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Marathon Digital Refinances $100m Credit Facility from Silvergate Bank

by Blockchain NewsAugust 2, 2022

Marathon Digital Holdings, Inc., a major US enterprise Bitcoin mining firm, announced on Monday that it has secured another $100 million line of credit from Silvergate Bank backed by Bitcoin (BTC).

In July last year, the Bitcoin miner financed a $100 million revolving credit line with the crypto bank.

Hugh Gallagher, Marathon’s CFO, talked about the latest development: “We are pleased to be closing on these debt facilities and believe that the combination of a term loan and revolver provides Marathon with exceptional flexibility regarding our funding options. With these facilities in place, we have achieved our goals of adding capacity and optionality to finance our future operations growth. We thank the team at Silvergate for their engagement as we collaborated to put these facilities in place.”

The term loan comes with a variable interest rate, which is currently priced at 7.25%.

The miner announced refinancing the $100 million revolving line of credit that was set to expire in October 2022. At this point, the firm has no amounts outstanding under the revolving credit facility. The company secured both loan facilities backed by Bitcoin. The loans are set to mature in July 2024.

Marathon said it acquired the loan to give it the flexibility to navigate the market volatility. Part of the company’s strategy is to “risk” the business by becoming more resilient to a potential fall in Bitcoin prices. The firm is working to be agile with the turbulence of Bitcoin prices by leveraging its scale to negotiate favourable contract terms.

Marathon is building one of the largest Bitcoin mining operations in North America. Its mining operations are based in South Dakota/Nebraska (hosted by Compute North), Montana (hosted by Beowulf), and Texas (hosted by Compute North).

Like Marathon, most Bitcoin mining firms use their Bitcoins as collateral for fiat loans, which they can use to pay electricity costs, purchase ASICs or other mining hardware, finance other operational costs, or fund other growth projects.

Instead of traditional loans, Bitcoin-backed borrowing allows such mining firms to keep their Bitcoin while sourcing additional funds to expand their operations with fiat currency.

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Billionaire Steve Cohen Removes Investment from Crypto Startup Radkl

by Blockchain NewsAugust 2, 2022

Billionaire Steve Cohen has removed his investment from cryptocurrency trading startup Radkl.

Prior to the hedge fund billionaire’s exit, the trading firm had already lost at least two managing directors this year, including Jim Greco and Beatrice O’Carroll.

The quantitative crypto trading firm was just formed last year by New York Stock Exchange market maker GTS.

On Radkl’s website, only five employees are listed, including O’Carroll. However, O’Carroll already confirmed with Bloomberg that she had left the company.

“Radkl remains extremely well capitalized with its current investors and continues to grow rapidly,” the spokesperson told Bloomberg.

Cohen is a Wall Street titan who also owns the New York Mets baseball team, and his support for Radkl had made top headlines last September. Additionally, his entry into the crypto sector was seen as a sign of the traditional finance world’s increasing interest in the industry.

However, investors such as Cohen have backed off from the crypto sector this year as there has been a slump in digital assets and a series of crises such as the LUNA crash.

Besides Radkl, Cohen’s other crypto investment included his family office – Cohen Private Ventures – involvement in a funding round last year for non-fungible token (NFT) firm Recur.

According to Sept 2021 report from the Wall Street Journal (WSJ), a spokeswoman for Cohen had said that the investment in Radkl had come from his personal capacity and not through his hedge-fund firm – Point72 Asset Management LP.

She had further added that Cohen wouldn’t be involved in the startup’s day-to-day operations.

The WSJ also said that in August 2021, Point72’s venture-capital arm had invested in crypto data and analytics provider Messari.

During the heyday of the crypto industry last year, other hedge fund billionaires such as Paul Tudor Jones and Stanley Druckenmiller also publicly embraced crypto, which further helped fuel a rally in digital currencies.

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Tagged : Bitcoin / Blockchain / Crypto / News / RADKL / STEVECOHEN

BTC Miner Bitfarms’ Energy Capacity Touches 21% in July

by Blockchain NewsAugust 2, 2022

Bitfarms’ energy capacity increased to 21% in July from June 30.

The Bitcoin miner’s increase in energy capacity reached 166 megawatts following the firm’s completion of the second construction phase at a location in Canada.

According to Bitfarms’ monthly update, the total hash rate also increased by 5.6% to 3.8 exahash per second (EH/S); it plans to further increase the rate to 4 EH/s by the end of August 2022.

The company further added that it witnessed an increase in production at two other sites in Canada and Washington State.

However, Bitfarms’ Chief Mining Officer, Ben Gagnon, said, “unseasonably high temperatures in Québec and Washington state late in the month also slightly lowered miner productivity and affected our corporate hashrate.”

In July, Bitfarm mined 500 BTC and sold 1,623 BTC throughout the month. The revenue it collected was utilised to cut down a bitcoin-backed loan by $15 million, bringing the outstanding debt to $23 million.

While in June, the miner sold 3,000 BTC to pay down a portion of a $100 million loan from Galaxy Digital.

Since July 31, Bitfarms has held 2,021 BTC in custody after selling 1,623 BTC last month.

According to a report from Blockchain.News, Canada-based Bitfarms also announced in mid-June that it entered into an equipment financing deal to stabilise its financials amid the plunge in crypto prices.

The report also added that it had announced Bitfarms entered a new $37 million equipment financing deal with NYDIG at a 12% interest rate. Bitfarms collateralised the loan by the mining rigs at the company’s Leger and Bunker facilities.

In its Q1 report from March 31, 2022, Bitfarms stated that it had mined 961 Bitcoin (BTC) at an average cost of production of $8,700/BTC during Q1 2022.

The company admitted that financial results in Q1 2022 were significantly impacted by the decline in the market price of Bitcoin during the quarter compared to Q4 2021.

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Tagged : Bitcoin / Bitfarms / Blockchain / Crypto / Mining

BTC Miner Bitfarms’ Energy Capacity Increased to 21% in July

by Blockchain NewsAugust 2, 2022

Bitfarms’ energy capacity increased to 21% in July from June 30.

The Bitcoin miner’s increase in energy capacity reached 166 megawatts following the firm’s completion of the second construction phase at a location in Canada.

According to Bitfarms’ monthly update, the total hash rate also increased by 5.6% to 3.8 exahash per second (EH/S); it plans to further increase the rate to 4 EH/s by the end of August 2022.

The company further added that it witnessed an increase in production at two other sites in Canada and Washington State.

While in June, the miner sold 3,000 BTC to pay down a portion of a $100 million loan from Galaxy Digital.

Since July 31, Bitfarms has held 2,021 BTC in custody after selling 1,623 BTC last month.

In its Q1 report from March 31, 2022, Bitfarms stated that it had mined 961 Bitcoin (BTC) at an average cost of production of $8,700/BTC during Q1 2022.

The company admitted that financial results in Q1 2022 were significantly impacted by the decline in the market price of Bitcoin during the quarter compared to Q4 2021.

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Tagged : Bitcoin / Bitfarms / Blockchain / Crypto / Mining

Nomad Lost Nearly $190m TVL in “Decentralized Robbery”

by Blockchain NewsAugust 2, 2022

Cross-chain token bridge Nomad was breached on Monday, resulting in losing nearly all the total value of the cryptocurrency in the protocol for nearly $200 million.

In a statement published on Twitter, the trading platform confirmed the hacking incident:

“We are aware of the incident involving the Nomad token bridge. We are currently investigating and will provide updates when we have them.”

The protocol also warned that “impersonators posing as Nomad and providing fraudulent addresses to collect funds,” adding, “We aren’t yet providing instructions to return bridge funds. Disregard comms from all channels other than Nomad’s official channel.”

As a sort of cross-chain bridges, the protocol allows users to swap various tokens, such as Ethereum (ETH), Avalanche (AVAX), Evmos (EVMOS), Milkomeda C1, and Moonbeam (GLMR).

Citing the data from DeFi Llama, a Defi tracking data platform, the total value locked (TVL) of Nomad reached up to $190 million before the exploit, according to the online media outlet Cryptonews. The platform showed the TVL of Nomad remains less than $11,000 at the time of writing.

Source: DefiLlama

Another cybersecurity platform BlockSec estimates the total loss in this incident is estimated around $150 million worth of Tether (USDT). The monitoring platform suggested that some loopholes among functions might exist in Nomad’s verification procedure: “Since an uninitialized storage slot is always considered as zero, the attacker can actually pass any message that has never shown before to bypass the verification procedure.”

Anonymous Terra researcher FatMan described the incident as “the first decentralized robbery,” adding that “all one had to do was copy the first hacker’s transaction and change the address, then hit send through Etherscan.”

Online media CoinDesk explained that bridges typically function by locking up tokens in a smart contract on one chain and then reissuing those tokens in “wrapped” form on another chain.

In addition, If the smart contract where tokens are initially deposited gets sabotaged in terms of Nomad’s situation, the wrapped tokens might no longer have any protection, resulting in losing their values.

Last month, Nomad announced it has secured a strategic investment of $22.4 million in April from various investors, including OpenSea, CoinBase Ventures, Crypto.com and Polygon.

Ironically, the latest security loophole might make the company feel embarrassed to keep its words and pursue ambitions as Nomad showed its determination by setting its primary goal to “create a safer crypto ecosystem where blockchains can communicate seamlessly and securely with each other,” according to its press release.

The company estimated that more than $1.5 billion was stolen this year by hackers exposing vulnerabilities in cross-chain bridges, indicating that the industry is in need of security-first solutions that maximize the safety of users, funds, and messages.

Image source: Nomad, DefiLlama

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Tagged : Cybercrime / Hacking / NOMAD / Tvl

Coinbase Introduces Ethereum Staking for US Institutional Clients

by Blockchain NewsAugust 2, 2022

Coinbase Prime – an integrated solution that offers secure custody, an advanced trading platform and prime services– has introduced an Ethereum staking service targeting corporate clients in the US.

Coinbase exchange described the addition of Ethereum to its staking options for US institutional investors as an important feature designed for financial institutions which want to enter the crypto money industry but hesitate about it.

The exchange said the staking service gives companies an opportunity to earn passive income by avoiding risks. The product offers yet another cryptocurrency on-ramp for institutions which have become interested in the industry’s explosive growth but have not always known how to get in.

Generating yield through staking plays an important role to big firms that often are looking for attractive places to invest their money.

Coinbase Prime also offers staking services for Solana, Polkadot, Cosmos, Tezos, and Celo tokens, the exchange said in a blog post on Monday.

Aaron Schnarch, the Vice President of Product, Custody at Coinbase, talked about the development and said institutional customers can create a wallet, decide how much to stake and start staking ETH in their Coinbase Prime account.

According to the exchange, withdrawal keys are held in Coinbase’s cold storage custody vault, and the staking process happens through the validation of new cryptocurrency transactions on a proof-of-stake blockchain.

Coinbase has launched its staking services to take advantage of “the Merge,” the highly anticipated upgrade of the Ethereum network.

Staking Rewards

Staking allows customers to earn a yield on their cryptocurrencies by putting them in a pool of assets, which helps support the liquidity and operations of a blockchain ecosystem. Staking is often compared to a high-yield savings account where investors can earn more than 20% in annual yield on some platforms.

However, that practice does not come without risks. Staking normally requires customers to store their money with a third-party called a “custodian,” who technically owns the funds while they are being staked. Few months ago, investors experienced huge losses of funds when custodians such as Celsius Networks, Voyager Digital, among others, went bankrupt after crypto markets crashed.

In January this year, institutional crypto custody firm Anchorage Digital introduced Ether staking for institutions.

The San Francisco-based federally chartered crypto bank started providing ETH holders with the opportunity to earn rewards for their holdings.

Anchorage also planned to expand its Ethereum blockchain service once the network moves to a proof-of-stake (PoS) mechanism later this year.

“The Merge” – the upgrade that will shift the blockchain from a proof-of-work (PoW) consensus mechanism to Proof-of-Stake (PoS) alternative consensus mechanism – is expected to begin next month. The transition to PoS, which is intended to be faster and more energy efficient than PoW, is now anticipated to occur on September 19th.

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Tagged : Blockchain / Coinbase / ETHER / Ethereum / Institution / Staking / Upgrade

Philcoin Rolls Out Staking Program for Donating Charity

by Blockchain NewsAugust 2, 2022

To change the way of charity, Philcoin has established a staking mechanism that will enable users to donate part of their earnings to a charity of their choice within PHILApp.

The philanthropic blockchain movement intends to create wealth for all through the staking feature by contributing to society.

Per the announcement:

“Staking has never been more rewarding – until now. Philcoin’s mission to change the way giving happens starts with you. You have the power to take back your financial sovereignty while empowering others to do the same.”

The staking mechanism is expected to help Philcoin create a global philanthropic movement by changing how giving happens.

Since staking enables users to earn a fixed interest upon storing some tokens for a certain period, the new feature on PHILApp will offer an annual percentage rate (APR) of 15%.

The report noted:

“Here’s where it gets interesting – and what makes Philcoin’s staking the first of its kind in the world! You keep 50% of this APR and get to donate the remaining 50% to a charity of your choice within PHILApp. It’s a staking mechanism that rewards Philcoin’s entire global community.”

The APR is founded on the number of tokens and not the USD value of the tokens. Therefore, Philcoin plans to take staking a notch higher by incorporating the giving aspect.

Meanwhile, the connection between crypto and charity continues to grow strong as cryptocurrencies are deemed ideal donation tools.

For instance, Al Jalila Foundation became the first healthcare charity in the United Arab Emirates (UAE) to accept crypto donations to bridge the gap between physical and digital currency pertaining to giving.

Therefore, staking seeks to be the new avenue of bringing wealth to greater communities, not just individuals, through giving.

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Tagged : Charity / Crypto / Donations / Enterprise / Philanthropy / PHILAPP / PHILCOIN / Staking

Blockchain Startup W3BCloud to Go Public via SPAC Deal

by Blockchain NewsAugust 2, 2022

Blockchain cloud infrastructure service provider W3BCloud is set to go public via a Special Purpose Acquisition Company (SPAC) dubbed the Social Leverage Acquisition Corp I (SLAC).

According to the transaction document, the SLAC vehicle is being sponsored by Social Leverage, a leading early-stage VC. The proposed funds to be raised via the SPAC are pegged at about $100 million.

Going public through a special purpose acquisition company is an alternative route designed for startups looking to raise funds and trade on public bourses.

They are generally a faster-track option for promising startups, provided they have a matching business design with their sponsoring SPACs. Per the proposed merger deal, W3BCloud is on track to be listed on the New York Stock Exchange (NYSE).

W3BCloud is one of the promising startups that hope to be the go-to cloud infrastructure provider for the emerging Web3.0 ecosystems. Currently, the startup ticks the box for providing a quality supply chain and access delivery through its integration of AMD technology. The startup’s core partnership also extends to ConsenSys, which gives it software and protocol insights.

Over the years, the development of Web3.0 focused on cloud infrastructure providers has progressed in a limiting way. This is because crypto-based startups hardly patronize these decentralized cloud providers as preference remains largely for centralized services like Microsoft Azure and Amazon Web Services (AWS).

W3BCloud aims to change the narrative, and it is developing the right data centres, most of which are in the United States. The firm is exploring avenues to bolster its infrastructure with the funds raised and the remaining $345 million cash it has in its trust.

W3BCloud is riding on the strength of both its founders and the expertise of the veterans from Social Leverage. With the clamour for Web3.0 soaring remarkably this period, W3BCloud is hopeful it has a large market potential for its products.

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Tagged : CLOUD / Finance / Infrastructure / Spac / W3BCLOUD

SEC Sues 11 Individuals involving Forsage Crypto Ponzi Scheme

by Blockchain NewsAugust 2, 2022

The United States Securities and Exchange Commission (SEC) has filed charges against 11 alleged masterminds of the popular Forsage crypto pyramid and Ponzi scheme.

As announced by the commission, the charges were filed in the United States District Court in the Northern District of Illinois, and it involved four of the platform’s founders living outside of the US and 11 residents in America.

The Forsage platform was launched as an investment outfit on Ethereum but later launched on the Tron and BNB Chain. Through the scheme, investors earn money only when they onboard other people into the scheme, and through the aid of smart contracts, the investment protocol also rewards people from overflows through a series of downlines.

According to the SEC, the 4 masterminds, Vladimir Okhotnikov, Jane Doe a/k/a Lola Ferrari, Mikhail Sergeev, and Sergey Maslakov, launched Forsage.io and contracted the other defendants to help in promoting the scheme across the board. The Forsage platform was reportedly marketed and opened access to US residents without regard for the underlying securities laws.

The regulator said the Forsage defendants continued with the promotion of the platform despite warnings from the Securities and Exchange Commission of the Philippines and in March 2021 by the Montana Commissioner of Securities and Insurance.

“As the complaint alleges, Forsage is a fraudulent pyramid scheme launched on a massive scale and aggressively marketed to investors,” said Carolyn Welshhans, Acting Chief of the SEC’s Crypto Assets and Cyber Unit. “Fraudsters cannot circumvent the federal securities laws by focusing their schemes on smart contracts and blockchains.”

While the case is now opened, the four masterminds are not yet in court. However, two of the remaining defendants, Samuel D. Ellis of Louisville and Sarah L. Theissen of Hartford, Wisconsin, have agreed to pay civil fines that the judge will determine.

Fraudulent schemes featuring cryptocurrencies have been making the rounds in recent times. In like manner, the founder of OneCoin, Ruja Ignatova, has been placed on the list of the 10 most wanted criminals in the world by the Federal Bureau of Investigation (FBI).

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Tagged : FORSAGE / Legal / Ponzi Scheme / SEC

Binance.US To Delist AMP following SEC’s Claim Token as Security

by Blockchain NewsAugust 2, 2022

Binance.US, the U.S. arm of the world’s largest cryptocurrency exchange Binance, announced on Monday that it will delist the AMP token after the US Securities and Exchange Commission (SEC) described the token as a security.

Last week on July 21, the SEC identified nine crypto assets as securities, and the AMP token was one of them.

In a statement made on Monday, Binance.US said that the exchange always supports transparency while adhering to compliance with the directives of federal authorities.

The exchange stated that projects trading under its platform should continue to meet the listing standards based on the legally approved scope of the Digital Asset Risk Assessment Framework.

Binance.US said it will delist the AMP token “out of an abundance of caution” of potential enforcement by federal regulators.

The exchange disclosed it will close down deposits of Amp (AMP) and remove the AMP/USD trading pair from its platform on Aug 15. The exchange said the move follows the token’s mention in legal action from the SEC.

According to its blog post, Binance.US stated: “We believe that, in some circumstances, delisting an asset best protects our community from undue risk. We operate in a rapidly evolving industry, and our listing and delisting processes are designed to be responsive to market and regulatory developments.”

Binance.US said AMP is the only token of the nine mentioned in the SEC’s legal case trading on its platform. The exchange added that it may resume trading of AMP in the future on its platform, according to the regulator’s decision.

Implications of SEC Calling Coins Securities

On 21st July, The SEC brought insider trading charges against a former Coinbase (COIN) product manager and other two individuals. The regulator also mentioned nine cryptocurrencies as securities, with potential plans to charge the issuers and the exchange listing the so-called securities.

The designation of the nine cryptocurrencies as securities could have wide implications in the crypto markets. The designation means that the coins will be regulated as if they were a stock or a bond. The issuers of such tokens will also have to comply with the country’s securities laws to be able to offer the assets to investors within the US.

Such designations would make running a crypto exchange more expensive and complex. Furthermore, exchanges would face continuous scrutiny by regulators, which could lead to penalties, fines, penalties and, in the worst case, prosecutions if criminal authorities got involved. This could also mean losing future funding from investors who may abandon trading because of fear of increased compliance burdens and regulatory scrutiny.

And more implications are yet to come as SEC’s rulings are underlay.

In its simplest form, whether an asset is or is not a security under US rules is basically a question of how much such a token looks like shares issued by a firm raising money.

To determine that, the SEC applies a legal test from a 1946 US Supreme Court decision. Under that framework, the SEC can consider an asset as security if investors raise or pump in funds with plans to profit from the efforts of the company’s leadership.

In December 2020, the SEC filed a lawsuit against Ripple Labs Inc., for allegedly raising funds by selling the XRP digital token without registering it as a security.

The regulator claimed that the firm was funding its growth by issuing XRP to investors, betting its value would rise. The case is now a massive legal battle between the SEC and Ripple.

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Tagged : AMP / Binance.Us. / Delisting / Exchanges / Legal / SEC / Token