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Korean crypto startup Uprise lost virtually all of its client funds by shorting luna (LUNA) during its price crash and getting caught on the bounces, Seoul Economic daily reported on Wednesday.

The Korean firm billed itself as using artificial intelligence (AI)-enabled automatic trading strategies to trade crypto on behalf of its clients. This trading desk is one-half of the company’s service called Heybit while the other half is a global exchange-traded funds platform called Iruda.

Under Heybit, Uprise took custodied crypto assets from customers and traded them in the cryptocurrency futures market. Uprise’s AI-enabled trading technology was supposed to minimize the risk associated with leveraged crypto trading.

However, the system could not prevent the firm from being liquidated out of its LUNA futures trading position and losing 26.7 billion won ($20 million) in the process. This happened during Luna’s price crash. It was reportedly shorting Luna — while its price plummeted — but got caught out during sudden price pumps along the way.

The lost funds represent about 99% of the funds that Uprise was managing on behalf of its customers. These clients are high-net-worth individuals and corporate entities, according to the report. Uprise also reportedly lost $3 million of its own funds short trading LUNA.

Uprise is reportedly considering some form of compensation for affected customers. “It is true that damage to customer assets has occurred due to unexpected great volatility in the market. We plan to finalize the report on [the] virtual asset business soon,” said a spokesperson for the company, according to Seoul Economic daily.

Korean venture capital giant Kakao Ventures and major Korean commercial lender Hana Bank are among some of the backers of Uprise. The firm raised about $18.3 million in a Series C funding round in December 2021.

Uprise is the latest crypto business to be impacted by the LUNA collapse. The token’s death spiral in May — along with its sister token TerraUSD (UST) — has triggered serious financial problems for hedge funds and lenders alike including Three Arrows Capital and Celsius.

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© 2022 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.

Nike-owned RTFKT, pronounced “artifact,” is giving commercial rights to CloneX NFT holders, in a move which will allow owners to create derivative projects, mint fan art and make and sell merchandise featuring their avatar.

RTFKT, which was acquired by Nike in December 2021, launched in 2019 and was one of the first-movers in the web3 fashion space, creating NFTs for large brands. 

CloneX features 20,000 algorithmically-generated cartoon figures, which are currently traded on the secondary market. The floor price for CloneX NFT was 11.7 ETH or around $12,000 on July 6.

The figures were first marketed as 3D characters, which owners will eventually be able to use in the so-called metaverse. When the collection first launched, what people could do with their avatars was very limited. 

This change emulates that of other popular NFT collections such as Bored Ape Yacht Club (BAYC), whose holders own full commercial rights. BAYC’s liberal allocation of intellectual property rights has spurred spinoffs including Hollywood films, themed restaurants and creative writing projects. 

Owners of CloneXs can also now download and customize their 3D avatar, in a file that is token gated (meaning it’s only available to those who hold a CloneX NFT). 

The news comes in the midst of a bear market, during which floor prices for some of the most popular collections have dropped.

© 2022 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.

There’s been a sudden change in headwinds for crypto firms over the last two months, with the chaos centered on Celsius Network and Three Arrows Capital spreading among many other companies. This, along with a related, widespread market decline, has thrown many companies’ hiring plans into disarray. 

Chief among them are Coinbase, Gemini, BlockFi and BitMEX. All have announced significant cuts in their headcount — reversing initial targets to double or even triple staffing by the end of the year. It’s a big change in momentum. 

Despite this, some firms are planning to stay the course and have made clear statements that they intent to keep hiring, albeit perhaps not as aggressively. These include Binance, Kraken and Nexo. 

Here’s a look at which firms have had to make cuts. 

Crypto firms making layoffs 

• Coinbase has slashed its workforce by about 18% or approximately 1,100 employees. The decision to make layoffs was, according to CEO Brain Armstrong, to “ensure we stay healthy during this economic downturn.” He also acknowledged that the company had grown too quickly and had “overhired.”  
• US-based crypto exchange Gemini trimmed about 10% of its workforce, or around 100 employees. The company cited “current macroeconomic and geopolitical turmoil” as the reason behind the layoffs. 
• BlockFi, a crypto lending and financial services platform, fired roughly 20% of its workers, affecting more than 150 people. Co-founders Zac Prince and Flori Marquez cited “current market conditions that have had a negative impact on our growth rate and a rigorous review of our strategic positions.” 
• Crypto derivatives trading platform BitMEX announced layoffs for 75 employees in early April. The move was made after the collapse of a bank acquisition deal. 
• Crypto.com announced that as many as 260 employees — 5% of its employee base — have lost their jobs. The layoffs were made amid the company’s evaluation in optimizing resources “to position [themselves] as the stronger builders during the down cycle.” 
• Latin American crypto exchange Bitso laid off around 80 employees. Amid the cuts, the company was reported as still listing more than 60 open positions on its jobs pages. 
• Bullish, a crypto exchange serving institutional clients, has let up to 30 employees go, out of a total staff of about 390. The company said it “continues to actively hire for product, engineering and other strategic roles.”
• Abra, a California-based crypto trading and lending platform, has cut 12 jobs, around 5% of the company’s total workforce. The measure was taken “purely as a cost-saving measure,” per CEO Bill Barhydt. 
• On the same day Abra announced layoffs, Hong Kong-based licensed crypto exchange OSL said it has cut between 40 and 60 jobs, about 15% of its workforce. A company spokesperson asserted that the job cuts were not caused by OSL’s exposure to any troubled crypto firms or tokens, including staked ether (stETH) and TerraUSD (UST). 
• Buenbit, an Argentina-based crypto exchange, has cut the jobs of 45% of its staff — or about 80 workers. While saying that the layoffs were made due to the “global overhaul” of the tech industry, CEO Federico Ogue denied that it was linked to the recent crash of UST and Luna. 
• 2TM, the holding company for Mercado Bitcoin, laid off more than 80 employees. The company cited “the changing global financial landscape, rising interest rates and inflation.” Mercado Bitcoin is Brazil’s biggest crypto exchange. 
• Second-largest crypto futures exchange Bybit has laid off some of its workers, although the company did not disclose the number of jobs lost. The firm offered affected staff a severance package and access to the company’s employee career support in their job transition. 
• Austrian investing platform Bitpanda has cut the jobs of around 270 employees and cancelled offers of employment. This move happened only three weeks after the company executives announced to employees in internal Slack channels that “there will not be any kind of massive layoffs.”
• Publicly listed Australian crypto payment firm Banxa has announced that around 70 staff in its international offices in Europe and Indonesia will lose their jobs. The company has also paused all expansion efforts in Europe and will focus on its operations in Australia and the Philippines. 

© 2022 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.

Porter Finance, a decentralized finance (DeFi) credit service on the Ethereum network, announced this week it will shut down its bond issuance platform amid a lack of demand.

The service, launched only last month on the Ethereum mainnet, allowed decentralized autonomous organizations (DAOs) such as Ribbon DAO, to issue convertible bonds through Porter Finance. However, in a statement on Monday, founder Jordan Meyer said he was “not confident” there would be a large enough inflow of lending demand for fixed-income DeFi products. 

Meyer cited the competitiveness of rates offered in traditional finance and the lack of institutional fixed income DeFi adoption as the reason behind Porter Finance’s pivot away from bond issuance. The decision comes amid widespread price volatility in the crypto market in recent months, with bitcoin dropping below the $20,000 mark.

“We are also no longer willing to take on the legal risk associated with bond offerings,” Meyer said in the statement.  “For these reasons, we are pivoting away from the bond issuance platform and exploring better opportunities.”

Meyer did not immediately respond to a request for comment by the time of publication.

© 2022 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.

Voyager Digital has filed for Chapter 11 bankruptcy in New York, according to a court filing from the crypto broker.

Per the firm’s petition, estimated assets are between $1 billion and $10 billion, with between $1 billion and $10 billion in estimated liabilities. The estimated number of creditors exceeds 100,000. 

Three business entities — Voyager Digital Holdings, Voyager Digital LLC and Voyager Digital, Ltd. — are seeking protection. The filings were made in the Southern District of New York bankruptcy court.

The firm is being represented by Kirkland and Ellis LLP, according to the filing documents. 

Last Friday, Voyager halted withdrawals, deposits and trading, citing the present market conditions. “This was a tremendously difficult decision, but we believe it is the right one given current market conditions,” CEO Stephen Ehrlich said at the time.

Prior to that event, Voyager issued a notice of default to hedge fund Three Arrows Capital over failed repayment of a $650 million loan.

Three Arrows itself filed for Chapter 15 bankruptcy on Friday, as previously reported.

This story is developing and will be updated.

© 2022 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.

Count this as a sign that one of Wall Street’s most important market participants is becoming increasingly focused on the digital assets market: Virtu Financial is hiring a weekend crypto trader. 

The firm, one of the traditional finance world’s most important market makers, is a later entrant to the crypto market and has ramped up its hiring efforts in the space this year. 

The aspiration to hire a crypto trader for the weekend indicates the extent to which crypto is a priority for Virtu, which trades across 200 venues in dozens of countries. The firm is known for making markets in crypto exchange-traded products and has been trying to carve out a niche as a wholesaler for crypto brokers. 

The potential hire also reflects the unique nature of crypto, which trades 24/7. Virtu is seeking a “dependable, trustworthy and highly self-motivated and self-disciplined individual,” the job advert said. 

“Our Crypto Traders are risk managers that help to keep our trading system and strategies running smoothly, providing critical operational support and maintaining our high‐performance algorithmic trading strategies.”

Virtu is reportedly working with rival Citadel Securities on a new ecosystem for institutional crypto trading. The operation could help brokers like Charles Schwab and Fidelity offer crypto services to their clients. 

© 2022 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.

As the cryptocurrency market weighs on trading volumes, Bitstamp is charging inactive customers a fee to make up for costs.

The firm said in a blog post published Friday that the new inactivity fee would impact customers with balances below $200 who have not traded, deposited, or staked on its platform in the last 12 months. The inactivity fee would charge such users 10 euros. 

It is set to go into effect on August 1 and will not apply to US users. 

“The majority of Bitstamp’s customers are not affected by the Inactivity Fee,” Bitstamp said. “Nobody loves fees (we don’t either!) but keeping inactive accounts on the books is a cost, and in order for us to continue providing great services to all our customers, we made the hard decision to implement the Inactivity Fee.”

Most exchanges make money from fees on trading volumes, which have dropped precipitously alongside the price of cryptos since the beginning of the year. 

Data from The Block shows that volumes across exchanges have declined from $2.2 trillion in May 2021 to approximately $622 billion in June. 

Crypto exchanges, which have heavily relied on trading fees as a primary source of revenue, are looking to expand their revenue base to diversify their business.

Coinbase, for instance, has been testing a new subscription service dubbed Coinbase One, while other exchanges like Kraken have expanded into staking. 

© 2022 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 had a positive day on the stock market, as Bitcoin’s price climbed above the $20,000 mark.

At press time, the price was around $20,590, according to TradingView.

Bitfarms, Cipher Mining and Hive Blockchain performed the best on Tuesday, going up by 17.27%, 15.15%  and 13.70%, respectively.

Core Scientific announced on Tuesday that it sold over 7,000 bitcoin in June — a large majority of its holdings, which as of May 30 had totaled 8,058. The miner’s stock was up by 13.25% by the end of the trading session.

TeraWulf announced that it secured an additional $50 million dollars from an existing loan that was initially $123.5 million. The company said it would use the funds to complete its facilities in New York and Pennsylvania. Its stock was up by 5.60% on Tuesday,

Here’s how crypto mining companies performed on Monday, July 5:

© 2022 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.

Quick Take

• Michelle Bond, CEO of the Association for Digital Asset Markets (ADAM), has decided to run for Congress.
• The Block sat down with Bond to talk about what she hopes to accomplish through her campaign — for crypto and beyond.

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Jason Choi and Daryl Wang, two former crypto executives at two major investment firms in Asia, are launching their own fund to support Web3 projects. 

The news was announced on Choi’s Twitter linking to the company’s website, with additional information reported by Bloomberg. 

The new firm, called Tangent, is committing both “time and capital in a select few Web3 companies every quarter as angel investors,” the website states. The firm won’t accept outside funding or charge management fees, according to Bloomberg. The firm will work with 2 to 5 early-stage crypto projects every quarter “using an undisclosed small pool of proprietary capital,” the website states. 

Choi was previously general partner at Spartan Capital, and Wang was previously principal at DeFiance Capital in Singapore.

“Over the last cycle, we’ve kind of confirmed that web3 and crypto are here to stay,” said Wang in an interview to Bloomberg. “In what form it takes or how long it will take to get there is up for debate — but you know, in an extended depressed market, it provides a lot of diamonds in the rough for us to support and hopefully, to push the space forward for the better.”

Advisors at Tangent include Gabby Dixon, cofounder of Yield Guild Games, a play-to-earn game; 0xMaki, cofounder of SushiSwap, a platform to buy and sell crypto assets; Sam Kazemian, founder of Frax Protocol; Tasha Punyaneramitdee, cofounder of Alpha Venture DAO, and others listed on the website. 

Tangent wants to help Web3 projects navigate a downturn in activity across the industry.

“At a time where actors are withdrawing from crypto, we’re here to stay and build. Be it a 6 month or 6 year bear market, our belief in crypto remains stronger than ever,” Wang wrote on Twitter.

© 2022 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.