FreeCryptoCurrency.Me

Quick Take

• For the past half-year, the Bahamas has been rolling out the world’s first functional central bank digital currency, but the process has been uneven.
• Near the end of March, the government stepped up its efforts to get the Sand Dollar in use. 
• The Block decided to try out the Sand Dollar for ourselves.

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Encrypted messaging app Telegram is reportedly looking to go public. 

Citing unnamed sources involved in the process, Russian news outlet Vedomosti broke the news on April 11. The timing is notable, given that at the end of March, Telegram’s founder and CEO Pavel Durov announced via his Telegram channel that the firm had sold $1 billion in bonds. 

Resistant to the sale of user data and ad space, Telegram has long suffered from a lack of clear revenue flow. Durov, along with his brother Nikolai, first made their fortunes with Russian social media site VKontakte.

The Durov brothers used that money to make Telegram, which is designed to be resistant to the Russian government’s extensive firewalling and media censorship. This did not ingratiate the pair to the authorities. They ultimately left Russia but have kept up work on Telegram. Money, however, became a persistent issue. 

Famously, Telegram ran afoul of the US Securities and Exchange Commission over its $1.7 billion initial coin offering for its GRAM tokens. Regarding the recent bond issuance, Durov said “the end goal for Telegram is to become a financially sustainable project that can serve humanity for decades (or centuries) to come.”

In December, Durov outlined some revenue-generating measures in his Telegram channel, noting the planned introduction of an “Ad Platform” that “is user-friendly, respects privacy and allows us to cover the costs of servers and traffic.”

Per Vedomosti, Telegram also seems to be looking at a direct listing, an increasingly popular mechanism among tech firms for public investment. The Vedomosti report also suggested that should Telegram go public, it may do so in Hong Kong rather than New York, due to its history with the SEC.

© 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.

Officials in the U.S. national security and financial apparatus are looking askance at China’s development of a digital yuan. 

A Bloomberg report from April 11, citing anonymous sources, states that the U.S. Treasury, State Department, Pentagon and National Security Council are investigating China’s central bank digital currency project with concern for its potential to circumvent U.S. sanctions. 

In November, news broke that Trump administration intelligence officials wanted the Securities and Exchange Commission to brief them on China’s involvement in cryptocurrencies, which they viewed as a national security concern.

Meanwhile, China’s digital yuan project continues to advance in public view. As of February, over $17 million worth of the digital yuan were in circulation. However, many have noted that the principal target of digitizing the yuan is not international at all, but rather an effort to compete with local tech giants like Alibaba and Tencent, whose platforms dominate payments within China. 

© 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.

Dante Disparte has been hired by Circle to serve as its chief strategy officer and head of global policy.

Circle CEO Jeremy Allaire outlined the hire in a blog post Monday, writing that Disparte “will help drive global strategy for Circle, and manage and lead our global initiatives to help shape policy and engage and collaborate with industry and public sector leaders around the world.”

Disparte previously worked as executive vice president of stablecoin initiative Diem, formerly known as Libra. Diem rebranded at the end of 2020 as part of a broad realignment — a move perhaps motivated by a divisive public response to the project’s 2019 debut, including regulators who scrutinized the role of Facebook in its development. Diem has yet to publicly launch, instead opting to secure approval from regulators before going live.

In a statement posted to LinkedIn, Disparte wrote that Circle has “common cause with Diem Association in building a more inclusive financial system.”

“I’m excited to confirm the news that I’m joining Circle to lead strategy and global policy and look forward to joining Jeremy Allaire and an incredible team,” Disparte wrote.

© 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.

Galaxy Digital filed for a bitcoin exchange-traded fund (ETF) on Monday, according to a new S-1 with the Securities and Exchange Commission (SEC). 

The Galaxy Bitcoin ETF filing names NYSE Arca as the intended exchange venue. Per the filing, Galaxy has yet to name a custodian, administrator or transfer agent and will likely submit amended filings as these roles take shape and become public.

Galaxy trades publicly in Canada, and already acts as sub-advisor to a Canadian bitcoin ETF offering sponsored by CI Financial, the CI Galaxy Bitcoin ETF. That particular product began trading on the Toronto Stock Exchange last month. 

That product utilizes the Galaxy Bitcoin Index, which is owned and calculated by Bloomberg services. The Galaxy Bitcoin ETF, if approved, would also utilize the index as its pricing mechanism.

“The Index is designed to measure the performance of a single bitcoin traded in U.S. dollars,” said the filing.

The end-of-day price of the net asset value of the ETF, or the pricing of the underlying holdings each day, is determined using the Bloomberg Crypto Price Fixings’ mid-price for bitcoin. It’s a “simple average” of the price of bitcoin using inputs from real-time pricing sources, according to the S-1. 

The submission comes after a strong Q4 report from the firm. CEO Mike Novogratz said the crypto bank is seeing growth across asset management, trading and its newest addition, mining. The Q4 report also revealed plans to conduct a secondary listing on a U.S.-based venue. 

The Galaxy filing joins a number of other submissions, including NYDIG, Fidelity and First Trust/SkyBridge. The U.S. has seen an increase in submissions since a wave of Canadian approvals, including the CI Galaxy Bitcoin ETF. 

© 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.

Business analytics company MicroStrategy now pays its board of directors in bitcoin.

Announcing the news on Monday, the Nasdaq-listed company said non-employee directors would receive all fees for their service in bitcoin instead of cash.

“In approving bitcoin as a form of compensation for Board service, the Board cited its commitment to bitcoin given its ability to serve as a store of value, supported by a robust and public open-source architecture, untethered to sovereign monetary policy,” said MicroStrategy.

This is a developing story and will be updated…

© 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.

Russia-based BitRiver has rolled out an ERC-20 token to pre-sell the energy capacity of its bitcoin mining colocation facilities.

The bitcoin mining farm operator said in an announcement on Monday that it’s raising $35 million through the pre-sale of 100 million BitRiver Tokens (BTR) with each representing one watt-hour of the low-carbon energy at its colocation data centers. The token is scheduled to list on Bithumb Global in the following week.

BitRiver said that mining investors who hold the BTR tokens have the right to secure an equivalent amount of energy capacity at BitRiver and up to 10% of the BTR can be used to pay for their monthly bills at the farm.

The token issuance is part of BitRiver’s efforts to secure mining customers for its two operational data centers with 110 megawatt of capacity as well as to fuel the development of its third site that’s under construction and expected to become operational in September also with a 100 megawatt capacity, according to the white paper. 

“By launching the BTR token, we seek to accelerate our efforts to make cryptocurrency mining greener while offering investors around the world an easier-than-ever way to become part of environment-friendly cryptocurrency mining today,” BitRiver founder and CEO Igor Runets said.

For instance, if buyers purchase 100,000 BTR at a cost of $35,000, they are entitled to host bitcoin mining machines at BitRiver’s facilities that consume 100 kilowatt-hour (kWh) of energy, provided that they have notified BitRiver 90 days ahead and staking the tokens for three consecutive months.

That amount of capacity can power about 30 units of Bitmain’s AntMiner S19 Pro, which computes at 110 TH/s and is the most efficient mining equipment on the market.

BitRiver said it prices each BTR at $0.35 as it factors in a yearly cost of utility at its data centers.

In the same instance of 100,000 BTR that equals to 100 kWh, BitRiver assumes the annual cost of using that amount of electricity is $35,000. That means the monthly cost is around $2,916 and the hourly cost is $4 – hence the price of each kWh is at $0.04.

Up to 10% of the 100,000 BTR can be used to pay for a monthly bill, based on its market prices and BitRiver said it will buy back all the tokens after five years.

The move comes at a time of surging demand for bitcoin mining machines while the world is experiencing a global chip shortage. Since BitRiver is essentially collecting utility fees upfront, it said it also holds a reserve of additional 65 million BTR for paying a 10% annualized interest to BTR holders for five years. 

© 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.

Hangzhou-based bitcoin mining hardware maker Canaan estimates its Q1 revenue to be not less than 400 million yuan, or $61 million, which is already close to what it made for the year of 2020.

The firm disclosed its earning reports for Q4 on Monday, saying it made a gross profit of $5.8 million on a net revenue of $68 million for 2020. That means the average price for its 6.6 million terahashes second of computing power sold in 2020 was $10 per TH/s, which is much lower than market average.

Factoring in interests and expenses, Canaan still recorded a net loss for 2020 but the net loss narrowed to $33.0 million from a whopping $150 million in 2019. 

Notably, bitcoin’s surging prices during Q4 didn’t help boost Canaan’s revenue for the quarter as it “did not have sufficient inventory to deliver to its customers.”

Amid a global chip shortage, major bitcoin mining equipment makers in China do not have spot inventory but have been selling equipment on a preorder basis. 

Indeed, Canaan’s contract liability was nearly $66 million as of December 31 for the preorders it received from mining clients that are due for shipment this year.

“As the price of bitcoin started to move up in the fourth quarter of 2020, the Company believes that its revenue will be substantially improved in 2021 and expects that its total net revenues in the first quarter of 2021 will be not less than RMB400.0 million [$61 million],” Canaan said in the filing.

As The Block reported last month, institutionalized capital, especially the ones from North America, has invested more than hundreds of millions of dollars since Q4 in placing preorders of bitcoin mining equipment.

© 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 Binance has ventured into the space of tokenized stock trading, following the likes of FTX and Bittrex Global.

To begin with, Binance has listed Tesla stock tokens, meaning the exchange’s users can now buy Tesla tokens representing its shares.

One Tesla stock token represents one share of the company. Users, however, can buy fractions of the token, with the minimum trade size being one-hundredth of the token.

The fractionalization of stock tokens makes them more affordable. One Tesla stock, for instance, is currently priced at around $700, which is quite expensive.

“Stock tokens demonstrate how we can democratize value transfer more seamlessly, reduce friction and costs to accessibility, without compromising on compliance or security,” said Binance CEO Changpeng Zhao.

Zhao first hinted at the launch of tokenized stock trading service earlier this year. He told The Block at the time: “We’re definitely looking at it.”

“We do try to copy innovation when innovation is good,” Zhao said at the time, referring to FTX’s similar service.

Like FTX and Bittrex Global, Binance has also partnered with German financial firm CM Equity AG and Switzerland-based tokenization firm Digital Assets AG for the service.

‘Commission-free’

Binance is not charging any commission for trading stock tokens. It is not clear what the exchange’s business model is around the service. The Block has reached out to Binance and will update this story if we learn more.

Binance’s service follows traditional market hours. Tesla’s stock token, for instance, will follow Nasdaq market hours, a Binance spokesperson told The Block. FTX and Bittrex Global, on the other hand, offer 24/7 tokenized stock trading.

When asked why to follow traditional market hours, the Binance spokesperson told The Block: “Stock tokens are fully-backed, and the trades are executed in real-time. Hence, trading of stock tokens follows the underlying stocks’ traditional trading hours.”

Binance’s stock tokens are priced and settled in BUSD, meaning users can buy and redeem these tokens via the exchange’s stablecoin, issued by Paxos. FTX’s stock tokens, on the other hand, are quoted in “USD stablecoin,” meaning users can buy and redeem in a range of options, including the U.S. dollar, as well as USDC, BUSD, HUSD, and PAX Standard stablecoins.

It is worth noting that stock tokens are not shares, but they only give exposure to underlying shares and potential corporate actions, including dividends and stock splits. 

Binance said it would list more stock tokens in the future based on market demand.

To get started with the stock tokens service, Binance users will have to go through know-your-customer (KYC) measures, including submitting identity documents and completing facial recognition verification.

Additional KYC measures, including proof of address, will be required for German residents. Meanwhile, the service is not available to residents of the U.S., mainland China, Turkey, and other restricted jurisdictions.

© 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.

There were twice as many crypto venture capital deals larger than $50 million in the first quarter of 2021 than there were in all of 2020, according to The Block Research. 

Last year there were four crypto venture capital deals worth more than $100 million, and three deals worth between $50 million and $100 million.

In Q1 of this year, there were seven deals of $100 million or more: BlockFi, NYDIG, Dapper Labs, FireBlocks, Blockchain.com (twice). Seven more were worth $50 million to $100 million.

These large-scale deals were enough to push the average deal size from $5.7 million in 2020 to $12.7 million in the first few months of 2021. 

To get more of an overview private funding of crypto and blockchain projects in Q1 ‘21, check out The Block Research.

© 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.