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Crypto startup Ledn has reportedly approached rival lender BlockFi about a potential acquisition.

Ledn proposed to lead a funding injection of up to $400 million, with a $50 million equity contribution, according to a report by Bloomberg, citing anonymous sources.

If accepted, the deal would give Ledn a significant portion of BlockFi, per the report. The report stated that ParaFi Capital, the venture capital firm, would also invest.

BlockFi has seen its valuation collapse in recent weeks after it emerged that the company had significant exposure to Three Arrows Capital, the troubled hedge fund. BlockFi is already engaged in talks with exchange operator FTX, which The Block revealed is looking acquire the lender outright after handing it a $250 million credit facility in late June.

The Block contacted Ledn and BlockFi for comment on the report but had not heard back by press time.

© 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.

El Salvador bought 80 additional bitcoins earlier today at a price of $19,000 each, according to a tweet from the Central American country’s president Nayib Bukele.

“Bitcoin is the future!” Bukele tweeted. “Thank you for selling cheap,” he added, followed by a winking emoji. The president also shared images showing what appears to be a list of purchases for 1 bitcoin each at the $19,000 price, with timestamps indicating the purchases occurred earlier this morning. 

El Salvador bought today 80 #BTC at $19,000 each!#Bitcoin is the future!

Thank you for selling cheap 😉 pic.twitter.com/ZHwr0Ln1Ze

— Nayib Bukele (@nayibbukele) July 1, 2022

Bukele has tweeted several times about the country’s bitcoin purchases since El Salvador made the cryptocurrency legal tender last September. In May, he announced that the country purchased 500 BTC at an average price of ~$30,744. 

Based on the various purchase announcements Bukele has made so far on Twitter, it appears that El Salvador has bought at least 2,381 bitcoins to date. However, the country’s current bitcoin balance has not been confirmed through other means.

While El Salvador has indicated that it is holding onto its bitcoin purchases, the country’s finance minister Alejandro Zelaya said in early June that the country had previously sold a part of its bitcoin to fund the Chivo Pets pet hospital, but that it is keeping the coins it is purchasing now. Last October, Bukele said the country was not selling any bitcoin for the project, indicating that Chivo Pets would be funded by a surplus in a government trust fund due to the rising value of bitcoin. 

© 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

• In this weekly series, we dive into some of the most interesting data and developments across the Layer 1 blockchain landscape, from DeFi and bridges to network activity and funding
• The recent exploit of the Harmony Horizon bridge has had rippling effects in the Harmony ecosystem, which now faces a steep uphill climb to recovery
• BNB Chain teams continue to look for ways to strike the ideal balance between decentralization and growth, while Polkadot and Kusama parachains have begun to establish cross-chain communication channels with increasing frequency

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eToro, an Israel-based online brokerage offering cryptocurrency and stock trading, is not moving forward with its plans for a SPAC merger, according to sources who spoke to The Information.

The deal was set to take place on Thursday, merging with a SPAC called FinTech Acquisition Corp. V, backed by banking entrepreneur Betsy Cohen.

A spokesperson for the firm told The Information that it would be “sharing an update in the coming days.” 

The eToro deal was originally struck in March 2021 to merge at a valuation of $10.4 billion. In December, the plan was delayed to June 2022 after failing to get SEC approval. The valuation was dropped to $8.8 billion, based on SEC filings.

As part of the FinTech Acquisition Corp. V deal, the combined company was expected to get over $400 million in private investment in public equity funding, according to the SEC. The merger was going to inject $250 million into eToro from the SPAC, and another $650 million from PIPE funding.  

This news follows a broader trend of other tech companies abandoning plans for a SPAC merger due to stock market instability. Media company Forbes canceled plans in early June, and SeatGeek, a ticketing app did the same in May.

© 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.

A developer of a “rug pulled” NFT collection could face up to 40 years in prison if convicted on new wire fraud and money laundering charges after the project collected more than $2 million from investors and subsequently disappeared last year. 

The U.S. Department of Justice charged 26-year-old Le Anh Tuan of Vietnam with one count of conspiracy to commit wire fraud and one count of conspiracy to commit international money laundering in connection to the Baller Ape NFT.  

The Baller Ape project is the largest known NFT scheme charged to date. The DOJ announced charges in three additional crypto-related criminal cases on Thursday.

Tuan is accused of selling Baller Ape NFTs on the Solana blockchain and then abruptly ending the project, deleting its website and stealing investors’ money.

“According to the indictment, shortly after the first day Baller Ape Club NFTs were publicly sold, Tuan and his co-conspirators engaged in what is known as a “rug pull,” ending the purported investment project, deleting its website, and stealing the investors’ money,” the DOJ said.

After the so-called rug pull, the DOJ claims that blockchain analytics show the developers laundered investor funds through “chain-hopping.” The practice involves converting coins, moving them across multiple cryptocurrency blockchains and using decentralized cryptocurrency swap services to obscure the movement of the money.

Tuan was charged in the Central District of California. 

More cases announced Thursday

A trio of other cases announced by the DOJ this week includes one man who allegedly faked relationships with the U.S. government and Apple to prop up his initial coin offering. In another case, a Nevada allegedly held meetings in the Hollywood Hills and traveled with armed guards to woo investors. 

Three senior execs of EmpiresX, a cryptocurrency investment platform and unregistered securities offering, are facing charges from the Department of Justice. Founders Emerson Pires and Flavio Goncalves of Brazil, and “head trader” Joshua David Nicholas of Florida, were charged with one count of conspiracy to commit wire fraud and one count of conspiracy to commit securities fraud. 

The charges are in connection to an alleged global Ponzi scheme that used cryptocurrency and generated $100 million from investors, according to the DOJ. Pires and Goncalves were also charged with conspiracy to commit international money laundering. The trio is accused of fraudulently promoting EmpiresX and paying earlier investors with cash from later investors in the scheme.

Pires and Goncalves could face up to 45 years in prison if convicted on all counts. Nicholas could face up to 25 years in prison. 

The CEO and founder of Titanium Blockchain Infrastructure Services could also face two decades in prison if convicted. Michael Alan Stollery of California was charged with one count of securities fraud. Stollery is accused of falsifying white papers, planting false testimonials on the project’s website and fabricating relationships with the U.S. Federal Reserve Board, along with companies including Apple and Pfizer. 

Meanwhile, the owner of the cryptocurrency investment platform Circle Society is facing criminal charges in a crypto commodities scheme.

David Saffron of Nevada is accused of fraudulently raising $12 million from investors to participate in an unregistered commodity pool. Saffron falsely claimed he used a trading bot that would generate between 500 and 600 percent returns on the amount invested, according to the DOJ. He also misled investors with a seemingly lavish lifestyle. 

“To entice investors to invest, Saffron allegedly led investor meetings at luxury homes in the Hollywood Hills and elsewhere, and traveled with a team of armed security guards in order to create the false appearance of wealth and success,” according to the DOJ. 

Saffron faces one count of conspiracy to commit wire fraud, four counts of wire fraud, one count of conspiracy to commit commodities fraud and one count of obstruction of justice. Saffron faces up to 115 years in prison if convicted on all counts.

© 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.

A majority of bitcoin miner stocks tracked by The Block fell on Thursday.

Digihost Technology, Bit Digital and Marathon fell by 9.73%, 9.03% and 7.93%, respectively.

Meanwhile, Cipher Mining, Iris Energy and Stronghold Digital Mining’s stocks rose by 7.87%, 4.69% and 2.47%.

New York’s Department of Environmental Conservation announced during the afternoon that it denied Greenidge’s air permit renewal and the miner stated that it would challenge the decision and keep operations running in the meantime.

The company’s stock was down by 7.30% at the end of the trading session.

Here’s how crypto mining companies performed on Thursday, June 30:

© 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.

Crypto firm CoinFLEX announced it would not resume withdrawals as initially planned, following a suspension last week.

The withdrawal function is still suspended, with the firm citing how the company continues to talk with investors interested in the Recovery Value USD (rvUSD). CEO Mark Lamb wrote in a statement that CoinFLEX will announce the path towards enabling withdrawals once the token sale is fully committed. 

CoinFLEX paused withdrawals on June 23 due to “extreme market conditions and continued uncertainty involving a counterparty.”

The company immediately clarified that the counterparty in question was not Three Arrows Capital, the under-fire crypto hedge fund. The suspension announcement was immediately followed up by an estimation that the withdrawals would have resumed on June 30. Later, it emerged that the firm is in a dispute with long-time bitcoin investor Roger Ver.

The company previously announced on Tuesday a plan to raise funds by issuing a new token, rvUSD, that promises a 20% annual return. The token was raised in order to resume withdrawals on its platform. 

“The goal is to do everything possible to avoid haircuts to customer funds,” CEO Mark Lamb wrote in the statement. “And we remain confident in our ability to bring this to resolution.”

© 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.

A new Ethereum token standard proposal allowing rentable non-fungible tokens (NFTs) reached its final stages earlier this week. 

The new rentable token type, dubbed ERC-4907, allows an NFT owner to permit another individual to use their NFT for a designated period of time. After that time ends, the user no longer has access to the NFT. 

While it’s unclear whether the proposed token standard has officially gone into effect, it permits users who may not have the funds or desire to purchase an NFT to still access whatever utility that token provides, whether it’s land in a virtual world or a weapon in a blockchain-based game. 

The ERC-4907 proposal was put in place by Double Protocol, a firm building out the infrastructure for rentable NFTs for gaming and metaverse use. 

Potential use cases for rental NFTs include renting out land in the metaverse. For instance, an individual who owns land in Decentraland may sublet their property to another individual. 

There are already some ways to rent play-to-earn gaming assets through decentralized autonomous organizations (DAOs) such as Merit Circle, however this proposal would address the issue in a new way. 

Double Protocol did not respond in time to The Block’s questions about whether the token standard has gone into effect.

© 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.

The European Union has finalized its massive Markets in Crypto Assets regulation.

 Stefan Berger, MiCA’s rapporteur in European Parliament,  tweeted the news on June 30. The bill had been in trilogue debates, bringing the European Parliament, Council and Commission together to hash out a final compromise.

As The Block reported yesterday, France had been keen to complete trilogues on MiCA, as the French presidency in the European Council ends at midnight tonight. 

The finalized version is not yet public and Berger’s staff had not responded to a request for the bill as of publication time.

Berger noted in his tweet that the final version did not ban Proof-of-Work mining, which members of the Green and Socialist parties had been trying to push earlier in Spring. 

MiCA is the first regulation of its scale in the EU. Its rollout across regulatory agencies will take years. 

© 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.

The New York Department of Environmental Conservation (DEC) has denied bitcoin miner Greenidge’s air permit renewal.

The regulator said Thursday that Greenidge’s application didn’t comply with the green gas house gas (GHG) emissions limits set by the state’s Climate Leadership and Community Protection Act (CLCPA), signed into law in 2019.

“Greenidge has failed to demonstrate that the continued operation of the Facility is justified notwithstanding this inconsistency,” the letter to Greenidge stated, adding that the miner didn’t demonstrate “adequate GHG mitigation measures.”

Greenidge now has the right to request an administrative adjudicatory hearing within 30 of the decision. The company said in a statement on Thursday that their mining operations in New York will continue running during the extended judicial review process.

“We can continue running uninterrupted under our existing Title V Air Permit, which is still in effect, for as long as it takes to successfully challenge this arbitrary and capricious decision,” Greenidge said. “We are confident that an unbiased court system will reverse this regulatory misjudgment.”

The DEC said that there was a “dramatic increase in greenhouse gas emissions” stemming from Greenidge’s 106-megawatt facility in Dresden, as well as a shift in the power plant’s primary focus.

“Rather than solely providing energy to the state’s electricity grid, the power plant now primarily provides energy behind-the-meter to support the demands of Greenidge’s energy-intensive proof of work cryptocurrency mining operations,” the DEC said.

Per the DEC’s letter, Greenidge didn’t initially state that it intended to use a significant amount of energy “for its own purposes” when it originally applied for an air permit in 2014, with the intent of powering back up a former coal-fired and switch it to natural gas.

“The reopening of the Facility was, according to Greenidge, for the purpose of producing electricity on a limited basis to be sold into the New York Independent System Operator (NYISO) market. That is, the Facility was to be utilized in a “peaking” capacity, providing a limited amount of electricity to the grid in certain circumstances,” the DEC said. 

The DEC had delayed the final decision on Greenidge’s application multiple times. The regulator said that it reviewed roughly 4,000 public comments.

The mining firm has stressed that it was compliant with the CLCPA, arguing, for example, GHG emissions limits in the CLCPA would only need to be achieved years after the new permit would expire.

The DEC countered that logic, stating that “achieving the Statewide GHG emission limits will require substantial action prior to 2030.”

“We believe there is no credible legal basis whatsoever for a denial of this application because there is no actual threat to the State’s Climate Leadership and Community Protection Act (CLCPA) from our renewed permit,” Greenidge said on Thursday. “It is not, and cannot be transformed into, a politically charged ‘cryptocurrency permit’.”

Assemblywoman Anna Kelles, the sponsor of the mining moratorium recently recently passed in the Senate praised the regulator for the decision on Twitter:

“A huge win for our #CLCPA goals and the first step toward preventing the use of NY’s old retired fossil-fuel power plants for personal corporate gain. Happy to see @GovKathyHochul and the @NYSDEC issue this decision today as #SCOTUS weakens EPA’s ability to regulate power plants,”Kelles said, in referance to a decision on Thursday from the Supreme Court to prevent the Environmental Protection Agency from regulating GHG limits.

© 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.