SEC Chairman Gary Gensler Targets Crypto Lending Platforms, Starting with Coinbase Lend

SEC doesn’t want Coinbase Lend to allow its users to earn a 4% interest rate on USDC “over 8x the national average for high-yield savings accounts.”

Coinbase has been warned by the US Securities and Exchange Commission (SEC) against launching a new product, Lend, that allows its users to earn interest on their crypto holdings.

The biggest crypto exchange in the US said it had received a Wells notice saying the agency will bring an enforcement action against them if the company goes ahead with its product. Coinbase said that it plans to delay the launch at least until October.

Coinbase Lend allows users to earn a 4% interest rate on USDC stablecoin, which it says is “over 8x the national average for high-yield savings accounts.”

In the company blog post, Paul Grewal, Chief Legal Officer, said they had been proactively engaging with the SEC about Lend for nearly six months. But didn’t get any response from the agency other than that the SEC considered Lend to involve security.

Instead of providing an explanation, the SEC has opened a formal investigation and has asked for documents and written responses, along with the name and contact information of every single person on their Lend waitlist.

“We have not agreed to provide that because we take a very cautious approach to requests for customers’ personal information. We also don’t believe it is relevant to any particular questions the SEC might have about Lend involving a security, especially when the SEC won’t share any of those questions with us,” said Grewal.

Coinbase CEO Brian Armstrong also took to Twitter to share the “really sketchy behavior” from the SEC.

He also pointed out how in his confirmation hearing, SEC Chair Gary Gensler said that it is “important for the SEC to provide guidance and clarity.” And now, they are doing exactly the opposite.

Earlier that month, in an interview with FT, Gensler asked crypto companies to “Talk to us, come in,” adding, existing platforms are “begging for forgiveness, rather than asking for permission.” And when Coinbase did just that, the SEC didn’t provide any explanations.

“If you don’t want this activity, then simply publish your position, in writing, and enforce it evenly across the industry.”

As we reported, Gensler has been targeting two areas: crypto trading and lending platforms and stablecoins that are embedded on these platforms. He also asked for legislative priority on them, whether centralized or decentralized.

The CEO then argued that while SEC claims to be working to protect investors and create fair markets, who exactly “are they protecting here and where is the harm?”

Armstrong also met with every regulator and branch of government in the DC that he could in May this year except the SEC that “refused” to meet him, “saying “we’re not meeting with any crypto companies.” This was right after we became the first crypto company to go public in the US,” he said.

In response to Armstrong’s Twitter thread, Dallas Mavericks’ Mark Cuban advised him to go on the offensive.

Meanwhile, the crypto community pointed to the fact that Gensler is a former Goldman Sachs partner and speculated that the banking industry is making the moves behind the curtain to try and curb the crypto industry that is revolutionizing finance and working on putting them out of business. Others speculate that it could be a personal political power grab by SEC leadership.

“Hopefully the SEC steps up to create the clarity this industry deserves, without harming consumers and companies in the process. America could really use us all working together to figure this out right now,” concluded Armstrong.

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Author: AnTy

BSV Network ‘Enduring A Series of Block-Reorganisation Attacks’ Sees Hash Rate Crashing Over 52%

BSV Network ‘Enduring A Series of Block-Reorganisation Attacks’ Sees Hash Rate Crashing Over 52%

Due to the 51% attack, which the Bitcoin Association says is currently going on and law enforcement authorities have been reported, Coinbase has halted BSV withdrawals and stopped all BSV trading.

Bitcoin SV has suffered a 51% attack, and crypto exchange Coinbase has halted BSV withdrawals.

“Due to the 51% attack that has occurred on BSV today, we are stopping all BSV trading,” said the exchange late on Tuesday.

On Tuesday morning, the network suffered a 51% attack, according to Lucas Nuzzi, an analyst from the crypto intelligence firm CoinMetrics, who reported confusion across mining pools after the attack.

“Some serious hashing power” was reported to be unleashed on the network in order to take control of more than 50% of the Proof-of-Work (PoW) blockchain.

“FARUM (its blockchain security monitoring tool) has identified a 51% attack today on the BSV network at around 11:45AM EDT,” noted Coin Metrics. “All of our FARUM nodes witnessed a deep reorg with a max depth of 14 blocks. No further reorganization events have been witnessed, but there are still synchronization conflicts taking place on major mining pools.”

Following the attack, Bitcoin Association recommended node operators to mark the fraudulent chain invalid so that nodes can be returned to the chain supported by honest miners and the attacker’s chain is locked out.

In a report on Wednesday, the Bitcoin Association noted that the BSV network is “currently enduring a series of block-reorganisation attacks by a malicious actor attempting to illegally double-spend BSV coins.”

It is believed to be the same attacker that previously initiated block re-organisation attacks against the BSV network on June 24 and then three times the next month.

The Bitcoin Association said it is collecting evidence of the illegal activity and actively working with law enforcement authorities in affected jurisdictions.

Bitcoin SV (BSV) is a hard fork of Bitcoin Cash (BCH) which itself was a hard fork of Bitcoin (BTC). BCH 1.36% Bitcoin Cash / USD BCHUSD $ 548.49
$7.461.36%
Volume 1.79 b Change $7.46 Open $548.49 Circulating 18.81 m Market Cap 10.32 b
6 h $162 Billion Asset Manager Files for a Crypto Basket ETF 10 h BSV Network ‘Enduring A Series of Block-Reorganisation Attacks’ Sees Hash Rate Crashing Over 52% 1 d Investors Took Profits on BTC & ETH In the Recent Price Surge, But Invested in Multi-Asset Products
BTC 3.53% Bitcoin / USD BTCUSD $ 39,799.30
$1,404.923.53%
Volume 25.33 b Change $1,404.92 Open $39,799.30 Circulating 18.78 m Market Cap 747.29 b
6 h Genesis Records 13 Consecutive Quarter of Growth, Reports Rotation Out of BTC into ETH While DeFi Attracts Funds 6 h $162 Billion Asset Manager Files for a Crypto Basket ETF 8 h Grayscale Hires its Global Head of ETF After SEC Chair Pours Cold Water on Physically-backed Bitcoin ETF

This attack saw the hash rate of the network falling by 52.74% in the past 24 hours, as per Bitinfocharts. It is due to not having the security of a large hash rate that despite having the same algorithm as the leading cryptocurrency that it takes less than $5,600 to 51% attack BSV for an hour, as it has been so many times and less than $23k for BCH compared to Bitcoin’s $1.66 million.

The attack, however, didn’t have any impact on BSV price, which as of writing, is trading at $138.53, down only about 2% in the past 24 hours. From its mid-April peak of about $490, BSV is currently down 71.5%.

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Author: AnTy

Bitcoin Block Time Soars to Highest Level Since 2010 After Hash Rate Crashes to 2-Year Low

Bitcoin hash rate has taken a drop and is now down about 70% from its all-time high in mid-May. With this latest drop, the hash rate has fallen to a two-year low last seen in July 2019.

However, it’s just a short-term block-interval inferred hash rate, and the actual drop is about 47%.

Still, this drop resulted in an average block time of more than 23 minutes, up from the regular 10 minutes, to mine a single bitcoin block, “the largest daily mean block interval since the very early Bitcoin days,” in 2010, noted Glassnode.

Only 58 Bitcoin blocks were mined throughout Sunday, representing a drop of 60% from the baseline of 144 blocks per day.

This, of course, led to daily bitcoin miner revenue falling 80% from $70 million in May to about $12.8 million yesterday. Miners were earning the same level of revenue in early November when the price of bitcoin was around $13,000.

The largest drop in hash rate is causing a significant decline in Bitcoin network activity, with the number of active addresses also falling off a cliff, reaching levels not seen since early 2019.

Even fee is extremely low, with average fees now 0.00021 BTC ($7.12), down from over $62 in late April, and able to keep stable during this whole ordeal.

As a result, the difficulty is expected to have a negative adjustment, which reached an all-time high on May 13 and has seen two downward adjustments since.

While one wants a quick difficulty adjustment after such a harsh drop in hash rate, the fact is when the hash rate drops a lot, blocks take longer to mine, so difficulty adjustment takes longer to come.

Adjustments are supposed to happen every 14 days, but the last adjustment was 16 days ago, and there are still 453 blocks to go. The difficulty adjustment is expected to be the largest downward ever, which should lower the block times.

This drop follows China’s crackdown on cryptocurrency mining. Such a big drop means China might have gone “almost entirely off grid already.” As we reported, Chinese miners are moving overseas, but this definitely provides a great opportunity for those with access to cheap energy.

Even JPMorgan strategies can feel the bullishness of it, saying, “the crackdown on mining operations in China should be considered as positive for bitcoin over the medium term as it accelerates a shift away from China’s high share in bitcoin’s hash rate, reducing concentration.”

While a real annoyance, 60-80% drop is “not fatal,” said Balaji S. Srinivasan, former Coinbase CTO, and General Partner at Andreessen Horowitz.

“In general, the global decentralization of Bitcoin mining shows a way to robustify against the famous Thanksgiving Turkey Chart. Even the Chinese state going after mining (not really a surprise) is only causing a temporary rise in block times. So far, pretty antifragile!”

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Author: AnTy

Marathon & Compute North Partner to Achieve 10.37 EH/s Hash Rate; Miners Will Be 70% Carbon Neutral

Marathon & Compute North Partner to Achieve 10.37 EH/s Hash Rate; Miners Will Be 70% Carbon Neutral

Marathon Digital Holdings, a Bitcoin self-mining company in North America, has entered into a binding letter of intent with Compute North to host previously purchased 73,000 Bitcoin miners as part of a new 300-megawatt data center located in Texas.

Under this agreement, Marathon will be providing the other company with an 18-month bridge loan of up to $67 million to construct the facility. Its implementation is expected to take place in stages between October 2021 and March 2022.

Once all the mining machines are installed, Marathon will achieve a hash rate of 10.37 EH/s, while the average mining cost will be $0.0453.

What’s interesting here is that Marathon is expecting its operations to be approximately 70% carbon neutral with a long-term objective to have a 100% carbon neutral footprint. Fred Thiel, Marathon’s CEO said,

“This agreement sets us on a clear path to becoming one of the largest, most efficient, and most environmentally conscious Bitcoin miners in North America.”

Dave Perrill, CEO at Compute North commented,

“We are thrilled to expand our relationship with Marathon and help achieve their ESG goals through the delivery of carbon-neutral hosting operations.”

Growth in Bull Market

Another Bitcoin mining company, the Nasdaq-listed Riot Blockchain, meanwhile has announced the appointment of Benjamin Yi as Executive Chairman, and Lance D’Ambrosio is the company’s new lead independent director.

Last week, Riot Blockchain also reported a 10x increase in its mining revenue to $23.2 million in the first quarter of 2021 and a net income of $7.5 million.

The company mined 62% more BTC in the first quarter compared to the last quarter at 491 BTC.

In April, Riot acquired Whinstone US, the owner, and operator of North America’s largest bitcoin hosting facility, with 300 megawatts in developed capacity and a long-term power purchase agreement, for $651 million in stock and cash.

Riot expects to achieve a total hash rate capacity of 7.7 EH/s in the fourth quarter of 2022, assuming full deployment of its fleet of about 81,146 Antminers acquired from Bitmain, 95% of which will be the latest generation S19 series model of miners.

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Author: AnTy

Fed Promises to Keep Monetary Policy Loose; Interest Rate Near Zero & Inflation Above 2%

Fed Promises to Keep Monetary Policy Loose; Interest Rate Near Zero & Inflation Above 2%

The dovish tone from the Fed is pushing the USD down, which has been falling throughout this month while the risk-on environment is good for both stocks and bitcoin.

“The economy is beginning to move ahead with real momentum,” Jerome Powell, Federal Reserve chair, told reporters Wednesday after the central bank held interest rates near zero and kept bond purchases at $120 billion a month.

Powell reiterated that it is not the time to discuss scaling back asset purchase. “When the time comes for us to talk about talking about it, we’ll do that. But that time is not now,” not until there is more than one great job report, he said.

As for the concerns around inflation due to the Fed’s aggressive support, Powell said though prices are likely to rise amidst surging demand, it is just,

“An episode of one-time price increases as the economy re-opens is not the same thing as, and is not likely to lead to, persistently higher year-over-year inflation.”

The central bank is interested in keeping the inflation above the 2% target and only when it was to move “persistently and materially above 2%” that threatens to move longer-term inflation materially above 2% that the Fed will use its tools to bring it down to mandate consistent levels, he said.

“Markets are having a hard time digesting this.”

“The Fed is saying, ‘I hear you. Inflation is going to be above 2% for a while, but I am trying to tell you we are not going to do anything about it.”

Michael Gapen Chief U.S. Economist at Barclays Plc

President Joe Biden, meanwhile, is all set to unveil a $1.8 trillion plan after a $2.25 trillion infrastructure proposal and the $1.9 trillion pandemic relief package was signed into law last month. This time to expand educational opportunities and child care.

“I took away that not even any preliminary discussion of a change in policy is imminent.”

“He gave a spirited defense of the Fed’s view on inflation and employment. They are very happy with the course they are on and not likely to change it soon.”

Carl Tannenbaum Chief Economist at Northern Trust in Chicago

How’s the Market Feeling…

This opens the doors for the continuation of a risk-on environment, which means investors are willing to enter into higher-risk investments like Bitcoin and stocks, wrote Deutsche Bank in a report published this week.

S&P 500 jumped to a record high in part bolstered by Fed’s same dovish tone and in part the ongoing tech earnings report. However, the promise of keeping the monetary policy loose is not turning out good for the dollar.

The USD index has been going down throughout this month and is currently near 90.6, while gold is still around $1,780 per ounce.

As for Bitcoin, it is hovering around $54k, which is giving altcoins a perfect chance to run higher.

Amidst this, the White House released a slew of tax increases in its “The American Families Plan,” as per which top personal income tax rate is raised from 37% to 39.6% for all taxable income north of about $550,000 for individuals and about $650,000 for married couples.

The top individual tax gain rate on long-term capital gains and dividends would be increased from 23.4% to 43.4%.

It is also proposing to give the IRS the authority to regulate paid tax preparers. They would get an annual report on the money deposited and withdrawn from every bank account in America.

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Author: AnTy

Nvidia’s Latest RTX 3060 Limits Ether Hash Rate by 50%, Introduces CMP for Professional Mining

Nvidia’s Latest RTX 3060 Limits Ether Hash Rate by 50%, Introduces CMP for Professional Mining

Nvidia is limiting the Ethereum hash rate by 50% with its latest RTX 3060 software drivers, shared by the company on Thursday. It noted,

“RTX 3060 software drivers are designed to detect specific attributes of the Ethereum cryptocurrency mining algorithm and limit the hash rate, or cryptocurrency mining efficiency, by around 50 percent.”

The company that designs graphics processing units for the gaming and professional market said they took this decision because GeForce GPUs were designed for gamers and,

“We are gamers, through and through. We obsess about new gaming features, new architectures, new games, and tech.”

As such, to ensure GeForce RTX 3060, to be launched on Feb. 25th ends up in the hands of gamers, their mining efficiency has been limited.

GeForce RTX GPUs introduce RTX real-time ray-tracing, DLSS AI-accelerated image upscaling technology, Reflex super-fast response rendering for the best system latency, and other cutting-edge technology tailored to meet the needs of gamers.

However, it doesn’t mean they won’t cater to the cryptocurrency miners. To meet the specific needs of Ethereum mining, the company has announced NVIDIA CMP or Cryptocurrency Mining Processor, a product line for professional mining.

image1

CMP products are optimized for the best mining performance and efficiency but don’t do graphics and do not meet the specifications required of a GeForce GPU.

These products lack display outputs and enabling improved airflow while mining means they can be packed more densely. Furthermore, they have a lower peak core voltage and frequency, improving mining power efficiency.

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Author: AnTy

Bitcoin Mining: Network Congestion, Fees Uptick, China Ban, & Russian Hash Power in Play

In the world of Bitcoin mining, the hash rate of the network, the computing power used to validate BTC transactions has taken a drop following the positive difficulty adjustment of 8.8%.

The 7-day average hash rate of the network is currently at 131 EH/s, down from the all-time high of 146.8 EH/s, as per Blockchain.com.

A decline in the hash rate resulted in a sudden jump in the total number of unconfirmed transactions in the mempool to over 91.2k today only to get back down to 43k shortly.

This clogging of the network happened as the Bitcoin price broke new ATH’s yesterday. This led the crypto exchange Coinbase to experience delays in BTC withdrawals.

Before the issue was resolved less than five hours after the incident was first reported, Coinbase stated, “We are currently experiencing delays in processing BTC withdrawals due to Bitcoin network congestion.”

This, as usual, had the fees on the network jumping to $5.3, up from around $2 on Nov. 22nd. Miners are enjoying this spike in fees and price with their 7-day average revenue pushing above $18 million.

China is at it again

Amidst this came the report from China that crypto miners located in Baoshan, Yunnan have received a notice of the ban on November 30. As per the document, the power station is asked to stop supplying power to the miners.

After Sichuan and Xinjiang, Yunnan is the third-largest mining place in China.

According to Chinese publications, the attitude of Chinese local power companies continues to change towards crypto mining. It is reportedly more of a demand for economic interests than because of political pressure.

“China rolling out all the old tricks. Bull market confirmed,” commented Alistair Milne on this.

Siberia Dominates Russia’s Hash Power

According to a report by HASHR8 Inc., Russian bitcoin miners rank among the top three countries for contributing hash rate to the largest network.

It further reveals that Russia’s Siberian region accounts for the dominant portion of the country’s mining facilities. It is the “significant energy surplus from advanced hydropower infrastructure in the region” that enables the miners to “secure extremely competitive electricity rates.” The report stated,

“The estimates indicated that Russia’s share of hashrate was comparable to that within the United States. Recent estimates by industry professionals in Russian mining put Russia’s energy draw from mining at ~800 to 900 MW.”

The report mentions that the federal law passed in the country this year “clearly defines Bitcoin mining as an economic activity.”

It further noted that pooling activities must be carried out with a “foreign entity.” While the mining hardware imported is subject to a 20% tax, those imported indirectly through Kazakhstan only involve a 12% VAT charge.

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Author: AnTy

82% of Bitcoin Mining Pools in Support of Taproot Activation

The majority of the Bitcoin hash rate is in favor of Taproot, the biggest upgrade to the largest cryptocurrency network since SegWit implementation in 2017.

This upgrade will expand Bitcoin’s smart contract flexibility while bringing more privacy to the network.

“Taproot has a lot of use cases that will help with user privacy, save on block space, and should marginally reduce the overhead to run a node,” noted a developer.

As of writing, A total of 82.05% of Bitcoin mining pools have announced their support. That number was sitting at around 30% just two weeks ago.

This has been made possible because of the biggest Bitcoin mining pools, Poolin, F2Pool, Antpool, and BTC.com, all of which account for 10 to 20% of the global hash rate in the past month. Combined, they account for more than 50% of the Bitcoin mining hash power.

When it comes to the exchange mining pools, Huobi, which has a share of more than 10%, has also given its nod to the upgrade. The mining pool of the leading spot exchange, Binance Pool, which accounts for just under 10% of Bitcoin’s total hash rate, is yet to announce its support.

It is basically the smaller mines that have to signal their support, although a few like ViaBTC, 58COIN&1THash, SlushPool, and NovaBlock, which accounts for 7.85%, 6.36%, 2.60%, and 1.04% share respectively, have given their yes.

So, basically, Binance Pool and SigmaPool are the only ones left.

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Author: AnTy

Chinese Bitcoin Mining Farms Hit Hard by Floods, Hash Rate Crashes Across Mining Pools

  • Bitcoin hash rate is reaching new all-time highs as the price surges above $12,000 to a 13-month high.

The hash rate of the largest network had a rocky start to 2020, seeing a huge drop following the March price crash and then due to May 11th halving. But now it has fully recovered and even eclipsed the previous levels.

This means the fundamentals are bullish, and network security is stronger than ever.

Bitcoin miner revenue, which has become more dependent on trading fees following the halving, has also been growing. Thanks to the average trading fee rising from $0.81 to $2.31 post halving, miner revenue surged 7% in July.

Starting at nearly $16 million, bitcoin miner revenue rose to $19.8 million in mid-February, as per Blockchain.com. But a month later, this revenue crashed to $6.9 million due to the price crash. But before the halving, it climbed to over $20 million only for the reward halving to push it back around $7 million.

Now, in August, so far, miner revenue is keeping in the range of $13.7 million and $10.39 million, the lowest point of this month hit today.

Source: Blockchain.com

But with the price of Bitcoin back on an uptrend, things might get better for miners.

Soaring BTC prices and cheap electricity has been what is leading the hash rate to new all-time highs currently.

The 14-day mining hash rate has already climbed to a new all-time high of 127 Eh/s. This means the next difficulty adjustment, estimated to be positive 8%, within a week’s time could set a new record as well.

However, what has been pushing the electricity cost down is now leading to the drop of hash rate among major Chinese bitcoin mining pools.

The monsoon season in China brings abundant rain leading to cheap electricity prices. In the Sichuan province, which is estimated to account for more than 50% of Bitcoin’s total computational power, heavy rainfall is now affecting the operations. Molly, the head of marketing at HashKey Hub noted,

“The heavy rainfall in Sichuan is continually getting worse, caused internet blackout in multiple places in Sichuan, might cause bitcoin hashrate drop temporarily since over 70% of mining farms in Sichuan.”

And the hash rate has dropped significantly as per data from BTC.com, between 10% to 20% as bitcoin mining farms in the region are forced to unplug.

Bitcoin Block Explorer - BTC com
Source: BTC.com

One of the largest bitcoin mining pools, Poolin, shared several videos of the mining farm located in the Sichuan region being hit hard by the floods.

The three-day hash rate has already dropped 3% to about 123 Rh/s, and the one-day average fell 10% to 110 Eh/s.

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Author: AnTy

The Bigger the Hit to a Country’s GDP, the Higher the Stock Market Jumps

The US economy shrank by an annual rate of 32.9% between April and June, the sharpest contraction triggered by the coronavirus pandemic since the second world war.

This economic shock in April, May, and June was over three times as sharp as the previous record of 10% in 1958 and about four times the worst quarter during the Great Recession.

“This is something we have never seen before,” said Jason Reed, assistant chair of finance at the University of Notre Dame.

“At first I felt it was like a natural disaster that had hit the entire country at the same time. Now it is evolving into something worse than that.”

The record-settling fall in the gross domestic product, the broadest measure of economic activity compared to the same time last year after for the second week in a row following a four-month decline 1.43 million Americans filed for unemployment benefits last week.

Economists expect the economy to recover sharply later this year, but the recent rise in infections across the US is clouding that outlook.

Interestingly, during this time, the S&P 500 jumped 24% thanks to all the money printing the Federal Reserve did. After the initial $3 trillion stimulus package, another trillion-dollar aid is expected soon. For now, Congress is struggling to strike a deal on the new round of financial support.

On Wednesday, the Fed said the US economy is facing significant challenges from the coronavirus pandemic and vowed to continue to take aggressive action to support the economy to recovery.

The US’s GDP report came as Germany, Europe’s largest economy, recorded a slump in economic growth, contracting by 10.1% in Q2, the most significant decline since 1970, while its stock market DAX jumped 28%.

The fall in GDP came as parts of the US economy shut down in an attempt to halt the spread of coronavirus across the country. The closures led to a historic number of layoffs that sent unemployment soaring to levels not seen since the 1930s Great Depression.

Now, as the first month of the third quarter comes to an end, the S&P 500 jumped 3.6% in July. But it was precious metals that stole the show.

Gold jumped 10.6% this month and broke the 2011 record to hit a new all-time high in Q2. This has been in part due to a 1.6% decline in the US dollar index, which further hit over two-year low with a 4% decrease in July.

Meanwhile, bitcoin the ‘digital gold’ woke from the slumber just last week and spiked 23.6% in July, after a 68% jump in Q2, now trading above $11,300.

“Gold, Silver, Bitcoin all hitting, or going, to new ATH,” said Max Keiser adding the bad news is all of this is because,

“global central banks are staging a debt-for-equity coup disenfranchising 7.6 billion people who will be left for dead unless they have some Gold, Silver, Bitcoin.”

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Author: AnTy