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Cryptocurrency exchange Coinbase has reined in a plan to triple its headcount this year in response to turbulent market conditions.

Emilie Choi, Coinbase’s president and chief operating officer, said in a blog post on Tuesday that the firm would be slowing hiring to “reprioritize our hiring needs against our highest-priority business goals.” The note had been circulated among staff earlier.

“Heading into this year, we planned to triple the size of the company. Given current market conditions, we feel it’s prudent to slow hiring and reassess our headcount needs against our highest-priority business goals,” she said. “Headcount growth is a key input to our financial model, and this is an important action to ensure we manage our business to the scenarios we planned for, specifically the potential adjusted Ebitda we are aiming to manage to.” 

The news comes with crypto markets in turmoil following last week’s spectacular collapse of TerraUSD (UST), the crypto industry’s third-largest stablecoin. Major cryptocurrencies across the board are down, with bitcoin dropping below $30,000 last week for the first time this year.

Shares in Coinbase — which went public via a direct listing last year — have also taken a beating, dropping to new lows last week after its earnings report for the first quarter underwhelmed. The stock closed at $61.70 on Monday, an 80% slide from its first day as a public company in April 2021.

In her note, Choi said that “now is the time to ensure we are fully integrating all recent hires — so we can ensure that they are successful at Coinbase.”

“Big picture: We know this is a confusing time and that market downturns can feel scary. But as we said at last week’s Town Hall, we plan for all market scenarios, and now we are starting to put some of those plans into practice,” she continued. “We’re in a strong position — we have a solid balance sheet and we’ve been through several market downturns before, and we’ve emerged stronger every 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.

Following China’s crackdown on bitcoin mining last year, a large number of miners were seemingly plugged back into the network by September 2021, according to the most recent data from the Cambridge Centre for Alternative Finance (CCAF).

In fact, China still had the second-largest share of the network’s hash rate share (21.11%), following the United States (27.69%). China was home to about half of the world’s bitcoin mining hash rate before the government outlawed the activity last summer.

According to the Cambridge Bitcoin Electricity Consumption Index (CBECI), China’s share of the hash rate plummeted to 0% in July and August 2021. This points to two possible theories: either there was an abrupt and massive return of miners operating despite the ban, or the miners that kept operating in July and August were concealing their locations.

The study authors write that such a sudden change after the ban seems “unlikely given physical constraints.” Instead, a more likely explanation of the finding might be a limitation to the research group’s methodology, which was based on aggregated geolocational data reported by partnering mining pools BTC.com, Poolin, ViaBTC and Foundry.

“This approach is theoretically vulnerable to deliberate obfuscation by individual miners who may, for various reasons, choose to conceal their location by using virtual private networks (VPN),” the authors state. “In practice, we believe this limitation to only moderately impact the validity of the overall analysis.”

It’s not clear how many China-based miners were actually unplugged in July and August, according to Alexander Neumueller, CBECI’s project lead in the Digital Assets Team. “But miners in China seem to be more comfortable sharing their location again.”

In December, CNBC reported that as much as 20% of all the world’s bitcoin miners were in China, according to unnamed sources.

CCAF’s newest data runs until January 2022 and further confirms that the United States has emerged as the global hash rate leader. The US captured 37.84% of the share in January.

Mining in Canada, meanwhile, has grown at a much more modest pace. Even though hash rate there jumped from 11.54 EH/s in August 2021 to 12.15 EH/s in January 2022, Canada’s hash rate share actually decreased from 9.55% to 6.48% due to how much the network grew during that same period. “The overall network was growing very fast,” Neumueller said.

Due to the increased presence of mining in the US, CCAF started also looking at state-by-state data. As of January 2021, the top three states in terms of hash rate share were Georgia (30.76%), Texas (11.22%), and Kentucky (10.93%).

Distribution of bitcoin mining hash rate in the US as of 31 December 2021. Source: Cambridge Centre for Alternative Finance

Of course, that doesn’t account for facilities that have opened since or that are currently in development. Bitcoin miner Riot, for instance, has started building centers that will be able to use up to 1.7 gigawatts. The president of the Texas Blockchain Council recently estimated that by the end of next year around 5 gigawatts will be used by the industry within the state.

Other states with more significant mining activities included New York (9.77%), California (7.9%), North Carolina (4.7%), and Washington (4.1%).

Kazakhstan, which also became a popular destination for miners following China’s ban, has essentially forced some of them out of the country in recent months. According to CCAF’s data, total mining activity fell to 24.79 EH/s in January 2022, resulting in the country’s market share declining to 13.22%, from 18.31% in October 2021.

CCAF also said that it is currently working on a new model that estimates the network’s greenhouse gas emissions on a continuous basis.

© 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.

BitMEX — one of the longest-running exchanges in digital asset futures space — is hoping that the launch of a spot new market will help it lure retail customers in the midst of the crypto trading doldrums. 

The firm, which has made headlines thanks to the legal woes of its founder Arthur Hayes, unveiled on Tuesday its new spot market, offering the trading of cryptocurrencies like bitcoin, ether, Bored Ape Yacht Club’s APE token, and Uniswap’s governance token UNI. 

Since European exchange veteran Alexander Höptner stepped in for Hayes in late 2020, BitMEX has hinted at an expansion outside of its bread-and-butter perpetual swaps, which once sat at the center of the market before rivals like FTX and Binance ate into its market share.

The new spot market features a more friendly user interface than its traditional derivatives platform, sporting softer fonts and warmer coloring. 

“It is completely different from our classic look and feel,” said BitMEX Vice President of spot Genia Mikhalchenko. He is hoping that will appeal to retail traders who may be looking for new options after the most recent downturn. 

“We are hoping to break into the top 15 spot markets over the next 12 to 16 months,” he added. “We want to ride this wave back up as the market turns around.”

Taking a realist approach, Mikhalchenko said he’s aware BitMEX is late to the game on gate-crashing spot trading, adding that the firm doesn’t have any “delusions” about its prospects. 

Still, he said that firm’s plan to giveaway $1 million in crypto to new users could be an incentive to sign-up for the new service.

“Given everything that’s going on… this will be especially attractive,” he said, referring to the draw down in crypto prices. 

The firm is also adding pressure to the ongoing pricing wars in crypto trading, charging 0.10% for a trade under $100,000. FTX.US, by way of comparison, announced it would slash its prices to charge 0.20% for the same type of trade — a decline from 0.40%.  

“Last year we had a pretty bold plan to get into different business lines and it’s been quite the process,” Mikhalchenko said. “It’s been a crazy ride for everybody.”

© 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.

Using virtual private networks (VPNs) and online payment platforms, North Korean workers are apparently getting freelance work in the tech sector, particularly in crypto. 

The Departments of Justice, State and the Treasury released a joint advisory warning of the development on May 16. 

“The DPRK has dispatched thousands of highly skilled IT workers around the world, earning revenue for the DPRK that contributes to its weapons programs in violation of U.S. and UN sanctions,” the advisory reads.

Among industries targeted, cryptocurrency is among the first the advisory names. The advisory goes on to identify “Requests for payment in cryptocurrency” as a red flag for companies to be on the alert for in making new hires. 

The government departments proceed to outline the means that workers in North Korea use false documentation or proxy identities to get work via online freelance platforms. In addition to earning income for the North Korean regime, the agencies say they use privileged access to information to stage intrusions. 

The work of North Korea’s hacking program — most infamously Lazarus Group — is long. Just recently, the US government identified a $600 million hack of Axie Infinity’s Ronin Network as the work of the group. The Office of Foreign Asset Control subsequently sanctioned a roster of wallet addresses associated with those funds after the hack. 

© 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.

CEOs from two cryptocurrency exchanges were scheduled to meet with Brazil’s Central Bank president Roberto Campos Neto in the past few days, indicating that talks between industry and the government are ongoing even as the country waits for lawmakers to potentially approve a new crypto regulation law. 

As spotted by Brazilian publication Portal do Bitcoin, an official agenda showed a videoconference scheduled between Campos Neto and three Binance executives on Friday afternoon to discuss “institutional matters.” Binance CEO Changpeng Zhao was listed as an attendee, along with vice-president of government relations, Latin America, Daniel Mangabeira and vice-president of global expansion Matt Schroder. That meeting was shown as being closed to the press. Binance declined to comment on the nature of the meetings. 

That publication also spotted that Coinbase CEO Brian Armstrong and two other company executives had a video meeting scheduled today with Campos Neto, also out of the public eye. According to the agenda, the participants were to “present their macroeconomic scenario.” Coinbase did not comment by press time.

Both Binance and Coinbase have signaled interest in acquiring Brazilian companies, and have been expanding in the region. Coinbase has been in talks with Mercado Bitcoin parent 2TM about a possible expansion deal, but Bloomberg reported earlier this month that the talks fell through. Coinbase also recently hired Fábio Tonetto Plein as its new Brazil country manager, who joins the crypto company after previous management roles at PicPay and Uber.

Binance, on the other hand, announced in mid-March that it would “explore” the acquisition of Brazilian securities brokerage Sim;paul Investimentos. The status of those talks is unknown. 

The meetings come as a proposed crypto regulation bill has finally gained momentum with Brazilian lawmakers, following years of deliberation. The legislation still has to pass muster with Brazil’s lower house before it would go to president Jair Bolsonaro for a vote, but it could have a decent shot of becoming law. The bill gives Brazil’s executive branch the ability to decide on which government entity would regulate crypto companies, although rapporteur Irajá Abreu has told Bloomberg that he thinks that Brazil’s Central Bank would ultimately be in charge.

Meanwhile, Brazilians now have more options than ever to trade crypto as additional exchanges move into the market and even banks start embracing digital assets. Fintech unicorn Nubank announced last week that it would work with Paxos to offer bitcoin and ether trading to its customers, and exchange Bybit recently launched in Brazil. The broker XP also recently revealed it would work with Nasdaq to create a new digital asset trading platform for Brazilian customers. 

And investment bank BTG Pactual also looks ready to launch its crypto trading platform Mynt, which was originally slated for launch by the end of 2021. The bank’s president Roberto Sallouti said during a May 9 earnings call that the new tool will be ready in two months, Cointelegraph Brasil reported.

© 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

• Axie Infinity was a pioneer of play-to-earn gaming and became immensely popular last year.
• But indicators of popularity — the average cost of an Axie, total NFT sales and daily active users — have since plummeted.
• What happened?

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As a new week of trading commenced, most bitcoin miners’ stocks went down during Monday’s trading session.

Iris Energy, in particular, fell by 36.45% on Nasdaq. Riot, Marathon and Core Scientific also saw their stocks drop by between 9% and 10%.

After announcing declining revenues in the first quarter of 2022, Bitfarms’ stock went down by 5.41% on the Toronto Stock exchange and 7.88% on Nasdaq.

Here is a look at how other crypto mining companies did in the markets on Monday, May 16:

© 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.

Terraform Labs CEO and co-founder Do Kwon has formally proposed forking the Terra network into a new chain. 

Kwon circulated a new proposal today in a post on a forum for Terra discussion in the wake of the collapse of Terra-based assets. It adds to his initial revival plan, posted last week, which amounted to a restart of the Terra blockchain. That initial proposal would create one billion tokens to distribute among stakeholders to incentivize them to remain and rebuild.

“$UST peg failure is Terra’s DAO hack moment – a chance to rise up anew from the ashes,” said Kwon in his post.

This latest addition proposes to fork the Terra chain into a new “Terra” with token “Luna” while the old chain would become “Terra Classic” and the original Luna tokens would become “Luna Classic” (LUNC). The new Luna would be airdropped to Luna Classic holders, stakers, Terra holders and app developers of Terra Classic. The intention is for the chain to be “community-owned” and target a 7% inflation rate through staking rewards.

The creation of one billion Luna is still part of the proposal. Kwon proposed that a quarter of those tokens would go to a community pool on the forked chain controlled by stake governance, 5% to developers, 35% to wallets that held Luna prior to the attack, 10% to Luna holders at the launch of the new chain, and 25% to UST holders on a vesting schedule. 

The proposal will be put up for governance vote on May 18th Asia Time.

Kwon took to Twitter to explain why he’s advocating for this path forward, saying the developer talent pool is “broader and deeper on Terra than most ecosystems,” and that “Terra’s blockchain is incredibly robust, as attested to by recent events.”

© 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.

Canada-based bitcoin miner Bitfarms reported a net income of $5 million in the first quarter of 2022, down by about 50% from the previous quarter.

The firm also said during its earnings call on Monday that it would scale back expansion plans for the rest of the year due to logistics and supply chain issues related to the increase in natural gas prices.

President and COO Jeff Murphy spined the current challenges the market is facing as an opportunity for the company to “increase relative market share gains,” as the capital supply chain and other constraints potentially slow the growth of the network.

Bitfarms presented a 33.3% decrease in total revenue compared to last quarter, totaling $40 million. Gross mining margins dropped to 76%, compared to 84% in Q4 2021.

Murphy said that Bitfarms continued to present profitable results “despite the price erosion in Bitcoin.”

The company’s expansion plans for 2022 had originally included reaching a target of 7.2  exahash per second (EH/s). But rising gas prices have forced it to reassess that goal. As it stands, Bitfarms expects to reach 6.0 EH/s by the end of the year. It currently operates 3.4 EH/s, representing about 1.5% market share, per the announcement.

A large portion of this growth was associated with the deployment of miners into a new facility in Argentina, operating inside the gates of a private power company, with up to 210 megawatts of power capacity available for Bitfarms.

The company has scaled back its commitments and now anticipates that the completion of phase one of the Argentina project (which includes 50 megawatts) will happen by the end of October 2022, while phase 2 (an additional 50 megawatts) has been pushed back to the first quarter of 2023.

“However to be clear Argentina still remains an attractive area for new development opportunities,” Murphy clarified during the call.

Bitfarms currently operates a total of nine farms — up from six at the beginning of 2022 — and has a capacity of 137 megawatts, with an additional 92 megawatts under construction and scheduled to come online by the end of the year. This will take the total to 229 megawatts. 

CFO Jeff Lucas said that Biftarms was “exercising prudent action” given the current environment.

Lucas also said that the company had an edge in the mining industry because of its relatively low operating costs. In Q1 2022, the Bitfarms had an average direct cost of $8,700 per bitcoin mined.

“Overall, we continue to focus and being a low-cost producer, which offers competitive advantages and financial flexibility. Even with the significantly lower Bitcoin prices being experienced currently, we maintain healthy margins,” Lucas said.

Lucas stated that, while Bifarms has continued t0 hold on to bitcoin, it is still considering selling a portion of daily bitcoin mining, in an effort to minimize its overall capital costs.

As of March 31, it held 5,244 BTC — 961 of which were mined in the first quarter.

Last week, bitcoin mining giant Core Scientific also said it was also planning to take a more conservative approach and scale back on previous growth objectives, given current market conditions.

As of press time, Bitfarms’s stock was down on the Toronto Stock exchange and on Nasdaq by around 7%.

© 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

• The Ethereum Merge has recently been postponed to “a few months after June,” according to one core developer in April. 
• Despite the numerous delays, the Merge is anticipated to take place after all and will transition the consensus algorithm to proof-of-stake. 
• A looming question is what will happen to the millions of GPUs that are running on the Ethash algorithm at the moment.
• In this piece, we take a look at the current Ethereum mining landscape and the economics of GPU mining.

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