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Customers of Art Blocks are complaining after failing to receive pieces they appeared to have purchased in the NFT platform’s latest headline drop.

Generative artist Piter Pasma’s Skuptuur collection — 1,000 digital sculptures “carved from a sea of infinite possibilities” — sold out in less than an hour on Art Blocks’ curated section last night.

The Dutch auction never dipped below 5 ether (roughly $14,500) and netted a total of 5,281 ether (around $15.34 million), according to Twitter user FutureAce6. Since then, individual items, such as Skulptuur #647, have been sold on NFT marketplace OpenSea for as much as 90 ether ($261,400).

Yet some buyers were left puzzled when pieces that they believed they had secured during a frenzied mint failed to appear in their wallets.

One would-be buyer pointed out, on Art Blocks’ Discord server, that Skulptuur #445 seemed to have been minted by two separate accounts, according to OpenSea’s records. Another said they had spent over $1,400 in gas fees — costs linked with verifying transactions on the Ethereum blockchain — only to see someone else claim the piece they believed they had bought.

“I never got the money back but that’s not I want. I want to receive the artwork that I paid for!” they said.

A miner inconvenience

Roughly an hour after the mint, an Art Blocks representative confirmed via Discord that the platform had fallen victim to a “block-reorg” — meaning a temporarily confirmed block of Ethereum transactions had later been replaced by a different block.

This kind of thing may have been just due to how blockchains work (small reorgs happen all the time) or it could have been a user collaborating with a miner to put the transactions in their favor.

“This is not something that Art Blocks has any control over, this re-org happened at the level of the state of the Ethereum Virtual Machine as a whole,” they said. The representative provided Etherscan links to the affected blocks – 13308900 and 13308901. They also suggested that a recently upgraded version of the Art Blocks site should solve this issue in the future.

“On the new site we should be waiting for multiple block confirmations before showing you a success to avoid this bad UX [user experience] of seeing a success that isn’t ultimately true once chain-state finality is achieved. We definitely understand the frustration here and are sorry that the issue exists on the old site,” they added.

Some Art Blocks observers saw the episode as an example of miners on the Ethereum network — who earn fees in exchange for verifying transactions — exploiting their position for profit.

EthereumDegen tweeted that the reorganization of transaction blocks allow miners to “get their mints in and earn free money by flipping.”

“If you aren’t mining blocks your chance to get an Art Blocks mint are reduced and those miners are scalping us,” they added.

Art Blocks was contacted for comment but did not respond by press time. 

© 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.

Two most popular crypto market data sites have now become inaccessible for users based in mainland China.

CoinGecko and CoinMarketCap are currently both blocked by China’s internet firewall, according to tests run by The Block. Search results on Greatfire.org, an online tool for checking sites censored by China’s Great Firewall, also show that the two sites are 100% blocked as of press time.

It’s not clear when exactly CoinGecko and CoinMarketCap became inaccessible but users started to notice the blockage early Tuesday morning China time.

It appears the data sites did not actively cut off Chinese IP access but rather it was a move by China’s internet censorship agency. “As far as we know, we didn’t block proactively,” CoinGecko co-founder TM Lee told The Block. 

The censorship over crypto data sites is the latest sign of China not only forcing out crypto companies with roots and services in the country but trying to limit Chinese users’ exposure to market information.

That said, users based in mainland China can still access the two sites by routing through virtual private networks (VPN) to get around the firewall.

And the usage of VPNs is rising among the Chinese crypto community after the People’s Bank of China released toughened measures last Friday to intensify its crackdown on crypto mining and trading activities.

In fear of government retaliation, administrators of many chat rooms on Chinese messaging app WeChat in the crypto community have either changed their group names or dissolved the groups to migrate to Telegram.

Many of them also posted tutorials on how to set up VPNs and join chat groups on Telegram so that they can discuss crypto-related information more safely.

© 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 company behind Immutable X, an NFT-focused Layer 2 scaling protocol, announced Monday that it raised $12.5 million in under an hour from its $IMX token sale. 

According to a tweet, Immutable X received over 720,000 unique token registrations but only gained 25,000 new $IMX token holders. Still, the startup raised $12.5 million in less than an hour in a sale that occurred on CoinList, a platform that offers digital assets before they’re available on exchanges. 

Immutable X was created by Immutable, an Australian startup that aims to reduce transaction fees down to zero and provide instantaneous trading on Ethereum.

Immutable had also raised $60 million in Series B funding earlier in September, The Block previously reported. The funding round was led by BITKRAFT Ventures and King River Capital, with additional participation from Prosus Ventures, Galaxy Interactive, Fabric Ventures, Alameda Research, AirTree Ventures, Reinventure, Apex Capital, and VaynerFund.

Immutable first launched in early April 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.

Chinese e-commerce giant Alibaba said Monday that, beginning on October 8, it will halt the sales of cryptocurrency mining equipment on its platform.

Per a rule announcement, Alibaba cited recent pronouncements from China’s central bank and other oversight bodies in the country that amounted to a renewed crackdown on cryptocurrency activities. 

Alibaba said in the notice:

“[A]fter thorough evaluation, taking into account the instability of laws and regulations on virtual currencies and relevant products in various international markets, Alibaba.com will prohibit the sale of virtual currency miners in addition to the prohibition against selling virtual currencies such as Bitcoin, Litecoin, BeaoCoin, QuarkCoin, and Ethereum, which include but are not limited to: 1) Hardware and software used to obtain virtual currencies such as Bitcoin miners ; 2) Tutorials, strategies, and software for obtaining virtual currencies such as tutorials on mining.”

Alibaba also said that it would close two sales categories related to mining.

China’s crackdown on mining began in earnest earlier this year, resulting in the exit of some mining firms from the country. The lockout appears to be accelerating quickly, as shown by developments like the service shutdown of Hangzhou-based Sparkpool, an Ethereum mining pool company. 

Exchanges like Huobi and Binance have also moved to restrict service access in the wake of the Chinese regulatory moves. 

Hat tip @kevinsekniqi

© 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) has charged two men with allegedly wash trading meme stocks to take advantage of rebate programs.

At the start of 2021, certain unlikely stocks went gangbusters when online communities identified that Wall Street short-sellers were taking on large positions in thought-to-be-failing businesses like GameStop and AMC. Retail traders piled in, driving the stock price higher, and eventually support for so-called meme stocks became widespread.

In an announcement today, the SEC alleges that Suyun Gu identified an opportunity to scheme exchanges’ “maker-taker” programs of certain stocks promoted on social media. He traded options of these stocks with himself using broker-dealer accounts that passed rebates to customers on one side of the transaction and broker-dealer accounts that did not charge fees for taking liquidity of the orders on the other.

Gu brought in about $668,671 in liquidity rebates, according to a statement from the SEC. His partner also charged in the case, Yong Lee, netted $51,334. The SEC claims that the trading activity  “skewed the volume in certain option contracts and induced other traders to place trades in otherwise illiquid option contracts,” in addition to the ill-gotten gains.

The pair selected meme stocks because they thought the volatility would make options trading on these stocks less attractive, according to the SEC. They had their accounts shut down by some platforms in March, but they continued by using accounts in the names of other people through the use of virtual private networks to further obscure their identities.

Lee will be disgorging the sum gained in rebates with a civil monetary penalty of $25,000, pending court approval of a final judgment. Though, the deal doesn’t require Lee to admit to wrongdoing. The case against Gu is ongoing. 

© 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.

Aave Arc, a permissioned version of the popular DeFi lending platform Aave, is getting ready for its first deployment.

Fireblocks, an institutional custody firm, has made a proposal to Aave’s governance forum for it to be the first whitelister for when it is deployed. As a whitelister, Fireblocks will play a key role in onboarding institutional investors to the protocol and it will act as a gatekeeper of sorts, ensuring that only whitelisted participants — who have gone through KYC processes — can get involved.

As The Block has reported, Aave Arc will enable such whitelisted participants to take part in the permissioned lending and borrowing pool. Participants will only be able to borrow from and lend to other whitelisted participants. In theory, this is aimed at enabling companies that have more stringent requirements to get involved.

In the proposal, it lists the next steps as the governance deciding if it should approve Fireblocks as a whitelister in one or more deployments of Aave Arc and, assuming it gets accepted, the actual deployment of the protocol itself, along with onboarding of institutional investors.

Separately, Aave is working on a protocol for decentralized social media, upon which it hopes to launch a decentralized version of 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.

Okcoin, which was founded in 2013, is doing something different in a crowded field of crypto exchanges: it’s going to allow clients to denominate trades in bitcoin in units of satoshi, rather than BTC. 

On this episode of The Scoop, Okcoin CEO Hong Fang joined host Frank Chaparro for a discussion on Okcoin’s rapid retail product launches and the hiring growth they’ve undergone in an effort to compete in the space. She also explained the reasoning for the launch of Satoshi dominated trades. 

“Our focus and area of kind of innovation driven product efforts on the retail side continue to drive our product offerings. Some of those will also evolve into institutional offerings.” Said Fang.

Okcoin announced on The Scoop that they will be launching a “SAT Mode” in an effort to cater to retail client demand for Bitcoin. That SAT mode will mean an ability to package and sell Satoshis, or 1,000th of a bitcoin. Since bitcoin holders often hold only a portion of a bitcoin in decimals, Okcoin wants to make clients feel comfortable with Sats in order to make transactions easier to understand. This announcement comes on the heels of Okcoin’s integration of Lightning, the layer 2 micropayment protocol used for for sending small amounts of Bitcoin. Okcoin is expecting to use this retail lead offering as an opportunity to test the waters for such a product for institutional grade clients.

“I’m not worried about looking at who else is eating the cake. I’m looking at how we can serve the cake and how big the cake need to be.”

In an attempt to capture more DeFi exposure for institutional clients, Okcoin recently also launched an Earn APY offering for institutions following their retail offering. In their view, Okcoin is focusing its business on participating in a decentralized future, though they acknowledge that as DeFi adoption grows the business could still evolve into something very different than an exchange, such as a DAO. “Ultimately everyone will own their own data,” Said Fang.

© 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 exchange Coinbase will launch a new feature for its U.S. customers that will allow them to directly deposit their paycheck into a Coinbase account.

“In the coming weeks, we’ll launch the ability for customers in the US to get paid directly into Coinbase. Customers can get paid in crypto or US dollars and can choose any percentage of their paycheck to deposit,” the company said Monday. “With direct deposit, customers can more easily access our crypto-first financial services and be ready for any trade or purchase.”

With the new feature, users will be able to set up once and make recurring buys, earn interest on yield-generating assets or spend with their Coinbase Card, depending on whether they choose to get paid in U.S. dollars or crypto. Coinbase said it can convert users’ direct deposits into either U.S. dollars or any of the supported 100 plus cryptocurrencies on its platform.

Coinbase further said that it has also partnered with several companies to enable staff to get paid in crypto, including M31 Capital, Nansen, and SuperRare Labs.

Coinbase Card updates

Coinbase also announced new features for its Visa debit card that gives customers up to 4% rewards in crypto for making purchases in crypto. But starting this week, Coinbase cardholders can also spend U.S. dollars to earn crypto rewards, said the company.

Coinbase Card has also expanded the list of supported assets to get crypto rewards in. It has included Dai (DAI), Amp (AMP), and Rally (RLY) tokens, in addition to the current five supported coins: bitcoin (BTC), ether (ETH), dogecoin (DOGE), The Graph (GRT), and Stellar Lumens (XLM).

The firm is also making the card available to all eligible U.S. customers starting this Fall, excluding Hawaii, it said. 

© 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.

Ethereum researcher Virgil Griffith has pleaded guilty at the start of his trial in the Southern District of New York.

Griffith was formally indicted for allegedly giving a talk in North Korea on blockchain and cryptocurrencies, violating U.S. sanctions laws. At the time, U.S. Attorney Geoffrey S. Berman said Griffith allegedly “provided highly technical information to North Korea, knowing that this information could be used to help North Korea launder money and evade sanctions.”

Griffith was charged with conspiracy to violate the International Emergency Economy Powers Act, facing a maximum of 20 years in prison. However, Griffith took a plea deal today with a maximum of 6.5 years in prison, according to journalist Ethan Lou, who spent time with Griffith in North Korea and attended today’s hearing.

The guilty plea itself came the first day of Griffith’s trial in New York began and jury selection was expected to start. “Virgil was quite emotional. Deep sighs sometimes when he spoke. Unclear what new development caused this guilty plea. The paperwork was signed only yesterday. One possible reason is the barring of the remote testimony of an Ethereum Foundation lawyer,” Lou tweeted from the courthouse.

Griffith will be sentenced on January 13 of next 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.

Quick Take

• Zero knowledge proofs are prevalent in Ethereum layer 2 scaling solutions.
• These proofs eliminate the need for a dispute period after a batch of transfers is posted to the mainnet since all transactions must be valid, minimizing the withdrawal time.
• The storage of data on-chain or off-chain is what sets the validity proof scaling methods apart from each other.

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