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The U.S. Senate is scheduled to move forward with its consideration of Gary Gensler as chair of the Securities and Exchange Commission (SEC) on April 12, according to an update to the legislative body’s executive calendar. 

A new notice says the Senate will go into executive session after morning business on April 12. There, it will continue its consideration of multiple nominees from the Biden Administration, including Gensler. It will also consider Polly Ellen Trottenberg’s nomination for Transportation Secretary Wendy Ruth Sherman for Deputy Secretary of State and Brenda Mallory for the Council on Environmental Quality. 

Gensler’s confirmation hearing took place on March 2, and he later cleared the Senate Banking Committee with a 14-10 vote. During his confirmation hearing, he told Congress he believes cryptocurrencies are a “catalyst for change.” The former Commodities Futures Trading Commission (CFTC) chair is knowledgeable about the crypto space, teaching a course on blockchain at the Massachusetts Institute of Technology. 

Allison Herren Lee remains acting chairwoman of the securities regulator as Gensler awaits confirmation. If Gensler is confirmed, he will serve the remainder of the term left open by former chairman Jay Clayton, which expires on June 5. 

© 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 board of commissioners for Florida’s Miami-Dade County has approved the deal that will see crypto exchange FTX secure the naming rights to the sporting arena used by the Miami Heat professional basketball team.

The vote saw just one commissioner — René Garcia of Miami-Dade’s District 13 — vote against the resolution after he cited concerns about the short time window in which the commissioners had to review the final details of the deal. Still, Garcia was not alone in putting forward those concerns, though ultimately the other commissioners who struck skeptical tones during the hearing voted to approve the resolution. Ten commissioners voted in favor of the deal, with two others not present for the hearing.

The development comes days after the county announced that it struck an agreement with FTX over the naming rights, which Mayor Daniella Levine Cava said “will have [a] positive impact across our community, and we are glad to find a partner in FTX ready to invest in Miami-Dade.” Cava said Friday that her office would work with commissioners to develop a plan to use the proceeds from the deals on local initiatives across the county, including programs focused on gun violence and at-risk youth. 

Jimmy Morales, Miami-Dade’s COO, said from the $135 million deal, the county would reap about $90 million in net proceeds during the 19-year period or about $4.7 million annually. $14 million would be paid upfront, netting the county roughly $8 million for the first year. While the majority of the funds will be allocated by the mayor’s office, 30% of the funds will be apportioned to each of the 13 county commissioners to award to similar efforts in their districts.

The issue of gun violence was raised repeatedly throughout the hearing, drawing passionate statements from commissioners, who at times appeared on the verge of tears. Those most in support of the deal cited the funds as a once-in-a-lifetime opportunity to direct money to these issues, citing daily gun violence across Miami-Dade in each of the districts the commissioners represent. 

“This has got to be one the greatest moments in Miami-Dade history,” Commissioner Kionne McGhee of District 9 said during the hearing.

Concerns were also raised about the nascent crypto industry in which FTX operates, the future of crypto regulation and whether FTX will be a viable business over the course of 19 years and meet its payment obligations. 

Other specific issues were highlighted, including how the National Basketball Association (NBA) has yet to give its final approval for a logo change in light of the stadium renaming. However, a representative from a Miami Heat affiliate present at the hearing said that the working expectation is that the NBA will issue an approval. Should the NBA shoot down the logo approval and effectively scuttle the deal, the terms call for FTX to pay the county $2.5 million.

Dan Friedberg, FTX’s general counsel, was present for the hearing and defended the agreement. He spoke about the firm’s commitment to charitable causes, including in the Miami-Dade area beyond the terms of the agreement, and cited founder Sam Bankman-Fried’s past focus on charity. “Sam is a remarkable man,” said Friedberg.

Yet at one point Friedberg sparked the ire of Commissioner Garcia after drawing a connection between any potential deal delay and continued gun violence in the county, as noted by Miami Herald reporter Doug Hanks. 

But ultimately,  the desire to put resources behind efforts to fight gun violence overcame the skepticism expressed during the hearing by some of the commissioners. 

“This is the moment we’ve been waiting for,” McGhee remarked.

© 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 venture firm Dragonfly Capital has launched a new fund worth $225 million to invest in a variety of projects.

The Dragonfly Fund II looks to mainly invest in four areas: Decentralized finance (DeFi) protocols; non-fungible token (NFT) projects; Ethereum Layer 2 solutions and businesses built on top of them; and centralized financial (CeFi) infrastructure.

Sequoia China has backed the fund as a strategic limited partner, and other partners in the fund include OKEx, Huobi, Bitmain, and Bybit.

“Together with many of the technology and cultural leaders from US technology firms and VCs, we’re in an incredible position to help unite and push the crypto movement forward,” said Haseeb Qureshi, managing partner at Dragonfly Capital.

Dragonfly was founded in 2018 and raised $100 million for its first fund. To date, the firm has invested in more than 35 projects, including dYdX, Compound, Maker, and StarkWare, as The Block Research reported late last year.

Dragonfly operates from Beijing and San Francisco and is currently looking to hire people in Singapore as well. The firm has a total of five jobs open, including a chief operating officer to be employed either in Singapore or the U.S.

© 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 analytics firm Chainalysis announced Friday that it secured $100 million in Series D funding, tipping the company’s valuation above $2 billion. 

Paradigm, a crypto investment company, led the new round of funding. Addition and Ribbit Capital, investors from Chainalysis’ Series C and B rounds, respectively, also participated alongside Marc Benioff, who invested by way of his firm TIME Ventures.

Chainalysis provides data analytics services for blockchain networks, offering tools to both corporations as well as various agencies across the United States. The firm has played a role in a number of prominent investigations, including one that led to a significant seizure of bitcoin funds tied to the now-defunct Silk Road dark marketplace. The firm launched a tool focused on managing seized funds by law enforcement in November. 

In a broader sense, the funding round is perhaps a signal that industry investors are betting on a future in which vendors like Chainalysis play a larger role in the interactions between governments and open crypto networks like bitcoin. 

The firm has raised a total of $266.6 million across eight funding rounds since its inception in 2014, according to Chainalysis’ Crunchbase profile. Most recently, Chainalysis raised $100 million in a Series C funding round in November led by Addition Capital through which the startup first achieved a valuation above $1 billion. 

A Chainalysis representative told The Block that the new financing will be used to bolster Chainalysis’ data solutions offerings to crypto businesses, asset managers, and government agencies.

“Chainalysis provides key data infrastructure and software for the cryptocurrency ecosystem, and as cryptocurrency adoption grows, so will demand for Chainalysis offerings,” Fred Ehrsam, Paradigm’s co-founder, said in a statement. 

© 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.

Kentucky’s governor signed a pair of legislative bills focused on cryptocurrency mining incentives into law.

As previously reported by The Block, the bills in question were finalized and approved by state lawmakers earlier this month. One measure is focused on clean energy use incentives whereas the other provides tax breaks to mining operations. 

Kentucky Governor Andy Beshear signed the two bills on Thursday, March 25, according to public records. Both laws become effective on July 1.

The laws represent the most tangible evidence to date that U.S. states are seeking to attract crypto miners, or companies that undertake the energy-intensive process of building network transaction blocks and minting new coins in the process. 

As previously reported by the Lexington Herald-Leader, a Kentucky-based news outlet, lawmakers sought hundreds of millions of dollars worth of tax breaks for technology firms and data center operators. The tax incentives for crypto miners fit into that broader process, having been first introduced in January. The energy bill, which supplements the state’s existing framework for promoting clean energy use, was introduced in late February.

The developments come as publicly-traded mining companies continue to ramp up their operations and institutional investors place bets on the future of the mining space. 

© 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.

HM Revenue & Customs, the United Kingdom’s tax authority, will publish new guidance on cryptocurrency taxation next week.

The update, due March 30, will consolidate two existing pieces of guidance on crypto tax into a single “crypto manual”, according to people with knowledge of the situation. They said the move is an attempt to “future proof” further guidance, which they said could be updated multiple times over the next year.

The same sources expect fresh guidance from the taxman on yield earned by lending out cryptocurrencies – which startups like BlockFi have made increasingly popular – and on staking, through which crypto holders earn rewards for helping to maintain proof-of-stake blockchains. 

In a statement sent to The Block, a spokesperson for HMRC confirmed it would soon be publishing “a new internal manual” containing guidance on crypto tax.

“The guidance manual demonstrates our commitment to providing clarity to our customers and will help individuals and businesses understand the tax consequences of different types of transactions in crypto assets. This builds on the previously published policy papers and will provide a more flexible approach to updating customers in this fast-moving sector,” they added.

To date, HMRC has published two separate documents offering advice on crypto taxation on its website – one for individuals and the other for businesses. The guidance was last updated in December 2019.

Nimesh Shah, CEO of tax consultancy Blick Rothenberg, told The Block that the thrust of the most recent guidance was “for the majority of people, gains on cryptocurrencies are going to be treated as capital gains” – a rate of 20%. Those actively trading cryptocurrencies, however, would be subject to income tax at the higher rate of 40% or 45%.

HMRC’s 2019 guidance also stated that individuals would be liable to pay income tax and national insurance contributions on crypto received from an employer as a form of payment or through mining, transaction confirmation or airdrops.

The crypto sector has changed significantly since then.

One area insiders expect to be addressed in the coming months is decentralized finance, a market that has grown significantly over the past year. DeFi Pulse, an analytics site, shows the value of the DeFi space has grown from roughly $650 million this time last year to around $40 billion today.

In addition to the rise of DeFi and, even more recently, non-fungible tokens (NFTs), prices in the crypto sector have soared over the past six months – with bitcoin hitting all-time highs of approximately $60,000 in early March.

© 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.

L’Atelier BNP Paribas CEO John Egan has said that ether (ETH) is likely a “significantly safer” investment than non-fungible tokens (NFTs) at this point.

That is because Ethereum provides an infrastructure to NFTs, according to Egan.

“Ethereum is clearly the big winner when it comes to NFTs,” Egan told BNN Bloomberg in an interview on Thursday. “So starting with Ethereum and adjacent infrastructure to Ethereum is probably a significantly safer investment at this point.”

Buying NFTs, on the other hand, at this stage is akin to gambling in a casino, according to Egan. “You know you’re going to spend money, but maybe you’re doing it for the enjoyment, for the experience. If you win, you’ve got lucky,” he said.

BNP subsidiary L’Atelier identifies trends in digital and virtual domains through research and analysis. Egan said NFTs are “very much an emerging asset” and are risky at this point.

However, in the next ten years, Egan expects NFTs to be the “bedrock economic infrastructure within the virtual economy” as it emerges.

Egan also compared the current NFT boom to the 2017 initial coin offerings (ICO) mania. He said both the trends are “very similar.”

“I think a vast majority of the NFT propositions currently available are wrapped up in a hype cycle and have no real value,” said Egan. “That doesn’t mean NFTs aren’t of value. I think NFTs are an extraordinary value as an infrastructure play in the long term.”

© 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.

In Malaysia’s Melaka state, police are hunting a bitcoin miner, who allegedly caused about 9 million ringgit (around $2.2 million) loss to utility company Tenaga Nasional Berhad.

The miner, Tan Joe Pheng, was actively running bitcoin mining activities at 18 premises in the state, Melaka police chief Datuk Abdul Majid Mohd Ali told a press conference on Friday, as reported by Malay Mail.

The 26-year-old miner was reportedly the syndicate’s mastermind and allegedly caused that loss to Tenaga Nasional since February 2019. He apparently stole electricity from the utility company.

“I urge the public who have information about the suspect to inform the police,” said Mohd Ali. “The suspect is also urged to surrender to the nearest police station.”

The police have detained six individuals in the case, including a man and a woman who are believed to be siblings of the main suspect and worked as accountant and manager of the bitcoin mining activities.

The police also raided six of the 18 premises and seized 317 bitcoin mining machines and other equipment.

If proven guilty, the bitcoin miner could face up to 10 years imprisonment or a maximum fine of 1 million ringgit (about $250,000).

© 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 Layer 2 scaling solution Optimism has delayed the public launch of its mainnet.

The mainnet was scheduled to roll out this week, but it has now been postponed at least until July. The new schedule is just a rough estimate, said Optimism, because the launch is a “collaborative effort” of the Ethereum community.

“Opening mainnet to the public is not something we can do alone,” said Optimism. “It will be a collaborative effort between us, projects, and core infrastructure providers like oracles, wallets, nodes & explorers.”

So when the ecosystem is ready and there is stability, Optimism will launch its mainnet to the public.

Optimism has been building an Optimistic Rollup-based Ethereum scaling solution since June 2019. The solution aims to increase Ethereum’s throughput (the number of transactions processed per second) and reduce its gas fees.

Earlier this year, Optimism “soft launched” its solution — the Optimistic Virtual Machine (OVM) — with decentralized exchange Synthetix. That means Synthetix will integrate the solution in four phases to limit risk to its platform.

Optimism said Synthetix users have already been enjoying speed and cost savings. Around $10 million have been saved on fees across more than 100,000 transactions, said Optimism.

Another major decentralized protocol set to integrate with Optimism is Uniswap. Earlier this week, Uniswap said it targets an L1 Ethereum mainnet launch of its version 3 (V3) on May 5, and an L2 deployment on Optimism will follow “shortly after.”

Optimism, formerly known as Plasma Group, has pioneered Optimistic Rollups. A rollup provides scaling by bundling or rolling up transactions into a single transaction. With rollups, a transaction is received on the main Ethereum blockchain, but it is executed on a Layer 2 solution, and the execution data is then sent back to Ethereum. Since computation is done off-chain, it reduces Ethereum’s load but maintains its security.

Another variant of rollups is ZK-Rollups. Both Optimistic Rollups and ZK-Rollups have their pros and cons, but the main difference between the two is that the former uses fraud proofs, and the latter uses validity proofs. Thus, with Optimistic Rollups, a transaction can be challenged, but not with ZK-Rollups. With ZK-Rollups, transactions are valid by design.

Ethereum creator Vitalik Buterin recently said rollups are a “powerful” solution for Ethereum scaling in the “short and medium-term future (and possibly long-term as well).” But they are still an early-stage technology, Buterin said, suggesting that more work needs to be done in the years to come.

StarkWare and Hermez are two of several projects that have built ZK-Rollups-based scaling solutions. StarkWare’s clients include dYdX and DeversiFi, and Hermez’s clients include Tether and others.

© 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.

Digital asset bank Avanti raised $37 million in a Series A round, according to an announcement from the bank. That brings its total raised since inception to $44 million. 

A number of individual investors participated in the round, including some of Avanti’s executives and directors. Binance.US, Coinbase Ventures, Morgan Creek Digital and Susquehanna Private Equity Investments are among its institutional investors. 

The raise will provide the capital needed to launch, as required by regulators. The funds will also support the engineering and operating expenses. 

Avanti first gained bank charter status from the state of Wyoming in October of last year. It is the second crypto company to become a bank after Kraken’s Kraken Financial. This allows the crypto firm to provide final and simultaneous trade settlements between crypto and the dollar.

With the help of the raise, founder Caitlin Long said Avanti plans to issue its dollar-pegged token Avit, as well as custody on and off-ramp services for crypto. As of now, it has over 2,500 inbound customer inquiries, according to Long.

However, it also means Avanti is obligated to comply with the Bank Secrecy Act, anti-money laundering compliance standards and other bank compliance standards.

Further launch details will be coming soon, according to Avanti.

© 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.