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Cryptocurrency prices were little change alongside other risk assets ahead of Federal Reserve Chair Jerome Powell’s speech this afternoon at the Economic Club of Washington.

Bitcoin was trading at $22,962 at 10:05 a.m. EST, up about 0.4% over the past day, according to TradingView data. 

BTCUSD chart by TradingView

Ether rose 0.4%, up to $1,638. Binance’s BNB gained 0.3%, Ripple’s XRP lost 0.5%, and Solana’s SOL traded flat.

Chair Powell’s annual sit-down with Carlyle Group’s David Rubenstein is “something the market is not pricing in fully,” according to QCP Capital’s market update, which said it it was impossible to tell if Powell’s view of markets was hawkish or dovish at the FOMC press conference last week.

“Hopefully … [the] interview will clear things up for everyone,” QCP said. “Especially his view on financial conditions, and whether he thinks the rally has gotten out of hand.”

Crypto stocks and structured products

The Nasdaq traded down, with the 30-stock index down 0.4% and the S&P 500 dropping 0.2%.

Coinbase shares shed 5.7% to trade around $70 by 10:05 a.m. EST, according to Nasdaq data. 

Silvergate was down about 8% to just under $18. 

Block fell about 0.8% to trade below $82, while MicroStrategy dropped over 1.6% to $277.

© 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.

A former Coinbase product manager pleaded guilty on Tuesday to wire fraud charges in a criminal case brought against him. 

The Justice Department indicted Ishan Wahi in July, alongside his brother and friend, in connection with an insider trading scheme to front-run listings of new tokens on Coinbase. 

The guilty plea may moot a legal argument in separate civil charges brought by the Securities and Exchange Commission as to whether the nine tokens in question are securities. Lawyers for Wahi filed a motion to dismiss that case last night. The agency said Wahi tipped off his friend and brother about which tokens were going to be listed for trading on Coinbase — and in the process made over $1 million. That case is still ongoing, pending a decision in the motion to dismiss. 

Nikhil Wahi, the brother of the ex-Coinbase manager pleaded guilty in September to a wire fraud conspiracy charge.  

David Miller, a shareholder at Greenberg Traurig, LLP, representing Ishan Wahi, declined to 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.

The Bank of England, the UK’s central bank, launched its long-awaited digital pound project, pitching the potential to create a new payment system and form of money. 

The potential digital currency would be issued solely by the central bank, with households and businesses able to hold the currency in a digital wallet accessible via smartphones or cards, a consultation document published on Tuesday said. 

”A UK central bank digital currency – a ‘digital pound’ – would be a new form of digital money for use by households and businesses for their everyday payments needs,” Chancellor of the Exchequer Jeremy Hunt, and Bank of England Governor Andrew Bailey said in a statement. 

The document is meant to solicit public comment and the report’s authors stressed several times that any digital currency plans were still at an early stage and might not be needed depending upon how the payments landscape evolved. If there is political and public demand to move forward then a prototype technology would be designed and tested before moving to a pilot project, the document said.

According to the proposal, wallets would be anonymized on the central bank’s ledger to address privacy concerns and the digital currency would non-programmable, meaning authorities can’t control how people spend their money.

The BoE also proposes an initial limit on the amount any individual could hold of up to £20,000, in order to manage the risks of deposits flowing out of the banking system.

Even if it did progress, building the necessary infrastructure would take several years to complete, the report said. 

The BoE also published a separate working paper on technological design considerations such as privacy, security and resilience.

There is now a four-month consultation period for the public to submit responses.

© 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.

Technology giant Dell will join the likes of Google, FIS and Abrdn on the governing council of the enterprise network Hedera, a distributed ledger technology that uses a hashgraph consensus mechanism.

“Now you’re seeing a whole industry start to grow, lots of investment,” said David Frattura, senior director of technology strategy at Dell. “And for us, it becomes more and more serious for us to pay attention and focus on this.” 

As a part of the governing council, Dell will run a consensus node, which is used to determine transaction ordering. Members of the governing council also manage the software related to the network. 

“The node was actually part of the learning exercise we’re going through,” Frattura said. “We’re doing this to understand policy implications, processes. What does it take to be a part of a permissioned public ledger and then, for our IT, how do we actually operationalize this? I can go into all the glorious details, but it takes a lot.” 

Dell also intends to leverage the Hedera network within applications, but that’s still early days. 

“As far as any use case, I think it’s a little premature,” Frattura said. “As we get our steam rolling, maybe later this year we’ll see some more, but right now, let’s just get on the council.” 

‘Scale at its core’

“Like Hedera, Dell has innovation and scale at its core,” Bill Miller, co-chair of the membership committee for the Hedera Governing Council, said in a statement. “Dell’s insight and decades of computing experience, will bring a great deal of value to Hedera Governing Council.” 

Hedera appealed to Dell because the solution has been designed for a wide range of use cases and has a strong community of industry heavyweights behind it, Frattura said. 

Researchers at University College London found Hedera to be the most sustainable proof-of-stake network compared to others like Algorand, Cardano, Ethereum, Tezos and Polkadot. The focus on ESG appeals to companies such as Dell that are looking to explore how technology can be utilized to help enterprises address environmental and social goals. 

Several other industry players are also leveraging Hedera’s network including IBM, which has incorporated the Hedera consensus mechanism into its Hyperledger Fabric product, while digital workflow company ServiceNow is integrating Hedera into its Now platform. 

“The reality is we’re looking at this as a technology specific point of interest for us,” Frattura said. “It’s not about being a crypto exchange, it’s about how does this technology solve problems for enterprises. And for us, as a company, how can we potentially leverage it to better serve our customers and improve our processes and potentially build products.” 

© 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 miners Hut 8 and US Bitcoin (USBTC) are merging to form a new company called Hut 8 Corp, which will be based in the United States.

Hut will have a total self-mining capacity of 5.6 EH/s, according to a press release. The new company will have access to 825 megawatts across six sites with self-mining, hosting and managed infrastructure operations.  Shares of Hut 8 were up +2.9% in pre-market on Nasdaq.

“Our established track record of creating shareholder value through organic growth and strategic acquisitions while maintaining a balance sheet-first approach has positioned us perfectly to advance our growth trajectory through this business combination,” said Hut 8 CEO Jaime Leverton, who will stay in that role at the new company.

The merger is pending court and regulatory approvals, and will be put to the vote in a special meeting of Hut 8 shareholders — also requiring consent from USBTC stockholders. This is expected to happen in the second quarter.

Meanwhile, Hut 8 will give USBTC a bridge loan ranging from $6.0 to $6.5 million.

“During the interim period, we plan to cover our operating costs through a combination of selling the Bitcoin we mine, selling from our stack and/or exploring various debt options, as agreed under the terms of the Business Combination Agreement,” Leverton also said.

Hut 8 is a public company currently trading on Nasdaq and the Toronto Stock Exchange, and the new company’s common stock will require approval for listing on those exchanges.

According to the plan, shareholders of Hut 8 will get 0.2 of a share of common stock for each Hut 8 share, while stockholders of USBTC will get 0.6716 of a share for each or each share of USBTC capital stock That means that “existing Hut 8 shareholders and USBTC stockholders will each collectively own, on a fully-diluted in the money basis, approximately 50% each of the stock of the Combined Company,” the statement said. 

While there’s been consolidation in the mining industry during the current bear market, it has mostly been in asset acquisitions. US Bitcoin, for instance, recently bought bankrupt Compute North’s 50% share of a 280-megawatt wind power facility in Texas.

© 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 crypto community is stepping up to help victims of the tragic natural disaster in Turkey by opening a multisig wallet on BNB Chain for earthquake support. So far, over $170,000 in donations have been made, predominantly in the stablecoin BUSD.

Turkish rock star Haluk Levent asked his 6.7 million Twitter followers if he should open a crypto account for people to deposit donations to the non-governmental and non-profit organization Ahbap, also known as the Dude Association. 82.9% of those responding to the poll selected “open a crypto account, bro.”

Co-founder of web3 analytics platform Lytera, Baki Er, jumped on the idea, calling it “the moment we’ve all been waiting for,” referring to Ahbap as the “most trusted charity in Turkey” and encouraging the community to donate to the multisig. Famous digital artist Murat Pak also offered to help the cause, explaining he was trying to put together an NFT campaign for Turkey and Ahbap.

The tragic 7.5 magnitude earthquake — the worst Turkey has witnessed since 1939 — has also affected Syria, Cyprus, Jordan, Lebanon, Iraq, Georgia and Armenia, with over 5,000 dead.

© 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.

Robinhood will report its fourth quarter results on Wednesday, with the company expected to hit its highest quarterly revenue figure to date.  

The online brokerage, which gained popularity during the meme-stock era as a leading venue for buying and selling crypto, is expected to report revenue of $396 million for the fourth quarter, according to the average estimate compiled by FactSet. That compares to $363 million recorded a year earlier. 

Although the firm’s monthly active users (MAU) are expected to have declined with transaction-based revenue remaining flat, overall revenue is expected to have increased due to a significant rise in interest-based revenue that should come in at $160 million, down from $128 million in the previous quarter. Most of that revenue comes from interest that Robinhood charges its customers for securities lending and margin accounts.  

The company is expected to report a net loss of $131 million for the quarter, compared to a loss of $175 million in the previous one. The lower figure is mostly anticipated because of cost-cutting measures taken by the firm, which shaved its headcount by approximately 23% over the summer, and 9% in the spring. 

Crypto-based transaction revenue is expected to have fallen to $50 million, down slightly from $51 million in the previous quarter.

“Crypto is becoming less important”

While crypto became critical for Robinhood’s growth during the peak of the meme-stock era, . Dan Dolev, senior analyst at Mizuho Securities, thinks that it’s “kind of over now.”

Robinhood, he said, is “much less volatile or susceptible to crypto movements than it was twelve months ago.” 

Other products that are exciting include its retirement account, its equities and options trading platform, and its brokerage cash sweep program, Dolev said, nothing that it’s “becoming a bank, basically.”

Still, customers continue to flock to the firm’s crypto-based products. In September, for example, Robinhood launched its crypto wallet to a waitlist of 10,000 users.

And in December, CEO Vlad Tenev said that his firm had gained from the collapse of crypto exchange FTX. “These events weed out the weaker companies that have invested less in risk management and compliance,” he said at the time, adding that the firm had “no direct exposure.” 

Robinhood has a buy recommendation from Dolev, who said that in his eyes crypto products are a “necessary evil.”

“There’ll be ups and downs,” Dolev said, “but I think overall their trajectory is very good.”

© 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.

Ethereum Name Service (ENS) DAO delegates have voted to sell 10,000 ether ($16.5 million) from the DAO’s treasury to fund the project’s activities for the next 18 to 24 months.

The vote ended with 89% of all participants in favor of the plan, according to figures from Tally. Major ENS personalities who supported the vote include founder Nick Johnson and ENS Foundation chair Brantly Millegan.

The ENS DAO will now proceed to sell 10,000 ETH in exchange for USDC. These funds will come from the project’s spendable treasury, which is denominated fully in ether. By selling 10,000 ETH, the proposal aims to reduce the DAO’s exposure to ether.

This trade will take place via CoW Swap. The DAO hopes to earn at least $13 million from the sale, increasing the DAO’s USDC balance to above $15 million.

There was some debate over how the tokens should be sold. The proposal stated a single swap of the 10,000 ETH tokens for USDC. Some USDC delegates argued in favor of breaking down the sale into smaller units. They also suggested that the DAO should employ a dollar-cost averaging technique to get the best value out of the sale.

Ultimately, the DAO has gone for a single swap strategy. The reason for this is that a phased sale process would have required delegates to vote for each stage, said Johnson on the DAO forum.

The bulk of the funds raised will go toward covering the daily expenses incurred by ENS Labs. The Singapore-based ENS project developer receives a daily stream to the tune of $11,500 USDC from the DAO. Over two years, this spending bill will reach $8.4 million.

The funds raised will also be used to support the DAO’s core working groups, of which ENS DAO has three. The budget proposed could see these working groups claim as much as $6 million in the next two years.

© 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.

Decentralized exchange aggregator CoW Swap suffered a major hack, with the attacker making off with over $180,000 in funds, according to security firms PeckShield and BlockSec.

As a decentralized exchange (DEX) aggregator, CoW Swap’s goal is to provide users with the best prices across decentralized exchanges. However, a hacker targeted its trade settlement smart contract, GPv2Settlement, to drain funds.

PeckShield estimated that the attacker drained roughly $180,000 worth of DAI from CoW Swap before routing the funds through Tornado Cash to obtain 551 BNB. The attack targeted the GPv2Settlement, a trade settlement smart contract that is part of the CoW Swap alpha (GPv2) protocol.

It appears that the attacker tricked the owner of the GPv2Settlement contract into approving the use of the SwapGuard, which is normally not permitted.

According to PeckShield, SwapGuard is a second contract used by CoW Swap to assist and validate swap results. This approval may have contributed to the success of the attack, as SwapGuard allows arbitrary function calls. In the context of smart contracts, arbitrary function calls allow anyone with access to the contract to execute any function within its code.  

A BlockSec spokesperson told The Block that there is a function in the contract SwapGuard that can transfer money to any address. The attacker invoked the public function to transfer the DAI into their address.

The CoW Swap team said that the settlement contract that was exploited only has access to the fees collected by the protocol in a week and that the hacker was unable to directly access user funds.

© 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.

File hosting giant WeTransfer and blockchain platform Minima will begin rolling out an NFT minting service in March.

The NFTs will be offered through a secure peer-to-peer network, allowing the transfer of an NFT from person-to-person without third-party intermediaries, according to a company release. 

Anyone who uses the free Minima cooperative can create their own assets to share on the network, and will also allow creators to collect royalty payments – a levy paid back to creators upon any sale or resale of an NFT. Users will need to run a Minima node to use the service. 

Witht the involvement o WeTransfer, it’s the latest example of a large establishment tech company dabbling in NFTs. Recent data suggests that 70 million people send around 2 billion files every month through WeTransfer. E-commerce giant eBay has also made a concerted play for the NFT space in recent months.

“This partnership will explore the practical use of NFT technology, [and] be a test case to demonstrate the potential of wider adoption of this innovative digital tool,” said Hugo Feiler, CEO of Minima.

© 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.