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Quick Take

• Headquartered in Hong Kong, Animoca Brands develops and publishes mobile games in addition to other products based on its portfolio of intellectual property
• Coming off of its recent fundraising rounds conducted over the past 3 months, Animoca is one of four unicorns within the NFTs/Gaming vertical
• In total, the firm has deployed capital to at least 56 startups and protocols across sixteen verticals, which The Block has mapped out

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Crypto exchange Binance has hired Greg Monahan, a former U.S. government official at the Internal Revenue Service (IRS), to lead its global money laundering reporting efforts.

Monahan is based in Washington and spent over 20 years at the IRS, leading cybercrime criminal investigations at the agency. He joins Binance from Deloitte, where he spent less than five months in a compliance role, according to his LinkedIn.

At Binance, Monahan takes the role of global money laundering reporting officer. “My efforts will be focused on expanding Binance’s international anti-money laundering (AML) and investigation programs, as well as strengthening the organization’s relations with regulatory and law enforcement bodies worldwide,” said Monahan.

Binance is reportedly under investigation by the IRS and the U.S. Department of Justice for any potential illicit activities. In recent months, Binance has beefed up its compliance and regulatory advisory team. The exchange has hired former U.S. Senator Max Baucus as policy and government relations advisor and former FATF members Rick McDonell and Josée Nadeau as compliance and regulatory advisors.

“We are always expanding our capabilities to make Binance and the wider industry a safe place for all participants,” said Binance CEO Changpeng “CZ” Zhao.

Karen Leong, who has been the global money laundering reporting officer at Binance since 2018, will become a director of compliance, said Binance.

© 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.

Australia-headquartered bitcoin mining firm Iris Energy has submitted a draft proposal in the U.S. seeking a direct listing on Nasdaq.

The firm said in an announcement on Wednesday that it has submitted a confidential draft F-1 form with the U.S. Securities and Exchange Commission and expects the direct listing to happen in Q4 2021.

The plan comes amid recent reports from Bloomberg that Iris Energy had weighed on a SPAC deal to go public but shifted away from that plan and was seeking to raise as much as $200 million before filing for a direct listing.

Per Iris Energy’s website, it has an operational mining capacity of 9 megawatts (MW) in British Columbia, Canada, with an ongoing plan to scale it to 30 MW this year. Iris Energy raised $50 million in May to finance its equipment expansion.

It also joins a list of private bitcoin mining firms that are seeking to go public in the U.S.

The parent entity of New York-based bitcoin miner Greenidge has previously filed for a merger deal with Nasdaq-listed Support.com. At the time, Greenidge said it had allocated 19 MW out of its proprietary 106 MW capacity for bitcoin mining.

U.S.-based Core Scientific, which operates self-mining business and hosting services, has also entered a deal last month to be acquired by Nasdaq-listed Power & Digital Infrastructure Acquisition Corp.

© 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.

Galaxy Digital, a crypto-friendly investment manager headed by Mike Novogratz, announced Monday that it lost $175.8 million in the last quarter while citing growth in trading activity and managed assets.

“While the second quarter included significant volatility and macro-related headwinds to near-term results, our core operating activities including providing liquidity and execution services for clients and counterparties, and our strategic investment portfolio, delivered another quarter of rapid growth consistent with the pace of adoption of the crypto economy,” said Galaxy Digital CEO Michael Novogratz in a release. 

Galaxy is now estimated to have earned a net of $35.3 million in the last year. Galaxy Digital Asset Management reported their assets under management surpassed $1.6 billion — an increase of 12% in the quarter — as of July 31, 2021. 

The firm also reports pouring $52 million of venture capital into 14 NFT-related companies. In addition, counterparty trading volumes grew more than 90% in Q2. 

Galaxy’s recent hires include Tim Grant, former CEO of Switzerland’s SIX Digital Exchange, as head of Europe, and Jennifer Lee as the firm’s chief people officer. Galaxy is one of many crypto firms that are increasing its headcount.

© 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.

OpenSea, one of the largest NFT marketplaces, saw record-high Google search interest last week, according to data collected by The Block Research.

Search interest jumped from 73 in the first week of August to 100 — the maximum amount of interest possible — in the second week. 

The Google search trend for OpenSea coincides with increased trade volume on the NFT platform. As The Block previously reported, OpenSea trades increased over 194% from July to August and already reached $830 million in volume for the month. 

OpenSea is a New York-based startup founded in 2017, receiving venture funding from Andreessen Horowitz back in March. OpenSea is now worth over $1.5 billion, with the most recent venture funding of $100 million secured in July.

© 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

• NBA Top Shot trading volumes have declined significantly since they peaked in February, but the digital marketplace remains popular among NFT collectors. 
• The digital trading card platform is on track to generate an estimated $30 million this month based on data collected in the first two weeks of August.

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Galaxy has filed with the Securities and Exchange Commission (SEC) for an exchange-traded fund that will invest in products with indirect exposure to bitcoin.

The Galaxy Bitcoin Strategy ETF won’t provide any direct exposure to cryptocurrencies, according to its N-1A.

“The Fund does not invest in, or seek direct exposure to, the current “spot” or cash price of bitcoin. Investors seeking direct exposure to the price of bitcoin should consider an investment other than the Fund.”

The SEC has been reluctant to approve structured products with direct exposure, meaning ETFs with more indirect methods could have an easier time within the approval process. SEC Chair Gary Gensler previously said he and his staff are looking forward to reviewing bitcoin ETF applications, “particularly if those are limited to these CME-traded Bitcoin futures.”

As Eric Balchunas, senior ETF analyst at Bloomberg noted, a futures-only offering is “as Gensler-ready as you can get,” considering it proposes to do just that. 

The Galaxy submission is the fifth crypto futures product offering to reach the desks of SEC officers. It plans to pool cash-settled bitcoin futures contracts traded on exchanges registered with the Commodity Futures Trading Commission (CFTC), with Treasury bills, repurchase agreements and Canadian ETFs. Canada has approved a number of crypto-based products, and the Galaxy fund would seek exposure through them as well, saying:

“The Fund may invest in the securities of exchange traded funds, or “ETFs,” organized and listed for trading in Canada, or other jurisdictions, and in other pooled investment vehicles. The shares of these instruments represent an interest in a portfolio of bitcoin.”

Galaxy has acted as a subadvisor for Canada’s CI Financial ETH-based ETF. 

© 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.

On August 17, Rep. Tom Emmer (R-MN) announced that he and Rep. Darren Soto (D-FL) were reintroducing the Blockchain Regulatory Certainty Act. 

Emmer introduced the original bill at the beginning of 2019. With slight edits, the new version aims to provide the same sort of safe harbor for blockchain firms that do not hold customer assets, which developing guidance threatens with registration as money services businesses. In a statement on the announcement, Emmer said: 

“Certain blockchain developers and service providers, like miners and multisignature service providers, should not have to register as money transmitters because they never custody consumer funds.”

This issue has become more pressing with the emergence of decentralized finance last summer. Congressional members expressed concern that developing guidance from the Financial Action Task Force would classify many DeFi operators as virtual asset service providers.

The topic of sparing certain types of crypto businesses from potentially burdensome regulation is a potent one given the recent fight over tax reporting requirements in the Senate. Supportive lawmakers and advocacy groups fought what they called unfair language in a bipartisan infrastructure bill. Ultimately, efforts to carve out compromise amendments failed as that chamber cleared the infrastructure bill. The fight has now shifted to the House, though the contours of that process and what changes are possible remains an open question. 

Crypto interest groups have endorsed the latest legislative effort, with support coming from groups like the Chamber of Digital Commerce, Coin Center and the Blockchain Association. 

The text of the BRCA can be found below:

BRCA by Mike McSweeney on Scribd

© 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.

1inch, a decentralized exchange (DEX) aggregator that sources liquidity from various exchanges, has expanded to Optimism Ethereum, a Layer-2 scaling solution.

The aim is to lower gas fees and increase throughput or transactions per second (TPS) for users, said 1inch. Specifically, Optimism Ethereum will be capable of up to around 2,000 TPS when an optimized production version of its network is launched, 1inch co-founder Anton Bukov told The Block.

However, Optimistic Ethereum’s throughput is currently limited to 0.6 TPS; the limitation is to avoid potential risks and failures during the alpha stage of development, said Bukov. Ethereum’s current TPS, on the other hand, is around 15. 

As for reduced gas fees on Optimistic Ethereum, Bukov said there should be savings of around 2x-10x compared to Ethereum. “The reduced gas fees became possible due to the architecture of the Optimistic network, which only needs to transfer compressed state changes to Layer-1 (L1) and doesn’t have to pay for calculations on L1,” said Bukov.

1inch users can now start migrating assets to the Optimistic Ethereum network through the Optimism Gateway, said 1inch. The network is compatible with several wallets, including MetaMask.

With the expansion on Optimistic Ethereum, 1inch is now available on a total of four blockchains, including Ethereum, Binance Smart Chain, and Polygon (formerly Matic Network).  

Bukov said 1inch is looking to support more blockchains, including Solana, Avalanche, TRON, NEAR, xDAI, and also other Layer-2 solutions like Arbitrum and zkSync. 

© 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.

Ondo Finance, a decentralized finance (DeFi) protocol launched by two former Goldman Sachs employees, has raised $4 million in a seed equity funding round.

Pantera Capital led the round, with Genesis, Digital Currency Group, CMS Holdings, CoinFund, and Divergence Ventures participating, among others. Angel investors such as Stani Kulechov (Aave founder), Richard Ma (Quantstamp founder), and Christy Choi (former head of investments at Binance) also backed the round.

Ondo Finance is an Ethereum-based DeFi protocol that lets users originate loans backed by crypto to earn yield. Lenders and borrowers contribute capital together in “Ondo Vaults,” which use smart contracts to enforce loan provisions. There are two types of positions in Ondo’s initial vaults: fixed yield and variable yield. Fixed yield vaults seek to deliver a stable yield, and variable yield vaults seek to maximize returns by using leverage. 

Ondo CEO Nathan Allman, a former staff of Goldman’s Digital Assets team, explained how the vaults work, using the example of the Ondo USDC-ETH Uniswap vault. This vault breaks down the yield earned from providing liquidity to the Uniswap USDC-ETH pool into fixed yield and variable yield positions. Users can deposit into the fixed yield position with USDC and earn a stable yield for a fixed duration, or they can deposit into the variable yield position with ETH and earn leveraged exposure on the yields from the USDC-ETH Uniswap Liquidity Pool, said Allman.

“Ondo users can invest in both positions in any ratio they choose, creating their own customized return profiles,” Allman added.

Ondo’s other co-founder, Pinku Surana, was a vice president at Goldman Sachs in a technology team. Surana led Goldman’s blockchain research and development team, providing the technical expertise for these initiatives. 

With fresh capital at hand, Ondo is looking to expand its current team of around ten by hiring mostly engineers, said Allman. It is also looking to support more blockchains and launch more yield strategies, he said. 

Looking at the future, Ondo also plans to launch its own token and a decentralized autonomous organization or DAO, said Allman. “We think DAOs are the best organizational structure to align community incentives with the future success of the protocol, as well as to promote transparent and distributed development and decision making.”

© 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.