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Most bitcoin mining firms tracked by The Block trended downward Friday.

Bitcoin’s price rose above $20,000 before falling to $19,000 around market close, data from TradingView show.

Mawson Infrastructure Group fell 6.20%, followed by TeraWulf (-3.82%) and HIVE Blockchain (-2.96% on Nasdaq). On the other end, SAI.TECH rose 43.36%, Northern Data by 15.51% and Iris Energy by 10.05%.

Here’s how crypto mining companies performed on Friday, Sept. 30:

An overview of how miners fared over the week of trading:

© 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 Solana NFT ecosystem has evolved into an important pillar of the overall NFT market.
• The debate about NFT royalties has been swirling around Solana NFTs as well.
• DeGods has outperformed its competitors with a floor price increase of +1,151.5% YTD.
• The highly anticipated y00ts launch has made a dent in the Solana NFT universe, letting daily Solana NFT mints soar to an all-time high of 312.4K.

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The representative for the Department of Justice in the Celsius bankruptcy case is looking to block the firm’s attempt to reopen withdrawals for certain customers until after an independent investigation is completed.

Celsius filed a motion to return funds to customers in the custody and withhold accounts program at the start of this month. The U.S. Trustee objected to that motion today, saying “the motions are premature and should be denied until after the Examiner Report is filed.”

“The facts necessary to evaluate these Motions are the exact facts identified by the Examiner Motion as lacking transparency and that the Examiner is required to investigate and analyze in the Examiner’s Report,” the objection argues. “Any distribution or sale at this juncture could inadvertently impact or limit distributions to other creditors in this case.”

According to the U.S. Trustee, Celsius is “impulsively” attempting to reopen withdrawals for one group of creditors while the court has yet to gain comprehensive insight into the company’s crypto holdings and the relationship between their crypto balance sheet and crypto deposited by creditors. 

“Parties cannot evaluate if the Debtors should be making distributions or sales until it is clear how many creditors the Debtors have, what the Debtors owe, to whom, what the Debtors assets are, and how its crypto assets are held,” the objection says.

Prior to any distribution the U.S. Trustee wants more information on the storage and possible commingling of accounts related to Celsius’ crypto holdings, and why there was a change in account offerings for some customers in April of this year.

The court appointed Shoba Pillay as independent examiner yesterday, a rare measure in bankruptcy cases. Pillay is tasked with producing an independent report giving insight into Celsius’ finances in the lead-up to its collapse – insight the U.S. Trustee and state regulators have said Celsius failed to provide. 

Celsius’ next hearing is slated for 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.

Celsius Mining, the mining arm of the bankrupt crypto lender, filed a motion Wednesday against its hosting provider Core Scientific, accusing the company of breaching their agreement and violating bankruptcy rules.

Celsius owes Core Scientific approximately $5.4 million, the company claimed in documents filed with the U.S. Bankruptcy Court for the Southern District of New York. The company asks that Core Scientific be held in civil contempt for having violated the automatic stay in relation to Celsius’ bankruptcy filing. Celsius filed for Chapter 11 bankruptcy protection in July. 

Celsius claimed that Core Scientific has failed to deploy mining machines on time and has illegitimately tried to pass on power charges that their agreement prevented against, as well as banned Celsius from sending them any more machines.

“Thus, rigs that Celsius has been planning to deploy (…) are now sitting in limbo with no place to go, instead of earning revenue for the estate,” it stated in the document. 

Core Scientific threatened to terminate the hosting agreement between the two companies until Celsius paid its pre-petition obligations, the filing said.

Core Scientific has deployed only 6,564 of the 10,885 rigs that Celsius delivered, providing the company with 21.5 megawatts of power when their agreement stated Celsius was entitled to 79.4 megawatts by September, Celsius claimed.

Additionally, Core Scientific billed Celsius for over $3.65 million in “power cost pass-through” charges due to “tariffs” following the bankruptcy filing in July, the document said.

The agreement between the company has a fixed price and only allows Core Scientific to pass through costs as a result of “new taxes, levies, tariffs or governmental fees and charges with respect to the provision of services,” the document states.

When Celsius asked for evidence of the “tariff increases,” Core Scientific sent “information showing increased power rates in the various jurisdictions where Celsius rigs are located,” the company said.

“Core Scientific’s improper attempt to ‘pass through’ to Celsius increased power costs violates the automatic stay,” the company said.

The motion asks that Core Scientific be directed to perform under the agreement and “immediately return any improperly invoiced amounts.”

Core Scientific did not immediately responded to The Block’s request for comment.

Rising power costs have thinned margins for bitcoin miners and been a source of tension between other companies — for instance, Compass and one of its hosting providers Dynamics Mining.

Prior to the bankruptcy, Celsius had announced in May plans to take Celsius Mining public. The lender got involved with bitcoin mining starting in 2020, having extended loans to miners such as Argo Blockchain and Core Scientific itself. It also invested in Core Scientific’s equity, as well as miner Rhodium Enterprises and mining pool Luxor Technologies.

Celsius Mining owned $720 million in “mining assets” at the time of the bankruptcy filing, documents show. The company took out up to $750 million in inter-company credit from Celsius and had an outstanding balance of $576 million in July.

© 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 Commodity Futures Trading Commission (CFTC) is suing crypto futures exchange Digitex LLC and its founder and CEO Adam Todd for failing to register with the agency and attempting to manipulate the price of their token.

Digitex Futures met the definition of designated contract market or foreign board of trade, yet never sought registration with the commission as a futures commission merchant, a necessary licensure according to the CFTC. The complaint also alleges Digitex failed to comply with Bank Secrecy Act requirements, including implementing effective know-your-customer checks and a customer information program.

The complaint further alleges that Todd attempted to manipulate the price of the exchange’s native token, DGTX. The CFTC claims Todd allegedly manipulated the price of DGTX by buying up swaths of the token, not with the intention of making money on the individual trades, but inflating the exchange’s holdings by pumping the price of the token. The complaint cites multiple moments where Todd discussed the actions on livestreams. 

The CFTC wants a court order prohibiting Digitex and Todd from continuing transactions. The CFTC also wants Digitex and Todd to be halted from trading on registered exchanges, engaging in transactions involving “commodity interests,” and digital assets considered commodities, or soliciting or accepting funds for the purpose of purchasing or selling commodities. The agency also wants the firm return profits and disgorge other gains, make full restitution and pay civil monetary penalties to be determined.

A Twitter account appearing to be the company’s official one touts a ‘Digitex 2.o coming soon’ from April 29. The company’s website no longer appears to be active. 

© 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.

DeFiance Capital, the crypto venture capital firm that recently distanced itself from bankrupt crypto hedge fund Three Arrows Capital (3AC), is in the process of raising a $100 million fund to invest in liquid tokens, three sources with direct knowledge of the matter told The Block.

The fund is called “Liquid Venture Fund,” one of the sources said, adding that almost half of the targeted fundraise has been completed.

While the target raise is $100 million, the fund can get started with investing with less, two of the three sources confirmed. DeFiance Capital has received some commitments from one crypto fund of funds and a few family offices.

DeFiance Capital was founded in 2020 by Arthur Cheong, and the firm once described itself as a “sub-fund and share class of Three Arrows Capital.” After 3AC got into financial trouble in June, DeFiance Capital said in July that it is a separate firm from 3AC and operates independently.

3AC had grown into one of the crypto industry’s biggest hedge funds, before May’s collapse of the Terra ecosystem left it facing significant losses. In June, a court in the British Virgin Islands appointed financial advisory firm Teneo to handle 3AC’s liquidation. 3AC later filed for Chapter 15 bankruptcy in New York.

DeFiance Capital recently said it had been “materially affected” and “prejudiced” by the liquidation of 3AC.

DeFiance’s new fundraising effort comes as more venture capital giants are looking to invest in liquid tokens. Earlier this year, Sequoia Capital launched a $500 million-$600 million crypto fund to primarily invest in “liquid tokens” — tokens that are already listed on crypto exchanges and those that are yet to be listed — Shaun Maguire, partner at Sequoia Capital, told The Block at the 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.

After conducting an investigation into the recent $160 million exploit of Wintermute, digital assets firm Amber Group said it was able to repeat the full attack vector.

Amber said it recalculated the private key of the address that market-making firm Wintermute had used. It also signed a transaction from Wintermute’s hacked address and left an on-chain message to prove its claim. 

In its analysis of the hack, Amber said that it took the firm only two days to crack the private key with the help of a MacBook M1 computer. To do this, the firm launched a brute force attack that extracted the seed phrase (or private key) to then unlock funds held in Wintermute’s address. 

“We have reproduced the recent Wintermute hack. Figured out the algorithm to build the exploit. We were able to reproduce the private key on a MacBook M1 with 16G memory in <48h,” Amber Group noted  in a tweet.

On Sept. 20, crypto market-making firm Wintermute was hacked for $160 million from its Ethereum vault. The vault relied on an admin address, which was targeted to extract the private key to move the funds.

Wintermute’s hacked admin account was a “vanity address,” a type of crypto address containing identifiable names or numbers within them — or which have a particular style — and can be generated using certain online tools including Profanity. Security analysts at 1inch found that private keys of vanity addresses generated with Profanity could be calculated by malicious hackers to steal funds.

Several days after the exploit of Wintermute, Amber decided to conduct its own investigation. The firm went on to determine that it too could extract the private key belonging to Wintermute’s vanity address and estimate the hardware and time requirements to crack the address generated by Profanity.

In its independent analysis, Amber explained that Profanity relied on a particular elliptic curve algorithm to generate large sets of public and private addresses that had certain desirable characters. The Profanity tool created millions of addresses per second and searched for the desired letters or digits that were requested by users as custom wallet addresses. Still, the process used to generate those addresses lacked randomness, and private keys could be reverse-calculated with GPUs.

“We figured out how Profanity divides the job on GPUs. Based on that, we can efficiently compute the private key of any public key generated by Profanity. We pre-compute a public key table, then do reverse computation until we find the public key in the table,” Amber 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.

Alexey Pertsev, a Tornado Cash developer arrested in August by Dutch authorities over allegations of facilitating money laundering, is to stay in jail for at least another two months after his appeal was rejected.

A judge in the Netherlands dismissed the appeal on Thursday, Pertsev’s wife, Ksenia Malik, told The Block. The Dutch Public Prosecution Service and the Fiscal Information and Investigation Service didn’t immediately respond to requests for comment. 

Pertsev, who was born in Russia, has already been in custody for more than seven weeks, after being arrested in Amsterdam on Aug. 10. His arrest came two days after the U.S. government added Tornado Cash and 44 associated Ethereum and USDC wallets to its Specially Designated Nationals list. The U.S. Treasury said the crypto mixing service, which allows users to obscure transactions, had “repeatedly failed to impose effective controls designed to stop it from laundering funds for malicious cyber actors.”

Thursday’s ruling means Pertsev, 29, will remain in custody until at least Nov. 22.

Malik said the rejection is “absolutely not fair” and that no argument from Pertsev’s side was taken into consideration. “There is absolute lawlessness going on here,” she said.

She went on to say that Dutch authorities are “afraid that Alex will return to Russia, although if he returns there, he will be sent to war.” Russia invaded Ukraine in February.

Property seizure and auction?

Dutch prosecutors plan to seize and sell Pertsev’s property at auction, according to Malik. She said his car was seized on the day he was arrested and Pertsev’s lawyer told her that prosecutors will sell the vehicle.

When asked if Dutch prosecutors can seize an arrested person’s assets without charging them officially, Malik said they can “as we see.”

“At the moment, only a car, but I think they can come and take something else at any moment. I don’t feel safe,” she said. Prosecutors will sell “all of our legal property at auction, leaving me with nothing.”

Pertsev’s arrest has been condemned by many in the crypto industry. Last month, a group of about 50 crypto and privacy advocates protested in Amsterdam. Malik helped organize the demonstration and took part in it. Protestors argued that Pertsev should not be held responsible for writing open-source code, regardless of how it is used by bad actors.

© 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.

Web3 firewall provider Blowfish emerged from stealth having announced the closure of an $11.8 million funding round led by Paradigm. 

Other investors included Dragonfly Capital, Uniswap Lab Ventures, Hypersphere and 0xLabs, according to a company blog post. 

Founded by a team of engineers from companies such as Meta, 0xLabs and MakerDAO, Blowfish provides firewall technology to protect web3 users from malicious transactions. 

Blowfish’s API helps wallets and custodians protect users from attacks such as phishing and decentralized application DNS hijacking, the company said. The API will return real-time warnings and easy to understand transaction context. 

Phantom, a wallet provider on Solana, has already teamed up with Blowfish. 

“Blowfish has helped us protect thousands of our users from malicious scams & fraud,” said Francesco Agosti, chief technology officer and co-founder of Phantom. “We’ve partnered with them because we trust their ability to continue building a great product that stays one step ahead of scammers.”

The new funds raised by Blowfish will be used to expand the team, upgrade the API’s fraud detection engine and expand to new blockchains. Blowfish is already available on  Solana, Ethereum and Polygon.

Blowfish isn’t the only crypto firewall provider to raise money this week. Harpie, an on-chain firewall provider, raised $4.5 million in a seed round to prevent theft on Ethereum wallets. Dragonfly Capital also participated in Harpie’s round.

Through July 2022, $1.9 billion worth of crypto had been stolen in hacks of services, compared to just under $1.2 billion at the same point in 2021, according to an August report from Chainalysis. 

© 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.

MicroStrategy appears to be moving beyond just holding bitcoin as the firm searches for a bitcoin lightning engineer. 

The software company is looking for an engineer to build a Lightning Network-based sales-as-a-service (SaaS) platform, according to a listing. It goes on to say that the platform will provide enterprises with “innovative solutions to cyber-security challenges” while also looking to enable new eCommerce uses for the Lightning Network. 

The Lightning Network is a Layer 2 protocol that aims to provide an accessible way for users to engage in off-chain payments quickly and reliably by adding another layer to the Bitcoin blockchain, according to The Block’s data dashboard. Lightning is built on the notion of payment channels, allowing two parties to lock up on-chain funds in the channel as they transact, without pushing their transactions to the blockchain. 

Platforms such as Strike, which recently raised $80 million in a Series B funding round, and Jack Dorsey’s Cash App already use the network.

MicroStrategy’s co-founder and former CEO, Michael Saylor, moved into a role as executive chairman in August to focus on bitcoin advocacy. Since then, MicroStrategy has added an additional $6 million worth of bitcoin, bringing the firm’s total holding to about 130,000 btc.

The company currently has two applicants on LinkedIn, according to the listing. MicroStrategy did not immediately respond to a request for comment from 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.