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Coinbase announced on Monday that it will bring Shopify’s CEO and co-founder onto its board. 

The company said Tobias ‘Tobi’ Lütke would bring experience and a new perspective as it looks to build out its product offerings and expand into new regions. 

Coinbase CEO and co-founder Brian Armstrong said the open source programmer “deeply believes in the power of crypto and was an early adopter of crypto through Shopify’s integration with Coinbase Commerce.”

Coinbase is hoping to tap both Shopify’s reach — it serves merchants in more than 175 countries — and its expertise, straddling finance, payments web applications and “the internet itself.”

“With his guidance, we hope to unlock crypto’s potential to increase economic freedom in the same way Shopify democratized online commerce,” said Armstrong. 

Lütke began his career as an active member of the open source community having contributed to projects such as Ruby on Rails, Liquid and ActiveMerchant. He was an early arrival to e-commerce, launching a brand selling snowboarding equipment in 2004, which evolved into Shopify. 

Shopify lets customers pay in crypto and supports the selling and minting of NFTs. 

“The concepts of decentralized finance and entrepreneurship exemplify the promise of Web3 where opportunity exists for the many, not the few,” said Tobi Lutke. “Coinbase and Shopify share this like-minded vision, and I am excited to join the Board to support the future that Brian and the Coinbase team are building.”

The move will be subject to formal board confirmation later this week. 

© 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.

Meta, formerly known as Facebook, has signed up to a trade body that promotes the free use of innovative technology in the crypto sector, according to an announcement.

By joining the Crypto Open Patent Alliance (COPA), Meta has agreed not to enforce its core cryptocurrency patents — except in defense of litigation.

Jack Dorsey’s Block, formerly known as Square, established the organization in September 2020. Its dozens of members include major crypto firms like Coinbase and Kraken.

In April this year, the body sued nChain’s chief scientist Craig Wright over his efforts to prevent crypto groups from hosting the Bitcoin white paper on their websites.

Meta’s head of licensing and open-source, Shayne O’Reilly, will join COPA’s board, alongside representatives from Coinbase and Block.

“Companies large and small can encourage innovation by collaborating on fundamental infrastructure. This is one step further to advancing COPA’s mission, which is to remove legal obstacles so cryptocurrency can become the backbone for transferring value anywhere in the world,” said Max Sills, IP counsel at Block and general manager of COPA, in a statement.  

Meta’s commitment comes a few weeks after Block’s Dorsey, who recently stepped down as CEO of Twitter, launched a new fund to help defend Bitcoin developers against litigation.

© 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.

Last year’s Robinhood GameStop debacle kicked off calls for the modernization of stock market infrastructure to democratize investment opportunities for retail investors.

We are seeing increased demand from a younger generation of investors for more individual autonomy and more control over their investment actions. For example, investors are demanding the ability to take their assets off exchange and move positions from one platform to another or to earn income when their assets are lent to someone else. They seek true transparency in markets that have grown too complacent with opaque corners. They request fractional ownership and the ability to trade assets 24 hours a day, 7 days a week, 365 days a year.

Digital securities, to all intents and purposes, have been expressly built with this new generation of Gen Z investors in mind. Prior to 2018, digital securities or “security tokens” offered all of the attributes that investors demanded with one huge limitation – they were largely limited to accredited investors and given this, there was limited volume, and only a handful of investments available.

INX (NEO:INXD) realized that one way to bring digital securities mainstream was to make them available to retail investors without the lock-up periods found in exempt offerings. To enable this significant leap forward, the company spent over 950 days working with the SEC and its advisors to craft a security that appealed to regulators, investors and issuers alike. This resulted in the first fully-registered security token IPO on the blockchain.

Declared effective in August 2020, the INX Token serves as an example of how a digital security can be structured for retail investors. It required a full prospectus that detailed risk disclosures for a blockchain-based security and it served to provide investors more fulsome transparency into the vision and business plan of the company. 

The INX Token and its prospectus now serve as a roadmap for assets to move into the digital future. In the digital world so many more possibilities are under your control.

What this potentially means is a world where 24/7 trading becomes normal and fractional ownership is encouraged. If your platform or exchange bans you from buying or selling, simply remove your digital security and trade it elsewhere, even peer to peer. If a company drops exciting news on a Friday afternoon, investors would not have to wait through the weekend to start investing. 

Given digital securities seek to provide solutions to overcome legacy capital market limitations, it is inevitable for mass adoption… first a trickle, then a river, then a tsunami. Change is coming and it’s coming fast, but don’t take our word for it. Rather listen to what the former SEC Chair Jay Clayton said when discussing equities as he walked out the door: “…It could very well be the case that those all become tokenized…”

© 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.

Binance has amassed around $1 billion for an insurance fund, created as a buffer against the impact of a potential hack.

The exchange has been earmarking money to protect users interests since 2018 and recently consolidated these to one place, according to a press release. When the Secure Asset Fund for Users (SAFU) was established, Binance committed 10% of all trading fees in order to grow it to a sizable level to safeguard users’ interests, the release added. 

It said it will continue to monitor the SAFU in order to ensure the fund size remains adequate. The value will fluctuate based on the market. 

Binance published the wallet addresses in a move founder and CEO Changpeng Zhao (CZ) said he hopes will foster transparency and build trust in the exchange. 

“We call on all centralised exchanges to do the same as it will benefit the entire ecosystem and demonstrate to governments, regulators and important stakeholders our collective commitment to uphold trust, integrity and transparency in the crypto ecosystem,” he said.  

The moves come amid a slew of high profile hacks targeting exchanges. Binance suffered an attack in 2019, worth over $40 million. More recently, crypto exchange AscendEX said that its hot wallet was breached to the tune of $78 million. BitMart was also hacked late last year for $200 million.

Binance isn’t the only exchange which has taken this step. BitMEX is known for its large emergency fund which grows from liquidations that were able to be executed in the market at a price better than the bankruptcy price of that particular position.

© 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 frothy venture capital market continues to buoy the empire of billionaire trader and entrepreneur Sam Bankman-Fried. 

FTX Trading Ltd. — the firm behind the US brand that is now ubiquitous across sport centers in the US— announced on Monday its most recent fundraise: a $400 million Series C that values the crypto exchange-operator at $32 billion. 

The announcement comes less than four months after FTX raised at a $25 billion valuation and just a few days after its US affiliate FTX.US announced that it had raised at an $8 billion valuation. 

“There’s a big difference between public and private markets,” noted Bankman-Fried in a phone interview with The Block, referring to the firm’s luck in raising capital relative to the more bearish environment for liquid tokens. The latter has come crashing to earth since the start of the year. Meanwhile, FTX and its crypto peers — including the likes of MoonPay, TaxBit, and Gemini — have easily secured cash in the private market in recent months.

Participants in FTX’s round included SoftBank, Paradigm, Tiger Global, and Ontario Teachers’ Pension Plan Board. These investors simultaneously joined the cap table of FTX.US as part of the deal, according to a press release. 

FTX’s US business has captured the attention of financial press as it grew its user base to 1 million and hinted at ambitions to go after household names like Robinhood with its own stock trading feature. Its marketing budget has likely played a roll in that success. FTX.US owns the naming rights to the Miami Heat stadium and it is the official crypto exchange of Major League Baseball. It also counts football legend Tom Brady as a partner. 

Looking to the future of the international business, Bankman-Fried outlined the ways in which the firm will compete head-to-head with its off-shore rivals. While FTX commands a sizable portion of market-share in bitcoin futures trading and has grown its total user-base by 60% since OctoberFTX, it still lags behind Binance, OKEx, and Bybit in terms of volumes, according to data compiled by The Block. 

Bankman-Fried said that FTX has been expanding the capacity of its exchange’s matching engine, whilst building out its fiat on-ramps to compete with international exchange venues. It also plans to announce a batch of new licenses to operate more globally in the coming months. 

As for the firm’s valuation — which makes it more valuable than more traditional finance companies like Deutsche Bank and Nasdaq — Bankman-Fried said that it is tied to both its ambitions to take market-share within crypto while also expanding the breadth of its product suite. 

Ultimately, the executive said that the firm could be at the forefront of assets beyond its bread and butter futures. It has already expanded in NFTs, a red-hot asset class that’s drawn attention from the art world and gaming developers. In the future, FTX could offer 401(k)-like products and other consumer financial products, offering a one-stop shop for its users. 

“We see ourselves as the backbone of all assets,” Bankman-Fried said. “Become the one stop, mobile, wallet system.”

© 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.

A DAO looks set to die, according to a vote that’s in progress.

The DAO in question is ApeDAO, which was founded by the pseudonymous NFT collector KyloRen and is the third-largest holder of Bored Ape Yacht Club NFTs. It looks after a huge treasury of NFT assets, including 81 Bored Apes, 81 Mutant Apes, CryptoPunks, Fidenza, and Cool Cats.

Assuming the vote passes, which looks likely, the DAO will liquidate all of its assets and return them to token holders.

Why is this happening?

According to a Twitter thread by Sprise co-founder Montana Wong, discontent among some members of the DAO has led to a vote on whether the community should liquidate its NFT assets.

The discontent is reportedly linked to the fact that the DAO’s governance token has failed to keep up pace with the value of the treasury’s holdings. “Given the current gap between $APED price and net asset value of DAO holdings, liquidating the DAO would generate substantial returns for $APED Holders,” the proposal stated.

According to data from crypto portfolio aggregator Zapper, ApeDAO’s treasury is worth about $32.6 million, or 13,000 ETH. This conservative estimation takes in only the floor price of the various NFT collections in the entire treasury. As such, the actual value of the ApeDAO treasury holdings could be much higher.

Based on only this conservative treasury valuation, the implied APED token price should be above $16. Yet the token has largely traded around the $8 mark. That’s despite a community fundraise held last Summer where tokens were valued at $10 each.

According to the proposal, liquidating the DAO’s NFTs could deliver as much as 8 ETH ($20,000) per 1,000 APED tokens.

Voting is underway

As of the time of writing, the proposal to liquidate the DAO’s assets seems to be popular with the community. Currently, 86.5% of the vote is in favor of the move. The vote ends on February 3.

Tweeting in response to the situation, KyloRen said the DAO’s multisig custodians “will act on the basis of the vote.”

Meanwhile, Wong’s tweet stated that the vote has come as something of a surprise to KyloRen who formed the DAO with his own extensive NFT holdings.

Activity regarding the vote also seems to have triggered an upward swing in the APED token price action as the token is up 10% in the last 24 hours and briefly peaked at $12.38 on Sunday.

BAYC has been on a tear in terms of NFT sales recently with the collection’s floor price soaring to over 116 ETH. The popular collection has also attracted interest from celebrities, such as Eminem, and public figures.

© 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

• The embattled crypto exchange has made a bold swoop for an ancient German bank.

• CEO Alexander Höptner hopes he can vault BitMEX back into the ranks of the biggest crypto exchanges, but time is of the essence. 

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Open-source blockchain Celo recently introduced a Brazilian Real-pegged, algorithmic stablecoin called the Celo Real (cREAL). 

Three crypto exchanges in Brazil will provide access to the cREAL stablecoin: FlowBTC, NovaDAX and Ripio. In addition, the wallets Bitfy and Coins will also support the digital asset. Algorithmic stablecoins are designed to hold their peg to a currency automatically, instead of being backed by fiat money. 

While Brazil already has a very popular public instant payment system, called Pix, CLabs partner Markus Franke told The Block that the cREAL now provides a way to use complementary DeFi applications (CLabs is a “service organization” focused on developing and growing Celo projects). For example, Celo’s DeFi applications could help enable new options for building up a credit history, he said. 

“Celo is completely open-source, so there will be projects that will build a bridge from Pix to Celo transactions,” Franke said. ”There will be people who build lending and borrowing applications, so I think this is really, really nice.” 

According to Franke, Brazil’s high penetration of smartphones and strong “gig economy” make the country an interesting market for launching a stablecoin in local currency that is focused on mobile payments.

While most early stablecoins have been pegged to the U.S. dollar to help people avoid the volatility of their home currencies, Franke says there’s now growth in those pegged to local currencies as well. 

“Now, this is changing,” Franke says, of stablecoins typically being pegged to the dollar. “Now we see real end-users coming into the equation, using crypto not only for trading but also for transactions, for saving, for lending and borrowing, but also for payments for remittances. And now it makes a difference because people in these different countries actually have to maybe pay their merchants in local currencies, or pay taxes in local currencies.” 

According to Celo, the cREAL stablecoin can be used for both centralized finance and decentralized finance (DeFi) applications on its blockchain, such as Moola Market for collateralized loans.

People in Brazil can also load cREAL into their Bitfy wallet to pay for bills, food or merchants belonging to the network of leading Brazilian payment processor, Cielo. 

© 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.

Several traditional banks are looking to fill crypto-related roles within their research divisions — the latest sign that the digital asset ecosystem is becoming fully integrated with the broader market. 

Investment banks have long produced research on digital assets, but such firms are now wanting to pay closer attention, as the number of large publicly traded firms operating in the space grows and crypto markets bleed into traditional finance. At the end of last year, Morgan Stanley announced that Sheena Shah would lead a new team covering the crypto ecosystem, while Bank of America announced its own crypto coverage unit in October. 

Coinbase — the poster child of the US crypto market — has a long list of analysts covering its stock, including researchers from Citi, JPMorgan, Goldman Sachs, and Raymond James. 

In addition to covering the business of crypto firms, analysts also unpack macro topics that may shape the price gyrations of tokens, new technological developments in the blockchain space, and other topics. 

“If you look at the number of corporates mentioning crypto on their earnings calls, that’s gone from about 17 last year to about 147 in the most recent quarter,” Candace Browning, head of global research at BofA Securities recently told Bloomberg TV. 

The trend has also been fueled by rebrands, such as in the Meta (formerly Facebook) and Block (formerly Square) aimed at highlighting crypto ambitions. As for the metaverse, the niche new crypto buzzword was mentioned by executives of Bumble, Qualcomm, and Tencent during Q3 earnings calls. 

Amidst the growing intrigue over crypto, Jefferies has stood up a research team dedicated to payments and crypto equity research, according to a job ad. The firm is currently seeking an associate for the unit to focus on “cryptocurrency and blockchain technology.”

Canaccord Genuity is looking to fill a similar junior-level role, which will interface with company management teams and write research reports. 

Credit Suisse, meanwhile, is looking to fill a crypto and digital assets role at the VP level, also according to a job ad. That person would draft reports on the crypto industry and present them to the firm’s institutional and wealth management clients. 

Such firms, to be sure, are going head to head for talent with crypto-native firms offering research and company coverage, including Galaxy Digital. 

As for recent moves and promotions, John Todaro joined Needham & Company last year and was promoted to its crypto-asset and blockchain research principle in December, according to the former TradeBlock director’s LinkedIn. Todaro is among Coinbase’s analysts. And Goldman Sachs’ Mike Nance, who has been with the bank since 2015, took on the position of lead research analyst for payments and digital assets sectors last 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.

The community of the DeFi protocol, Wonderland, has removed Sifu as its treasury manager. The move comes two days after the revelation that Sifu is Michael Patryn, the convicted co-founder of the failed Canadian crypto exchange QuadrigaCX.

Wonderland DAO opened a vote to unseat Sifu on January 27 and passed it with a majority on January 29. TIME token holders with a combined over 64,000 tokens participated in the vote. (One token generally serves as one vote). Nearly 88% of the TIME tokens voted that Sifu should be replaced. TIME is the native token of Wonderland.

The revelation that Sifu is Patryn was made Thursday by a crypto sleuth who goes by Zach on Twitter. Zach posted their conversation with Daniele Sestagalli — the other co-founder of Wonderland — saying that Sifu is Patryn.

Sestagalli at the time told The Block that he found out Sifu is Patryn one month ago. Sestagalli and Sifu launched Wonderland in September of last year.

Wonderland is a DeFi protocol mostly based on Avalanche. It is a fork of Olympus DAO, a decentralized reserve currency protocol that lets users deposit or sell tokens to the Olympus treasury in return for discounted OHM tokens. Wonderland quickly became a famous fork of Olympus. The current treasury balance of Wonderland stands at over $735 million, according to its website.

Sestagalli said he decided not to judge Sifu by his past. Sifu/ Patryn is a convicted financial criminal who spent time in jail. He also pled guilty to conspiracy to commit credit and bank card fraud in 2005 and burglary, grand larceny, and computer fraud in 2007. He founded QuadrigaCX in 2013 with Gerald Cotten, who passed away unexpectedly and mysteriously in 2018 after a trip to India. Cotten’s death caused over $130 million in losses for 76,000 investors as the exchange was found to be largely devoid of assets.

What are the next steps for Wonderland?

Now that the vote to remove Sifu as Wonderland’s treasury manager has ended, the project is holding another poll on whether to wind down Wonderland or not. 

“Winding down will mean giving every wMEMO [wrapped wonderful memories token] holder back the funds from the treasury that they are entitled to and declare the OHM Fork experiment closed,” said Wonderland in a forum post on Friday. “We strongly believe that this would be the cleanest way of moving forward.”

The new vote has opened today and will last for 48 hours. If the Wonderland community votes against the winding down proposal, the DAO will identify a new entity to give the control of the treasury to. But since that is not an easy task, the DAO expects the community to submit a counter-proposal within five days, recommending relevant people willing to take over the multi-sig and take on the project. 

But if no counter-proposal is made, Wonderland will unwind the treasury. “We don’t want anything to happen to users’ funds, and we would not feel confident to delegate the whole treasury to a non-structured replacement,” it said.

Wonderland believes unwinding the treasury is the best solution. To that end, it is already getting a user interface ready for the community to claim its funds back.

It looks like the Wonderland community does want the treasury back. Thus far, TIME token holders with a combined 53,000 tokens have voted “yes” and those with a combined 33,000 tokens have voted “no.”

For more breaking stories like this, make sure to follow The Block on Twitter.

© 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.