DOJ Selling $56M Crypto to Compensate BitConnect Victims, Mt Gox Rehabilitation Plan Finalized

DOJ Selling $56M Worth of Crypto to Compensate BitConnect Victims, Mt Gox Rehabilitation Plan Also Finalized

The timing and specific amount of the Mt. Gox repayments haven’t been announced yet. Meanwhile, the DOJ describes the liquidation as the US’s largest single recovery of crypto fraud.

The United States Department of Justice has seized $56 million worth of cryptocurrency that will be sold to compensate the victims of the BitConnect fraud.

This week, the DOJ announced that US District Judge Todd W. Robinson had granted the request to liquidate approximately $56 million in fraud proceeds seized from the self-described “number one promoter” of BitConnect, who consented to the seizure.

The agency described the liquidation as the largest single recovery of a crypto fraud by the United States to date.

According to court documents, Glenn Arcaro pleaded guilty to participating in the conspiracy to defraud BitConnect investors in the US and abroad, in which investors were fraudulently induced to invest over $2 billion.

Scheduled to be sentenced on Jan. 7, 2022, Arcaro is facing a maximum penalty of 20 years in prison.

To make victims of the BitConnect scheme whole, the government will begin the process of selling the crypto assets and holding the proceeds in USD. The seized proceeds will be custodied in crypto wallets which will then be used to provide restitution to the victims pursuant to a future restitution order by the court at sentencing.

Coming To An End

In other news, creditors of the defunct Bitcoin exchange Mt. Gox are now getting closer to receiving reimbursements under a plan that has become final and binding. With this, one of the longest-running sagas, which began in 2014 in the crypto world, is now coming to an end.

The rehabilitation plan filed in Tokyo court nearly a year ago was approved last month and has now been finalized.

According to a letter from a Japanese trustee Nobuaki Kobayashi, who is in charge of returning the funds to creditors, the timing and specific amount of the repayments hasn’t been announced yet.

The announcement of finalization follows the approval by a “large majority” of creditors last month.

The Rehabilitation Trustee thanked all the involved parties for their support, leading to the plan “becoming final and binding” as per which repayments to rehabilitation creditors holding allowed rehabilitation claims will be made.

“An announcement will be made to rehabilitation creditors on the details of the specific timing, procedures, and amount of such repayments.”

While some feel the announcement of the payout might negatively affect the market, resulting in BTC falling under $59k, it is unlikely that reimbursement would happen anytime soon or at least this year, given that court proceedings take time.

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Author: AnTy

ETH’s Net Annual Inflation Now under 1%, Ethereum Foundation Selling Ether

Since the implementation of EIP-1559, almost 860,000 ETH worth $3.2 billion have been burnt, which is about 40% of the ETH issued in that period.

Daily net ETH issuance has now dipped below zero in 10 days, making the crypto asset deflationary. This has now significantly dropped ETH’s expected rate of net annual inflation. According to Coin Metrics, based on the 30-day moving average, ETH’s net annual inflation has now dropped under 1%.

This is despite the fact that the number of transactions implementing EIP-1559 type fees is still around 60%.

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The total supply of wrapped Bitcoin (WBTC) on Ethereum has also risen to 235,000, representing more than 1% of the total bitcoin supply. The fact that 90% of all average transfer size for WBTC has been greater than $1k in value likely suggests that WBTC is mainly used on Ethereum in DeFi protocols for trading and other financial activity.

Amidst this, Ether has also hit a new all-time high this week at $4,870, up 550% YTD. As of writing, ETH has been trading at $4,550.

As Ether hit new highs, Ethereum Foundation, a non-profit organization supporting the development of the second-largest cryptocurrency and its developers, has moved its ETH to cryptocurrency exchange with an intention to sell them.

On-chain data shows, Ethereum developer, sent 20,000 ETH worth about $95 million to Kraken.

In the past as well, Ethereum Foundation has sold its Ether stash to provide financial support to the ecosystem.

With Ether price surging and activity resuming on-chain, ETH gas fees are rising as well. Over the last week, the Ethereum transaction fee averaged $50, with a median of $26. As of writing, the average fee is still above $50.

Daily active addresses meanwhile have averaged $650,000 over the last week, the highest level since August this year. NFT activity, however, is currently not the main factor behind the jump in gas fees as daily ERC-721 transfers averaged $67k over the last week, down from a peak of $200k per day in early September.

“Activity that might be less cost-sensitive such as trading is likely the biggest contributing factor to the rise in fees,” noted Coin Metrics.

While high network usage means there is high demand for Ethereum block space from users, it also limits scalability on layer-1 Ethereum, pricing out smaller users.

This week, however, the L2 solution Optimism released one of its biggest upgrades to improve the developer experience building on layer 2. With this, Optimism is currently offering the cheapest experience at $0.01 ETH transfer cost, as per Cryptofees.

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Author: AnTy

Terra Founder Sues SEC, Stablecoin Platform Is Burning $4B Worth of LUNA Tokens

The algorithmically-governed stablecoin platform Terra is proposing to burn 90 million LUNA, worth $4 billion at current prices and about 10% of the total supply, in the community pool to mint UST stablecoin for the network’s insurance protocol Ozone.

When the native stabilizing crypto asset of the network, LUNA, is burned to mint new Terra (UST) stablecoins, the amount of Luna burned is “seigniorage.”

Roughly every week, a portion of this seigniorage goes to fund the community pool controlled by Luna governance and reward Luna stakers.

According to the proposal called “Burn the community pool,” this proposal will burn all remaining funds in the community pool, route all future seigniorage to be burned instead of being routed to community/staking reward pools, and amortize the distribution of the existing reward pool to three years instead of the current one year.

“Next week, we will uphold Terra signal prop 44 and initiate a proposal to burn 90M Luna in the community pool to mint UST for Ozone. This will reduce Luna’s total supply by 90M and increase UST supply by roughly 3-4 billion,” said Do Kwon, founder of the project.

As of writing, TerraUSDT (UST) has a market cap of $2.75 billion. As we reported, Kwon has predicted UST’s market cap to exceed $10 billion by the end of this year.

Kwon further shared that a byproduct of this operation is that a lot of swap fees will accrue, which is expected to result in LUNA staking returns to 5x to about 15%.

“Pretty sure this is the largest burn ever,” commented Ryan Watkins of Messari, expecting this burn to increase UST’s supply to $6.7 billion overnight and put it within striking distance of DAI, which is $7.4 billion.

“This would also be the first DeFi blue chip to be flipped by a multichain competitor on its number 1 KPI. That said think there’s a place for both, and DAI continues to grow at an impressive pace, even before it’s tokeneconomic revamp.”

As a result of the news of this burn, LUNA rallied 30% to hit $45.25 on Friday. Currently trading at $42.46, LUNA is up 6,450% YTD but still down 14% all-time high of $50 earlier this month.

In other news, Terraform Labs and CEO Kwon are suing the US Securities and Exchange Commission (SEC).

Kwon confirmed this week that he was served a subpoena by the SEC at Messari’s Mainnet conference last month. According to the filing, the matter dates back a few months; it started in May when the SEC’s Enforcement Division emailed Kwon.

Terra’s decentralized finance (DeFi) platform Mirror Protocol is at the center of the lawsuit, on which synthetic stocks of major US firms are minted and traded.

The subpoena wants Kwon to provide testimony to US regulators, but as a South Korean resident, Kwon is contesting that.

“Rare case of a preemptive lawsuit against a regulator making sense,” commented Anderson Kill lawyer Stephen Palley.

The agency also told Terraform’s lawyers that they might sue the company with the suit saying,

“the SEC attorneys advised that they believe that some sort of enforcement action was warranted against TFL [Terraform Labs] and any cooperation, and implementation of remedial actions as to the Mirror Protocol, would result in a reduced financial sanction as part of any consent agreement.”

Kwon was served just five days later at the conference as he was exiting an escalator on his way to make a scheduled presentation that was not about the Mirror Protocol. At the time, Kwon had denied being served that day.

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Author: AnTy

Wyoming Senator Cynthia Lummis Discloses Bitcoin Purchase Worth Up to $100k in Late Filing

Wyoming Senator Cynthia Lummis Discloses Bitcoin Purchase Worth Up to $100k in Late Filing

Despite being the most controversial digital asset in the nascent industry, Bitcoin is slowly gaining support in Washington. Reports coming from the Capital City states that Senator Lummis has recently increased her BTC holdings.

Lummis Buys BTC Worth $100K

U.S. Senator Cynthia Lummis, representing crypto-friendly Wyoming, recently disclosed her purchase of Bitcoin worth between $50,000 and $100,000.

According to a Periodic Transaction Report filed yesterday, Lummis made the purchase on August 16 after unsuccessfully trying to amend the Senate-passed crypto infrastructure bill. The purchase was made through her brokerage platform River Financial.

Lummis is a long-time crypto bull and has been swelling her Bitcoin holdings since 2013. According to the crypto enthusiast, she started buying Bitcoin when it traded for as little as $330.

However, her latest purchase has drawn criticism from several quarters largely due to the lateness of the filing.

According to the Stop Trading on Congressional Knowledge Act (STOCK), all serving senators and senior officials within the $119,554 pay bracket are meant to report specific financial transactions within a stipulated time.

The Senate ruling also demanded that all purchases, sales, or exchanges of any stock, bond, commodities futures must be disclosed within 45 days of the transaction.

When contacted by the media, a spokesperson to the Senator admitted that the oversight was due to a ‘filing error.’

“It was an honest mistake, and the issue has been resolved without penalty.”

The premier digital asset has drawn strong criticism from the White House, with Treasury Secretary Janet Yellen labeling it a tool for money laundering and terrorist financing. The Securities and Exchange Commission (SEC) Chair, Gary Gensler, has repeatedly called for more oversight as the industry sees more mainstream adoption.

Lummis No Friend To Stablecoins

Senator Lummis is not the only lawmaker with a crypto war chest in Congress, and Senator Pat Toomey of Pennsylvania also owns stakes in the rapidly-growing digital financial space.

Senator Toomey is reported to have purchased $15,000 worth of Grayscale’s Ethereum Trust (ETHE) and another $15,000 price of the famous digital asset management firm’s Bitcoin Trust (GBTC) in mid-June, according to data from Quiver Quantitative.

Meanwhile, Lummis has called for a more elaborate retirement fund for Americans while pointing out that cryptocurrencies may be a viable tool as concerns continue to grow around inflation.

Stablecoins are meant to reduce volatility issues surrounding crypto assets like Bitcoin by pegging their value to a national currency. Stablecoins have come under increasing criticism, with SEC’s Chair Gensler attributing them to poker chips.

According to the SEC boss, digital trading could hurt investors without proper regulatory oversight. One of the most criticized of the bunch has been Tether’s USDT which has been required by the New York Attorney General (NYAG) office to provide quarterly reports on USDT backing.

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Author: Jimmy Aki

dYdX Records $6.5B Volume to Surpass BitMEX & Coinbase Driven by China Crypto Ban & Liquidity Mining

DYDX token surged past $22.50, making its airdrop worth $100k. However, the token holders do not get a share of the trading fees earned on the platform, which goes to dYdX Trading Inc and equity holders.

As China cracks down on crypto declaring virtual currency-related business activities, including the provision of services by overseas exchanges to Chinese residents through the Internet to be “illegal financial activities,” decentralized finance (DeFi) is gaining a lot of traction in the country.

One DeFi project, in particular, is enjoying increased activity; decentralized derivatives exchange dYdX.

“China’s strong regulatory policy may benefit DeFi applications such as MetaMask and dYdX,” said Wu Blockchain as it noted, “A large number of Chinese users will flood into the DeFi world… All Chinese communities are discussing how to learn defi.”

In the last 24 hours, dYdX perpetual recorded more than $6.5 billion in trading volume, according to Coingecko. With these numbers, dYdX has outperformed the popular centralized crypto exchange BitMEX, which saw $1.69 billion in volume and has reached closer to FTX and Bybit, seeing just over $8.5 billion each.

In terms of open interest, dYdX is in 14th place with $483 million in OI compared to Binance Futures’ more than $8.23 billion, which sits in first place and records $56.7 billion in volume.

Late on Sunday, dYdX founder Antonio Juliano shared on Twitter that five years ago, he left leading US crypto exchange Coinbase to eventually found dYdX, and now for the first time, his platform is “doing more trade volume than Coinbase.”

Coinbase, which is a spot exchange, recorded $3.1 billion in volume.

Besides China turning to decentralized exchanges, this growing volume could also be driven by all the hype going around the platform usage, creating a feedback loop and the liquidity mining programs currently underway.

Users who trade on the exchange get to earn tokens through this program. Token rewards are based on the total fees paid and OI on the dYdX exchange. The first epoch of this reward incentive program ends on Sept 28, and there are currently just over 3.8 million DYDX tokens worth more than $86.3 million in this reward pool for distribution.

Given that the value of the DYDX token is on the rise, this further fuels this frenzy of activity on the platform.

Up more than 91.5% since the weekend, the DYDX token today hit a new all-time high at $22.56 thanks to growing usage.

Launched earlier this month, the governance token which was airdropped to its users and for which United States’ users were not eligible is currently worth $100,000.

Currently, DYDX has a market cap of about $1.1 billion based on the circulating supply of 50.855 million DYDX, out of the 1 billion total supply.

Amidst the ongoing dYdX mania, the crypto community got to know that all the trading fees earned on the platform go to the dYdX Trading Inc. Equity holders of the DyDx Foundation actually earn a percentage of the revenues generated by the exchange.

Also, the token holders can’t vote for the fees to be shared among them because, according to the team, “trading fees aren’t part of the smart contracts owned by the token.” And there are no plans to do any token burns either.

In the past 7-days, dYdX earned $12.55 million in revenue, the fourth-largest, and $29 million in the past 30 days.

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Author: AnTy

Trezor Adds EIP-1559 Support to its Model T Wallet, $1 Billion Worth of ETH Burned

Trezor Adds EIP-1559 Support to its Model T Wallet, $1 Billion Worth of ETH Burned

Hardware crypto wallet Trezor has finally announced the support for EIP-1559 but only in its Model T’s firmware. This Ethereum upgrade is not yet supported on Model One, but the team is working on porting Model T firmware to Model One to unify its stack.

On August 5th, the Ethereum network had the London upgrade, which also implemented EIP-1559 which burns a portion of the fees paid to the miners. Since this proposal’s implementation on the second largest network, base fees are burned while a small tip is added that is paid to the miners.

So far, this burn mechanism has resulted in burning more than 311,000 ETH worth more than $1 billion.

NFT marketplace OpenSea is responsible for the majority of these burns at just over 43,800, followed by more than 26k ETH by Uniswap V2 plus V3, and Ether transfers at 26k ETH, according to Dune Analytics.

Popular Ethereum wallet MetaMask has already provided support to the new transaction fees mechanism, which provides a way for users to avoid overpaying under normal conditions.

Now, hardware wallet Trezor has also joined in, and EIP-1559 support is now available for Trezor Connect – a platform for integration of login with Trezor into 3rd party wallets.

Now, developers can use Trezor Model T wallets to secure EIP-1559 compatible wallet interfaces thanks to Trezor Connect and Model T firmware support, it noted.

At the same announcement, the wallet provider said a new version of Trezor Suite (21.9.2) and updated firmware for the Trezor Model T (2.4.2) and Trezor Model One (1.10.3) hardware wallets are now also available that are essential only if a user stores Stellar (XLM) crypto asset in the wallet.

Also, a new native arm64 has been built, which is optimized for Apple’s Silicon chip architecture, M1 processor.

Furthermore, the company announced offline onboarding, which means that a new Trezor device can be set up without the host machine being actively connected to the internet, improving one’s privacy and security.

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Author: AnTy

OpenSea Bug Transfers Tokens to Burn Addresses, Over $100K Worth of NFTs Lost

OpenSea Bug Transfers Tokens to Burn Addresses, Over $100K Worth of NFTs Lost

Despite the success of the crypto market, the sector has found it hard to shake off the constant security issues that plague the industry.

This week, the non-fungible token (NFT) space got a brutal reality check after NFT marketplace OpenSea was hit by a bug that destroyed multiple tokens.

Burning Tokens Without Permission

On Wednesday, Nich Johnson – a lead developer on the Ethereum Name Server (ENS), announced on Twitter that he had accidentally “burned” the first ENS ever registered. The developer explained that he had tried to transfer the ENS – named “rilxxlir.eth” – to one of his personal accounts.

While Johnson had planned to offer the ENS as an NFT through PaperclipDAO, it would have been impossible to do this until he transferred the ENS as an ENS account held the name. The developer moved to OpenSea to process the transfer, where he discovered a glitch in the marketplace’s code.

Rather than send the ENS to Johnson’s address, OpenSea sent the NFT to a burn address-never to be seen again. OpenSea has reportedly patched the issue, but not before it affected 32 other transactions – involving 21 users and 42 traded NFTs. At the time of his tweet, all NFTs affected were collectively valued at 38.44 ETH.

“It transpires I was the first and apparently only victim of a bug introduced to their transfer page in the past 24 hours, which affected all ERC721 transfers to ENS names. Ownership of rilxxlir.eth is now permanently burned,” Johnson said.

Not the Best Time for OpenSea

The transfer glitch on OpenSea is quite disturbing, considering how important the marketplace is in the sector. But this was expected considering their staffing problems. In late August, the company’s head of product, Nate Chastain, posted that they had been severely understaffed, with only 37 people processing 98 percent of all NFT volumes.

OpenSea’s careers page also shows various open positions, from business development officers to finance professionals and full-stack engineers. Chastain added that OpenSea is looking to expand its team to take the stress off its existing workforce.

The company’s security flaws and staffing issues are also coming at a bit of a challenging time, with competitors now coming into the market. This week, top decentralized exchange and derivatives trading platform FTX launched a native NFT marketplace on the Solana blockchain.

As the company explained, the NFT marketplace is exclusive to American customers, and it will enable users to buy, sell, and mint NFTs. All tokens are tradable across the Etheruem and Solana blockchains, with deposits and withdrawals coming in the next few weeks. The deposits and withdrawal feature will essentially allow users to deposit external NFTs on the platform too.

Top crypto exchange Binance also launched an NFT marketplace in June. The company is looking to reduce transaction costs, and it will be based on the exchange’s blockchain infrastructure.

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Author: Jimmy Aki

ETH Fees Renews its Uptrend and Back at May Levels, Making Ethereum Effectively Deflationary

So far, more than 50k ETH worth about $160 million has been burned, which is flipping Ethereum issuance to negative in more and more blocks.

The market has started to get back into action with Bitcoin above $47k, Ether $3,285, and the total market cap $2.1 trillion.

With this, the fees on the second-largest network have started to spike as well, currently, around $20, last seen on May 23rd, according to Blockchair. Average gas price has also jumped to 62.55 gwei, which increases further when using other applications like DeFi protocols, during high periods of activity, congestion, and if one needs their transactions to be processed fast.

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This surge in gas fees has resulted in more amount of ETH getting burned, leading to the flipping of Ethereum issuance to negative. About 100-150 gwei is the breakeven for the Ether issuance.

“Sustained base fee needed to fully offset issuance in Ethereum. Today: 167 gwei. After The Merge: 19 gwei. After capacity increase: even less,” noted yearn developer Banteg.

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So far, since August 5th, when the London upgrade with EIP-1559 was activated, more than 50k ETH worth roughly $160 million have been burned. The biggest contributor to this burn is the NFT marketplace OpenSea.

OpenSea continues to be the biggest gas guzzler on the Ethereum blockchain for some time now, followed by Axie Infinity (AXS), Tether (USDT), Uniswap V2 (UNI), and Uniswap V3, according to Etherscan.

The fees on the Ethereum network have actually been gradually increasing since early July, thanks to non-fungible tokens.

Before the greens made their re-entrance in the past month, NFTs have been attracting the mainstream masses to the world of cryptocurrency. Everyone has been hopping on this digital art train, from teenagers, celebrities, artists, and companies from different sectors.

OpenSea is also seeing its trading volume rising since the beginning of this month, recording nearly $800 million in August, up from $284.2 million in July and $125.2 million in the previous month. Last month, it raised a $100 million funding round led by A16z, valuing OpenSea at $1.5 billion.

However, in this NFT frenzy, it’s all about attention, with the likes of Pudgy Penguins and CyberKongz now at the forefront and the top collectible projects such as CryptoPunks and Meebits now seeing their sales drop by more than 70% in the last week.

While trading is declining, Christie’s is all set to auction Bored Ape NFTs along with CryptoPunks and Meebits NFTs next month, which can bring them back into the limelight. Rare NFTs are the ones that fetch millions of dollars, and the auction houses tend to sell the rarest ones.

Amidst this, this past weekend, the five-star hotel Ca’ di Dio announced that it is officially opening in Venice on August 27. Before that, through Monday, August 16, the parent company VRetreats is auctioning off a night’s stay, but consumers must bid on an NFT.

“We see using NFT for this auction as an advantage from a distribution point of view, not just from a marketing point of view,” said Angelo La Riccia, commercial director of VRetreats and VOIhotels.

“I’ve heard from colleagues in the hospitality industry that work at other brands who say they’re putting in a couple of euros to bid in the auction just to understand how that works,” La Riccia said. “Hoteliers have to think creatively as we come out of the crisis.”

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Author: AnTy

Chipmaking Giant Intel Buys A Small Stake, Not Even Worth a Million Dollars, in Coinbase (COIN)

Chipmaking Giant Intel Buys A Small Stake, Not Even Worth a Million Dollars, in Coinbase (COIN)

Cathie Wood meanwhile continues to buy COIN shares, making it the fund’s 4th largest holding worth more than $1 billion.

  • The chipmaker giant, Intel Corp. has disclosed a small stake in the US cryptocurrency exchange Coinbase.
  • The stake, however, is really small and not even worth a million dollars.

On Friday, the chipmaker reported holding about 3,014 shares of Coinbase’s Class A common stock as of June 30 in a regulatory filing. This makes their stake at just under $800,000, with COIN shares trading at $261.25, down over 39% from its all-time high of $429.54, hit briefly on its debut day.

Coinbase went public through a direct listing on Nasdaq in April with a valuation that rose to as high as $112 billion on the first day of its trading.

Earlier this week, Coinbase reported a strong second-quarter beating expectation with nearly $2 billion in revenue and growth of 44.2% in the monthly transacting users (MTUs) to 8.8 million. Their trading volumes also rose to $462 billion, from $335 billion in Q1.

Major players like Cathie Wood have been doubling down on crypto holdings. Wood’s Ark Investment has actually been continuously buying COIN shares, making Coinbase the fund’s 4th largest holding, having a 4.79% weightage worth more than $1 billion in their ARK Innovation ETF.

This ETF invests in companies involved in “disruptive innovation” such as Tesla, Teladoc Health, Roku, Unity, Zoom, Square, Shopify, Twilio, and Spotify, all making its top 10 holdings.

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Author: AnTy

Auto Insurer Metromile Adds $1 Million worth of Bitcoin to its Balance Sheet

Auto Insurer Metromile Adds $1 Million worth of Bitcoin to its Balance Sheet

Car insurance company Metromile invested $1 million in Bitcoin during the six months ended June 30, 2021.

“During the six months ended June 30, 2021, the Company purchased an aggregate of $1.0 million in digital assets, comprised solely of bitcoin,” reads the company’s SEC filing on Tuesday.

For the storage of its Bitcoin, the company is using a third-party custodial service.

The company also reported an impairment loss of $0.1 million on Bitcoin, while no realized gains or losses were recognized during the three months and six months ended June 30, 2021. As such, the fair market value of bitcoin held as of June 30, 2021, was $0.9 million.

“The digital assets are initially recorded at cost and are subsequently remeasured on the consolidated balance sheets at cost, net of any impairment losses incurred since acquisition,” says the document.

Back in May, when announcing the option for policyholders to pay premiums and receive claim payouts in BTC, the digital insurance platform had said that the company would buy $10 million in Bitcoin in Q2.

“Supporting decentralized finance and adding bitcoin as a new payment option is the next logical step… as cryptocurrency becomes mainstream and a more significant portion of consumers’ assets,” said Metromile CEO Dan Preston at the time.

Metromile, which charges premiums based on miles driven, reported net earnings per share loss of $0.33 on total revenue of almost $29 million in the second quarter.

While the numbers improved from the second quarter of 2020 and both revenue and EPS beat analyst estimates, investors were disappointed with the results and the remaining outlook for the year.

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Author: AnTy