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Bitwise Asset Management, the crypto-focused fund manager, has hired Katherine Dowling as its first general counsel.

Dowling, a Harvard Law School alumnus, spent more than a decade as an assistant attorney in the economic crimes unit of the United States Attorney’s Office in San Francisco, where she prosecuted crimes including insider trading and Ponzi schemes, according to her LinkedIn profile.

Dowling also served stints at Credit Suisse and, more recently, at a handful of venture capital and private equity firms. She begins at Bitwise on March 5.

“In recent years, the cryptocurrency industry has evolved and expanded more rapidly than many believed was possible,” said Bitwise president Teddy Fusaro. “At Bitwise, we serve professional investors, many of whom are entering this asset class for the first time. These developments require the creation of a regulatory environment that both educates and protects investors while fostering innovation. Katherine’s experience will help Bitwise continue to lead the industry in achieving these goals.”

The San Francisco-based Bitwise, which launched the first cryptocurrency-focused index fund, recently surpassed the $1 billion mark in assets under management across its various products.

Those funds include the Bitwise 10 Crypto Index Fund, Bitwise Bitcoin Fund and Bitwise Ethereum Fund. The company debuted its first decentralised finance-focused fund on February 17, offering investors exposure to DeFi projects such as Uniswap, Aave, Maker and Compound.

© 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 proposal to extend tax breaks to cryptocurrency miners who make a home in the U.S. state of Kentucky has advanced in spite of a potential drain on the government’s coffers.

The Budget Committee for the Kentucky House of Representatives approved the measure in a 19-2 vote, as reported by the Lexington Herald-Leader, a local publication in the state. As The Block reported in January, the measure would extend sales and use tax breaks, particularly for the electricity necessary to power crypto mines, which typically operate 24/7. 

A fiscal note related to the bill indicates that the state could lose as much as $9 million per year, a number premised on the idea that “at least one new facility would come online in the next year, and existing facilities in the state would be able to take advantage of the exemption,” per the note.

The Herald-Leader’s report indicates that the crypto mining bill fits into a broader effort to attract technology firms to the state through the use of tax incentives. The budget committee reportedly approved a separate measure extending sales and use breaks to corporations that open data centers in the state.

Lawmakers in the Kentucky Senate are also considering a similar bill focused on crypto mining.

The developments come as the crypto mining footprint in the United States continues to grow, buoyed by high digital asset prices and a willingness among institutional investors to place bets on the industry. 

© 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

• Despite February being the shortest month of the year, several metrics recorded new records.
• Total adjusted on-chain volume saw a moderate increase of 11.6% to a new all-time high of $590 billion.
• Adjusted on-chain volume of stablecoins increased by 24.9%, to a new all-time high of $381.9 billion.
• For the first time since July 2017, Ethereum miners revenue is on par with Bitcoin miners revenue at $1.36 billion.
• Centralized exchange spot trading volumes increased by 25.7%, to a new all-time high of $1.153 trillion.

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A mining firm looking to democratize exposure to the highly technical underbelly of the crypto market has raised $1.7 million in venture funding to scale its operations. 

Announced Wednesday exclusively to The Block, Compass Mining said the raise was led by Galaxy Digital and included participation from CMT Digital, Coinfund, Rarestone Capital, and BlockFi’s Zac Prince. 

The firm operates a two-sided marketplace—one looks much like sites like Hotels.com or Expedia—that pools together bitcoin mining hardware suppliers on one side and buyers looking to buy that hardware on the other. Typically, access to such machines is limited to those with a lot of capital, but Compass allows users to purchase individual mining machines.

The buyer then holds an ownership stake in the machine but the supplier operates it for them, transmitting the proceeds to the buyer as the hardware generates BTC. In some ways, the approach is akin to the cloud mining model, whereby an operator rents out or sells hash rate from their stock of machines. 

Since the firm began operations, Compass Mining has sold $11.4 million in mining hardware. In February, the firm mined 6.5 BTC across about 1,000 customers, according to CEO Whit Gibbs. The former television producer told The Block that its earliest customers “who bought in late October were able to make a return on their investment in mid-February.”

Compass’s fundraise comes amid a period of heightened activity for the North American mining sector, which has drawn the attention of institutional investors. Elsewhere, Galaxy Digital announced its own business in the market and DCG’s new mining unit foundry said it would colocate $14,000 bitcoin mining machines in the US to target institutions. 

© 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

• The fastest-growing blockchain applications focused on decentralized finance in 2020. To start 2021, NFTs have been at the center of attention
• DeFi overall has seen (more) linear growth rates in 2021, instead of the exponential rates we saw in the summer of 2020
• MakerDAO is a standout, with $85 million in annualized stability fees as revenue to MKR token holders. Prediction markets are down in popularity post-2020 election

This research piece is available to
members of The Block Genesis.
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Sovryn, a bitcoin-based decentralized finance (DeFi) protocol for trading and lending, has raised $10 million in a token sale.

Sovryn said its “governance token” SOV was on sale, each for 9,736 satoshis, i.e., 0.00009736 bitcoin, or around $5.

That means Sovryn collected 200 bitcoin through the sale, co-founder Edan Yago told The Block. Given that bitcoin’s price is volatile, the collected amount could rise or fall in the future.

Yago said the raised funds will be kept in the protocol’s treasury, and the community will decide how to utilize them.

Sovryn today also launched a bug bounty program worth up to $1.25 million via a bug bounty platform called Immunefi. The protocol looks to reward white hat hackers for identifying “critical bugs” relating to its smart contracts.

Sovryn went live last December and currently has 4,000 active addresses, Yago told The Block. The protocol’s volume and total value locked data aren’t known yet. Yago said analytics tools around Sovryn’s data are currently being rolled out.

The token sale round brings Sovryn’s total funding to date to $16 million. Earlier this year, the protocol raised $2.5 million in a token sale, previously $2.1 million from venture firms, and “additional smaller sales in the interim on a strategic basis,” Yago 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.

On this episode of The Scoop, Ethereum 2.0 developer and Prysmatic Labs founder Preston Van Loon and Joe Sticco joined Frank Chaparro to discuss their project Cryptex.

Already, the firm has lined up 500 users for its testnet, including a number of liquidity providers in the US. The team expects to launch a new token, called TCAP in the next few weeks. Van Loon and Sticco broke down how the project will offer investors a way to buy the entire crypto market, how DeFi can offer an alternative to indexes popular on Wall Street, and the scaling solutions being explored in Ethereum. 

© 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, a crypto industry investment firm, has received investments from billionaire hedge funder Marc Lasry and J. Christopher Giancarlo, the former chairman of the Commodity Futures Trading Commission.

The investments were reported by Bloomberg. With the investments, the amount of which was not disclosed, BlockTower is added the co-founder of private equity firm Avenue Capital Group as well as a former regulator and proponent of a digital dollar to its investor ranks.

Lasry notably predicted in the summer of 2018 that bitcoin’s price could top $40,000, as reported by CNBC at the time. He also said that he’d personally invested in bitcoin. At press time, the price of bitcoin is roughly $47,750, according to Coinbase.

According to Dealroom, BlockTower’s portfolio includes Dapper Labs, the blockchain startup behind NBA Top Shot and CryptoKitties, Solana and Origin Protocol.

Disclosure: BlockTower is an equity investor in 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.

Crypto exchange giant Binance announced Tuesday an investment in Multicoin Capital.

Multicoin is a hedge fund that invests in crypto startups. With the deal, Binance has now become a partner of the hedge fund.

“This is the first investment we have made of this nature. As a result, we will continue working closely with Multicoin Capital to explore new opportunities for blockchain, including development and market expansion,” Binance said in a blog post.

Other investors in Multicoin include Ribbit Capital, eminent venture capital fund Union Square Ventures, venture capitalist Marc Andreessen, and former chief operating officer of PayPal Holdings Inc David Sacks.

“[Multicoin Capital] has a strong track record and a unique knowledge of emerging assets that extend well beyond Bitcoin,” said Binance CEO Changpeng Zhao in a statement. “They are the best at what they do, and we are glad to join them as limited partners. We look forward to working more closely together in the broader industry.”

As noted in a profile of Multicoin’s portfolio produced by The Block Research, the hedge fund was founded in 2017 by Kyle Samani and Tushar Jain. Its portfolio cuts across an array of industry sectors, including infrastructure.

© 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.

Amazon Web Services (AWS), the cloud computing platform providing subsidiary out of the multinational technology company Amazon, announced today that Ethereum is now available on its Amazon Managed Blockchain service.

AWS users can now set up Ethereum nodes and join the public Ethereum main network on the Amazon Managed Blockchain. 

“With this launch, AWS customers can easily provision Ethereum nodes in minutes and connect to the public Ethereum main network and test networks such as Rinkeby and Ropsten,” Amazon said in its blog post. “With Amazon Managed Blockchain, customers get secure networking, encryption at rest and transport, secure access to the network via standard open-source Ethereum APIs, fast and reliable syncs to the Ethereum blockchain, and durable elastic storage for ledger data.”

Amazon first began providing blockchain-related services back in 2019, which gave customers initial access to blockchain networks, nodes, decentralized applications, and smart contracts. In addition to Ethereum, Managed Blockchain also supports Hyperledger, a permissioned blockchain software developed by a consortium of companies and organizations.

This service was first only available to customers on the East Coast of the United States, but now customers can access Ethereum across the AWS regions in the Eastern U.S., Asia Pacific, and Europe.

© 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.