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Bybit, one of the largest crypto derivatives exchanges, has launched the crypto spot trading offering.

Announcing the news on Thursday, Bybit said spot trading in bitcoin (BTC), ether (ETH), XRP, and EOS coins is now available to users against the Tether (USDT) stablecoin. More trading pairs will follow shortly, said the exchange.

Bybit says it won’t charge any maker fees, which are levied for providing liquidity to the market in the form of buy or sell limit orders. Binance, the world’s largest crypto exchange, for instance, charges 0.1000% maker fees for trading a volume worth less than 50 bitcoin.

Bybit’s zero maker fees is a “life-long” feature and not a limited-time offer, the exchange’s founder and CEO Ben Zhou told The Block. Bybit’s taker fees are 0.1% of trading volume, he said. Taker fees are usually higher than maker fees as taker orders are matched immediately against an order already on the order book, which removes liquidity​.

Serving more customers

Bybit was founded in 2018 and is currently the second-largest bitcoin futures exchange in terms of open interest and trading volumes, according to The Block’s Data Dashboard. When asked why launch spot trading now, Zhou said it will allow the exchange to serve more customers.

“Now that we are comfortably at the top of the derivatives-only lane, and managed to stay operational throughout the bull run as virtually all our peers experienced overload and downtime, we feel it is time that we brought the same level of reliability Bybit has embodied in derivatives to spot,” said Zhou.

When asked how Bybit will ensure the liquidity of the spot trading offering, Zhou said there is an incentive program in place for market makers, and that currently “all” market makers are already plugged into the exchange’s testing environment.

Like Bybit’s derivatives offering, spot trading won’t be available to residents of the U.S., mainland China, Singapore, Quebec (Canada), Iran, Syria, North Korea, and other restricted jurisdictions.

Bybit will also launch options trading “later this year,” Zhou told 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.

Law enforcement at the Hong Kong customs has arrested four suspects for allegedly laundering criminal proceeds through cryptocurrency in its first such crackdown. 

The Hong Kong customs said the alleged syndicate laundered illegal funds totaling to HK$1.2 billion ($150 million) with a majority of them through Tether’s USDT, South China Morning Post reported on Thursday.

According Mark Woo Wai-kwan, senior superintendent of the Hong Kong customs’ syndicate crimes investigation bureau, the laundering operations lasted for 15 months through shell companies via 40 USDT wallets.

“Our investigation revealed that the syndicate laundered about HK$880 million through the cryptocurrency between February 2020 and May 2021,” Woo was quoted as saying in the report. The remaining funds were believed to be laundered through conventional methods.

The customs arrested a ringleader, aged at 33, as well as three other local men, aged 24 to 36, last Thursday. The report cited an anonymous law enforcement officer that the suspects charged their criminal clients a commission between three to five percent. The crackdown of the case involving crypto assets was the first of its kind in the city, according to Woo. 

The officer said the investigation showed the funds were further sent to bank accounts belonging to individuals and companies in Hong Kong, mainland China and Singapore. 

© 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 July 14, the U.S. Securities and Exchange Commission unveiled settled charges against UK-based Coinschedule. 

Accessible in the U.S. from 2016 to August 2019, Coinschedule was a platform that reviewed upcoming initial coin offerings, providing seemingly objective perspective as to which ICOs were more or less scammy. 

Per the SEC’s order: “The platform claimed to ‘list’ or profile the ‘best’ token offerings, such as so-called initial coin offerings (ICOs) and initial exchange offerings (IEOs), and stated that its ‘mission is to make it easy and safe for people around the world to join ICOs.'”

Meanwhile, Coinschedule was taking payment from issuers in exchange for more favorable reviews. Failure to disclose such payments violate the anti-touting provisions of the Securities Act’s Section 17(b).

The terms of the settlement are, however, quite merciful. Coinschedule’s operator goes unnamed in the SEC’s charges and will have to pay disgorgement and fines totaling roughly $200,000. Moreover, Coinschedule was able to without admitting to or denying the SEC’s charges. 

The SEC has spent years cleaning up after securities issues resulting from the ICO boom. Famous figures including Floyd Mayweather, DJ Khaled and Steven Seagal found themselves in legal hot water over the same anti-touting provision.

© 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

• Darknet drug market Hydra operates relatively openly and has been around for much longer than most competitors.
• We explored reasons for Hydra’s longevity and prospects that recent attention on Russia’s domestic cybercrime industry will change the situation.

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Tom Farley, in many respects, was early to crypto. 

The 45-year-old — who is best known for his time as the head of the New York Stock Exchange — vividly recalls a conversation with early Coinbase employee Dan Romero, who connected him Coinbase co-founder and fellow Duke alumnus, Fred Ersham. 

“So I met with Fred and was blown away by what they were doing and agreed to put ten million dollars on behalf of the New York Stock Exchange into Coinbase,” Farley said on the most recent episode of The Scoop. He made that investment in 2013. 

Fast forward to 2021: Farley has officially gone full crypto, announcing last week that he would join EOS-backed crypto exchange Bullish as its CEO following the completion of a SPAC deal that would merge the company with Far Peak, the SPAC company Farley joined after his tenure at NYSE.

On this episode of The Scoop, Farley joins The Scoop’s Frank Chaparro to discuss the deal, which is expected to be valued at a whopping $9 billion. Farley will enter a crowded market with well-placed competitors like Coinbase, which recently went public at a valuation above $50 billion. Bullish aims to win over clients with a blended market structure that borrows from the DeFi world and centralized exchange space, Farley explained. 

“Bullish is really tipping our hat to the successful use of liquid pools and automated market makers, and it’s combining them with a CeFi market structure,” Farley said. “And so each pair not only will be underpinned by the liquidity pool, but we will also accept bids and offers from third parties and we’ll allow third parties to cancel bids and offers. So in that respect, we will look much like a traditional CeFi.”

Farley also unpacks:

• His journey into the crypto Rabbit hole
• The inside story on how the Far Peak/Bullish deal executed
• The benefits and drawbacks of going public via a SPAC 
• How SPAC projections can be problematic for investors 
• Bullish’s blended market structure and the benefits automated market makers add to an exchange platform

© 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.

Cryptocurrencies aren’t part of current retirement strategies, according to BlackRock CEO Larry Fink.

In an interview with CNBC this morning, Fink said the asset manager has seen very little demand for digital assets. Granted, Fink said, clients interested in crypto or other volatile assets like meme stocks may not be BlackRock’s clientele. Most of those who work with the manager are thinking on a longer time horizon, and crypto has yet to fit into that thinking.

“The dialogue is about how I should navigate my portfolio and how should I think about my portfolio over the long horizon,” he said.

Fink also said financial literacy is key to getting people to think over the long term. As it stands, much of today’s retail focus is devoted to speculating on markets. That equity market focus could be a gateway to improved understanding for many who otherwise wouldn’t think about strategic retirement planning. 

“If we could improve financial literacy, if we could help more people focus on not just speculating of markets and the ups and downs but translating that into investing in the long run the issue of retirement may be less of a problem for the next generation who are now focused on the equities markets,” he said. 

BlackRock still only “dabbles” in bitcoin, as its CIO Rick Rieder said earlier this year. The asset manager bought bitcoin futures in January of this year, revealing it held 37 units of CME’s March 2021 bitcoin futures. 

© 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.

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A DeFi lobby group, which received $20 million in funding earlier this month from the decentralized exchange Uniswap’s governance treasury, sold half of its funding on Tuesday — despite the group promising that it would allocate the funds over the next few years, not days.

“The proposal outlines that these funds are anticipated to be allocated over the next 4-5 years, so it won’t have the same dilutive effect of selling 1M UNI all at once, which we agree would be a problem,” wrote a representative of the “DeFi Education Fund” in Discord, ahead of the on-chain vote.

Yet it announced — just eight days after receiving the funds — that the group has sold 500,000 UNI for just over $10 million of the U.S. dollar-backed stablecoin USDC, presumably to fund its plans.

This move caused surprise and consternation in the Ethereum community, which expected the large supply of tokens to be sold more gradually, and it highlighted the lack of any enforceable conditions tied to the grant money. 

Where did the idea come from?

The idea for the lobby group was suggested by Harvard Law’s Blockchain and Fintech Initiative on May 27 and was described as a political grants committee with board members who are legal and policy experts. 

On June 1, the group submitted a longer proposal for the entity, which it plans to turn into a 501(c)(4) “policymaking machine.” The main goal was to lobby for regulatory clarity for the DeFi industry. It said that the 1 million UNI needed was just “an initial infusion.”

Before the main vote, there were two snapshots taken to gauge the community’s reception to the idea. 

For the second snapshot at least, it appears that the majority of the votes were from the proposer themselves, Slingshot Finance COO Kenneth NG and two other student groups. These four entities comprised 86% of the yes vote. (Although the tokens themselves were delegated to the student organizations by a few unknown whales.)

Those voting against the snapshot included DeFi lending platform Compound CEO Robert Leshner and Ethereum investor “DC Investor,” who each put 5 million UNI behind their votes.

The vote passes

On June 29, the main on-chain vote for the proposal ended, with 79 million UNI for it and 15 million UNI against.

The lobby group said that well-known crypto individuals are supporting the project, by holding the keys to its multisig wallet, which controls access to the funds. These include lawyer Jake Chervinsky, Orca Protocol advisor Larry Sukernik and Aave general counsel Rebecca Rettig.

On July 4, the lobby group received the funds from the Uniswap governance. It then worked with OTC firm Genesis Trading to sell the UNI, netting around $10.2 million in USDC.

The group has said that it is already hiring a policy director to establish a strategy for the fund and to engage with policymakers, in the range of $150,000 to $250,000.

Following the sale, Chris Blec, founder of DeFi Watch — a platform trying to encourage transparency in DeFi — has published eight questions on the Uniswap governance forum demanding answers from the DeFi Education Fund about the fund and how it originated.

Prior to the vote, he had written a letter to the lobby group, and immediately after it passed he wrote a letter to venture capital firm a16z. On the forum, he said both letters were ignored.

The Block has also reached out to Harvard Law’s Blockchain and Fintech Initiative and will update this article if we hear back.

H/T to @bebop98 on Twitter for pointing out where the “4-5 years” comment was made.

© 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.

Phantom, a crypto wallet and browser extension for accessing decentralized finance (DeFi) applications, has raised $9 million in a Series A funding round.

Andreessen Horowitz (A16z) led the round, with participation from Variant Fund, Jump Capital, DeFi Alliance, and the Solana Foundation. Angel investors, including early Coinbase investor Garry Tan and unknown executives from Compound, dYdX, Lolli, and the Ethereum Foundation, also backed the round.

With fresh capital at hand, Phantom, a non-custodial wallet that currently supports the Solana blockchain, plans to expand to other networks, including Ethereum and Ethereum layer-two scaling solutions.

“We are currently engaging with and evaluating a number of layer-two solutions, and sidechains, including Polygon, Arbitrum, Optimism, and ZK Sync,” Phantom CEO Brandon Millman told The Block. He said Phantom is targeting the fall of this year for multi-chain support.

Besides expanding to the Ethereum ecosystem, another major plan of Phantom is to continue innovating on its Solana ecosystem and introduce more features, said Millman. These features include in-wallet staking, more markets and liquidity for the in-wallet token swapper, fiat on-ramps via MoonPay, and a new Ethereum/Solana asset bridge, he said.

“We will look at monetization of our in-wallet token swapper and potentially staking features. NFTs are also an exciting new area for experimentation,” said Millman on Phantom’s business model.

Phantom is currently a team of three full-time founders — Millman, Chris Kalani, and Francesco Agosti — with plans to grow to a team of 10-15 total by hiring across engineering, community, and support roles, said Millman.

As part of its development plans, Phantom is also looking to release its mobile applications for iOS and Android.

Phantom had a beta launch in April of this year and claims to have secured 40,000 users and 70,000 signups. The multi-chain support and the user-first approach are Phantom’s competitive advantages, said Millman. “We are moving to more and more of a multi-chain world … Users need a way to seamlessly operate applications that live across these different networks, and we believe the wallet is the best place to solve this unique challenge,” he said.

This is Phantom’s first fundraising round, having skipped a seed round, said Millman. Earlier this year, the project received $500,000 in grants from Serum and the Solana Foundation.

© 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.

Blockchain audit firm CertiK has raised $37 million in a Series B funding round — the largest single fundraising round in the blockchain audit space.

Hedge fund Coatue Management and China-based venture capital firm Shunwei Capital co-led the round, with participation from Coinbase Ventures. No other investors joined the round, CertiK COO Daryl Hok told The Block.

The funding comes as the demand for blockchain and smart contracts audits is increasing in the wake of hacks and attacks in the decentralized finance (DeFi) space. According to The Block Research, nearly $500 million has been stolen and lost in DeFi attacks and scams in the last year and a half.

CertiK audits codes of blockchain projects and protocols to ensure they are secure. The New York-based firm, founded in 2018, claims to have over 1,000 clients, including Aave, Polygon, Yearn, and Binance. It claims to have secured $70 billion worth of digital asset value. The firm’s top five markets include the U.S., Europe, China, Singapore, and Korea, Hok told The Block, adding that CertiK also serves non-crypto clients, including Ant Financial and Hyundai.

Given the rising demand for its services, CertiK has been profitable since last year, Hok told The Block. He declined to share profit and revenue figures but said CertiK’s H1 2021 revenue was more than four times the total revenue earned by the company in 2020.

Expansion plans 

CertiK said in a statement that the Series B funding will help to expand its team and security capabilities. The firm’s current headcount is 100, and it plans to double the team size in the upcoming year.

As for enhancing its security capabilities, CertiK plans to protect protocols against “novel manipulations and hacks” as well as serve more projects, co-founder Ronghui Gu, a computer science professor at Columbia University, told The Block.

“We recognize that the demand for getting an audit often surpasses the capacity of trusted auditors, so we’re continuing to scale our technology to be able to offer the most accessible, as well as the most robust, audits in the space,” said Gu.

In addition to code auditing, CertiK also offers a service called Skynet, which provides security scores of DeFi projects by analyzing their on-chain and off-chain data such as social sentiment, market volatility, suspicious transactions, and governance control.

Skynet’s security scores and alerts are publicly available, and its paid version provides more detailed information on each of the analyzed projects, said Gu. “Following an audit, Skynet is deployed to actively monitor and alert for any suspicious activity in real-time,” he added. “It analyzes a project’s codebase, transaction history, social media, market prices, and more.”

The Series B brings CertiK’s total funding to date to $48 million. The firm raised $11 million just under a year ago. Hok declined to share CertiK’s valuation with the latest round.

© 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.