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CME Group is following in the footsteps of Sam Bankman-Fried’s FTX.US, proposing to regulators its own plan to offer derivatives trading directly to consumers. 

CME Group, one of the largest exchanges for trading of derivatives and other financial contracts, filed paperwork to register as a so-called futures commission merchant (FCM), according to a report by The Wall Street Journal.

If the exchange’s plans are approved by regulators, then traders would be able to trade derivatives directly through CME rather than through brokers. Typically individuals traders trade derivatives through a third-party brokerages like TDAmeritrade. 

CME’s plan is similar to FTX.US’s proposal to allow traders to post margin and trade crypto derivatives directly on its platform. 

“This is notable and comes as no surprise,” noted CoinFund president Christopher Perkins, who took to LinkedIn to comment on the Journal’s reporting. 

“The CME Group has desired direct relationships with clients for as long as I can remember.” 

Still, CME spoke out against FTX’s similar proposal. During a congressional hearing in May, CME Group CEO Terence Duffy asserted FTX.US made “false claims of innovations that are little more than cost-cutting regimes.” 

If its application is approved, CME entering the futures brokerage space is a “game changer” and a “dramatic concern for every FCM” should CME sets fees lower than such middlemen, Joseph Guinan, CEO of the FCM Advantage futures, told the Journal.

Regarding FCMs and risk management, a CME spokesperson told the Journal that, “Our commitment to the FCM model and the significant risk management benefits it provides to all industry participants remains unwavering.” 

© 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.

India-based crypto exchange WazirX has laid off more than 50 people as it navigates a period of languishing volumes, the company told CoinDesk on Saturday.

As per reporting from CoinDesk, the crypto exchange has laid off as many as 70 employees or approximately 40% of its total workforce. 

The firm hopes the layoffs will allow it to  maintain adequate financial stability to survive the crypto market downturn. Employees in customer service, HR, management, and other departments were impacted, and will each have 45 days of pay following termination. 

WazirX’s layoffs comes nearly two months after Indian authorities began investigating the company for alleged money laundering. India’s Directorate of Enforcement froze $8 million worth of WazirX’s funds on Aug. 5, 2022. 

Binance was thought to have acquired the Indian crypto exchange. After WazirX’s funds were frozen, however, Binance co-founder and CEO Changpeng Zhao claimed that acquisition of WazirX never actually occured.

© 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’s NFT space saw a surge in minting this month despite NFT market volumes  showing little improvement following the crash earlier this year. SudoAMM has conducted $50 million in trading since its launch, proving there’s a market for royalty-free NFT trading despite the controversy they generate. The most popular web3 game of September saw almost 2 million users this month, but its smart contracts have registered less than $20 in incoming value to the dapp’s smart contracts.

Find out about this and more in this month’s data wrap.

NFT mints on Solana reach an all-time high

The number of NFTs minted on Solana hit a high of 312,000 on Sept. 7, up from 39,000 just three days earlier. On Sept. 6, Solana-based NFT market volume his $11.5 million, the highest level since May.

Top collections on Solana, Sept. 2022. Source: Hello Moon

The surge was likely influenced by the excitement surrounding the y00ts mint. The 15,000-strong NFT collection is a new release from Dust Labs, the team behind the DeGods NFT collection.

In terms of trading volume, Solana also saw some increase this month, but numbers still remain much lower than earlier this year.

The Solana NFT community is hoping the surge of interest earlier this month represents the market beginning to mature. They have long lamented the challenge of getting NFTs on the chain taken seriously. Chase Barker, head of developer ecosystem at the Solana Foundation said he remembers people laughing at Solana NFTs last year, while Metaplex co-founder Stephen Hess said, “It felt like cold calling.”

StepN logs 67 million miles as of its first anniversary

Move-to-earn app StepN revealed it has logged 67 million miles of walking and physical activity since its launch a year ago, with over 4.7 million users registered on the app.

The company earned more than $26.8 million and $122 million in the first and second quarters of 2022, respectively, despite challenges in finding the right balance for its tokenomics.

It also announced this month that it would be moving its headquarters from Australia to Hong Kong.

SudoAMM reaches over $50 million in trading since its launch

Two months after its launch, royalty-free NFT trading platform SudoAMM has taken more than $50 million in total trading volume.

As of Sept. 23, the automated market maker (AMM) has processed more than 90,000 transactions, attracted 29,000 users and amassed $251,000 in total platform fees.

Sudoswap volume. Source: Dune Analytics via user 0xRob

Launched in July by the same team as Sudoswap, SudoAMM removed royalties last month as part on an attempt to keep fees as low as possible.

Gameta September’s most popular web3 game

Casual mobile game collection Gameta attracted a stunning 1.92 million users — calculated by number of unique wallet interactions with a dapp’s smart contract — in September following its switch from Solana to BNB Chain. It beat out Alien Worlds, which saw 713,000 users in the same 30-day period. 

Source: DappRadar

Still, transaction volumes tell a slightly different story, with Gameta registering volumes of just $17.50. The Sandbox is the top game by volume, followed by Axie Infinity, Crazy Defense Heroes and Gods Unchained. 

Source: DappRadar

Metaverse trademark applications have already eclipsed 2021

Companies and individuals filed 4,200 U.S. trademark applications and 5,800 NFT-related patents from January to August this year, according to data shared by trademark attorney Mike Kondoudis in early September.

Numbers average at 523 a month, peaking in March with a record 759 filings. This compares with last year, which saw a total of 1,866 metaverse and 2,087 NFT applications overall.

© 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.

This has been a long week for players in U.S. crypto regulation, as the government brings more actions against companies and politicians weigh in on how to tame the crypto industry beast.

As jurisdictions including the EU and Australia look this week at whether to create Central Bank Digital Currencies (CBDCs) and how they should be implemented, in the U.S. the focus is on whether crypto assets should be considered securities and what companies should have to do in order to operate on U.S. soil.

Also in the news, Alex Mashinsky has stepped down from Celsius and Meta is introducing a hiring freeze as it seeks to cut costs following a dismal second quarter.

More companies face U.S. legal action

Eight states announced actions against cryptocurrency lender Nexo on Sept 26. California, Kentucky, New York, Maryland, Oklahoma, South Carolina, Washington and Vermont allege that the firm offered unregistered, interest-bearing crypto accounts to users.

California’s Department of Financial Protection issued a cease and desist order over Nexo’s crypto interest-bearing accounts, while New York Attorney General Letitia James is seeking to permanently bar the company from selling securities in the state.

The following day, Nexo said it had acquired a minority stake in U.S.-based Summit National Bank, which is regulated by the Office of the Comptroller of the Currency. The deal will expand its presence in the U.S. and enable the firm to offer bank accounts, lending and card services. The bank’s clients will be able to access Nexo’s crypto services.

The news comes as more legal action hits crypto companies in U.S. courts. Also announced this past week were cases against crypto futures exchange Digitex for failure to register with the agency and attempting to manipulate the price of its token, as well as another case against Hydrogen and market maker Moonwalkers Trading on allegations of market manipulation.

Some in the industry are attempting to self-regulate — eight more industry players including Bittrex and BitGo signed a crypto market integrity pledge by the Crypto Market Integrity Coalition — but politicians are also looking for ways to bring law and order to crypto.

Former U.S. Treasury secretary Lawrence Summers sees regulations as a potential tailwind for the growth of the digital asset industry, while Sen. Bill Hagerty, (R-Tenn.) has introduced a bill to create a safe harbor for cryptocurrency exchanges that might otherwise face legal action for listing unregistered securities.

California is hoping to become a model for other states when it comes to crypto regulation. State official Dee Dee Myers told The Block it plans to continue building out new rules for crypto. She said Gov. Gavin Newsom’s veto of a state crypto licensing bill earlier this month frees up his administration to create its own regulations. 

Executives at FTX, Celsius step down

Brett Harrison stepped down as president of FTX.US and will be moving into an advisory role at the company. Harrison joined FTX.US as president in May 2021 and oversaw the growth of the company as it clinched unicorn status and expanded outside of crypto into stock and non-fungible token trading.

FTX’s U.S. derivatives unit head Zach Dexter will take over the entire operation in the wake of Harrison’s departure ahead of the company moving U.S. operations from Chicago to Miami.

Embattled Celsius CEO Alex Mashinsky also resigned effective immediately. The controversial founder, whose firm collapsed earlier this year, will be replaced by CFO Chris Ferraro as “Chief Restructuring Officer” and interim CEO.

As the Celsius bankruptcy case continues to make its way through the courts, on Friday a representative for the Department of Justice was looking to block the firm’s attempt to reopen withdrawals for certain customers until after an independent investigation could be completed.

Meta to freeze hiring and restructure teams to cut costs

Facebook owner Meta Platforms is freezing hiring, trimming budgets and restructuring teams to cut costs. In July, Meta warned it would “steadily reduce headcount growth” amid a downturn in advertising revenue growth and increased competition from competitors like TikTok.

The company missed on both earnings and revenue in the second quarter. Its metaverse and virtual-reality division Reality Labs lost $2.8 billion in the three-month period.

At the same time, the company has added more digital asset functionality on Facebook and Instagram. U.S.-based users can now connect their wallets and share their digital collectibles across both platforms. Users in any of the 100 countries where digital collectibles are available on Instagram can now access the feature.

Also in the metaverse, retail giant Walmart has joined the list of companies seeking new ways to market their brands via metaverse platforms with the launch of two new experiences in Roblox. The experiences feature in-game advertising that Roblox is planning to roll out in 2023 as part of its attempts to find new revenue streams.

The use of advertising on the platform has raised eyebrows, given its popularity with children. 

© 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 ACA Group, which has bases in Singapore and Japan, has decided to give up on the planned acquisition of BitFlyer Holdings, which owns a crypto exchange in Japan, Nikkei reported today in its Japanese language edition.

ACA had agreed in April with a coalition of BitFlyer Holdings shareholders to buy a majority stake, estimated at the time to have a value of as much as 45 billion yen ($370 million).

The decision comes as a number of planned M&As have failed, including Galaxy Digital terminating the acquisition of crypto custodian BitGo, and Thailand’s SCB X calling off its deal to acquire crypto exchange Bitkub Online, both last month.

© 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.

Juno, a Singapore-headquartered crypto firm that provides checking accounts in the U.S. has raised $18 million in a Series A funding round and launched a native token as part of its tokenized loyalty program.

ParaFi Capital led the round, with Hashed, Jump Crypto, Uncorrelated Fund, Greycroft, 6th Man Ventures and others participating. This was an equity round and closed two months ago, Juno co-founder and CEO Varun Deshpande told The Block.

Juno’s Series A round comes three years after it raised $3 million in a seed funding round in 2019. That round was co-led by Polychain Capital and Sequoia Capital India’s Surge program. Deshpande declined to comment on Juno’s valuation with the latest round.

Juno provides checking accounts to U.S. residents that allow them to earn, invest in and spend crypto. Juno says its checking accounts are free and insured by the Federal Deposit Insurance Corporation (FDIC). “The Juno Checking Account (which holds USD deposits) is sponsored by Evolve Bank & Trust and is FDIC insured up to $250,000,” reads Juno’s website.

The checking account allows users to buy and sell crypto, earn interest on deposits and spend crypto and cash via a debit card. “We primarily compete with banks like Wells Fargo or Chase. In crypto, our closest competitors are Eco, Crypto.com, Strike and Robinhood,” said Deshpande.

‘Loyalty tokens’

Juno has today also launched a tokenized loyalty program, which will distribute its native ERC20 token, JCOIN, to verified users as a reward for certain activities on the platform. Those activities are receiving deposits, such as a paychecks, in the Juno account, and spending funds with the Juno debit card.

“Juno makes money via interchange and trading fees,” Deshpande said.

As for rewards to users for the activities, they are set at 1:1, meaning if someone receives or spends $1,000 in their Juno account, they will be rewarded with 1,000 JCOINs, according to Juno’s website. The firm terms JCOINs as “loyalty tokens.”

Juno says it will not distribute JCOINs to employees or investors and will not facilitate secondary trading of the tokens. Token holders will be able to shop products with partner brands, starting with crypto hardware wallet maker Ledger, said Deshpande. One billion JCOINs have already been minted and after their exhaustion, the firm plans to mint 1 billion more tokens. The supply of the token is uncapped.

Juno says more than 75,000 users are eligible to claim free 150 million JCOINs in an airdrop today, according to a snapshot taken on Sept. 30.

With fresh capital in hand, Juno plans to expand its loyalty program, team and product line. Deshpande said there are currently 80 people working for Juno, with 75 in India and 5 in the U.S., and the plan is to expand the U.S. team to 25 people and the overall team to 150 people in the next 12 months.

As for geographical expansion, Juno plans to continue to focus on the U.S. market “for the foreseeable future,” said Deshpande. Still, he added, “We are excited about potentially launching in Latin America.”

Juno was founded in 2021 by Deshpande, Ratnesh Ray and Siddharth Verma. The team had created decentralized finance protocol Nuo in 2019 but shut it down a year later “to pursue a more regulated approach to crypto.”

© 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

• The highly anticipated ETH Merge was successfully executed on September 15.
• Total adjusted on-chain volume decreased by 8.4%, to $365 billion.
• A total of 34,873 Ethereum, equivalent to $52.1 million, was burned.
• Monthly volume of NFT marketplaces on Ethereum decreased, by 17.6%, to $504 million.
• Centralized exchange spot trading volumes increased by 16.4% to $733.6 billion.

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Solana is back online following an outage on Friday night caused by a misconfigured node that stopped the blockchain from processing transactions.

A validator appeared to be running a duplicate validator instance, meaning that instead of the validator producing a single block, each instance produced one each.

“Not an issue in itself and something the network should handle,” said software and blockchain company Stakewiz, which operates a validator node on Solana, in a Twitter thread.

This caused the blockchain to fork because validators couldn’t agree on which one was correct. This fork caused an obscure code path that left validators unable to switch back to the main fork. Stakewiz suggested the Solana network’s failure to rectify the situation could be due to a failed node failover setup.

A decision was made to restart the network from 153139220, the last confirmed slot. The restart was completed at 7 a.m. UTC. Dapps are working to restore services.

Despite promoting itself as a high-performance blockchain, Solana has suffered a series of outages over the last year. In September 2021, it went offline for almost 18 hours.

It also froze for about seven hours in early May until validators restarted, and was knocked offline for about four hours in June. The network saw degraded performance in January, March, April and May. 

© 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. Securities and Exchange Commission (SEC) and the Ontario Securities Commission (OSC) have filed parallel fraud charges against crypto firms Arbitrade and Cryptobonix and their executives.

The regulators allege the two firms along with executives Troy Hogg, James Goldberg, Stephen Braverman and a self-professed international gold trader, Max Barber, perpetrated a pump-and-dump scheme of the crypto token Dignity (DIG).

Between May 2018-January 2019, the agencies claim Cryptobontix made false announcements that Arbitrade acquired and received $10 billion in gold, and the firm planned to back its DIG tokens at a $1 peg worth of gold.

The companies allegedly told investors that independent accounting firms had performed an audit, verifying the gold. However, the regulators say the acquisition announcements were a fraud aimed at selling DIG tokens at an inflated price, resulting in $36.8 million in DIG sold. 

The OSC additionally alleged that Hogg and the companies used investor funds for purposes unrelated to the DIG tokens, including real estate purchases and payments to companies he controlled. It also highlights that Hogg failed to register a sale of DIG tokens with the OSC.

The OSC and SEC collaborated on parallel investigations, according to their statements. The agencies are seeking court orders in their respective jurisdictions that would halt the businesses, require them to pay back ill-gotten gains, bar the executives and firms from holding similar positions and pay to-be-determined monetary penalties.  

© 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.

There are a vast number of similarities between the early days of the internet and where the blockchain industry is today, Wilhelm said.

In 1995, the average internet speed was around 10kB and there were fewer than 30,000 websites. In just 10 years, those speeds had vastly increased, ease of use to build had improved, and the number of websites created surpassed 6 billion.

The 10x moments are defined by improvements in the following areas: Speed, the costs to build, the ease of building, and trust, Wilhelm said.

ZkSync’s Layer 2 mainnet launches on Oct 28. Upon launch, its Layer 2 solution is expected to increase transactions per second (TPS) by around 10-20 times, compared with Ethereum, and enable developers to build zero knowledge-based applications using the industry standard Solidity language. This obviates the difficult task of learning a native ZK language to build applications.

“Think of Layer 2 as one-blockchain-size-fits-them-all. It scales Ethereum by anywhere from 10 to 100x. When you get up into Layer 3, I would say it’s a starfield of 10x moments,” Wilhem said on The Scoop.

Layer 3s could enable massive increases in TPS, native bridging that removes non-native bridge hacks, and unlock brand new uses for blockchain technology via application customization.

At the Layer 3 level, developers can choose what data they want for security and privacy, enabling huge increases in TPS by allowing developers to customize their chain exactly to their project’s needs.

Wilhelm used the analogy of a game to illustrate the concept. Within a game environment, it’s important that credit card information has the highest security and privacy guarantees to ensure no user information is stolen. Conversely, specific game data like the color of an in-game item does not need to have the same security or privacy guarantees, he said.

Layer 3s give developers the ability to choose what specific data they pay for to have on-chain security from Ethereum. The data that is not can be ported off-chain to a validium, which reduces transaction fees to practically zero.

ZKSync’s solution will also aim to address bridge hacks, a primary concern plaguing the industry with more than $1.4 billion stolen and counting.

“We have found a way to make the bridges between blockchains and Layer 3 to be native, and that’s huge because that’s a 10x moment for security, and that’s because of the way our prover works. So if all the blockchains in Layer 3 are approved by one proven technology, then they all share what’s called a circuit, and as long as you’re on that circuit, then all bridges are native.”

The ability to code using native Solidity, see huge increases in TPS, and mitigate one of the largest security issues in the industry are three 10x moments zkSync and its Layer 3 architecture provide.

The final 10x moment of improving ease of use for developers comes from its LLVM compiler, which enables the building of applications in almost any coding language – all while tapping into the above Layer 3 benefits.

“I can see a day when we open our browser and instead of seeing a lock icon in the top left… we see the Ethereum icon — that’s the sort of stuff that happens up because of Layer 3,” Wilhem 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.