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A bill moving through the New Jersey General Assembly would prevent public officials from accepting non-fungible tokens (NFTs) or other virtual currency as gifts in connection to their role.

The legislation would build upon long-standing rules that prevent bribery and corruption. It was approved by the Science, Innovation Technology Committee on Monday and is not yet scheduled for a vote.

“It is important that we adapt to our current environment and recognize crypto and blockchain technologies, and this proactive piece of legislation ensures that our ethics laws adapt as well so we can continue to hold public officials to the highest possible standards,” Assemblyman Christopher Tully, who sponsored the bill, told The Block. The bill was also sponsored by Assemblywoman Ellen Park. 

A separate bill including frameworks for the crypto industry in New Jersey was also approved by the committee on Monday. It would require business operators to get a license with the New Jersey Department of Banking and Insurance in order to engage “in a digital asset business activity with or on behalf of a resident.”

According to the proposed legislation, anyone convicted of embezzlement, forgery, fraud or theft in the past five years would be barred from getting a license.

Prospective license owners would have to disclose a long list of information details, including audited financial statements and how they would make sure anti-money laundering and anti-terror financing laws are followed.

The bill is meant to add transparency and consumer protections for New Jersey residents in the crypto space, according to a statement from the Science, Innovation Technology Committee.

“New Jersey is a hub of innovation and, with this bill, we can lead the nation in providing thoughtful regulation to the industry,” said Assemblywoman Yvonne Lopez, who sponsored the bill.

Lopez believes that while cryptocurrency “has utility there is still a great deal of risk for consumers.”

© 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.

Banking platform ClearBank said on Tuesday that it had raised $229 million, marking its push to expand internationally. 

The ‘bank of banks,’ which has partnered with crypto giants such as Coinbase and Gemini, said the round was led by funds advised by Apex Digital, the growth equity arm of Apax. Existing investors, CFFI UK Ventures (Barbados) Ltd and PPF Financial Holdings BV, also participated, it said in a release.

ClearBank CEO Charles McManus declined to offer details of its valuation but said in an interview with The Block that major shareholders from CFFI and PPF now control 82% of the company.

McManus said that the business is “very close to profitability.”

“We are focusing on growing the business so that the valuation will take care of itself,” he said. “In the future, we will talk more about valuations – at the moment we want the focus to be on the business.”

ClearBank, which operates as a cloud-based clearing bank, currently serves more than 200 financial institutions and fintech customers including Tide, Chip and Oaknorth Bank. 

Alongside its push into Europe, it plans to use the funds to expand its range of products and services to include direct API-based access to interbank payment schemes such as SEPA, enhanced multi-currency accounts, and additional FX services.

It is the latest bumper fundraise by a fintech. According to Dealroom data, in February, the sector raised a collective $9.5 billion.

© 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.

Coinbooks, an accounting software startup based in San Francisco, is 3 months old. But in that time, the company has raised a total of $3.2 million from investors including Y Combinator, Multicoin Capital, Lattice Capital, Polygon’s founders, Seed Club Ventures, and Orange DAO.

Founded by 21-year-old founder and CEO Arnav Bathla, the company aims to change the way decentralized autonomous organizations or “DAOs” and crypto companies currently perform accounting.

“Existing accounting platforms integrate with your bank account. DAOs and crypto companies use wallets for their crypto transactions. This means they have to manually copy-paste transactions onto existing platforms to track their crypto,” Bathla told The Block.

Coinbooks work by integrating with crypto wallets and existing accounting software so that crypto companies can manage both their crypto and non-crypto transactions in one place.

DAOs saw growth in the last year, with nearly 1.7 million members and $16 billion in total AUM as of December 2021, according to The Block Research. Unlike traditional companies, DAOs work through smart contract tooling and often utilize flat organization structures.

Coinbooks’ most recent round, completed earlier this month, was for $2.5 million, with a pre-seed in February for $700,000. With this funding, Bathla aims to build out a stronger team, test a product-market fit, and focus on scaling. Coinbooks will also be joining Y Combinator’s summer 2022 cohort.

© 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.

Yesterday, Yuga Labs, the creators of Bored Ape Yacht Club (BAYC), airdropped ApeCoin (APE) to anyone who owns one of their NFTs. 

The team allocated 150 million tokens or 15% of the total ApeCoin supply to holders of Bored Ape Yacht Club and Mutant Ape Yacht Club collections, amounting to a staggering value of more than $800 million. Each BAYC holder got 10,094 tokens, valued anywhere between $80,000 to $200,000.

But someone found a way to claim the airdrop, using NFTs that they did not initially own. They took advantage of the specific way the airdrop works to carry it out. And it was a very effective move that netted them $1.1 million in ApeCoin.

The trick was that the ApeCoin airdrop was not handed out based on a snapshot of who owned which Bored Ape at a specific time in the past. Instead, it was claimable by anyone who owns a Bored Ape at the point of claiming the airdrop. So if you gave someone your Bored Ape — and you hadn’t already claimed the tokens — they would be able to claim your tokens. 

This meant all the person had to do was get a hold of some Bored Apes that hadn’t had their tokens claimed — and they would only need to be in possession of these Apes for a brief moment to claim the airdrop. In fact, they could be handed back straight away.

So, what happened?

For this maneuver, the person started by finding a vault that contained five Bored Ape NFTs, which hadn’t been used to claim the airdrop. 

A vault is a way to tokenize an NFT or a set of NFTs. What happens is you take a group of NFTs, put them in the vault and you create a token. This token can then be staked to earn token rewards, or it can be sold (representing part of the value of the collection of NFTs). Anyone who owns enough of the tokens can redeem them for the underlying NFTs.

This vault was created on a protocol called NFTX. It contained five Bored Apes: #7594, #8214, #9915, #8167, and #4755 worth about 500 ETH ($1.4 million) based on the current floor price. Since the NFTs were locked up in the vault and not controlled by any one party, nobody had used them to claim the airdrop.

The person wanted to unlock the NFTs to use them to claim the airdrop, but they didn’t want to buy them outright — something that would be expensive to do. 

So they used a flash loan, a tool commonly used for large DeFi hacks, to carry out this plan. Flash loans are a way to borrow large amounts of crypto at low cost, on the basis that the crypto is repaid in the same transaction in the same block (meaning that the funds are never at risk of not being repaid). 

In this case, they bought a Bored Ape on NFT marketplace OpenSea for under $300,000 and used it as collateral to take out the flash loan. The flash loan was then used to purchase a large amount of the vault’s token, letting them redeem the five NFTs. The NFTs were used to claim the airdrop — all in this one, complex transaction — before all of them were then returned, the tokens sold back and the loan repaid. 

In this process, they managed to claim an airdrop of 60,564 ApeCoin. They then sold these tokens on the decentralized exchange Uniswap for 399 ETH ($1.1 million). After, they sold back the original Bored Ape NFT that was used as collateral to the same NFTX vault. 

Attack or arbitrage?

Even though many social media commentators hailed the incident as an innovative arbitrage trade, security firm BlockSecTeam disagreed. It has labeled this as an attack that exploited an issue in the airdrop-claiming mechanism.

BlockSecTeam told The Block that based on its analysis, the user likely took advantage of a “vulnerability” in yesterday’s airdrop event.

“We think it’s an attack as the airdrop mechanism has a vulnerability. The airdrop claim depended on the spot state, whether a user held the NFT at that time of claim and the attacker exploited this vulnerability to profit,” BlockSecTeam said.

One way this could have been avoided is if the airdrop had taken into account how long a person owned the NFT before the reward could be claimed. 

Since Yuga Labs did not take a snapshot — a method that’s common for most airdrops — it meant that anyone could buy the NFT in real time to claim it. This is likely the primary reason why the BAYC sales spiked so soon after the airdrop announcement. 

© 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.

Taiwan’s largest cryptocurrency exchange, MaiCoin, is reportedly raising a Series C funding round that would value it at $400 million.

A report by Bloomberg on Friday indicated that the company is considering joining fellow exchange Coinbase in going public on the Nasdaq stock exchange in the US within two years.

Maicoin is a cryptocurrency exchange that offers users the ability to trade BTC, SOL and ADA among other currencies – along with the ability to earn yield on ETH and USDC.

According to company documents seen by Bloomberg, it expects trading revenue to rise more than 70% annually up until 2025 with 80% of its revenue currently from Taiwan. The exchange plans to use the new funds to expand into Southeast Asia. 

The news comes as cryptocurrency exchanges globally make major plays for global expansion. On Tuesday, Crypto.com kicked off the rollout of its US exchange platform, and on Wednesday, FTX continued its push into Africa by partnering with payments company AZA Finance. 

© 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.

For those unfamiliar with the term “anon”, it refers to the prolific but anonymous identities that many veteran crypto investors use to discuss projects and express views on the market without revealing details of their personal lives.

Out of the legion of such popular anon accounts on Twitter, the members of a syndicate known as “eGirl Capital” have established large followings due to their commentary, research and investment in cryptocurrency.

In this episode of The Scoop, CL, an anon from eGirl Capital joins host Frank Chaparro to discuss how the group formed and why they are able to operate so cohesively.

As CL explained during the interview, the fourteen strong group formed out of friendship:

“The 14 of us kind of became friends over time. Mostly at first it was just sharing life stories, sharing alpha, so we got pretty tight after a few months.”

What started out in 2020 as a simple group chat between friends became reality when one of the group’s members registered eGirl Capital as a legal entity.

While not a VC firm in the traditional sense, the establishment of a legal entity paved the way for eGirl Capital to participate in deals together, as CL explained:

“There were more VCs setting up dealflow in chat rooms with us and projects hitting us up than we expected. We did not expect such a name to have a lot of legitimacy.”

At a time when established firms such as Bain Capital are entering the crypto space, CL believes the crypto native anons of eGirl Capital have an edge in terms of spotting quality projects.

While being crypto-native gives the group much more experience and knowledge than the traditional financial institutions who are trying to enter the space, eGirl Capital also benefits from their lack of traditional corporate structure.

“There is no founder, no head trader…and none of us are getting paid, except for a few interns,” CL said.

In regards to potential deals, the decision must be unanimous: “If one person is very firmly ‘no’ then it’s a no.”

During this episode, Chaparro and CL also discuss:

• Whether or not crypto gaming will be disruptive
• The potential impact of VR on society
• How shorting the market can be bullish

This episode is brought to you by our sponsors Fireblocks, Coinbase Prime & Chainalysis
Fireblocks is an enterprise-grade platform delivering a secure infrastructure for moving, storing, and issuing digital assets. Fireblocks enables exchanges, lending desks, custodians, banks, trading desks, and hedge funds to securely scale digital asset operations through the Fireblocks Network and MPC-based Wallet Infrastructure. Fireblocks serves over 725 financial institutions, has secured the transfer of over $1.5 trillion in digital assets, and has a unique insurance policy that covers assets in storage & transit. For more information, please visit www.fireblocks.com.

About Coinbase Prime
Coinbase Prime is an integrated solution that provides institutional investors with an advanced trading platform, secure custody, and prime services to manage all their crypto assets in one place. Coinbase Prime fully integrates crypto trading and custody on a single platform, and gives clients the best all-in pricing in their network using their proprietary Smart Order Router and algorithmic execution. For more information, visit www.coinbase.com/prime.

About Chainalysis
Chainalysis is the blockchain data platform. We provide data, software, services, and research to government agencies, exchanges, financial institutions, and insurance and cybersecurity companies in over 60 countries. Our data powers investigation, compliance, and market intelligence software that has been used to solve some of the world’s most high-profile criminal cases and grow consumer access to cryptocurrency safely. Backed by Accel, Addition, Benchmark, Coatue, Paradigm, Ribbit, and other leading firms in venture capital, Chainalysis builds trust in blockchains to promote more financial freedom with less risk. For more information, visit www.chainalysis.com.

© 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.

GameStop intends to launch its forthcoming non-fungible token (NFT) platform by the end of Q2 2022.

The firm announced its plans in its Q4 2021 earnings call today and included the plans in its 10-K disclosure filing as part of “new growth opportunities.”

“As we scale and expand our core offerings we will simultaneously invest in additional growth, including blockchain, digital assets (including non-fungible tokens (“NFTs”)), Web 3.0 technology, and new destination formats for our stores,” said the filing.

GameStop partnered with Immutable X in January of this year to build out the NFT marketplace. Digital Worlds plans to grant up to $100 million in IMX tokens to NFT creators and up to $150 million to GameStop itself as it meets certain milestones, according to the terms of the deal.  

Immutable X is an Ethereum Layer 2 network for NFTs built with StarkWare’s ZK-rollup technology, which purports increased scalability and lower gas fees.

© 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.

Argentina’s government has signaled it will discourage the use of cryptocurrencies as part of a proposed, nearly $45 billion debt restructuring deal with the International Monetary Fund (IMF), leaving the country’s crypto sector questioning what this policy could mean if approved.

In a memorandum outlining financial policies under the debt agreement, Argentina’s government laid out a framework with goals from 2022 to 2024. These focus on government policies targeted to help the country’s growth and resilience. 

The IMF announced on March 3 that it had reached a staff-level agreement with Argentine authorities, but several Argentine news sites spotted a paragraph referencing cryptocurrencies in a leaked draft of the text days earlier. 

Per the text published by the IMF:

“Strengthening financial resilience. While commercial banks remain liquid and well-capitalized, strong bank oversight will continue, especially following the unwinding of pandemic-related regulatory forbearance. To further safeguard financial stability, we are taking important steps to (i) discourage the use of crypto-currencies with a view to preventing money laundering, informality and disintermediation; (ii) further support the current process of digitization of payments to improve the efficiency and costs of payments systems and cash management; and (iii) safeguard financial consumer protection.”

For now, crypto companies and organizations are still largely trying to figure out what the potential impact of discouraging cryptocurrencies would mean, exactly. An IMF spokesperson did not provide further information to The Block on March 17. 

Argentina’s high inflation and foreign currency controls have contributed to local interest in cryptocurrencies over the past few years, turning Buenos Aires into a key hub for blockchain startups and innovation. The country ranked 10th on Chainalysis’ latest Global Crypto Adoption Index.

To gain clarity on the issue, nonprofit organization ONG Bitcoin Argentina announced on March 10 that it had filed a public information request addressed to the country’s economic minister, Martín Guzmán. The information request calls for the government to provide all documents, reports, administrative files, emails or other documentation that have evaluated cryptocurrencies and their links to money laundering and financial stability in the context of the IMF negotiations. 

“We are convinced that the path is neither disincentives or prohibition, but to work in a coordinated manner with the private and public sectors to take advantage of the potential of decentralized finance, so that more and more individuals can transact in a secure manner and security forces can improve their abilities to combat cybercriminals,” ONG Bitcoin Argentina’s Executive Director Javier Madariaga wrote in a March 10 blog post explaining the action. “It worries us that the authorities are agreeing to disincentivize a technology that the population itself has already massively adopted, instead of unleashing its potential to address historic problems.”

Spanish-language outlets including Criptonoticias and iProUP previously reported on the ONG’s action. 

Argentina’s Congress must approve the debt agreement before the IMF’s executive board can sign off on it. The country’s Senate discussed the debt restructuring deal extensively on March 17. Local reports indicate that Argentina’s Senate will vote on the deal late Thursday or early Friday, following approval from the legislature’s lower chamber on March 11. 

© 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 Bored Ape Yacht Club (BAYC) has seen its trading volume spike on Thursday following the launch of ApeCoin.

Sales volume more than doubled from the day before to around $43.5 million for March 17, according to data from Dune by @metaland. The March 16 figure was roughly $15.9 million. 

OpenSea shows a 1,616.98% BAYC volume increase over the last 24 hours. The floor price is at 89 ETH as of Thursday afternoon.

Other projects associated with the Bored Ape Yacht Club have also seen a steep increase in volume, including the Mutant Ape Yacht Club (970.43%) and the Bored Ape Kennel Club (852.80%).

Yuga Labs, the creator of the popular non-fungible token (NFT) project, said on Twitter that ApeCoin would be used “as the primary token for the Bored Ape Yacht Club ecosystem as well as future Yuga products and services.” The new token is governed by the ApeCoin DAO. 

The ApeCoin Twitter account describes it as a “​​token for culture, gaming, and commerce used to empower a decentralized community building at the forefront of web3.”

On Wednesday, ApeCoin announced that 62% of token supply would go to the ApeCoin community, of which 15% could be claimed via airdrop.

Popular exchanges like Gemini, Coinbase and Crypto.com are already supporting the new token, which was valued at close to $8 on Thursday afternoon 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.

Russia’s largest bank, Sberbank, will soon start issuing and exchanging digital financial assets (DFA).

The bank announced on Thursday that companies will be able to make transactions on their network one month from now.

Sberbank got the green light from Russia’s central bank a month after  Atomyze Russia was allowed to exchange digital assets, according to Reuters.

The move to digital assets comes in the midst of Russia’s invasion of Ukraine, as the West responds with strict economic sanctions to the country.

Sberbank’s announcement speaks of possible benefits to the market. Companies will be able to issue their own DFAs, which will “enable them to attract market investments,” is states.

They will also be able to acquire CFAs, allowing them to “invest their currently idle funds to generate income.”

“We are just starting our work with digital assets, realizing that further development requires adaptation of the current regulatory framework,” said Sergey Popov, director of the Transaction Business Division at Sberbank.

As far back as 2020, the bank had announced its intention of launching a stablecoin — to be called Sbercoin. As reported in January last year, Sberbank had also sought approval from the central bank for a blockchain-based financial platform.

© 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.