FTX Exchange Raises $900M At $18B Valuation; Binance Is Out, Coinbase and Many Big Giants Are In

Two-year-old cryptocurrency derivatives platform FTX has completed a series B fundraising round, the largest private equity round in the industry of a whopping $900 million.

With this, FTX now has a valuation of $18 billion, up from a mere $1.2 billion a year ago. This may feel fast, but it is the world “going in slow motion” while FTX is “going normal speed,” according to the founder and CEO Sam Bankman-Fried.

This makes sense given that FTX is the most rapidly growing business in the cryptocurrency space which has signed multiple high-profile marketing deals [Tom Brady & Gisele Bundchen Ambassadors, MLB Partnership, eSports Team TSM, FTX Arena, and Blockfolio Acquisition] to spread the word. The company also plans to use this fresh capital to expand its product offerings and for other investments.

“The primary goal of the raise was to [find] strategic allies who can help FTX grow its brand,” but the capital itself will be primarily used for acquisitions, said Bankman-Fried.

With this latest funding, 29-year old CEO Bankman-Fried, who previously worked for quantitative-trading giant Jane Street Capital LLC, has seen his riches grow by at least $7.9 billion.

Bankman-Fried who owns 57% of the company shares is now worth $16.2 billion and is the wealthiest known crypto billionaire, as per Forbes.

More than 60 Participants

The exchange raised the funds from a vast number of big names, more than 60, that includes the Paul Tudor Jones family, British hedge fund manager Alan Howard, Silicon Valley venture capital firm Sequoia Capital, hedge fund billionaire Daniel Loeb’s Third Point, private equity giant Thomas Bravo, another hedge-fund billionaire Israel Englander, and SoftBank Group.

Paradigm, Sino Global Capital, Circle, VanEck, Ribbit Capital, Insight Partners, Lightspeed Venture Partners, Altimeter, BOND, NEA, Willoughby Capital, 40North, Senator Investment Group, Multicoin, and Hudson River Trading also participated.

“Absolutely ecstatic to let you know that Sino Global Capital participated in FTX’s Series B round (in retrospect, it was inevitable),” tweeted Matthew Graham, CEO at Sino Global Capital.

“Today, SBF is no longer merely a titan of crypto. He’s now a titan of business, and he and our good friends at FTX are just getting started.”

Exchanges Making Strategic Investment

Amidst this, leading crypto exchange Binance recently exited its position in FTX. Binance made a strategic investment of an undisclosed sum in FTX in December 2019.

“We’ve seen tremendous growth from them, we’re very happy with that but we’ve exited completely,” said Binance CEO Changpeng Zhao.

“CZ” told Forbes that the withdrawal was part of “a normal investment cycle” and it was on good terms. “We’re still friends but we no longer have any equity relationship,” he said.

Coinbase meanwhile joined in through its investment firm Coinbase Ventures.

Coinbase recently made its debut on Nasdaq with an evaluation that briefly went past $100 billion and marked the Bitcoin top but FTX has no such plans yet. While “actively thinking about,” Bankman-Fried has no idea how this will end exactly, not to mention, there’s no “ticking clock on our need to go public.”

FTX has a native token FTT, a $3 billion market cap coin trading at $27.91, currently down over 56% from its all-time high above $63 two months back.

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Author: AnTy

“Tax Private Stablecoins Out Of Existence,” Proposes Latest Fed Paper Ahead Of Treasury Secretary Meeting

“Tax Private Stablecoins Out Of Existence,” Proposes Latest Fed Paper Ahead Of Treasury Secretary Meeting

Written by a Professor of Finance from Yale School of Management and an attorney at the Federal Reserve System, wants regulators to take a lesson from history, the Free Banking Era because the central bank must have a “monopoly on money issuance.”

Before the Treasury Secretary Janet Yellen met with SEC, OCC, and FDIC officials on Monday to discuss stablecoins, a paper called “Taming Wildcat Stablecoins” was released by the Federal Reserve and Yale over the weekend.

Written by Gary Gorton, Professor of Finance at the Yale School of Management, and Jeffery Zhang, an attorney at the Board of Governors of the Federal Reserve System, the paper laid out the regulatory options for US dollar stablecoins and footnote references to Yellen’s upcoming meeting.

According to these authors, while crypto is all the rage, there is “nothing new” about privately produced money, but the difference is its goal to be accepted at par with no questions asked.

They point to history, the Free Banking Era when private money made it hard to track due to fluctuating prices, which were then curtailed by the National Bank Act of 1863. “Subsequent legislation taxed the state-chartered banks’ paper currencies out of existence in favor of a single sovereign currency,” they noted.

Now, Gorton and Zhang propose regulating the issuers of stablecoins like Tether and Facebook’s Diem as banks and the central bank to issue its digital currency (CBDC).

With regulation outpaced by innovation, an uneven playing field has been created that needs to be corrected.

While stablecoins do not appear to be used as money currently, as they evolve further, “the stablecoin world will look increasingly like an unregulated version of the Free Banking Era—a world of wildcat banking,” it adds.

The paper proposed a couple of ways to address this development and wants regulators to “better get going.”

These options include transforming stablecoins into public money by passing new legislation requiring issuers to become FDIC-insured banks or require stablecoins to be backed one-for-one with Treasuries or reserves at the central bank.

CBDC is also proposed as a substitute to privately produced digital money like stablecoin, mainly because the central bank must have a “monopoly on money issuance,” and paper and metal coins won’t be used forever.

With the introduction of a central bank digital currency, the purpose is to have digital fiat and “tax private stablecoins out of existence.”

“Free banking in the US was a failure DUE to state regulation, not despite it,” argued Nic Carter of Castle Island Ventures and co-founder of CoinMetrics.

“The difference between now and then is that blockchain-based assets are more resistant to state capture, being natively digital (compare with gold specie), are more global in nature (compare binance with say, the royal bank of Scotland), and enable a more egalitarian relationship between depositors and depository institutions as the cost of verification is low, and thus the ease of taking ‘physical’ delivery is high. So easier to hold custodians accountable, and the threat of a ‘run’ is higher.”

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Author: AnTy

Privacy-Focused Messaging App, Signal Launches Crypto Payments Through MobileCoin

  • Signal, the private messaging app, launches a mobile payment system.

Following an impressive year in the messaging industry, Signal, the popular private messaging app, is launching mobile payments system, mobilecoin (MOB). According to a statement by Signal founder Moxie Marlinspike, who has been an adviser to the project for the past three years, the new payment system aims to provide a simple and private platform to send payments. The platform is built on Stellar blockchain leveraging the blockchain’s scalability and instant payments network.

The platform will launch a beta project first before rolling out the full product, a blog post confirmed on Tuesday. At launch, the beta phase of Signal’s payment service will only be available to U.K. customers enabling them “to send and receive privacy-focused payments as easily as sending or receiving a message.”

Users will send funds, receive funds, keep track of their balances, and review their transaction history directly from the Signal app. MobileCoin aims to improve privacy in financial transactions; hence the app will not have access “to your balance, full transaction history, or funds.” The app also allows users to transfer funds when they switch to another app or service.

The coin will be available to eligible users only on FTX exchange.

However, some analysts look at this as a step back for Signal, who have made their name in enhancing privacy via encrypted messages. “Signal as an encrypted messaging product is really valuable,” Matthew Green, a member of the Zcash Foundation board, said.

“Speaking solely as a person who is really into encrypted messaging, it terrifies me that they’re going to take this really clean story of an encrypted messenger and mix it up with the nightmare of laws and regulations and vulnerability that is cryptocurrency.”

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Author: Lujan Odera

European Central Bank (ECB) Demands Power to Shut Down Private Stablecoins, Like Diem, in the EU

European Central Bank (ECB) Demands Power to Shut Down Private Stablecoins, Like Diem, in the EU

The European Central Bank finally tables its official opinion regarding crypto regulations to the top decision-making again, European Commission.

In their official opinion, the ECB now wants the EU members of parliament to grant its veto powers regarding the legal status of stablecoins such as Facebook-supported-Diem.

The ECB raised its concerns regarding the use of stablecoins that get their value from being pegged on one or many global currencies. The central bank is worried that stablecoins could jeopardize its control on payments, banking, and cash supply. Part of the ECB’s statement reads,

“Where an asset-reference arrangement is tantamount to a payment system or scheme, the assessment of the potential threat to the conduct of monetary policy, and to the smooth operation of payment systems, should fall within the exclusive competence of the ECB.”

The ECB also urges the lawmakers to ensure its absolute powers on stablecoins are binding and applicable to the entire national authorities within the Euro Zone.

The ECB argues that various ‘rigorous liquidity requirements’ are crucial in ensuring redemption rights are protected and clients’ direct claims towards the reserved assets that the issuers of stablecoins hold.

Firms offering tokens which are pegged on different currencies should at a minimum grant end-users a direct claim on the issuer or the reserve assets and redemption rights”, the central bank added.

Facebook had in the past laid a plan to roll out its stablecoin dubbed Libra that was pegged on different global currencies. However, the tech giant slowed down on the Libra project following many regulatory hurdles in the world. At the moment, the firm is aiming at launching the dollar-pegged stablecoin dubbed Diem.

If the EU legislators grant ECB the veto powers, Facebook and other privately issued stablecoins will likely encounter another round of regulatory backlash irrespective of the project being licensed by Swiss authorities.

It is also important to note that Christine Lagarde, the current ECB president, has criticized cryptos and stablecoins. Lagarde has in the past said central banks should never be allowed to hold Bitcoin.

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Author: Joseph Kibe

Private Aviation Company Sees 20% Revenue Coming from Bitcoin Paying Users

Almost 20% of private aviation company PrivateFly’s yearly revenues are now coming from travelers paying with Bitcoin. The use of cryptocurrency as a payment option has surged over the past two months, which previously made up only a marginal amount of revenue.

According to the company’s latest figures, 12% of flights were paid for using Bitcoin in December. These numbers increased to 13% in January, a huge jump from about 2% of previously paid flights through digital currency.

Those paying with Bitcoin tend to spend it on more expensive flights, notes the company. The company CEO Adam Twidell said,

“Some of these are clients who are looking to realize their gains, while others want to hold onto their cryptocurrency, in expectation of future increases. So, in addition to taking out a membership with us in Bitcoin and converting the account funds into traditional currency (as we have offered for a while), we now offer a membership program that allows the account funds to stay in Bitcoin

The price of Bitcoin has nearly increased 13x since its March 2020 low as it currently trades above $52,000.

The company first started accepting Bitcoin as a payment option in 2014 when a tech entrepreneur flew from Brussel to Nice and paid for that trip with digital currency.

PrivateFly has introduced a new membership program that allows its customers to place Bitcoin in an account that is charged using the value of BTC at the time of booking.

Other cryptos accepted by the company include Ethereum (ETH), Bitcoin Cash (BCH) and USDC, GUSD, PAX, and BUSD stablecoins.

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Author: AnTy

India Proposes Bill to Ban “Private” Crypto’s and Introduce a CBDC, But No Need to Panic

India Proposes Bill to Ban “Private” Crypto’s and Introduce a CBDC, But No Need to Panic

The proposed bill is yet to be presented, and WazirX CEO says they have “been preparing for this” and “pushing for regulations.”

The Indian government is now planning to introduce a bill to ban all private cryptocurrencies and launch its own central bank digital currencies (CBDC).

“To create a facilitative framework for creation of the official digital currency to be issued by the Reserve Bank of India. The Bill also seeks to prohibit all private cryptocurrencies in India, however, it allows for certain exceptions to promote the underlying technology of cryptocurrency (sic) and its uses,” reads the screenshot shared by Crypto Kanoon on Twitter.

However, this isn’t the first time that there are talks of such a bill to be proposed in India or in the crypto space.

Not to mention, the market has been seeing a lot of FUD in the ongoing bull market — China and Tether FUD has already been renewed.

“Let’s not be afraid. We’ve been preparing for this. We’ve been pushing for regulations. I believe this bill will be referred to a standing committee for further deliberations,” tweeted Nischal Shetty, founder, and CEO of Indian exchange WazirX, which is acquired by leading spot exchange Binance.

When it comes to a CBDC, central banks of several countries have taken steps towards this, and Shetty believes it a good thing, but the scary part is banning private cryptocurrencies, which he believes are expected to be in the context of crypto being used as a “currency.”

“Crypto as an asset/utility would be ok in India. It would also be ok to trade these assets. There are millions of Indians who own crypto assets. Billions of dollars of people’s money and wealth are at stake here. I’m sure the Government understands that” he said.

He further goes on to explain that there is no such thing as a “private cryptocurrency” because, by their nature, they are decentralized and public.

“Attacking digital assets by confusing them to be INR competitors wud be amateurish,” he said.

Being a large country, India has the second-largest population in the world after China; the WazirX CEO expects the government to understand the underlying terminologies before presenting any related bills and not be in a rush and destroy the general public’s value by doing it wrong.

Shetty is rather “looking forward to a healthy debate if this is presented” and expects this to be a precursor to positive crypto regulations.

“Wrong or hasty regulations will set us back by a decade. Right regulations will catapult India to the forefront of this technology,” Shetty said.

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Author: AnTy

Reddit User Finds Private Keys to A Forgotten Bitcoin Wallet Holding 127 BTC

Reddit User Finds Private Keys to A Forgotten Bitcoin Wallet Holding 127 BTC

  • Reddit user finds private keys to a wallet holding 127 BTC.
  • The lucky ‘schooling’ man is set to invest the profits made in low-risk investments.

One Reddit user, BitcoinHolderThankU, has raised the curiousness of several crypto fanatics on the app after he claimed that he accidentally HODLed 127 BTC for the past 8-9 years. The user cashed out his gains, totaling $4.24 million, on over the counter (OTC) trading desks and plans to invest the profits on investments in the S&P 500.

Following a flurry of messages and crypto media taking up the story, BitcoinHolderThankU wrote a post to explain the journey of finding the crypto and how to cash out. According to the post, the user found the private key on December 22 when the price of one Bitcoin was roughly $23,000 – a total fortune of $2.92 million at the time.

The user spent the next week figuring out how to safely and securely liquidate the large sum of Bitcoins at the best price with the cheapest fees. While centralized crypto exchanges such as Binance and Coinbase were an option, their daily withdrawal limits hindered the user from selecting them as he wanted a quick exit while the price of Bitcoin was still high.

“Not only would it take forever due to the daily withdrawal limits, but at the time, I was also worried that the price of Bitcoin would suffer a major drop throughout the lengthy liquidation process.”

Finally, he selected an unnamed OTC desk to complete the trade, selling all the BTC for a price of $33,439.02 per coin minus a 0.15% fee, bring him a net total of $4.24 million.

Despite the sale’s profits, the user still faces regret aversion on selling all his 127 BTC. Over the past fortnight or so, the price of BTC doubled from previous all-time highs to trade at $41,000 before retracing to current levels of $34,000, as of writing.

“Looking back at things, I would not have sold all 127 Bitcoins if I were given a second chance,” the Reddit post reads. “Instead, I would’ve sold the majority of them and kept a handful to hold for years to come.”

So what next for the lucky Bitcoin HODLer?

The user plans to reinvest the profits in a “safe, low-risk investment channel” once he completes paying his taxes on the gains. At the moment, he plans to keep the money in S&P 500 till he is done with his schooling. The fortunes, however, will not influence his lifestyle at all, he stated in the post. He wrote, “No expensive luxuries, no new house, no new car, nada.”

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Author: Lujan Odera

German Conglomerate, Bertelsmann, Invests In BaFin Regulated Crypto Fund for Web 3.0

German private multinational conglomerate and publishing firm Bertelsmann announced an investment in a Berlin-based regulated crypto fund, Greenfield One.

Reports from Berlin confirm that Greenfield One, an institutional-focused crypto fund, has successfully completed its second crypto fund, including an investment from Bertelsmann, a Germany-based conglomerate owning top publishing firm Penguin Random House LLC., RTL Group, Arvato, and music publishers BMG Rights Management.

The crypto fund is regulated under the country’s top financial regulator, the Federal Financial Supervisory Authority (BaFin), allowing institutional investors to take positions in the crypto market. According to a statement from Sebastian Blum, one of Greenfield’s founders, having a regulated digital asset fund provides “regulatory clarity and a safe haven” for institutions investing in it. Blum said,

“We have deliberately decided to structure all of our funds as an on-shore product to provide a high level of clarity and comfort for investors with no exposure to crypto yet.”

“This caused additional scrutiny and complexity in fund formation on our end, but we believe that this turns out to be helpful in the long-run.”

The company is yet to disclose the value of the crypto fund and the value of investment made by Bertelsmann and other investors participating in the fund, including a major European family office known as Lennertz & Co.

The company used the first crypto fund to invest in promising blockchain solutions, including Multis, Dapper Labs, Vega Protocol, Near Protocol, Celo, and Spacemash. The second fund is yet to be invested with no comment or reply from Greenfield One on how they plan to spend the funds.

However, according to a circular distributed earlier in the year, the crypto fund will be invested in assorted blockchain projects with no specific market mentioned.

“The fund focuses on crypto networks and developer teams that use blockchain-based technology to create the infrastructure for Web 3.0 as a fundamental asset layer on the internet,” the circular read.

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Author: Lujan Odera

DEX Aggregator 1inch’s Latest Feature Enables Everyone to Transact Privately

DEX aggregator 1inch.exchange announced a new “killer” feature of private transactions on late Friday or early Saturday.

To allow everyone to transact privately, 1inch will connect the user straight to their miner network instead of getting them waiting in mempool. However, the feature isn’t supported on Metamask.

“No more front-running,” tweeted the exchange as it stated, “We are now connected to 10 Ethereum miners in order to broadcast user transactions directly to the miners,” in order to reduce the transaction mining time.

Pantera’s Director of Platform, Franklin Bi, congratulated the 1inch team for pushing this new feature to save cost and preserve privacy for their users. He called this development “game-changing for both power users and casual traders on 1inch.”

Pantera Capital is the lead investor of 1inch’s Series A funding round of $12 million. The DEX aggregator team shared this week that this recent round of funding is a “vital step in our mission to create meaningful innovations for the world of decentralized finance.”

In the 17 months since its launch, the aggregator has been recording a cumulative trading volume of almost $6.6 billion and a daily trading volume of over $80 million. During this time, the 1inch team has also scaled to 16 people.

“We’re excited to back the 1inch team on their journey to raise the bar for decentralized finance,” said Pantera Capital in its investment announcement.

At the time, it has also been shared that the 1inch team has expanded its product suite to include a next-generation AMM protocol, and native token with yield farming and lending protocols are on the way.

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Author: AnTy

Bitcoin Mining Pool Stirs Controversy by Promoting Censoring BTC Transactions

Blockchain analyst firm, BlockSeer has launched a private mining pool, currently, in beta, that will censor certain Bitcoin transactions.

Given that the Bitcoin community emphasizes censorship-resistance, an essential feature of cryptocurrency that makes it differentiating from the central bank digital currencies, it’s pretty obvious that the company would come under fire for its move.

The community has never favored such steps and has time and again criticized those, like Coinbase and Tether, and other cryptocurrency exchanges, who censored specific transactions or parties.

Last month, DMG Solutions, to which BlockSeer is a subsidiary, suggested that ensuring transaction blocks are OFAC (US Government’s Office of Foreign Assets Control) compliant will help in the leading digital asset’s mainstream adoption.

DMG’s COO Sheldon Bennett said at the time that this pool would be “the first of its kind focused on governance, transparency and building Bitcoin blocks on the network,” which instead of focusing on transaction fees will be all about “sound transaction data and history.”

The company wants to bring “a new compliance-focused standard to the industry” by focusing on

“being devoid of transaction from known nefarious wallets which use this medium in ways that continue to sully the reputation of cryptocurrencies, specifically Bitcoin, in the mainstream as well as to impede widespread adoption.”

Protesting this move, Monero’s lead developer Riccardo Spagni says with censoring transactions as a key selling point of these new mining pools, regulators will try to take advantage of this by encouraging other mining pools to implement similar measures.

“It’s only a matter of time till most Bitcoin mining pools are forced to do this transaction filtering. Might be time to dust off p2pool + focus on Stratum v2 support for pools,” argued Spagni. “Also worth noting that adding more privacy to Bitcoin would prevent this,” he added.

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Author: AnTy