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Quick Take

• Charles Schwab is weighing the possibility of launching a crypto brokerage.
• The service would rely on the tech of a crypto-native partner, according to sources.

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International investment bank JPMorgan released the results of a poll surveying 3,400 investors at 1,500 institutions during their Macro Quantitative Conference on Thursday, offering indications of what the investor community thinks about cryptocurrency

The survey results, obtained by The Block, suggest cryptocurrency’s reputation is shifting to greater legitimacy in the minds of investors, but the coin hasn’t lost its risky and crime-related perception. Surveyed investors still seem to think crypto is a risky investment area — a belief JPMorgan analysts have agreed with in the past. 

Over three-quarters (78%) of investors admitted their firm most likely won’t invest in crypto, and that 97% thought crypto crime was somewhat or very much prevalent.

That said, 58% of participants believe crypto is “here to stay” and 7% believe cryptocurrency “will become one of the most important assets.” 

Almost a tenth of surveyed investors’ firms said they have invested in crypto. Of the 89% who aren’t, 22% said they’re likely to do so in the future and the remaining 78% said they weren’t. 

When asked their opinion, 21% said crypto was a “temporary fad,” 14% thought it was “probably rat poison squared” — a quote from famed investor Warren Buffet describing his pessimistic stance on the cryptocurrency. Seventy-seven percent want regulators to develop stricter cryptocurrency regulations.

© 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.

Payments company Square is buying a majority stake in Tidal, the music streaming service backed and owned by performing artists such as Jay-Z, Beyoncé and Rihanna, among others. 

According to a press statement, Square will pay $297 million in cash and stock to secure the majority stake and “existing artist shareholders will be the remaining stakeholders.” Tidal will continue to operate independently, and Jay-Z will be named to Square’s board of directors.

In a tweet thread, Square CEO Jack Dorsey wrote that “[i]t comes down to a simple idea: finding new ways for artists to support their work. New ideas are found at the intersections, and we believe there’s a compelling one between music and the economy. Making the economy work for artists is similar to what Square has done for sellers.”

He went on to say:

“Square created ecosystems of tools for sellers & individuals, and we’ll do the same for artists. We’ll work on entirely new listening experiences to bring fans closer together, simple integrations for merch sales, modern collaboration tools, and new complementary revenue streams.”

The move comes weeks after Dorsey and Jay-Z co-funded a bitcoin development endowment backed by 500 BTC. The development fund has an initial focus of providing resources to teams in Africa and India, as reported at the 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.

BitGo can now provide custody services for New York state clients.

The New York Department of Financial Services (NYDFS) issued the crypto services provider a New York Trust license, according to an announcement from the company released Thursday.

While BitGo was already a qualified custodian through the South Dakota Division of Banking, it now has the green light to offer its services to New York-based clients. This means meeting the state’s high compliance standards, including know-your-customer controls, a SOC 2 Type 2 audit from an independent reviewer and insurance of up to $100 million in digital assets.

But New York is where the institutions are, and BitGo said the license is key to building its institutional client base. 

“New York-based financial institutions are critical for the accelerated adoption and acceptance of digital assets and BitGo has received tremendous interest from institutional investors in the State for its products and services from banks, pension funds, hedge funds and other fiduciaries,” said the announcement.

During the path to approval, BitGo hired former Coinbase chief compliance officer Jeff Horowitz at the start of 2021. It first applied for the license in August of 2020. 

BitGo also recently partnered with KPMG and Coin Metrics to further institutional and bank adoption of crypto with a product suite to monitor blockchain network risks. 

© 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.

Popular rock band Kings of Leon will be the first band to release an album as a non-fungible token (NFT).

According to Rolling Stone, on Friday the group will release the album, titled “When You See Yourself,” along with three types of tokens. The first type of token will be a special album package, the second will offer holders perks like front-row tickets for life, and the third will be for “audiovisual art.”

All of the tokens will come with art created by the band’s creative partner, Night After Night. Blockchain startup YellowHeart is managing the technical side of the album’s release, including the development of smart contracts. 

Kings of Leon joins a growing group of professional musicians that are planning to release NFTs, including Portugal. The Man, Shawn Mendes and Grimes. 

© 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 derivatives exchange BitMEX is considering offering three new services: Spot trading, brokerage, and custody.

Alexander Höptner, CEO of BitMEX operator 100x Group, revealed the plan in an interview with Bloomberg published Thursday.

“We have to very fast make up our mind how we want to approach these aspects and then see whether we could find a partner or whether we build something or buy something,” said Höptner.

BitMEX is also aiming to amend relations with global regulators, said Höptner, a former CEO of the German stock exchange Börse Stuttgart.

“We are approaching regulators where we are currently present, but we will also reach out to regulators where we are not,” said Höptner.

Höptner joined 100x Group in January, three months after the U.S. government charged BitMEX and its former executives for failing to deploy adequate anti-money laundering measures at the trading platform and violating CFTC rules.

U.S. authorities are currently discussing a surrender agreement with former BitMEX CEO Arthur Hayes, and he could surrender as soon as next month, according to a recent court filing.

Another co-founder Ben Delo is planning to appear in New York, per the filing. The U.S. government has also begun extradition proceedings against Greg Dwyer, former head of business development at BitMEX.

© 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 and custodian Gemini has launched a new dedicated service for fund managers, including bitcoin exchange-traded fund (ETF) providers.

The service, dubbed Gemini Fund Solutions, provides wealth managers with trade execution, clearing, custody, and other capital market services tailored to their needs on a single platform.

“There are a multitude of crypto funds coming to the global markets by a variety of methods, massively expanding the number of institutions bringing crypto products to their investors,” said Gemini’s global head of business Dave Abner. “Offering them an all-in-one solution is a way to help issuers to support this rapidly-growing trend.”

Two Canadian bitcoin ETF providers, Purpose Investments and Evolve Funds Group are two existing Gemini Fund Solutions clients, among others. Their bitcoin ETFs, launched recently, cumulatively manage more than $500 million worth of assets.

Some other Gemini Fund Solutions clients include Canadian crypto fund managers 3iQ, CI Global Asset Management, Galaxy, and Ninepoint Partners. They cumulatively manage around $2 billion worth of assets in bitcoin and ether, said Gemini.

© 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

• Avon Ventures is a digital asset venture capital firm based in Boston, Massachusetts, and affiliated with FMR LLC, the parent company of Fidelity Investments
• Led by Sachin Patodia, the fund’s main area of focus to date has been geared toward companies that are enabling infrastructure that will help grow the ecosystem and capture value for digital assets
• In total, the firm’s active portfolio consists of at least 11 startups across seven verticals, which The Block has mapped out

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Meerkat Finance, a decentralized finance project, has just said it has been drained by $31 million worth-of crypto assets due to a hack. But on-chain data shows it may not as simple as that.

The team behind Meerkat Finance, a yield farming pool running on the Binance Smart Chain that went live just one day ago, claimed in its official Telegram channel around 9:00 UTC on Thursday that its smart contract vault was compromised. 

The project was subsequently drained by about 13 million BUSD and about 73,000 BNB, which in total are now worth $31 million. The funds were further transferred to multiple new blockchain addresses.

On-chain data shows that the supposed hacker(s) drained the funds by altering Meerkat’s smart contract that contains the project’s vault business logic via using the original Meerkat deployer’s account. 

That suggests that either the private key of the Meerkat deployer was compromised or this is self-directed by the project. What’s also raising eyebrows is that the website of Meerkat has been taken down. At the same time, Meerkat Finance’s twitter account has also been deleted.

A Binance representative said in the exchange’s official Chinese Telegram channel that they have noticed the abnormality of the Meerkat project and is working with auditing firms Certik, PeckShield and Slowmist to investigate. 

The representative further added a link for victims of the “Meerkat Finance rug pull” to report issues and stay up to date with the development.

It appears that victims have formed a “Meerkat_Rugpull” chat group on Telegram to post updates on the issue with 135 members already.

© 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.

Malta-based crypto and blockchain investment group Cryptology Asset Group has led a $30m Series B investment in Nextmarkets, the neo-broker headquartered in Cologne, Germany.

Cryptology invests alongside acclaimed British fund manager Alan Howard, who is an active backer of crypto businesses.

Nextmarkets facilitates retail trading in a wide range of financial instruments, including stocks and cryptocurrencies. The money will be used to accelerate the platform’s growth, after its recent expansion into the United Kingdom, Portugal, the Netherlands, France, Spain and Italy.

Cryptology was founded by German financier Christian Angermayer’s famile office Apeiron Investment Group.

“We are just at the very beginning of a new retail boom on stock markets. However, the crisis of confidence towards other neobrokers in connection with the Gamestop phenomenon has shown how important it is to choose the right partner,” said Angermayer.

Angermayer is a well-known figure in Europe’s venture capital scene, with wide-ranging interests. He is currently working on a $200m biotech blank-cheque company, has made big bets on psychedelics and, according to the Financial Times, played a key role in brokering SoftBank’s $1.1bn investment in disgraced payments business Wirecard.

Cryptology, which counts Galaxy Investment Partners CEO Mike Novogratz as an adviser, trades on several German exchanges including Börse Düsseldorf, Gettex and Tradegate – and is exploring an international listing to open access to new investors.

© 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.