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Quick Take

• During September, the crypto industry kept up its frenetic pace of hiring, with many big changes.
• There were also a number of key promotions and exits.

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The NASDAQ-listed bitcoin mining firm Greenidge Generation Holdings disclosed preliminary information regarding its Q3 performance on Monday. 

Greenidge reported mining 729 bitcoin ($34.6 million as of writing) during this time frame using 15,300 miners operating at 1.2 EH/s of overall capacity. In all, the company held $52 million worth of crypto during the Q3 period.

From July 1 to September 30 of this year, Greenidge earned revenue between $33 million and $37 million and reported a net loss between $16 million to $19 million. In addition, the firm had earnings before interest, taxes, depreciation, and amortization (EBITDA) between $18 million and $22 million. 

The company reports that much of its net loss resulted from the merger with NASDAQ-listed technical support company Support.com. The merger was announced in March of 2021 and finalized on September 14. 

Greenidge had also announced plans to expand its bitcoin mining operations into South Carolina on July 2. However, the firm doesn’t expect the Southeastern mining operation to be operational until late 2021 or early 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.

On October 4, Europol announced the arrest of two ransomware operators in Ukraine, part of a crackdown on a larger organized cybercrime group that targeted industrial groups in North America and the EU.

The ransomware operators were not named, nor was the operating group or strain of ransomware they deployed. The only specifics were that they charged victims between €5 and €70 million to decrypt affected files.  

Europol reported seizure of cash, luxury vehicles, and $1.3 million in cryptocurrencies. 

In addition to Europol’s cybercrime team, the investigation involved participation from the law enforcement agencies of Ukraine, France, the U.S. and Interpol. 

Since high-profile attacks on the Colonial Pipeline and JBS earlier this year, ransomware has skyrocketed as a priority for international cooperation. As part of cybersecurity month, the Biden administration recently announced plans to convene 30 allied countries to discuss the subject. 

Not party to many of the international agreements that govern communications and cybersecurity, eastern Europe continues to be a hotbed for ransomware and cybercrime. 

© 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.

Warsaw-based crypto startup Ramp has closed a $30 million Series A fundraise led by British venture capital firm Balderton Capital, according to three people close to the deal.  

The crypto on-ramp specialist, which styles itself as the “PayPal for crypto,” is now valued by investors at $300 million.

Ramp and Balderton were contacted for comment but did not respond by press time. 

The news comes less than four months after Ramp’s $9 million seed raise. That round, led by venture capital firm NfX and Mike Novogratz’s Galaxy Digital, brought in a bevy of big-name fintech investors including former TransferWise CEO Taavet Hinrikus, former Coinbase CTO Balaji S. Srinivasan and ComplyAdvantage founder and CEO Charles Delingpole.

One source close to Ramp said the company had generated a lot of traction since its seed raise, attracting the attention of larger investors “without wanting to raise.”

Radical on-ramping

Founded in 2017, Ramp aims to help customers move fiat money into crypto-assets — whether that be bitcoin or NFTs — more easily. The startup does that with a non-custodial payment infrastructure that exchanges, marketplaces and wallets can integrate to help their users buy crypto.

Szymon Sypniewicz, co-founder and CEO of Ramp, told The Block in June that the startup wants to “radically simplify” the onboarding process.

Ramp is headquartered in London and supervised by the United Kingdom’s Financial Conduct Authority, but most of its operation is run out of Poland. It is one of just thirteen crypto operators to have been added to the FCA’s anti-money laundering register.

The startup’s first fundraise came in 2018 – a $1.2 million pre-seed round from investors including Fabric Ventures, Firstminute Capital, Seedcamp and MakerDAO.

Its rivals include Wyre in the United States and MoonPay. The source close to Ramp said the startup — “a small team out of Warsaw with a chip on their shoulders” — is trying to differentiate itself by focusing on growth and network effects over revenues in the short term.

© 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

• Optimistic rollups have been used by protocols such as Optimism and Arbitrum to improve the scalability of Ethereum
• Arbitrum and Optimism have seen significant growth in the number of users and TVLs over the last few months
• Metis, an Optimism fork, aims to provide another optimistic rollup framework with a different optimization between transaction throughput and decentralization
• Metis’ native governance token, METIS, is already in circulation and Metis aims to bring its protocol to Ethereum mainnet in October

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The Hong Kong Monetary Authority started looking at a potential retail central bank digital currency (CBDC) in June of this year. It has now published a technical whitepaper exploring possible architectures and design options that could be applied to the CBDC if it issued one. 

The HKMA has not yet decided whether to issue the retail CBDC but has started researching it under the project named e-HKD. The technical whitepaper is part of that research, and the HKMA wants to begin a dialogue through it on the appropriate design of e-HKD as well as evaluate its benefits and risks.

According to the HKMA, a two-tier distribution model for a retail CBDC makes a good design: the wholesale layer and the retail layer. “Only intermediaries (banks and PSPs [payment service providers]) — which are relatively more trustworthy — can participate in the wholesale layer, whereas, the retail layer is an open system accessible to the general public,” said the HKMA. In other words, the HKMA would issue and redeem a retail CBDC, and commercial banks would distribute and circulate the CBDC. 

“The Whitepaper marks the first step of our technical exploration for the e-HKD,” said Eddie Yue, CEO of the HKMA. “The knowledge gained from this research, together with the experience we acquired from other CBDC projects, would help inform further consideration and deliberation on the technical design of the e-HKD.”

Based on its proposed technical design, the HKMA has identified several areas for further discussion, which it has summarized as seven problem statements. These are ensuring privacy, interoperability, performance and scalability, cybersecurity, compliance, operational robustness and resilience, and technology-enabled functional capabilities.

The HKMA is seeking feedback and suggestions on its proposed design from academia and industry by December 31. 

Working on LionRock

Besides its retail CBDC project e-HKD, the HKMA has also been working on a wholesale CBDC research project named LionRock since 2017.

In 2019, the HKMA and the Bank of Thailand jointly initiated Project InthanonLionRock to study the potential of wholesale CBDC for cross-border payments. The project entered the second phase in 2020 and was subsequently renamed to Multiple CBDC Bridge (mBridge) in February 2021, when it was joined by the Central Bank of the United Arab Emirates and the Digital Currency Institute of the People’s Bank of China (PBoC).

Project mBridge is now a collaboration of four central banks and is also supported by the Bank for International Settlements (BIS) Innovation Hub Centre in Hong Kong. The project aims to improve cross-border payments.

© 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 Securities and Exchange Commission (SEC) punted on four bitcoin exchange-traded fund (ETF) applications today, shifting deadlines into late November and December.

Issuers Global X, Valkyrie, WisdomTree and Kryptoin all received extension on their proposals today. The proposals are now slated to receive their decisions on Nov. 21, Dec. 8, Dec. 11 and Dec. 24, respectively. Kryptoin, WisdomTree and Valkyrie, have all faced previous extensions.

Each order notice read:

“The Commission finds that it is appropriate to designate a longer period within which to issue an order approving or disapproving the proposed rule change so that it has sufficient time to consider the proposed rule change and the issues raised in the comment letters that have been submitted in connection therewith.”

The SEC has a history of extensions when it comes to bitcoin ETFs. Many of the last wave of applications faced as many extensions as the Commission’s mandate allows until finally receiving rejections.

Since the changing of the guard at the SEC, a new wave of applications have been filed facing similar extensions. VanEck’s offering was the first to receive the treatment, receiving an extension that also called for more comment letters on the proposal. It is the furthest along in the review cycle, meaning it will likely be the first to receive a decision order. Hopefuls can expect an answer on VanEck by November 14. 

Chair Gary Gensler recently expressed his interest in reviewing applications for a bitcoin ETF tied to futures under the Investment Company Act of 1940. In those comments, he notably omitted any mention of spot products filed under the Securities Act of 1933, under which all of the above products proposed to be regulated. 

© 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.

An NFT from SolanaMonkeyBusiness, a collection of 5,000 NFTs minted on the Solana blockchain, just sold an NFT for 13,027 SOL (~$2.1 million) — making it the most expensive Solana-based NFT to date. 

The SolMonkey in question is #1355. It’s the rarest NFT in the collection, according to the NFT rarity tool HowRare.Is, complete with a skeleton body (2.42% of SolMonkeys have this trait), an orange jacket (1.06%) and a bejeweled crown (0.02%). 

The first Solana-based NFT to sell for over $1 million occurred just three weeks ago, providing further evidence that the Ethereum blockchain is losing its dominion over NFTs. 

Record high transaction fees have plagued the Ethereum blockchain since May of this year, The Block’s data dashboard shows. 

These market conditions have pushed users into alternative blockchains such as Solana. It’s native token SOL experienced all-time highs in early August and surpassed $1 billion market capitalization on October 1.

© 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

• Major crypto trading firms are expanding beyond their core capacities and more broadly into the industry.
• GSR, Wintermute, and Jump Capital have been investing in early-stage crypto startups and projects. 

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In a statement released October 1, the White House revealed plans to convene 30 nations for cybersecurity month as part of a “whole-of-nation effort to confront cyber threats.” 

“We must lock our digital doors,” the statement enjoined, “by encrypting our data and using multifactor authentication, for example — and we must build technology securely by design, enabling consumers to understand the risks in the technologies they buy.”

The administration is apparently looking to gather members of NATO and the G7 on the issue. Since a turbulent spring, cybersecurity and, especially, ransomware has emerged as major national and international security priorities.

Unspoken in today’s announcement was the role of Russia. Relations between the White House and the Kremlin have increasingly hinged upon the latter’s involvement with Russia’s ecosystem of cyber gangs. Ransomware was a major sources of contention in conversations between US president Joe Biden and Russian president Vladimir Putin.

More recently, Biden’s Treasury issued the U.S.’ first sanctions against a cryptocurrency exchange, Suex. Registered in Prague but based in Moscow and St. Petersburg, Suex was linked to ransomware cashouts as well as dirty crypto exchange BTC-e and darknet market Hydra. 

© 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.