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The Biden administration is contemplating how it wants to regulate stablecoin issuers, and people familiar with the matter say it’s considering encouraging firms to register as banks.

The Wall Street Journal reported the rumblings today, saying the administration is expected to recommend Congress draft legislation for a special-purpose charter for stablecoin issuers. This charter would be tailored to crypto business models, according to the Journal.

The news comes ahead of a forthcoming Treasury report on stablecoins. The highly-anticipated document is expected to highlight potential risks and set a framework for a federal approach to the stablecoin system. The report may also recommend that the Financial Stability Oversight Council (FSOC), the Treasury’s panel formed under Dodd-Frank for monitoring the financial system’s stability, take a closer look at stablecoins. However, sources told the Journal that this isn’t the administration’s “preferred approach.”

Stablecoins have remained top of mind for regulators in a variety of agencies as of late. The reports of the Biden administration’s plans to regulate issuers as banks come after both Acting Comptroller of the Currency Michael Hsu (OCC) and Securities and Exchange Commission (SEC) chair Gary Gensler each referred to stablecoin issuers as in the vain of the wildcat banks of the 1800s. Gensler also called stablecoins the “poker chips” at the casino-like platforms of the crypto “Wild West.”

Previous Comptroller and former Coinbase legal counsel Brian Brooks issued guidance clarifying that banks could custody stablecoin reserves and use stablecoins in payment settlements during his tenure at the OCC. That led many crypto firms, especially custody-focused enterprises, to apply for banking licenses. Some of those licenses are still pending due to Hsu’s review of crypto-related actions, but Anchorage got the green light prior to Brooks leaving office.

CEO and co-founder Nathan McCauley said the reported action coming from the Biden administration could create the necessary clarity for stablecoins. 

“Dollar-denominated stablecoins represent an opportunity to further the strategic reach of the US,” he said. “The Biden administration is wise to embrace stablecoins in this way and look for ways to strengthen trust in the industry through regulation.” 

Still, applying banking regulation to crypto firms hasn’t been easy due to the wealth of regulators with overlapping mandates on both the state and federal levels. For that reason, Hsu convened a “sprint team” of the three biggest players on the federal level: the OCC, the Federal Reserve and the Federal Deposit Insurance Corporation. Likewise, Gensler said securities regulation of the crypto space will likely require deeper collaboration between the SEC and his former place of work, the Commodity Futures Trading Commission. 

© 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 this episode of The Scoop, Sky Mavis Games Co-Founder and Growth Lead Jeff ‘Jiho’ Zirlin joined Frank Chaparro at the 2021 Mainnet Conference to discuss their game Axie Infinity.

Chaparro and Zirlin cover Axie’s recent growth in popularity, kicking off the ‘Play-To-Earn’ trend in gaming, and how Axie Infinity players in the Philippines and other emerging economies are playing the game to supplement their incomes.

To be sure, the project’s concentration in the Philippines speaks to how much work the project has ahead of it in making it truly global. Zirlin told Chaparro that Axie’s user base has grown from some 38K active users in April to around 1.7 Million active users in August.

Interest in the project has since waned given a wider drawdown in the gaming NFT market, down roughly 45% as per data from The Block, with a weekly volume declining from the peak of $220M to around $130M. But even Zirlin admitted that interest can wane as quickly as it has built up:

“So the cool thing about NFT games or even crypto in general is like we have these very powerful feedback loops that cause over decades or over years, huge network effects. But any positive feedback loop that creates a negative creates a network effect can also run in reverse.”

Like the emerging markets Axie is popular in, Zirlin noted that the game also shows characteristics of an emerging market economy where “you have hot inflows of money and then also withdrawals.

“Axie Infinity is competing over mind share from a wide-range of blockchain gaming projects, including Cryptokitties, from which Axie initially drew its inspiration. Zirlin announced on The Scoop that Axie is creating their own DEX for the game. Instead of moving funds to wallets and then to an exchange to convert cryptocurrency, players will be able to convert their funds directly to the currency of their choosing through the DEX.

“We’re also working on an in-house decentralized exchange or a Dex which will be native to our Ethereum-side chain called Ronin.” Zirlin said, adding, “I think we really saw the future of the gaming industry and rightly, we’ve kind of seen the emergence of this metaverse emerging market worker.”

© 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.

Axie Infinity, one of the most popular blockchain gaming startups, is bridging the nascent gaming world with the market for decentralized finance with the launch of a new decentralized exchange. 

The new product, announced exclusively on The Scoop podcast, will facilitate the trading of tokens used within its ecosystem. Axie Infinity,  launched by Sky Maven, allows users to buy, sell, and breed creatures called “axies.” 

The ConsenSys-backed project has become the zeitgeist of the crypto market in the Philippines where players are playing the game to earn crypto that supplements their existing income. 

While the project has seen its user-base grow from some 38,000 active users in April to around 1.7 million active users in August, interest has waned in recent weeks. Weekly volume declined from $220M from peak to around $130M.

The DEX could help keep users playing the game because it will remove certain frictions that exist for players who have to move their tokens off the platform to trade them. The DEX will be built on Ronin, an Ethereum-linked sidechain purpose-built for Axie Infinity.

“People want to acquire and use their tokens from the same place without having to use a bridge constantly,” growth lead Jeff Zirlin told The Block in a message. 

Axie Infinity recently completed a $7.6 million funding round that drew in investors like billionaire entrepreneur Mark Cuban.

© 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.

Third-party actors exploited a bug in the multi-factor authentication (MFA) process at crypto exchange Coinbase, gaining access to at least 6,000 user accounts between March and May of this year.

BleepingComputer first reported the developments, which were outlined in a message previously issued to affected users.

The attackers obtained user account information then used a flaw in Coinbase’s MFA system to gain unauthorized access to user accounts and moved funds off of the exchange. As the crypto exchange told its affected users in the message: 

“​​While we are not able to determine conclusively how these third parties gained access to this information, this type of campaign typically involves phishing attacks or other social engineering techniques to trick a victim into unknowingly disclosing login credentials to a bad actor. We have not found any evidence that these third parties obtained this information from Coinbase itself.” 

Coinbase pledged to deposit funds into affected accounts equal to the amount lost during the exploit, as well as to provide free phone support and credit monitoring for victims. The exchange also stated that it will work with law enforcement and launch internal investigations to find the culprits responsible for the incident. 

Coinbase saw sizable growth in user accounts during Q1 and Q2 of this year when the hack occurred. Per The Block’s Data Dashboard, the number of user accounts grew 30% between Q4 of 2020 and Q1 of 2021, and 21.4% between Q1 and Q2 of this year.

© 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.

DeFi lending protocol Compound is losing its lead attorney. 

On October 1, Jake Chervinsky tweeted that he would be stepping down as Compound Labs’ general counsel, a role he has occupied for two and a half years.

In that time, Compound has grown dramatically, with over $15 billion in assets currently earning interest on its protocol. 

On September 29, Chervinsky announced that he would be working with Grwth Lbs as a strategic advisor on the Gro Protocol.  As for next full-time position, Chervinsky is playing that close to the vest. 

Chervinsky’s announcement comes as Compound faces scrutiny over a bug that distributed $80 million in mistaken rewards. Last night, Compound’s founder Robert Leshner tweeted what seemed to be a threat that who did not return those rewards would be doxxed. Leshner subsequently apologized.

Possibly to preemptively stave off any connection between the rewards mishap and his own departure, Chervinsky specified: “I gave notice four weeks ago & spent the month of September wrapping up & transitioning out.” 

Chervinsky did not immediately respond to The Block’s request for comment as to the COMP rewards or his replacement.

© 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

• This research piece dissects the mechanics behind Olympus DAO and analyzes its performance in the last six months
• Olympus issues OHM tokens that are backed by collaterals while allowing the token to trade at a significant premium on the open market
• Olympus accrues collaterals mainly by selling vested and inflationary OHM tokens at a below-market price 
• Olympus generates artificial demand that encourages holders to stake and auto-compound their OHM via inflationary means

This research piece is available to
members of The Block Genesis.
You can continue reading
this Genesis research on The Block.

Women at Revolut, the $33 billion British neobank, are paid 69p for every £1 earned by their male colleagues in the United Kingdom.

That’s the headline finding from Revolut’s first ever gender pay gap report, which gives a snapshot of gender diversity at the startup as of April 5, 2020.

The 69p figure (a gap of 31.3%) trails results filed by Monzo and Starling Bank – Revolut’s main U.K. rivals – in recent years. As of the same date in 2020, women at Starling Bank were paid 84p for every £1 (15.6%) earned by men. Monzo is yet to file its latest report, but women at the neobank were paid 80p for every £1 (20.4%) earned by men in 2019.

These headline figures reflect the companies’ median hourly pay gaps – a metric that highlights the typical situation faced by staff. U.K. firms with more than 250 employees must report these metrics on an annual basis.

Qualifying companies must also report mean gender pay gaps, which offer another way of assessing pay disparity. Revolut compares more favourably with its peers in this field. At Revolut, women’s mean hourly pay is 23.1% lower than men’s. The most recent available figures for Starling Bank and Monzo, respectively, are 21.3% and 19.3%

Revolut’s maiden gender pay gap report also reveals that women occupy 13.9% of the highest paid jobs and 45.5% of the lowest paid jobs across the company.

The pay disparity is also evident in bonuses. Women at Revolut earn 40p for every £1 earned by men when comparing median bonus pay (60.2% less), and women’s mean bonus pay is 97.2% less.

The advent of gender pay gap reporting in the U.K. in 2017 has highlighted the extent of gender pay disparity within the fintech sector. Numerous initiatives, including the trade body Innovate Finance’s Women in Fintech program, have been rolled out to try to combat the situation. 

© 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

• Most metrics continued to recover in September. Ethereum metrics generally exhibited a higher beta.
• Total adjusted on-chain volume increased by 33% to $691.7 billion.
• Stablecoin supply grew slightly by 6.6% to a new all-time high of $120.5 billion.
• Centralized exchange spot trading volumes increased by 13.6% to $1.247 trillion.

This research piece is available to
members of The Block Genesis.
You can continue reading
this Genesis research on The Block.

The price of bitcoin has reached nearly $48,000, adding $4,000 in a matter of hours. Its current price is around $47,300 but it remains very volatile.

The price of bitcoin has broken above $47,000. Image: TradingView.

The surge in prices has seen $241 million in bitcoin shorts liquidated, according to bybt. There have also been plenty of long liquidations too, with $116 million liquidated so far today. Short traders are those betting the price of bitcoin will go down, while long traders bet in the opposite direction. The long liquidations likely happened earlier today.

This comes on the same day that El Salvador has officially started mining bitcoin, although it is still in its experimental stages. The country has mined 0.0059 BTC so far, worth $260, using geothermal energy from volcanos.

This story is breaking and will be updated. 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.

El Salvador has officially started using volcanos to mine bitcoin, according to its president Nayib Bukele. So far, it has mined 0.0059 BTC, worth $260.

“We’re still testing and installing, but this is officially the first Bitcoin mining from the volcanode,” tweeted Bukele, providing a breakdown of the mining rewards so far.

The breakdown of the rewards so far. Image: Nayib Bukele.

The bitcoin is being mined using geothermal energy generated by volcanos in the region. The country heavily relies on geothermal energy and is one of the top producers of it in the world.

This comes after Bukele tweeted a video on September 28, which showed mining rigs being delivered and set up to the facility in El Salvador. In the video you could see ASIC miners being installed and plugged in.

© 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.