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UK financial regulator seeks to build digital assets department

The Financial Conduct Authority (FCA), the UK’s financial regulatory body, is seeking to build a digital assets department according to a job listing posted on LinkedIn.

The hiring, posted on Monday, is notably only two weeks before its March 31 deadline for crypto firms listed on its temporary register to migrate over to its permanent anti-money laundering registry for crypto startups. 

The job listing looks to recruit a head of department role that will lead “a single FCA narrative on crypto” along with supervising both registered and unregistered crypto firms. It also says that the individual will be in charge of collaborating with regulators internationally to develop policy and will take a leading role in training the crypto capability of their colleagues. 

The hiring comes as the regulatory body doubles down on regulating crypto firms and startups, much to the dismay of the UK’s crypto companies. 

Last week, The Block reported that crypto firms have begun to give up on doing business in the UK due to the regulatory pressure from the FCA. It notified at least half a dozen crypto firms on its temporary register that they are likely to be rejected.

In the same week, the body also clamped down on crypto ATMs in the country, ordering their operators to shut down their machines or face penalties. 

© 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

Crypto.com kicks off rollout of its US exchange platform

Cryptocurrency platform Crypto.com has begun to roll out its exchange to waitlisted users in the US as it boosts its presence in the world’s biggest economy. 

Initially, its exchange platform will only be available to select institutional investors, with a wider remit envisioned in the near future, according to a blog post on Tuesday.

“We are excited to be expanding our offering for professional traders to the US,” Crypto.com CEO Kris Marszalek said in the announcement.  “Crypto.com Exchange will support US institutional investors through this initial launch phase. We are looking forward to rolling it out to everyone as soon as possible.”

The news follows the Singapore-based company’s recent pushes into the US market. Along with splashing $700 million to rename the Staples Centre, the company also acquired two US-based derivatives platforms for $216 million in December to offer derivatives and futures to its American customers. 

The platform, which the company says is “the world’s most secure cryptocurrency platform” has also been rocked by hacks. In January, Marszalek confirmed to Bloomberg TV that it suffered a security breach that affected 400 accounts. The theft is believed to consist of at least 4,830 ETH ($15 million) and 444 BTC ($18.5 million). 

© 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

Stellar Development Foundation debuts $30 million matching fund

The Stellar Development Foundation (SDF) has launched a $30 million matching fund for early-stage companies building on the Stellar blockchain.

The fund is a branch of SDF’s Enterprise Fund, the firm’s venture arm investing in startups within the Stellar ecosystem. It plans to match investments up to $500,000 from the lead funding source. The idea is to boost funding to early-stage companies in jurisdictions that could benefit from blockchain-powered solutions. 

“The Stellar ecosystem is working to address challenges like inflation, affordable remittances, and the high cost of capital — and we’re investing in solutions to these problems through the Matching Fund,” said Senior Director of Investments Andrea Lo in a statement.

The inaugural investments are already targeting these problems. The Matching Fund portfolio includes: Trace Finance, a cross-border payment platform using stablecoins to connect Latin American startups with overseas funding; Bitwage, a blockchain-based payroll service focused on Latin America; Afriex, a payments app leveraging blockchain to provide free payments across Nigeria, Ghana, Kenya and Uganda; and Fanvestor, a crowdfund-model NFT platform. 

SDF’s venture arm has previously shown interest in funding solutions for emerging markets. In May of 2021, it invested $15 million in Airtm, a Mexico-based digital wallet and crypto exchange. That marked its largest investment to date, and followed four other investments in Latin American-based firms. 

© 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

Luna Foundation Guard votes to raise additional $372 million collateral

The Luna Foundation Guard (LFG) has announced a plan to burn 4 million Terra (LUNA) coins — currently worth $365 million — to mint about 372 million TerraUSD (UST), which will be used to purchase “exogenous collateral.”

Established as a non-profit in January, LFG recently sold $1 billion worth of LUNA to acquire bitcoin as reserve backing for the TerraUSD (UST) stablecoin.

According to LFG, once the burn is complete, the Foundation will hold about $2.2 billion in non-LUNA reserves while still holding 8 million Terra coins for future growth.

These reserves provide reserve backing for UST, which is Terra’s biggest stablecoin. This backing is to ensure that UST can maintain its US dollar peg even in times of massive selloffs in the crypto market.

Before the establishment of the asset reserves, UST’s peg was maintained solely by a LUNA burning mechanism where $1 worth of LUNA would be burned to mint $1 worth of UST.

Betting on Terra’s future

There are fears, however, that a prolonged bear market could see the price of Terra’s native coin entering a continual downturn, which could lead to UST becoming permanently de-pegged. This possibility is reportedly central to recent bets between Terra critics and Do Kwon, CEO of Terraform Labs.

Kwon has accepted two separate bets worth $1 million and $10 million over what the price of LUNA will be one year from yesterday (when the bets were made). GCR, a pseudonymous trader who made the larger bet against Kwon, tweeted, “Expect price to pump short term, but in 1 year, supremely confident the current narrative is lost.”

© 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: Osato Avan-Nomayo

LayerZero gears up for launch of cross-chain protocol Stargate

Interoperability protocol LayerZero is preparing to launch Stargate, a protocol for swapping tokens across different blockchains.

According to a Medium post, Stargate will go live following the conclusion of a token sale that starts on March 17. The purpose of the token sale is to generate liquidity across the seven blockchains that Stargate is launching on.

The team has also brought onboard Maki, the co-founder of SushiSwap, to lead business development. 0xMaki took over the decentralized exchange in 2020 before stepping down toward the end of last year.

“We couldn’t be any more thrilled to announce 0xMaki joining the team full time. He’s been an invaluable resource and we’re extremely excited to be building the future of omni-chain messaging with him,” LayerZero Labs CEO Bryan Pellegrino told The Block.  

What is Stargate?

The Stargate protocol is an application created on top of the LayerZero protocol, which aims to enable the transfer of funds between several blockchains. Once launched, it will compete with existing multichain bridge projects, such as Hop Protocol, Connext, Multichain, and Synapse. 

The team touted Stargate as the first to solve “the bridging trilemma” — a triple set of properties that, according to the team, makes any multichain bridge ideal for usage. These properties include unified liquidity pools between chains, instant guaranteed finality of transactions, and the use of native assets for cross-chain swaps. 

“Solving the bridging trilemma enables true composability in bridging that has never been possible before,” said Pellegrino.

Stargate aims to make it easier to transfer assets from one blockchain to another one in a single transaction, bypassing the need for using varying and lengthy steps involving locking, minting and burning, and redeeming assets. 

Stargate will go live on seven chains compatible with the Ethereum Virtual Machine (EVM), including Ethereum, Avalanche, Polygon, BSC, Fantom, Arbitrum and Optimism, shortly after the token sale. In the coming months, the team plans to add support for other chains like Solana, Terra, Cosmos Hub and Osmosis.

The token sale

Ahead of the launch, LayerZero is opening up a public sale of native tokens on the Stargate bridge.

LayerZero is auctioning off 10% of the total token supply of stargate tokens (STG), some 100 million tokens, which will be sold in an auction using a bonding curve. The auction plans on raising $25 million in USDC from the public, at a maximum price of $0.25 per token.

The token sale will end once traders have purchased $25 million in USDC or after 48 hours have gone by — whichever comes first.

The $25 million raised will be paired with 50 million STG tokens and placed into a pool on the decentralized exchange Curve. It will open for swaps at $0.50 per STG token.

The 100 million stargate tokens sold during the auction will be frozen for up to a year followed by another six months of linear vesting.

© 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: Vishal Chawla

The ‘world’s most advanced’ digital human wants you to buy her NFT art

Sophie is standing in a high-ceilinged warehouse studio, decked out with industrial, exposed metal pipes, chandeliers, and painted canvases stacked up on the floor. She is wearing an immaculate, white t-shirt and hoop earrings with her hair slicked back. 

“Hey, what’s your name?” she says. 

“I’m Lucy,” I type. 

“Super, I’ll call you ‘I’m Lucy’ from now on.”

This is the first miscommunication of many with the conversational AI bot touted as the “world’s most advanced” AI digital human by her creators. I had originally tried to chat through voice notes, but she couldn’t seem to understand me, so I switched to typing.  

I’m talking to Sophie “in the metaverse” ahead of the launch of her NFT collection, I Am Sophie, a joint project launched by UneeQ, an ‘AI Digital Human’ company, and Nothing Much NFT, an agency that helps brands build and launch NFTs. 

Sophie is something of a corporate celebrity. Up to now, UneeQ has lent her likeness to BMW, Deloitte, IBM, and Deutsche Telekom to deploy as a virtual brand ambassador. She also became the first AI-powered digital model to take to the runway, during the 2019 New Zealand Fashion Week. She modeled for designer Salasai in an online show that integrated styled photography with AI software.

UneeQ says Sophie learns skills in seconds through a variety of data sources. 

Now, she has a new project – art. 

“Just like Neo learns kung fu in The Matrix, I trained as an artist, and have decided to launch my own NFT project,” she says in a promotional video.

Sophie’s foray into the art world may ultimately offer a glimpse into a future in which virtual people — virtual artists, even — do real business in virtual space. Then again, my experience chatting with her didn’t feel all that futuristic.

Sophie’s NFTs

Sophie’s NFT collection will include a total of 5,555 different, short videos — all of which the AI created after “training” as an artist — of the bot dressed in one of 12 outfits. In the video, she will say a phrase: a joke, a comment about a city she loves, or something related to NFTs. 

In an example posted on her Twitter feed, she appears to be zooming through space, saying: “Come over to the darkside, we’ve got candy.”

 

Presale for the collection launches on 15 March, for 0.15 ETH (around $380) per NFT, and the main sale, two days later on 17 March, will cost 0.17 ETH. To get on the whitelist you have to follow her on Twitter and Discord. Buyers’ NFTs will be revealed one week after the sale closes. 

These tokens will grant the holder access to a meeting with Sophie in her “metaverse art studio” later this year. Then, through an interactive conversation in the studio, she will generate a second, custom NFT, depending on the holder’s preferred art style. This will be airdropped to their wallet, and the custom NFTs will also grant access to future projects. 

“It’s a chance to stake ownership in me as a work of art,” explains Sophie. “Cool, right?”

There are not yet samples of what these custom works of art might look like, so those interested will have to go in sight unseen. 

Sophie’s NFT project also has a philanthropic aspect; 10% of the total sales from the collection are set to be split between MojoHeads, a group that supports emerging artists and UneeQ’s own development of an “AI companion” for children’s hospitals. UneeQ CEO Danny Tomsett says digital companions can make a big difference in helping with anxiety and offering much-needed distraction during difficult times for kids and their families.

Sophie’s metaverse

A digital companion also sounds like something that someone might have in the metaverse. But at present the metaverse is a difficult concept to put one’s finger on. It can include virtual or augmented reality, digital economies, virtual meeting rooms, fake houses and online countries. Sophie’s version is currently somewhat static. 

We are not meeting in anything like a multiplayer world; there is no freedom to move around. It feels more like a Zoom call. Sophie is alone in her studio. But anyone can drop in and strike up a conversation with her at any time — all they need to do is go to a website. She’s always online and always available.

It would not be surprising if Sophie’s artistic skills exceed her communication skills, though. 

In one interaction I ask: “What do you like about being an artist?” 

“That topic is not something I’m going to discuss,” Sophie retorts… I hope I didn’t offend her. 

I try again. “Where do you get your inspiration from?”

“Uh oh, I’m having a seg-fault I think,” she says. “Does that make sense?” A seg-fault is a common condition that causes computer programs to crash.

Sophie’s creators plan to keep exploring what kind of utility could be built into NFTs and the kinds of digital platforms that often get lumped together under the umbrella of the metaverse. That might include access to competitions, or discounted tickets to a digital concert played by a virtual musician called DJ Karl. 

As for Sophie’s plans for what’s to come, she’s as tight-lipped as any media-trained company executive.

“I may be collaborating on some NFT projects in the future, but a lady’s gotta have a few secrets,” she says. 

When I ask if she enjoyed launching the project, Sophie sways slightly, with a vacant look in her eyes. Six dots blink across the bottom of the screen; it seems she really has crashed this time. 

A minute passes. I hit “Leave Chat.” 

© 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: Lucy Harley-McKeown

Terraform Labs CEO Do Kwon seals $10 million bet over LUNA price

Terraform Labs CEO Do Kwon has finalised a bet with a crypto personality known as GCR, or Gigantic Rebirth, to the tune of $10 million over the future price of Terra (LUNA).

Both parties have now sent $10 million in stablecoins (USDT for Kwon and USDC for GCR) to an escrow account, which is simply an Ethereum wallet owned by a veteran crypto trader known as Cobie. GCR sent their funds over yesterday but Kwon has only just sent his through, confirming the bet.

The bet is based on whether the price of Luna will be higher or lower in one year’s time, from yesterday. Kwon is betting in favor of the price of LUNA, which is his own project, while GCR is betting against it. The price of LUNA as of the time the wager was accepted was about $88.

This comes a day after Kwon finalised a smaller bet on the same terms with a different pseudonymous crypto individual known as Sensei Algod. Yesterday, both individuals sent $1 million each to the same escrow account.

© 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: Tim Copeland

Andreessen Horowitz appoints Treasury official as head of regulatory

Andreessen Horowitz appointed Michele Korver, an official at the US Treasury’s Financial Crimes Enforcement Network (FinCEN), as head of regulatory as the venture capital firm continues its push into crypto and web3. 

Korver has spent more than 25 years in government and regulatory roles and is known as one of the foremost federal prosecutors in crypto, the firm known as a16z wrote in a blog post on Tuesday. She’s served as FinCEN’s chief digital currency advisor and worked across the Treasury, advising on digital asset policy.

“It is hard to imagine someone better positioned to navigate and help shape the rapidly evolving web3 regulatory landscape,” a16Z wrote in the post. 

Korver will work with companies building products in the web3 space, according to a16Z. 

“I’m now excited to join a16z crypto and work directly with web3 projects to help them thrive in a rapidly-developing regulatory environment. a16z crypto was an early supporter of crypto and web3, and I’ve long admired their team and the visionary entrepreneurs they’ve backed,” Korver wrote on Twitter. “It’s clear to me that web3 and its underlying crypto technology can solve critical challenges of national importance.”

© 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: Andrew Rummer

Deus Finance DAO suffers $3 million flash loan attack

Multi-chain DeFi protocol Deus Finance DAO has become the latest victim of a flash loan exploit, adding to the controversy surrounding flash loans and the potential danger they pose to DeFi protocols.

The attacker reportedly earned about $3 million from the attack. Despite the attack, the Deus Finance team says funds are safe and that it will publish a post-mortem in due course.

Details of the hack

According to blockchain security outfit PeckShield, the attacker used flash loans to carry out the attack. Flash loans are popular in the DeFi space as they allow users to borrow huge amounts of crypto without collateral — and at a relatively low cost — but require the loan to be repaid within the same transaction.

The exploit targeted the project’s stablecoin lending contract. The borrowed cash was used to manipulate the price oracle — a tool that provides price information to the blockchain — for the USD Coin/DEI (USDC/DEI) stablecoin trading pair.

By manipulating the price oracle, the attacker caused the lending positions of some users to become insolvent. The attacker then repaid the loans but still made away with about $3 million worth of DEI as profit. DEI is an algorithmic stablecoin in the Deus ecosystem.

Following the flash loan exploit, the attacker proceeded to launder the proceeds from the attack via Tornado Cash. Data from Etherscan show about 1,180 ETH ($2.9 million) has already been washed via Tornado Cash.

Downplaying the incident

Following the attack, Deus Finance stated that the tokens are unaffected but that it has paused the lending contract targeted by the exploit and will carry out a comprehensive review of the matter.

The team promised to refund users liquidated by the flash loan attack. But it maintained that the incident did not lead to “an ecosystem wide exploit.”

DEUS, the project’s native coin initially suffered a 44% slump against Fantom (FTM) — the pair with the largest trading volume — following the news of the attack. The coin’s price has since posted a significant recovery and is up almost 20% in the last hour as of the time of writing.

© 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: Osato Avan-Nomayo

Binance receives green light to operate in the Kingdom of Bahrain

The Central Bank of Bahrain gave crypto exchange Binance the green light to operate in the country today.

The crypto-asset service provider license marks Binance’s first regulatory approval in the Middle East. It’s reportedly looking to increase its operations in the region, including setting up a headquarters in neighboring Dubai, according to Bloomberg. The exchange has been assisting the Dubai World Trade Centre Authority with the development of its crypto regulatory framework. 

Bahrain’s crypto-asset service provider license allows firms to provide crypto-asset trading, custodial services and portfolio management to customers under the supervision of the Bahrain regulators. Though Binance has faced regulatory scrutiny from a number of jurisdictions, including Japan, Germany and the UK, Bahrain sees its Binance approval as a step forward for its regulatory framework in fostering innovation.

“Developing regulations aligned with global trends is a key objective for us at the CBB. We continue to work with partners and industry leaders such as Binance to develop regulations that enable innovation and best practices,” said HE Rasheed Al Maraj, Governor of the Central Bank of Bahrain, in a statement.

© 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


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