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Brett Redfearn, a luminary of the market structure world and former director at the Securities and Exchange Commission, has left his post at Coinbase after only four months with the cryptocurrency exchange.

The exit, which was first reported by The Wall Street Journal, was confirmed to The Block by a Coinbase spokeswoman. Coinbase announced in March that it hired Redfearn as its capital markets head. Redfearn left Coinbase in July.

Redfearn spent 3 years at the SEC between 2017 and 2020, leading the division that oversaw brokers and exchanges. Prior to joining the SEC, Redfearn held senior trading posts at JPMorgan and Bear Stearns. 

The Journal’s report said that Redfearn left the firm after the exchange decided it would “shift its priorities away from digital-asset securities.” 

At present, Coinbase lists only cryptocurrencies that it views as being non-securities. In 2018, the firm acquired broker-dealer Keystone Capital in a bid to potentially trade blockchain-based securities. It has yet to launch a service or product in that arena. 

© 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.

At a press conference in the Senate on Monday, Senators Pat Toomey and Cynthia Lummis revealed a new compromise on cryptocurrency tax provisions.

The compromise has managed to get almost all of the senators working on two competing amendments on board, with the lone holdout of Ron Wyden, who apparently wanted greater privacy protections. The proposed amendment also has the support of the Treasury Department.

“We came together to provide greater clarity on who is a broker,” Toomey said of the compromise. 

The infrastructure bill, in an effort to pay for its own outlays, initially codified new requirements for certain cryptocurrency operators to report transactions to the Internal Revenue Service as brokers. The issue was that the original version was vague about who would be considered a broker. The definition included “any person who (for consideration) is responsible for regularly providing any service effectuating transfers of digital assets on behalf of another person.”

Toomey, Wyden, and Lummis had previously introduced an amendment, which the Senate did not add to the bill. The latest amendment differs from the earlier version in one key way, removing the following exemption from classification as a broker: 

“Developing digital assets or their core responding protocols for use by other persons, provided that such other persons are not customers of the person developing such assets or protocols.”

The emergence of two competing amendments to the original language of the INVEST Act last week proved highly contentious and sparked a backlash from the crypto industry. The conflict delayed the bill’s passage in the Senate, which some had been expecting Thursday night.

It has been a remarkable showing from the cryptocurrency industry and its growing voice in Washington, DC. “Regardless of how this turns out,” said Lummis, “This has been a very positive exercise for people in the cryptocurrency and digital asset space.”

The compromise, however, faces a tough road ahead. While Senate Majority Leader Chuck Schumer has said that he will not block unanimous consent on the amendment, unanimity among the Senate is hard to come by. Any senator will be able to block the amendment. The clock is already ticking on the massive infrastructure package, though Toomey said “there’s still time to adopt this amendment.”  

Despite their work on this compromise, both Toomey and Lummis said they did not plan to support the passage of the overall infrastructure bill. 

© 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 former Amazon executive brought into oversee the department that looks after Revolut’s thousands of employees is set to leave the startup after roughly one year in the role.

Jim MacDougall spent more than six years as a human resources director at Amazon before joining Revolut in September of last year. MacDougall has now decided to move on from the startup and will be succeeded on an interim basis by Upayan Mitra, Revolut’s head of performance management, according to people familiar with the matter. 

London-based Revolut was recently valued at $33 billion after an $800 million Series E round that made it the most valuable British fintech firm in history.

But the ascent of the startup, often referred to by staff as a “rocket ship,” has not been linear. Its people operations team was hit particularly hard by the Covid-19 crisis, suffering a string of high-level departures.

In his time at Revolut, MacDougall helped craft the startup’s flexible working policies, according to a person with knowledge of the matter. In February, the neobank announced that it would move most of its more than 2,000 employees to a permanent remote working model. The company now also allows staff to work overseas for up to two months a year.

Fundraising frenzy

Meanwhile, after netting $800 million in July’s Series E round, which was led by SoftBank Vision Fund 2 and Tiger Global Management, Revolut has raised yet more money, according to an announcement published this morning. 

Schroder UK Public Private Trust, formerly known as Woodford Patient Capital Trust, has made a $13.7 million investment in the neobank. The investment comes alongside the Series E deal and was made on the same terms as those negotiated by Tiger Global Management and SoftBank Vision Fund 2.

Woodford Patient Capital Trust was previously run by Neil Woodford, the disgraced former fund manager whose investment empire collapsed in 2019.

© 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.

For the second month in a row, web traffic to crypto exchanges has continued to fall.

As data compiled by The Block Research shows, there were 319.2 million visits to crypto exchanges in July — 13.5% less than in June and nearly half of the all-time high in May. 

Binance held 42% of the web traffic for crypto exchanges in July, followed by Coinbase with 15.5% and Bybit with 4.7%, The Block’s data shows. 

The Block Research’s Lars Hoffman noted on Twitter that declining crypto exchange web traffic coincides with falling trading volume. Indeed, trading volume fell from the all-time high of $2.3 trillion in May to $1.22 trillion in June (a -47.2% month-over-month decrease), before dropping further to $816.5 billion in July (-33.1%). Bybit rose about 1.4% compared to the previous month while Coinbase fell around 3%, The Block’s data shows. 

Hoffman wrote in a recent The Block Research report that other aspects of the crypto ecosystem saw declines in July as well, such as a 29.3% decline in total on-chain volume and a 32% decrease in spot trading volumes for crypto exchanges. 

© 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 is trading at its highest level in several months, shrugging off anxiety about crypto-specific language in the bipartisan $1 trillion infrastructure bill currently being debated in Washington. 

The price of bitcoin was trading around $46,000 at the time of writing, up more than 30% over the last month. The last time the digital currency was trading at this level was in May. 

Currently — after much back and forth — language in one section of the so-called Infrastructure Investment and Jobs Act opens the door to the government compelling certain miners and other entities in the crypto space to report tax information as brokers. 

In any case, traders are apparently not worried. Josh Lim, head of derivatives at Genesis Global trading, told The Block that demand was strong over the weekend, playing into this morning’s bullish rally. He said traders are also not concerned about U.S. Securities and Exchange Commission chair Gary Gensler’s recent speech, which implied that he would pursue crypto-specific regulations.

“Bitcoin is climbing a wall of worry as allocators look past the Gensler comments and the upcoming tax provisions in the infrastructure bill,” Lim said. According to Lim, the buy-sell ratio for bitcoin and ether was 3 to 1. 

“We’re also seeing heavy options buying going into the vote which is driving implied-realized vol premiums much higher.”

© 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.

Circle — the fintech company behind stablecoin US dollar coin (USDC) — dropped a regulatory filing Monday morning that reveals its ambitions to become a U.S. national bank. 

Circle, which is set to go public via a special-purpose acquisition company (SPAC), told The Block in a message that it “intends to become a full-reserve national commercial bank, operating under the supervision and risk management requirements of the Federal Reserve, US Treasury and OCC, and the FDIC.”

In the new S-4 filing, the firm said that a banking framework could reduce the risks around its business, including its reliance on third-party payment systems. 

“Our ability to offer our core API services depends on our ability to maintain existing sponsorship relations and to seek out and obtain new sponsorship relationships,” the filing said. 

Rival Paxos — which has its own stablecoin offering — received conditional approval from the OCC for a national trust banking license.  

“We believe that full-reserve banking, built on digital currency technology, can lead to not just a radically more efficient, but also a safer, more resilient financial system,” said Circle’s chief executive officer Jeremy Allaire said in an emailed statement. 

© 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.

Core implemented in its proof-of-work blockchain network the ED448-Goldilocks elliptic curve cryptography, the only blockchain in the world to implement ED448 encryption technology to date. Speaking to Rastislav Vašička, CIO of Core said, “Goldilocks is popular for its solid performance and security. The ED448 encryption technology allows the Core Blockchain Network to execute transactions with the highest security standards, confirming transactions in around 42 seconds, an ideal network for transacting due to the implementation of banking standards.” With mining on almost any IoT device at only 6 watts per hour, Core is not only the most affordable fully decentralized proof-of-work blockchain in the world, it is also truly environmentally friendly. “In short, we can unquestionably say that the Core Blockchain Network is currently the fastest, safest and most affordable, truly scalable decentralized blockchain in the world” Michael Loubser, Core Decentralized Technologies, Chairman.

The fast, economical and secure scalable Core Blockchain technology will be the backbone of Core Decentralized Technologies, an entire ecosystem of blockchain based solutions and applications that facilitate effective transacting, data processing and information flow across organizations. The ecosystem comprises of several platforms such as: Core Group, a decentralized asset digitization, financial services and settlement platform, Ting, a peer to peer decentralized communications platform and TokToKey, a fully decentralized ecommerce platform, all integrated through the CorePass, a decentralized blockchain based digital identity with integrated digital attributes and digital wallets. The entire Core Decentralized Technologies ecosystem has various forms of AI built on the Lunaº Mesh platform, allowing inclusive worldwide reach of the Core services, in some areas without internet, covering 98% of the globe, including oceans.

Ockert Loubser, who recently took over the CEO helm from his father Michael said “In our opinion we believe free connectivity is a human right. Lunaº Mesh’s peer to peer communications platform will eventually provide free connectivity for all while bringing Core’s cutting edge ecosystem to everyone in the world.”

The interoperable Core applications and use cases will be promoted by Core Decentralized Technologies for implementation of blockchain in the real world. Core Decentralized Technologies blockchain software as a service with its uniquely integrated solutions, applications and use cases provides multiple business functions on a single secure blockchain platform of truth and transparency.

Ockert Loubser CEO, or better Okkie as he likes to be called further added ” As a technology provider, Core Decentralized Technologies allows companies and individuals to manage complex business processes by giving verified access, through its use cases, CorePass, access to real-time insights across the enterprise. As a result, businesses can accelerate workflows, improve operational efficiency, raise productivity, enhance customer experiences – and ultimately increase profits.”

Okkie referred us to some videos to have a more in-depth understanding of the entire ecosystem there are several videos available:

• Core Ecosystem Livestream
• Interview with Clayton Morris on Morning Invest
• Interview with Yusuke Maramatsu on Coin Club

For more information you can go to Core Decentralized Technologies

© 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.

Stablecoin issuer Tether has published a transparency report detailing the breakdown of its $62.8 billion in reserves as of June 30.

The majority — 85% of Tether’s (USDT’s) reserves — was held in the “Cash & Cash Equivalents & Other Short-Term Deposits & Commercial Paper” category as of the date.

Within this category, commercial paper and certificates of deposit formed the majority, with a 58% share. Treasury bills accounted for 29%, cash and bank deposits for 12%, and reverse repo notes for 2% of the category.

The breakdown of Tether’s reserves. Source: Tether/The Block Research.

Notably, Tether’s allocation to treasury bills has increased significantly. The amount of treasury bills has increased from 3% of the cash & cash equivalents category in March to 29% of the even bigger category in June. Treasury bills are short-term government debt obligations with a maturity of one year or less.

Tether has also made a notable change to its cash and bank deposits category this time around. Last time, cash and fiduciary deposits were separate categories. Now Tether has combined these two categories, with a new name: cash and bank deposits. And the allocation to this combined category as of June is down from 28% to 12% — meaning it has reduced the combined amount of cash and fiduciary deposits.

The breakdown of the Cash & Cash Equivalents & Other Short-Term Deposits & Commercial Paper category. Source: Tether/The Block Research.

Another notable change in the latest reserves report is that Tether has given the ratings of its commercial paper and certificates of deposit holdings as of June 30. The majority of its holdings had an A-1 rating, followed by A-2, A-3, A-1+, and other ratings as of the date.

Tether has also given the breakdown of the maturity of the commercial paper and certificates of deposit holdings this time. The majority of these holdings had a maturity of 81–365 days, followed by 0–90 days and 91–180 days.

This is Tether’s second reserves report since its launch in 2014. Earlier this year, Tether proposed ongoing publication of the reserve breakdown as part of its $18.5 million settlement agreement with the New York Attorney General’s Office. Audit firm Moore Cayman has given an assurance opinion for both the reports.

“Our most recent assurance opinion from Moore Cayman again confirms Tether is fully backed,” said Tether CTO Paolo Ardoino. “A healthy and conservative portfolio with an emphasis on liquidity continues to fuel our growth and confidence in our innovative offerings.”

© 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 U.S. Securities and Exchange Commission (SEC) has fined crypto exchange Poloniex $10 million for operating an “unregistered online digital asset exchange.” Poloniex has agreed to pay the fine without admitting or denying the SEC’s filings.

Founded in 2014, Poloniex was purchased by Circle in 2018 for $400 million. In late 2019, it was spun out of the company, forming a new firm named Polo Digital Assets. According to The Block’s sources, Tron founder Justin Sun was leading the consortium that acquired it.

The SEC’s action focuses on the timeframe July 2017 to November 2019, until the point of the sale. The SEC claims the exchange sold digital assets that were securities — although the exchange was not registered to do so.

The statement further claims that the exchange wanted to be “aggressive” in adding new tokens, even ones that might be deemed securities.

“Poloniex chose increased profits over compliance with the federal securities laws by including digital asset securities on its unregistered exchange,” said Kristina Littman, chief of the SEC Enforcement Division’s Cyber Unit. “Poloniex attempted to circumvent the SEC’s regulatory regime, which applies to any marketplace for bringing together buyers and sellers of securities regardless of the applied technology.”

In a regulatory filing in July, Circle said it had set aside more than $10 million in anticipation of the SEC’s complaint. In March, it had offered to settle the case for $10.4 million.

© 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

• Lido enables users to deposit Ether and earns passive income from Ethereum 2.0 staking
• Withdrawals are unavailable until 2022, depending on the development of Ethereum 2.0
• Ether staked via Lido is mostly custodial, while solutions are being proposed and implemented to decentralize the protocol further 
• Lido has the largest market share among ETH 2.0 liquid staking protocols

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