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Crypto exchange operators FTX and BitMEX have committed to becoming carbon neutral through donations.

FTX CEO Sam Bankman-Fried did the math of how much “dirty electricity” bitcoin, ether, and other proof-of-work coins consume to mine. The calculation considered various factors, including mining and electricity costs. Based on this calculation, Bankman-Fried came up with a ratio of $0.0026 for every $1, meaning for every $1 spent to mine a proof-of-work coin, $0.0026 worth of carbon is emitted.

To that end, FTX decided that it would donate $0.0026 for every $1 its clients pay in blockchain or gas fees to become carbon neutral.

FTX estimates that it will pay roughly $60 million in blockchain fees this year, which would imply about $150,000 in carbon offsetting costs. But given the uncertainty in the calculations, the exchange operator has decided to cover all bases by donating $1 million this year to carbon offsetting organizations, including Cool Earth.

Using the same math, BitMEX said it would also donate “at least $0.0026 for every $1 of blockchain fees our clients pay out.” The exchange operator did not provide any estimates of how much this would come to.

Bitcoin’s environmental footprint

Concerns around cryptocurrency’s environmental footprint recently ignited when Tesla CEO Elon Musk said, earlier this month, that his company would no longer accept bitcoin, citing the “great cost to the environment.”

But as The Block reported recently, it is extremely challenging to measure bitcoin’s carbon footprint due to its decentralized nature. It is also difficult to quantify how much of the energy the network uses is sourced from renewables.

If energy authorities in different countries could identify how many bitcoin mining farms are there in their regions, how much energy they consume and what type of energy they use, that could theoretically measure bitcoin’s carbon footprint, but it’s no easy task.

© 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.

Until this week, it’s quite possible that the term “flippening,” which refers to the market capitalization of ether outstripping that of bitcoin, had never before been uttered in the U.K.’s House of Commons.

Enter Tom Tugendhat, Conservative member of Parliament (MP) for Tonbridge and Malling, who used the term in a response to the Queen’s speech on May 18. The MP ran out of time before he was able to finish his full speech — which he later posted online — but briefly mentioned the topics he was unable to address.

“I’m not going to go in in the few moments left to me of the flippening and why I’m going to be bullish on ether and not bitcoin, or the nature of the change in the Treasury that is needed to enable innovation that sees the sharing of prosperity on a global basis,” he told Parliament.

Calling for crypto innovation in the UK

Tugendhat urged HM Treasury, the U.K.’s finance ministry, to encourage crypto innovation.

“This Treasury needs to create a safe space for cryptocurrency development, because setting a standard for this new economy will shape a new electronic age, a new digital world,” he told Parliament.

According to the full speech, Tugendhat planned to call on the Treasury to “create a box into which people can experiment with cryptocurrencies, with crypto contracts.” The proposal seems somewhat similar to the Financial Conduct Authority’s regulatory sandbox program, through which cohorts of fintech firms have been able to test their systems since 2016.

The intervention comes just a few months after CryptoUK, the lobby group representing more than 50 crypto firms, called on chancellor Rishi Sunak to intervene over continued delays to the FCA’s anti-money laundering registration process.

Hundreds of crypto startups in the U.K. remain trapped in limbo awaiting approval from the regulator, prompting CryptoUK chair Ian Taylor to write in March that the FCA’s actions risked a raft of businesses going bust or leaving the country.

Taylor’s warning was echoed in parliament by Tugendhat, who told MPs: “If we do not get this right, those standards [governing the crypto economy] will be set by authoritarian governments with no interest in innovation or in wild places where there is no regulation and no accountability.”

The Block checked the latest available register of MPs’ financial interests and found no relevant shareholding disclosures related to Tugendhat. He has a small shareholding in Crypto Quantique Ltd, a cyber-security startup focused on the Internet of Things.

Taylor told The Block that it is “good to see a member of parliament raise awareness of crypto in the house and we fully support the idea of public support to further develop the U.K.’s burgeoning crypto industry.”

Tugendhat’s office was contacted by The Block for additional comment but did not respond by press time.

Unfriendly regulators

The crypto register saga is not the only grudge born by U.K. crypto startups against regulators. In October 2020, the FCA banned the sale of crypto derivative products to retail consumers despite considerable opposition to the move during a consultation period. Some founders in the sector have become disheartened.

“I’m done with the crypto lobby in the U.K. It’s a waste of time. The very fact they’re thinking sandbox and experimentation while there’s trillions of dollars flying around says it all,” said one senior executive at one of the country’s largest crypto firms, who insisted on anonymity. 

Others remain optimistic.

“When you consider the FCA sandbox, the multiple crypto-asset taskforce consultation papers and most recently the Bank of England’s CBDC taskforce ‘call to arms’ with the proposed engagement forum, there is a clear trend going back multiple years that these British institutions are thinking and positioning themselves for a world where new technology, including blockchain, is used for exchanging value,” said Matthew Pollard, chief financial officer at digital assets exchange Archax, which is one of just four businesses to have been fully registered by the FCA.

© 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.

This fintech hack maximizes your paycheck by paying your 401(k) match and ESPP benefits for you.

If your company offers a 401(k) match, stop funneling thousands of dollars into your retirement account every year. Instead, Lendtable will advance that cash for you, increasing disposable income for you to invest in more crypto stocks and blockchain ETFs. 

With NFT and crypto stocks rallying this year, taking advantage of Lendtable is an attractive financial decision for Fortune 500 employees whose companies offer 401(k) matching and Employee Stock Purchase Plan benefits. 

Using a 401(k) match as guaranteed leverage: 

Your 401(k) has unquestionable benefits: It lowers your taxable income, while also providing average annual return rates of 5-8%.

When an employer throws in a 401(k) match, you receive even sweeter returns — in many cases, an employees’ contributions are doubled. Employers commonly match up to the first 4-6% that you elect to contribute out of your salary dollar for dollar. 

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Maximize returns and your bimonthly paycheck

While 401(k) matches are a great tool to get ahead for retirement, many individuals struggle to set aside the extra cash necessary to max out the benefit. 25% of all families in the U.S. have $0 saved for retirement and $24 billion is left on the table every year in unused 401(k) Matches.

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Lendtable supplements the cash now going towards receiving your full 401(k) match. They disburse it as you contribute so you’re never liquidity constrained. With Lendtable, you’re maximizing both the 401(K) match, and also your cash on-hand. 

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© 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 report is part of a new series produced by The Block Research to provide insights and due diligence on some of the leading companies in the digital asset ecosystem. 
• Bitso is one of the most dominant cryptocurrency exchanges in Latin America
• All data presented in this report has been updated as of May 14, 2021

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

Weekly search volume on Google for the topic “cryptocurrency” has reached its highest level yet both in the U.S. and worldwide, according to data from GoogleTrends. The search volume peaked during the week of May 9 – 15, when the price of bitcoin was mostly still above $50,000.

A topic on GoogleTrends includes related search terms, meaning this volume is more indicative of a wider interest in the crypto space than just the specific word. In fact, search volume for the word “cryptocurrency” is actually lower than it was in 2017.

Possible explanations for the increased interest in the cryptocurrency ecosystem could involve Ethereum’s bull run, as it shot up drastically to hit an all-time high price above $4,000 during that week. Data compiled by The Block shows Google keyword searches for “Ethereum” also reached record highs around the same time.

The period between May 9 and May 15 is also when Ethereum miners earned higher revenue than bitcoin miners. On May 15, Ethereum miners earned $128.04 million — an all-time high — compared to bitcoin’s $61.6 million on the same day. 

Tesla CEO Elon Musk also hosted Saturday Night Live (SNL) on May 8, joking with his mother that he would buy her dogecoin for Mother’s Day — coinciding with record high search terms for Dogecoin on GoogleTrends. This was four days before Musk announced on Twitter that Tesla would no longer accept bitcoin for Tesla car payments on May 12 due to environmental concerns.

GoogleTrend’s Twitter account pointed out that searches for “Should I sell my crypto” rose 400% in the U.S. yesterday, as prices across the board plummeted. It added that searches for “environmentally friendly cryptocurrency” are also rising — likely thanks to Musk’s recent tweets — along with questions over how the Bitcoin network uses energy.

© 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 U.S. Federal Reserve plans to publish a discussion paper this summer that will have a “particular focus on the possibility of issuing a U.S. central bank digital currency,” according to a press release today.

The press release added that the paper will complement research that the Federal Reserve is already undertaking.

Federal Reserve chairman Jerome Powell highlighted the agency’s goals of promoting financial stability and ensuring the payments system is efficient. “In pursuit of these core functions we have been carefully monitoring and adapting to the technological innovations now transforming the world of payments, finance, and banking,” he said.

The press release stated that the main concerns are whether the U.S. could improve the current domestic payments system. Powell said that the CBDC would be designed to work alongside the current payments systems, including cash, rather than replacing them.

“The design of a CBDC would raise important monetary policy, financial stability, consumer protection, legal, and privacy considerations and will require careful thought and analysis—including input from the public and elected officials,” he 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.

Blockchain-based lending firm Figure Technologies has raised $200 million in a Series D funding round, pushing its valuation to $3.2 billion.

The round was co-led by 10T Holdings and Morgan Creek Digital. It included Digital Currency, Group, Ribbit Capital, DCM and DST Global.

Founded in 2018 by former SoFi founder Mike Cagney, Figure provides financial services, including loans and mortgage refinance, using its own blockchain called Provenance.

“Figure is building next-generation lending, trading, and settlement infrastructure,” said Dan Tapiero, general partner of 10T Holdings. “The speed, transparency, finality, and cost-efficiency of Provenance blockchain will be an improvement to the systems and framework that exist in the traditional financial world.”

Figure also applied for a U.S. banking charter last year through the Office of the Comptroller of the Currency. The application has yet to receive approval.

In December 2019, the firm raised $103 million in Series C funding at a post-money valuation of $1.2 billion.

The Series D brings Figure’s total funding to date to over $425 million. Additionally, 10T Holdings’ co-founder and partner Stan Mironshik and Morgan Creek’s general partner Sachin Jaitly have joined Figure’s board.

© 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.

© 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.

President Joe Biden is giving the Internal Revenue Service (IRS) additional funding to address the crypto market, and he wants the tax regulator to apply some traditional standards to crypto exchanges. 

The Treasury has released a report detailing tax compliance measures aimed at closing the tax gap, which is the difference between taxes owed to the government and taxes actually paid. Some of the measures are aimed at cryptocurrency, including a requirement that crypto exchanges report gross receipts and purchases.

The report calls virtual currencies a “significant concern” for tax evasion, especially as the market grew to $2 trillion in the past year before dropping below that figure in yesterday’s crash. It specified that it’s hard to detect illegal activity using cryptocurrency in general, including tax evasion, and that burden isn’t going away.

The report said that an increase in the number of ways people are able to hide income is encouraging fewer people to comply with the rules. It highlighted not only traditional methods of doing so, such as using offshore accounts, but also moving taxable assets into the crypto economy.

For that reason the President’s proposal includes additional resources for the IRS to address crypto reporting, as well as a new reporting regime that will also cover crypto exchanges and custodians. It calls for businesses receiving crypto to report on transactions larger than $10,000 — a standard that already exists for cash transactions. 

“Despite constituting a relatively small portion of business income today, cryptocurrency transactions are likely to rise in importance in the next decade, especially in the presence of a broad-based financial account reporting regime,” said the report. 

© 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 Dutch Central Bank, DNB, has reversed its decision to enforce stricter measures for withdrawing cryptocurrencies from exchanges, according to Dutch crypto exchange Bitonic. 

In January, the central bank set out rules that required crypto exchanges to collect additional data from their users when they withdraw cryptocurrencies. Namely, users had to add the recipient address — where they are sending funds to — to their whitelist and provide a photo to “prove” that they indeed owned the address. Crypto exchanges in the region, such as Bitstamp and Bitonic, swiftly started enforcing the requirements.

The central bank’s reversal on the policy comes almost two months after Bitonic filed an objection over the stringent rules. “Aside from the fact that verifying every address for every transaction has no technical merit, it is also a serious violation of our customers’ right to privacy,” Bitonic said, in a statement when it filed the complaint in March.

In April, the Preliminary Relief Judge of the Rotterdam District Court ruled that the crypto exchange had every right to challenge the new requirements and that DNB must consider Bitonic’s objections and make a decision within six weeks.

DNB has now said that the original requirement “does not do enough justice to the discretion that an institution has to implement this standard in a risk-oriented manner.” It declared the objection well-founded and revoked the wallet verification requirements.

The central bank still requires crypto exchanges to take adequate measures to check that the person withdrawing the funds is actually the recipient. But it has added a clarification to the official guidance that states providers are able to choose the verification methods that suit them and their customers, rather than having to follow any specific measures.

Bitonic stated that it was pleased with the outcome and will be removing the wallet verification measures as soon as possible.

© 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.