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Do Kwon doesn’t seem too stressed that he’s wanted by authorities.

“I’m writing code in my living room hbu,” the Terraform Labs founder replied to a user on Twitter. When asked about his thoughts on a recently reported Interpol red notice on the heels of a warrant issued by a South Korean court, the founder again responded in a way that seemed to make light of his situation:

Although his current location remains undisclosed, Do Kwon stated he is “making zero effort to hide,” and added, that he goes on walks and to malls.

“No way none of CT [hasn’t] run into me the past couple weeks,” said Do Kwon. However when pressed on where one might visit him, the founder apologized for any confusion and said he hadn’t issued a “twitter wide invitation.” 

South Korean officials are seeking the founder-turned-fugitive and fellow Terraform Labs executives for allegedly breaking capital market laws, following the $40 billion collapse of luna and terraUSD.

© 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.

Deribit, the largest bitcoin options exchange by market share, has raised funds from existing investors at a $400 million valuation, four sources with knowledge of the matter told The Block.

The Panama-based exchange raised around $40 million in the deal, said two of the four sources. Its existing shareholders include QCP Capital, Akuna Capital and Dan Tapiero’s 10T Holdings.

The fundraising comes three months after Deribit took a “small” hit from liquidating Three Arrows Capital’s (3AC’s) positions after the now-bankrupt crypto hedge fund failed to meet margin calls. Deribit raised new capital to restore its reserves to where they were before the 3AC incident, according to one of the sources.

3AC collapsed in June after suffering huge losses from the Terra ecosystem implosion and the ensuing crypto market turbulence. The fund’s $200 million investment in Terra’s native luna token sank to almost zero as the TerraUSD algorithmic stablecoin de-pegged from the dollar in mid-May. Deribit initiated a liquidation application against the fund in a British Virgin Islands court in June.

The unique circumstances of the latest fundraise — given the 3AC hit and the current weak market conditions — translated into a steep discount for existing backers, according to one of the sources. Deribit was valued at $2.1 billion in its last funding deal in August 2021, when it raised $100 million, the source said.

The $400 million valuation “is essentially irrelevant” because the fundraising is from existing investors, Luuk Strijers, Deribit’s chief commercial officer, told The Block. “It could have been any value. It’s more a clawback of dividends from existing shareholders. We paid a high divided before and decided it’s more prudent to strengthen our balance sheet and retain assets instead of distributing them to shareholders.”

Strijers said a company’s true valuation isn’t known until it conducts an external fundraise. He went on to say that Deribit kept its valuation low in this internal round “to avoid discussions” with potential investors and that a company’s valuation matters “only matters when you raise externally.”

Founded in 2016, Deribit caters mainly to institutional investors and co-founders John Jansen, Marius Jansen and Sebastian Smyczýnski keep a low profile compared to FTX’s Sam Bankman-Fried and Binance’s Changpeng Zhao. Despite this, Deribit has claimed an 88% share of open interest in bitcoin options trading, according to data from The Block’s Research team.  Open interest is the value of outstanding derivative contracts that are yet to be settled.

Deribit’s lower valuation highlights the pressure bearish crypto market conditions are putting on private company valuations. FTX is reportedly in discussions with potential investors to raise up to $1 billion at a valuation in line with the $32 billion achieved in January.

© 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.

Bankrupt bitcoin mining hosting provider Compute North received approval today to operate its cash management system, pay insurance obligations and file a list of its creditors.

Judge Marvin Isgur of the U.S. Bankruptcy Court for the Southern District of Texas (Houston) signed three more orders enabling the firm to continue key operations amid the Chapter 11 process. The approvals came after a hearing on Friday rolled over certain first-day motions in the wake of Compute North’s bankruptcy declaration. 

The company received approval to maintain its existing bank accounts and business forms, with banks permitted to honor checks written before the firm entered bankruptcy when directed by Compute North and the bankruptcy court.

The firm is also approved “but not directed,” to continue intercompany transactions, according to the documents. That includes transactions within the company that would have been usual prior to filing for Chapter 11 protection.

Isgur also approved a revised order directing Compute North to file a list of its top 30 creditors. The firm is also approved to redact the address information of its employees, directors, and contractors. The subsequent filings will also set key dates for the case and start the firm on a path to considering how to repay certain debts. 

Compute North filed for Chapter 11 bankruptcy last Thursday, stating in a document that “after any administrative expenses are paid, no funds will be available for distribution to unsecured creditors.”

The company’s Chief Financial Officer Harold Coulby explained in his declaration that the crypto market downturn impaired the firm’s liquidity in addition to a soured relationship with its largest funding source, infrastructure investment firm Generate Capital.

The company raised $385 million earlier this year and an additional $25 million last year. According to bankruptcy documents, just over $100 million of the $300 million line of credit extended by Generate Capital remains outstanding.

Compute North has between $100 million-$500 million both in estimated liabilities and estimated assets, according to the initial bankruptcy filing.

© 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.

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.

Walmart Land and Walmart’s Universe of Play will let users take part in several new experiences and games including a fashion show and a Jurassic Park-themed egg-collecting game. Players will also have the chance to collect in-game coins and tokens, prizes and “verch” (“virtual merch”).

A metaverse rollout was expected from Walmart for some time. While there are plenty of unofficial Walmart-themed games on Roblox, the company itself filed several patents for virtual goods and currencies in December 2021. 

William White, chief marketing officer at Walmart US of Roblox, cited a reason for choosing Roblox was that Walmart “customers are spending loads of time there.” A representative for Walmart wasn’t immediately available to comment when reached.

Almost a quarter of the 52.2 million daily active users on Roblox in Q2 2022 are under the age of 13, according to the information provided at sign-up. It appears Walmart is trying to tap into this young user base, as the retailer’s Universe of Play tells players “making a toy wish list has never been this fun! Find them all at Walmart.”

Keen eyes might also notice the in-game advertising. Having historically struggled to monetize beyond selling virtual goods, Roblox announced plans earlier this year to debut ads in 2023. It said it would test ads with certain developers and brands by the end of this year as it searched for ways to “gently” incorporate more advertising.  

Walmart may be one of these test cases. Its in-game billboards — which are marked as advertisements — tell players that they can “find all the best toys” in their stores.

Bringing advertising onto a platform so popular with children has led to some controversy, however. Roblox has faced criticism for its ability to safeguard its users, and as the company attempts to find new streams of revenue via advertising, groups such as U.S.-based non-profit Truth in Advertising have raised concerns about deceptive marketing practices. 

In April the group filed a complaint with the Federal Trade Commission claiming Roblox had “completely shirked its responsibility” in following advertising laws. The complaint identified Netflix, Nike, Hasbro and Mattel as well.

Another complaint was also sent to the Advertising Standards Authority in the U.K. in August.

© 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 European Central Bank (ECB) is analyzing options for integrating decentralized ledger technology (DLT) into existing payment settlement systems, Fabio Panetta, an executive ECB board member, said in a speech on Monday during a symposium in Frankfurt dedicated to the topic of settlements. 

But the senior central banker suggested that the ECB will not be a first-mover in the space, instead monitoring how widely stablecoins and central bank digital currencies take hold. 

If stablecoins and central bank digital currencies become more widely adopted, the ECB will look at creating bridges between existing European real-time payments systems or its own digital euro, said Panetta. 

Bankers see the most potential for stablecoins in large daily wholesale transactions that take place between banks internationally due to the existing complications of cross-border and cross-currency payments, Panetta said. But he noted that the ECB, which exists in part to ensure a stable euro, is wary of the fact that major blockchain networks primarily exist in areas outside of Europe, “which raises concerns about strategic autonomy,” Panetta said.  

“But despite the uncertainties surrounding DLT’s potential, we want to be prepared for a scenario where market players adopt DLT for wholesale payments and securities settlement,” said Panetta. “We must ensure that, in such a scenario, central bank money would still retain its role as the settlement asset for wholesale transactions.”

Panetta implied that the ECB’s path forward will largely depend on how prominently stablecoins or central bank digital currencies figure into payments. The central bank’s current research efforts are more focused around continuing to “anchor” the euro as a stable currency by being poised to build infrastructure better connecting existing payments rails to stablecoins, CBDCs, or more decentralized networks if needed. 

Panetta noted that the European financial system already has real-time payments, a major selling point of stablecoins, and that blockchain-based payments will need to “prove” that they are superior to other existing technologies. Furthermore, “implications for governance, settlement efficiency and liquidity management need to be carefully assessed.”

The ECB is amping up resources towards digital currencies and its use cases. It kick-started a two-year investigation into the digital euro in July 2021, and announced the partners in the prototype development earlier in September. The evaluation and results of the project is anticipated in March 2023.

© 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 Grayscale Bitcoin Trust (GBTC), which has been trading at a discount since the beginning of 2021, hit a record low last week.

GBTC’s discount fell to -35.26% — its lowest point ever, according to The Block’s Data Dashboard. This means the market price of GBTC shares is over 35% lower than its net asset value or NAV.

GBTC hit its previous all-time low on June 17, when it reached -34%. The discount narrowed ahead of the SEC’s ruling on whether or not GBTC could be converted to a spot bitcoin ETF. 

Grayscale’s bid to convert its product into a spot ETF was rejected based on the regulator’s conclusion that the company hadn’t shown sufficient planning to prevent fraud and manipulation. Grayscale later filed a lawsuit against the SEC after the decision. 

Friday’s low comes amid a broader market downturn for cryptocurrencies and financial markets. Bitcoin was trading at $19,173 at the time of writing on Monday, per data via Coinbase. 

Last week the U.S. Federal Reserve raised the U.S. federal funds rate by 75 basis points, marking a 15-year high. The decision to take the rate from 3% to 3.25% was expected, with the market pricing in a rise of 75 basis points ahead of time. However, markets sold off sharply on the news.

Crypto markets have been tightly tracking equities as of late, as the correlation between the Nasdaq and bitcoin has reached its highest point since May.

Before last week, markets dipped following the release of hotter-than-expected U.S. inflation data of 8.3% year-on-year. 

© 2022 The Block Crypto, Inc. All Rights Reserved. This article is provided for informational purposes only. It is not offered or intended to be used as legal, tax, investment, financial, or other advice.

Quick Take

• ApeCoin aims to fuel innovation at the intersection of culture, gaming, and commerce.
• Governance is conducted through the synergistic relationship between the ApeCoin DAO and the APE Foundation.
• Several monumental Ape Improvement Proposals (AIPs) have fundamentally shaped the ecosystem’s development.

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members of The Block Research.
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this Research content on The Block Research.

The Aragon community is voting on what to do with its treasury funds after it transitions from its old DAO structure to one that incorporates delegated voting as part of its architecture.

Aragon is a blockchain project that provides tools for users to create and manage DAOs on the Ethereum network.

This vote is one of two ongoing polls within the Aragon community. The second vote is to determine what happens to the charter of the Aragon Network DAO (AN DAO) when the new DAO emerges. Charter, in this case, refers to an agreement that was used to establish the AN DAO. With the transition to a delegated voting DAO, a new charter will be created for the new decentralized organization.

The move from AN DAO to the new structure will enable delegated voting. AN DAO was deployed on Aragon Govern, a smart contract system for creating DAOs. DAOs created with Aragon Govern do not support vote delegation, according to the Aragon forum post. Hence, the reason for the transition to a new DAO that supports vote delegation.

In this context, vote delegation is when holders of a project’s token that confers voting rights transfer those rights to other community members to vote on their behalf.

According to the Aragon governance proposal, this transition brings up issues concerning what to do with the AN DAO treasury. “The potential termination of the AN DAO Charter opens up significant risk regarding the balance of funds held in the AN DAO Treasury,” the proposal on the Aragon forum stated.

Voters have to choose whether or not to transfer the AN DAO treasury balance to the Aragon treasury as soon as the new DAO structure emerges. Data from DeepDAO shows that AN DAO holds $166 million in its treasury, half of which is in the form of the USDC stablecoin. The treasury also holds $46 million in ether and $25 million in wrapped bitcoin.

Data from the voting page show that 67% of participants are in the favor of the treasury transfer. The vote will end on Oct.5.

© 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.

With the pound in the doldrums, crypto investors in Britain received some respite from bitcoin losses. 

The pound hit an all-time low of $1.0327 versus the U.S. dollar on Monday, as traders bet against the latest UK Chancellor’s budget plans. Kwasi Kwarteng revealed plans to ditch Britain’s top income-tax rate, and cancel a planned increase in national insurance, while also cutting stamp duty on a property up to £250,000 (approx. $270,000). 

“New Chancellor Kwasi Kwarteng’s tax-slashing, deficit-ballooning Budget — let’s call a spade a spade — was met with a mixture of surprise, incredulity, and downright bafflement by financial markets, particularly as the full extent of extra borrowing required to fund the largest tax cuts in 50 years became clear,”  Michael Brown, head of market intelligence at Caxton’s, wrote on Monday.

However, the plummeting pound might have a silver lining for about 10% of UK adults — the number which say they hold or have held a cryptoasset, per research commissioned by HM Revenue and Customs, published in July.

FTX’s Sam Bankman-Fried pointed out on Twitter on Monday that people might feel differently about crypto prices, should they measure them in currencies other than the U.S. dollar.

Taking the DXY Dollar index, a measure of the value of the U.S. dollar relative to a basket of other foreign currencies, it showcases SBF’s point. The DXY recently hit a two-decade high and is currently trading up over 17% this year, meanwhile the pound is trading at all-time lows. 

Looking at investments through this scope, Britons holding bitcoin have paper losses of about 53% year-to-date while investors denominating their holdings in dollars are down a little over 62%. 

© 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 Reserve Bank of Australia (RBA) and the Digital Finance Cooperative Research Centre (DFCRC) are looking for industry participants to make submissions on central bank digital currency (CBDC) use cases for its pilot.

Dubbed the “eAUD”, the RBA expects the pilot will demonstrate new capabilities in terms of cost, speed and quality outcomes through the use of the digital currency.

In a white paper published on Monday, it cited potential uses including atomic settlement of transactions involving tokenised assets, multi-party or syndicated transactions, escrowed transactions, enabling conditional or programmable transactions, as a verifiable reserve asset to reduce counterparty risks and for 24/7 operations.

For the pilot, the eAUD will be a liability of the RBA and denominated in Australian dollars. The amount to be issued will be determined by the RBA considering the requirements of selected use case providers, and no interest will be paid by the RBA on any holdings of eAUD.

Only Australian-registered entities and Australian resident individuals will be allowed to hold eAUD, and that holders would need to be invited to participate, approved and KYC-ed to take part.

According to a timeline included in the white paper, the pilot will be conducted with selected use cases from January-April 2023. It is currently engaging with industry participants on the design and usage of the CBDC pilot, with a deadline of Oct. 31 for expressions of interest. The selected use cases for the pilot will be announced in December, with the actual pilot running from January to April next year. Following the end of the pilot, it will publish a report detailing the findings in mid-2023.

The RBA announced its new research project exploring CBDC use cases in early August and joins the ranks of countries such as China, Thailand, the Philippines, Jamaica and Sweden, which have or are planning to have CBDC pilots within the next year.

Last week, The People’s Bank of China announced it was extending the trial of e-CNY to several new provinces including Guangdong and Sichuan.

© 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.