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The hatred on NFTs continues.

Since Twitter brought out hexagon-shaped profile pictures for anyone who wants to prove that they own the NFT they have displayed as their profile picture, it has fueled the fire of those disgruntled with the non-fungible tokens.

It’s an ongoing battle, with gamers and some tech-enthusiasts on one side mocking the “funge” of NFTs and crypto enthusiasts maintaining their belief in the technology on the other.

But now a developer, who goes by mcclure on GitHub, has made a way for those who dislike NFTs to actively segment themselves away from NFT believers.

The tool is a Google Chrome and Firefox plugin that blocks Twitter users who have the new hexagon profile pictures. When on Twitter, if the user presses the “run NFT block” button, it will scroll the page and block anyone with the offending icon. The developer says that future versions will scan the user’s notifications and do the blocking process automatically.

The tool is derived from a plugin called the Twitter Block Chain, which blocks everyone on a single page. It was adapted to only block those with NFT profile pictures.

The developer claims that NFTs are an “investment scam” and gives three reasons why a user would want to block those showcasing their NFTs. They said NFTs contribute to global warming and that there are scams and art theft in the NFT markets. 

As the third point, they said, “In short, NFT users are just irritating to be around. People who bought NFTs have to keep hyping other people to buy NFTs or the NFTs they bought will lose value. Twitter NFT cliques are rife with sockpuppet accounts, dogpiling and indifferentiable monkey clones. Blocking NFT users just makes Twitter nicer.”

But there is one catch. Twitter may pick up on the activity and identify it as automated. In this case, the user would need to provide a phone number to prove they’re real.

© 2021 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.

Uniswap founder Hayden Adams tweeted Sunday that JPMorgan Chase has closed his bank accounts without notice or explanation.

“I know many individuals and companies who have been similarly targeted simply for working in the crypto industry,” wrote Adams. “Thanks for making it a personal.”

Adams’ bank accounts were closed last week. The move comes a few months after the US Securities and Exchange Commission (SEC) reportedly started investigating Uniswap Labs, the main developer of the world’s largest decentralized exchange protocol Uniswap.

In September, the Wall Street Journal reported, citing “people familiar with the matter,” that the SEC enforcement attorneys are investigating Uniswap Labs about how investors use the decentralized exchange protocol and how it is marketed.

At the time, a Uniswap Labs spokesperson told The Journal that the firm is “committed to complying with the laws and regulations governing our industry and to providing information to regulators that will assist them with any inquiry.”

Brian Quintenz, the former chairman of the US Commodity Futures Trading Commission (CFTC), who now works as an advisory partner at the crypto-focused investment firm Andreessen Horowitz, weighed in on the matter.

“Likely a shadow de-banking of crypto by [The Federal Reserve] or [The Office of the Comptroller of the Currency] bank examiners, with direction from the top. If the examiner told a bank that a certain customer is too risky and the bank ended that relationship, the bank is contractually prevented from telling that customer why,” Quintenz tweeted as a reply to Adams’ initial tweet.

This is not the first time JPMorgan Chase has closed an account of a crypto executive or a crypto firm. In 2018, the bank closed an account of Erik Voorhees, founder of the crypto exchange ShapeShift. The bank has previously also shut down an account of crypto exchange Kraken’s payroll account.

© 2021 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.

Sygnum Bank’s Digital Asset Outlook 2022 report analyses the developments that shaped the crypto industry in 2021, and lays out Sygnum’s strategic outlook for the market and its key sectors and trends for the year ahead. Read the full report here – key takeaways include:

• A tipping point has been reached where asset class maturity and regulatory clarity have passed the threshold for institutional investors to make significant allocations

• Innovations in decentralisation, scalability and security are driving growth in applications as well as
  the mainstreaming of user adoption and a diverse range of use cases across multiple segments

• Web3 presents the next frontier in digital assets, with key tokens appreciating more than 2,000 percent in 2021 and blockchain-based gaming and metaverse-related projects gaining momentum 

This comprehensive 32-page report is split into three parts: 

Part I: Crypto market developments – This section covers key structural shifts, including the move to mainstream user adoption, the present tipping point for investor fund flows and the supportive macro-backdrop. Also included is the solving of the bottlenecks of cost, speed and throughput via new innovations and a shift by regulators from scepticism to pragmatism. Key trends explored include expanding corporate use-cases, a potential flippening from Bitcoin to Ethereum, and the emerging metaverse ecosystem.

Part II: Key market segment outlook – This section includes the resolution of longstanding issues in the blockchain protocol layer, and the growth of applications and use-cases building-off these newly scalable protocol layers like DeFi, Web3, gaming and the metaverse. A diverse range of market segments are also analysed including NFTs, stablecoins, asset tokenization and Security Token Offerings (STOs).

Part III: Trends in Focus – In this section, we look at the defining year for Venture Capital, the large investments into custody solutions triggered by ramped-up institutional adoption, and the positive impact of increasing regulatory clarity in leading jurisdictions. 

Report author, Katalin Tischhauser, Sygnum’s Head of Discretionary Solutions and Research, says: “We now see the scope of blockchain-fuelled decentralisation accelerating beyond financial applications into a broader range of sectors and use cases that have the potential to touch almost every facet of life. This will transform many industries and greatly expand the universe of crypto assets.”

“2021 was the year when the consensus shifted to accepting that crypto assets are here to stay. Looking forward, our medium-term outlook for the market is strongly bullish as all the key macro drivers point in a positive direction – a rare state for any asset class. In 2022, we expect to see another strong year of continued innovation and growth,” adds Fabian Dori, Sygnum’s Deputy Group CEO and Head of Asset Management.

Download the full report here: Sygnum Digital Asset Outlook 2022

To keep up to date with the latest announcements, news and reports from Sygnum, join our active community on LinkedIn here.

© 2021 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.

Opposition forces in Russia are not pleased with a recent proposal to ban cryptocurrency mining and trading in the country. 

In two separate (and lengthy) Telegram posts from January 20 and 22, Leonid Volkov and Pavel Durov denounced the Central Bank of Russia’s proposal. 

Durov will be familiar to The Block’s readers as the co-founder (alongside his brother Nikolai) of encrypted messaging app Telegram, whose ill-fated venture into launching its own cryptocurrency was shut down by US authorities.

Volkov is the right-hand man of leading Russian oppositionist Aleksei Navalny, currently in jail for his political activities. During Navalny’s incarceration, Volkov has largely served as the mouthpiece for the opposition movement. Just last week, Russian authorities added him and colleague Ivan Zhdanov on their register of extremists and terrorists, which bars them from much of public life as well as holding bank accounts. 

Warning of an exodus of tech workers from Russia, Durov said: “Such a ban will inevitably stall development of blockchain technology as a whole.”

Durov continued:

“Recommending the imposition a total ban on cryptocurrencies, the Central Bank of the Russian Federation is proposing to throw the baby out with the bathwater. Such a ban will harly stop bad actors, but it will bury legal Russian projects in this area.” 

Volkov, meanwhile, suggested that the move to attack crypto was a counterbalance to Russian security forces’ incursion into Kazakhstan to help the Tokaev administration quell civil unrest, as well as make up for lost bribe money that he says police and the regime often receive from the drug trade at the border. Technologically, Volkov is skeptical.

“‘Banning cryptocurrency’ is the same as banning a transfer from one person to another — which is to say, impossible,” wrote Volkov, arguing that a blanket ban would just complicate transactions and send them through foreign jurisdictions. “This is Luddism, a fight against technology and technological progress. Luddism is doomed.”

He further took the opportunity to plug the Bitcoin address through which Navalny’s team has been taking donations since 2016 — over 666 BTC in total receipts as of press time, with a fairly notable increase in incoming transactions in the past month.  

© 2021 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.

Radkl’s Jim Greco, like many traders who have had to deal with the Solana network’s outage over the last few days, is annoyed.

“How can anyone possibly trust the Solana network with real capital after a meltdown like today?” Greco said in a tweet on Friday night.

As the price of cryptocurrencies across the board slid during Friday’s trading session, traders large and small found themselves unable to execute transactions on Solana’s blockchain — a protocol that has been touted by proponents for its scalability and fast transaction speeds. Transactions per second (tps) were down significantly. 

Those issues spilled into Saturday. Meanwhile Solana’s official status Twitter account noted that the blockchain has been “experiencing high levels of network congestion” tied to “excessive duplicate transactions.”

According to Solana founder Anatoly Yakovenko, bots were also apparently sending duplicate transactions, adding to the problem. 

Solana was not the only blockchain experiencing issues as prices plunged. But the network’s issues have taken the spotlight because it has become a darling of large trading shops in the crypto industry and beyond.

FTX’s Sam Bankman-Fried is a big backer and Jump Trading has poured capital into Solana-based projects. According to The Block Research’s John Dantoni, more than 50% of Jump Crypto’s protocol investments went into the Solana ecosystem.  

Pyth — the Solana-based data project — counts a wide range of market participants as backers, including IEX, Virtu, and GTS. (It too has experienced issues.) 

Part of the reason that Solana has been so attractive to large trading shops is that it has prioritized scale. Still, when the network gets overcrowded, it has shown that it can stall out. 

Solana released a fix on Saturday to ameliorate “the worst effects of this issue,” it said.

“These forthcoming releases are aimed at improving the state of the network, with more improvements expected to roll out in the next 8-12 weeks,” the developers added.  “Many of these features are currently live on Testnet, where they are being rigorously tested.”

Solana has a big war chest to draw from to address its issues, having completed a $314.2 million fundraise in June 2021. 

Trader woes

Solana’s network logjam has had ramifications across the crypto-ecosystem. Not only does it make it difficult for a retail market participant to, for instance, sell a Solana-based NFT, it also slows down large DeFi traders and forces them to work around the network. “Slows everything down,” one trading executive said. 

For large traders moving tens of millions, they have to move activity over-the-counter and agree to settle once the chain is working. “Agree on a price now and settle later… CEXes are still working so you still have price discovery,” an executive at a derivatives trading desk noted. 

Others traders complained about not being able to top off a leveraged position in Solana on a decentralized venue — meaning, add to their position before risking liquidation. 

These complaints raise questions about Solana’s ability to maintain its position as Wall Street’s preferred crypto platform. A firm trying to move around hundred of millions might opt for a different blockchain even if they have to pay hefty fees — if they can count on it to work.

 “I don’t care about the price,” Jim Greco said in a message to The Block. “But I can’t get anything done on the network. How many times is this going to happen at exactly the time when the network needs to perform the most?”

© 2021 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.

“Being a public company seems like a total blast.”

Barry Silbert, chief executive of crypto power-house DCG, was of course sarcastic in his January 21 tweet; it’s been a brutal period for publicly traded companies in the digital asset market amid the ongoing rout in liquid tokens. 

Shares in Robinhood, the popular brokerage app company, are down 29.61% since the start of 2021. Since soaring to all-time highs above $80 soon after its public market debut, it has declined by more than 80%.

Meanwhile, Coinbase’s stock is down 23.5% since the beginning of the year and ended Friday’s trade down $13.38. 

Friday’s session was even worse for MicroStrategy, which plunged on reports that the Securities and Exchange Commission had rebuffed the company’s approach to accounting for bitcoin in financial disclosures. It’s down more than 71% from its February 2021 high. 

Bitcoin, meanwhile, has fallen approximately 48.7% from its highs near $69,000 per coin to $35,369. It’s down about 25% year-to-date.

The US Federal Reserve’s intention to hike interest rates as part of a strategy to combat mounting inflation has rippled through markets, pushing investors out of growth stocks and more risky assets that have benefited from the Fed’s easy-money policies. The Nasdaq Composite is down more than 12% year-to-date. 

Exploring the impact

There’s a stark dichotomy between the state of the public equity market for crypto firms and the privately-held market, where the number of unicorns has been growing at a breakneck clip.

At the same time, venture funds in the market have been raising billions of dollars in fresh funding. FTX announced its own $2 billion fund earlier this month, following the lead of venture capital firms Paradigm and a16z. 

The venture capital sitting on the sidelines could be propping up valuations while public companies feel the pressure, according to David Mercer, CEO of LMAX. 

“Everyone is hunting for the next Skype,” he told The Block. “If you were able to write a bunch of $1 million checks you would, you don’t need that many to work out: it’s throwing spaghetti at the wall.”

As for public crypto companies, Mercer said that in volatile markets, companies are “oversold.”

The view has emerged that bearish action in crypto stocks — juxtaposed with the ample amounts of cash in private markets — could dampen ambitions to go public among other firms in the space.

“Certainly, both equities and crypto market trends matter for crypto-based business IPO aspirations,” said Eric Risley, managing partner of M&A advisory firm Architect Partners.

“It is certainly safe to say that these market conditions right now are not conducive to launching a crypto business IPO roadshow right now,” Risley added. “Anyone in that position would certainly be monitoring how things develop over the next few weeks or perhaps a month before making any type of final decision on go/no-go.”

© 2021 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

• Digital asset prime brokerage and liquidity aggregator
• Aug-21 Series C raised $210mm at a $3.75bn post-money valuation
• 30.0x YoY Revenue Growth and ~$10bn in monthly volume as of Aug-21

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members of The Block Genesis.
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this Genesis research on The Block.

El Salvador has purchased an additional 410 bitcoin for $15 million, according to a Friday tweet from its president Nayib Bukele.

“Some guys are selling really cheap,” Bukele wrote in English, referring to bitcoin hitting a six-month low the same day.

According to CoinMarketCap, the price of bitcoin dipped to about $36,630 at 4:54 p.m. before Bukele’s tweet at 5:18 p.m. It continued to decline throughout the evening.

The Jan. 21 tweet was in response to an older one from Jan. 14, where the president had written “I think I might have miss[ed] the dip this time.” But he started this most recent update by saying “Nope, I was wrong, didn’t miss it.”

Most of what we know about the quantity and timing of El Salvador’s bitcoin purchases comes from Bukele’s tweets, in which he often mentions that the country had just “bought the dip.” That phrase refers to a strategy of purchasing bitcoin at a “discount” when it significantly decreases in value, which in theory would create gains for the buyer when the price eventually rises again.

El Salvador has now bought at least 1,801 bitcoins, based on what we know about the country’s purchase history. Before the latest tweet, El Salvador had amassed 1,391 bitcoin according to Bukele’s announcements. In a January 12 news story, Bloomberg calculated that Bukele’s announced purchases up to that time would have cost El Salvador $71 million.

El Salvador bitcoin purchases, based on Bukele’s tweets

Total BTC to date: 1,801 

Jan. 21, 2022 – 410 BTC (worth $15 million at time of purchase)

Dec. 21, 2021 – 21 BTC

Dec. 4, 2021 – 150 BTC (purchased at average USD price of ~$48,670)

Nov. 26, 2021 – 100 BTC

Oct. 27, 2021 – 420 BTC

Sept. 19, 2021 – 150 BTC (bringing total to 700)

Sept. 7, 2021 – 150 BTC (bringing total to 550)

Sept. 6, 2021 – 200 BTC  (additional coins)

Sept. 6, 2021 – 200 BTC (first purchase)

Source: The Block’s analysis of Bukele’s tweets relating to bitcoin purchases

But Salvadorans and industry analysts alike have raised questions about how the country purchases bitcoin, not only due to market conditions but also in light of Bukele’s comments on social media. For example, on December 4 Bukele tweeted: “Missed the f***ing bottom by 7 minutes.” The same day, he also revealed that he trades bitcoin from his phone. And when Bloomberg mentioned the phone trading nugget in a tweet about their recent article, he responded with another single word: “naked.” 

Not surprisingly, people are wondering how exactly Bukele decides when and how to buy bitcoin. When finance minister Alejandro Zelaya appeared on the local interview program Frente a Frente in early January, he mentioned the existence of a team fully immersed in trading bitcoin. One viewer asked what kind of methodology the government is using for buying and selling bitcoin, wanting to know if that strategy included tools like an asset manager, algorithmic trading or technical analysis.

“Of course there is use of technology, and of course there are procedures used for the purchase of coins as such,” Zelaya said, without giving specifics.

© 2021 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.

Stablecoin issuer Tether has helped users recover $87 million in USDT sent to wrong addresses since its launch in 2014, its CTO Paolo Ardoino told The Block.

Just earlier this week, for instance, Tether recovered nearly $1.5 million in USDT on behalf of users, according to Ardoino. As The Block has reported previously, Tether has a recovery mechanism in place that allows it to blacklist addresses on the Ethereum and Tron blockchains, freeze funds in those addresses, and issue new USDT tokens to affected users. 

“Some users make mistakes when sending tokens to DeFi [decentralized finance] projects or trading platforms, which result in tokens being sent to smart contracts or addresses that do not have the functionality to recover the funds,” said Ardoino.  

“As part of the recovery process, Tether has to blacklist the address in order to recover a token. This revokes all USDT held by that address and reissues an equivalent amount of USDT to an escrow address in order to process and return funds to their rightful owners. To be safe, Tether requires confirmation of ownership, among other information, to start the recovery.”

Tether’s recovery process isn’t a free service. The stablecoin issuer charges $1,000 or up to $10% of the recovery amount, whichever is greater, according to its website. That means it has made up to $8.7 million in fees. Tether accepts recovery requests for amounts exceeding $1,000. 

Besides for its recovery mechanism, Tether also blacklists addresses because of regulatory reasons. Earlier this month, for instance, Tether blocked three Ethereum addresses holding over $160 million worth of USDT. At the time, Ardoino said, “Tether is cooperating with a law enforcement request, imposing a temporary freeze to allow the investigation to proceed.”

Tether has been a market leader since its launch. But last week, the total supply of its rival USD Coin (USDC) surpassed tether on the Ethereum blockchain and continues to remain higher. The current total supply of USDC on Ethereum stands at over 42 billion, whereas USDT’s total supply on the blockchain stands at nearly 40 billion, according to Etherscan. Across all blockchains, tether remains in the lead, according to The Block’s Data Dashboard.

© 2021 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.

Twitter Blue, a paid subscription offering from Twitter, rolled out a new feature for its subscribers to upload non-fungible tokens (NFTs) as profile pictures on Thursday.

The company is one of the first major traditional Web2 companies to incorporate NFT features, in a race to become the defining social media hub of Web3. But following the announcement, there was a strong backlash from some quarters of Twitter’s NFT community and broader user base about what this means for the platform and for NFT art owners going forward.

Crypto enthusiasts and influencers — including Elon Musk — expressed concerns that Twitter isn’t doing enough when it comes to preventing scams and protecting stolen NFTs. On Friday, Musk accused Twitter of spending engineering resources on integrating NFTs rather than focusing on pre-existing problems like spam and fake accounts.

Yet the situation undoubtedly provided some insight into what users really want when it comes to the intersection between web3 constructs and platforms like Twitter that have amassed huge numbers of users.

The fuller (profile) picture

Twitter Blue is the upgraded version to Twitter that gives members premium features, such as the ability to undo tweets, remove ads and create folders for bookmarked Tweets for $2.99 USD a month.

On January 20, Twitter Blue decided to add another feature for its users: the ability to connect a crypto wallet and upload an NFT as a profile picture for mobile iOS users, which it added to accommodate as a result of high-user demand, according to a Twitter thread.

Twitter received mixed reactions from users about these new NFT profile picture features. Some view the development as a positive step forward for the NFT community, such as Spencer Noon, the creator of the crypto-focused venture fund Variant.

“Given Twitter’s distribution and audience, this is truly a mainstream moment for profile picture NFTs, which are emerging as an increasingly important identity primitive in Web3,” Noon told The Block. “I suspect we’ll look back on this as a major turning point for NFTs becoming ingrained in broader culture and society.”

Others pointed to issues with the implementation and questioned Twitter’s end goal. NFT community member Mec.eth said in a Twitter Spaces session this week that the company appears primarily focused on selling Blue memberships.

“They’re paying attention to what we’re doing, but we aren’t considered the influencers of those executions,” Mec.eth said. “I don’t know any of us in pilot programs, and maybe I just haven’t been informed, but the things that I know are happening happen around what their interest is — to sell Blue, their product.”

Twitter Blue users with the iOS Twitter mobile app can opt to use an NFT that they already own to set a new profile picture. The user must then connect their crypto wallet and have the choice to use a Coinbase, Rainbow, MetaMask, Trust, Argent or Ledger Live wallet. After selecting an NFT in their wallet, the image associated with the NFT appears as a hexagon on the Twitter Blue user’s profile.

Other NFT holders think the move is the right direction, but more could be done to better verify who has access to a hexagonal profile picture – which Twitter is using to identify NFTs from regular profile pictures.

“What I was really hoping this feature would do is give people the ability – at a very quick glance, when they see a tweet going down their timeline and they’re scrolling and they see somebody with a hexagon – they’re going to know that that person simply owns that NFT,” said Adam Hollander, owner of Bored Ape #397 and founder of Hungry Wolves NFTs, in an interview with The Block.

Hollander points to the existing verification system Twitter has in place for certain users with the blue checkmark. If the same sort of verification were applied to NFTs, it would make fakes easier to spot, he says.

“This is a big problem. There are thousands and thousands of accounts with just fake Bored Apes, let alone the other thousands of accounts with fake punks, and fake doodles and everything else,” he said. “Because these NFTs cost a lot of money, in some cases, hundreds of thousands or millions of dollars. And there’s a lot of people out there that would love to be able to associate themselves digitally as owning an asset that has that level of prestige behind it.”

Twitter appears to have expected some of the community’s critiques.

The company’s head of consumer product marketing Justin Taylor wrote on Twitter: “We don’t want to limit this to just verified collections, that would be wrong, and non-supportive of the broader NFT movement. Anyone SHOULD be able to mint anything and make it their nft. We do show if a collection is verified in the detail page though!”

What’s next?

Based on the feedback on the platform, Twitter may have to focus on authenticating connected NFTs.

Some have suggested Twitter could collaborate with the NFT marketplaces such as OpenSea – currently the largest NFT marketplace by volume. While OpenSea itself is not free from fraudulent uploads, marketplace-verified NFTs add a level of legitimacy that, as of publication, does not exist for Twitter Blue users.

The move is an experiment for Twitter, as they incorporate feedback from users to further build out and improve the feature, a rep from the company confirmed with The Block.

“We’re providing access to NFT Profile Pictures via our early access Labs feature in Twitter Blue to monitor and learn about people’s feedback as we continue to iterate,” said a Twitter spokesperson to The Block. “Based on feedback, we’ll be providing updates as to anything forthcoming.”

© 2021 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.