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Quick Take

• Roughly $3.84 billion was deployed into crypto-related companies last month. Last month’s funding was the highest this year and equated to more private investment than all of 2020 combined
• A revival in DeFi investment last month has primarily been related to VC firms backing non-Ethereum projects
• NFTs/Gaming projects continue to attract the most investment from any vertical, accounting for roughly 42% of all crypto-related deals for the second consecutive quarter

   

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Bitcoin block #714,032, which was mined at 23:26 UTC, rewarded its miner with 6.25 BTC as per the current issuance schedule.

As a result of this latest emission, 90% of all bitcoin has now been mined.

The block increased the circulating supply of bitcoin to 18.9 million BTC exactly. That means there’s only 10% of the anticipated total supply of 21 million coins left to be produced — a process that will take tens of years to get close to the limit.

Blockstream CEO Adam Back told The Block, “It highlights there is really not much bitcoin left to mine. Curiously the timing could not be better for the increasing hardening of bitcoin as an asset class, quantitative hardening being the antidote to runaway fiat quantitative easing via monetary supply inflation.”

This milestone would have been reached 32 blocks earlier at 714,000 if all bitcoin miners had always taken the whole block reward. But since some early miners didn’t claim the entire subsidy, fewer bitcoin were brought into circulation, according to Casa CTO Jameson Lopp.

While bitcoin’s supply limit is set to 21 million, there are a few reasons why it won’t reach exactly that number: the fact that not all rewards were claimed; the stipulation that 50 BTC created by Satoshi Nakamoto in Bitcoin’s Genesis block can’t be spent; and because of a few early bugs in the infrastructure.

There is also a lot of bitcoin that has been lost — with some estimates as high as 3.7 million BTC. But these coins are not technically inaccessible so they still count within the circulating supply.

© 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.

Deel, the fintech firm focused on payroll, has expanded its crypto capabilities with the addition of two new tokens, according to an announcement.

Contractors who use the Deel platform to get paid can now take their salary in the stablecoin USDC or Solana, the native token of the fast-growing proof-of-stake blockchain. The platform already supported bitcoin, ether and XRP salary payments.

Users will need an account with the crypto exchange Coinbase in order to take advantage of the new functionality.

Deel reckons cryptocurrencies offer contractors a faster way to get paid, with lower processing fees. Coinbase charges a 1.5% ‘provider fee’ for crypto salary withdrawals. Additionally, USDC payments will entail a variable fee of 1%, while Solana payments will cost an extra 1.5%.

Deel’s corporate clients include the likes of Coinbase, BlockFi, Rarible and OpenSea, according to co-founder and CEO Alex Bouaziz.

“By definition, crypto companies are decentralized and they’re hiring all over the world,” he said. “Whatever crypto company you know, they’re probably using Deel.”

Founded in 2019, Deel aims to support companies with workforces that are scattered globally. In addition to payroll tools, the platform also helps firms to hire contractors and full-time staff in over 150 countries through locally incorporated entities that are effectively let out to clients.

Deel raised a whopping $425 million in a Series D fundraise in October.

In its announcement, the startup said that it has seen a 10% month-on-month increase in demand for crypto salary payments among its users.

© 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

• The founder of the Tezos-based NFT marketplace Hic et Nunc decided to step away from his project — by unexpectedly pulling its frontend. 
• After brief panic and confusion, the Hic et Nunc community managed to get the marketplace up and running again. 
• Here’s the story of how Web3 tools helped the Hic et Nunc community resurrect the largest NFT marketplace on the Tezos blockchain. 

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Justin Kan, the co-founder of the video game livestreaming service Twitch, and other gaming industry entrepreneurs are launching a Solana-based marketplace designed for gaming non-fungible tokens (NFTs) called Fractal.

Fractal will act as a primary market, in which gaming companies can drop new products for fans, as well as a secondary market where users can sell their NFTs to each other. The Fractal team also hopes to develop new use cases for NFTs in gaming, Kan wrote in a Medium post. 

Other Fractal founders include Robin Chan, who founded a mobile gaming company called XPD Media and the game development giant Zynga, and Mike Angell, who previously worked at the firms Fast and Shopify. 

Investor interest in blockchain gaming has grown rapidly within the past few months with firms such as CoinFund and Multicoin Capital funding blockchain-based gaming startups. Even the popular NFT project Bored Ape Yacht Club is expected to have a blockchain-based game in Q2 of next year through a partnership with Animoca Brands. 

© 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 Bank of England (BOE) said on Monday that regulatory and legal frameworks for crypto-assets would have to be ramped up both domestically and globally to combat the fast-moving market.

In its December financial stability report and financial policy committee (FPC) meeting minutes, taken on November 29 and December 9, the bank said that changes would “manage risks, encourage sustainable innovation and maintain broader trust and integrity in the financial system.” 

While recognizing the benefits of innovation, it said these developments would only be sustainable alongside “effective public policy frameworks.” 

The FPC also said it welcomed the UK Treasury’s proposal, put forward earlier this year, for a regulatory regime for governing the use of stablecoins as a means of payment.

This included recommendations for bringing systemic stablecoins into the bank’s regulatory remit.

This is the latest in a series of comments the bank has made on potential crypto regulations. Deputy Governor for Financial Stability Jon Cunliffe suggested in November that crypto-assets could potentially destabilize the UK’s financial system.

Cunliffe warned at the time that regulators would have to “think very hard” about the risks, due to the growing use of cryptocurrencies within the world’s traditional financial systems. 

© 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 Hong Kong-based software firm Animoca Brands is helping the creators of the popular non-fungible token (NFT) project Bored Ape Yacht Club create a blockchain-based game, according to a Monday announcement. 

While much about the game remains unknown, it will feature a play-to-earn system that allows users to accrue real wealth by playing the game. The game is expected to drop between April 1 and June 30 of next year. 

“There are very few icons that are able to represent the surging world of NFTs as powerfully as Bored Ape Yacht Club, which is why we, as a group and in aggregate, hold a significant number of them. We are incredibly excited and proud to collaborate on a game for this cultural milestone,” said Animoca Brands co-founder and executive chairman Yat Siu in the statement.

This partnership between Yuga Labs and Animoca Brands comes at a time of increased interest in blockchain-based gaming. Not only has there been an increase in venture funding for blockchain-based gaming startups but also gaming giants like Ubisoft are entering the waters.  

Bored Ape Yacht Club remains one of the most popular NFT projects by trading volume, according to data fom The Block. Launched in April of 2021, the collection of 10,000 randomly generated apes brought in $132.14 million at their peak in August and maintains a devoted fan base. 

© 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.

We get it — you don’t just HODL, you BUIDL. You’ve worked hard to create a platform that brings decentralization to more users. And you know the rules: Don’t trust, verify. Not your keys… But let’s face it, your transparency reporting is nonexistent or not up to par. You know it, your customers know it, and soon, regulators will, too. 

The vast majority of exchanges, crypto lenders and custodians are behind in transparency reporting. This open secret continues to plague the industry, despite the availability of products and processes that can provide insight while maintaining privacy. Customers, especially large institutional clients, are learning about what’s possible and what custodians and exchanges should provide. Regulators are certainly soon to follow.

As we saw in last week’s congressional hearings covering Digital Assets and the Future of Finance, the notion of providing real-time reports on proving collateral over reserves is at the top of the list for key industry leaders. One of the first to testify, Jeremy Allaire of Circle, mentioned that the company receives regular attestations from a leading public accounting firm. And a legend in the making, Sam Bankman Fried, CEO of FTX.com, had an eye on the future when he noted that these attestations can, and will be, more real-time.

Transparency reporting services provide multiple benefits, in addition to creating trust and fostering the adoption of digital assets. Here are some advantages of these systems:

1. They provide internal controls, financial hygiene and allow your platform to easily follow best practices.
2. They serve as a market differentiator. When your customers know where their stables are and that their crypto on your platform is properly collateralized, they will place more capital with increased confidence.
3. With regulatory uncertainty and the threat of new laws, you can get ahead of regulators to reduce impacts on your operations down the line. Whether required by law or whether they’re adopted as a form of self-regulation, transparency reports are a valuable currency.

One of the most compelling, but still misunderstood transparency tools in our industry is Proof of Reserves. Exchanges, lenders, wallets and custodians can provide their clients, prospects and regulators with independent reporting plus cryptographic customer verification tools, allowing each customer to check the reserves of the provider while preserving privacy of all users. Proof of Reserves is required for New York’s BitLicense, Wyoming’s SPDI license, as well as in jurisdictions outside the US, with more coming soon. 

Armanino is at the forefront of bringing transparency to digital assets and fostering trust in markets. Through TrustExplorer, a suite of crypto-focused solutions assurance solutions, Armanino enables companies to show their customers and the world why digital assets are simply superior. Let us help you make transparency reporting work for you and your customers. 

Learn more about Proof of Reserves and contact our Digital Assets & Blockchain group at DigitalAssets@armaninoLLP.com.

Follow us on Twitter: @ArmaninoCrypto

© 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.

Earlier today, 96 private keys were stolen from the crypto gaming ecosystem Vulcan Forged, enabling the attacker to siphon off $140 million in cryptocurrency.

Vulcan Forged offers a smorgasbord of crypto activities. It is primarily a game studio, offering six different blockchain-based games. But it also has an NFT marketplace and its own decentralized exchange, where users can trade its token PYR.

When someone registers an account with Vulcan Forged, the platform creates a set of blockchain wallets for them on the Ethereum, Polygon and VeChain blockchains. Rather than have the user manage their own private keys, the platform does so on their behalf. 

According to the project’s own wiki, it works with wallet management service Venly (formerly Arkane Network) to create its wallets — a service also used by Atari, Matic and the Blockchain Game Alliance. 

In Venly’s Discord channel, Lawrence Pluym, head of community at Venly, said it’s undergoing an audit to check whether only Vulcan Forged wallets were affected.

Dumping the tokens on Uniswap

The 96 wallets that were affected contained 4.5 million PYR, worth $140 million at the time of the attack. That’s 9% of the project’s total supply of tokens, according to CoinGecko, and 23.7% of the circulating supply. Other assets including ether (ETH) and polygon (MATIC) may have also been taken.

After the exploit was discovered — but before it was announced — Vulcan Forged told its community to remove funds from the liquidity pools on decentralized exchanges. This would make it harder for the attacker to cash out the funds, without using centralized exchanges where they might need identity documents.

Despite this, the attacker has sold significant amounts of PYR for ETH, selling small batches of tokens at a time. But they still have 2 million PYR (currently worth $47 million) sitting untouched in one wallet.

This selling pressure has dropped the price of PYR. It was at $31 prior to the attack and is now at $24 — down 22%.

Vulcan Forged has said the project’s treasury will send out PYR and Vulcan Forged’s LAVA tokens to those affected. They will need to set up accounts with MetaMask and will receive the tokens there. Anyone who had ETH or MATIC stolen will receive the equivalent amount in PYR. So far, half of the funds have been reinbursed.

“We have contacted all exchanges to blacklist that address. It also seems the wallet owner may have KYCd [completed Know Your Customer checks] on an exchange we’re now in contact with,” tweeted Vulcan Forged

It added that it is removing what it described as a semi-custodial solution from the Vulcan Forged ecosystem — meaning that in the future, its users will need to look after their own private keys.

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

© 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.

Binance Asia Services (BAS), the Singapore-based Binance entity, is set to cease its licensing efforts in the country, the crypto exchange service announced on Monday.

Today’s news confirms previous speculation that the company might withdraw its license application while seeking a new global headquarters. BAS had been exempted from holding a license under the country’s Payment Services Act while the Monetary Authority of Singapore (MAS) reviewed its application.

Tweeting on Monday, Binance CEO Changpeng Zhao clarified that Binance’s investment in the MAS-regulated Hg Exchange rendered its previous licensing application “somewhat redundant.”

Apart from discontinuing its plans to obtain regulatory approval, BAS also announced that it will begin a phased shuttering of its services in the country to be concluded on February 13, 2022.

As part of the phased shuttering process, BAS says it has stopped new registrations and users without identity verification will see their accounts suspended with immediate effect.

Binance Singapore users with completed know your customer (KYC) verification will still be able to trade on the platform until January 12, 2022. The platform advised such users to use the time to begin withdrawing their assets.

According to Monday’s announcement, all crypto trading services on Binance Singapore will end on January 13. Withdrawals will still be possible until the final phase of the shutdown process slated for February 13, 2022.

Users who fail to withdraw their assets by the final shutdown date will have to contact BAS’s customer service team. According to the announcement, late withdrawals will draw a 5% maintenance fee per month as well as a one-time 20% administrative levy.

In September, Binance’s global crypto trading platform Binance.com stopped offering services to users in Singapore due to regulatory issues.

The crypto exchange giant has come under scrutiny from financial regulators in a range of different countries in 2021. The added scrutiny has led to the platform discontinuing some of its services in several jurisdictions around the world.

© 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.