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Cryptocurrency prices dipped over the past 24 hours. Altcoins experienced a sharp sell-off, with Polygon’s MATIC down about 5% as the project announced job jobs. 

Bitcoin was trading at $24,600 by 8 a.m. EST, down 0.8%, according to TradingView data. The leading cryptocurrency by market cap is still up about 13% over the past week, reaching its highest point since last June on Thursday. 

BTCUSD chart by TradingView

Ether slipped 1.5% to $1,677, and Binance’s BNB dropped 1.3% to $312. Altcoins were trading lower, with Polygon’s MATIC down 5%, Cardano’s ADA down 2.2%, and Solana’s SOL falling 4.1%. Memecoins were also in the red. Dogecoin and shiba inu lost 1.3% and 2%, respectively. 

Polygon Labs announced on Tuesday it has cut about 100 jobs, or 20% of its total staff. 

Despite the price fall, most cryptocurrencies have been green over the past seven days. The latest rally in digital assets occurred alongside a drop in equities.

The correlation between bitcoin and equities has fallen from highs at the beginning of February, according to The Block’s data. Bitcoin’s correlation to the Nasdaq fell to 0.81 from 0.94. 

Looking ahead this week, the U.S. Federal Reserve’s meeting minutes loom large on the horizon.

“The Fed minutes may have taken on extra significance, given recent CPI and NFP data, both of which were well above expectations,” said Adam Farthing of market maker B2C2, adding that “signs of variance from the recent Fed meeting would indicate a higher likelihood of the Fed raising their forecast for peak rates.”

© 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.

Curio Research raised $2.9 million in seed funding as it sets out to change the mechanics of how users interact with blockchain-based games, beyond the financial incentives it says have driven the space so far. 

Founded in 2022 by engineers and gamers Kevin Zhang and Yijia Chen, Curio’s on-chain games are powered entirely by smart contracts. These enable a new way of multiplayer computation that allows all participants to contribute to what they call a “shared universe” of code and data. This, they say, leads to games built almost entirely by players.

“Despite the tremendous growth and innovation we have seen in the on-chain gaming space, we haven’t seen that many innovations that would truly differentiate the on-chain gameplay experience from that of traditional games,” said Chen in a company statement.

The round was led by Bain Capital Crypto, with participation from TCG Crypto, Formless Capital, Smrti Lab, Robot Ventures and various angel investors, according to the release.

The money will be used mainly to expand the team, with a focus on hiring blockchain engineers, a micro-economist, game designers and a client engineer, who will work on how the game looks and feels. Curio will also look to hire an art director and a community manager. Zhang and Chen are both fluent in Chinese, so there is the potential for expanding their search beyond the English-speaking market and into China. 

Treaty’s social contracts

The company’s first game, Treaty, is an on-chain strategy game where users can write and deploy smart contracts. These so-called “Treaties” allow them to draft rules around how they interact with other players in the game, almost like a social contract. 

Players are essentially on-chain diplomats, a company blog post states.

A treaty could be a NATO-style agreement where upon joining and membership payment you’re forbidden from attacking other committee members. Or a national bank that issues USDC-backed tokens, forcing your trading partners who’ve signed to strictly use your national currency next time they swap in an in-game marketplace. It could be a profit-sharing agreement, letting guild leaders tax guild members every time they harvest resource ERC-20 tokens while ensuring members’ safety by issuing them advanced weaponry. It could even be a marketplace itself that restricts swap access to designated treaty members and awards special game-specific bonuses.

A screenshot of gameplay

Players are free to build any tooling, infrastructure or application they wish, such as custom asset marketplaces, lending primitives, guilds and more. This will involve developing the backend with user-generated content and composability in mind, the team said. 

“The type of content that the user created is in some ways no different than the type of content that we are creating. And they’re both treated equally as part of the core game experience,” said Zhang in an interview.

To be sure, getting to a point where users building content without specific coding skills will not be easy. How the tooling evolves will be a gradual process, will be partially dependent on how the tooling for the Ethereum blockchain develops, and will partly shape the future of the game.

“You can take what other people have done and improve it,” said Zhang. “I think the remixing there is really powerful.”

NFT building blocks

“It’s very likely that we’ll have NFTs, which are the building block of the game,” Chen added. These NFTs could be a source of revenue, bringing in money through primary and secondary sales. The team is also thinking about having a tax on in-game transactions to bring in cash, but that would also be down the line. 

So far, Curio has had between 200 to 300 players trial the game, with the feedback gleaned informing its next iteration. 

In addition to developing games, Curio is building in-house custom infrastructure that will allow on-chain games to be more accessible.

For now, Curio is a fully-crypto game, with no fiat onramp built in. This could be added at a later date, the team said. A native token is not currently part of the roadmap. 

Curio’s backing follows a flurry of funding for projects in the NFTs and gaming subsector — the most popular subsector in terms of percentage of total funding since August 2021, according to The Block Research.

Last month, crypto gaming platform Oh Baby Games raised a $6 million seed round as it emerged from stealth. In the same month, Neopets Meta, the web3 version of the popular virtual pet game, also raised a $4 million round.

© 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.

Composable Finance Chief Technology Officer Karel Kubat said he is leaving the company over a lack of transparency and what the now-former executive called “suspicious transactions.”

“I, Karel Kubat, am resigning from Composable Finance,” he wrote, adding that the company’s “financial statements have not been provided to me or the community. The community and I have no current overview of Composable Finance financial health.”

In another tweet, Kubat said that, “Enforcing the law is left up to the authorities. We’re a decentralized community however, and simple, unethical management is enough for me to leave.”

Composable Finance confirmed Kubat’s departure in its own Twitter post. “We’re sorry to announce that Composable Finance has parted ways with our former CTO,” the company posted. “While this naturally prompts questions and concerns, our team is committed to addressing these questions and alleviating any concerns.”

Kubat’s exit and allegations follows months of turmoil in the world of crypto, which has reeled from several company collapses accompanied by allegations of financial wrongdoing and self-dealing. 

In his posts discussing the departure from Composable, Kubat also expressed concern the decentralized finance organization is engaging in “possible trading with company funds and suspicious transactions.”

Composable did not immediately respond to requests for comment. The company said it would hold a question and answer discussion on Twitter.

© 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.

The major crypto debacles of 2022 caused a spike in retail crypto trading, new data from the Bank for International Settlements suggests. However, the data suggests that large investors sold their assets at the expense of smaller investors attempting to diversify their assets following moments of crisis.

“These patterns highlight the need for better investor protection in the crypto space,” the report from BIS, an institution that financial regulators use as a resource to inform their own thinking, concludes. The Swiss-based bank for central banks reiterated previous calls for global coordination in regulating digital assets, and warns against increased exposure to the global financial system. 

“Options include banning specific crypto activities, containing crypto, regulating the sector or a combination of these. Containment may prevent risks in crypto from spilling over to the real economy and traditional financial system,” the report concludes. “The appropriate mix of measures will be needed to promote market integrity, investor protection and financial stability.”

An analysis of retail investor returns on bitcoin for an approximately seven-year period starting in 2015 found that the median retail investor lost about half their investment by Dec. 2022, despite the major jump in price that occurred from 2015 to 2021. The data is based on crypto exchange app activity and downloads from August 2015 to mid-December 2022 in 95 countries, as well as on-chain data. 

The price of the original cryptocurrency led to spikes in users across platforms, the study found: In the time between August 2015 and November 2021, when bitcoin’s price peaked at $69,000, the global average daily active users bounced from 100,000 to more than 30 million.

“However, most global investors have probably lost money on their crypto investments. These losses could be exacerbated by the fact that larger, more sophisticated investors tended to sell their coins right before steep price declines, while smaller investors were still buying,” the report reads. That may further concerns already held by regulators around market manipulation and insider trading in digital assets. 

After the collapse of Terra and Luna in May, and the collapse of the FTT token and exchange FTX, bitcoin, ether and other assets fell by more than 20% within a few days. But daily active users spiked on major exchanges Binance, Coinbase and FTX during both those crises, which BIS concludes was due to users trying to, “weather the storm by adjusting their portfolios away from owning tokens under stress towards other cryptoassets, including asset-backed stablecoins.” 

Disclaimer: Beginning in 2021, Michael McCaffrey, the former CEO and majority owner of The Block, took a series of loans from founder and former FTX and Alameda CEO Sam Bankman-Fried. McCaffrey resigned from the company in December 2022 after failing to disclose those transactions. 

© 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.

Syncracy Capital Co-Founder Daniel Cheung has filed a lawsuit alleging he was scammed out of nearly one million dollars.

In a lawsuit filed in the U.S. District Court of Central California’s Western Division, Cheung alleges that Sean Full, a Los Angeles resident, took funds from him to invest in cryptocurrencies and decentralized finance projects, but then never returned the money. Cheung says he tried repeatedly to recoup his funds but was unable to.

Cheung claims that Full was meant to set up an investment portfolio and would allow Cheung to control the funds. And Cheung alleges that Full, without his consent, invested his money into an “unspecified, and presumably unregistered, ‘delta neutral yielding farming’ fund.”

The lawsuit also alleges that Cheung sent Full nearly one million dollars but his losses “likely” total more than $2.7 million.

© 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.

FTX Japan, the Japanese subsidiary of the collapsed crypto exchange FTX, will resume crypto and fiat withdrawals from Feb. 21.

Withdrawals will be processed via the Liquid Japan web platform, it said in a company statement. FTX acquired Liquid in 2022.

Customers with assets on the exchange will have to confirm their balance. Users without an account on Liquid Japan will need to open one to withdraw their assets, the company added. 

FTX Japan said that it had contacted all users with funds on the platform. The company said these users have been informed of the withdrawal procedure. FTX Japan urged users to be mindful that the process could be slow, given the volume of pending requests.

FTX Japan paused crypto and fiat withdrawals in November 2022 after the collapse of the FTX crypto exchange and its sister trading firm Alameda Research. The platform was initially asked to suspend its operations in early December 2022. FTX Japan, however, secured an extension to this order until March 2023. The platform is looking to announce the resumption of other services, according to Monday’s statement.

Disclaimer: Beginning in 2021, Michael McCaffrey, the former CEO and majority owner of The Block, took a series of loans from founder and former FTX and Alameda CEO Sam Bankman-Fried. McCaffrey resigned from the company in December 2022 after failing to disclose those transactions. 

© 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.

Animoca Brands, a web3 investor focused on gaming and metaverse, invested an undisclosed amount in EthSign, a decentralized electronic signature platform.

The investment will help EthSign continue building its token management platform called TokenTable and launch it publicly, EthSign said Monday. TokenTable is currently live in beta and allows users to manage the issuance and distribution of tokens.

While the investment amount wasn’t disclosed, EthSign co-founder Potter Li told The Block that the firm’s total funding to date now stands at $14 million. Since EthSign has previously raised $12.65 million in two funding rounds, that would suggest Animoca invested $1.35 million in the company. Animoca Brands declined to comment on the size of the investment.

TokenTable goes live

EthSign’s TokenTable went live last week in beta. It lets web3 founders, investors and employees manage token holdings on chain.

The current token management process is tedious, according to EthSign. Founders have to manually distribute and track token allocations, while investors and employees have to keep track of dates of token unlocks, it said. TokenTable, on the other hand, leverages blockchain technology for record-keeping, fund transfer and agreement enforcement, EthSign said.

“TokenTable puts terms of legal agreements into the smart contract, thereby ensuring that the investment terms of every agreement signed on the platform are executed — this is a major step in bolstering the rule of law with the rule of code,” according to EthSign.

Animoca Brands itself seeks to benefit from TokenTable, being an investor in more than 380 firms and a frequent recipient of token allocations.

“Many projects use excel spreadsheets to calculate and track token allocation and unlocking, which is inefficient, not secure, and highly inconvenient,” Yat Siu, co-founder and chairman of Animoca Brands, said in a statement. “EthSign’s TokenTable addresses these challenges to enable a new standard of operational efficiency for web3 businesses.”

TokenTable currently supports Ethereum and Polygon and has plans to expand to other Ethereum virtual machine-compatible chains and Layer 2 networks in the future, said Li.

EthSign was founded in 2019 in Singapore. Its first product, Signatures, is seen as a decentralized version of DocuSign. It allows users to sign and manage agreements on-chain via crypto wallets.

© 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.

Renegade, a start up building a new type of decentralized exchange, emerged from stealth with a $3.4 million seed round, led by Dragonfly Capital and former AngelList CEO Naval Ravikant.

Other investors in the round included Balaji Srinivasan and Lily Liu, Tarun Chitra from Robot Ventures, Marc Bhargava from Tagomi and Lev Livnev from Symbolic Capital Partners, according to a company statement.

Renegade is developing an on-chain version of a dark pool — a trading venue common in traditional financial markets — based on multi-party computation (MPC) and zero-knowledge proofs. 

Although the 18-page whitepaper makes it look fiendishly complicated, Renegade has a simple aim: to allow sophisticated traders to trade at better prices, without alerting the wider market to their intentions. 

In traditional equities markets, dark pools allow institutional investors to buy or sell large quantities of stock with less chance of the price reacting to their monster orders. This is in sharp contrast to DeFi, where all trade information is available for anyone to see.

Swimming in the dark pool

Renegade’s tech is designed to improve price execution in DeFi by preventing behavior such as front-running, sandwiches and statistical arbitrage. It aims to provide a trustless platform for trades that avoids the dangers of current decentralized exchanges, the company said. As such, it will anonymously cross order flow directly at midpoint prices.

© 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.

Fireblocks is trialing a hybrid custody solution that its clients can use to safeguard their crypto even while trading on exchanges, according to a Financial News report on Friday.

The proposed platform has been conceived as an “off-exchange” service. This platform will enable clients to keep their crypto assets in custody while trading on exchanges. The funds will only move out of the custody platform when the trades need to be settled. Huobi and Deribit have been added as partners in the project.

Fireblocks Senior Vice-President of financial markets Stephen Richardson said the arrangement could help customers minimize their exposure to crypto exchanges. Richardson added that institutional traders were wary of keeping crypto tokens on exchanges following FTX’s November collapse, the report added.

Fireblocks joins a growing list of firms offering such hybrid custody services. Institutional crypto custodians like Copper and Fidelity Digital Assets also have such off-exchange platforms as part of the service suite. Binance Custody also has a similar product that enables clients to mirror their assets held in cold storage to their trading accounts. The assets do not leave the custody platform until the trade is settled.

© 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.

Hong Kong’s regulator proposed a relaxation of rules banning retail investors from buying crypto tokens from licensed platforms on Monday.

The prohibition had been the source of debate in the city’s legislature, with lawmakers last year pushing the regulator to relax the rules because investors were already using offshore and unregulated platforms such as FTX to place trades.

The regulator also announced all crypto trading platforms operating in Hong Kong need to be approved by the Securities and Futures Commission by June 2024, or else close down its operations. The SFC “will not hesitate to take enforcement action,” the regulator suggested in a new consultation. 

Crypto exchange Huobi will set up a new platform to apply for the SFC’s license, advisor Justin Sun confirmed. 

A Hong Kong crypto hub?

The government has been behind changes to the city’s crypto licensing rules with officials keen to position Hong Kong as a financial center for digital assets. The city’s central bank only last week issued the world’s first tokenized green bond, raising around $100 million to invest in clean energy technology and related projects.

Hong Kong last year announced  new mandatory licensing provisions for centralized crypto service providers, which come into effect on June 1.  The SFC said Monday it was looking “to strike a better balance between investor protection and market development.”

The regulator also suggested that only the largest tokens will be available for retail traders. The consultation covers token admission requirements and outlines that “eligible large-cap virtual assets” need to fulfil certain market criteria issued by at least two independent index-providers.

The regulator also asked exchanges to explain which crypto derivative products they want to offer investors and why. Currently, licensed exchanges in the city are not allowed to sell crypto derivatives, a rule the regulator said it might change.

© 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.