Galaxy Digital Reports $860M in Net Income in Q1 2021 and Surpasses $1 Billion in AUM

Galaxy Digital Reports $860M in Net Income in Q1 2021 and Surpasses $1 Billion in AUM

Mike Novogratz’s Galaxy Digital reported a profitable Q1 2021 with $860.2 million in net comprehensive income, a complete turnaround from the $27 million loss in Q1 2020. Novogratz, founder, and CEO of Galaxy Digital said,

“Galaxy Digital reported another consecutive record quarter, as net comprehensive income grew to $860 million from $336 million in the prior quarter.”

Income from the company’s trading business increased to $508.7 million, while net realized gains from investments were $151.1 million in the quarter.

The firm made 12 new investments in the quarter and now holds about 80 investments across approximately 60 portfolio companies.

In Q1 of 2021, during the bull market, Galaxy Digital reported an increase of 50% in trading volumes from the last quarter and a surge of 510% in gross counterparty loan originations to $670 million.

Galaxy Digital Trading also onboarded over 100 new counterparties in the quarter. The firm further launched several products in this period, including a Bitcoin ETF and an Ether ETF.

As of March 31, 2021, the company had $1.27 billion in assets under management.

In the Bitcoin mining realm, Galaxy started hosting its machines at a third-party data center in the United States and expects to achieve up to 1,995 Petahash per second (PH/s) of mining capacity delivered monthly by the end of next year.

The company has appointed Erin Brown as its Chief Operating Officer, who previously served as Chief Risk Officer at Jump Trading. Novogratz said,

“Beyond delivering dramatic organic growth, we announced we would acquire BitGo, which will establish Galaxy Digital as the first full-service digital asset financial platform for institutions and ensure our business is aligned with broader institutional adoption.”

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Author: AnTy

Colonial Pipeline Capitulates to $5 Million Ransomware Demand: Report

Colonial Pipeline Capitulates to $5 Million Ransomware Demand: Report

Emerging reports have revealed that the cybercriminals that attacked the US fuel pipeline, Colonial Pipeline Co, were paid $5 million in cryptocurrency.

According to Bloomberg, sources familiar with the situation confirmed the extortion fee was paid to enable them to resume fuel shipments.

Colonial Pipeline Attack Associated With DarkSide

The hefty ransom fee was reportedly paid within hours of the attack due to the mounting pressure on the pipeline operator to get gasoline and jet fuel flowing again across cities.

This is contrary to earlier reports asserting that Colonial Pipeline was refusing to negotiate with the attackers.

The FBI had earlier confirmed that the hackers were part of a Russia-linked DarkSide group specializing in digital extortion.

The Georgia-based Colonial ransomware attack crippled gas delivery systems in Southeastern states. Half of the gas stations in North Carolina, Virginia, Georgia, and South Carolina were reported empty.

The cybergang had reportedly demanded that the ransom be paid with a privacy coin like Monero (XMR).

However, the ransom payment goes against the advice of the Federal Bureau of Investigation (FBI). The government agency has repeatedly discouraged American ransomware victims from paying hackers. According to them, payment isn’t guaranteed to work and could incentivize cyber crimes.

Crypto Surge Propelling Ransomware Attacks

Ransomware refers to a category of malicious computer programs that force users into paying a ransom fee before they can access their data. The hackers involved in this type of cybercrime lock up victim’s files and demand ransom or payment for them to unlock it.

According to data from the blockchain analytics firm Chainalysis, crypto payments via ransomware attacks rose in 2020.

In its annual Crypto Crime Report released in January, Chainalysis said the amount paid by victims increased by 311% in 2020, reaching about $350 million in cryptocurrency. The average ransom paid by organizations in 2020 was $312,493, as stated in the report.

The vast majority of criminal crypto payments included in the report had to do with darknet markets and the general category of scams. A major reason for the increase in ransomware-connected payments during 2020 was coronavirus work-from-home measures, which opened up new vulnerabilities for many organizations.

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Author: Jimmy Aki

Coincheck Sees 5x Surge in Revenue; Japan Assembly Members Seek ‘Tax-Free’ Crypto Zone in Tokyo

Coincheck Reports 5x Surge in Revenue, Japan Assembly Members Call to Make Tokyo a Special ‘Tax-Free’ Crypto Zone

During the period of Oct. and March, Monex Group acquired a crypto exchange that was hacked in Jan. 2018 gained 210,000 users. Meanwhile, ruling party members want to transform the city into a crypto “trading center.”

Japan is now aiming to boost its cryptocurrency industry with a member of the ruling party Tokyo Metropolitan Assembly wanting to transform the capital into a “trading center” for cryptos. And for this, they are advocating for a 0% tax on cryptocurrency trading.

Assembly member Yuu Ito talked about bolstering the city’s financial sector by increasing its involvement in the digital asset industry.

“According to our research, the number of financial institutions that are gathered in the city is key to our success or failure,” Ito was quoted as saying, “unfortunately, Tokyo is lagging behind in that regard.”

Fellow Tokyo Metropolitan Assembly member Nobuko Irie is of a similar opinion as she said,

“The country is printing deficit-financing bonds in the wake of the corona. Even in Tokyo, we must create new financial resources by setting technology that can generate wealth like blockchain as a growth strategy.”

While praising the rising bitcoin adoption, she raised concerns about how politicians were handling the situation and urged for necessary action to make Tokyo a crypto trading center.

“Politicians should now tackle the issues of monetary policy and taxation around bitcoin. If you do it in the nation, you will lose the sense of speed, so create a special zone in Tokyo to use it tax-free in the city. I think it is the role of politicians to identify issues and clear them systematically while running.”

Virtual currency and blockchain can also be used to turn its economy around, Irie said.

Gains on cryptocurrencies are taxed as capital gains, but Bitcoin “is originally a currency, therefore, it’s not easy to use unless taxation is set to 0%,” said Ito.

Moving Forward

Japan has been seeing a growth in crypto adoption until the crypto exchange Coincheck was hacked in January 2018, which has been acquired by online brokerage Monex Group. Hindering the growth of the crypto frenzy in the country, people are now hopeful of moving to the next stage after undergoing a period of scrutiny and renewal.

Coincheck’s revenue actually increased fivefold to ¥20.8 billion (over $191 million) in the 2020 fiscal year compared to the previous year, as per earnings released by the Monex Group last month.

The exchange also gained 260,000 users, out of which 210,000 were accumulated in the second half of the business year ending in March, reported Japan Times. However, the volume on the exchange only including the BTC/JPY pair, is still only about $150 million, as per CoinGecko.

According to CryptoCompare, JPY has the fifth biggest share of BTC volume by currency after Tether (USDT), USD, Binance stablecoin BUSD, and EUR.

“Due to our hacking problem, not only us but each Japanese cryptocurrency exchange had to strengthen measures to protect customers” and prevent cyberattacks, money laundering, and other inappropriate transactions, said Yusuke Otsuka, an executive, and co-founder of Coincheck.

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Author: AnTy

MakerDAO Reports $12.57 Million in Net Income for April

MakerDAO Reports $12.57 Million in Net Income for April

Original decentralized finance (DeFi) protocol, MakerDAO has released the financial report for April 2021.

Yet again, the protocol recorded growing income for the month. Maker DAO broke past the $12 million this time, up 44% from the previous month’s $8.7 million. These insane numbers show that the stablecoin minter has come a long way over the past year, as in April 2020, its net income was less than $51k.

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Maker has three business lines — 1: Lending where DAI is lent against strong collateral, i.e., non-dollar backed stablecoins. 2: Trading, which involves exchanges of DAI with other dollar-backed stablecoins. 3: Liquidation, which involves liquidating loan collateral before losing money.

MakerDAO’s latest income resulted from increasing interest income due to loan demand accounting for $10.3 million, up 27% from the previous month, of all the net income. The average yield during the month was 5.15%, about the same as March.

Project’s trading business saw a deep decline, down 61% due to slowing demand on the USDC PSM and lower fees (0.04% vs. 0.10%) on PSM outflow. Liquidations provided it with $2.2 million, which was mainly because of one big ETH-B vault.

When it comes to stablecoin on-chain volume, DAI recorded 63% MoM growth, increasing its market share from 4% last year to 11% now.

MakerDAO is also currently dominating the Ethereum DeFi scene with $11.52 billion in total value locked (TVL), as per DeFi Pulse. In response to all the growth amidst the bull market, the MKR price is hitting new all-time highs; today’s new one was at $5,644.

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“Thanks to a good business performance and some MKR burning, we have generated $10 for each token this month. The market decided that the price that was too cheap it seems,” said Sébastien Derivaux, head of real-world finance at MakerDAO.

MakerDAO also made its very first real-world asset-backed loan with real estate project New Silver, currently at $588k and growing.

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Author: AnTy

FinTech, Investview, Reports a Record Month Adding $1M in Bitcoin & Crypto to Its Holdings

FinTech, Investview, Reports a Record Month Adding $1 Million in Bitcoin & Crypto To Its Holdings

Fintech company Investview Inc. reported the highest monthly gross revenue in the month of February in the company’s history. A public company, Investview, is listed on the OTC Markets Group.

The company had $5.5 million gross revenue last month and another record high of $1.9 million net income. Yet another record high monthly performance was recorded in terms of operating margin, which is estimated at 30% for February.

“It was a record month for gross revenue demonstrating strength and growth from multiple subsidiaries,” said Joe Cammarata, Chief executive Officer at Investview.

Investview also reported more than $1 million worth of digital currency holdings consisting of Bitcoin (BTC) and other digital assets as of Feb. 28, 2021.

Its subsidiaries are involved in providing financial education tools, content, research, and management of digital asset technology that mines cryptocurrencies, with a focus on Bitcoin mining and the generation of digital assets.

“Financial education remains a driving force with individual demand growing rapidly, especially with greater participation from Gen X and Y.”

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Author: AnTy

NEXON Denies Reports Linking It to The Sale Of Bithumb Exchange For $460M

South Korean Conglomerate, NEXON, Denies Reports Linking It to The Sale Of Bithumb Exchange For $460M

South Korean gaming conglomerate Nexon Co. Ltd. denies reports connecting it to the purchase of troubled crypto exchange, Bithumb. The deal was reported to cost the buyer over $460 million.

According to reports, Bithumb crypto exchange will continue looking for a buyer for a bit longer after South Korean gaming conglomerate NEXON Co. Ltd. denied any connections to the purchase. A spokesperson from the company stated, “Nexon has not invested or acquired Bithumb and has no plans to do so.”

The email sent by the company further clarified that the reports, which “arose from an inaccurate news report last week,” are false and should not be believed. The email further states,

“We cannot comment on the investment plans of other companies.”

NEXON was ready to fork out 500 billion Korean won ($460 million) to purchase 65% of Bithumb’s stake.

Bithumb, the sixth largest crypto exchange across the world, has been in negotiations with several companies since 2018, intending to find a buyer. In October 2018, BK Consortium agreed to purchase a 50% plus one stake in Bithumb, giving it controlling power for a price of $333 million. However, in September last year, the deal was called off after the company failed to make full payments to complete the deal.

This opened a leeway for other investors to purchase the South Korean based exchange with the full acquisition price set between 500 billion won ($460 million) and 700 billion won ($644 million). Chinese exchange, Huobi, is one of the crypto exchanges interested in purchasing Bithumb, local reports noted. Huobi sees this as an easy route to enter the Korean market and easily comply with its crypto laws.

However, the purchase of Bithumb has been riddled with several legal challenges as a police raid on Bithumb Korea and Bithumb Holdings chairman Lee Jung Hoon’s offices complicated the sale. In a separate case, police raided the Bithumb Holdings buildings for the second time in a fortnight on charges of fraud connected to Bithumb’s $25 million ICO fundraising of its BXA token – which was never released.

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Author: Lujan Odera

Indian Government Looks to Ban Cryptocurrency Trading With New Law

India is not new when it comes to harsh and unfriendly cryptocurrency laws. Now, Bloomberg reports that the country is set to introduce a new law which will ban cryptocurrency trading within its borders.

Citing anonymous sources, the report states that India’s federal cabinet is set to discuss the bill prior to being sent to the parliament.

The report states that the Indian government will continue encouraging and supporting the growth of blockchain technology but will discourage crypto trading.

In 2018, Indian central bank instituted a ban on all crypto transactions following numerous cases of frauds prior to the sudden decision to ban about 80% of the country’s currency by Prime Minister Narendra Modi. However, the decision was rescinded in March this year after a successful filing of a suit in the Supreme Court by various crypto-based firms operating in the country.

The lifting of the ban saw almost a 450% increase in crypto trading in just two months from March. Paxful, a Bitcoin marketplace, registered a staggering 883% growth from January to May this year representing a growth from $2.2 million to about $22.1 million in revenues. Similarly, India’s largest crypto exchange WazirX registered a growth of 400% and 270% in March and April respectively.

The renewed effort to ban crypto trading comes at a time when the Indian Parliament has reopened following a prolonged break due to COVID-19 pandemic. The bill is likely to be introduced to parliament in this monsoon session which kicked off yesterday and is set to affect over 1.7 million Indians who actively trade in digital assets as well as institutions coming up with platforms to ease crypto trading.

Today’s report appears to be in tandem with June’s news where the nation’s finance ministry was reportedly urging for inter-ministerial consultations on how to ban crypto.

In the recent past, India’s federal government has been exploring possible ways of using blockchain technology to enhance service delivery in different sectors like management of land records, enhancement of pharmaceutical drugs supply chains, management of educational certificates, among others but remains adamant against crypto trading.

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Author: Joseph Kibe

Russia’s New Amendment On Crypto Laws Could See Bitcoin Miners Lose All Their Rewards

  • New reports from Russia confirm amendments in the country’s crypto laws that could ban Bitcoin (BTC) miners from receiving mining rewards.
  • The amendment is yet to be finalized, but experts argue if the law is passed, it could have a drastic impact on the overall use of crypto assets in the country.

As first reported by a Russian news outlet, Izvestia, the Ministry of Finance in Russia, is proposing an amendment to the federal law on digital financial assets (DFA) that could see Bitcoin miners receive no rewards on their efforts. According to the letter, the amendment allows Bitcoin mining using Russian infrastructure, but miners are not allowed to receive rewards in crypto.

The amendment further bans all transactions using virtual currencies in the country with three main exceptions. However, the amendment to DFA is yet to be finalized. The letter has been sent out for interdepartmental coordination and approval across different government departments.

A Closed Mining Cycle

The new amendment raises several questions on the implementation and wording of the document. As stated above, Bitcoin, Ethereum, and other crypto miners will be allowed to mine their tokens but will be stripped of its financial value as miners cannot receive BTC or ETH.

Several experts have since condemned the amendment as a “revenue loss” for the country, calling for revisions on the bill. Speaking on the issue, Dmitry Zakharov, CEO of Moscow Digital School, stated the “wording does not bode well for miners” as no other alternative has been offered on how to receive mining rewards. He added,

“Perhaps experts will try to come up with some interesting legal constructions, but all of them will be fraught with significant risks of bringing to administrative and criminal liability.”

If the amendment passes, then Russia could lose a share of its revenues, another expert on the matter said. According to Anton Babenko, partner of the Padva and Epstein law office, prohibiting receiving crypto could lead to more people not reporting their revenues, leading to tax losses.

A Leeway? Or Not?

Russia implemented a total crypto ban last year causing a public outcry that caused the parliament to shut down the ban. The latest amendments stipulate a similar ban – prohibiting any individuals, companies, or entrepreneurs from performing any transactions with virtual money. However, the amendments stipulate three exceptions to the rule – an inheritance of crypto assets, enforcement proceedings, and if a debtor goes bankrupt.

Any use of crypto in the country could lead to legal and criminal liability on the user with a 100 thousand rubles fine on individuals or five to seven years prison time and up to 1 million in fines for legal entities.

The new rules aim at tightening the use of cryptocurrencies in Russia in a bid to stop illicit items and illegal activities using Bitcoin and crypto in Russia. According to a law expert, the new amendment constitutes a “total ban on cryptocurrencies” which could have a severe impact on the countries crypto space.

The country’s policies on crypto could be a missed opportunity for the country, economist, Vladislav Ginko said earlier this month even as Russia extends its efforts in hoarding physical gold.

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Author: Lujan Odera

Phishing Attacks On Electrum Wallet Sees Over $16 Million Stolen From Unsuspecting Users

New reports show that over $500,000 worth of Bitcoin (BTC) has been siphoned from Electrum wallets – about 72 hours after a GitHub user claimed they had lost 1,400 BTC in a similar hack. Some of the funds have been traced to Binance, with the exchange blacklisting up to 70 accounts linked to the transaction IDs.

Back in February 2019, an Electrum wallet user named “KallEYE” wrote on GitHub that 0.09 BTC was missing from their wallet following an update software upgrade. Over the last year, several users also complained of a similar phishing attack, one user stating they had lost about 0.00796663 BTC to this address.

On Aug. 30, another GitHub user claimed the same address had stolen over 1,400 BTC (currently worth ~$17 million), raising brows on the bug exploiting Electrum wallets. Explaining the happenings of the hack, the user said he had not accessed the BTC since 2017 and mistakenly downloaded the old version of the Electrum wallet.

Once downloaded, the app prompted the user to update their software before withdrawing any amounts from the wallet. Once installed, the update “immediately triggered the transfer of my entire balance to a scammers address,” the user wrote on GitHub.

Another user, Cryptbtcaly, claims over 36 BTC, worth ~$500k, was stolen from their wallet two months ago, showing the rampancy of the hacks on old Electrum wallets. Investigations on the movement of the coins showed some coins moved to Binance wallets, but despite constant calls to the exchange team, much has yet to be done.

The hacker’s address shows it has received over 1,506 BTC and sent out 1,500 BTC since its first transaction in 2018.

Binance connection and response

According to data from Crystal Blockchain, a crypto transaction tracking analysis firm, a transaction worth around 5 BTC (~$60 k) can be traced back to the hacker’s wallet on Binance. The exchange responded to the 1,400 BTC hack and the specific transaction ID traced to Binance on Jan 2018.

A spokesperson from the exchange revealed that the transaction ID (TxID) is connected to 72 addresses on Binance but not a specific wallet on the exchange. The founder and CEO of Binance, Changpeng Zhao, alias CZ, said the addresses have since been blacklisted.

Notwithstanding, Electrum has opened up a phishing case with the German Police and the U.K authorities. A representative from Electrum stated,

“We (electrum developers) have reported the phishing attack to the police about a year ago. I cannot make any comments about the progress of the investigation, but it helps if victims report it independently. If you live in Germany, you should contact the cybercrime unit of the LKA Berlin.”

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Author: Lujan Odera

Fintech Unicorn, Revolut, Reveals 150% Increase In Its Crypto Holdings In 2019

  • London based fintech, Revolut, reports $140 million in losses in 2019 despite its cryptocurrency holdings growing to $123 million, a 200% increase from 2018’s holdings. The company also recorded a 2.5x boom in customer growth rate in 2019.

Revolut published its 2019 financial year report on August 10, showing a sustained growth in its cryptocurrency holdings at £93.3 million (~$122.27 million), representing a sharp 151% increase from 2018’s crypto holdings – £37.1 million (~$48.62 million).

Despite the rapid growth in customer acquisition and crypto holdings, Revolut registered over a 200% increase in losses. As of December 31, the company posted a total loss of £106.5 million (~$139.57 million) through 2019, tripling the £32.9 million (~$43.11million) published in 2018.

“We still have some way to go, but we are pleased with our performance in 2019,” Nik Storonsky, founder and CEO at Revolut, said speaking to CNBC. “We increased daily active customers by 231%, and the number of paying customers grew by 139%.”

The report states the company’s losses are mainly due to expansion and market acquisition costs incurred in 2019. As reported by BEG, the British fintech unicorn recently received a green light to operate in Australia by the ASIC, extending its reach to 24 territories, including the U.S., Russia, Canada, Japan, and New Zealand.

The company did not release the breakdown of its crypto holdings to the public with six main digital assets available on the platform – Bitcoin, Ethereum, XRP, Bitcoin Cash, Litecoin, and recently added Stellar Lumens.

They offer its users a direct platform to purchase cryptocurrencies and store them securely. However, the firm also owns its stash of cryptocurrencies, which are accounted for as “intangible assets.” The report states:

“Cryptocurrencies are recognized at fair value using the revaluation model. Accordingly, an impairment loss on an asset that was not previously re-measured is recognized in profit or loss.”

The losses recorded are further strained by the fact that revenues were up 180% to £162.7 million ($221.6 million) in 2019 as compared to £58.2 ($75.7 million) in 2018. The company also announced an increase in its cash holdings, which doubled to £2.281 billion, up from £903 million in 2018.

Revolut also states its currency exchange business is facing a blip in 2020 following the COVID-19 pandemic as traders are not as interested. However, the pandemic has had an unusual positive effect on its crypto businesses in the short term, the report further states.

The U.K. fintech firm recently partnered with Paxos in a bid to expand its crypto purchase and custody services across 49 of the 50 states in the country.

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Author: Lujan Odera