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The blue-chip NFT project Azuki said Friday that its Twitter account had been compromised, with apparent hackers posting two tweets that prompted users to claim virtual land. One tweet was pinned to the top of Azuki’s timeline for maximum visibility. 

The post scammers made on Azuki’s hacked Twitter account. Do not enter the website.

Azuki officials alerted followers of the scam and instructed people not to click any links. Azuki’s Head of Community & Product Manager, who goes by Dem, confirmed that the Twitter account was compromised on their personal account.

The incident comes just two days after Robinhood, a crypto-friendly investment app, saw its Twitter account compromised. Twitter and Azuki did not immediately respond to requests for comment from The Block. 

Azuki’s Head of Community and Product Manager confirming the hack on their personal Twitter account.

The unauthorized posts play on Azuki’s newly launched virtual world called Hilumia that is designed to be an expanding virtual city that combines physical and digital elements. 

The Block identified two wallets that appear to be associated with the scam posts, with one containing over 468 ETH ($782,000). 

© 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.

Crypto prices remain relatively steady, with most of the major coins flat or marginally higher. Silvergate sank after suspending a preferred dividend.

Bitcoin was trading at $23,000  by 11:50 a.m. EST, up 0.5% over the past day, according to TradingView data. The leading cryptocurrency by market cap has been trading within this range throughout the week.

BTCUSD chart by TradingView

Ether was down 0.3% to $1,588 in the same period, and Solana’s SOL dropped 0.6%. Meanwhile, Polygon’s MATIC surged as transactions on the network soared. Daily active users on Polygon rose over 8% in the past 7 days, according to Token Terminal.

Dog-themed meme coin floki inu soared in price following a community proposal that would burn $55 million worth of its tokens. The token jumped up 18% by 11:10 a.m. EST.

Crypto stocks

Silvergate dropped in early trading following an announcement that it would suspend payment on its 5.375% Fixed Rate Non-Cumulative Perpetual Preferred Stock, Series A. Analysts at KBW, led by Michael Perito, said they were surprised by the announcement.

Shares in the crypto-friendly bank were down 8.7% by 11:50 a.m. EST, according to Nasdaq data. 

SI chart by TradingView

Coinbase shot up 10% to trade over $58, while Jack Dorsey’s Block jumped 3.4% to trade at $84.10. MicroStrategy added about 1.4% to trade above $248.

© 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 New Jersey bankruptcy court judge has approved BlockFi’s request to offer bonuses to top staff.

“It offers the debtor and the employee an opportunity to move forward and maximize the estate,” Judge Michael Kaplan said in a hearing on Friday. “I’m happy to approve it going forward.”

The failed crypto lender previously said it is losing employees to other companies in a “war for talent,” including Walmart, Google and Block Inc. Eleven employees have left BlockFi since the firm filed for bankruptcy protection in November, lawyer Rush Howell said during the hearing, representing nearly 10% of the firm’s remaining workforce. 

“This was a perfect mix for potential attrition and unfortunately the debtors have seen that attrition,” Howell said. “It’s essential that the debtors institute these retention programs to keep critical workers with the company.” 

The retention program filed in court authorizes the BlockFi debtors to implement a program that would offer employees bonuses worth 42.5% or 9% of their base salary, depending on their role. The program could cost up to $10 million. 

During the hearing, BlockFi lawyers also acknowledged a redaction “snafu” that happened earlier this week. Lawyers mistakenly uploaded unredacted financial documents. The new figures prompted media to report that secret financials showed BlockFi had a $1.2 billion exposure to failed crypto exchange FTX — $200 million more than was previously known.

“What happened here is purely a mistake,” said lawyer Joshua Sussberg. “I want to be very clear there are no such secret financials.”

Sussberg said BlockFi’s numbers varied in court documents because one figure marked a loan from Alameda Research, which used FTX’s native utility token as collateral, down to zero.

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.

Gryphon Digital Mining is going public in a deal to buy Akerna Corp. in an all-stock transaction.

Privately-held Gryphon, which claims to be a carbon neutral bitcoin miner, will buy the publicly-traded cannabis software company, which in turn will sell its software business to POSaBIT Systems Corporation. The latter is a cannabis infrastructure payments provider.  

The deal comes amid tough times for miners, which have seen margins squeezed amid higher energy costs and lower bitcoin prices. Several, including Core Scientific, have filed for bankruptcy.

Upon completion of the deal, Gryphon equity holders are expected to own approximately 92.5% of the combined company and current Akerna equityholders are expected to own approximately 7.5%. The combined company is expected to continue to be publicly traded on Nasdaq.

© 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.

Trading giant Virtu Financial is still committed to the crypto market, chief executive Doug Cifu said during the company’s fourth-quarter earnings call. 

The market-making firm has traded across several exchanges and acted as a designated market maker for bitcoin exchange-traded funds in Canada.  

The meltdown of FTX and Alameda Research has not impacted the firm’s long-term plans to operate in the cryptocurrency space, with Cifu noting Virtu continues “to view crypto as a long-term growth opportunity.”

“In the aftermath of recent events, I’m proud to say that we manage the risk around the events of this quarter, as you would expect from Virtu,” Cifu added. “Although we had an approximate 8-figure fiat and coin balances deployed across several venues when the FTX news broke, we acted quickly and did not realize any material losses.”

Still, the company has reduced its activity in the space, according to co-president Joseph Molluso.

“We remain bullish on crypto as a growth area in the future and remain – and we remain excited about EDX, our joint venture,” Molluso said, referring to its investment in upstart crypto exchange EDX. 

The company reported revenue dropped 29.5% to $497.8 million for the fourth quarter compared to $705.6 million a year earlier. Net income totaled $39.6 million, down from $186 million in the prior year. Shares were up more than 2.5% at 11:05 am EST.

© 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.

Crypto derivatives exchange Gains Network has recorded $1.6 billion in trading volume on the Arbitrum blockchain one month after launch. Initially deployed on the Polygon network, Gains Network runs gTrade, a decentralized margin trading protocol. 

The Gains platform enables users to trade financial derivatives of various assets, including crypto tokens, U.S. stocks, and indices through smart contract-based trades. Since it has launched on Arbitrum,  Gains’ gTrade has generated about $1.1 million in fees on Arbitrum, distributed to those who stake the platform’s native token, GNS. 

GTrade has been driving significant activity on both the Arbitrum blockchain and the Polygon network, where it was first launched in late 2021. On the Polygon sidechain network alone, it has processed more than $23 billion worth of trading volume since October 2021.

To further drive activity, Gains Network recently launched a trading competition offering $100,000 in rewards for traders, which may have contributed to the recent spike in volume.

The GNS token was trading at $6.27 at 10 a.m. EST, up 11.5% over the past 24 hours, according to CoinGecko data. The token has seen a 40% increase over the past week, with a market capitalization of $173 million.

GNS chart by CoinGecko

Gains Network’s rise on the Arbitrum blockchain is particularly noteworthy as the network serves as a Layer 2 scaling solution for Ethereum, providing faster and cheaper transactions while maintaining the security and composability of the Ethereum network.

The platform has attracted significant user activity, particularly in the realm of derivatives trading protocols. With the rise of Gains, Arbitrum now has two popular derivative trading protocols. GMX was the first and has so far led the niche on the network.

Dwindling volumes 

The uptick in trading on the Gains Network comes as decentralized and centralized derivatives trading volumes have plummeted.

Decentralized trading volumes fell to about $44 billion last month from more than $107 billion in November, according to The Block’s data. Volumes have reached about $50 billion this month, well below the $180 billion registered in January 2022.

As for centralized derivatives, the picture is much the same. Bitcoin futures volumes plummeted to $386.6 billion in December, down 39% month-on-month. Volumes recovered somewhat this month and are currently above $580 billion, still well below last year when volumes reached $1.4 trillion in January.

The landscape is similar for ether futures and options as well. The drop in volumes wasn’t limited to the derivatives market, with spot volumes on centralized exchanges also declining. A possible explanation for the fall-off in centralized activity may have been the collapse of FTX in November, Carlos Gonzalez, a research analyst at 21.co, told The Block. 

Meanwhile, the ratio of decentralized to centralized exchange spot trade volume has increased to 14% from 12.7% last month. 

© 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.

Crypto miner Marathon Digital is forming a joint venture with FS Innovation in Abu Dhabi to create and operate mining facilities.  

The company said in a filing the initial project will consist of two digital asset mining sites comprising 250 MW. The new entity will be 80% owned by FSI and 20% owned by Marathon, and will cost an initial $406 million.

Marathon hasn’t previously owned the facilities where it operates, instead contracting with hosting providers. The mining industry has been struggling with high energy costs and the slumping price of bitcoin from a 2021 high. Many are highly indebted and some have filed for bankruptcy. 

Electricity costs about $0.081 per kilowatt hour for households in the United Arab Emirates, compared to $0.175 in the U.S., according to Globalpetrolprices.com.

Marathon declined to comment on the new venture.

Marathon closed out 2022 with $104 million cash after paying down all of its revolver borrowings.  

‘Significant progress’

Earlier this month, Marathon’s CEO Fred Thiel said the company made “significant progress” in increasing its hashrate while also moving to more sustainable sources.  

“We remain confident in our ability to scale Marathon into one of the largest and most energy efficient bitcoin mining operations globally,” Thiel said. “We have thousands of miners ready to be energized over the coming months, which we expect to more than triple our current production capacity to approximately 23 exahashes by mid-year.”

© 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.

Silvergate fell more than 6% before the open after announcing it suspended the payment of dividends on its 5.375% Fixed Rate Non-Cumulative Perpetual Preferred Stock, Series A.

The company said it is trying to preserve capital as it attempts to maintain “a highly liquid balance sheet with a strong capital position as it navigates recent volatility in the digital asset industry.”

Silvergate’s stock has been volatile this month after it reported a $1 billion fourth-quarter loss, and cut about 20% of its workforce. Crypto prices have been rising lately, but are still far from their 2021 peaks. The collapse of 3AC and FTX have led to ripple effects throughout the industry.

“We were surprised by the announcement, to be frank, as SI hadn’t previously indicated it was contemplating pausing the dividend payment in recent public commentary,” KBW analysts led by Michael Perito wrote in a note. “The bank indicated it still has more cash than deposits as of the date of the announcement (1/27), and we continue to have no liquidity concerns.”

The company said it “continues to maintain a cash position in excess of its digital asset customer related deposits,” and the board will re-evaluate the payment of quarterly dividends as market conditions evolve.

© 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.

OpenZeppelin, a provider of smart-contract security solutions, has released the results of its latest security audits on zkSync, a zero-knowledge, proof-based scaling solution developed by Matter Labs. The audits reportedly uncovered a number of issues, most of which have been fixed.

Of the 45 issues found in OpenZeppelin’s two previous audits, 40 have been resolved by the Matter Labs team, including two critical and two medium-severity issues, OpenZeppelin said in a statement shared with The Block.

The most recent audit, which concluded in December, focused on zkSync’s system called “bootloader” as well as three more Layer 2 system smart contracts with corresponding interfaces and one library.

ZkSync is a ZK-rollup scaling solution that supports compatibility with the Ethereum blockchain. It aims to offer developers the ability to port their apps from Ethereum mainnet to zkSync Layer 2 with low gas fees and high transaction speeds, without compromising on Ethereum’s security. The alpha variant of its second version “zkSync 2.0” was released on Oct. 28 as part of a three-step process to bring the Layer 2 network into public use.

In light of the successful partnership, OpenZeppelin and Matter Labs have agreed to continue working together to further enhance the security of zkSync in the long term. The security audits have added an extra layer of reliability in zkSync’s network security, the team said.

“As our collaboration with OpenZeppelin continues to provide such great results, we are glad to expand this partnership in order to further make zkSync as secure and reliable as possible for our users and ecosystem projects,” said Anton Astafiev, head of security at Matter Labs.

© 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.

Game studio Darewise Entertainment, a subsidiary of Animoca Brands, is on the hunt for a head of degen relationships.

The company posted the job ad earlier this week to join the team as it develops its play-and-earn sci-fi civilisation-building game, Life Beyond.

The head of degen relationships is expected to act as an ambassador for the game in the crypto space, connecting with key opinion leaders, communities and events, the job advert says. 

A degen is a slang term short for ‘degenerate,’ typically understood as someone who buys into an asset not because they see value, rather with the belief that others will join in after them and speculate on the price swings, according to CoinGecko. 

Web3 community building

The move is in line with the growing trend of community-building and project promotion in the web3 space, which has led to the creation of new roles in community engagement and influencer marketing.

During the market downturn last year, some NFT projects such as Fractional, a startup which specializes in buying and selling fractionalized NFTs, even put out ads for ‘vibe managers’ who could help spread positivity and keep up the hype around their projects.

These roles often go to those who already have a following in the crypto space. Being active in communities can also lead to job opportunities. For example, last year Danny Greene, the general manager for the MeebitsDAO, took a position as Meebits brand lead at Yuga Labs.

But working with influencers to push projects and attract more retail investors has its critics, especially when a project doesn’t even have a full product yet. Retail investors have been burned investing in NFTs and tokens linked to over-hyped projects that failed to deliver.

Weaponizing community?

“A lot of these projects plainly require a constant inflow of new suckers to prop up the prices of these tokens or NFTs or whatever the project is centered around,” software engineer Molly White, who runs crypto critic site Web3 is Going Great, told The Guardian in July last year.

She described such attempts at fostering community as an “insidious weaponization of the idea of community.”

The role isn’t the only-community focused job Darewise is currently hiring for. It’s also looking for a head of community that will work on developing and implementing community-building strategies and build relationships with key community members and influencers.

The Ethereum Foundation, Binance, Polygon are also among those looking to fill community-focused roles, according to crypto job board Degen Crypto Jobs. 

Darewise did not 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.