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Category Archive : Crypto News

Bored Ape whales cash out $10 million using Blur liquidity

Bored Ape Yacht Club NFT holders who run research and trading firm Degenz Finance cashed out to the tune of more than 6,000 ETH, or $10 million, on Wednesday, capitalizing on the increased liquidity afforded by NFT marketplace Blur. 

BAYC was the top collection for volume as a result, with half of that coming from just two traders, according to an update posted on the Degenz website today. The sale was orchestrated by anonymous traders known as Mando and OSF.

“It was a tough and emotional decision, and certainly in no way a reflection or view on Yuga Labs which we remain bullish on, holding Otherside, Mutants, Sewer Passes, $APE and also being angel investors,” a note on the website reads. “The liquidity provided by Blur is insane at the moment.”

“We’ve always asked ourselves, how will we ever monetise this position without greatly impacting the market,” they added.

On Monday, NFT twitchers watched as the 71 BAYC NFTs were listed on Blur for around 5,545 ETH. The floor price currently sits at 77.4 ETH. 

 

© 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: Lucy Harley-McKeown

Ark Invest adds another $13 million worth of COIN

Cathie Wood’s Ark Invest made another large COIN purchase, this time coming in at over $13 million. Wood’s fund has added over $30 million in COIN shares this month alone. 

Ark added 181,972 Coinbase shares to its Ark Innovation ETF and 31,547 shares to Ark Next Generation Internet, according to its latest trade filing. Shares in the crypto exchange closed down 1.4% to about $61 Wednesday. Based on the price at the close, Ark’s most recent purchase cost just over $13 million.

Wood had purchased over $21 million worth of shares in the past month, despite COIN’s dipping about 6.8% since the beginning of February — and mounting regulatory headwinds facing the exchange.

COIN was up 1.3% in the early session, trading close to $62 by 7:30 a.m. EST, according to TradingView data. 

Coinbase’s fourth-quarter revenue beat estimates on Tuesday, analysts said. Interest income from USDC for the quarter came in at $146 million, up more than 100% from the previous quarter, even as full-year revenue came in 57% lower than in 2021. 

© 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: Adam Morgan McCarthy

Spotify starts testing ways to access music via NFTs

Spotify has started rolling out a function called token-enabled playlists, which allows users who hold specific NFTs to access exclusive content and interact with the music-hosting app differently.

It is working with a startup called Overlord, which tweeted on Wednesday that the pilot would be available in the U.S., UK, Germany, Australia and New Zealand. Overlord said it would only be accessible on Android and to people holding Creepz NFTs. 

Through holding an NFT, users can access a holder-curated playlist. Spotify confirmed the partnership in a tweet reply.

The Bored Ape Yacht Club derivative music group Kingship, created by Universal Music Group, also said it would participate in the trial. A playlist will be made exclusively available to Kingship Key Card NFT holders. 

This isn’t the first time Spotify has dabbled in NFTs. In May last year, it allowed a group of artists — including Steve Aoki and The Wombats — to promote their own NFTs on the app. 

© 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: Lucy Harley-McKeown

SEC and New York regulators push back on Binance.US’s acquisition of Voyager

The U.S. Securities and Exchange Commission (SEC), the New York Department of Financial Services (NYDFS) and the Attorney General of the State of New York have objected to Binance.US’s amended plan to acquire crypto lender Voyager.

The objections were filed as part of Voyager’s bankruptcy proceedings in the Southern District of New York on Feb. 22.

Binance.US entered into a good faith agreement with Voyager to acquire the crypto lender’s assets in December 2022. The exchange’s winning bid of $1 billion beat other industry players such as CrossTower and Wave Financial. The acquisition is still subject to regulatory approval, however.

Securities law violations

The SEC objects to the debtor’s plans to sell crypto assets as part of its rebalancing plan and has concerns about the security of assets on Binance.US’s platform.

“Here, the transactions in crypto assets necessary to effectuate the rebalancing, the re-distribution of such assets to account holders, may violate the prohibition in Section 5 of the Securities Act of 1933 against the unregistered offer, sale, or delivery after sale of securities,” said Therese Scheuer, senior trial counsel at the SEC, in the filing.

The regulator also raised concerns over whether Voyager could demonstrate that it complies with federal laws with this plan, questioned whether the acquisition is “just a $20 million sale of Voyager’s customer list to Binance.US” and also said the plan did not include adequate detail on the impact of potential regulatory action on the purchaser, Binance.US. 

“Regulatory actions, whether involving Voyager, Binance.US or both, could render the transactions in the plan impossible to consummate, thus making the plan unfeasible,” said Scheuer in the filing.

Discrimination against New Yorkers

Meanwhile, the NYDFS alleges the current plan “unfairly discriminates” against New Yorkers by delaying their recovery of assets compared to other creditors within the same class and criticized Voyager for illegally operating in the state of New York.

“Even putting aside for the moment the debtors’ past violations of law, the debtors’ plan as proposed unfairly discriminates against these New Yorkers by materially delaying their recovery compared to creditors in the same class and by not allowing them the option to recover cryptocurrency instead of liquidated assets,” said Kevin Puvalowski, acting executive deputy superintendent for NYDFS, in the filing.

This isn’t the first time the regulators have pushed back on the deal. Federal and state agencies previously objected to the sale, citing the possibility that assets could be moved offshore and more challenging to recover on behalf of consumers. 

The ad hoc committee of equity holders has also submitted an objection to the amended acquisition plan.

Several regulatory actions have been taken against crypto companies as of late. Crypto exchange Kraken settled with the SEC over the failing to register the offer and sale of its “crypto asset staking-as-a-service program” last week, paying a $30 million fine. Lender Nexo is set to close down its earn program in the U.S. following a settlement with the SEC.

© 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: Kari McMahon

Discord scam sees The Block come knocking with fake ‘Article Writer’ promises

“Hello there, I am Rummer. from theblock.co where I work as a Article Writer. Our team is intrigued by your NFT project and we would like to request permission to write an article about your project.”

That’s the Discord message that greeted Elton Penguin, a pseudonymous project lead for the Noundles NFT collection, on Sunday, purporting to come from, well, me.

Unfortunately for Elton, however, that beautifully crafted missive hadn’t been penned by me at all. Someone had set up a fake Discord server for The Block and fake profiles for several of our staff, including Frank Chaparro, Lucy Harley-McKeown and Editor-in-Chief Sarah Kopit.

Fake accounts

Elton wasn’t alone. Dozens of people had been contacted by fake accounts purporting to be employees of The Block.

Exactly what these imposters were after wasn’t immediately clear, though the consensus from those targeted was that the efforts at chumminess would result in an eventual phishing attempt.

“My take is they want to get me to feel good and tell them about the project. And then social engineer me for a bit to feel like it’s safe to click links. Then hack my stuff,” said Jake Baker, another victim, who runs the Twitter account behind the Shaq Gives Back NFT collection.

For the record: The Block has no official presence on Discord.

‘Malicious site’

“The attackers are likely attempting to compromise existing Discord accounts,” said Sacha Tememe, a security engineer at The Block. “The verification link to join their server leads to a malicious site which may try and steal a user’s authorization token, essentially granting the attackers full access to the user’s account.”

A Discord spokesperson said it “takes the safety of all users seriously” and the account impersonating me has now been deleted.

“Our community guidelines prohibit users from coordinating or participating in malicious impersonation of an individual or an organization, and our Trust & Safety team takes action when we become aware of this kind of behavior,” they added. 

Discord is a messaging and chat tool founded in 2015, where users can build communities — called servers — around a specific activity. After first finding an audience among video gamers, the app has more recently become one of crypto’s social networks of choice. It’s rare to find a DAO or NFT project that doesn’t have an affiliated Discord server.

There is an irony here, of course. In targeting projects like Noundles and Shaq Gives Back with the promise of coverage in The Block, the hackers have inadvertently given them coverage in The Block. In this article.

More irony

The second irony is that in attempting to report out this story, I found myself sending Twitter DMs that — on reflection — sounded distinctly scammy.

“How should I refer to you? Do you go by Elton Penguin or do you prefer to be called by your real name in the article?” I found myself typing, just an imagined step or two away from asking for his private keys.

Elton had some advice for me on that front.

“Just work on making your grammar worse, then you’ll have it nailed.”

© 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: Andrew Rummer

3AC’s NFT collection to be put up for sale by liquidator

A collection of prized NFTs purchased by Three Arrows Capital (3AC), the failed crypto hedge fund, will soon be put up for sale.

3AC’s liquidators, Teneo, notified interested parties about the sale on Feb. 22, according to a filing.  

Christopher Farmer, a senior managing director at Teneo, wrote that the purpose of the sale “is to realize the value of the NFTs for the purposes of the liquidation,” adding that it is expected to commence within 28 days of the notice.

The NFTs on sale are separate from the Starry Night Capital portfolio, which was assembled by the pseudonymous collector VincentVanDough on behalf of 3AC, wrote Farmer. Teneo took possession of the wallet holding Starry Night’s NFTs in October last year, with the help of VincentVanDough. But the Starry Night portfolio is “presently subject to an application before the Eastern Caribbean Supreme Court in the High Court of Justice in the British Virgin Islands,” Farmer wrote in the filing.

The assortment of NFTs put up for sale nevertheless represents a potential treasure trove for collectors. There are a dozen CryptoPunks, 30 of Tyler Hobbs’ Fidenzas and 17 of Dmitri Cherniak’s Ringers — all blue-chip collections. Zerion suggests the value of the collection is roughly $6.4 million, though the estimate is based on floor prices, and therefore the figure may ultimately be higher.

3AC splashed 1,800 ETH (more than $5.6 million at the time) on Ringer #879 last year. The hedge fund’s co-founder and CEO Su Zhu said of the purchase at the time: “We like the Goose.” Cherniak tweeted today that the goose is now being liquidated.

Once vaunted as one of the top investors in the crypto market, 3AC imploded spectacularly last year, ultimately filing for bankruptcy in July. It owes creditors at least $3.5 billion.

© 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

Indian web3 gaming studio Kratos raises seed round at $150M valuation, acquires IndiGG

Kratos Studios, a web3 gaming startup based in India, reached a valuation of $150 million in a seed funding round of $20 million.

Accel led the round, and other investors included Prosus Ventures, Courtside Ventures, Nexus Venture Partners and Nazara Technologies, Kratos said Thursday. The gaming startup also acquired IndiGG, a sub-DAO of Yield Guild Games DAO via a token swap, meaning existing INDI token holders will be swapped to new Kratos tokens.

“The new token will be launched in 12 months,” Kratos co-founder Manish Agarwal told The Block in an interview. “The current INDI token holders will be swapped for the dollar value they initially invested so that they don’t have to mark down their investment,” he said. Agarwal is the former CEO of Nazara, India’s first publicly listed gaming company.

IndiGG raised $6 million in funding in January 2022 from investors including Sequoia Capital India, Lightspeed Venture Partners, Variant Fund, Jump Capital, Animoca Brands and Alan Howard. Kratos was founded last September, and as part of the IndiGG acquisition, will continue to build the IndiGG brand as a gaming DAO, said Agarwal.

Expansion plans

“We believe after Polygon, IndiGG could be the next multi-billion dollar company, bringing billions of ad revenue to the exchequer of India and getting millions of earners in India and South Asia,” Agarwal said. “We will then aim to take that playbook to Africa, Southeast Asia, and some countries in the Middle East as well.”

Kratos’s business model brings game developers and gamers onto its platform, earning revenue from both sides. “We create on-chain profiles of gamers in the form of cohorts, and we let game developers design quests for gamers,” Ishank Gupta, another co-founder of Kratos, said in the interview. “Game developers pay us for listing their quests and gamers pay us for validation of their quests.”

Kratos also helps gamers with the off-ramping process that converts on-chain assets into fiat currency in their bank accounts, said Gupta.

Kratos launched the IndiGG app earlier this week and it aims to increase the number of participants on both sides with more games and more gamers, Gupta said.

Argarwal and Gupta said they will work closely with Polygon co-founder Sandeep Nailwal and YGG co-founder Gabby Dizon toward the mission of “building the largest gaming DAO in the world.”

© 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: Yogita Khatri

Forsage founders indicted in $340 million Ponzi scheme 

The founders of Forsage, a decentralized finance crypto investment platform, were indicted for their alleged roles in a $340 million “global Ponzi and pyramid scheme.” 

A federal grand jury returned an indictment charging four Russian nationals for their role at the platform: Vladimir Okhotnikov, Olena Oblamska, Mikhail Sergeev and Sergey Maslakov. 

All four were charged with conspiracy to commit wire fraud and could face 20 years in jail if convicted. 

“The defendants aggressively promoted Forsage to the public through social media as a legitimate and lucrative business opportunity, but in reality, the defendants operated Forsage as a Ponzi and pyramid investment scheme that took in approximately $340 million from victim-investors around the world,” the Justice Department said in a press release. 

The indictment comes months after the Securities and Exchange Commission charged nearly a dozen people for their alleged roles at Forsage.

The defendants are accused of coding and deploying smart contracts that “systemized their combined Ponzi-pyramid scheme” on the Ethereum blockchain, the Binance Smart Chain and the Tron blockchain. Court documents say that when an investor put their funds into Forsage, the smart contract automatically diverted them to another investor.

More than 80% of Forsage investors received fewer ETH than they invested, and more than 50% never received a payout, according to the Justice Department.

© 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: Stephanie Murray

New York Attorney General sues CoinEx crypto exchange over registration

New York Attorney General Letitia James is suing cryptocurrency exchange CoinEx for allegedly failing to register with the state.  

“CoinEx offered, sold, purchased and effected transactions in cryptocurrencies that are commodities and securities, without having been registered as a commodity broker dealer and a securities broker or dealer in New York,” according to a petition filed in the Supreme Court of the State of New York on Wednesday.  

New York has been an active player in the crypto space with lawsuits against others, including Alex Mashinsky, the former CEO of crypto lender Celsius and in the past, actions against Bitfinex and Tether. The petition alleged that CoinEx “represented itself as an exchange” while not being registered with the state.

The exchange also failed to comply with a subpoena served in January, according to the petition.  

The attorney general said some of the crypto offered by CoinEx counted as commodities and securities under the Martin Act, a New York securities law, because “they represent investments of money in common enterprises with profits to be derived primarily from the efforts of others”.

The attorney general’s office listed four tokens that included AMP, the LBRY token (“LBC”), LUNA and the Rally (“$RLY”). The petition seeks to stop CoinEx from engaging in unauthorized activities in state and wants to have New York IP addresses blocked from using exchange.

 James is also seeking  “a full accounting of New York accounts and all fees received from New York customers.”

CoinEx did not immediately respond to a request for comment.  

© 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: Sarah Wynn

Discord scam sees The Block come knocking with fake ‘Article Writer’ promises

“Hello there, I am Rummer. from theblock.co where I work as a Article Writer. Our team is intrigued by your NFT project and we would like to request permission to write an article about your project.”

That’s the Discord message that greeted Elton Penguin, a pseudonymous project lead for the Noundles NFT collection, on Sunday, purporting to come from, well, me.

Unfortunately for Elton, however, that beautifully crafted missive hadn’t been penned by me at all. Someone had set up a fake Discord server for The Block and fake profiles for several of our staff, including Frank Chaparro, Lucy Harley-McKeown and Editor-in-Chief Sarah Kopit.

Fake accounts

Elton wasn’t alone. Dozens of people had been contacted by fake accounts purporting to be employees of The Block.

Exactly what these imposters were after wasn’t immediately clear, though the consensus from those targeted was that the efforts at chumminess would result in an eventual phishing attempt.

“My take is they want to get me to feel good and tell them about the project. And then social engineer me for a bit to feel like it’s safe to click links. Then hack my stuff,” said Jake Baker, another victim, who runs the Twitter account behind the Shaq Gives Back NFT collection.

For the record: The Block has no official presence on Discord.

‘Malicious site’

“The attackers are likely attempting to compromise existing Discord accounts,” said Sacha Tememe, a security engineer at The Block. “The verification link to join their server leads to a malicious site which may try and steal a user’s authorization token, essentially granting the attackers full access to the user’s account.”

A Discord spokesperson said it “takes the safety of all users seriously” and the account impersonating me has now been deleted.

“Our community guidelines prohibit users from coordinating or participating in malicious impersonation of an individual or an organization, and our Trust & Safety team takes action when we become aware of this kind of behavior,” they added. 

Discord is a messaging and chat tool founded in 2015, where users can build communities — called servers — around a specific activity. After first finding an audience among video gamers, the app has more recently become one of crypto’s social networks of choice. It’s rare to find a DAO or NFT project that doesn’t have an affiliated Discord server.

There is an irony here, of course. In targeting projects like Noundles and Shaq Gives Back with the promise of coverage in The Block, the hackers have inadvertently given them coverage in The Block. In this article.

More irony

The second irony is that in attempting to report out this story, I found myself sending Twitter DMs that — on reflection — sounded distinctly scammy.

“How should I refer to you? Do you go by Elton Penguin or do you prefer to be called by your real name in the article?” I found myself typing, just an imagined step or two away from asking for his private keys.

Elton had some advice for me on that front.

“Just work on making your grammar worse, then you’ll have it nailed.”

© 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: Andrew Rummer


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