Crypto Custodian BitGo Adds an Additional $600M Insurance Coverage As Demand Increases

Crypto Custodian BitGo Adds an Additional $600M Insurance Coverage As Demand Increases

This follows increased institutional interest in crypto assets. Crypto.com is one of the first companies to take advantage of the excess limits.

Digital asset custodian, BitGo announced an additional $600 million to its “Dedicated Customer Excess Specie” insurance program as institutional investment in crypto skyrockets to new highs. The custodian launched a $100 million insurance program in 2019 via Lloyds’ of London to protect investors’ crypto holdings from any kind of external threat.

The additional cover is a response to the strong institutional investment growth in digital assets in 2021. With the insurance now covering up to $700 million, BitGo ranks as the largest insurance coverage in the crypto-space, Peter Najarian, BitGo’s chief revenue officer, boasted.

“We’ve been able to offer to our clients the ability to purchase bespoke insurance directly from a group of insurers that sit on top of our insurance at very favorable rates,” he said. “I would imagine our in-force coverage of over $600 million is certainly the largest in the marketplace today.”

Similar to its first insurance cover, the additional cover is sourced from Lloyds of London in collaboration with Woodruff-Sawyer & Co. and Paragon International Insurance Brokers of London.

BitGo opened up doors for companies to purchase “excess limit” insurance cover above the $100 million in 2020, and the latest additional cover is an extension to that program. Major crypto payment platform and exchange, Crypto.com was one of the first to purchase the dedicated customer excess limits in a bid to protect assets held in cold storage.

Speaking on the additional $600 million insurance cover, BitGo CEO Mike Belshe said,

“This milestone demonstrates that the offering has been very popular with clients seeking the ultimate secure and insured storage.”

However, crypto insurance marketplaces are still in the budding stage as regulatory concerns and security challenges push most global insurance companies from offering cover. As such, crypto custodians are forced to store their assets in cold storage to avoid hack attempts on the wallets. While security is enhanced, storing assets in cold storage has its challenges, such as difficulties in trading and withdrawing the funds.

A “specie” insurance policy covers such risks, also used to insure fine art and bullion stored in banks and other institutions.

According to Jacob Decker, a vice president at Woodruff-Sawyer, having specie policies protects the clients from “fraudulent activity involving insiders such as employees and possible collusion with external bad actors”. Also, it insures the funds in case of “physical destruction of key material due to fire, flood or earthquake.”

BitGo recently received its charter from the New York Department of Financial Services (NYDFS) to become an independent custodian operating in the city.

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Author: Lujan Odera

Traditional Auction House Now Accepts Bitcoin and Ether on ‘Demand from Consumers’

Traditional Auction House Now Accepts Bitcoin and Ether on ‘Demand from Consumers’

Goldin Auctions partnered with crypto exchange Gemini to facilitate crypto payments.

Goldin Auctions, the trading card, and sports memorabilia auction house announced this week that it would now accept cryptocurrency. The traditional auction house hopped on the crypto bandwagon following the success of auction house Christie’s.

“We now accept Bitcoin as payment,” tweeted Goldin Auctions which is known for high-value items.

In a separate tweet, the auction house said, in addition to standard payment and payout methods, they allow the same in both BTC and Ether. This decision is made on “demand from consumers,” said Ross Hoffman, Goldin’s chief executive officer.

“Look, we think a big macro theme that we’re seeing is folks that are hedging,” he told Bloomberg. “One, against inflation, and two, there’s interest in alternative investing.”

Cryptocurrency and sports collectibles, according to him, have “a pretty large overlap.”

They have already accepted two payments in crypto a couple of weeks back, the most notable one for a Jay-Z card that was sold for $103,200.

“It’s pretty amazing how easy the tech is to integrate,” Hoffman says. “We had the idea [to accept crypto] two weeks ago, did the integration, and accepted our first payment in Bitcoin last week.”

This isn’t the first time Goldin has forayed into the blockchain industry. Earlier this year, the auction house partnered with YouTuber Logan Paul to auction a box of Pokemon cards.

Goldin also announced a partnership with crypto exchange Gemini on Tuesday following a $40 million investment in the auction house from The Chernin Group (TCG) and several prominent individuals and firms, including Dwyane Wade, Mark Cuban, Kevin Durant, Mark Wahlberg, and many more.

“We are excited to team up with Goldin Auctions and help them facilitate crypto payments for collectors and sellers on their platform,” said Tyler Winklevoss, CEO of Gemini.

Commenting on “some volatility” involved with crypto assets, Hoffman said, “whatever risk there is [will] be offset by the benefit of bringing in more members.”

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Author: AnTy

Acer Technologies Targeted In ‘Largest Ever’ Ransomware Attack; Hackers Demand Monero (XMR)

Acer Technologies Targeted In ‘Largest Ever’ Ransomware Attack; Hackers Demand Monero (XMR)

The global computer manufacturer is yet to confirm any attacks.

In what has been dubbed as the ‘largest ransom ever asked for,’ the notorious REvil ransomware gang is reportedly asking for $50 million from the Taiwanese computer manufacturer, Acer. First reported by Tech Radar, the hacking group is asking the amount to be paid in privacy-enabled Monero (XMR) cryptocurrency to decrypt their computers.

According to cybersecurity specialist company Malwarebytes, this is the largest ransom any operator has ever faced. Ransomware attacks involve hackers infiltrating your systems, encrypting valuable/confidential information, and asking for a fee to decrypt the systems.

If the reports are true, the hackers seem to have attacked the company’s back-office systems and not the production line. As of the time of writing, no spokesperson has released any comments from Acer. We will update you on this story as it develops.

The REvil group usually records and keeps the demand letters sent to their victims, especially those that do not cooperate. While the Acer documents are yet to be put up, the hackers blasted the Acer representative who was in touch with them as an “incompetent negotiator.” They asked to be linked with the management or a supervisor in their negotiation.

Monero is gradually becoming the coin of choice for hackers, given its highly private nature. Days before the 2020 U.S. Presidential elections, Donald Trump’s campaign website was hacked with the hackers asking for XRM payments to release the information.

In February this year, KIA Motors hackers asked for $32 million in Bitcoin or Monero in order to decrypt their systems.

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Author: Lujan Odera

“Very Significant Demand for Digital Assets,” says BNY Mellon Investing in Fireblocks

“Very Significant Demand for Digital Assets,” says BNY Mellon Investing in Crypto Custody Startup, Fireblocks

Bank of New York Mellon Corp. is investing in cryptocurrency startup Fireblocks that builds tools for the transfer and storage of cryptocurrencies, reported the Wall Street Journal — yet another move by a traditional Wall Street player to embrace crypto assets.

This latest one came just after last month, the bank announced that it plans to serve as a custodian for crypto assets on behalf of institutional investors.

“There is very significant demand for digital assets in general,” said Roman Regelman, chief executive of BNY Mellon’s asset-servicing and digital businesses. “They’re becoming part of the mainstream.”

One of the world’s largest custody banks, BNY Mellon has $2 trillion in assets under management (AUM), as of 2020.

Earlier this month, PayPal also acquired Curv, a Fireblocks rival. Another major custody bank State Street Corp. is working on a digital asset custody service as well.

BNY Mellon’s strategic investment in Fireblocks is part of the New York-based startup’s larger funding round of $133 million from investors that include venture-capital firms Ribbit Capital and Stripes and hedge-fund firm Coatue Management.

“Eventually, the major cloud providers will either have to buy these infrastructure companies or build them in-house. Lacking the domain expertise alone of custody or scaling public chains will put them at a massive disadvantage longer term,” said trader Joe McCann, founder of NodeSource.

Amidst the ongoing bull market that has Bitcoin becoming a trillion-dollar crypto asset and the total cryptocurrency market cap surpassing $1.8 trillion, the companies in the industry are using this as an opportunity aggressively to raise funds, with Coinbase in the lead.

Founded in 2018, Fireblocks has raised $179 million, including the new round, to date. The Series C round gives the firm a valuation of over $900 million.

The startup moved over $100 billion in crypto assets last month, which was more than double the amount done three months earlier.

With over 200 clients, Fireblocks is working with some of the larger crypto-focused trading firms and several multinational banks as well.

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Author: AnTy

Nasdaq listed Canaan Creative Sees A Boost in Demand for Bitcoin Miners As Crypto Prices Rise

Nasdaq listed Canaan Creative Sees A Boost in Demand for Bitcoin Miners As Crypto Prices Rise

Bitcoin Mining firms are struggling to meet the increased demand for mining machines despite the rising prices of cryptocurrencies.

According to Canaan Creative, a Nasdaq listed firm, crypto mining orders have been rising despite Bitcoin’s hitting new highs in the recent past. Over the weekend, Bitcoin’s price surged to a new level, trading at $60,000. The king coin has been bullish over the last year, with its value increasing by about 110 percent since January this year.

Buoyed by the rising price, Bitcoin mining equipment manufacturers have witnessed their businesses hitting the peak with some grappling to meet the soaring demand.

As one of the largest mining equipment manufacturers, Canaan Creative claims that its orders have been increasing since 2020. The firm stated that North America and Central Asia are the largest sources of the current surge in demand.

According to Global Times, the firm’s presale mining hardware to the North American region were about 120,000 units which is a 17% surge from mid-Feb.

In the wake of the global shortage of mining chips, Canaan entered into agreements with various fabrication plants in advance, giving the company leeway to manufacture mining hardware as per the market demand.

To take advantage of the soaring Bitcoin prices, the firm intends to kick-off its own mining business later in the year rather than just providing mining machines.

The firm stated that Bitcoin’s price is likely to be bullish following the recent plans by the US government to inject about $1.9 trillion into the economy following the sluggish growth and collapse due to the Covid-19 pandemic.

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Author: Joseph Kibe

Bitcoin as a Treasury Asset Goes Global Amidst Renewed Bullish Sentiments

Bitcoin funding rates are gearing up as the price aims for $55,000. Substantial demand for crypto assets from institutions is also here.

Bitcoin had a promising start of the week as we aim for $55,000. In tandem with Bitcoin, Ether and other altcoins have also shaken their uncertainty and recovered strongly.

Traders are getting bullish as the funding rate starts heating up some. On Bitcoin perpetual contracts, the rates are currently between 0.0291% (Deribit) and 0.1908% (Bybit), as per Viewbase. As for Ether perpetual contracts, it is between 0.0550% (OKEx) and 0.1939% (BitMEX). However, the funding rates are still far from February levels.

While the open interest on CME’s Bitcoin futures, which dropped $1 billion to $2.1 bln suggests some cautiousness from institutional investors, the same cannot be said about the digital assets’ addition to balance sheets.

This wave of publicly listed companies using BTC as a reserve asset which was kickstarted by Microstrategy in the US, is now going global as it reaches Scandinavia and Hong Kong.

This week, oil billionaire Kjell Inge Rokke came out strongly in favor of Bitcoin as he said it’s not inconceivable that BTC could one day “be worth mil­lions of dollars.”

Norway’s second-richest person with an estimated $5.4 billion net worth is the co-founder of Aker ASA, which has more recently branched out into green tech and renewable energy companies. And the company is also setting up a new business Seetee AS, to tap into the potential of Bitcoin. It has already deployed $58 million in Bitcoin.

Recently, China’s publicly listed company also added Bitcoin and Ether to its balance sheet. Lennix Lai, director at crypto exchange OKEx commented,

“Meitu is the very first listed company in HK that publicly announced they invested in Bitcoin for cash-hedging purposes. It’s just the beginning of all cash-rich HK-listed companies’ start allocating to crypto.”

“Huge” institutional demand

The $1 trillion market cap crypto asset has been gaining the support of some notable endorsements lately, such as Elon Musk. On Wall Street as well, from custody banking giant Bank of New York Mellon Corp., Mastercard, Morgan Stanley, and JPMorgan, a growing number of companies are warming up to Bitcoin.

However, when it comes to adding Bitcoin to corporate Treasuries, the companies are finding issues with the accounting of the digital asset as the Financial Accounting Standards Board doesn’t have guidance specific to the accounting for cryptocurrencies.

“I don’t think it’s the best accounting so far,” said Robert Hertz, a former FASB chairman. “I am hoping that if more mainstream companies get into bitcoin, the accounting standards board may revisit the accounting treatment.”

According to US research firm Gartner’s survey of 77 executives last month, about 5% of chief financial officers (CFOs) and senior finance leaders said they plan to hold bitcoin on their balance sheets this year.

While some feel companies would avoid adding Bitcoin to the balance sheet as they are “happy sinking money into very safe places with low interest” to focus on growing the company through its operations, others point out how the value of the dollar continues to get weaker and “Bitcoin flips the script on that.”

Just last week, Goldman Sachs reported substantial demand for crypto assets from institutions. In a survey of nearly 300 clients conducted by the bank, 40% currently have crypto exposure.

Matt McDermott, global head of digital assets for Goldman Sachs Global Markets Division, said in an interview that the current situation is different compared to 2017 due to “huge” institutional demand from private banking clients and across different industry types.

Blockchain technology offers “a real diverse set of opportunities for the financial industry and something that there’s a huge amount of momentum” for in the market, said McDermott.

“We know firsthand just given the various different projects we’re working on. And we see this as a hugely exciting time exploring the potential of that technology.”

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Author: AnTy

Bitcoin Lending Grew Nearly 12x; Only Accounts for 0.15% of the $20T Total Collateral Market

There is also growing demand for Ether among traditional actors entering crypto lending with ultra-high-net-worth individuals, corporations, traditional hedge funds, and family offices wanting to enter the market looking to generate excess yield on idle cash.

Total active collateral in the Bitcoin lending markets has grown from $1.9 billion in Q3 2019 to a whopping $24.3 billion in Q4 2020, reveals the latest joint report by Arcane Research and crypto exchange Bitstamp.

The crypto lending market is simply flourishing, but it has a long way to go with the collateral markets’ current size estimated to be $20 trillion, providing a huge potential for bitcoin as collateral.

Over 400,000 BTC are estimated to be used as collateral for Bitcoin-backed loans today, doubling over the last year, reads the report. It is particularly used to leverage up and buy more crypto for arbitrage, market-making, tax deferment, and the need for fiat and miners covering costs.

The interest rate on Bitcoin deposits is currently high at 6-10%, which is expected to decline as more BTC are collateralized, and the crypto sector grows.

In total, 625,000 BTC, approximately $30 billion, are used as collateral in the crypto market today, based on estimations of collateral held in the derivatives market and tokenized BTC in DeFi. Still, bitcoin collateral only accounts for 0.15% of the total collateral market, which is growing rapidly, states the report.

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Arcane Research expects further growth in the BTC lending market, which could be “very bullish” for Bitcoin as it allows users to employ their cryptocurrency to serve their everyday fiat-needs, without requiring the hodlers to sell and realize profits.

Bitcoin, which can be transferred around the world instantly, at almost no cost, is a superb collateral asset because it is without both counterparty risk and credit risk, reads the report.

Institutions are just as interested in the crypto lending market, with institution-focused Genesis seeing a YoY growth of 245% in their outstanding loans.

One of the market-leading companies in the lending market, Genesis has seen incredible growth over the past year. Their outstanding loans surged to $3.8 billion in Q4 of 2020, a roughly 80% growth from Q3.

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The company further processed nearly $20 billion on loans last year to institutions only, “showing tremendous demand for traditional actors entering crypto lending.” In Q4, the company also pointed to the inflow of institutional lenders as well with ultra-high-net-worth individuals, corporations, traditional hedge funds, and family offices wanting to enter the market for the first time looking to generate excess yield on idle cash.

But it isn’t only about Bitcoin; there is also growing demand for Ether among institutions. There has been a steady increase in ETH loans outstanding, which grew 177% during the last three quarters of 2020.

Like BTC, this growth was attributable to ETH’s price inflation, the biggest reason was tied to in-kind placements in Grayscale’s Ethereum Trust, according to Genesis.

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BlockFi is another company leading in crypto lending with over $4 billion in outstanding institutional loans. According to the report, BlockFi’s internal numbers show that the company is a clear competitor to Genesis on the institutional side.

In 2020, BlockFi processed $18.6 billion in loans to its institutions and private clients, and by the end of the year, it had $4.4 billion in outstanding institutional loans. These clients aren’t just based in the U.S. either, just 60%, but spread across the world — 25% in the Asia-Pacific and the last 15% are based in Europe.

Other notable competitors in this sector are Celsius which processed over $8 billion in loans, Nexo which has over 1 million users and shares profits with its token holders, and Nebeus, which was one of the first movers in 2014.

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Author: AnTy

Hackers Demand Up to 600 Bitcoins ($32 Million) in Kia Motors Ransomware Attack

Hackers Demand Up to 600 Bitcoins ($32 Million) in Kia Motors Ransomware Attack

  • Kia Motors America suffered a ransomware attack on Thursday.
  • Hackers demand a $22 million payout to decrypt the data.
  • Ransom could shoot up to $32.7 million in the coming week if not paid on time.

Kia Motors America is the latest company to face a ransomware attack from the notorious DoppelPaymer gang of hackers. The hackers are demanding the payment in Bitcoin (BTC), 404 Bitcoins (~$22 million, as of writing), to decrypt the data and not leak the data to the public. The ransom is set to increase by 50% to 600 Bitcoins if not paid by 28th February 2021.

A ransomware attack is a malware attack in which a hacker encrypts files and data of the victim and asks for a ‘ransom’ to decrypt the data. According to a report by BleepingComputer, the attack on Kia Motors America witnessed “a nationwide IT outage” affecting the company’s mobile UVO Link apps, phone services, payment systems, owner’s portal, and internal sites used by over 800 dealerships in the U.S.

In a note first revealed by BleepingComputer, the DoppelPaymer gang alleges they orchestrated the attack on Hyundai Motors America, Kia’s parent company. No hack attempts have been reported on Hyundai Motors. The Tor ‘victim page’ reads that the hackers made away with large volumes of data threatening to release them to the public if no negotiation or payment is held in the next 2 weeks.

To prevent any leak of the data and get the data decrypted, Kia Motors should pay 404 BTC through a Tor website link, with instructions on how to do so. If not paid in the next nine or so days, the ransom is stated to grow by 50% to 600 BTC (~$31.7 million, at current prices).

Several services remain affected on the Kia Motors America website, but the hackers have released no information on the type of data stolen.

This is not a first-time hack attempt for the DoppelPaymer gang, who also launched a ransomware attack on Foxconn, one of the largest electronic firms in the world, in December. The hackers asked for 1,804 BTC, or $35 million at the time, to decrypt their files.

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Author: Lujan Odera

JPMorgan Co-President: The Bank Will Get Involved in Bitcoin If Demand is There

JPMorgan Co-President: The Bank Will Get Involved in Bitcoin If Demand is There

Which Daniel Pinto says isn’t there yet but will be at some point.

JPMorgan Chase is onboard to support Bitcoin if the banking giant sees demand for the cryptocurrency from its clients.

In an interview with CNBC, Co-President Daniel Pinto said the client demand isn’t there yet, which he’s certain will change. He said,

“If over time an asset class develops that is going to be used by different asset managers and investors, we will have to be involved.”

“The demand isn’t there yet, but I’m sure it will be at some point.”

Pinto has signaled that he is open-minded about Bitcoin in a recent company meeting, CNBC said, citing unidentified people familiar with the matter.

Back in late 2017, JPMorgan CEO, Jamie Dimon, called Bitcoin a “fraud,” which is currently trading at $48,000.

This week, Bitcoin hit a new all-time high at $49,000 and is up nearly 12x from its March low.

Yesterday, America’s oldest bank BNY Mellon announced that it would hold, transfer, and issue Bitcoin and other cryptocurrencies, including stablecoins and CBDCs. This week has been full of institutional adoption reports from Twitter, Uber, and GM following Tesla’s announcement of $1.5 billion worth of Bitcoin purchase.

Another banking giant, Goldman Sachs, has also been reportedly eyeing the cryptocurrency market. Last week, Goldman Sachs hosted a private forum with Mike Novogratz, the founder, and CEO of crypto firm Galaxy digital, for clients and employees.

“It’s possible Galaxy could help Goldman and other banks facing the same challenges,” said Damien Vanderwilt, co-president of Galaxy, who spent over two decades at Goldman Sachs. Vanderwilt expects “a range of releases over 2021,” with more corporates, pensions, and insurance companies to invest in Bitcoin.

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Author: AnTy

Institutional Demand in Bitcoin is Increasing at an ‘Accelerating Pace’ in 2021: Grayscale CEO

Institutional Demand in Bitcoin is Increasing at an ‘Accelerating Pace’ in 2021: Grayscale CEO

  • Institutional digital asset investment, Grayscale CEO, Michael Sonnenshein says companies’ interest in Bitcoin is increasing at an accelerating pace.
  • Could 2021 be the year institutions finally take over the crypto space?

The crypto market is still buzzing off Tesla’s $1.5 billion bets on Bitcoin as the company designated 7.7% of its cash reserves to purchase Bitcoin (BTC) last month. In an interview with CNBC’s Squawk Box on Wednesday, Grayscale CEO, Michael Sonenshein, said this latest trend of institutions such as Tesla, Square, PayPal, and Twitter adding Bitcoin to their operations and balance sheets is set to boost across 2021.

Notably, companies prepare themselves to add Bitcoin to their reserves this year as the sentiment around the digital asset switches, Sonnenshein said. In particular, Michael Saylor, Jack Dorsey, and Elon Musk have started a Bitcoin movement that is spreading across institutions like wildfire, he added,

“I wouldn’t be surprised to see there being almost some sort of a race now — you have Elon Musk, you have Michael Saylor, Jack Dorsey.”

“You’re gonna see a lot of other visionary leaders in disruptive companies actually realizing that it’s really moved from ‘why’ to ‘why not,’ and see which companies are next to get involved in having Bitcoin as part of their treasury program.”

Institutional demand for BTC is not only increasing, but it is doing so at an accelerating pace, according to Sonnenshein. The inflows on Grayscale so far in 2021 are outpacing last year’s inflow, which could be a key indicator that the demand for Bitcoin is accelerating. He said,

“I’m very pleased to say and encouraged that that momentum is not only continuing this year but is actually accelerating.”

“So we’re seeing very, very sustained and growing demand from a lot of institutional players at the moment.”

One of the reasons that institutions are flocking into Bitcoin is “regulatory concerns,” Sonnenshein explained. Those tasked with company treasuries are increasingly finding ways to invest in digital assets legally, and the “no-regulation” narrative is slowly fading.

Secondly, companies are also focusing on the size of their reserves and timing. MicroStrategy made several buys across 2020 totaling $1.3 billion, while Tesla made a one-off payment. According to the Grayscale CEO, institutions are more likely to move to buy in intervals than a one-off buy. He explained,

“I think the second piece of the conversation is around sizing and timing.”

“[Institutions] they recognize that they don’t need to get invested all at once.”

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Author: Lujan Odera