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Author: Nikhilesh De
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Author: Jack Schickler
RIT Capital Partners Plc, a £3.6 billion ($4.6 billion) UK investment trust, marked down the value of investments in several high-profile crypto startups earlier this year.
The trust, founded by Jacob Rothschild, had invested tens of millions of pounds in crypto firms since 2021, in addition to backing numerous tech startups. Its 2021 annual report shows positions of £27.8 million, £33.2 million and £20.8 million in Animoca Brands, Kraken and Paxos, respectively. In accounts for the following year, published in February, those positions had shrunken to £14.2 million, £16.2 million and £16.2 million.
It is possible that part of RIT’s stakes were sold off, but unlikely given that the three startups in question are privately held.
In a note in the 2022 accounts, RIT chairman Sir James Leigh-Pemberton wrote, “Over 2020 and 2021 private investments added around 34% to total NAV… In 2022, the sharp correction in public markets, and in particular tech markets, has meant that we have written down a portion of these significant gains.”
He also wrote that RIT’s private investments are, “by design, multi-year investments, which we are not forced to sell to fund redemptions.”
RIT, Kraken and Paxos did not immediately respond to a request for comment. A spokesperson for Animoca Brands declined to comment.
The news comes amid a broad reset in how investors value crypto startups, and indeed tech startups in general, after a period of exuberant venture capital investing in 2021 and 2022.
Yesterday, London-based Molten Ventures Plc de-valued its stakes in Revolut, the fintech and crypto business, and crypto security firm Ledger by 40% and 22%, respectively. Revolut was valued at a gaudy $33 billion when it last raised money in mid-2021.
In March, The Block reported that shares in numerous private crypto startups were being hawked at sizable discounts on Birel.io, a platform that specializes in secondary market transactions. Those startups included Alchemy, Blockchain.com, Chainalysis, Kraken, ConsenSys, Blockdaemon, CoinDCX and OpenSea. The discounts on offer were as high as 74% in some instances.
© 2023 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.
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Author: Ryan Weeks
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Author: Oliver Knight
New York-based digital assets platform Baakt is delisting Solana, Polygon and Cardano, citing regulatory uncertainty.
The company’s general counsel and secretary Marc D’Annunzio told Fortune it was taking action “until there is further clarity on how to compliantly offer a more extensive list of coins.”
The delisting decision follows the recent lawsuits filed by the U.S. Securities and Exchange Commission (SEC) this month against crypto exchanges Binance and Coinbase, in which the SEC alleged both platforms were offering unregistered securities to their customers, including Solana, Polygon and Cardano.
The SEC’s actions have also led to a reassessment of token listings by other crypto platforms. Last week, fintech app Robinhood announced it would end support for Solana, Polygon and Cardano on June 27 amid the regulator’s crackdown. On Tuesday, social trading platform eToro said it would delist Polygon, Decentraland, Dash and Algorand on its U.S. platform from July 12.
Bakkt previously delisted Algorand and Decentraland in April, following an SEC lawsuit against Bittrex. It continues to support eight other cryptocurrencies, including Bitcoin, Ether, Dogecoin, Litecoin, USDC and Shiba Inu.
© 2023 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.
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Author: Lyllah Ledesma
The team behind Frax Finance, known for creating the Frax stablecoin, has unveiled its strategy to introduce a Layer 2 blockchain: Fraxchain.
The team said the network will be directed towards creating a smart contract platform with a strong emphasis on decentralized finance. “Fraxchain essentially represents the culmination of the entire Frax ecosystem and all of the traction and usage that we’ve gained,” Frax founder Sam Kazemian told The Block.
The network is expected be ready by the end of the year. Fraxchain’s governance will be led by the holders of Frax Shares (FXS) tokens. The network will employ the use of the Frax stablecoin and Frax Ether, Frax’s liquid staking derivative, for transaction fees. Furthermore, fees generated by the roll-up network could be partly burned or redirected back to the Ethereum mainnet to be distributed among stakers of FXS governance token, Kazemian added.
Incorporating a Layer 2 rollup model in its design, Fraxchain will publish state roots to the Ethereum mainnet for securing the network.
Fraxchain will incorporate decentralized sequencers. These sequencers are specialized nodes responsible for ordering transactions into batches in a rollup network. They will be operated by any entity chosen via a governance vote. This feature, according to Kazemian, will differentiate Fraxchain from other Layer 2 solutions on Ethereum, which typically depend on a single sequencer.
“Fraxchain proposes a solution where sequencer roles can be auctioned off and rotated, creating a decentralized sequencer base. If a sequencer is forced to shut down, Fraxchain would allow the next elected sequencer to pick up from where the previous one left off,” Kazemian said.
© 2023 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.
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Author: Vishal Chawla
Crypto exchange Binance is under investigation by local authorities in France over the alleged illegal provision of crypto services and “aggravated money laundering.”
The news was first reported by Le Monde this morning. The report states that Binance has been under “preliminary investigation” by the financial judicial investigation service under the direction of authorities in Paris since February 2022. Paris’s public prosecutor’s office confirmed the report, Le Monde wrote.
The investigation concerns the alleged “illegal exercise of the function of service provider on digital assets (PSAN), and on the other hand facts of aggravated laundering, by competition with investment operations, concealment, conversion, the latter being carried out by perpetrators of offences who have generated profits,” the report stated.
Binance, which is also suspected of breaching KYC rules, has been registered as a PSAN in France since 2022. It counts Paris, alongside Dubai, as one of its regional hubs — and a considerable number of its thousands of staff are based in the area.
Binance said it has an on-site visit last week by local authorities. It claimed this was part of standard regulatory obligations.
“Binance invests considerable time and resources into cooperating with law enforcement globally. We abide by all laws in France, just as we do in every other market we operate. We will not comment on the specifics of law enforcement or regulatory investigations except to say that information about our users is held securely and only provided to government officials upon receipt of documented appropriate justification,” said a Binance spokesperson.
The news comes with the exchange also facing multiple lawsuits in the United States. Binance was sued by the Securities and Exchange Commission earlier in June for allegedly lying to customers and misdirecting capital. It had earlier been sued by the Commodity Futures Trading Commission, the derivatives regulator.
© 2023 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.
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Author: Ryan Weeks
Stablecoin issuer Tether did partially back its stablecoin with Chinese securities for a period of time, despite refusing to admit so at the time.
Tether held securities issued by companies including China Construction Bank Corp. and Agricultural Bank of China Ltd, documents released by the New York Attorney General show, according to Bloomberg.
For a while, there were a lot of rumors that Tether had backed its stablecoin with Chinese securities. While Tether remained silent on the issue, it denied in September 2021 that it held commercial paper issued by troubled Chinese real estate giant Evergrande.
In July, Tether said that, by that point in time, it didn’t hold any Chinese commercial paper — while refusing to acknowledge whether it had done so in the past.
At the time it criticized “naysayers who continue to spread falsities about its commercial paper holdings” and said they were wrong.
The documents were released due to a freedom of information request. They are part of the data gathered by the NYAG in its investigation of Tether, which resulted in a 2021 settlement and an $18.5 million fine.
Tether has since removed all commercial paper from the backing of USDT, the company claims.
© 2023 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.
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Author: Tim Copeland
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Author: Sandali Handagama
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