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J. Christopher Giancarlo, former Chairman of the Commodity Futures Trading Commission, is putting out a book on cryptocurrency and its role in Washington, DC.

Announced in a September 8 tweet, the book is called “CryptoDad: The Fight for the Future of Money.” The forthcoming book takes its title from a nickname that the crypto world gave him for his work while at the CFTC.

A passage from the dust jacket that Giancarlo provided to The Block explains: 

“CryptoDad tells the story of Giancarlo’s oversight of the world’s first regulated market for Bitcoin derivatives, an action that ventured domestic political fallout and engendered some global derision. Yet, by braving the political risk of greenlighting the debut of Bitcoin futures, the CFTC provided regulatory certainty essential for today’s burgeoning crypto industry.”

According to Amazon, ‘CryptoDad’ is scheduled for an October 26 release.  

Giancarlo began his term as a CFTC commissioner under President Obama. In 2017, under President Trump, he became the chairman of the commission. It was a time critical for the development of crypto market regulation

After leaving the commission in 2019, Giancarlo continued his work on crypto, launching the Digital Dollar Project alongside Accenture and former LabCFTC leader Daniel Gorfine to advocate for a U.S. central bank digital currency.

Giancarlo subsequently joined the board of crypto lending platform and neobank BlockFi. He left that position a week ago, as BlockFi faces scrutiny from state regulators, though BlockFi has said that Giancarlo will continue to serve in an advisory capacity.

In his tweet announcing the book, Giancarlo noted that he is “seeing the greatest danger to America’s future in Washington’s focus on the past.”

© 2021 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.

Eden Network, a priority transaction network for Ethereum that provides protection against miner extractable value (MEV) and arbitrary transaction reordering, has raised $17.4 million in a seed funding round.

The round was secured via selling EDEN tokens, Caleb Sheridan, a core developer of Eden Network, told The Block. Multicoin Capital led the round, with Jump Capital, Alameda Research, Wintermute, GSR, and DeFiance Capital also participating.

Angel investors, including Andre Cronje, founder of Yearn Finance, and Joshua Lim, head of derivatives at Genesis Capital, also backed the round.

The fresh capital injection will help Eden Network strengthen its infrastructure through research and development and further grow its adoption, said Sheridan. To that end, the project is also looking to triple its current team of 10 by hiring mostly engineers, he said.

Eden Network went live last month with Ethereum’s London upgrade. Since it is a transaction priority network for Ethereum, Eden helps users prioritize their transactions on the blockchain while providing protection against practices such as MEV or frontrunning. As The Block reported recently, MEV refers to certain kinds of profit-generating opportunities that miners could have by frontrunning their transactions, because they are the ones who choose the order of transactions in a block.

Sheridan said users who stake EDEN tokens get priority in Eden blocks with protection from MEV, improved trade privacy, and better price execution. Eden Network says it already represents more than 50% of the Ethereum hashrate, meaning more Eden blocks are now being produced on Ethereum than non-Eden blocks.

Eden Network provides an additional revenue stream to Eden block producers or miners in the form of EDEN tokens, said Sheridan. Miners that are currently utilizing the Eden Network include F2Pool, SparkPool, Nanopool, and 2Miners.

Eden Network rents prioritized block space in Eden blocks to so-called “Slot Tenants.” That means projects looking to become tenants have to participate in a slot auction where the highest EDEN staker wins. In return, the winning projects or tenants get access to Eden Network for processing their trades with protection from MEV and frontrunning. 

Eden Network is a project initiated by the Archer DAO team. Sheridan said Archer DAO raised $1 million last year via an ARCH token sale. The EDEN token now represents a technical upgrade on the ARCH token, and ARCH holders are eligible to upgrade 1:1, he said.

© 2021 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 hardware manufacturing giant Bitmain is set to boost its joint mining capacity in North America.

The firm has entered into a bitcoin mining hosting deal with data center and power partners Bit5ive and ISW Holdings, which will house 56,000 units of Bitmain’s proprietary AntMiner equipment in the U.S. state of Georgia. 

According to a statement on Wednesday, the entire mining fleet will be using 200 megawatts (MW) of capacity when fully deployed by October 2022. The first 20 MW of capacity is expected to be up and running by next month, the firms said.

That means the mining equipment model to be used in the deal is Bitmain’s newest generation of AntMiner S19 series, which have an average hashing power of 100 terahashes per second (TH/s). When fully deployed, the entire fleet will have about 5.6 exahashes per second (EH/s) of hash rate.

ISW Holdings, the hosting partner in the deal, said the cost for it to roll out and activate the facility will total $62 million with $6 million already being paid.

With the deal, Bitmain joins a growing list of institutional miners that are expanding their crypto mining infrastructure in North America following China’s crackdown on the mining industry earlier this summer.

Bitmain also led a $32 million investment round in June into Dallas-based Applied Blockchain along with Ethereum mining pool Sparkpool. 

As part of the investment, Bitmain reserves long-term hosting capacity at Applied Blockchain’s facilities when the infrastructure becomes operational. 

Applied Blockchain said at the time that it expected the first 50 MW be operational by the end of the year with another 50 MW to be ready by the first quarter next year.

© 2021 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 bug in the NFT marketplace OpenSea has accidentally destroyed at least 42 NFTs, worth a minimum of $100,000.

The issue was first raised by the lead developer of the Ethereum Name Service (ENS), Nick Johnson, who pointed out that when he transferred an ENS name — which come in the form of NFTs — it went to a burn address. This means it was accidentally sent to an address that nobody controls and can no longer be moved again.

The ENS is a service that lets you associate blockchain addresses with domain names. It’s designed to make it easier to send transactions to human-readable names rather than complicated blockchain addresses.

Regarding the ENS name that was burned, Johnson stated that it was the first ENS name ever registered. The name was rilxxlir.eth, a palindrome, and while Johnson registered it with personal funds it was held by an ENS account. In order to move the ENS name so it was under his own account, he went to OpenSea to transfer it. This was when it was mistakenly sent to the burn address.

“A frantic call to OpenSea later, it transpires I was the first and apparently only victim of a bug introduced to their transfer page in the past 24 hours, which affected all ERC721 transfers to ENS names. Ownership of rilxxlir.eth is now permanently burned,” he tweeted.

Since Johnson remains the controller of the ENS name, he is still able to modify it — in terms of the blockchain addresses that the ENS name is linked to. He’s just unable to move the name itself.

Johnson then received further reports from other people who were similarly affected, and put together a list of 32 affected transactions involving 42 NFTs. The majority of NFTs were on the ERC-721 standard but a few used ERC-1155. He checked the floor prices of each of the NFTs (the lowest price available on the market) and totalled them up to reach $100,000.

Johnson claimed that OpenSea has now fixed the bug. OpenSea has not replied to request for comment from The Block.

© 2021 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

• OKEx Block Dream Ventures is the investment arm of the Hong Kong-based crypto exchange OKEx that was established in February 2021
• During Q2′ 21, Block Dream Ventures made over 30 investments in the industry, qualifying it as one of the most active investors in the sector.
• In total, the firm’s active portfolio consists of at least 104 startups and protocols across thirteen verticals, which The Block has mapped out

This research piece is available to
members of The Block Genesis.
You can continue reading
this Genesis research on The Block.

SubQuery Network, a data indexing protocol for the Polkadot and Kusama ecosystems, has raised $9 million in a new funding round.

This was a Series A round and was secured via a simple agreement for future tokens (SAFT) sale, SubQuery CEO Sam Zou told The Block. Digital Currency Group, Arrington Capital, and Stratos Technologies co-led the round, with Hypersphere Ventures, NGC Ventures, Wintermute, and Skynet Trading also participating.

With fresh capital at hand, SubQuery plans to decentralize its network and launch a token by early next year, said Zou. SubQuery also intends to support more Layer 1 blockchains, including Solana and Terra.

SubQuery currently supports Polkadot and Kusama parachains and applications, meaning it helps them query blockchain data to build those applications. SubQuery says it eliminates the need for custom data processing servers and lets developers focus on product development and user experience rather than building their own querying systems.

The project can be seen as similar to The Graph in the Ethereum ecosystem, but it is yet to be decentralized. SubQuery currently offers managed services and says over 60 projects are using its services, including Acala and Moonbeam.

“SubQuery is a critical part of the Polkadot stack, and its deep relationships with leading Polkadot projects prove it,” said Matt Beck, director of investments at Digital Currency Group. “As an active investor in the Polkadot ecosystem, we are impressed by the team’s passion, knowledge, and dedication towards their work and are very excited to back them.”

There are currently 15 people working for SubQuery, and the project plans to hire more people in the near future, especially engineers, said Zou. Most of SubQuery’s staff is based in Auckland, New Zealand, he said.

The Series A round brings SubQuery’s total funding to date to $10.8 million. Earlier this year, the project raised $1.8 million in a seed funding round backed by DeFi Alliance, D1 Ventures, Hypersphere Ventures, Digital Finance Group,  and The Lao. 

© 2021 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 Coinbase CEO Brian Armstrong responded Tuesday evening to planned enforcement by the U.S. Securities and Exchange Commission pertaining to the firm’s recently announced yield-generating product.

The firm, which went public on the Nasdaq stock exchange in April, received a subpoena by the SEC less than three months after it announced to the market a product, dubbed Lend, that would allow users the opportunity to earn double-digit yields on deposits of USDC on its platform. That’s a much juicer yield than what is offered by consumer banks, which provide less than a basis point for savings accounts.

Armstrong said that the exchange contacted the SEC about its yield product and the SEC told Coinbase that the offering is a security but gave no guidance on the compliance with existing laws.

In a tweet, Armstrong added: 

“They refuse to tell us why they think it’s a security, and instead subpoena a bunch of records from us (we comply), demand testimony from our employees (we comply), and then tell us they will be suing us if we proceed to launch, with zero explanation as to why.”

According to Armstrong, the SEC “refused” to meet with the chief executive during a visit to DC earlier this year. 

“The SEC was the only regulator that refused to meet with me, saying ‘we’re not meeting with any crypto companies,'” Armstrong wrote. “This was right after we became the first crypto company to go public in the U.S.”

In a blog post, the firm’s chief officer Paul Grewel said that Coinbase has “been proactively engaging with the SEC about Lend for nearly six months.”

He said that if the product officially launched, the SEC would sue:

“Despite Coinbase keeping Lend off the market and providing detailed information, the SEC still won’t explain why they see a problem. Rather they have now told us that if we launch Lend they intend to sue. Yet again, we asked if the SEC would share their reasoning with us, and yet again they refused.”

BlockFi, a crypto financial services provider, has also been under fire for a similar product, which offers users a high-yield when they park stablecoin with the company. Five states have said that the firm has violated securities regulations and laws. 

In addition to plans to offer a yield on USDC held by the company, Coinbase offers other yield generating services via proof-of-stake protocols like Ethereum 2.0 and Tezos. A source said the SEC’s action does not apply to staking. 

© 2021 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 launched it’s state-run bitcoin wallet, Chivo, on Tuesday, but it’s still working out a few technological snags. 

Last month, the nation’s president, Nayib Bukele, teased that Chivo Wallet would become available on the same day El Salvador’s bitcoin law was slated to take effect. The country’s legislature approved a law recognizing bitcoin as legal tender in June, with an implementation date of September 7. 

The idea was that the Chivo Wallet would hit app stores today with users receiving a $30 credit in BTC upon downloading, and they did — after a considerable lag and Bukele tweeting as a form of technical support. 

Download down

The application was slated for release on Apple, Google and Huawei app stores at midnight. However, it seemed unavailable for download in the early morning hours.

By 3 a.m. El Salvador time, Bukele tweeted a link to the Chivo app on Huawei’s platform but said the team behind the wallet was still working to list it on Google Play and the App Store. By 11 a.m. El Salvador time, Chivo had reached Apple’s App Store. It is unclear if the application has reached the Google Play store.

But even once the application was installed, some still claimed to have issues. This led the Chivo team to temporarily pull the plug, since a lack of server capacity barred users from entering their data — a necessary step to setting up the wallet and receiving the free bitcoin.

Once the team reconnected the wallet with a new set of higher capacity servers, Bukele asked users to reply with any ongoing issues. Some complained they were still unable to register, but many sent images of their fully functioning wallet set up, with various BTC sums nearing $30. 

Transfer troubles

Some users reported issues sending the funds credited to their accounts. It appears that the initial $30 can only be sent to other Chivo users and merchants rather than to other wallets outside the Chivo ecosystem. Some have taken to Twitter to post possible workarounds to allow users to withdraw the $30. They claim the funds must pass through a few Chivo-to-Chivo transactions before they’re unlocked for withdrawal.

But participants seem interested in using the wallet and the credited funds for bitcoin transactions. Bitrefill CEO Sergej Kotliar, the crypto startup specializing in gift cards and prepaid connectivity services, told The Block the firm has seen more than 20,000 pending transactions from Chivo wallets. These have not been able to be completed, according to Kotliar, due to the spending limitations on the initial funds.

As Chivo works out these issues, they may be able to purchase from Bitrefill at a later time, says Kotliar. The firm is also positioning itself to capitalize on the El Salvador bitcoin rush with a partnership with Hugo, a delivery service that’s growing in popularity in Central America. 

Matt Ahlborg, head of research at Bitrefill, tweeted his test of the Chivo functionality. He found the $30 in BTC could be sent off-chain after three to five Chivo-to-Chivo transactions and Lightning payments can be sent to and from the wallets. 

When users purchase their own BTC in the wallet, it does not appear to have the same limitations as the $30 credit.

Alex Gladstein, chief strategy officer for the Human Rights Foundation in Oslo, reported that a Chivo wallet and his own non-custodial Muun wallet were able to trade $5 Lightning payments without any issues. 

© 2021 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 number of crypto exchanges that serve the U.S. market encountered operational problems Tuesday as cryptocurrency prices fell sharply.

As the price of bitcoin and other cryptos took a drubbing — coming the same day that El Salvador’s bitcoin legal tender law took effect — exchange Coinbase, Kraken, Gemini and others reported that users had been affected in various ways.

The largest U.S. exchange, Coinbase, featured a “degraded performance” banner across the top of its site: 

Source: Coinbase

Late Tuesday morning, Coinbase’s support account Twitter wrote: “We’re aware transactions are currently delayed or cancelled at elevated rates and our apps may be experiencing errors.” The account added that a “sudden increase in network traffic and market activity led to a degradation in our services.”

Later, Coinbase Support said that “[t]ransactions are going through normally and service issues have been resolved. We’ve taken steps on our end to maintain stability and keep our services up.”

Elsewhere, Kraken reported on its status page that it was seeing web and mobile connectivity issues as well as email delivery. Earlier in the day, Kraken said that “logins, trading and funding operations are unavailable intermittently” amid an effort to resolve connectivity problems. It later said that trading was fully available and that a fix for the connectivity issues had been put in place. At 17:07 UTC, Kraken said that “[s]ome clients are still experiencing issues with ACH online banking purchases.” 

Gemini temporarily entered full maintenance mode, according to its status page, in order to resolve “to address an exchange issue that is causing platform performance issues.” That issue has since been resolved, according to a subsequent post, and Gemini now says that its exchange is fully operational.

The exchange headaches — which have become more common during periods of heightened market turbulence — occurred as the price of bitcoin briefly fell below $43,000. Data collected by The Block Research at the time showed billions of dollars in liquidated long positions as a result of the market decline. 

At press time, the price of bitcoin is trading hands at $47,157.10 on Coinbase. 

© 2021 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 operator crypto exchange FTX has struck its latest endorsement deal, this time with NBA star Steph Curry.

The firm announced Tuesday that Curry will serve as an ambassador for the firm, following in the footsteps of Tom Brady and Trevor Lawrence who signed similar deals with the fast-growing crypto derivatives venues. 

“I’m excited to partner with a company that demystifies the crypto space and eliminates the intimidation factor for first-time users,” said Curry, who plays for the Golden State Warriors. “FTX is likeminded when it comes to giving back to the community in meaningful ways and I can’t wait to see what we can achieve together.”

FTX said in a statement that “Curry will receive an equity stake in FTX Trading Limited and Curry’s foundation, Eat.Learn.Play., will partner with FTX on charitable initiatives.” The exchange closed a $900 million funding round at a $18 billion valuation in July. 

As for Curry, this marks the 33-year old’s first foray into the crypto market, according to a press release.

“After meeting and speaking with Stephen, it was clear that he is a seamless fit for FTX,” FTX CEO Sam Bankman-Fried said “His tireless commitment to charity alongside a ferocious work ethic to become the greatest in any arena he steps foot in, whether it is basketball, investing or business, perfectly align with FTX’s core values. I look forward to working together with Stephen to create a positive impact for those who need it most in the world.”

© 2021 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.