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Bitcoin miner and hosting provider Blockstream raised $125 million in a convertible note and secured loan financing round.

The company will use the money to expand its institutional bitcoin mining colocation services at a time when others in the industry are struggling to keep afloat due to a prolonged decline in mining economics.

“Demand for Blockstream’s hosting services remains high due to the company’s strong track record and substantial scale, coupled with an industry-wide shortage of available power capacity,” the company said in a statement.

Blockstream currently has over 500 megawatts in its development pipeline. Its business also extends to hardware and Layer-2 technologies like Core Lightning.

The demise of large-scale centralized parties and protocols in the past year and “resulting refocus on security and decentralization presents an opportunity for market participants to move to Bitcoin-based non-custodial architectures,” CEO Adam Back said. 

The company had already raised $210 million in a series B round in 2021. In December, Bloomberg reported that it was looking for fresh funds at a significantly lower valuation than before.

© 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.

Celsius Earn account customers will be “entitled to a significant return,” a representative for crypto lending firm Celsius told a bankruptcy court on Tuesday.  

“The Earn customers we think are going to be treated equally and will be entitled to a significant return of value here,” the representative said, while also respecting the rights of the different categories of customers.   

The vast majority of Celsius’ customers are in the Earn program and the vast majority of the value of the assets is going to go to customers of that program, the representative said on Tuesday.  

The debtor’s obligation is to “propound a plan” to return value to the “right people in the right form,” the representative said.  “And that’s what we’re doing and we’re in the later stages of being ready to do that.” 

Company representatives at the hearing also spoke about a recovery corporation concept, a proposal for the company to tokenize and distribute to account holders an “asset share token that would reflect the value of the assets managed by the Recovery Corporation.” That token would also entitle holders to dividends from the recovery corporation over time, they said. 

If approved, the tokens would be provided to all account holders who have account balances over a certain threshold. The recovery corporation would also be a public company, and file public financial reports, such as 10-ks, in the future.

Judge Martin Glenn, chief judge for the U.S. Bankruptcy Court for the Southern District of New York ruled earlier this month that assets in Celsius Earn accounts belong to the company, not customers. Earn accounts allowed users to deposit assets into a Celsius account, which was then used by Celsius to generate yields across various on-chain and off-chain investment strategies.    

Glenn said Celsius’ terms of use formed a “valid, enforceable contract” and “that the terms unambiguously transfer title and ownership of Earn Assets deposited into Earn Accounts from accounts holders to the debtors.” He acknowledged the decision could make it harder for Celsius customers to recoup the full value of their accounts, as the company looks to sell off portions of itself to fulfill its debts.  

Celsius filed for Chapter 11 bankruptcy protection in July, one of several firms that have fallen over the past 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.

Bitcoin mining stocks tracked by The Block were mostly lower on Tuesday, with seven gaining and the other 11 declining.

Bitcoin rose 0.3% to $23,037 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.

The French National Assembly voted in favor of rules that will ease licensing requirements for crypto firms, offering a sigh of relief for the industry.

Lawmakers opted for an amendment proposed by Sen. Daniel Labaronne that allows crypto firms to register with the financial regulator following requirements already covered by the European Union’s comprehensive regulation for crypto assets which will enforce licensing. The vote passed with a tally of 61 in favor and 33 against.

In December, Sen. Herve Maurey had proposed an amendment that would have required a higher-tier license that has yet to be obtained by a single company. The stricter amendment had come in the wake of the collapse of the FTX exchange as policymakers called for a crackdown on crypto regulation.

Following a push from the crypto industry, Labaronne proposed that the additional amendment scrap the high-tier mandatory license and allow crypto firms to register with the Financial Markets Authority following provisions which are already outlined in the EU’s Markets in Crypto-Assets regulation. This includes requirements on governance, reporting to regulators and segregation of funds.

Companies that are already registered with the existing anti-money laundering provisions will be able to continue to operate until the end of the transition period which MiCA offers, likely in 2026.

© 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 mining arm of bankrupt lending firm Celsius will temporarily store 20,000 rigs it’s retrieving from Core Scientific and is optimistic about finding new hosting locations.

The company has already started the process of taking back the 37,500 machines after a judge allowed Core Scientific to turn them off earlier this month. It expects to finish the process by mid-March, said Chris Ferraro, who is operating as chief restructuring officer and interim CEO.

“There are options for hosting in the market that will allow us to continue mining with positive operating cash flows and significant upside,” Ferraro said in the hearing.

Celsius had been in conflict with Core Scientific — which also filed for bankruptcy last month — over the terms of a hosting agreement, with the former filing a motion to enforce an automatic stay in September. Core, however, claimed that Celsius was “using its Chapter 11 proceeding to withhold payment of certain charges.”

Last month, Core Scientific got the green light from its bankruptcy judge to power off all of Celsius’ machines. Celsius is also one of Core Scientific’s note-holders.

The current environment has been disastrous for miners. Lower cryptocurrency prices and higher energy costs squeeze margins, and forced several companies to file for bankruptcy.

Ferraro said that Celsius’ liquidity has improved with the recent rise in the price of bitcoin. There has also been a “tremendous decline” in energy costs after peaking in the fall. Bitcoin has recently been trading at around $23,000, the highest since last summer.

“Given the favorable market trends in energy prices and the improving price of bitcoin, we believe that there are options for hosting in the market that will allow us to continue mining with positive operating cash flows and significant upside,” Ferraro said. “That’s provided support for margin and cash flows.”

The company is currently mining 7 to 8 BTC per day at a margin of 25% to 30%, with 27,500 machines hashing.

Ferraro said that 2,150 rigs have been removed from Core Scientific’s facilities, while an additional 3,750 will be picked up this week and 2,700 next week. The company will send 6,000 machines to a site in Texas, and 10,000 to bitcoin miner Mawson Infrastructure’s site in Pennsylvania.

© 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-focused investment firm a16z led a Series A investment in the game studio Voldex. The amount wasn’t disclosed.

Voldex raises the quality of user-generated content platforms like Roblox and Minecraft by acquiring and improving existing games.

 “These platforms’ massive, growing user bases and the Voldex team’s deep understanding of the UGC game space make Voldex well-positioned to drive significant growth in the years to come,” a16z’s Andrew Chen and Jack Soslow said in a statement. Roblox alone has over 58.8 million users.

A16z as of December had deployed less than 50% of its Crypto Fund 4, a $4.5 billion investment fund launched in May, The Block previously reported. Founder and general partner Chris Dixon expressed excitement as to what 2023 held in store for blockchain-based gaming, particularly around the community building aspect of web3 games.

A16z did not immediately respond to a request for additional comment from 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.

Wilshire, the financial services firm, announced a partnership with crypto prime broker FalconX to provide institutional investors with access to the OTC crypto derivatives market.

The firm, which has office’s across the U.S. and in London, will develop a range of single-coin, multi-coin and thematic indexes through the partnership, the company said in a statement.

“We aim to help institutional investors realize the benefits of new digital forms of investment and blockchain technologies while providing the products that meet the most stringent institutional requirements to access this emerging asset class confidently,” CEO Mark Makepeace said.

FalconX CEO Raghu Yarlagadda said that the crypto derivatives ecosystem is at a “critical growth juncture,” adding that the company plans to strengthen its offering by working with Wilshire.

© 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.

After initially running on the Solana blockchain, Fractal, the gaming-focused marketplace founded by Twitch co-founder Justin Kan, is expanding to Polygon.

Fractal will initially work with 30 of the top Polygon games, the company said in a statement. Popular Polygon titles include Aavegotchi, Derby Stars, Sunflower Land, and Decentral Games, according to Fractal.

Since the success of play-to-earn title Axie Infinity, spurred in part by a crypto bull run that saw prices for digital assets soar, both new and existing blockchain games have been scrambling to onboard users. Exploring avenues potentially capable of removing obstacles to consumer adoption and use have become paramount.

For Fractal, by utilizing the Polygon network, the company aims to accelerate “the development and accessibility of the many game projects being built,” the company said, adding that so far more than “200 unique titles have launched on Polygon.”

“Fractal has emerged as a crucial hub for the discovery of blockchain games,” Polygon Foundation Co-Founder Sandeep Nailwal said in the joint statement. “We aim to make 2023 the year we bring Web3 gaming to the mass market.”

Fractal is a primary and secondary marketplace for NFTs with in-game utility. Gaming companies can mint and drop gaming NFTs for its fans while players can trade NFTs amongst themselves on the peer-to-peer marketplace. The marketplace launched in 2021 and raised $35 million in a seed round backed by investors such as Andreessen Horowitz and Animoca.

Seemingly growing in popularity as of late, Polygon is an Ethereum sidechain that allows for faster and cheaper 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.

Cryptocurrency prices meandered in early trading, with bitcoin unable to break past $23,000 on a consistent basis. Crypto stocks were marginally lower. 

Bitcoin gained 0.1% in the past day to $22,900 at 11:15 a.m. EST, according to TradingView data. BNB is bucking the trend, up 3.4% over the past 24 hours.

BTCUSD chart by TradingView

Bitcoin’s 30-day volatility reached its highest point since early December when it reached 42.2%, according to The Block’s data. The Block defines volatility as the standard deviation of the last 30 days’ daily percentage change in BTC price.

Ether declined marginally, down 0.2% around $1,620, and Cardano slid 0.4%. Avalanche jumped 3.2%, according to data from CoinGecko.

The global crypto market cap continues to trade above $1 trillion, according to The Block’s data. 

The recent rally caught the eye of chief investment strategist of Grantham, Mayo, & van Otterloo Jeremy Grantham, who sees a 17% downside for the S&P 500, which is up 5% year-to-date. 

The increase in crypto prices isn’t down to any “exotic” reasons, Grantham said. It’s likely this is just “crypto’s usual style of behaving like the most speculative stocks, almost all of which had a terrible 2022.”

Crypto stocks

Crypto-related stocks traded lower in early trading. Coinbase was down 1.7%, as of 11:10 a.m. EST, according to Nasdaq data.

Shares in crypto-friendly bank Silvergate dipped 1.7%, to about $15.70, after soaring 17% during Monday’s session.

MicroStrategy dropped 0.3% to about $250, and Jack Dorsey’s Block slipped 0.6% to around $81.

© 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.

Digital Distro, which describes itself as a full service web3 consulting company, intends to remove web3 from its roster of consulting services. 

The web3 services Digital Distro offered included education on the crypto market and ways for clients to incorporate blockchain-based products into their projects to create a “digital media experience.” However, the firm will not pursue any projects that incorporate NFTs, blockchain or crypto until the industry becomes more stable. It’s one of the first firms to cut web3 products after the bear market and legal maelstrom of 2022. 

“Given that the NFT and crypto space is still early on its development and has been filled with uncertainty, we feel that it is in the best interest of our shareholders to focus on film, music, and brand influence,” Digital Distro CEO Andrew Lane said in a release. 

Digital Distro provides full suite of pre- and post-production services for media professionals, including sets, casting, music production and branding strategies. The firm did not immediately respond to The Block’s 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.