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Computing hardware maker NVIDIA has settled with the Securities and Exchange Commission (SEC) for $5.5 million over alleged “inadequate disclosures concerning the impact of cryptomining on the company’s gaming business.”

The SEC announced the news today, saying that its order found that the company failed to disclose mining as a significant element of its revenue growth. During consecutive quarters in fiscal year 2018, the company did not disclose that crypto mining was a main driver of the sale of its graphics processing units (GPUs), according to the SEC.

Those GPUs were marketed and designed for gaming, but amid 2017’s bull run, many began purchasing high-end GPUs to mine crypto. As Mark D’Aria, CEO of Bitpro Consulting, a retailer of used GPUs, told The Block in a recent look at GPU price trends:

“There was a much bigger demand for these super high-end GPUs that gamers never really were willing to pay on average that much for,” he said. “Because miners were willing to pay whatever it cost, Nvidia sold far more 3090s than they would have sold to just gamers (…) there was this massive amount of volume of the really high-end cards.”

The SEC contends that NVIDIA was responsible for disclosing that driver of growth in its Forms 10-Q, which is a quarterly report of financial performance. According to the SEC, NVIDIA knew crypto mining was driving its growth, but left this detail out of two of its 2018 10-Qs. It also referenced how other parts of the company’s business were driven by crypto demand, which the SEC contends further obscured the link to crypto mining omitted in the GPU sales section. 

“NVIDIA’s disclosure failures deprived investors of critical information to evaluate the company’s business in a key market,” said Kristina Littman, Chief of the SEC Enforcement Division’s Crypto Assets and Cyber Unit in a statement.

NVIDIA agreed to pay the $5.5 million fine without admitting or denying the findings.

© 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.

Hop Protocol, a multi-chain bridge on Ethereum, announced a new governance token under the ticker HOP and an airdrop for early users in an official statement on Thursday. 

The token launch will help Hop organize itself as a decentralized autonomous organization called Hop DAO.

Hop is a popular cross-chain bridge connecting Ethereum with other EVM-compatible blockchains. The bridge lets Ethereum users transfer funds between Polygon and Gnosis sidechains, as well as some Layer 2 networks including Arbitrum and Optimism. Since its launch in 2021, the Hop bridge has processed more than $2 billion in cross-chain transfers.

This move makes Hop the latest crypto project to issue its own token with a retroactive reward for early users. So far this year, other projects including Optimism, CowSwap and Connext have also unveiled governance tokens along with airdrop plans for early adopters.

Cutting out airdrop farmers

Out of the total 1 billion HOP supply, Hop allocated 8% (80 million tokens) as airdrops to bridge users and those who had added funds to its liquidity pools. 

Out of this allocation, 3.35% of the total (33.5 million tokens) was set aside for early users of the bridge. 

Still, not everyone made the cut. Only those who had sent more than $1,000 between chains and made more than two transactions were classified as bridge users, according to an official Twitter post. This consisted of 43,000 Ethereum addresses the team recorded before Thursday.

While this steep criteria filtered out many bridge users from the airdrop, it was a move the Hop founder said was needed to remove airdrop farmers, also called “sybil attackers.” Airdrop farmers use DeFi products in small amounts from several wallets in anticipation of receiving later rewards.

“We set the criteria as low as we possibly could. There were way too many Sybil attackers in the $500 to $1000 range to handle and would have resulted in no one getting a good drop except for the bot farms,” Hop Protocol’s founder Chris Whinfrey said on Twitter.

Rewarding bridge users was only part of the airdrop as 4.65% from the airdrop (46.5 million tokens) was given to liquidity providers, “bonders” who locked assets into the bridge for a year, and other initial supporters.

Aside from the initial airdrop, 92% (920 million tokens) will be allocated for various uses to fund the bridge’s activities over the coming years. 

Large allocations of the HOP token supply include 60.5% moving to the Hop DAO’s treasury and 22.5% to the founding development team. The Hop team said on Twitter that the remaining 9% will be used to hire future team members and investors.

© 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 trading platform Amber Group is seeking fresh funding just a few months after topping up its coffers with $200 million.

Two people with direct knowledge of the situation told The Block that the deal would likely value the Singapore-based startup at up to $8 billion. One of those sources said the final valuation is likely to be between $5 billion and $8 billion.

Bloomberg was first to report news of the fundraising, saying that the round would value Amber at $10 billion.

A spokesperson for Amber declined to comment to The Block.

Whatever transpires, if the fundraise is successful it would represent a substantial uplift on the $3 billion price tag placed on Amber in February when it raised $200 million in a round led by Temasek, the Singaporean sovereign wealth fund. Sequoia China, Pantera Capital, Tiger Global Management, True Arrow Partners and Coinbase Ventures also participated in that round.

Amber’s CEO, Michael Wu, said in February that the $200 million capital injection would fuel hiring in Europe and the Americas — helping Amber to meet institutional demand in those regions. There are also plans to expand WhaleFin, its consumer app that offers yield on crypto holdings, and its creator-focused arm OpenVerse.

Founded in 2017, Amber offers a wide range of products to both institutional and consumer clients. As of February this year, it boasted more than 1,000 institutional clients globally and assets under management of more than $5 billion.

© 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.

Revolut’s head of crypto has left the company for an as-yet unannounced destination. 

Jean Meyer joined the neobank last September as part of Revolut’s first acquisition of start-up Wanted, a recruitment marketplace. He progressed from head of product to head of crypto in January, according to his LinkedIn page. Meyer replaced the incumbent head of crypto, Ed Cooper. 

Sources familiar with the matter said Meyer had taken over the post from Cooper months before it appeared on LinkedIn. 

While Meyer did not respond to The Block’s request for comment, his headline on LinkedIn now reads “working on something new…” The Block had not heard back from Meyer by the time of publication.

Cooper is still at Revolut but understood to be in a different role. The Block also sought comment from Cooper. 

 A well-placed source said the head-of-crypto role is being covered internally and will be filled more permanently in due course. 

The setback comes amid ambitious plans by Revolut to command various aspects of consumer crypto markets. 

This time last year, Revolut became one of the first “non-crypto” firms to give its users greater freedom to move cryptocurrency around, adding a function that meant its users could withdraw bitcoin to personal wallets. 

It is also rumored to be launching its own token, called “Revcoin.”

The bank’s crypto arm has encountered some regulatory hurdles in the UK in recent months as it struggled to obtain an anti-money laundering license from the Financial Conduct Authority (FCA).  

It is still on the regulator’s so-called temporary register, alongside crypto custodian Copper and three other firms. The register is a stopgap measure the FCA created after missing an earlier deadline to green-light companies’ operations. Their fate remains uncertain, but without full registration they could in theory be forced to stop crypto-related activities in the UK.

© 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.

Hedge fund Marshall Wace has begun bringing in new talent for its digital assets team as it prepares to push into blockchain investments. 

The London-based firm, which manages about $60 billion, hired William Benattar for its crossover investment fund, Bloomberg first reported, citing people familiar with the matter.

Benattar previously worked for Nick Candy at Candy Capital, where he headed up tech investments. In his new role he will focus on digital finance and private market investments, including funds, according to his LinkedIn bio. 

Plans for Marshall Wace’s digital asset unit have been ongoing since mid-last year, when it was reported that it was interested in acquiring stakes in crypto companies at a late stage in their development. 

Specifically, Marshall Wace said it would target investments in sectors including stablecoins, payments systems for digital currencies and blockchain technology.  

Marshall Wace is already an investor in Circle, the company behind the stablecoin USDC. The hedge fund participated in Circle’s $440 million fundraising round, which closed last May.

The Block contacted Marshall Wace and Benattar for comment 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.

Founded back in 2011, Blockchain.com recently closed a Series D funding round in March at a valuation of $14 billion, making the crypto company both one of the longest-operating exchanges as well as one of the highest valued in the industry.

After spending effectively “zero” on marketing for over a decade, Blockchain.com recently announced a sponsorship deal with the Dallas Cowboys, becoming the first crypto company to ink a deal with an NFL team approved by the league.

In this episode of The Scoop, Peter Smith, CEO of Blockchain.com, discusses his company’s upcoming strategy, including IPO rumors and the rationale behind their Cowboys partnership.

As he explains during the interview, Smith wants “to work with the biggest and the best,” making the Cowboys the ideal choice for Blockchain.com’s first sports partnership:

“When you really study these marketing deals, you’re basically looking for who has the biggest fan base, the demographics of the fan base, and then the TV side of it,” Smith said. “We really wanted to work with them because of the fan base and the TV exposure.”

Blockchain.com was also in the news in April, when a Bloomberg report circulated suggesting the company is planning an IPO for some time this year. However, when asked about the report, Smith commented that it must have been “a slow news day at Bloomberg.”

While Smith believes Blockchain.com “will be a public company someday – and probably sooner than later,” he clarified: “We haven’t done anything in the last 60 days that’s different than what we’ve been doing for the last nine months preparing to someday be a public company.”

During this episode, Chaparro and Smith also discuss:

• Blockchain.com’s NFT marketplace
• ‘Crypto companies’ as a new category of business
• IPO and the need for ‘crypto analysts’

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.

OpenSea’s Discord server was hacked to promote a scam, according to tweets from individuals and security firm PeckShield.

“We are currently investigating a potential vulnerability in our Discord, please do not click on any links in the Discord,” tweeted OpenSea on the matter.

It appears that the access was used to promote a scam NFT mint. According to screenshots, an announcement was made in the Discord server that there was a mint pass being offered in collaboration with YouTube. It directed members to go to a website that contained the word YouTube but was not its official website. PeckShield has identified the link as a phishing site.

The scam message was shared in the announcements channel. This channel has now been hidden from users.

It is unclear if any users fell foul to the attack or if any NFTs have been lost.

This follows similar attacks in the NFT space, where Discord servers are often hacked to promote fake giveaways. This happened to Bored Ape Yacht Club’s Discord server. More recently, the Bored Ape Instagram account was also hacked to promote a fake NFT mint — one that gleaned $2.8 million of NFTs from unwitting users.

We have reached out to OpenSea for comment and will update this story should we hear back.

For more breaking stories like this, make sure to subscribe to The Block on Telegram.

© 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.

Multicoin Capital is down 95% on its 8-figure investment in NFT project Loot, according to co-founder Kyle Samani, who maintains this is all part of the process.

“Being willing to lose 100% of capital at risk is *very* important to our long term success,” he tweeted, after acknowledging the drop in value.

Vine founder Dom Hoffmann launched Loot in August 2021. Unlike other collections that display images or the so-called profile picture-style NFTs, Loot featured randomly generated texts. The idea was that the text would be used in yet-to-be-created games (so rare words might one day become rare items). The collection was free to mint.

Upon its launch, Loot quickly garnered popularity in the NFT space with over $230 million in sales in the first week. Communities quickly formed around the collection leading to the creation of derivative projects (mostly other text-based NFT collections).

The crypto investment fund bought 8 figures of Loot — at least $10 million — at the height of the collection’s popularity in September 2021. At the time, Samani stated it was Multicoin’s first NFT purchase. He said Loot’s investment thesis was simple; it was “the first investable crypto-native game.”

This popularity did not, however, last long as trading activity on the collection soon plummeted. Data from NFT marketplace OpenSea shows that Loot’s floor price on September 5 last year was about 9 ETH ($35,000 at the time). The floor price of Loot is now 1.1 ETH which amounts to $3,100 at current prices.

Today, Loot ranks outside the top 50 NFTs on OpenSea with a floor market capitalization of 8,557 ETH ($24 million) — that’s calculated if you multiple the price of the cheapest Loot NFT by the number of NFTs in the collection.

Samani says Multicoin is still holding its Loot NFTs despite the 95% decline in the value of its investment in the NFT collection.

In March, Samani told The Block that buying NFTs directly is not viable enough for Multicoin Capital to invest in at scale. He said it was unlikely that the firm would have even a 1% position in NFTs. Instead, he said the company will focus on the infrastructure layers supporting NFTs.

© 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.

Argentina’s central bank (BCRA) announced today that financial institutions cannot enable their clients to carry out operations using digital assets, just days after two banks said they had opened up crypto trading to their clients. 

On May 2, the major private bank Banco Galicia and all-digital Brubank both announced they would offer crypto trading to customers through the investment portals on their websites. But now, the central bank said that financial entities in the country cannot allow this kind of service since crypto assets are not regulated. 

Argentina’s central bank defines digital assets as “a digital representation of value or rights that are transferred and stored electronically using Distributed Ledger Technology (DLT) or other similar technology.”

“The measure ordered by the Board of Directors of the BCRA seeks to mitigate the risks associated with operations with these assets that could be generated for users of financial services, and for the financial system as a whole,” the central bank statement reads.

Some Argentines have embraced crypto as a way to more easily save money while dealing with the country’s high inflation rate, as well as the currency controls reinstated by its current president, Alberto Fernández, in 2019.  

But in March, Argentina’s government signaled that it will discourage the use of cryptocurrencies as part of a nearly $45 billion debt restructuring deal with the International Monetary Fund (IMF). In a March 3 memorandum, the government said it would take steps to “discourage the use of cryptocurrencies with a view to preventing money laundering, informality, and disintermediation,” in addition to other measures aimed at strengthening the country’s financial resilience. 

© 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.

All the major publicly traded bitcoin miners ended Thursday on a decline, a perhaps unsurprising development given the turbulence in US equities. 

Still, some fared better than others.

Marathon’s stock fell 10.47% on Thursday, a day after announcing during its Q1 earnings call a net loss of $13 million, even though bitcoin production rose by a “record” 1,259 in the first three months of the year. 

After Riot announced in the early hours of the morning that it was powering its new flagship mining facility in Texas and expecting to start mining next week, the London-based company’s stock went up by about 10%, eventually dropping back down to similar levels and ending the day at a 0.83% drop.

Here is a brief look at how some of the major crypto mining companies faired in the markets on Thursday, May 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.