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Crypto unicorn Bitpanda snaps up FCA-registered custodian in first acquisition

Bitpanda, the Austrian investment platform, has acquired British crypto and DeFi custodian Trustology to boost its offering for professional investors. 

Announced today, the deal will pave the way for Bitpanda Pro — Bitpanda’s platform for experienced traders and institutional investors — to launch its own custody service.

While the company did not disclose an exact valuation, a spokesperson confirmed that it had spent a “significant two-digit million” sum in US dollars on the deal.

Bitpanda’s maiden acquisition comes after a period of frantic fundraising last year that saw the Vienna-based startup raise around $450 million across multiple rounds. The most recent fundraising in August valued the company at $4.1 billion.

Eric Demuth, co-founder and CEO of Bitpanda, said in a statement the launch of a custody service will bring the firm “one step closer to building a leading, fully regulated and secure digital investment platform for everyone, new investors and professionals alike.”

Trustology, which will be rebranded as Bitpanda Custody, has been fully registered as a crypto-assets firm with the UK’s Financial Conduct Authority (FCA) since October 2021 — one of only a few dozen crypto startups to have satisfied the regulator’s anti-money laundering requirements.

Trustology’s technology will be used to take custody of all Bitpanda’s assets across its retail, institutional and white-labelling arms. The company said in a statement that this will make it one of the largest crypto custodians globally.

Bitpanda sees the acquisition as a first step towards transforming the Bitpanda Pro platform into a fully-fledged prime brokerage business. The startup hired former JPMorgan executive Joshua Barraclough to lead the platform in October of last year. A month later, The Block revealed that the unit planned to launch a crypto derivatives desk.

“This is a great step for us as a company and especially for Bitpanda Pro,” said Barraclough. “Recently, we have invested a lot in upgrading Bitpanda Pro exchange as well as boosting our liquidity partnerships, so that we can compete with the largest exchanges on execution capabilities. Now we are looking to massively increase our footprint and bring lots more clients to our venues.”

He added that Bitpanda Pro is moving away from an assets under custody model, aiming over time to drive custody costs to zero for clients that trade actively on the platform.

Trustology last took investment in December 2018, when it raised $8 million in a seed round led by Two Sigma Ventures, with participation from Ethereum developer ConsenSys. 

© 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

Crypto platform Amber Group hits $3 billion valuation in latest raise

Crypto platform Amber Group has announced a $200 million raise led by Temasek, the Singapore-based sovereign wealth fund.

The investment values Amber, which is also based in Singapore, at $3 billion — and brings the total amount of capital it has raised to date to $328 million.

Alongside Temasek, existing investors including Sequoia China, Pantera Capital, Tiger Global Management, True Arrow Partners and Coinbase Ventures participated in the round.

Founded in 2017, Amber offers a wide range of products to both institutional and consumer clients. In addition to providing liquidity and market making services, it offers structured products, and advisory services. The company now has more than 1,000 institutional clients globally and boasts assets under management of more than $5 billion, according to a press release. 

Amber’s CEO, Michael Wu, said the firm’s latest capital injection will fuel hiring in Europe and the Americas — helping it to meet institutional demand in those regions. There are also plans to expand WhaleFin, its consumer app, and its creator-focused arm OpenVerse.

“We will cast our sights beyond business expansion and strategic acquisitions too, as part of our commitment to building a sustainable future for all,” Wu added.

Earlier in February, Amber’s WhaleFin acquired Japanese crypto exchange DeCurret Inc. — marking its first foray into the Japanese market. 

© 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

Intel shows off its energy-efficient ‘Bonanza Mine’ bitcoin miner

Tech giant Intel has publicly released technical specifications of its Bonanza Mine bitcoin miner hardware.

Presenting at the 2022 edition of the International Solid-State Circuits Conference (ISSCC), organized by the Institute of Electrical and Electronics Engineers (IEEE), Intel revealed that the first generation of its miner provided greater energy efficiency than other offerings on the market.

These days, bitcoin mining is carried out using specialized hardware called an application-specific integrated circuit (ASIC). Each Intel Bonanza Mine (BMZ1) miner packs 300 BMZ1 chips according to the technical specifications presented during the conference. The “one-subscript” in the name means that it is the first generation of the miner hardware.

These 300 BMZ1 combine to render a power rating of 3,600 watts (W) while delivering 40 terahash per second (TH/s) of computing power. This latter specification lags behind the hash rate quoted by leading miners on the market.

Bitmain’s Antminer S19 and S19 Pro deliver between 95 to 110 TH/s while MicroBT’s WhatsMiner M30S produces up to 112 TH/s of hashing potential. Bitmain is even coming out with a new liquid-cooled miner that the company says can reach up to 198 TH/s.

While Intel’s offering does not match up with the hashing power of its competitors, the company says the BMZ1 is more energy efficient. Companies like Block and Argo are already among the list of high-profile customers that have already made purchase orders.

It is not yet clear whether Intel will deliver only BMZ1 chips themselves for clients to incorporate into their own mining systems or ship the 3,600 W miners to customers.

Intel has also followed up the BMZ1 with plans to unveil the second generation of its miner hardware.

© 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

Artist blows up Lamborghini to make NFTs — in protest against crypto culture

Earlier this month, an artist called Shl0ms, with the help of an explosives expert, blew up a Lamborghini worth just shy of $250,000. They are now turning the charred parts into a collection of 999 NFTs – to protest crypto’s get-rich-quick culture.

“This technology is incredibly promising, there are so many good things we could do with it but there are so many terrible things being done with it,” Shl0ms tells The Block by video call. “It’s really extractive, zero-sum practices.”

The pseudo-anonymous artist chose a Lamborghini because, “the Lambo is a pretty potent representation of people simply engaging with crypto because it’s a way for them to make money off other people as quickly as possible.”

Who is Shl0ms?

Shl0ms agreed to be interviewed on a video call through a live filter that translates their face into a Matrix-like pixelated representation of a green image on a blue background — constantly shifting, constantly updating. Their voice wasn’t modified, however, so it lacked the deep monotone associated with anonymous individuals.

While they don’t have a traditional artist background, they have been in and around crypto since 2016 and are familiar with the industry. Yet they’ve always had an artistic flair and a penchant for conceptual thinking.

The Lamborghini Huracan in the desert before it was destroyed. Image: Shl0ms.

“To me, when I’m looking at a screen I’m super cognizant that I’m physically looking at a screen whereas before I had this mental shift, you sort of fall prey to an illusion that you’re looking at someone, for example that I’m looking at you right now and not at a glass surface and a bunch of pixels,” they say.

Shl0ms adds that the digital world is designed so you look like you drag a physical file across space, to make it seem like the real world, something known as skeuomorphism. They played with this idea in a previous artwork, which was an NFT of a fractal, where the actual data file itself contained folders within folders that replicated the same fractal. In a sense, the piece contained 730 copies of itself.

Blowing up objects

And it was this type of examination of the intersection between the physical and the digital that led them to blow up a real object to turn its fragments into NFTs. 

It started with a urinal.

Taking inspiration from artist Marcel Duchamp’s artwork of a urinal with a signature written on it, Shl0ms recreated a similar object before smashing it to bits. They picked up each tiny fragment and turned 150 of them into short video clips. In late 2021, they sold these video clips for an NFT collection called FNTN, raising $500,000.

“The destruction as creation motif is pretty common in the traditional art world. Not as common in the crypto art world.”

Shl0ms’ FNTN artwork, inspired by Duchamp. Image: Shl0ms.

Shl0ms has also played around with other ideas, such as an image measuring 1 pixel by 100 million pixels. They claim that, if somehow displayed, it would stand 16.44 miles tall. Other artwork includes a blank overlay over a scan of the Mona Lisa and an artwork making fun of the artist’s heavy use of blank imagery. In total, Shl0ms has made in the ballpark of $1 million from their NFT art experiments.

At the same time as their art career was beginning to take off, Shl0ms had a more ambitious idea. What if they could recreate the same conceptual framework of destroying an object and turning its remnants into NFTs with something bigger and more expensive? Something controversial and unnecessarily destructive?

They decided to blow up a Lamborghini. 

Lambo go boom

In September 2021, Shl0ms tweeted about the idea of blowing up a Lamborghini, or as they described it, “physically fractionalizing” it  – a reference to fractionalizing NFTs by turning them into lots of tokens.

They added that Ritholtz Wealth Management COO Nick Maggiulli asked whether it would be “chaotically destroyed or methodically disassembled?” and posed that question to their Twitter following. A poll was soon issued and Shl0ms’s followers narrowly chose “chaos” over “order.”

“Also, want to be clear that I hate ambos and that is why I want to destroy one,” Shl0ms said on Twitter at the time, adding, “In fact the DAO will only allow people who hate lambos, that will be our aligning ethos.”

Shl0ms got financial backing for the idea from a single entity and also used their own funds from previous art sales to push the idea forward. They started building out a team that would eventually encompass 100 people across the whole process. 

One part from the Lamborghini after it was blown up. Image: Shl0ms.

Shl0ms purchased a used Lamborghini Huracan — with a lot of miles on the clock — for just under $250,000 and sent one of his “minions” to go pick it up. They then drove it to an undisclosed desert location in the US for its destruction. 

On February 2, which Shl0ms notes was 2/2/2022, the Lamborghini was blown up.

But it’s no easy task blowing up a car without destroying it too much. The team spent two weeks prior testing the explosions, including blowing up another car. Plus, in order to handle such firepower, they had to hire a federally licensed explosives engineer (who said this was his most challenging detonation to date).

Following the blast, the team picked up the pieces and documented them. They shot a rotating video of each piece in 4K definition (although the NFT quality might be lower). 

The collection is going live on February 25 and at this point the full video of the explosion will be made available. It’s made up of 999 NFTs, with 888 for sale and the remaining 111 for the team and the initial investor.

Yet while the NFT collection seems inherently contradictory — destroying a real-life object to sell NFTs in criticism of using crypto to make a quick buck — Shl0ms is fully aware of it. Plus, they plan to use the funds to build a DAO that won’t have financial goals but will be more ethically minded. So at some point, Shl0ms’s vision might be achieved, that is, as long as the ends justify the means.

© 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

Korea’s largest bank to launch the country’s first crypto investment fund

Kookmin Bank, South Korea’s largest bank by net assets, plans to launch crypto investment products targeted at retail investors, according to an announcement. 

The bank has formed a Digital Asset Management Committee with the aim to launch a crypto exchange-traded fund (ETF) and future products as soon as regulation in the country allows. 

“We will launch a virtual asset-themed equity fund, etc., as soon as possible,” says Hong-Gom Kim, head of Kookmin Bank’s index quant management division. “We will also publish periodicals.”

Along with developing a fund through its proposed virtual currency index, the bank is also looking at the possibility of a hybrid fund that includes crypto alongside traditional assets. This fund will be utilized by an outsourced chief investment officer to provide guarantees on its investments. It may also be used in retirement pensions. 

The move follows other Asian legacy banking institutions moving into crypto. Last week, Singapore’s DBS Bank announced plans for a retail digital asset trading desk later this year. In January, the Philippines’ Union Bank unveiled plans to offer cryptocurrency trading and custodial 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.

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Author: Tom Matsuda

Spotify is hiring a senior backend engineer to explore web3

Spotify could be taking its first steps into crypto, according to a job listing posted on Linkedin.

The streaming company is hiring a senior backend engineer to explore new technologies such as web3. 

The job advert says that the engineer will be part of the experimental growth team within Spotify’s freemium offering. They’ll be tasked with utilizing new technologies like web3 to “uncover the next growth opportunity” along with building and running experiments on new and existing products. The job listing also asks for experience leading explorations and prototyping new products. 

In addition to a senior backend engineer, the company is also advertising for a senior manager in innovation and market intelligence that has “expert familiarity with emerging trends” especially those related to web3. 

This news follows other major tech companies’ moves into web3. YouTube is currently hiring for a web3 director to push into the space and Twitter began rolling out NFT profile pictures earlier this year. 

The Block has contacted Spotify for comment. 

© 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

Proposed Russian crypto regulations to require online exams for investors

A new draft proposal for crypto regulations in Russia could see citizens tasked with taking online tests before being allowed to invest in cryptocurrencies. This stipulation is part of plans to create a legal framework for virtual currencies in the country.

According to Russia’s finance ministry on Monday, the testing requirement is to ensure that citizens are acquainted with the risks associated with crypto investing. If the proposal is passed, Russians will have to take an online test before they can buy crypto.

Those who pass the test will be able to buy up to 600,000 rubles ($7,500) worth of crypto annually. Conversely, those who fail the test will see their annual crypto investment threshold limited to 50,000 rubles ($630).

This testing requirement is also on top of strict know-your-customer (KYC) identification protocols prescribed by the draft policy. Also, crypto trading platforms will be asked to maintain registers containing identifying information about all customers.

As part of the draft crypto regulations, exchanges will also have to come under a licensing regime. As part of the draft crypto regulations, a designated authority will monitor the compliance of cryptocurrency trading platforms.

This monitoring will cover matters such as risk management systems, corporate governance, and internal audits. Platforms will submit documents showing the crypto held by customers and the exchanges themselves.

On the issue of mining, the finance ministry’s draft proposal includes provisions for taxing crypto miners. In January, Russia’s President Vladimir Putin did call for regulations geared toward cryptocurrency mining.

Putin’s stance on the matter differed from that of the central bank that was in favor of a blanket ban on cryptocurrencies.

While the draft crypto regulations seek to legalize cryptocurrencies in Russia, the document still stated that virtual currencies will not be recognized as a means of payment. Instead, the finance ministry is calling for crypto to be designated as an investment vehicle.

© 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

California lawmaker files bill to let state agencies accept Bitcoin

California became the latest state last week of the current legislative cycle to weigh allowing residents to pay for government services in the form of crypto.

Senate Bill 1275, filed on February 18, “would authorize a state agency to accept cryptocurrency as a method of payment for the provision of government services,” according to the text. The bill is sponsored by State Senator Sydney Kamlager-Dove, a Democrat.

The bill joins a nascent but growing chorus of state efforts to allow people to make such payments. This month, Colorado governor Jared Polis pledged to let residents pay their taxes in crypto by the summer, though in this instance, such payments would be exchanged for fiat currency before the state takes possession.

Similar efforts have taken shape in Arizona and Wyoming. Legislation filed in late January in Illinois notably would let The Department of Revenue accept cryptocurrency directly. 

As noted by a recent report from Politico on the subject, past efforts to open the doors to crypto tax payments saw limited use. 

© 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: Michael McSweeney

Jambo secures $7.5 million in seed funding to build Africa’s web3 ‘superapp’

African web3 startup Jambo has raised $7.5 million in a seed funding round that involved notable investors from the crypto space, the company announced on Monday.

The company’s mission to build a web3 “superapp” for Africa drew investors like Delphi Ventures, Coinbase Ventures, Three Arrows Capital, and Alameda Research. Other participants in the seed funding round included Alliance DAO, Tiger Global, DeFiance Capital, Hashed, Polygon Studios, UOB, Signum Capital, BH Digital, and Yield Guild Games, among others.

According to Jambo founder James Zhang, the company aims to lead web3 adoption in Africa. Speaking to The Block, Zhang highlighted mobile phone penetration and crypto adoption as important metrics that position the continent as a viable location for significant investments in web3.

With over a third of Africa’s young adult population unemployed, Zhang stated that the company is looking to foster financial inclusion for millions across the continent via play-to-earn (P2E) gaming, remittance, and decentralized finance (DeFi). Jambo plans to aggregate social media and emerging web3 services into one superapp for millions on the continent, Zhang said.

Not a guild

P2E and guilds go hand in the world of incentivized crypto gaming. Guilds are communities of online gamers that come together to play these incentivized crypto games, often sharing data points and profits among the group.

Given the P2E component of its plans, Zhang clarified to The Block that Jambo has no plans to operate as a guild. Making the distinction, the Jambo founder stated that the business model of guilds involves a percentage levy on the gains earned by scholars — guild members who loan out premium in-game assets or provide startup capital for gamers.

“We have never taken a single dollar of profit from any scholar on a game, thereby by definition not a guild. We are the web3 onboarding portal of Africa which means we eventually later down the road will launch the best games to the region. But gaming is only a part of our entire ecosystem,” Zhang told The Block.

Boots on the ground

While the company has a vision for Sub-Saharan Africa, Zhang says Jambo is not looking at the region as a monolith. Instead, Zhang says Jambo is adopting a “boots on the ground” approach and will create strategies that are suitable for each community.

Zhang told The Block that the company is aware of an emerging divergence in DeFi adoption between developed and developing economies. To help close the gap, Jambo has signed up 12,000 students across 15 African countries to complete a curated web3 curriculum since the start of 2022.

According to Zhang, education is key to getting young Africans interested and invested in web3 – and their JamboAcademy will help bridge knowledge gaps in the areas of P2E ad DeFi. The academy is currently targeting signups from university students in Sub-Saharan Africa, with web3 courses available at over 600 partner locations across Africa.

© 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

Mapping out Solana’s Ecosystem

Quick Take

  • Solana is a layer-1 blockchain platform designed for decentralized applications featuring high throughput and low costs.
  • Even though there were technical hiccups in the past six months, Solana’s projects are receiving increasingly more attention and capital from private investors.
  • In total, The Block has recognized and mapped out 500 projects across 14 verticals.
  • This ecosystem map serves as an UPDATE to the previous Solana map

This research piece is available exclusively to
members of The Block Research.
You can continue reading
this Research content on The Block Research.

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Author: Edvinas Rupkus


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