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The number of scams that involve would-be victims buying bitcoin has risen high enough in Cleveland’s Cuyahoga County that the Federal Bureau of Investigations (FBI) has gotten involved. 

The Cuyahoga County Department of Consumer Affairs teamed up with the FBI to place signs around Bitcoin ATMs warning people about possible scams, such as someone claiming to need a bitcoin for an IRS payment, utility bills, or a law enforcement investigation. 

“We have a very active financial crimes unit in Cleveland,” said Vicki Anderson-Gregg, Special Agent for the Cleveland Division of the FBI. “We joined a partnership with the County Scam Squad to put out this alert.” 

Local reporting in Cleveland shows that, in one instance, a scammer pretended to be a victim’s son in need of bail money to pressure the victim into sending $9,000 in Bitcoin. But an observant clerk halted the situation before a transaction could take place. In another case, the scammer feigned being a Social Security Administration representative and claimed the victim’s Social Security number was involved in drug trafficking, money laundering, or other illicit activity. The victim would then be urged to pay the scammer through a Bitcoin ATM to “resolve” the situation. 

There are 212 Bitcoin ATMs in Cleveland, Ohio, according to the Bitcoin ATM tracking website CoinATMRadar. However, there are no exact number of crimes that have taken place to date that involve the use of a Bitcoin ATM.

“It is really difficult to capture numbers in regards to these types of scams, because people are embarrassed that they fell for it and don’t report it,” the Special Agent told The Block. “We think it is much more significant than actually reported.” 

While the statistics on Bitcoin ATM crime rates are sparse, the 2020 FBI Internet Crime Complaint Center (IC3) Internet Crime Report shows that there were 35,229 victims of virtual currency-related crime last year. The Cuyahoga County and FBI effort to educate people on scams and Bitcoin ATMs in an attempt to lower this number. 

“We really want to get the word out so that people are not victims — it is extremely difficult, pretty much impossible, to retrieve the money once they have sent it,” Anderson-Gregg said. 

Should someone fall victim to a financial scam the Special Agent advised they fill out an IC3 intake form. “Similar scams are grouped together and disseminated to the appropriate field office if it meets our threshold,” adds Anderson-Gregg.

One bad actor usually scams multiple people and can face charges of wire fraud, mail fraud, and “the typical white collar/financial crime charges” if they’re caught, according to Anderson-Gregg.

© 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.

Venture capital firm Andreessen Horowitz (a16z) is setting up a new fund to invest as much as $1 billion in crypto and crypto start-ups, according to a report from the Financial Times. 

A16z is looking to raise between $800 million and $1 billion for the fund, which will be its third and largest crypto-focused fund. Recently, the firm has invested in zero-knowledge private applications platform Aleo. 

The firm found early success by investing in Coinbase and Ripple through its traditional funds. It later created a dedicated crypto fund in 2018, and by 2019 it had amassed a portfolio of crypto firms that would become some of the highest-valued companies in the space, in addition to other early bets on tech firms like Skype, Facebook, Twitter and Airbnb. A16z established a second crypto fund last year. 

If a16z raises the $1 billion, this would make it one of the highest-funded investment pools dedicated to crypto. Paradigm previously raised $1 billion for crypto investments. 

© 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.

A Canadian bitcoin trust is in the final stages of its bid to convert to an exchange-traded fund (ETF).

The unitholders of investment manager Ninepoint’s Bitcoin Trust approved the conversion bid earlier this month. A final prospectus for the proposed ETF was filed on April 28, according to Ninepoint, which said Friday that it “filed a final prospectus and received a receipt for its final prospectus from the securities regulatory authorities in each of the provinces and territories of Canada.”

As the company noted:

“Subject to applicable regulatory and stock exchange approvals, the Conversion is expected to occur on or about May 6, 2021 (the “Effective Date”). On the Effective Date, units of Bitcoin Trust will be converted to units of the ETF on a 1:1 basis. Unitholders are not required to take any action in order to be recognized as holders of units of the ETF following the Conversion.”

The development comes as U.S.-based crypto firm Grayscale is looking to accomplish a similar feat with its Grayscale Bitcoin Trust (GBTC). 

Indeed, many market observers hoping for a U.S. bitcoin ETF have pointed to recent Canadian approvals as an encouraging sign, hoping the SEC may feel more confident with successful products to point to just north of the border. 

Earlier this week, the SEC delayed a final decision on a bitcoin ETF filing submitted by VanEck. 

© 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.

It was a tweet heard ’round the crypto world. 

A breaking news account fired off, in all caps, an unsubstantiated headline that the U.S. Treasury Department was set to crack down on a number of unknown banks for their activity in the crypto market. Soon after the tweet’s release, several industry insiders — including the Blockchain Association’s Kristin Smith — threw cold water on its key claim. 

“There’s a lot of rumors going around that don’t have any truth of foundation,” Smith said. 

In this episode of The Scoop, Smith unpacked the erroneous rumor, why U.S. Treasury Secretary Janet Yellen isn’t making bitcoin a priority right now, how crypto policy works, and why crypto market participants should be concerned about the Financial Action Task Force decision coming this June.

As Smith put it during the interview:

“The thing that we do have to worry about at Treasury isn’t coming from the top people as I said but Treasury’s interaction with the Financial Action Task Force or the FATF. The FATF has proposed something that is fairly scary … if adopted would require a lot of different entities in the U.S. to register as money services businesses.”

Smith went on to add: “The threat right now is not Yellen.”

© 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 miners brought in more than $1.5 billion in revenue during the month of April, according to data collected by The Block.

Monthly data through April 30 shows that ETH miners have brought in $1.59 billion, though this data is likely to be slightly higher by the end of the day. The figure surpasses the previous high of $1.38 billion reported for March. 

Of the $1.59 billion figure, $702 million was in the form of transaction fees, or the funds paid to transact on the Ethereum network.

Network data indicates that Ethereum surpassed another previous milestone during April: the number of transactions eclipsed 40 million for the first time in a one-month period, as shown in the chart below:

© 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, the central bank of the United Kingdom, is advertising job openings for a team dedicated to the exploration of central bank digital currencies (CBDCs).

The news comes a week after the Bank of England, together with HM Treasury, announced the creation of a joint task force to assess the possibility of launching a digital pound – a type of CBDC which has already been dubbed the “Britcoin” by commentators.

Earlier this week, the U.K. central bank posted job ads for four analyst roles, two architect roles and one senior management position – all related to CBDCs.

Fintech-focused employees at the central bank have highlighted the team job postings on LinkedIn in the past day. A request for comment was not returned by press time. 

A description of what the managerial entails states that the BoE is “actively exploring whether it should develop and issue a CBDC,” but adds that no decision had yet been made on whether a CBDC is needed in the U.K.

The analysis set to be undertaken by the new team, once in place, will focus on monetary policy and financial stability risks and opportunities; use cases; collaboration with other central banks; public policy issues; design and feature considerations, with usage by consumers and merchants front of mind; and technology design choices.  

In other countries, the CBDC era has already begun. In October, the Central Bank of The Bahamas launched its digital Sand Dollar. Last month, the Eastern Caribbean Central Bank launched a digital currency called DCash.

China is perhaps leading the pack among major economies, having already conducted significant testing of its digital yuan. The People’s Bank of China is also mulling whether to make the digital currency available to foreign visitors during the Beijing Winter Olympics in 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.

© 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 announced Friday that it will acquire data and analytics provider Skew for an undisclosed sum, its first acquisition deal following its blockbuster direct listing earlier this month.

Coinbase, which began trading publicly on April 14, will plug Skew’s data — which spans derivatives and spot volumes, charts, and information around bitcoin’s volatility — into its institutional prime brokerage platform, Coinbase Prime.

Skew’s tools will compliment Coinbase’s existing institutional product offering, which covers a range of products in custody and over-the-counter trading. The deal is expected to close in the second quarter. 

“We know that access to high-quality data is essential for institutions assessing investments in crypto assets,” Greg Tusar, VP of institutional product at the exchange operator said in a blog post. Coinbase acquired Tagomi last year in a deal that beefed up its suite of institutional products. Filings show Tagomi was valued at $77.2 million at the time of the deal. 

Coinbase counts more than 7,000 institutions as clients with $122 billion in total assets, according to Tusar. 

Such a deal reflects a broader M&A wave sweeping crypto. PayPal acquired crypto custody firm Curv earlier this year and Galaxy Digital is rumored to have held talks with Coinbase rival BitGo. Competition in the crypto prime brokerage market will continue to fuel this wave, as noted by Eric Risley, managing partner at Architect Partners, in a recent blog. 

“The full set of capabilities are soon to be table stakes and are a necessity for institutional adoption of crypto assets,” he wrote. “This is likely to be an area of significant M&A over the next 12 months with both crypto and fiat-native firms participating.”

Earlier this year, Coinbase announced its acquisition of crypto infrastructure firm Bison Trails in a bid to build out a business akin to Amazon Web Services. Coinbase said in January that it acquired the trade execution platform Routefire.

© 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.

Intercontinental Exchange, the owner of the New York Stock Exchange and crypto platform Bakkt, has sold its 1.4% stake in Coinbase for $1.2 billion.

The trade resulted in a net profit of about $900 million, Intercontinental Exchange’s CFO said in an earnings call on Thursday. The company sold the stake this month after Coinbase went public on April 14.

The Coinbase stake sale gave Intercontinental Exchange “some additional flexibility” to reduce its debt, said Hill. The company’s leverage is now about 3.6 times of EBITDA (earnings before interest, taxes, depreciation, and amortization) compared to 4.2 times six months ago.

Hill also talked about Bakkt on the earnings call, saying that the crypto firm’s merger with Victory Park should be completed “toward the end of this quarter.”

Bakkt announced the merger with Victory Park, the special purpose acquisition company (SPAC), earlier this year for its listing on the New York Stock Exchange.

As for Coinbase, its shares are trading 22% down since its listing on Nasdaq. The stock was listed at a price of $381 and closed at  $298 on Thursday.

© 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. 
• Circle is one of the oldest cryptocurrency firms with a rich history of large scale acquisitions, pivots, and shut downs
• All data presented in this report has been updated as of April 27, 2021

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