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The Justice Department’s fraud department has begun probing Silvergate’s handling of accounts for Sam Bankman-Fried’s firms, Bloomberg reported, citing unnamed people familiar with the matter.

The fraud probe is focused on potential criminal wrongdoing in allowing FTX’s deposits – including user funds – into Alameda’s accounts, according to the report. 

The porous relationship between the jumble of firms tied to Sam Bankman-Fried came to light amid ongoing bankruptcy proceedings. Silvergate’s role as bank to the failed crypto empire has placed it under increased scrutiny. 

Senators have also repeatedly questioned Silvergate’s conduct, calling the bank’s role in managing funds related to FTX an “egregious failure.”

 Silvergate has long operated in that market and is one of the biggest players providing such a bridge for dollar deposits.

© 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 settled around $23,570 at 5:20 p.m. EST after climbing as high as $24,100 earlier in the day, according to TradingView data. It’s up about 0.4% over the past day following the Federal Reserve’s interest rate decision.

BTCUSD chart by TradingView

Ether swung throughout the day, rising to a high of $1,710 around 1:30 p.m EST only to fall to $1,660 toward market close.

Polygon’s MATIC rose 4.3% over the last 24 hours, and Avalanche’s AVAX was up 8%. Uniswap’s UNI was up 6%, and BNB was also up 3.3%.

The rising tide began on Wednesday following the Federal Reserve’s decision to raise interest rates by 25 basis points. Because the FOMC decision was “incrementally dovish,” it has partially validated the thesis, among some speculators, that “bitcoin has bottomed,” FRNT Financial CEO Stephen Ouellette said.

Crypto stocks and structured products

Crypto-related stocks were up significantly today, trading in tandem with the broader crypto market.

Crypto-friendly bank Silvergate Capital shares had a wild day, rising as much as 38% after a filing revealed that the asset manager State Street had increased its stake in the company to 9.3%. Shares then declined 21% in post-market trading after Bloomberg News reported that the company was facing a probe in the U.S.

Coinbase rose significantly today, increasing 23.9% at market close. The spike was driven by the news yesterday that a class-action lawsuit filed against the company in 2021 by the U.S. District Court for the Southern District was dismissed.

The proposed suit alleged that Coinbase facilitated the sale of unregistered securities. In dismissing the case, the judge didn’t actually determine whether those digital assets were securities, but decided that Coinbase didn’t actively solicit investments through its marketing materials.

MicroStrategy rose about 9% in regular trading before falling 3% in post-market hours after the company reported results. Jack Dorsey’s Block rose 5.3%.

© 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.

Cross-chain messaging platform Connext released a new upgrade called Amarok that allows developers to build cross-chain applications, a move that could improve the on-chain user experience. The upgrade also allows for decentralized finance transactions such as liquidity providing, which could solve liquidity fragmentation issues.

“Today, when you search for cat videos on YouTube, you don’t need to know anything about Google’s complex distributed database infrastructure. You just interact with the app,” Connext’s founder and CEO Arjun Bhuptani said, highlighting the importance of cross-chain applications.

While there are several other bridges in the industry working on the same issue, Connext differentiates itself by having better security and trust assumptions, Bhuptani said.

“Cross-domain communication is a difficult-to-understand topic with a large amount of misinformation & propaganda spread by bridge projects, and high potential for disaster if done incorrectly,” he said.

Cross-chain messaging is the term used to describe how blockchains or applications communicate and send transactions to each other, with the bridging sector gaining lots of attention recently. Uniswap’s cross-chain governance proposal received the most attention “in recent memory,” Uniswap Foundation’s Executive Director Devin Walsh said earlier this week.

© 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.

Mastercard’s former NFT product lead Satvik Sethi has resigned from his position — and minted his resignation letter as an NFT. 

Sethi worked as the NFT product lead at Mastercard for the past two years. However, he noted that he left the company due to harassment, emotional distress and other poor working conditions in a multipart Twitter thread. 

He minted his resignation letter as an NFT on the marketplace Manifold, stating, “100% of this goes to survival. This isn’t gambling money.”

The NFT of Sethi’s resignation from Mastercard as NFT product lead.

The NFT costs 0.023 ETH to mint ($39). Sixteen of the NFTs have been minted so far, netting Sethi an estimated $624. He is now working on joincircle, a web3-focused social platform which Sethi founded and heads as CEO. 

Mastercard has made several moves in the crypto space within the past two years. The firm partnered with leading crypto exchange Binance to release a crypto-to-fiat card in Argentina in addition to launching tools to prevent crypto-based financial crimes. 

Regarding Sethi’s departure, a spokesperson from Mastercard told The Block, “We are aware of the concerns raised by Mr. Sethi. We take them seriously and they will be looked into. We will do so with the continued respect for his privacy and will not have a further comment at this time.” 

© 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.

MicroStrategy, the software firm better known in recent years for its bet on bitcoin, reported a net loss of $249.7 million for the fourth quarter of 2022 compared to a loss of $90 million in the same period of the prior year.

Analysts had been expecting net income of $10.7 million, which would have been the first quarterly profit since the fourth quarter of 2020. The company’s shares declined 2.9% in post-market trading, according to TradingView.

Revenue exceeded analyst expectations, coming in at $132.6 million compared to $134.5 million in the same quarter last year. 

MicroStrategy noted that the net loss had been affected by digital asset impairment charges of $197.6 million, with the company writing down the value of its bitcoin as its price declined over the period. The company said it sold 704 bitcoin for cash proceeds of $11.8 million in the fourth quarter that resulted in gains of $0.9 million. 

Overall, MicroStrategy increased its total bitcoin holdings to 132,500 worth $1.8 billion at the end of 2022, compared to 130,000 at the end of the third quarter. The company said cumulative impartment losses for its holdings totaled $2.2 billion. 

“Our corporate strategy and conviction in acquiring, holding, and growing our bitcoin position for the long term remains unchanged,” CFO Andrew Kang said in a statement. Co-founder Michael Saylor tweeted earlier in the day that “Bitcoin is a mission.”

While bitcoin has risen 43.5% so far this year to $23,709, it declined about 65% in the period covered in MicroStrategy’s latest earnings release. 

© 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 mining stocks tracked by The Block were higher on Thursday, with 15 gaining and three declining.

Bitcoin rose 1.2% to $23,830 by market close.

Here is a look at how the individual miners performed today.

© 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.

OpenSea has launched a suite of tools to let people or brands launch their own NFT projects. 

The tools aid deploying smart contracts across all supported EVM chains, configuring drop mechanics and personalizing landing pages. This move followed OpenSea’s efforts to create distinct tools for an augmented mint launch, such as immersive minting, scarcity trackers and royalty enforcement tools. 

The company said that it will allow certain creators to use the one-stop shop minting tools over the coming weeks. It will be adding more features. 

“Our vision is to expand this product so that anyone can easily drop collections across any chain on OpenSea with an immersive, safe storefront — without needing access to robust technical resources or expertise,” OpenSea said.

OpenSea is one of the most popular NFT marketplaces for Ethereum-based digital assets, bringing in 56% of the total NFT trading volume in January of this year, according to The Block’s Data Dashboard. OpenSea partnered with U.S. record label Warner Music Group to facilitate music NFT launches. 

© 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.

Shares of Coinbase have been rallying since Wednesday afternoon after a federal judge dismissed a lawsuit against the company.

The stock was up by roughly 21%, trading at around $78.7 as of 1 p.m. EST Thursday, according to data from TradingView.

Coinbase Chart by TradingView 

The proposed class-action suit, filed in the U.S. District Court for the Southern District of New York in 2021, alleged that Coinbase facilitated the sale of unregistered securities.

A federal judge dismissed the case on Wednesday, according to a report from Bloomberg. Although the judge didn’t actually determine whether those digital assets were securities, he decided that the exchange didn’t actively solicit investments through its marketing materials.

Crypto markets generally soared following the Federal Reserve’s decision to raise interest rates by 25 basis points on Wednesday. Bitcoin is trading at around $23,896, up by 4.1%.

Although some investors believe bitcoin has bottomed,  “market conditions continue to suggest Bitcoin/crypto traders remain uncertain of the future with BTC futures mostly flat,” Stephane Oullette, CEO of FRNT Financial, told The Block.

© 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 year kicked off with NFT trading volumes giving digital-asset enthusiasts a reason to cheer.

For the second consecutive month, transactions grew compared with the previous month. In January, Ethereum NFT marketplaces — as usual led by OpenSea — totaled $796.3 million, a month-on-month increase of 47%, according to data compiled by The Block Research.

The total number of trades also rose slightly from December to January, clocking in at 2.21 million transactions versus 1.92 million the previous month.

Blue chip maturation

There’s no getting around it. Last year was the pits across the digital-asset landscape for collectors and collections alike as prices dropped dramatically. Even blue-chip NFT collections like Bored Ape Yacht Club, Azuki and Doodles, were negatively affected.  

But these top NFT brands are trying to turn the page in 2023. So far, so good it looks like.

As part of a next phase in the evolution of their exclusive, token-gated NFT ecosystem that has featured prominent holders like Justin Bieber, Mark Cuban and Snoop Dogg, the creator of Bored Ape Yacht Club, Yuga Labs, dropped a NFT collection called the Sewer Pass. BAYC holders could mint one of the NFTs free of charge while non-holders are able to purchase a Sewer Pass on the open market.

The Sewer Pass mint generated more than $1.3 million in trading volume one hour after launch. Since then, in about two weeks, Sewer Pass trading has climbed to nearly $50 million worth of ETH, according to OpenSea data.

Owning a Sewer Pass allows holders to play a BAYC-themed video game called Dookey Dash. Scoring high in the game will eventually unlock some future benefits; the specifics of which are still under wraps. 
Yuga Labs’ Sewer Pass NFT trading volume since launching. Source: OpenSea.

Pursuing its own strategy, Doodles advanced the anticipated “Doodles 2” initiative, which allows holders to personalize the look of the profile-picture-like assets belonging to the collection. Using what’s called a “Dooplicator” Doodles owners can alter “attributes like body, hairstyle, emotion, apparel and accessories,” the company said.

In the wake of the launch, Doodles NFT sales volumes soared to a January daily high of $2.8 million, according to CryptoSlam. That was a massive jump from Doodles’ worst daily trading volume for January, which was $121,000.
Doodles trading volumes. Source: CryptoSlam.

Azuki also expanded with its creation and launched a virtual city called Hilumia. The introduction of Hilumia was timed to celebrate Azuki’s one-year anniversary. On the day of the announcement the project’s trading volume spiked 86%, according to the NFT data tracker CryptoSlam.

“Game of Thrones” drop fizzles

Despite being ridiculed by many on Twitter for its level of artistic quality, a drop based on HBO’s popular fantasy series “Game of Thrones” sold out in seven hours.  

The show’s favorite tagline, “Winter is coming,” proved apropos as the collections trading volume and then cooled significantly.
“Game of Thrones” January trading volumes. Source: OpenSea.

NFT lending pops off

NFT lending hit all-time highs in January, according to data from Dune Analytics. As NFTgators notes, 17,900 ETH was leant out from 4,399 loans.

The NFT lending ecosystem also saw a remarkable increase in January, with an all-time high in terms of monthly loan volume and number of loans. A total of 17.9K ETH was lent from 4,399 loans.@DuneAnalytics dashboard by @richardchen39, @1confirmation. pic.twitter.com/12dtlNI3SD

— NFTgators ???? (@NFTgators) February 1, 2023

Who said crypto lending was 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.

Charlie Munger, vice chairman of Berkshire Hathaway and longtime crypto critic, used an op-ed in the Wall Street Journal published late Tuesday to call for a ban on cryptocurrencies in the U.S. Munger also praised China’s industry crackdown.

“A cryptocurrency is not a currency, not a commodity, and not a security,” he wrote. “It’s a gambling contract with a nearly 100% edge for the house.”

The 99-year-old blamed the “wretched excess” in the sector on a public that doesn’t fully understand the subject matter, as well as a lack of regulation. It’s not the first time Munger’s has been critical, and Berkshire Hathaway CEO Warren Buffet is also well known for his unfavorable opinion of Bitcoin.

Munger referred to China’s ban on crypto as one of two precedents that could “guide us into sound action.” 

‘Thank the Chinese’

“What should the U.S. do after a ban of cryptocurrencies is in place?” Munger continued. “Thank the Chinese communist leader for his splendid example of uncommon sense.”

The op-ed was widely shared on social media, with many differing opinions.

“I’ve always been a huge fan of Charlie Munger – but why does he want to be Crypto Voldemort on this?” Ash Bennington, senior host and crypto editor at Real Vision, a financial TV channel, said in a tweet.

Stephen Diehl, a software engineer in London, said he agreed with Munger.

“Crypto is so toxic that we simultaneously have both rapacious American capitalists and the Chinese communist party finally agreeing on something for once — banning it,” he tweeted.

While bitcoin is well known for its volatility, the cryptocurrency has beaten Berkshire Hathaway shares over the past five-year period, rising nearly 170% compared to a gain of 45%, according to data from TradingView.

© 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.