difficulty we expect to see in the coming days,” said Kevin Zhang, senior vice president at Foundry, which runs of the biggest bitcoin mining pools. “It’s a combination of infrastructure coming online, meaning more capacity being built out, heatwaves dissipating which is resulting in better uptime and less curtailment across mining facilities, and more efficient latest generation mining equipment being deployed.”

Miners have been racing to scale operations in North America in the past year, following China’s move to ban the industry, but have seen delays due to supply chain issues and power constraints, according to Ethan Vera, COO of bitcoin infrastructure company Luxor Technologies, which runs a mining pool.

“As we head into Q4 of 2022, finally this is beginning to roll out in size, paving the way for machines to get plugged in and network hash rate to grow,” he said.

At the same time, many older-generation models have been coming offline around the world as it becomes less profitable to mine with them, according to Marathon CEO Fred Thiel.

“Now that you have those machines being replaced by (Antminer) S19j Pros, you have a 3 or 4X bump in hash rate on a per machine basis for the same electricity,” Thiel said. In other words, for the same amount of electricity used, newer models will have a much higher hash rate and mine more bitcoin.

Bitcoin’s mining difficulty jumped 9.26% at the end of August as high-heat weather began to subside and the Antminer S19 XP hit the market. The difficulty fell significantly earlier in the summer, with bitcoin miners, particularly in Texas, turning off their machines in response to peak power demand due to the extreme heat.

Mining difficulty refers to the complexity of the computational process behind mining and it adjusts roughly every two weeks (or every 2,016 blocks) in sync with the network’s hash rate.

The upcoming update will likely have an impact on already declining profits, as the industry struggles with the fall of the bitcoin’s value and rising energy prices.

“This will squeeze miners even further, putting pressure on some of the bottom tier operators to close down and also making raising capital in the space increasingly more difficult,” Vera said.

However, miners that can keep up with the global hash rate growth by deploying new-generation machines might not see as much of an impact, according to Thiel.

“We’re growing our overall scale at a much faster rate than the global hash rate is growing. So it’s going to increase our profits,” Thiel said. “For the miners who aren’t growing at the same rate that the global hash rate is growing, it’ll decrease their profits.”

A significant portion of the hash rate growth this past week came from Marathon, which energized 19,000 miners between Sept. 30 and Oct. 5, increasing its own hash rate by roughly 1.9 Eh/s — over 10% of the hash rate growth to the overall network.

“As we start deploying XPs over the next months that’s 30% more efficient than the S19 Pros. So essentially global difficulty could grow 30% and you’d be net zero change,” said Thiel.

A difficulty increase of around 12% could result in a 20% drop in profitability based on one example presented by Daniel Frumkin, director of research at mining firm Braiins, which runs a bitcoin mining pool. According to the example, profit per day for an S19j Pro running at $0.05/kWh with the current difficulty would be $4.65 — and drop to $3.75 with a 12% increase.

© 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.

Binance said it would halt deposits and withdrawals via the BNB Smart Chain amid growing concerns over a hack of the network’s official cross-chain bridge.

Word emerged earlier Thursday evening that more than $400 million worth of BNB tokens were transferred from the Smart Chain token hub to a new address. According to data from DeBank, the address in question holds more than $500 million worth of crypto, with holdings in ETH, MATIC and FTM, among others.

Amid the speculation about the exact nature of the transaction, the BNB Smart Chain was stopped. In a tweet, Binance said that the network is “is currently under maintenance.”

“We will suspend all deposits and withdrawals via BNB chain temporarily until there are further updates,” the exchange said. 

The official Twitter account for the BNB Smart Chain cited “irregular activity” as the reason behind the stoppage. 

“To confirm, we have suspended BSC after having determined a potential exploit.  All systems are now contained, and we are immediately investigating the potential vulnerability. We know the Community will assist and help freeze any transfers,” the account said.

Additionally, the USDT holdings in the account were blacklisted as word of the potential attack spread.

The price of BNB was down as the market reacted to news of the apparent activity, trading around $282.30.

A representative for Binance was not immediately available to comment when reached.

This is a developing story and will be updated as more information becomes available. 

© 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.

In its first major crypto investment, major banking sector capital firm Citi Ventures co-led startup incubator Accel with a $6 million investment round in crypto investment wrapper company Xalts, Bloomberg reported.

“We are launching multiple fund products linked to digital assets, including mutual funds and ETFs listed on several global exchanges. We are also leveraging our technology platform to partner with several asset management firms and staking infrastructure providers to jointly launch and manage mutual funds and ETFs,” Xalts COO Supreet Kaur told The Block via Telegram.

Xalts’ founders hail from investment backgrounds, with Chief Investment Officers boasting institutional trading experience at HSBC, Lehmon Bros, and Nomura. Likewise, Kaur brings crypto experience with previous work for Meta.

The company began with the idea of wrapping digital assets into investment products fit for institutional investors, the company said on Twitter. However, would-be institutional investors face numerous barriers in terms of tax treatment, technological burdens, as well as due diligence for legal and regulatory due custodians and credit layers, and more according to Kaur.

“In spite of having the risk appetite to invest in crypto,” Kaur said many institutional investors face too many initial barriers, accounting for which can cost “millions of dollars in budget and headcount approvals, just to get started.”

Xalts is developing several other products, collaborating with ecosystem players, according to Kaur, including “a structured product and repackaging platform which will allow institutions to issue structured notes with embedded crypto options.”

Citi and Accel are joined in the round by web3 investor AGBuild, and individual investors including Polygon Co-founder Sandeep Nailwal, Coinbase Lead Product Manager Nakul Gupta, and OYO Global Chief Strategy Officer, Maninder Gulati.

© 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.

Elon Musk filed to stop the upcoming trial in his ongoing legal squabble with Twitter and indicated that his high-profile deal to buy the platform could close by Oct. 28, according to a report by the New York Times. 

Musk’s legal team lodged a new motion to delay a trial in the lawsuit brought against him by the social media company for his alleged failure to adhere to a purchase agreement. Musk now also argues that Twitter must drop the lawsuit in order for a purchase to move forward. 

A trial on the matter is still slated for Oct. 17, and has led to the release of text messages from Musk, Twitter executives, and other major figures in tech regarding the deal.

Now Musk says he will see the transaction through, contingent upon debt financing, which was not part of the original agreement. Using the rationale that he expects to move forward on the deal, he now argues that trial is unnecessary, as he seeks to close the transaction at the originally agreed upon price of $54.20 per share. 

Twitter board members continue to weigh the situation, and may try to stay in court until Musk is able to provide financing to close the deal, or resist the new financial structuring Musk wants to use to reach the price he offered. 

© 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.

Most bitcoin mining companies tracked by The Block trended downward on Thursday.

The cryptocurrency was trading at slightly more than $20,000 by market close, according to data from TradingView.

Argo Blockchain was down 5.56% on the London Stock Exchange, followed by Stronghold Digital Mining (-4.27%), Digihost Technology (-4.10%) and Cipher Mining (-3.05%).

Marathon was up by 2.02% after saying in the morning that it grew its hashrate from 3.8 EH/s to 5.7 EH/s in the past week and that it invested a total of $31.3 million in bankrupt Compute North.

Here’s how crypto mining companies performed on Thursday, Oct. 6:

© 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.

Ledn has acquired digital asset manager Arxnovum as the crypto lender looks to scale its product suite.

The Canadian-based crypto lender made the announcement Thursday, with the acquisition set to be completed by the end of 2022, subject to regulatory approval. After completing the transaction Arxnovum will become Ledn Asset Management Inc.

The acquisition opens the door for Ledn to register its yield products in Canada, CEO Adam Reeds told The Block in an interview. 

Arxnovum, founded last year, operates as a digital asset manager, and it applied for approval for a bitcoin ETF in January 2021 that has yet to launch. The firm is registered with several securities regulators in Canada as an investment fund manager, portfolio manager, commodity trading manager, and exempt market dealer.

Ledn was introduced to Shaun Cumby, founder and chief executive of Arxnovum, through the firm’s counsel, Lori Stein of McCarthy Tetrault in Toronto. Cumby previously worked at 3iQ, an investment fund manager that made inroads with the Ontario Securities Commission (OSC) with its bitcoin fund, which trades on the Toronto Stock Exchange (TSX).

Arxnovum’s track record of working with regulators is something Ledn wants to emulate, Reeds told The Block. Gaining regulatory approval in Canada is significant beyond the country’s borders, Reeds contended, and the nature of the regulatory environment there means other regulators hold approvals from Canadian regulators in high regard.

Ledn was linked to an acquisition of rival crypto lender BlockFi in the summer. At the time  Reeds told The Block the firm’s “operational strength” meant it was evaluating a number of opportunities to broaden its leadership in digital asset lending and beyond.

The Arxnovum deal is the latest high-profile crypto acquisition in Canada, coming after CoinSquare announced its acquisition of fellow crypto trading platform CoinSmart. The planned acquisition and integration will see Coinsquare manage over CAD$350 million (approx. $258 million).

© 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.

Derivatives market giant CME Group is set to launch three new crypto reference rates this month. 

Reference rates for the native tokens of the Avalanche, Tezos and Filecoin blockchains will go live on the CME from October 31, in partnership with CF Benchmarks.

The reference rates will show the U.S. dollar price of each token, published once daily at 4 p.m. BST, the respective real-time index will be published once per second, 24 hours a day, year-round.

Bitstamp, Coinbase, Gemini, itBit, Kraken, and LMAX Digital will provide data for these reference rates. 

The CME CF Reference Rates and real-time indices will capture more than 92% of the investable cryptocurrency market capitalization, according to CME Group Global Head of Cryptocurrency Products Giovanni Vicioso.

“These new benchmarks are designed to allow traders, institutions and other users to access a much broader range of cryptocurrencies through a suite of products they are already familiar with, allowing them to confidently and more accurately manage cryptocurrency price risk, value portfolios or create structured products like ETFs,” Vicioso concluded. 

While these are reference rates and not tradable futures, the inclusion of new reference rates could suggest potential additions to tradable crypto futures on the CME. Last month, CME expanded its line of crypto derivatives products, launching ether options on September 12. 

© 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.

Tiger Global Management is raising $6 billion for a new tech investment fund, according to Axios.

The in-progress funding effort is expected to undergo its first close in January, the publication reported, citing an investment letter it reviewed.

As highlighted by The Block Research, Tiger Global has invested in more than three dozen crypto and blockchain startups since 2020. Such a pace wasn’t always the case, given Tiger Global’s seeming reticence to invest in the industry beyond participating in Coinbase’s $300 million Series E round. 

In the past few months, the firm has acquired stakes in gaming infrastructure startup Lysto and the NEAR protocol.

© 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 South Korean court dismissed an arrest warrant for a Terraform Labs employee, hours after reports emerged about the arrest.

The arrest of the person, whose surname is Yu, was reported previously by Korean media. Yu is said to be Terraform Labs’ head of general business operations.

However, Yonhap News and SBS have since reported that a judge has dismissed the arrest warrant, questioning whether detainment was necessary. 

Per the reports, the judge also raised potential doubt about whether LUNA, the native token of the Terra blockchain ecosystem that collapsed in value earlier this year, definitively falls within the definition of a security under Korean law. 

Yu was reportedly accused of violating Korea’s Capital Markets Act through the use of automated trading tools or bots, as well as fraud and breach of trust, per Yonhap. 

According to Yonhap, the prosecutor’s office is weighing whether to reapply for an arrest warrant for Yu. 

Yu is said to be a key aide of Terra creator Do Kwon. As The Block reported earlier Thursday, the South Korean Ministry of Foreign Affairs has ordered Kwon to return his local passport within 14 days. Kwon would risk losing the passport or face re-application rejections if the passport is not returned within that time.

When reached by The Block, Kwon suggested that he could appeal such a move or seek a passport from another country. 

Frank Chaparro contributed reporting. 

© 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.