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Elliptic has completed a pilot with major Spanish bank Santander, per a June 22 announcement from the blockchain analytics firm.

The pilot focused on risk assessment of client use of cryptocurrency exchanges. The firms used Elliptic’s Discover tool “to help Santander assess its indirect exposure to crypto by flagging and analysing transactions between the bank’s customers and crypto exchanges.”

Elliptic did not specify the breadth of the pilot, though its press release quoted CEO Simone Maini in applauding the pilot’s success.

Neither Elliptic nor Santander had returned requests for comment as of publication time. The pilot did apparently involve participation from Mouro Capital, a former VC branch of Santander and a continuing investor in Elliptic. 

Alongside Chainalysis and Ciphertrace, Elliptic is one of the leading analytics firms focusing on tracing cryptocurrency through the blockchain for illicit use. Unlike the prior two, Elliptic largely shies away from contracting with governments.

However, as major ransomware attacks have put criminal use of cryptocurrency at the top of international priorities, financial services providers will increasingly need to perform due diligence measures on crypto usage to appease regulators. 

© 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.

Iranian police have seized 7,000 cryptocurrency mining units at an illegal cryptocurrency farm, according to a report from Reuters, citing Iranian state media. 

According to the report, this is their largest haul to date and comes less than a month after Iranian authorities banned crypto mining until September of this year. The ban was a part of the government’s efforts to reduce the number of power blackouts which they blamed on overwhelming high electricity demand over the summer. 

According to Tehran police chief General Hossein Rahimi, the 7,000 miners were seized in a deserted factory in the west of the capital, state news agency IRNA said, per the Reuters report.

The country accounts for around 4.5% of all bitcoin mining, according to data collected by blockchain analytics firm Elliptic.

According to the firm, the country’s cheap electricity supply has attracted many miners recently. An increase in mining activity has enabled the country to “circumvent” trade embargoes and earn hundreds of millions of dollars in crypto assets which can then be used to purchase imports and sidestep sanctions.

© 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 price of bitcoin has dropped below $30,000 as the bearish sentiment in the crypto market continues.

At the time of writing, bitcoin is trading at around $29,800. The last time when bitcoin went below $30,000 was on January 27, when the cryptocurrency hit a low of $29,367.

As a result of the price drop, bitcoin’s market capitalization has plunged from a recent over $1 trillion to nearly $660 billion, according to tracker CoinGecko.

Meanwhile, ether (ETH), the second-largest cryptocurrency after bitcoin, is trading at around $1,770.

© 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.

Stronghold Digital Mining, a Pennsylvania-based bitcoin mining firm, announced Tuesday that it raised $105 million in funding from two private placements.

The investors are “mainly family offices,” a company representative told The Block, who added that Stronghold intends on using the $105 million funding to further fund restoration efforts in Pennsylvania, purchase crypto mining hardware, and finance more waste coal clean-up facilities. The fundraises were disclosed in a pair of SEC filings made public earlier this year.

Stronghold’s Scrubgrass Generating Plant uses waste coal, an environmentally toxic byproduct of coal mining, first to fuel its electricity generation. The company later brought crypto mining hardware into the power mining facility, creating “an economic incentive to continue cleaning up waste coal piles and land,” the company representative told The Block. 

Scrubgrass eliminates more than 90% of toxic substances from the waste coal in the energy production process, and the resulting fly ash can be used as a fertilizer approved by the Commonwealth of Pennsylvania’s Department of Agriculture.

“Coal waste fires have been wreaking havoc in my home state of Pennsylvania for the last hundred years,” said Bill Spence, co-chairman of Stronghold, in the statement. “We employ 21st-century crypto mining techniques to remediate the impacts of 19th- and 20th-century coal mining in some of the most environmentally neglected regions of the United States.” 

Stronghold’s CEO is Greg Beard, who formerly worked as the global head of natural resources for Apollo Global Management, the billion-dollar alternative investment management firm. 

Stronghold’s waste-coal-powered energy and bitcoin production reclaimed 1,000 acres of previously environmentally denigrate land and return it to local communities, which have then been used as playgrounds, sports fields, and green spaces. 

While Stronghold’s energy production uses waste material, other bitcoin mining operations have opted to offset their carbon emissions or use hydropower to become more sustainable.

© 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.

Digital Currency Group (DCG), the parent company of crypto asset manager Grayscale, announced Monday a plan to buy up to $50 million in shares of Grayscale’s Ethereum Classic (ETC) Trust.

The plan comes as the Grayscale ETC Trust continues to trade at a discount for over two months, meaning the market price of the trust’s shares has been trading lower than its net asset value or NAV.

The current discount of Grayscale’s ETC Trust is over -33%, according to tracker Bybt. The market price of the trust’s shares is about $28 at the time of writing, while its NAV is around $40. The Grayscale ETC Trust discount peaked at -55% last month.

Buying back of shares is a common strategy for companies looking to increase the market price of their shares by simultaneously creating demand while decreasing the number of shares outstanding.

Recently, DCG also announced plans to buy up to $750 million in shares of Grayscale’s flagship product, Grayscale Bitcoin Trust (GBTC). But that effort doesn’t seem to have helped GBTC much. The product continues to trade at a discount for over four months. Its current discount is nearly -15%, according to The Block’s Data Dashboard.

There are several factors behind the GBTC discount, as The Block reported recently. These include new competition and selling pressure from existing customers.

Grayscale has said that it remains “100% committed” to converting GBTC to a bitcoin exchange-traded fund (ETF), but the firm’s CEO Michael Sonnenshein said the regulatory environment in the U.S. still isn’t ready. The U.S. Securities and Exchange Commission has yet to approve a bitcoin ETF in the country.

Besides the ETC Trust and GBTC, Grayscale’s Ethereum Trust has also been trading at a discount for the past few months. The Ethereum Trust’s current discount is over -8%, according to Bybt.

© 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

• Liquidity on Curve has skyrocketed as liquidity providers can earn inflationary CRV rewards, where CRV is Curve’s native token
• CRV has a high inflation rate which gets absorbed by liquidity providers and yield optimizers who buy and lock up CRV for a long time to boost up their rewards
• Three whitelisted yield optimizing protocols provide free reward boosting for users who deposit Curve LP tokens into their vaults
• Convex Finance has locked up more CRV than its competitors albeit recently launched

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BIT Mining, formerly known as 500.com, a Shenzhen-based online sports lottery firm that pivoted into bitcoin mining last year, has already shipped some of its equipment to Kazakhstan.

The New York Stock Exchange-listed mining firm said in an announcement on Monday that it had delivered its first batch of mining equipment to the Central Asia country. The first batch that was already shipped had 320 bitcoin mining machines with a total computing power of 18.2 petahashes per second and is expected to be operational by June 27, BIT Mining said. It is shipping two more batches with a total of 2,600 bitcoin miners by July 1 to the same facility.

The move follows a government order last week from China’s hydro-hub Sichuan to shut down 26 bitcoin mining facilities as an initial target, which included a subsidiary of BIT Mining. It is one example of the swift response that many Chinese bitcoin miners are taking in reaction to the recent orders given in Xinjiang and Sichuan.

BIT Mining said in the announcement that its indirectly held subsidiary, Ganzi Changhe Hydropower Consumption Service Co, received a notice from State Grid Sichuan Ganzi Electric Power Co. on Saturday, which informed the firm that its power supply would be suspended “effective 9:00 pm Beijing time, June 19.”

“Ganzi Changhe Data Center has since suspended its operations. Data centers in Sichuan, including the Ganzi Changhe Data Center, contributed approximately 3% of the Company’s total revenues in the month of May 2021,” BIT Mining added in the announcement.

Ganzi is one of the three mountainous prefectures in the west side of the Sichuan province close to Tibet that had been known for housing bitcoin mining farms due to their abundant hydroelectricity resources.

Indeed, BIT Mining’s Ganzi Changhe data center was among the 26 bitcoin mining facilities on the Sichuan government’s shutdown order issued last Thursday. As The Block reported, a majority of the entities on the list were previously granted by the local government to operate mining facilities legally in Sichuan’s Hydroelectricity Consumption Industrial Demonstration Zones.

Another firm on the list that also stood out is called Shutian Information Technology, which is wholly and directly owned by the Chinese State‑owned Assets Supervision and Administration. That meant the Chinese state-owned capital fully funded and supported the development of the Shutian mining facility.

BIT Mining itself is also indirectly backed by some state-owned capital, as The Block explained last year when the firm formally revealed its pivot that had been in the works since early 2019.

Last month, days after the Chinese central government State Council released a meeting comment about cracking down on bitcoin trading and mining activities, BIT Mining already announced it’s investing in mining facilities in the U.S. Texas state and also Kazakhstan through joint ventures with local partners.

© 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.

As Europe inches toward the creation of a digitized euro, a data-focused body within the EU is calling for any design proposal to prioritize privacy and protection.

The European Data Protection Board, created to implement Europe’s General Data Protection Regulation (GDPR), said that it “stresses that a very high standard of privacy and data protection is crucial to reinforce the trust of end users and should be considered a distinctive element in the offering of a digital euro, representing a key factor of success.” The remarks were included in a letter approved Monday by the group, the text of which was not immediately available.

“Such concerns should be taken into account from the design stage. In addition, the EDPB recommends that the EU body in charge of the design of the project performs a high-level data protection impact assessment. The EDPB further indicates that it stands ready to provide advice to the ECB or other EU institution,” the group said in its June 21 release. 

Discussions around the potential launch of a digital euro, which will likely take years to roll out once a design is approved, continue.

ECB president Christine Lagarde told European Parliament lawmakers Monday that “[t]he design of the digital euro will be discussed on 14 July by the ECB governing council with a view to finding a solution for the shrinking use of cash and facilitating access to it for people without bank accounts,” according to a statement summarizing her remarks. Lagarde said in January that technical hurdles remain a key discussion point. 

© 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.

Even billionaires aren’t immune to market plunges in the decentralized finance (DeFi) space.

Mark Cuban — the serial entrepreneur and owner of the Dallas Mavericks — made headlines last week for buying into Iron Finance, a fork of algorithmic stablecoin project Frax. The price of the TITAN token collapsed to nearly zero after soaring to $65. 

“I got hit like everyone else,” Cuban, who could have played into the appreciation of Iron Finance’s coin Titan, said in a tweet. Essentially what happened was a large-scale seller of TITAN kicked off a wider run of the token’s underpinning network. As the large holder sold, new stablecoins were issued by the network that diluted the price of other market participant’s TITAN holdings, thus perpetuating the fall. 

“We never thought it would happen, but it just did. We just experienced the world’s first large-scale crypto bank run,” the project said in a post-mortem. 

Cuban, who recently penned a blog post championing the DeFi market, still has conviction in the market. In the aftermath of Titan, Cuban made headlines for calling for regulations on stable coins, arguing for “regulation to define what a stablecoin is and what collateralization is acceptable.

In an interview with The Block, Cuban shared his thoughts about the Titan drawdown and DeFi. He declined to comment further on his remarks about stablecoin regulation. 

(Edited for clarity and length)

Chaparro: What are the biggest strengths DeFi has over traditional finance?

Cuban: Lack of friction in transactions, permission-less and accessibility for everyone the ability for the community to drive activity (think enabling local loans) and better use of capital. Liquidity Providers, stakers, validators are unique to crypto and can allow projects to scale far more quickly and capital efficiently than traditional finance. 

Chaparro: How did the TITAN rug pull impact your thoughts on the space?

Cuban: It didn’t. It was on me for not doing my homework. I generally knew what happened with each transaction, but the scale of the rewards should have been enough reason to project out all the possible outcomes. 

A few hours with a spreadsheet and I would have been better informed of the risks.  I still may have taken the risks, but they would have been clearer.

Chaparro: Who introduced you to the project?

Cuban: I saw it online somewhere. 

Chaparro: What are your metrics for vetting projects? How are they different from the ways you vet companies and startups?

Cuban: There are investments and there are flyers where you know there is risk and but you think the upside makes it worth taking. 

I thought I would let the Titan compound and not be greedy and in a few days withdraw all. But obviously I never got there. And this also shows the importance of a vibrant community. Maybe if the community was more active and bigger someone would have warned of the risks of the type of a bank run that crushed Iron Finance. 

In addition, maybe there needs to be a community of auditors or test net simulation AI  that runs through every possible scenario combination to prevent this from happening again.

© 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 June 21, the Ontario Securities Commission began proceedings against Bybit Fintech Limited. 

The commission alleges that Bybit failed to respond to public statements requiring crypto exchanges to begin compliance talks with the regulators. 

The OSC action is just the latest in a series of enforcements from the regulator against custodial crypto exchanges operating in the country. As with similar actions against Poloniex and Kucoin, the commission is operating on an interpretation of securities law that identifies custodied crypto as its own form of securities contract, despite underlying assets like Bitcoin and Ether remaining commodities. 

The allegations against Bybit explain:

“While Bybit purports to facilitate trading of the crypto assets in its investors’ accounts, in practice, Bybit only provides its investors with instruments or contracts involving crypto assets. These instruments or contracts constitute securities and derivatives.”

The first hearing on the Bybit case is scheduled for July 15. 

As the OSC’s first case in this wave of enforcement — against Poloniex — only had its first hearing on Friday, the success of its argument remains to be seen. 

Alongside these enforcements, the commission has added 12 crypto trading platforms to its investor alert list since September. 

© 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.