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John McAfee has retained legal representation for charges he’s currently facing in the U.S.

Gordon Law Group, a tax law firm, will defend McAfee in federal legal cases he faces focused on alleged tax evasion and securities fraud.

The Department of Justice indicted McAfee on securities fraud-related charges earlier this month. The allegations are related to his cryptocurrency venture the “McAfee Team.” The DOJ says McAfee used Twitter to build interest in certain assets with misleading claims and without adequately disclosing his positions. The agency also alleges he engaged in multiple pump-and-dump schemes. 

The DOJ’s charges join civil cases lodged by the Securities and Exchange Commission (SEC) and the Commodities Futures Trading Commission (CFTC), all centering on McAfee’s alleged misleading use of social media for financial gain. 

McAfee is currently in Spain and faces extradition in relation to a separate case involving tax evasion. The U.S. government previously alleged that McAfee willfully failed to disclose a variety of income streams, including those related to crypto, from 2014 to 2018.

Gordon Law Group will defend McAfee in his criminal indictments, which include both the tax and securities charges, according to an announcement from the firm. The alleged penalties come with possible prison time. A statement from the firm indicates he is planning to fight the DOJ’s charges.

“Mr. McAfee strongly maintains his innocence, and we are prepared to establish that before the federal courts of the United States,” the law firm said.

Gordon Law has built a portion of its practice around the intersection of tax law and cryptocurrency. Its website features pages related to cryptocurrency auditing, reporting and a response to the Internal Revenue Service’s (IRS) letters to cryptocurrency holders. 

“Cryptocurrency is a developing area for the [Internal Revenue Service] and Department of Justice, and this case marks a turning point in the enforcement of cryptocurrency reporting,” said the firm.

While Gordon Law Group will defend McAfee against his criminal charges, it is unclear who will represent McAfee in his CFTC and SEC civil cases.

McAfee’s business partner, Jimmy Watson, is also facing securities charges from the DOJ. The Gordon Law Group does not mention Watson in its announcement. 

© 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 publicly-listed Chinese technology company Meitu has acquired $28.4 million worth of ether and $21.6 million of bitcoin via a subsidiary.

In a disclosure filing on Wednesday, Meitu said the bitcoin acquisition would compose part of Miracle Vision’s treasury. The ether purchase is intended to play a role in its wider aspirations in the blockchain space.

Meitu, a Chinese photo retouching app listed in Hong Kong, first bought cryptocurrency earlier this month, when it disclosed it had acquired $40 million in BTC and ETH as part of a so-called “Cryptocurrency Investment Plan.” The plan includes the purchase of $100 million worth of crypto. 

Now, its Singapore-based subsidiary has purchased close to an additional $50 million. Miracle Vision also creates beauty and communication-creator apps. 

Meitu’s purchase earlier this month included plans to create products that integrate blockchain. It reiterated the sentiment with Miracle Vision’s purchase disclosure:

“The Group is currently evaluating the feasibility of integrating blockchain technologies to its various overseas businesses, including but not limited to launching Ethereum-based dApps, as well as identifying suitable overseas blockchain-based projects for potential investments…that can be synergistic to its large user base that has hundreds million monthly active users globally.”

The firm said purchasing ether is a “logical preparation” for these initiatives. This ether would become the transaction expenditure reserve for any potential decentralized apps and investments, according to the statement.

The bitcoin purchase is part of a wider allocation strategy, according to the firm.

“The Board believes cryptocurrencies have ample room for appreciation in value and by allocating part of its treasury in cryptocurrencies can also serve as a diversification to holding cash (which is subject to depreciation pressure due to aggressive increases in money supply by central banks globally) in treasury management,” it said in the disclosure.

© 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.

Morgan Stanley alerted its wealth management advisors Wednesday that the Wall Street giant will begin offering access to at least one bitcoin-related fund to accredited wealth management clients.

It’s the latest sign of bitcoin adoption on Wall Street and a big development for the cryptocurrency in the wealth management channel. Morgan Stanley’s wealth management unit boasts 16,000 advisors, managing some $2.3 trillion in client assets.

According to a source at the bank, the firm could offer clients access to funds operated by NYDIG or Galaxy Digital.

On Wednesday, Morgan Stanley published a note through its wealth management unit that outlined the case for cryptocurrency as an emerging investable asset class. That piece notably suggested that would-be investors should look to publicly traded products rather than obtain direct exposure via coin ownership.

“For those qualified* investors ready to gain exposure, we suggest starting with publicly traded products—preferably ones that are multiasset and potentially accessing the growth opportunities through a venture capital/private equity investment in the blockchain ecosystem,” the note explained in its conclusion.

That Morgan Stanley would offer access to an NYDIG fund is perhaps unsurprising, given that the Wall Street bank was among those to participate in NYDIG’s $200 million growth capital round earlier this month.

NYDIG’s CEO, Robby Gutmann, said during a podcast appearance earlier this week that “[i]n the next week, you’ll see game-changing milestones for bitcoin adoption in the financial landscape.”

© 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.

New Universal (Newu), a Shenzhen-listed equipment manufacturer with a $400 million in market capitalization, has announced a move into the Filecoin mining space.

In a disclosure filed to the Shenzhen Stock Exchange on Tuesday, the firm said it has signed a purchasing contract with Sesumg, a Jiangxi-based electronic component manufacturer.

As part of the agreement, Newu is buying 580 million yuan ($90 million) worth of computing and storage equipment on the InterPlanetary File System (IPFS) network.

In the first batch of delivery, Sesumg will ship 500 units of computing and 100 units of storage equipment to Newu. Newu boasted that the potential revenue from the Filecoin storage-based mining could be as much as 119% of its 2019 revenue.

Based on its past filings, Newu made a net profit of $9.5 million on $74 million worth of revenue in 2019, which primarily came from the manufacturing and sale of industrial factory equipment.

This is the first known instance where a China-listed company has moved into Filecoin mining. 

In February, Chinese gaming company The9, which is listed on NASDAQ and already pivoted into bitcoin mining last year, has said it signed a $10 million agreement to purchase Filecoin mining equipment. 

The Filecoin network currently has 3.322 exbibytes of effective storage power with a majority of the contribution coming from Chinese companies. FIL, the native cryptocurrency on the decentralized storage network, is now changing hands around $72, according to data from CoinGecko.

© 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.

A new investor note penned by Morgan Stanley’s wealth management unit, dated Wednesday, outlines a case for cryptocurrency as an emerging investable asset class.

The note’s authors, Lisa Shalett and Denny Galindo, stress that their determination is a cautious one, noting that any investment in cryptocurrencies like bitcoin is a speculative one. Still, it represents another step in an ever-shifting viewpoint of the technology in the eyes of Wall Street from outright rejection to slow embrace.

As the two authors note in the piece’s introduction:

“For speculative investment opportunities to rise to the level of an investable asset class that can play a role in diversified investment portfolios requires transformational progress on both the supply and demand sides. With cryptocurrency, we think that threshold is being reached. A firming regulatory framework, deepening liquidity, availability of products and growing investor interest—especially among institutional investors—have coalesced.”

Among the specific recommendations is the pursuit of more information for the would-be investor. The authors note at the end of the piece that “our recommendation is that investors get educated and consider how and whether to get exposure to this bourgeoning asset class in their portfolio.”

As for what form that exposure might look like, the Morgan Stanley report outlines during its executive summary:

“As with any asset class still in its speculative phase, there are a multitude of risks—some predictable, some identified and some yet to be uncovered. Such risk characteristics limit prudent advice to having exposures in small positions in a highly diversified form, akin to how one might approach venture capital investing. Our initial modeling, replicated in spirit by a recently published CFA Institute study, suggests diversification benefits from the low correlation of cryptocurrency to other assets and that Sharpe ratio improvements can be achieved with positions no greater than 2.5%. It is important to keep in mind that we are only in the top of the first inning.”

Then, in the note’s conclusion, the authors reiterate that they aren’t at the point of recommending outright direct exposure in the form of owning any particular coin.

“From our vantage point, coin trading remains in its infancy. Issues around finding true price discovery and best execution are still to be addressed. We have yet to be convinced there and, therefore, advise clients to proceed with caution,” they write, concluding:

“For those qualified* investors ready to gain exposure, we suggest starting with publicly traded products—preferably ones that are multiasset and potentially accessing the growth opportunities through a venture capital/private equity investment in the blockchain ecosystem.”

The note’s release comes more than a month after Bloomberg News reported that Counterpoint Global, a unit of Morgan Stanley Investment Management, is weighing whether to invest in bitcoin. 

© 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.

Crypto exchange Coinbase filed an amended S-1 form early Wednesday, disclosing that it has registered about 115 million shares for its direct listing on Nasdaq.

The revised form doesn’t yet mention a date at which Coinbase’s shares will get listed under the ticker symbol COIN.

Coinbase also highlighted the SEC’s lawsuit against Ripple in the revised form and said such regulatory actions could ultimately impact its operating and financial results.

Coinbase suspended all XRP trading pairs on its platform earlier this year, although the digital asset represented a chunk of its trading volume and revenue.

“For the years ended December 31, 2020 and 2019, XRP represented $17.0 billion and $3.4 billion of Trading Volume and $108.6 million and $27.1 million of total revenue, respectively,” said Coinbase. “Going forward we expect no Trading Volume or total revenue related to XRP trading, and expect a decrease in Assets on Platform attributable to XRP.”

This is a developing story and will be updated…

© 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

• Livepeer is a protocol for decentralized video streaming. The project has raised a total of $11 million. Investors include Northzone, Multicoin Capital, and Digital Currency Group (among others)
• The primary argument in favor of Livepeer is that it can cut video streaming costs by bringing a latent supply of GPU miners to live video transcoding
• After a quiet period, Livepeer may be starting to see demand — 350k minutes of streaming in the past week and e.g. a new video streaming platform File.Video built on Livepeer and IPFS

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Kraken plans to go public next year via a direct listing, a spokesperson of the cryptocurrency exchange told The Block.

Direct listing means Kraken won’t choose the traditional IPO or the special purpose acquisition company (SPAC) routes. The spokesperson said Kraken is “too big” for the SPAC route.

Fox Business reporter Charles Gasparino tweeted Tuesday that Kraken could go public in 2022 either via a SPAC or an IPO.

Kraken’s plans of going public were first revealed earlier this year when its CEO Jesse Powell said he’d make the exchange go public at a valuation of above $10 billion. Kraken is reportedly in talks to raise funds in a move that could see its valuation reach that level.

The Kraken spokesperson further told The Block that the exchange at this point is “fully focused on scaling our business, filling key roles and making sure we’re giving clients the best experience in a time of unprecedented growth.”

Kraken rival Coinbase is set to go public on Nasdaq via a direct listing in the coming weeks. Crypto-friendly brokerage eToro also announced this week that it would go public via a SPAC merger.

Intercontinental Exchange-owned crypto firm Bakkt is also planning to make a stock market debut via a SPAC merger.

© 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.

BitMEX founder and former CEO Arthur Hayes intends to voluntarily surrender to U.S. authorities next month on a proposed $10 million bail.

Hayes plans to travel to Hawaii on April 6 from Singapore, where he is currently residing with his wife, according to court documents seen by The Block.

Hayes’ proposed bail worth $10 million, secured by $1 million in cash and co-signed by his mother, is subject to the court’s approval.

Hayes first discussed a surrender agreement with U.S. authorities earlier this month. Now as part of his bail conditions, Hayes has also proposed to reside in Singapore with pre-approved travel to New York and retain his passport for travel between Singapore and the U.S.

Hayes — along with his fellow co-founders Ben Delo and Samuel Reed — was charged in October by the U.S. Commodity Futures Trading Commission (CFTC) for allegedly operating BitMEX without registering and violating CFTC rules.

The U.S. Department of Justice also charged all three executives at the time, along with BitMEX’s first employee and head of business development Greg Dwyer, for allegedly violating the Bank Secrecy Act.

Delo surrendered to U.S. authorities earlier this week and was subsequently released on a $20 million bail. Reed was arrested last October and later released on a $5 million appearance bond. Dwyer remains at large, but U.S. authorities have begun extradition proceedings against him.

© 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 Bank of Japan (BOJ) will start experiments on a central bank digital currency (CBDC) this spring, according to central bank governor Haruhiko Kuroda.

Reuters reported today that Kuroda said the bank must “prepare thoroughly” to issue a CBDC. That includes experimenting with how it would operate a digital yen during the course of this year.

At a webinar with The Block in July of 2020, a senior researcher at Nomura Research Institute said the BoJ had no concrete plans to issue a CBDC. That’s still true, according to Kuroda, but he said that shouldn’t stop the central bank from experimenting with how such a rollout might take place.

Deputy governor Masayoshi Amamiya made similar comments in January of last year, saying the BoJ must be prepared to respond since “public demand for CBDCs could soar in Japan.” 

The BoJ has been researching CBDCs since at least 2019, according to an announcement from Kuroda in November of that year. 

© 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.