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The signs of NFT NYC started happening well before the conference did.  

For me, it first began with a guy on the plane out of Atlanta talking about NFTs to the woman beside him. Then, the day before the conference, I overheard two men discuss the metaverse over bagels and coffee. 

Technicolor crypto advertisements the size of small buildings populated Times Square’s electronic billboards. An increasing number of street graffiti and stickers mentioned “crypto,” “NFTs,” “DAO” and “WAGMI.”

Then, the conference began on June 21. What proceeded can be described in one word: excess. 

Over 1,500 speakers took the stage over the course of three days, with lavish parties raucously punctuating each night. That’s not to mention the wide swath of New York City over which the talks, events, and parties took place. 

Although many of the actual conference events drew a paltry attendance, the party scene did not. And hardly anyone mentioned the bear market.

Hitting the ground running

NFT NYC officially began with the founder’s welcome at Radio City Music Hall, in which MoonPay’s CEO Ivan Soto-Wright announced HyperMint, the utility token minting service for brands and creators (although MoonPay had given the news to The Block before anyone else.)

Ivan Soto-Wright speaking from the Radio City Music Hall at the Founder’s Welcome event at NFT NYC on June 21, 2022.

Following Soto-Wright was TicketMaster’s Vice President of Enterprise and Revenue Brendan Lynch discussing the utilities of NFTs for the ticketing industry. Film director Spike Lee arrived a couple of hours later to discuss how NFTs can democratize film funding. 

While these main stage talks held ample attention, other talks I attended saw lackluster attendance and audience participation. On more than one occasion, speakers asked the audience how it was doing only to receive a limp response. 

It became evident early on during the conference that many attendees weren’t there to attend the informational panels. Instead, networking and parties took precedent. Midtown warehouses with neon-lit exposed brick walls bumped with bassy music, and black-clad wait staff carried trays of drinks and finger foods between throngs of people. 

They are gonna make it?

Something that stood out was how little discussion at NFT NYC included the bear market. The decline in NFT prices, a part of the broader crypto bear market, was an afterthought.

When The Block asked attendees about their bear market strategies, many gave the same answer: keep holding their assets, keep building and wait for crypto summer to return. 

That’s to be expected, perhaps. One of the core mantras of crypto is the saying “we’re gonna make it,” shortened to WAGMI. With so much of crypto culture happening online, it makes sense that attendees would rather ignore the Twitter threads and simply wish to enjoy being in a shared space with other NFT-enthusiasts. 

Still, at nearly every party or conference talk, the bear in the room went undiscussed. There were also lots of reminders that venture capital funding is still plentiful.

Ultimately, NFT NYC felt like a full-throated attempt to make the case that things in the NFT world are still good despite the market conditions. Then again, crypto winter has only just begun.

© 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.

Embattled crypto lender Celsius Network is resisting a recommendation from its own lawyers to file for Chapter 11 bankruptcy — and seeking a show of support from users to help win the internal argument against the suits.

With the company’s management prevented from making any public pronouncements due to legal advice, Celsius believes many of its retail clients would prefer the firm to avoid bankruptcy, according to people with knowledge of the situation. To that end, users can show their support by engaging “HODL Mode” in their Celsius account, said the people.

Celsius didn’t respond to a request for comment. 

Celsius’s move is a last throw of the dice as it teeters on the edge of bankruptcy after being forced to freeze client withdrawals on June 12. The company, which offers retail investors returns on their crypto holdings and held more than $10 billion of client assets, found itself unable to honor its obligations as crypto markets cratered in recent weeks.

Amid the fallout, The Block reported that Celsius has appointed Wall Street giant Citigroup to advise on its financial options and The Wall Street Journal said the lender is working with lawyers from Akin Gump Strauss Hauer & Feld and restructuring-focused management consultants from Alvarez & Marsal. 

Celsius describes HODL Mode on its website as a “security feature that gives you the ability to temporarily disable outgoing transactions from your Celsius account.” When activated, clients are unable to withdraw or send funds. After deactivation, users must wait 24 hours before these abilities are reinstated. 

As clients are currently blocked from withdrawing or transferring funds anyway, this will have no practical effect on users, but — according to the people — it will help show the lawyers the strength of feeling that exists among users. They added that Celsius is still receiving some client deposits despite the ban on withdrawals. 

Friday ask-me-anything

Being advised to refrain from public statements puts Celsius in a novel situation. The firm’s CEO, Alex Mashinsky, has for years held a regular “ask me anything” event on Fridays to field questions from clients and holders of Celsius’s native CEL token. 

Mashinsky is currently in the US and is unable to comment on his firm’s woes due to legal advice, according to the people. 

Chapter 11 of the US Bankruptcy Code allows a company to continue operating while it works out its debts. The firm proposes a plan of reorganization for creditors to approve, overseen by a team of lawyers. 

If Celsius enters bankruptcy protection, client positions will be sold into US dollars at the current market price and clients will be added to the list of the firm’s creditors — to join the line for whatever value can be salvaged. 

Celsius believes that avoiding bankruptcy will result in more value for account holders as it should give the firm move time to unwind trades that are stuck in illiquid positions, according to the people. 

Untangling bankruptcy proceedings can prove both painful and time-consuming. After Tokyo-based crypto exchange Mt. Gox was hacked in early 2014, it took nearly eight years for the legal process to conclude. 

If Celsius is eventually forced to file for Chapter 11, it’s yet to be decided which legal entity would make the petition, according to one of the people. 

Despite the news of potential bankruptcy, Celsius’s CEL token has climbed over the past two weeks. After plunging from about $0.44 to $0.15 as the original news of halted withdrawal broke, the token has since rebounded to $0.74, according to Coingecko data. 

© 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.

Azuro, a platform that aims to decentralize the betting market, has raised a $4 million round. 

Investors in the round included Hypersphere, Ethereal Ventures, Arrington Capital, Delphi Digital, AllianceDAO, Gnosis and Merit Circle, among others, according to a release on Monday. The startup said there was no lead investor in the round and the valuation wasn’t disclosed.  

Traditional betting companies go to great lengths to make betting unfair and opaque, said core contributor Rossen Yordanov in the announcement. Azuro uses smart contracts to build a protocol that it hopes can be the base layer for more betting applications to build on top of using web3 technology. It believes that this can bring full transparency to the sector and increase liquidity in betting markets. 

“Betting markets are one of the few applications where crypto was always supposed to shine, said Hypersphere co-founder Jack Platts in the release. “So far though, none have been able to crack the nut of bootstrapping liquidity for popular betting disciplines. We believe Azuro’s team can finally make that promise true.” 

Azuro most recently launched its mainnet on Gnosis Chain, with its first frontend experience going live earlier this month. The company plans to use the funds to expand to different chains with Polygon being the current main contender, add further betting markets and create a non-fungible token (NFT) bets marketplace.  

© 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 exchange Bybit announced on Monday that it will offer futures contracts settled in the stablecoin USD Coin (USDC), rather than bitcoin.

This is the first time Bybit will offer futures settled in USDC rather than bitcoin, in an effort to give users stable prices for the duration of the contract, according to a statement.  The total number of bitcoin futures contracts held by users on its platform — bitcoin futures open interest — is one of the largest of any exchange.

CEO and co-founder, Ben Zhou, said in the statement that Bybit was very pleased with how the roll-out of its option trading product went. He went on to say “our derivatives platform has the world’s best liquidity and tightest spread, so traders are ensured the best quote and best execution in the market even during extreme volatility.”

Bybit’s announcement noted that unlike bitcoin-settled contracts, using USDC allows for stability for the duration of each contract. The move comes at a time when stablecoins have come under renewed scrutiny from regulators and investors, with several high profile stables de-pegging over the past month. 

Monday’s announcement comes just five days after Bybit was fined by the Ontario Securities Commission (OSC), although the exchange committed to working with the regulator as part of the settlement. 

Founded in Singapore in 2018, Bybit has grown to be the second-largest crypto exchange in futures trading over the past four years to, according to data via The Block Research.

© 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.

Banxa, an Australian crypto payment firm, has announced that it will reduce its staff numbers by 30% amid the ongoing bear market conditions, the Australian Financial Review reported on Monday.

According to the AFR report, the current crypto market downturn has led to dwindling trading volume for the company. Banxa, a publicly listed crypto outfit in Australia has seen its share price decline by about 74% in the last year.

Following the layoffs, the company’s staff strength will reduce from 230 to 160. Most staff cuts will come from the firm’s international offices in Europe and Indonesia. Banxa has also paused all European expansion efforts and will instead concentrate on its operations in Australia and the Philippines.

Apart from staff cuts and culling its expansion drive, the firm has also enacted more austerity measures including the cancellation of dinners, drinks and other internal company events. Banxa CEO Holger Arians reportedly told staff in a meeting that the company grew too quickly and must now restructure itself amid the current market climate which he predicted could last for up to a year.

Brian Armstrong, CEO of US exchange giant Coinbase, offered a similar explanation for his company’s staff cuts earlier in the month. The company laid off nearly 20% of its employees while also instituting a hiring freeze and rescinding previously issued offers to new hires.

Banxa’s staff cuts are the latest in the industry as crypto firms continue to cope with the general market decline. Cryptocurrency businesses have laid off more than 1,500 people in the last two months, The Block reported earlier in June.

© 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, a crypto app offering up to 12% returns, said it has issued a default notice against Three Arrows Capital for failure to repay a loan worth more than $650 million.

The crypto platform issued the notice to Three Arrows Capital, the crypto hedge fund known as 3AC, over a debt of 15,250 BTC ($325 million) and 350 million USDC, according to a statement on Monday. Voyager said it continues to operate and fulfill customer orders and withdrawals. It has accessed $75 million of the credit line agreed with Alameda Research this month and may make further use as needed. 

“We are working diligently and expeditiously to strengthen our balance sheet and pursuing options so we can continue to meet customer liquidity demands,” CEO Stephen Ehrlich said in the statement. 

As part of this process, voyager has engaged Moelis as a financial advisor, the statement added. 

Singapore-based 3AC had its positions liquidated this month after it failed to meet margin calls. The fund, which was founded in 2012 by former classmates Su Zhu and Kyle Davies, faces significant losses following last month’s collapse of the Terra ecosystem and its native luna token. Davies told The Wall Street Journal that the firm is “hoping to reach an agreement with creditors that would give it more time to work out a plan.”

© 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.

Coinbase (COIN) was downgraded from buy to sell by Investment bank Goldman Sachs on Monday, while shares plunged over 5% in pre-market trading. 

Goldman Sachs has downgraded Coinbase after several weeks of turbulence for the crypto exchange, setting a revised price target of $45, down from $70.

Shares in Coinbase closed at $62.71 on Friday, up roughly 9% over the week. Yet Coinbase was trading at $59.36 in pre-market today, down 5.34%, at the time of writing according to Nasdaq data via TradingView. 

According to Monday’s note the bank expects current cryptocurrency prices and trading volumes to cause “further degradation’ in Coinbase’s revenue base. Plus, analysts are forecasting breakeven to negative adjusted earnings before interest, taxes, depreciation and amortization (EBITDA) — a popular measure of a company’s financial performance — over the next few years. 

The downgrade comes just four days after Moody’s downgraded Coinbase’s senior unsecured notes. Moody’s said on Thursday that Coinbase’s Corporate Family Rating (CFR) had been downgraded from a Ba2 to a Ba3, and it guaranteed senior unsecured notes to Ba2 from Ba1. 

These announcements came less than two weeks after Coinbase laid off 18%, or approximately 1,100, of its staff. The layoffs were made in preparation for the tougher economic conditions to come and the prospect of a crypto winter. 

According to analysts at Goldman, however, these cuts don’t go far enough, as the reduction effort merely brings the company’s headcount back to levels last seen at the end of the first quarter in 2022. 

In Monday’s research note, Goldman Sachs analysts concluded that:

“Lastly, we are incrementally more bearish on the competitive environment and the outlook for fee rate compression given the announced merging of the Coinbase and Coinbase Pro platforms, which has the potential to reduce the switching costs and make lower pricing more easily available to its users.”

© 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 hacker who exploited NFT lending pool XCarnival for 3,087 ETH ($3.8 million) has returned half of the loot, according to on-chain security researcher and ZenGo co-founder Tal Be’ery.

As an NFT lending pool, XCarnival enables users to borrow funds using their collectibles as collateral for loans. XCarnival suffered a security incident on Sunday that saw the exploiter able to drain $3.8 million in ETH from the platform.

“The core issue was a vulnerability that allowed the attacker to borrow multiple times against the same NFT collateral,” Be’ery told The Block.

The hacker deposited one NFT, Bored Ape #5110, as collateral to borrow funds. Normally, the Bored Ape used as collateral should be locked up by the protocol until repayment of the loan occurs. The hacker was, however, able to withdraw the Bored Ape collateral without repaying the loan and using it to take another loan. This action was repeated several times, draining 3,087 ETH from the protocol.

XCarnival contacted the hacker after the incident via on-chain messages calling for a return of the funds. The NFT lending pool initially offered a $300,000 bounty in exchange for the stolen funds. XCarnival then increased its offer to half of the stolen amount, which the hacker obliged.

The hacker’s wallet still has 1,500 ETH ($1.8 million) as of the time of publishing. The remaining 120 ETH, which was withdrawn from Tornado Cash to carry out the exploit, has been returned.

The NFT lender also promised not to pursue any law enforcement action against the hacker if they returned half of the stolen funds.

It is becoming a popular occurrence for projects to offer bug bounties to hackers responsible for stealing from them. For example, this happened to the exploiter who stole 20 million Optimism tokens from Wintermute earlier in June and subsequently returned 17 million of those coins, with the two sides calling it even.

Harmony also recently offered a $1 million bounty for the return of the $100 million that was stolen from its Horizon bridge protocol on June 23. Harmony’s offer also includes a promise not to advocate for criminal charges against the hackers.

© 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.

Episode 58 of Season 4 of The Scoop was recorded remotely with The Block’s Frank Chaparro and Alok Tayi, Co-Founder & CEO of Vibe Bio.

Listen below, and subscribe to The Scoop on Apple, Spotify, Google Podcasts, Stitcher or wherever you listen to podcasts. Email feedback and revision requests to podcast@theblockcrypto.com.

One biotech startup is trying to use blockchain technology to revolutionize the way potential treatments for rare diseases are identified for funding and development.

According to Vibe Bio CEO Alok Tayi:

“Vibe is a community of patients, scientists and partners that help identify promising treatments for rare diseases and other overlooked diseases, and fund them in innovative ways.”

In this episode of The Scoop, Tayi shares his vision for how Vibe Bio aims to disrupt the centralized control of big pharma, and explains why a decentralized autonomous organization (or ‘DAO’) is the optimal solution for organizing the members of the Vibe community.

According to Tayi, the biology of rare diseases is often understood, but biotech companies do not have enough incentive to fund research given the limited financial upside. As Tayi notes:

“There actually ends up being a myriad of different candidate medicines with promise that are sitting on shelves today, but simply lack the capital and the focus to be able to develop them.”

This is the problem Tayi hopes to address through Vibe Bio. By using a DAO structure, Vibe Bio is able to put forward governance proposals to identify promising treatment options. $VIBE token holders can then vote on which treatments will get funded via the proceeds of the DAO’s token sale.

As Tayi explains, this decentralized approach empowers patients who would otherwise be unable to get assistance from centralized biotech companies:

“When you start to move away from a traditional sort of financing model to one that’s community led, patients can now be in the driver’s seat of deciding what medicines to pursue, what disease areas we should try to treat, not profit or politics.”

Earlier this week, Vibe announced it received $12 million in a funding round led by Initialized Capital, which also included participation from prominent angel investors Naval Ravikant and Balaji Srinivasan, as well as 6th Man Ventures — the venture firm helmed by The Block Co-Founder Mike Dudas — amongst others.

During this episode, Chaparro and Tayi also discuss:

• Tayi’s personal inspiration for Vibe Bio
• The intersection of crypto and biotechnology
• How DAOs enable decentralized coordination

This episode is brought to you by our sponsors Fireblocks, Coinbase Prime & Cross River
Fireblocks is an enterprise-grade platform delivering a secure infrastructure for moving, storing, and issuing digital assets. Fireblocks enables exchanges, lending desks, custodians, banks, trading desks, and hedge funds to securely scale digital asset operations through the Fireblocks Network and MPC-based Wallet Infrastructure. Fireblocks serves over 725 financial institutions, has secured the transfer of over $1.5 trillion in digital assets, and has a unique insurance policy that covers assets in storage & transit. For more information, please visit www.fireblocks.com.

About Coinbase Prime
Coinbase Prime is an integrated solution that provides institutional investors with an advanced trading platform, secure custody, and prime services to manage all their crypto assets in one place. Coinbase Prime fully integrates crypto trading and custody on a single platform, and gives clients the best all-in pricing in their network using their proprietary Smart Order Router and algorithmic execution. For more information, visit www.coinbase.com/prime.

About Cross River
Cross River is powering today’s most innovative crypto companies, with banking and payments solutions you can rely on, including fiat on/off ramp solutions. Whether you are a crypto exchange, NFT marketplace, or wallet, Cross River’s API-based, all-in-one platform enables banking as a service, ACH & wire transfers, push-to-card disbursements, real-time payments, and virtual accounts and subledgers. Request your fiat on/off ramp solution now at crossriver.com/crypto.

© 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

• Fintech-focused investor Andrei Brasoveanu says that venture capitalists spent 2021 “in catch-up mode.”
• The Accel partner also shares his thoughts on the limits of inflationary tokenomics, following stresses at major crypto firms.

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