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The United Kingdom’s advertising watchdog ruled against several crypto ads on Wednesday, saying crypto-assets are a ‘red alert’ priority. 

The seven companies whose ads were deemed to have broken the Advertising Standards Authority’s (ASA) rules included trading platforms eToro and Coinburp; exchanges EXMO, Luno, Kraken and Coinbase; as well as a promotion from pizza chain Papa John’s. 

The regulator said its rulings follow proactive monitoring of the adverts for cryptoassets, and will form part of an ongoing project which will look to shape specific guidance in 2022. The ASA said it would also monitor ads for fan tokens and NFTs. 

One ad from Papa John’s, which ran on both its website and Twitter page, stated “FREE BITCOIN WORTH £10” and “Save £15 when you spend £30 or more & get £10 worth of Bitcoin from Luno!” 

Another paid-for Facebook ad for Coinbase, seen on 27 July 2021, included text which stated “£5 in #Bitcoin in 2010 would be worth over £100,000 in January 2021. Don’t miss out on the next decade – get started on Coinbase today”.

Issues cited with the ads included taking advantage of consumers’ inexperience or credulity, failing to illustrate the risk of the investment, and misleading claims about future returns from bitcoin. 

The ASA warned companies about taking advantage of consumers’ lack of awareness around these “complex and volatile products”.

There were no fines issued on this occasion, only warnings that future ads must include details that make clear that the value of investments in cryptocurrency could go down as well as up and that cryptocurrency is unregulated in the UK.

© 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.

Crypto lending firm Ledn announced Wednesday that it has raised $70 million in a Series B funding round and is now valued at $540 million.

Dan Tapiero’s 10T Holdings led the round. As part of the deal, Tapiero is joining Ledn’s board of directors.

Other new investors in the round included Golden Tree Asset Management, Raptor Group, and FJ Labs. All existing investors, including Coinbase Ventures, Alan Howard, ParaFi Capital, and Susquehanna Private Equity Investments also participated in the round.

Growing business

Ledn says its business has grown significantly this year, both in terms of loan originations and assets (collateral placed for loans and balances of savings accounts).

“Since inception, Ledn has processed over $450 million in loan originations, with 90% of those originations occurring during 2021,” Ledn co-founder Mauricio Di Bartolomeo told The Block.

As for assets, they have surpassed $1.7 billion — representing a 4,000% increase from Q3 2020. Bartolomeo said Ledn now has 100,000 registered clients in 127 countries — representing a 10x growth from Q3 2020. The firm serves both retail and institutional clients.

Its key products include interest-bearing savings accounts for bitcoin and USDC, bitcoin and USD loans, and a trading feature between bitcoin and USDC.

Today, Ledn has also announced a new bitcoin-backed mortgage product, which will allow users to borrow to buy a home with their bitcoin holdings as collateral.

“Most people that hold extensive wealth in bitcoin still can’t utilize their assets to qualify for a mortgage at a bank,” said Adam Reeds, co-founder and CEO of Ledn. “That is why we are launching this product, in order to provide access to key financial products for those who choose to invest outside the mainstream of legacy banks.”

Mortgage product

The Bitcoin Mortgage product is currently in pilot mode and is expected to be made broadly available in the US and Canada in early 2022. Ledn said it is targeting over $100 million in bitcoin-backed mortgage originations by the end of Q1 2022.

With fresh capital at hand, Ledn plans to expand its team further. Bartolomeo said Ledn’s team has grown substantially from 8 people to over 65 in 2021 and it is looking to double headcount in 2022.

While Ledn offers services like a bank, it isn’t a regulated one yet. Bartolomeo said Ledn has applied to the Ontario Securities Commission to be registered as an investment dealer in all jurisdictions of Canada under the crypto regulatory regime set out by the Canadian Securities Administrators.

Ledn currently complies with AML/KYC rules in Canada and the US as it it is registered as a money service business with FINTRAC in Canada and FINCEN in the US, said Bartolomeo.

The Series B round brings Ledn’s total funding to date to $103.8 million. In May, the firm raised $30 million in Series A funding. Bartolomeo said Ledn may raise more funds in 2022.

© 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.

Ramp, the payments infrastructure crypto startup, has closed a $52.7 million Series A raise led by Balderton Capital, according to announcement.

The Block reported in October that the company, which is based in Warsaw and London, was set to raise $30 million at a $300 million valuation led by Balderton, citing people familiar with the matter. But a spokesperson for Ramp said yesterday that a larger sum had been sought from an early stage in negotiations. The company did not disclose a valuation in its announcement.

Existing backers NFX, Galaxy Digital, Seedcamp, Firstminute Capital and angel investors such as Wise co-founder Taavet Hinrikus and TrueLayer’s Francesco Simoneschi also participated. Balderton general partner Rana Yared has joined Ramp’s board.

Founded in 2017, Ramp offers a non-custodial payment infrastructure that helps exchanges, marketplaces and wallets to offer smoother paths to buying crypto and other digital assets, such as non-fungible tokens (NFTs). It styles itself as the ‘PayPal for crypto.’

Yared said in a statement that the Ramp team is “providing a reliable way in for new audiences by making buying digital assets as straightforward as buying US dollars when making a purchase from your favourite American brand in Euros.”

The Series A close comes barely six months after Ramp’s $9 million seed raise in June. The company said it has seen monthly transaction volumes grow by a factor of 30 times in the past 12 months, while tripling the size of its team.

Partnering up

The latest influx of cash will be used to continue hiring and to drive new partnership deals.

Szymon Sypniewicz, Ramp’s co-founder and CEO, said the company is targeting partnerships in three key areas: mass-market consumer tech firms like Mozilla and Opera; NFT and gaming platforms like Sorare and Axie Infinity; and crypto platforms.

“More broadly, the market opportunity for us is really with the advent of web3 — and we’re looking at partnerships, products and collaborations that will play a role in the mainstream adoption of decentralized applications,” he added.

The company is already partnered with more than 400 developers including well-known names like Mozilla, Dapper Labs, Aave and Sorare. It was added to the Financial Conduct Authority’s anti-money laundering register in July, and more recently has been handed approval from the Financial Crimes Enforcement Network to offer services in the United States.

© 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.

Anchorage Digital, a federally chartered crypto bank in the U.S., has raised $350 million in a Series D funding round.

Private equity giant KKR led the round by investing through its Next Generation Technology Growth Fund II. This is KKR’s first direct equity investment in a crypto firm, said Anchorage. In September, KKR took a stake in the flagship fund of crypto VC firm ParaFi Capital.

Other investors backing Anchorage’s Series D include Goldman Sachs, BlackRock, PayPal Ventures, Andreessen Horowitz (a16z), Alameda Research, Apollo credit funds, GIC (Singaporean sovereign wealth fund), GoldenTree Asset Management, Wellington Management, and private equity firm Thoma Bravo.

This round brings San Francisco-based Anchorage’s total funding to date to over $485 million and its valuation to over $3 billion. In February, the firm raised $80 million in Series C funding but did not disclose its valuation at the time.

Anchorage hasn’t even spent the funds raised from its Series C round, the firm’s co-founder Diogo Mónica told The Block. But it raised the new round to bring larger financial institutions on board for strategic growth.

“Many of these investors are also Anchorage’s clients or are on a path to becoming clients,” said Mónica.

Serving institutions

Anchorage started out as a crypto custodian in 2017, serving institutional clients. Over the years, it has turned into a fully fledged crypto bank, offering lending, borrowing, trading, and staking services.

Earlier this year, Anchorage received conditional approval for its national bank charter application from the Office of the Comptroller of the Currency. That conditional approval soon converted into a full-blown bank license as the firm met certain set conditions, said Mónica.

“We are already fully operational, and we have been so for over six months now,” he said.

Anchorage’s business has been growing “incredibly fast,” said Mónica, as more and more financial institutions enter the crypto space. He declined to share specific revenue details but said, “over the past year, client growth has been almost a thousand percent, and revenue has been very much alongside it in terms of order of magnitude.”

Anchorage serves both crypto and non-crypto firms, including VCs, hedge funds, fintechs, and corporates such as Visa.

With fresh capital at hand, Anchorage plans to scale its team further and expand internationally. The firm’s current headcount is around 200 people, and it looks to double the team size in the next 18 months, said Mónica.

As for international expansion, Mónica said Anchorage wants to set up regulated entities worldwide, including Asia and Europe.

Asked if Anchorage is planning to go public, Mónica said there is currently no plan to launch an initial public offering or IPO, but it “might make sense” at some point in the future.

© 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.

BCB Group is set to take over Hamberg-based Sutor Bank, in a move that will give the crypto payments provider banking capabilities. 

The group did not disclose terms of the deal but said it would include a “significant capital injection” to take over 100% of the bank after BaFin — Germany’s financial regulator — has given its approval.

Sutor, which is a private bank, will become part of the international BCB Group, which already includes regulated companies in Switzerland and the United Kingdom.

The group currently provides business accounts, payment services and crypto trading for some of the industry’s biggest players, including Bitstamp, Coinbase, Galaxy and Kraken. 

“In order to offer more clients world class service as a banking partner, and to sustain our growth trajectory, we need a bank in the group that is digitally innovative, that is highly reliable in the execution of regulated processes, and which offers more direct access to important payment rails,” said Oliver von Landsberg, founder and CEO of BCB Group.

BCB’s central product is BLINC, a liquidity network through which digital asset industry players, exchanges, traders and investors can transfer money in real time. The group currently outsources the banking services required for this business to various partner banks. In the future, a large part of this business will be handled by Sutor Bank.

The move will also allow Sutor Bank to expand its own crypto banking platform internationally. The platform currently supports crypto firms and companies that want to integrate crypto asset trading into their offerings with services for which a banking licence is required.

“We are glad to have found an investor in BCB with whom we can continue our growth-oriented fintech and crypto strategy,” said Robert Freitag, Sutor Bank’s managing director.

Sutor Bank will continue to operate in its current form. BCB intends to continue all business areas despite its focus on the digital assets industry. 

© 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.

The Internal Revenue Service (IRS) posted its finalized Form 1040, and it’s made some minor revisions to its crypto question.

The IRS included a question on cryptocurrency at the top of the 1040 form last year: “At any time during 2020, did you receive, sell, or otherwise acquire any financial interest in any virtual currency?” The IRS made the move in the hopes of curbing any confusion on reporting cryptocurrency. 

The 2020 wording left taxpayers with some questions, according to tax professionals. The previous iteration was unclear as to whether buying or holding qualified as transacting in crypto.

In March of this year, the IRS updated its frequently asked questions to clarify that “if your only transactions involving virtual currency during 2020 were purchases of virtual currency with real currency, you are not required to answer yes to the Form 1040 question.” This indicated that the IRS is mainly interested in reporting crypto activity that constitutes taxable events. 

The question still sits in its top slot, right below the identification information, but in this year’s form, the tax watchdog slightly reworded the question.

“At any time during 2021, did you receive, sell, exchange, or otherwise dispose of any financial interest in any virtual currency,” reads the form.

The previous version contained a catch-all asking if taxpayers had “otherwise acquire[d] any financial interest.” That is not the case for 2021. The new language solidifies the clarification, since the phrasing only covers transactions that would constitute taxable events. 

With the finalized form will come a set of instructions on how to answer the question. Those instructions are still in draft form as of Dec. 3, 2021, but they direct taxpayers to answer “no” to the question if the only activity they’ve engaged in is holding, transferring coins between their own wallets or purchased crypto using fiat.

Activities like receiving crypto as payment, airdrops, receipt from mining, staking or a hard forks, exchanging crypto for crypto and selling would require the taxpayer to answer “yes” to the crypto question.  

© 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.

Crypto data aggregator CoinMarketCap turned heads on Tuesday evening with a website bug resulting in eye-popping figures for prices, market capitalizations and more.

The bug was live for about one hour and has now been fixed.

In a tweet at 5 p.m. ET, the site’s operators acknowledged the pricing issues, saying that “[t]he Engineering team is aware of incorrect price information appearing on [CoinMarketCap]. We are currently investigating and will update this status when we have more information.”

A bug on the CoinMarketCap website showed nearly every coin at skyhigh prices. Image: CoinMarketCap.

According to the website, Bitcoin’s market cap appears to be one quadrillion five hundred trillion dollars. It also shows Cocos-BCX in first place on the list, despite a low market cap (even under normal circumstances).

“How did it feel to be a trillionaire for a couple hours?” the site, which is owned by crypto exchange Binance, said in a follow-up tweet.

As expected, the bug triggered a wave of social media attention. Some posts on Twitter indicated that TrustWallet, which offers a crypto wallet app, experienced issues in light of the CMC bug.

© 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.

The acquisition is the first for Robinhood’s crypto arm and follows its $140 million cash buyout of Say Technologies, its first major purchase since its IPO in July. 

Earlier this week it also said it is preparing to rollout a crypto wallet, integrating analytics tools from leading crypto intelligence firm Chainalysis.

Currently, Robinhood offers users exposure to the price movements of various cryptocurrencies on its brokerage app, which also offers more traditional stock trading. However, users cannot withdraw or deposit crypto off-platform. 

In September, Robinhood announced plans to change this and allow users to move tokens as they would be able to on a crypto exchange like Coinbase or Kraken. That is primarily a regulatory challenge, as the expectations for such a widely used platform to protect against money laundering are quite high. 

Since Robinhood went public its stock price has taken a hammering. On Tuesday it was trading at around $18.50, down from all time highs near $70. 

© 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.

The Senate is busy setting the stage for new regulations on stablecoins, but exactly what they will look like remains to be seen.

As Sen. Sherrod Brown, who chairs the Senate Banking Committee, told The Block: “It’s not going to remain unregulated. Regardless of what we do.” 

Congress has been remarkably slow to pass much substantive crypto policy into law, regardless of its political persuasion. Brown pointed to a range of regulators who are already laying the political groundwork to preside over stablecoins and their issuance even in the absence of statute — whether that’s the Securities and Exchange Commission, the Federal Reserve, the Treasury Department.

The Financial Stability Oversight Council is even aiming to get emergency authorities over stablecoins if congressional action is not forthcoming. 

Meanwhile, Brown’s counterpart across the aisle, Sen. Pat Toomey, maintained in his opening comments that the allocation of authority over stablecoins “is a question that rests with Congress.” 

Indeed, the witnesses agreed on the need for a new regulatory regime. The Republican-selected witnesses, however, were adamantly opposed to the central proposition from the President’s Working Group’s report on stablecoins. 

That report advocated for Congress to limit stablecoin issuance to insured depository institutions — essentially, banks. Brown would not wholeheartedly endorse that proposal, but he told The Block “that’s part of what we consider at the same time that we consider the Fed looking to do a central bank digital currency.”

Tuesday morning, Toomey released general principles for stablecoin regulation centered around the opposite notion: “Stablecoin issuance should not be limited to insured depository institutions.”

Instead, the developing Republican vision seems to be a multi-pronged regime for stablecoins operating under different business models. It was a vision that appealed to, for example, Dante Disparte. Disparte is the chief strategy officer and head of global policy for Circle, which issues USDC and is already working to get a banking license. 

Along with attorney Jai Massari, Disparte endorsed a regulatory framework that would limit the types of assets a stablecoin issuer can hold and would set up a common system of reporting and redeeming those assets. 

The other two witnesses, Alexis Goldstein of the Open Markets Institute and Hilary Allen, a professor at American University’s law school, broadly denied the utility of stablecoins beyond their usage in speculative trading and decentralized finance. 

Referring to her experience in finance in 2007 and 2008, Goldstein said: “I do think the secondary markets, especially DeFi, remind me of the over-the-counter derivatives market in the financial crisis.”

As The Block reported last week following a hearing before the House of Representatives, stablecoins seem to be at the top of Congress’ agenda when it comes to cryptocurrency, particularly the fiat-backed variety. This is likely because fiat-backed stablecoins both play a key role across crypto markets and because, with clear third parties to target, they are closer analogs to traditional financial regulations compared to areas like decentralized finance.

© 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.

The Ethereum Foundation has launched what has been dubbed the Client Incentive Program to encourage software development teams to continue to maintain the core network.

Client teams will each receive 144 validators totaling 4,608 ETH to operate on mainnet. The teams can unlock rewards as they continue to build software that meets performance and security requirements. Ownership of the funds vests over several years as the team maintains clients and meets performance benchmarks on mainnet. The first tranche unlocks at the delivery of Beacon Chain — Ethereum’s proof-of-stake solution — withdrawals.

Validators will earn transaction fees after the merge, so the program will act as a revenue stream. Teams can use the vested grants as they see fit, whether by staking to earn further rewards or withdrawing and liquidating. 

The Ethereum Foundation announced the opportunity in a blog post yesterday, naming the following teams as eligible for participation: Besu, Erigon, Go-ethereum (geth), Lighthouse, Lodestar, Nethermind, Nimbus, Prysm and Teku.

“The structure of the program aligns teams with the long-term health of the network and ensures they are incentivized to build secure and performant software,” said the post. “It was designed to be backwards-looking and reward teams who have already delivered production-quality software.”

© 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.