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Alex Botte of Runa Digital Assets explains why crypto isn’t ready for passive investing.

Even so, it remains the dominant centralized exchange in the industry.

The lack of clear crypto regulation risks sending companies overseas. Congress must bring regulatory clarity to crypto market structure, defining the bounds and appropriate legal treatment of crypto securities, commodities, and exchanges, say Jack Solowey and Jennifer J. Schulp.

Relevant House committees decided to meet together to figure out how to move forward with legislation, but one key Democrat pushed back on the need for special crypto rules.

Stablecoin issuer Tether said it had a net profit of $1.5 billion in the first quarter, more than double what it reported in the previous period, according to its latest attestation report. 

“We are thrilled with the tremendous success Tether has achieved in Q1 2023, with our reserves’ surplus reaching an all-time high of $2.44B,” Paolo Ardoino, CTO of Tether, said in a statement shared with The Block exclusively. “Our net profits for the quarter were $1.48B, a testament to the strength and stability of our platform.”

Tether’s consolidated total assets amounted to at least $81.8 billion as of May 9, while its consolidated total liabilities amounted to $79.4 billion, per the statement, reflecting excess reserves of at least $2.44 billion — an all-time high. The excess reserves are much higher than Tether’s Q4 numbers of $960 million.

Tether reveals bitcoin and gold allocations for the first time

Tether included additional categories into its reserves reporting for the first time. These include bitcoin, physical gold, overnight repo, and corporate bond allocations. It holds $1.5 billion worth of bitcoin and $3.3 billion worth of precious metals.

Tether said the majority of its investments, about 85%, are being held in cash, cash equivalents, and other short-term deposits. Gold and bitcoin represent around 4% and 2% of the total reserves, respectively, it added.

Source: Tether Q1 2023 attestation report by BDO Italia

“We continue to monitor the risk-adjusted return on all assets within our portfolio on an ongoing basis and expect to make further changes as the overall economic environment changes and the market cycle progresses as a part of our normal, ongoing risk management processes,” Ardoino said.

“Looking ahead to Q2, we have an extremely positive outlook and remain committed to transparency, which is why we have introduced new categories in the reserves’ breakdown in our quarterly report to provide even greater transparency to our users,” he added.

USDT total supply 

Tether’s USDT is the largest stablecoin in the market, with a supply of over 83 billion tokens, according to The Block’s Data Dashboard.

© 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.

Bitcoin gained on Wednesday after U.S. inflation data for April came in below estimates. Prices rose 0.4% month-on-month and 4.9% year-on-year, with the annual rate slightly below consensus estimates of 5%.

Core inflation, which excludes food and energy, rose 5.5% over the year — slightly below Nomura estimates of 5.6%. 

The leading cryptocurrency by market cap was trading around $28,100 by 8:50 a.m. ET, up over 1% since the data release, according to TradingView data. Ether was also buoyed by the figures and jumped on the news, trading around $1,800.

Market encouraged by inflation data

While the market has taken encouragement from the figures, inflation has now been above the U.S. Federal Reserve’s 2% target for 24 months, Trakx’s Ryan Shea told The Block ahead of the report, noting that it will weigh heavy on the Fed as it considers any potential rate cuts. 

© 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.

An MEV bot run by a pseudonymous crypto individual named after a jailed sex offender made $34 million in arbitrage and sandwich attacks in the last three months, according to a report by MEV tracking site EigenPhi.

A person going by Jaredfromsubway.eth — a reference to the former spokesperson for sandwich chain Subway who was sentenced to 15 years for sex crimes — created the bot in February. It quickly found traction by sandwiching other crypto users and outperforming rival MEV bots, a term for blockchain-based high frequency trading algorithms. 

As the bot has become more active, its transactions can now be found in more than 60% of Ethereum blocks, according to EigenPhi.

“Their success can be attributed to skill, strategy and tech,” a pseudonymous crypto developer called Nox said on Twitter this week. “Jared’s bot identifies more MEV opportunities and executes transactions faster than competitors.”

A sandwich attack is where a fast crypto user observes a pending transaction about to be processed on the blockchain. They then bundle that transaction with two of their own — one before the transaction and one after it — and submit that bundle to a blockchain validator who processes it, for a fee. The two transactions are designed to manipulate the market in a way that makes the original transaction less profitable and in turn boosts the attacker’s own profits.

Jaredfromsubway’s MEV bot

Jaredfromsubway.eth’s bot has run a total of 238,000 attacks with more than 106,000 victims, according to EigenPhi. It has generated revenue of $40 million and paid $6 million in transaction fees, leaving it with proceeds of $34 million.

The bot’s success appears to be driving out rivals. In the Flashbots Discord, an MEV bot owner called Yannick said that Jaredfromsubway.eth was willing to pay a higher percentage of the proceeds from the attacks to validators. “I was bribing 97% for months until he appeared and bribed 99.9%,” they said.

Yannick noted that Jaredfromsubway.eth’s attacks were effective because they would sandwich several tokens in a single transaction and add arbitrage opportunities at the end of the bundles. Yannick said that, in response, they were planning to shut down their own MEV bot.

© 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.

Officials are optimistic finance ministers will formally agree on laws allowing the sharing of information on crypto and NFT holdings between tax authorities next week.

The blockchain, called Alpha, is said to be built mainly to support decentralized trading.

Roblox’s growth engine kept on chugging along during the first quarter of the year with increases in daily users and sales of its in-game digital currency, “Robux.”

The metaverse-y game platform, a social gathering place for many players, reported $774 million in “bookings,” a 23% increase when compared to the previous year, according to the company’s earning statement.  Roblox classifies “bookings” as the revenue generated when users purchase “Robux,” an in-app currency with which users can customize their avatars.

Daily active users rose to 66.1 million, a 22% increase when compared to the same period in 2022, the company also said. Roblox CEO David Baszucki said the number of users was an “all-time high” and that the goal was to hit 1 billion daily active users. 

“The momentum in our business demonstrates the success of our creator community as they bring their visions to life on Roblox, attracting an ever-growing global user base that spans all ages,” said Baszucki.

Revenue also increased to $655.3 million, a 22% year-over-year, Roblox 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.