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Tesla sold $936 million bitcoin in the second quarter of 2022, bringing its current holdings down to $218 million.

The company listed the sum under “proceeds from sales of digital assets” in its second-quarter earnings results released on Wednesday. 

The electric car manufacturer initially bought $1.5 billion in bitcoin at the beginning of 2021, according to a February 2020 filing with the US Securities and Exchange Commission (SEC). It then sold $272 million of those holdings in the first quarter of 2021, which would have left the company with roughly $1.33 billion in BTC, according to prices at the time of the transaction.

Bitcoin’s value in January varied between around $23,000 to $27,000 and hit an all-time high of roughly $65,000 in November 2021, according to TradingView. Recently, the coin has been trading in the low $20,000s, having temporarily surpassed $24,000 on Wednesday.

When it first added bitcoin to its holdings, Tesla also announced that it was considering accepting car payments in that currency “subject to applicable laws and initially on a limited basis.” 

It eventually did start taking bitcoin payments in March 2021 but suspended them shortly after in May, with CEO Elon Musk saying in a tweet that the company was “concerned about rapidly increasing use of fossil fuels for bitcoin mining and transactions.”

Musk added that Tesla would not be “selling any bitcoin” and that it would reconsider the coin as a form of payment if miners switched to more sustainable energy sources. In fact, the company had not announced any other sales of digital assets since the first quarter of 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.

The EU and the US swapped crypto policy insights on stablecoins and other issues during a joint financial forum in Brussels last week.

Representatives from the two governments met as part of an EU–US Joint Financial Regulatory Forum from July 13-14, the US Treasury announced. Participants discussed the EU’s new Markets in Crypto-Assets Regulation (MiCA) deal,  which was finalized at the end of June.

EU participants included representatives from the European Commission and the European Banking Authority, among others. On the American side, officials and staff came from the US Treasury and agencies, including the Board of Governors of the Federal Reserve System and the Commodity Futures Trading Commission and Securities and Exchange Commission. 

The US also shared policy updates on the country’s work around stablecoins and other digital assets. Participants “took stock of discussions around the development of potential central bank digital currencies.” The forum is expected to meet again early next 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

• Market intelligence series includes our latest on Celsius, Voyager and BlockFi
• Silvergate Capital closed at $79.60 per share, reflecting a +22.4% rally on today’s earnings
• $35.9mm Q2’22 Net Income, +45% on Q1’22 and +72% on Q2’21
• $79.8mm Q2’22 Revenue, +33% on Q1’22 and +88% on Q2’21 and a +11% beat on $71.6mm consensus
• $1.13 Diluted EPS, +43% on Q1’22 and +41% on Q2’21 and a +35% beat on $0.85 consensus 
• Announced a $13.44 dividend per share on July 11, 2022

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Members of the House of Representatives are working to get a stablecoin bill together for a markup meeting next Wednesday. 

Democrats of the House Financial Services Committee are holding a member call this afternoon on the coming bill, sources with knowledge of the matter tell The Block. They have, it seems, agreed on core principles with their Republican colleagues but have not yet assembled text.

The members are planning to get the legislation ready and public in time for a markup on Wednesday, July 27. 

Jake Sherman of Punchbowl News originally reported today’s briefing, as well as the Democrats’ plan to share draft text with Republicans on Friday. 

As of today, however, sources with knowledge of the matter tell The Block that not even the Dems have seen any text. The core principles seem to be that, contrary to the Treasury-led President’s Working Group report from last November, the Democrats don’t intend to limit stablecoin issuance to insured depository institutions, or IDIs, which are mostly banks.

The Block reported that the committee had turned against this guidance as early as February, despite a draft bill from member Josh Gottheimer aiming to codify a similar regime. However, the new draft will likely limit bank-like lending to IDIs. 

The US Treasury itself has apparently brokered the bipartisan deal, despite earlier attempts to downplay the challenges of an IDI regime. One person familiar with the matter said that the Securities and Exchange Commission is displeased with the Treasury Department, as the view of the commission has become that stablecoins are all money market funds. 

Though the legislation is not expected to tackle algorithmic stablecoins, the collapse of Terra last month was apparently a catalyst for further work. With midterm elections approaching and few legislative days left in the current Congress, however, the chances that the bill will make it into law this time around seem nil — unless another catastrophe returns the issue to the top of the agenda. 

Members of the staffs of Maxine Waters and Patrick McHenry — the leading Democrat and Republican on the committee, respectively — did not return requests for comment as of press 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.

Non-fungible token (NFT) integrations are “generally not something we will support or allow,” Minecraft developer Mojang Studios said Wednesday. 

The comments came in a blog post published on the official Minecraft website and come ahead of a planned update to the Minecraft community guidelines. 

Mojang said it is opposed to NFTs on the grounds that their use would create a culture of unequal access in Minecraft. “In our Minecraft Usage Guidelines, we outline how a server owner can charge for access, and that all players should have access to the same functionality. We have these rules to ensure that Minecraft remains a community where everyone has access to the same content. NFTs, however, can create models of scarcity and exclusion that conflict with our Guidelines and the spirit of Minecraft,” the firm said.

The company went on to say:

“To ensure that Minecraft players have a safe and inclusive experience, blockchain technologies are not permitted to be integrated inside our client and server applications, nor may Minecraft in-game content such as worlds, skins, persona items, or other mods, be utilized by blockchain technology to create a scarce digital asset.”

Mojang didn’t name any specific projects by name that use NFTs in conjunction with Minecraft. The Block Research recently highlighted NFTWorlds, which uses Minecraft’s source code as a basis for an NFT-powered metaverse. 

In a statement posted to its Discord, the NFTWorlds team said it was “blindsided” by the Mojang statement.

“We have talked with Minecraft’s IP department multiple times in the past. They have never clearly indicated that anything we were doing was going to be ruled on/restricted (other than existing EULA items, which we complied with for the entirety of the project, such as our stance on advertising/IP within the game),” the team wrote. “I know this is extreme cause for concern in the community, and it is for us too. But we’re currently considered all options, and will do our best to figure out another option going forward, even if thats a pivot.”

In its blog post, Mojang didn’t completely shut the door on the use of blockchain tech in Minecraft.

“We will also be paying close attention to how blockchain technology evolves over time to ensure that the above principles are withheld and determine whether it will allow for more secure experiences or other practical and inclusive applications in gaming. However, we have no plans of implementing blockchain technology into Minecraft right now,” the company 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.

The crypto industry is one step closer to landing a new potential ally in Congress after Maryland Democrat Glenn Ivey won a congressional primary on Tuesday night.

Ivey defeated former Rep. Donna Edwards in a crowded primary in the state’s 4th Congressional District. Ivey was a state attorney for Prince George’s County and previously worked on Capitol Hill. The winner of the primary is likely to win the November general election in the deep-blue district.

Although the primary did not hinge on crypto regulation, Ivey dedicated a piece of his campaign platform to digital asset regulation. He cautioned against over-regulation of crypto, saying “this innovation should not be stifled before it has a chance to mature and add value to the U.S. economy.”

“I will work closely with industry experts and other leaders to make sure that regulation is thoughtful and even-handed,” Ivey wrote on his campaign website. 

Web3 Forward, a super PAC that supports crypto candidates and is funded by industry executives, reported spending $109,000 to boost Ivey’s primary campaign. He also nabbed a pre-primary endorsement from Rep. Maxine Waters, who chairs the House Committee on Financial Services.

© 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

• 12 public mining companies alone spent about $40 million on interest expenses and $77 million on SG&A costs during Q1’22.
• The numbers reflect the impact of operational expansion and financial leverage mining firms took over 2021 and earlier this year. 
• With rising energy prices, mining firms may report even higher direct, indirect and interest costs over Q2’22 for each bitcoin mined.

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

ZkSync, an Ethereum Layer 2 scaling solution, will go live on mainnet in the next three months, the project announced on Wednesday.

ZK stands for zero knowledge and zkSync is a scaling technology based on zero-knowledge rollups. ZkRollups is one of the methods used by Layer 2 networks to enable faster and cheaper transactions than is possible on the Ethereum mainnet. Other solutions include optimistic rollups, sidechains, and state channels.

According to the announcement by the project’s developer Matter Labs, zkSync 2.0 will be compatible with the Ethereum Virtual Machine (EVM) upon its launch. The project is hoping to become the first zk proof-based scaling solution for EVM smart contracts available in a live production environment upon its mainnet launch.

As such, zkSync will also support Solidity and Vyper, which are both scripting languages for EVM-based apps. The announcement also stated that zkSync 2.0 will have backward compatibility with older versions of the solutions. This is to make it easier for project developers to upgrade to the new version.

The mainnet launch will be a three-step process. The first stage will happen in November without any external projects. This will be followed by audits and then a fair alpha launch as the second stage. The final stage will be the full mainnet launch slated for the end of 2022.

Today’s announcement did not include any mention of a possible token for zkSync. Optimism, another Ethereum Layer 2 recently launched its native token, while StarkNet has announced that it is launching one.

© 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.

Bitcoin rose above $24,000 on Wednesday amid a broader crypto market rebound that has seen the global market cap surpasses $1 trillion.

Bitcoin was trading at $24,173 at the time of writing, the first time it has traded in this range since June 16. The cryptocurrency is up more than 23% over the past seven days, according to CoinGecko data. 

Crypto markets have experienced a recovery of sorts over the past week after a tumultuous time in May and June — following the Terra blockchain collapse and liquidity crisis for crypto lending platforms. The market tumult during this time — partly due to many forced liquidations — saw bitcoin register its worst quarter in 11 years. 

Ether has also seen some significant gains during this period, up more than 53% over the past week according to CoinGecko. The rally in ether followed the release of a soft timeline for the underlying Ethereum blockchain’s move to proof of stake, dubbed the merge. 

These surges combined have seen the global crypto market cap move past the $1 trillion mark again, having fallen significantly below its $3 trillion peak in November 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.

The UK unveiled its Financial Services and Markets bill in Parliament on Wednesday – a set of legislation that includes guidelines on the safe adoption of cryptoassets. 

Nadhim Zahawi, who stepped into the role of chancellor earlier this month following Rishi Sunak’s resignation, said that, under the bill, stablecoins and so-called “digital settlement assets” would be regulated as a form of payment in the UK.

“In fostering these new innovations, the Bill will also enable the creation of Financial Markets Infrastructure Sandboxes – allowing firms to test the use of new technologies and practices in financial markets, increasing efficiency, transparency and resilience of new products,” the Treasury said in a press release. 

The bill states that the government will have to consult the Bank of England, the PRA and the FCA before changes are made. 

The bill, which repeals hundreds of pieces of EU retained law, is controversial in the UK as it paves the way for ministers to “call in” regulatory decisions made by the Bank of England. Zahawi has taken Sunak’s mantle in this regard while also pushing for an approach to City regulation focused on growth. 

The bill will have to be passed by lawmakers in both the House of Parliament and the House of Lords to be written into UK law. 

Sunak’s approach while in office had included an open stance on cryptoassets. In April, he had started the process of looking at how stablecoins would be regulated and commissioned NFTs to be released by the Royal Mint this summer. 

Lawmakers have also been courting crypto companies and VCs in recent months. UK Treasury disclosures for the first quarter of 2022, unearthed by The Block, revealed Sunak and former economic secretary John Glen took a number of meetings between top officials and crypto companies. 

The HMT Ministers’ Meetings log, published on the UK government website, shows that Glen had meetings in February and March with crypto firms including Binance, Paxos, Coinbase and Circle, with the intention to “discuss cryptoassets.”

Meanwhile, Sunak met with Sequoia managing partner Douglas Leone to “discuss the UK’s Venture Capital sector.”

Sunak is currently running to lead the Conservative Party. Should he win the leadership contest, he would become the UK’s next prime minister. 

© 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.