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Adam Neumann’s crypto startup delays token launch: WSJ

WeWork founder Adam Neumann’s crypto venture Flowcarbon has delayed the launch of its products along with slowing operations due to market conditions. 

According to a Wall Street Journal report, co-founder Dana Gibber said that the company has decided to wait for markets to stabilize before launching products. Recent market turbulence has seen bitcoin drop below $20,000 from a high of more than $60,000 in November. 

Flowcarbon is a startup that combines cryptocurrencies with carbon credits to create tokens that can be burned when an owner wants to offset emissions. This token is called the Goddess Nature Token (GNT). The launch of this token had been expected by end of June, but that has now been put off indefinitely. 

“We invest with a long-term view and remain very confident about the market,” said a16z partner Arianna Simpson, who handled an investment in Flowcarbon. 

In May, Flowcarbon raised $70 million through both a token sale and a traditional equity round led by a16z. General Catalyst, who also participated in the round, declined to comment to the Wall Street Journal. 

The news follows other token launch delays. Earlier this week, cryptocurrency exchange BitMEX delayed the listing of its native token BMEX amid volatile market conditions.

© 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.

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Author: Tom Matsuda

Woman charged in $4.5 billion Bitfinex case cleared to seek new job: Bloomberg 

Heather Morgan, who was charged along with her husband in February of conspiring to launder $4.5 billion worth of bitcoin stolen from the Bitfinex crypto exchange, was granted permission by a judge to seek new employment while her case proceeds, Bloomberg reported today. 

A judge on Friday granted Morgan’s request to “engage in legitimate employment and receive income of greater than $10,000 per month,” Bloomberg said. 

Morgan and her husband Ilya Lichtenstein were arrested in New York and charged with conspiracy to commit money laundering and conspiracy to defraud the United States, and face as many as 25 years in prison if convicted. They were subsequently granted bail. The Justice Department seized $3.6 billion worth of bitcoin tied to the 2016 hack of Bitfinex.

The value of bitcoin has fallen more than 50% since February.

© 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.

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Author: Mike Millard

Voyager asks bankruptcy court to honor withdrawals

Crypto broker Voyager Digital has requested permission from a federal bankruptcy court to honor customer withdrawals for the more than $350 million held by Metropolitan Commercial Bank, a court document filed late Thursday shows. 

Voyager said in a July 6 statement that it has about $1.3 billion worth of crypto assets on the platform, and it held more than $350 million in a For Benefit of Customers (FBO) account at Metropolitan Commercial Bank. The company also said it has claims against Three Arrows Capital exceeding $650 million.

“The debtors have determined, in their business judgment, that failure by the debtors to honor withdrawals any longer could materially harm customer morale during these Chapter 11 cases,” the company’s July 14 filing with the US Bankruptcy Court for the Southern District of New York said. “Reinstating access to withdrawals will alleviate customer concerns that access to their cash held in the [Metropolitan Commercial Bank] accounts, and the integrity of the platform, is restored.”

In its court filing, Voyager also is seeking authorization to carry out other financial actions. These include liquidating crypto from customer accounts with negative balances, “sweep cash” held in third-party exchanges, conducting “ordinary course reconciliation” of the customer accounts, continuing cryptocurrency staking and “granting related relief.”

A hearing has been scheduled for August 4 at 11:00 a.m. Eastern Time. 

Voyager filed for Chapter 11 bankruptcy protection on July 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.

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Author: Kristin Majcher

Court sides with SEC in ICO promotion case against former McAfee assistant

The US Securities and Exchange Commission (SEC) on July 14 obtained a final consent judgment against John McAfee’s former assistant Jimmy Gale Watson, Jr., for his alleged role in McAfee’s initial coin offering (ICO) promotion. 

The final consent judgment with the U.S. District Court for the Southern District of New York requires Watson to pay the US Treasury $316,408 in disgorgement, the amount the SEC determined as Watson’s net profit from the illegal promotion, as well as $59,533 in pre-judgment interest. 

Watson will not have to pay a civil fine, the court ruled. McAfee is alleged to have earned more than $23 million from the scheme.

The judgment also bars Watson permanently from issuing, buying, offering or selling any digital assets in any professional capacity, but he may continue to sell or buy assets from his personal accounts. 

The SEC claimed in its 2020 complaint that Watson assisted McAfee in promoting ICOs on Twitter without disclosing that he was paid to do so.

A separate charge alleged the two men engaged in a “scalping” scheme by promoting crypto assets on Twitter without disclosing that they had accumulated a large position of digital assets in McAfee’s accounts with the intent of selling it. 

In a separate complaint, the US Justice Department had charged McAfee with tax evasion. The tech executive and crypto promoter was arrested in Spain in 2020, and was found dead last year of an apparent suicide.

On Thursday, the SEC filed a notice of death for McAfee in federal court, ending its case against him. 

© 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.

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Author: Madhu Unnikrishnan

Bitcoin mining stock report: Friday, July 15

Most mining stocks went up on Friday, as bitcoin prices climbed closer to $21,000.

At press time, the coin was valued at just around that number, according to TradingView.

Northern Data’s stock went up by 10.84%, followed by HIVE Blockchain (+8.95% on Nasdaq), Cipher Mining (+8.75%) and Riot Blockchain (+4.70%).

Mawson Infrastructure’s stock fell by 5.61%.

Here’s how crypto mining companies performed on Friday, July 15:

© 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.

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Author: Catarina Moura

SEC Commissioner Allison Herren Lee steps down

Allison Herren Lee stepped down from her position as a Commissioner of the Securities and Exchange Commission (SEC) today. 

Lee announced her planned departure in March of this year with plans to take up a visiting professorship in Italy. She had delayed the opportunity to take a seat on the Commission in 2019, according to the New York Times. 

The Democrat’s exit follows Republican Elad Roisman, who vacated his seat in January of this year. Mark T. Uyeda, a Republican, filled that seat at the end of June. Lee’s departure opens up another seat to be filled by the Biden Administration.

Lee joined the Commission in 2005 as a staff attorney in the Enforcement Division’s Denver Regional Office. She also served as counsel to Commissioner Kara Stein until 2019, when she herself was appointed, and ultimately served as acting head of the SEC while chair Gary Gensler awaited his confirmation. 

Her time with the Commission, including as its interim leader, was marked by efforts to push climate-related disclosures to the forefront and further investor issues. In her public remarks, she has expressed skepticism surrounding the cryptocurrency market, most recently in a March address that said digital assets largely defy existing laws and regulations. 

“Allison has been a stalwart advocate for strong and stable markets, including by emphasizing the need for market participants to maintain the highest ethical standards,” said a statement from her fellow commissioners. “She has been a champion for stronger climate disclosures, whistleblower protections, and individual accountability for violations of the securities laws.”

© 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.

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Author: Aislinn Keely

Art Blocks: The Kingmaker of Generative Art

Quick Take

  • Art Blocks is a platform spearheading the evolution of generative art through NFTs
  • Despite the inherent subjectivity of art, top sales for premium Art Blocks pieces still tend to be grounded in objective measures of rarity
  • Several developments hint at trading characteristics that differ from other industry verticals

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Author: Thomas Bialek

How online gaming firm Improbable is helping Yuga Labs build its metaverse

Herman Narula has been fascinated by online worlds and games his whole life. He says he’s part of a generation that decided it didn’t need to grow out of gaming. To him, the relationships he created within the games mattered. The things he did in them mattered. 

A decade later, many believe the future of gaming is something called the metaverse. And Narula’s company is helping build one. 

Narula is the CEO and co-founder of Improbable, a company that describes its mission as creating cutting-edge virtual worlds. Launched a decade ago in the UK, it’s worked quietly in the background on projects for about 60 different game publishers around the world.  

Improbable has now teamed with Yuga Labs, the creators of Bored Ape Yacht Club, to build Otherside, which has been billed as Yuga’s own metaverse platform. Otherside is probably the most highly anticipated metaverse project since “metaverse” became a buzzword.

But how do you build a metaverse? 

For years, Improbable has been focused on fundamental technical challenges of scale and complexity in gaming worlds. Now its challenge is to solve a similarly complex set of challenges in the metaverse — and help Yuga’s project live up to the hype.

From Second Life to the metaverse

Narula met Improbable’s co-founder, Rob Whitehead, a decade ago while both were studying at Cambridge University in the UK. At the time, Whitehead was paying his way through college selling items in the online game Second Life — he was a “Second Life arms dealer,” according to Narula.

Both computer science majors and keen gamers, Whitehead and Narula wanted to know why there were limits to the complexity of the games they played. Why couldn’t you have more people? More objects? What was stopping gaming from scaling?  

When they graduated in 2013, they launched Improbable to tackle this issue alongside a third co-founder, Peter Lipka. For the first year, the company was four people working out of Narula’s house.

From the outset, what Improbable wanted to do was to create large-scale gaming and bring massive numbers of players into a single world. Though games have advanced massively in terms of their visual effects, they remain limited in the amount of information that can be exchanged between different players and entities in the game. It’s a complicated data and networking problem.

Narula explains that adding ten more players to a game means one hundred times more data is sent from the server to clients. You need to render huge numbers of animated characters on screen, each with unique animation states and potential customizations. You need to build a server architecture that can handle the density of the game logic, AI and physics of a world while the development experience remains recognizable to designers and programmers. You need server structure that can scale and adapt to changing computer requirements. And it all needs to happens at once. 

“As fresh grads from Cambridge, we naively thought that we could solve this problem really quickly. We thought it would take us about a year. But it took about nine years to build the solution that we imagined,” Narula says. 

The technology Narula and Whitehead have developed is built to handle low-latency, high-volume, high-throughput data replication. This means potentially 10,000 players can join a single virtual space with increased levels of simulated content. 

Last November, Improbable helped facilitate a virtual concert featuring K-pop star AleXa. The concert, which took place within a multiplayer mode of a PC action shooter game, allowed almost 1,500 fans to create avatars, freely roam the arena and interact with the singer. 

“To date, a key piece of the story — people — has so often been missing from virtual worlds and the technology that powers them. You’ll see virtual events where the performer’s not actually there, or where only 50 people are in the audience, because almost everyone is watching online,” John Wasilczyk, VP of Improbable Games Studio, wrote in a blog post following the event. “These obstacles create barriers to interaction and creativity.” 

Improbable focused on making “real” interactions at the concert possible. Fans could respond to AleXa calling at them, wave glowsticks — a mainstay at K-pop shows — and could hear the roar of the crowd.

Narula says that Improbable had to build a technical system for allowing one person to talk to thousands at low latency “completely from scratch” because there was no off-the-shelf solution. “Even things like Twitch usually have a few seconds of delay,” he says.

More than hype?

Yuga Labs has revealed little so far about Otherside other than it will feature Yuga’s Bored Apes and other characters. Like other virtual world platforms like Decentraland and The Sandbox, people can own NFT-based parcels of digital real estate. An auction for virtual plots of land, called Otherdeeds, netted $317 million in when it launched in April.

That same weekend, Improbable revealed its role in helping develop “a MetaRPG universe where the players own the world, where any NFT can become a playable character, and thousands of people can play together at the same time.”

Narula says Improbable has also helped make sure that the platform will be accessible from a range of devices. The firm has developed a new approach based on machine learning that he says will open Otherside even to mobile phone users on less than perfect connections.

On July 16, Yuga Labs and Improbable will hold the first “trip” into Otherside, so called as it is only open to “Voyagers” (you become a Voyager by holding an Otherdeed). It’s a chance for people to finally spend time in the virtual world. 

Still, the full development of the platform will take years, Narula says. 

The first trip is not a demo of a finished product, but a look at the groundwork Improbable has helped lay. The idea is that much of what Otherside ultimately becomes will be the work of the community. Of the whole collection, 15,000 Otherdeeds are reserved for those who take up the challenge of building on Otherside. 

Yet there’s always a risk that Otherside will suffer the same fate as many other metaverse projects: empty lots worth thousands of dollars and nary a person in sight.  

“The reality is that right now there are maybe a couple of thousand people inside all of the crypto metaverses put together. The experiences don’t really appeal to people,” says Narula.  

Improbable is aiming to get beyond the metaverse hype. Otherside, he says, “could be the beginning of really showing the general public why the metaverse is worthwhile.”  

© 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.

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Author: Callan Quinn

Binance scales back investment in Axie Infinity developer’s post-hack fundraise

Binance has significantly reduced the size of its investment in Axie Infinity developer Sky Mavis.

In April, days after North Korean hackers stole $540 million in crypto from the sidechain that supports Axie Infinity, Binance rode to the rescue by announcing that it would lead a $150 million investment in Sky Mavis. The plan was to use the funds, alongside Sky Mavis’s own capital, to reimburse victims of the hack.

But Binance confirmed today that it is no longer the lead investor in the round.

“Since April, Sky Mavis has been able to both stabilise and recover funds. As a result, Sky Mavis is now in a position to cover users’ funds without significant investment from Binance,” said a Binance spokesperson. “To this end, Binance will no longer be the lead investor in Sky Mavis. Binance though will continue to support Sky Mavis.”

The company will invest an undisclosed sum in Sky Mavis while continuing to advise the startup, the spokesperson added. While the exact amount the exchange will invest is unclear, a person with knowledge of the matter said it is substantially less than the initial commitment.

Ronin, the Ethereum-linked sidechain that underpins Axie Infinity, was relaunched on June 28. A spokesperson for Sky Mavis said that all user funds had been restored by the time the bridge reopened.

“Sky Mavis is in a solid financial position with 150 employees and is still hiring,” said the Sky Mavis spokesperson. “All investors who committed to the round are still participating.”

Animoca Brands, a16z, Dialectic and Paradigm all participated in the April fundraise alongside Binance.

Last week, The Block revealed that the Ronin exploit was made possible after a senior engineer at Sky Mavis fell victim to a spear phishing attack in the form of a fake job offer.  

One of the world’s largest play-to-earn crypto games, Axie Infinity boasted 2.7 million daily active users and $214 million in weekly trading volume for its in-game NFTs in November last year, but those numbers have plummeted recently.

© 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.

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Author: Ryan Weeks

Bitcoin miners are racing to deploy cooling systems that use liquid instead of air

Quick Take

  • As the geography of bitcoin mining changes, immersion cooling technologies have become increasingly popular over traditional air cooling.
  • At the forefront of this shift are Riot and Argo, two companies that have invested in large-scale facilities in Texas.

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subscribers of The Block News Plus.
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Author: Catarina Moura


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