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Thailand’s Securities and Exchange Commission (SEC) announced Friday that it has filed a criminal complaint against Binance over unregistered operations.

The SEC said Binance has operated a cryptocurrency exchange business in Thailand via its website without a license. Binance has also solicited the Thailand public to use its services via either its website or the Facebook page “Binance Thai Community,” and thus is liable to criminal sanctions, according to the SEC.

The regulator said it sent Binance a warning letter on April 5 requiring the exchange to submit a written response, but it failed to reply within a specified time.

The SEC’s announcement comes at a time when Binance and its affiliates are under scrutiny or have received warnings from global regulators, including the U.S., the U.K., Japan, the Cayman Islands, and Singapore. But Thailand’s action appears to be one of the most significant actions to date against Binance since it is not just a warning but a criminal complaint directed at the exchange.

Thailand’s SEC has filed a criminal complaint against Binance with the Economic Crime Suppression Division of the Royal Thai Police, it said. That means the regulator has commenced a legal procedure, and a court process will pan out.

According to the SEC, Binance has violated Thailand’s crypto laws defined under the Digital Asset Businesses Emergency Decree. Thus, the exchange operator could face sanctions such as imprisonment for a term of two to five years and a fine of 200,000 to 500,000 baht (around $6,000 to $15,500), and a further daily penalty not exceeding 10,000 baht ($310) for every day during which the contravention continues.

Binance did not respond to The Block’s request for comment on the Thailand SEC’s action by press time, but has previously said, “we take a collaborative approach in working with regulators, and we take our compliance obligations very seriously.”

© 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 Cayman Islands Monetary Authority (CIMA) has said that despite media reports of Binance being incorporated in the territory, it is not licensed by the regulator to operate a crypto exchange business from or within the Islands.

In an announcement published on Friday, the CIMA said it is informing the public that none of Binance, the Binance Group or Binance Holdings Limited is under its regulatory oversight to run a crypto exchange business from or within the British overseas territory.

“The Authority is currently investigating whether Binance, the Binance Group, Binance Holdings Limited or any other company affiliated with this group of companies has any activities operating in or from within the Cayman Islands which may fall within the scope of the Authority’s regulatory oversight,” the CIMA said in the notice but did not make any accusation of potential wrongdoings.

“Binance.com has always operated in a decentralized manner. Binance.com does not run a cryptocurrency exchange out of the Cayman Islands, as reported incorrectly in some media articles previously,” a Binance spokesperson responded in a statement.

“We do however, have entities incorporated under the laws of the Cayman Islands performing activities that are not related to operating a crypto-exchange trading activities and permitted by law. We will work with regulators to address any questions they may have,” the exchange added.

According to the Cayman Island business registration record, at least Binance Holdings Limited is incorporated as a business entity within the territory.

Cayman Islands business registration record

Global scrutiny

The CIMA added that any company incorporated the territory that operates a crypto exchange business in or from within the Islands must fulfill at least one of the two criteria.

They must be registered or licensed “in accordance with the Virtual Asset (Service Providers) Act, 2020 (“VASPA”) or be an existing regulated company that is already granted a waiver by the CIMA under the VASPA.

According to local reports, Virtual Asset Service Providers (VASPs) must register with the CIMA by January 31 this year and the second phase of the enforcement of the law is expected to be effective in June which would include “licensing and prudential supervision.”

The CIMA notice came a day after the Singapore Monetary Authority said it would review the license application again from Binance Asia Services Pte because its parent entity Binance Holdings Ltd came under regulatory scrutiny worldwide, according to a Bloomberg report.

Last week, the U.K. Financial issued a statement to bar Binance’s UK entity from taking any “regulated” activities, although in practice the notice does not appear to have a direct impact the services on binance.com that is being used by U.K. customers. But it was an evidence showing how little control that regulators have over the crypto exchange giant.

Last month, Binance said it is exiting the Canadian province of Ontario amid a regulatory crackdown there and all Ontario-based users must close out all active positions by December 31, 2021.

The Japanese Financial Services Agency also issued another warning in June that Binance is still offering services to Japanese residents without having a proper license registered with the financial watchdog.

Binance said it “does not currently hold exchange operations in Japan, nor do we actively solicit Japanese users.” But it declined to comment when asked if that means Binance by default allows Japanese users to visit and trade on its site. 

In May, it was reported that Binance was facing an investigation by the U.S. Internal Revenue Services and the Department of Justices. That was on top of the inquiry Binance was reportedly facing from the U.S. Commodity Futures Trading Commission. But federal agencies did not accuse Binance of wrongdoing at the time.

© 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 e-sports tournament organizer Community Gaming announced Thursday that it raised $2.3 million in seed funding.

CoinFund, an investment firm that has shown an interest in non-fungible tokens (NFTs), led the round. Other notable investors include the NFT and digital rights unicorn Animoca Brands, Dapper Labs, and Multicoin Capital. 

The Ethereum-focused software firm ConsenSys, which had led Community Gaming’s pre-seed round in 2020, also participated.

“We are excited to have obtained support from major players in both the blockchain and gaming industries as we seek to bring web3 payment technology to millions of gamers worldwide and help accelerate the shift towards Play2Earn gaming ecosystems,” said CEO of Community Gaming Chris Gonsalves in a press statement.

Community Gaming plans to use the seed funding to continue expanding across Latin America and Southeast Asia, and to grow its team through new hires. 

Community Gaming was founded in 2017 in New York. The startup distributes the rewards of e-sport gaming competitions through blockchain technology, involving the Polygon Chain, Ethereum Mainnet, or Binance Smart Chain. While some competitions pay winners in fiat (USD), most use popular cryptocurrencies like ETH, DAI, and USDC.

© 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 1, the Bitcoin Mining Council released its first round of estimates for the energy mix used by the Bitcoin network.

The BMC is a relatively new project with the stated goal of setting new standards for transparency in Bitcoin’s energy use, which has become an increasingly controversial subject. 

Per its first reports, the BMC claims to have gathered data “from over 32 percent of the current global Bitcoin network in its first ever voluntary survey. The results of this survey show that the members of the BMC and participants in the survey are currently utilizing electricity with a 67% sustainable power mix.”

The findings further extrapolate that the global Bitcoin ecosystem uses 56% sustainable energy. Yet the nature of the extrapolation and methodology indicate how the survey’s conclusion may be overly optimistic. 

The survey involved depended heavily on BMC member responses and included just three questions, per the methodology:

“1.) How much electricity does your total fleet consume today?; 2.) What is the total % of sustainable electricity within your fleet’s power generation mix today?; 3.) What is the total aggregate hashrate of your fleet today?”

In addition to the fact that responses themselves were voluntary, the survey includes no definitions of “sustainable electricity,” nor is there any oversight involved in the self-reported figures. Voluntary responses from self-selecting members also make it difficult to build statistically valid conclusions. 

Per the fine print of BMC’s presentation:

“Estimated global Bitcoin network annualized power based on BMC analysis, assumptions, and extrapolation.”

The survey’s release comes amid a period of significant upheaval in the global mining sector as China-based operations shut down and attempt to relocate following orders from municipal and provincial governments in that country. Potential destinations for these operations and their hardware include the United States as well as coal-rich Kazakhstan, as previously reported.

As a result of the miner shutdowns in China, bitcoin’s hash rate has fallen sharply from its peak. 

The bitcoin mining network’s difficulty, which determines how hard it is for miners to mine new blocks, could fall by more 20% with the next adjustment in light of the exit of Chinese miners from the network. The next adjustment is expected to take place this weekend.

© 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 Hong-Kong based firm Animoca Brands announced Thursday that it raised nearly $139 million total in its most recent funding round, according to a company release. 

Animoca provides digital property rights through non-fungible tokens (NFTs) and blockchain tech, giving gamers the ability to own or exchange digital assets or properties in video games. 

Investors in Animoca’s most recent round include Coinbase Ventures, the investment arm of the crypto exchange giant Coinbase — the CEO of which had released his own NFTs. Over Animoca investors include Blue Pool Capital, Liberty City Ventures, Korea Investment Partners, Gobi Partners, Samsung Venture Investment Corporation, Scopely, Token Bay Capital, and zVentures. 

The round was “conducted at a pre-money valuation of US$1 billion,” per the firm.

“We are honored and excited to welcome strategic investors who offer powerful synergy and partnership opportunities,” said Yat Siu, co-founder and chairman of Animoca Brands, in the statement. “The strong demand we saw in this raise is a clear endorsement for Animoca Brands’ mission to deliver digital property rights to gamers and build the Metaverse.”

Animoca intends on using the funds to finance new products, investments and acquisitions, and intellectual property licenses. 

Previously, Animoca created games such as F1 Delta Time, a motorcar racing game licensed by the drag race association F1, and that uses the REVV ERC-20 token. Another is The Sandbox, a game with a Minecraft feel that allows players to own, trade, and sell digital assets created within the game as NFTs based on ERC-721 smart contracts. 

Both of Animoca’s games appear to use NFTs derived from the Ethereum network, a process which has been criticized as using too much energy and thus producing too much carbon, despite the true carbon cost of an NFT remaining unknown for certain. 

And yet, Animoca Brands’ unicorn valuation status, as well as other games companies like Hasbro interested in non-fungible tokens, indicate that interesting NFT continues to persist.

To be sure, NFTs have not recovered from their February peaks in terms of trading volume, which had reached a historic high of $198 million, according to data compiled by 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.

Brokerage app company Robinhood’s S-1 filing with the Securities and Exchange Commission (SEC) was released on Thursday as part of the firm’s bid to go public.

Broadly, the S-1 detailed the significant financial performance of the firm on the back of interest among retail investors. Among the performance metrics posted: $522 million in revenue for the three months ending March 31, a year-over-year increase of 245%.

Still, Robinhood said that “we recorded net loss of $1.4 billion, which included a $1.5 billion fair value adjustment to our convertible notes and warrant liability” for that period. It was during this time that Robinhood, as well as Wall Street more broadly, was swept up in the so-called meme stock mania around companies such as GameStop. There was also heightened interest in the platform’s crypto offerings at that time.

The S-1 showcases Robinhood’s strong crypto offering performance, particularly the role that the meme-themed cryptocurrency dogecoin played in that business unit’s fortunes.

As noted in the document:

“For the three months ended March 31, 2021, 17% of our total revenue was derived from transaction-based revenues earned from cryptocurrency transactions, compared to 4% for the three months year ended December 31, 2020. While we currently support a portfolio of seven cryptocurrencies for trading, for the three months ended March 31, 2021, 34% of our cryptocurrency transaction-based revenue was attributable to transactions in Dogecoin, as compared to 4% for the three months ended December 31, 2020. “

In terms of quarterly performance, Robinhood said:

“In the first quarter of 2021 alone, we saw over 9.5 million customers trade approximately $88 billion of cryptocurrency on our platform, and we held approximately $12 billion in cryptocurrency Assets Under Custody as of March 31, 2021, a 23-fold increase from March 31, 2020.”

Growth aside, Robinhood’s crypto unit represents a fraction of that of Coinbase’s, the crypto exchange company that went public via a direct listing in April. For the first quarter of 2021, Coinbase reported $222.7 billion in assets under management or about 19 times that of Robinhood’s customer holdings. Coinbase’s $1.8 billion in Q1 revenue is about 20 times more than the roughly $88 million Robinhood earned from its crypto offering during that time period. 

Regulatory scrutiny

Success aside, Robinhood’s cryptocurrency business has attracted the interest of regulators. Bloomberg reported earlier this month that the SEC has scrutinized Robinhood Crypto, potentially delaying the firm’s public debut as a result.

Robinhood’s S-1 also detailed a previously unknown investigation being conducted by the California Attorney General into its crypto business unit.

Though details of the investigation are spares, it appears to be in the context of the state’s commodities rules. The document had this to say:

“Additionally, on April 14, 2021, the California Attorney General’s Office issued an investigative subpoena to RHC, seeking documents and answers to interrogatories about RHC’s trading platform, business and operations, application of California’s commodities regulations to RHC and other matters.”

Robinhood noted that it is “cooperating with this investigation” and that “[w]e cannot predict the outcome of the investigation or any consequences that might result from it.”

The S-1 also details a “settlement in principle” reached between Robinhood Crypto and the New York State Department oof Financial Services. As noted in the document:

“On July 24, 2020, the NYDFS issued a report of its examination of RHC citing a number of “matters requiring attention” focused primarily on anti-money laundering and cybersecurity-related issues. The matter was subsequently referred to the NYDFS’s Consumer Protection and Financial Enforcement Division for investigation. In March 2021, the NYDFS informed RHC of certain alleged violations of applicable (i) anti-money laundering and New York Banking Law requirements (Part 417, Part 504 and Banking Law § 44), including the failure to maintain and certify a compliant anti-money laundering program, (ii) notification provisions under RHC’s Supervisory Agreement with the NYDFS, and (iii) cybersecurity and virtual currency (Part 500 and Part 200) requirements, including certain deficiencies in our policies and procedures regarding risk assessment, lack of an adequate incident response and business continuity plan, and deficiencies in our application development security.”

© 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.

BlockTower Capital, the cryptocurrency investment firm, is capitalizing on Wall Street’s unquenchable thirst for yield. 

The firm, co-founded in 2017 by Matthew Goetz and Ari Paul, recently acquired Gamma Point in a $35 million deal, as previously reported by Bloomberg. Gamma Point specializes in so-called market neutral strategies and has now been fully integrated into BlockTower, according to a source familiar with the firm’s operations.

BlockTower announced quietly that acquisition on June 28, noting in a press release that “there’s a tremendous market neutral opportunity in cryptocurrency, and it’s something we’ve consistently heard as important from investors and institutions looking for a strategy with this kind of profile that can remove the volatility so many focus on in this market.”

A source said that the firm officially launched its new fund with Gamma Point on Thursday, which will now begin to deploy capital into market-neutral strategies, meaning they won’t take directional long or short bets on a given token or coin. 

The plan is to continue to expand the fund’s strategies — which can span DeFi yield farming to capitalizing on basis funding rates — and opportunistically take on new investors via individual accounts. Thus far, BlockTower has seen success in wooing progressive endowments to the new vehicle, according to a source. 

There are also fund of funds looking to incorporate crypto into their existing market-neutral strategies, the person added. 

Hunt for yield 

Indeed, demand for the new vehicle was significant from such investors, which are hunting for yield in a low-yield environment. 

That’s been evident in the junk U.S. municipal bond market, which has seen strong demand among investors, as noted by The Financial Times. Often, when yields are low, investors flock to riskier investment opportunities. 

In a sense, a market-neutral strategy is more digestible for a large allocator to stomach—relative to other crypto investment opportunities. The thinking goes that such strategies don’t necessarily require an investor to buy into the story of a given token, but rather the notion that inefficiencies in the fast-growing crypto market can produce returns that don’t exist elsewhere. 

As for the logic behind the deal, Gamma Point offered BlockTower a technology stack and execution monitoring capabilities that the firm thinks will provide it with a moat relative to its competitors. BlockTower will continue to eye new “tuck-ins” — that is, acquisition deals that can help build out the firm’s capabilities. 

The firm’s expansion is in line with broader market moves.

Large crypto-focused venture capital and investment firms have been expanding. Paradigm, for instance, recently brought on talent to help portfolio companies recruit and market their wares to the crypto community. a16z — which just unveiled a new $2.2 billion fund — has brought on several heavy hitters to help their portfolio companies with similar functions. 

© 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

• Most metrics recorded record severe declines in June, with Ethereum metrics recording a higher beta than Bitcoin metrics.
• Total adjusted on-chain volume decreased by 46.6% to $572.7 billion.
• Stablecoin supply grew slightly by 3.7% to a new all-time high of $105.4 billion. Notably, Tether did not issue any more stablecoins in June.
• Centralized exchange spot trading volumes declined by 56% to $958.3 billion.

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A collection of five non-fungible tokens by digital artist FEWOCiOUS has sold for $2.16 million in a sale hosted by auction house Christie’s. 

The collection of NFTs, titled “Hello, i’M Victor (FEWOCiOUS) and This Is My Life,” was inspired by the 18-year-old artist’s experiences as a young, transgender artist growing up in an abusive household.  

NFTs, or non-fungible tokens, are collectibles stored on the blockchain that can represent digital files like images, audio, and video. Each of the 1/1 NFTs in this collection captures a year in the life of FEWOCiOUS, chronicling his childhood life in Las Vegas to his eventual move to Seattle. Each NFT is also paired with a collection of newly minted doodles, drawings, and journal entries curated from his archives of that year. 

FEWOCiOUS (b. 2003), Year 1, Age 14 — It Hurts To Hide, 2021. Image: Christie’s

The sale was live from June 23 to June 30 and received bids from more than 20 collectors. Buyers had the option of paying in ether and bitcoin.

In addition to owning an NFT from the collection, all successful buyers will have the opportunity to meet FEWOCiOUS in person and will also receive the physical painting. 

Shortly after the sale closed, FEWOCiOUS tweeted, “at a loss for words right now. thank you so much to everyone for making me feel so loved, believing in my art and believing in me, it means the world.”

Rise to digital art stardom

FEWOCiOUS, otherwise known as Victor Langlois, rocketed to fame earlier this year when his collaboration with musician Two Feet generated over $1 million in sales on NFT marketplace NiftyGateway. The artist has also been a part of several well-known NFT collaborations with digital fashion brand RTFKT Studios and collaborators Odius, Parrot_ism and Jonathan Wolfe — partnerships which have also brought in millions. 

FEWOCiOUS said he turned to art as a way to escape the pain of an abusive household. He discovered the NFT space after a person who bought one of his paintings encouraged him to mint his other work. FEWOCiOUS submitted an application to join NFT platform SuperRare. After getting approval, he sold multiple pieces for over half a million dollars in the span of just a few months. He was eventually able to move out of the house he had grown up in. 

“I feel healthier and in a way, I feel them not supporting my art at all fueled this fire,” he told The Block in March. “Art saved my life in so many different ways.”

While FEWOCiOUS is known for his signature use of dynamic and vibrant colors as well as the distorted, unrealistic proportions in his artwork, many in the NFT community, particularly younger, emerging artists, have looked to him as a source of inspiration and support in their own careers. FEWOCiOUS has even been known to get involved in art auctions to make sure that his peers don’t miss out on profits.

“He sends positivity around the community and sets a better example for everyone,” said digital artist Pierce (@Blizzy), a member of a three-person teenage artist collective called RetroCoin (@RETROCOIN). “FEWOCiOUS shows that he is not cordoned off to the VIP area.”

© 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 total revenue of Bitcoin and Ethereum miners declined by 42% and 53%, respectively, in June, compared to the previous month.

According to The Block’s Data Dashboard, Bitcoin miners raked in $839 million in revenue during June, compared to $1.45 billion in May. Bitcoin’s price drop and a drop in transaction volume (and therefore fees) appear to be the two main reasons behind the revenue fall. Bitcoin’s hash rate has also fallen by 50% since its peak in May, which has temporarily slowed down the rate of block production until the next difficulty adjustment — potentially also affecting revenue numbers.

The share of bitcoin mining revenue from transaction fees fell to 5% in June from about 9% in May as the number of daily transactions dropped to near 200,000 in June — a level not seen since August 2018, compared to about 300,000 daily transactions in May.

Ethereum mining revenue 

Ethereum miners also saw their revenue decline in June, to about $1.1 billion, compared to an all-time high of $2.35 billion reached in May. Both the price decrease and a drop in transactions on the network will have contributed to this.

Of the $1.1 billion figure, only around $166 million came in the form of transaction or gas fees — a significant decline compared to the previous month — as fees plunged to a six-month low during June. Block subsidy payments to Ethereum miners made up the remaining nearly $940 million.

While the June revenues of Bitcoin and Ethereum miners declined sharply, those are still above their December 2020 levels, when bitcoin and ether were trading lower, closer to the $20,000 and $1,000 levels.

At the time of writing, bitcoin is trading at around $33,300 and ether at about $2,200.

© 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.