OpenAI has purportedly entered into an agreement that has escalated the valuation of the San Francisco artificial intelligence (AI) company to £80 billion or more, indicating an almost threefold surge in less than 10 months.
As per a report in The New York Times, the company intends to vend current shares in a tender offer spearheaded by Thrive Capital. This strategy permits employees to vend their shares, deviating from conventional funding rounds aimed at garnering capital for business activities.
In a similar arrangement in 2023, venture capital firms Thrive Capital, Sequoia Capital, Andreessen Horowitz, and K2 Global consented to procure OpenAI shares in a tender offer, establishing the company’s worth at roughly £29 billion, as per the report.
OpenAI CEO Sam Altman has also purportedly been engaging in discussions to amass funds for a chip venture and advocating collaborations between the company and “various investors,” chip manufacturers, and energy suppliers.
The CEO affirmed that OpenAI would consent to be a “significant customer” of the new factories as he endeavours to enhance the world’s chip-producing capability to propel novel AI-related tools.
In December 2023, it was disclosed that OpenAI was deliberating with investors contemplating injecting over £100 billion into the company.
In November 2023, the OpenAI board expelled Altman, inciting turmoil and casting doubts on the company’s future.
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Employees threatened to resign en masse, prompting Altman’s reinstatement, accompanied by the departure of some board members.
OpenAI enlisted law firm WilmerHale to scrutinise the board’s decisions and Altman’s stewardship. The report on the matter is anticipated in early 2024.
The unveiling of OpenAI’s ChatGPT in late 2022 sparked interest in AI, instigating companies to delve into methods to harness the potential of the technology.
The AI company revealed its inaugural text-to-video model on Thursday, 15th February.
While acknowledging that the model still requires refinement, the new generative AI model dubbed Sora generates intricate videos from simple text prompts, extends existing videos, and even concocts scenes based on a static image.
OpenAI did not promptly respond to a Cointelegraph request for comment on the agreement.
Major banks and financial institutions in the United States are urging the United States Securities and Exchange Commission (SEC) to revise its definition of crypto assets, potentially enabling them to assume a more significant role in the crypto sphere, such as serving as custodians for the recently sanctioned spot Bitcoin exchange-traded funds.
On 14th February, a coalition of trade groups including the Bank Policy Institute, American Bankers Association, Financial Services Forum, and Securities Industry and Financial Markets Association presented their argument in a letter to SEC Chair Gary Gensler.
The coalition highlighted the recent endorsement of spot Bitcoin (BTC) exchange-traded products in the U.S., observing the absence of American banks as custodians for the approved products.
“The Commission recently approved 11 Spot Bitcoin ETPs, allowing investors access to this asset class through a regulated product.
However, notably absent from those approved products are banking organizations serving as the asset custodian, a role they regularly play for most other ETPs.”
The letter called for the SEC to consider adjustments to Staff Accounting Bulletin 121 (SAB 121), issued in March 2022, which offers guidance on accounting for crypto asset custody obligations.
They noted that it has been two years since the issuance of the guidance, and there have been “several relevant developments” during this period, including the approval of spot Bitcoin ETFs.
The existing guidance mandates banks to include crypto assets on their balance sheet, resulting in increased costs and hindrances to offering crypto custody services on a large scale.
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The coalition has now urged the SEC to refine the definition of crypto assets in SAB 121 to exclude traditional assets recorded on the blockchain.
This would prevent assets like tokenized deposits from falling under the stringent crypto guidelines.
They also seek exemptions for banks from the on-balance sheet requirements while retaining the disclosure obligations, enabling them to engage in certain crypto activities while maintaining transparency for investors.
In a post on X, Bitwise chief investment officer Matt Hougan stated that the letter indicates a change in the “tone around crypto regulation in Washington,” with others suggesting that banks are expressing interest in joining the “digital finance wave.”
“US banks, left off key bitcoin ETF roles, are pushing SEC to tweak guidance around holding digital assets,” summarised Bloomberg ETF analyst Eric Balchunas.
Meanwhile, TheBitcoin Therapist, author of a weekly Bitcoin newsletter, echoed the sentiment:
“Bankers are getting annoyed they can’t hold spot Bitcoin ETFs for their customers. The Q1 FOMO is already driving them mad.”
According to preliminary data from Farside, total aggregate inflows to the recently launched spot Bitcoin ETFs have just surpassed $4 billion despite an acceleration in outflows from Grayscale.
Bankrupt cryptocurrency lender Celsius has announced that most eligible creditors have now collected their liquid crypto distributions from its two distribution agents: payments giant PayPal and crypto exchange Coinbase.
In a recent court filing, Kirkland & Ellis — the legal team representing Celsius — provided an update on the creditor distributions outlined in the restructuring plan.
This follows Celsius’ recent announcement that it exited bankruptcy, which it initially filed for in July 2022.
According to Kirkland & Ellis, crypto distributions to holders in the United Kingdom are facilitated through PayPal, while overseas holders are managed by Coinbase as the distribution agent.
The lawyers declared that £2 billion worth of crypto had been transferred to creditors, including 20,255.66 Bitcoin and ETH.
“As of the date hereof, a significant number of Holders have successfully collected their Liquid Cryptocurrency from PayPal/Venmo and Coinbase: Nearly 75% of the BTC/ETH set to be distributed by PayPal/Venmo and through Coinbase has already been collected.”
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However, the filing explained that account holders who did not agree to the restructuring plan will not receive any distribution until their individual claims are resolved.
Additionally, it mentioned that certain account holders might face challenges in receiving their distribution if Coinbase or PayPal flags any Anti-Money Laundering (AML) or compliance issues.
“Distribution Agents have discretion to refuse making distributions to anyone they believe does not fulfil their compliance and other requirements,” the filing states.
There has been speculation within the crypto industry about how the actions in the restructuring plan might affect the broader crypto market.
On Jan. 5, Cointelegraph reported that Celsius started recalling and rebalancing its crypto assets to ensure timely distributions to creditors.
However, blockchain analytics firm Nansen highlighted at the time that almost a third of the ETH in the pending withdrawal queue currently belongs to Celsius.
In October 2023, Celsius asked the court to approve its restructuring plan, hoping to have creditors repaid before the end of 2023.
Meanwhile, Alex Mashinsky, the former CEO of the now-defunct crypto lender, is scheduled for trial in September 2024 regarding Celsius’ collapse.
However, his legal team has recently faced scrutiny for a potential conflict of interest, as it also represents Sam Bankman-Fried, the former CEO of bankrupt crypto exchange FTX.
On Feb. 6, U.S. Prosecutors raised concerns about lawyers Marc Mukasey and Torrey Young, who have both filed notice of appearances in the criminal cases against the former crypto CEOs.
Cointelegraph recently reported that the U.S. government called for a Curcio hearing, in which the judge may ask questions about a potential conflict of interest and why both lawyers were involved in Bankman-Fried and Mashinsky’s cases.
Up to 20% of Bitcoin’s present hash rate may cease operation following the Bitcoin halving, as block rewards diminish and only the most efficient mining rigs persist.
Towards the conclusion of 2023, approximately 70% of the Bitcoin hash rate stemmed from eight ASIC miner models, as indicated by Galaxy’s mining analysts in a report dated February 14, citing Coin Metrics data.
“Given how sensitive the breakevens are for the various ASIC models to Bitcoin price and transaction fees as a percent of rewards, we estimate that between 15 – 20% of network hash rate coming from the ASIC models […] could come offline,” the analysts articulated.
Galaxy’s forecast considered potential future power costs.
It computed the breakeven threshold for mining rig models based on “post-halving economics,” with each mined Bitcoin block slated to halve rewards from 6.25 BTC to 3.125 BTC, “transaction fees constituting 15% of rewards and a Bitcoin price of $45,000.”
According to Galaxy’s more conservative projections, nearly all outdated mining rigs — particularly Bitmain’s S9, Canaan’s A1066, and MicroBT’s M32 models — would be decommissioned, while about half of MicroBT M20S and Bitmain S17 models would persist online.
These five models collectively accounted for roughly 15% of Bitcoin’s hash rate by the end of 2023.
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Enduring predominantly would be the Antminer S19 and S19J Pro, newer and more prevalent models that comprised over half of Bitcoin’s hash rate in 2023, alongside Canaan’s A1246, albeit a minor fraction of each might still deactivate in locales with elevated operational expenses.
Nevertheless, a bleaker scenario would witness almost all older models nearing complete deactivation, although Galaxy once more anticipates that Canaan’s A1246 and both S19 models might endure.
Galaxy’s analysts acknowledged that their estimates could be influenced by certain business choices.
Miners utilising “older and more inefficient machines” are likely to implement bespoke firmware to enhance their rig’s efficiency and yield, whilst certain miner models may transition to miners with more economical power costs instead of shutting down.
The analysts also speculated that miners employing the newer S19 models might struggle to maintain profitability, and those employing older mining rigs might purchase them as an upgrade.
The Bitcoin halving will be enacted at block number 840,000, anticipated to be mined around April 20, according to data from Blockchair.
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Bitcoin remained steady at $52,000 during the Wall Street opening on February 16, with the latest United States macro data surpassing expectations.
Data from Cointelegraph Markets Pro and TradingView indicated a lack of movement in BTC price leading into the final TradFi trading session of the week.
Following closely after the Consumer Price Index (CPI) release two days earlier, the Producer Price Index (PPI) figures for January added to concerns about inflation in the U.S.§§§
Year-on-year, PPI stood at 0.9%, slightly lower than the previous month but still 0.3% higher than market forecasts.
In combination with the high CPI, these results made markets more cautious about the possibility of the Federal Reserve adjusting fiscal policy this year.
According to data from CME Group’s FedWatch Tool, the likelihood of the Fed reducing interest rates at its March meeting was 8.5% at the time of reporting — less than half the 17.5% probability at the beginning of the week.
“A March interest rate cut is likely completely ruled out after this data,” trading resource The Kobeissi Letter commented on X (formerly Twitter), echoing its response to CPI.
“Furthermore, a May rate cut has become questionable as well.”
Bitcoin reached $52,884 on Bitstamp the previous day, marking its highest level since late November 2021, but encountered resistance from sellers.
Analysing four-hour timeframes, popular trader Skew highlighted the importance of the 21-period exponential moving average (EMA), currently at approximately $51,000.
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“There’s been choppy price action here with a lot of inside bar closes essentially within the same intraday balance,” he observed.
U.S. spot-Bitcoin exchange-traded funds (ETFs) experienced net inflows of nearly half a billion dollars on February 15.
This contributed to an impressive week where the ETF products gained renewed interest more than a month after their initial launch.
However, despite removing more BTC from circulation than adding to it daily, the ETFs have caused some concern among market observers.
In his latest analysis, Venturefounder, a contributor at on-chain analytics platform CryptoQuant, suggested that a slowdown in ETF interest could expose Bitcoin to a significant retracement.
“Bitcoin ETF net inflow flatline/normalize is where the next 20-30% correction will start,” part of X’s commentary stated alongside a summary of current flows.
A previous post outlined potential BTC price floor levels, with estimates extending down to $34,000.
According to the latest research from crypto intelligence firm Coin Metrics, it is no longer feasible for nation-states to dismantle the Bitcoin and Ethereum networks via 51% attacks due to the exorbitant costs involved.
A 51% attack occurs when a malicious actor possesses over 51% of the mining hash rate in a proof-of-work system or 51% of staked crypto in a proof-of-stake network.
This power could be abused to manipulate the blockchain, compromising trust.
In a report released on February 15, Coin Metrics researchers Lucas Nuzzi, Kyle Waters, and Matias Andrade contended that nation-state attackers can no longer sustain such assaults due to the prevailing cost of capital and operational expenses needed to attain 51% control.
The researchers introduced a metric named “Total Cost to Attack” (TCA) to precisely gauge the expense of launching an attack on a blockchain network.
Utilising TCA, the report concluded that there are no financially rewarding avenues to attack either the Bitcoin or Ethereum networks, negating the financial incentive for malicious actors.
“In none of the hypothesized attacks presented here [would the attacker] be able to profit by attacking Bitcoin or Ethereum,” read the report.
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“Consider that even in the most profitable double spend scenario presented, where the attacker could potentially make $1B after spending $40B, that would account for a 2.5% rate of return.”
Analysing secondary market data and real-time hash rate output, the report revealed that a 51% attack on Bitcoin would necessitate an actor to procure a staggering 7 million ASIC mining rigs, costing approximately $20 billion.
Acknowledging the scarcity of available ASIC rigs, the report explored an alternative attack vector, which might be pursued by a particularly “relentless” actor.
Assuming a nation-state attacker could fabricate their own mining rigs—identifying the Bitmain AntMiner S9 as the only “plausible” device for reverse-engineering—it would still exceed a $20 billion investment.
Furthermore, the report debunked concerns over a potential 34% staking attack from Lido validators on Ethereum, suggesting it would be both time-consuming and financially prohibitive.
Castle Island Ventures partner Nic Carter commended Coin Metric’s research as “enormously important,” highlighting its rigorous empirical analysis as a significant contribution to the literature.
Oliver Bell, the founder of the Xcad Network, has stepped forward to defend YouTuber KSI against accusations made by crypto investigator ZachXBT.
ZachXBT alleged that the internet personality engaged in a pump-and-dump scheme involving his digital asset tokens, including XCAD.
On February 14th, ZachXBT shared screenshots of KSI’s X account promoting XCAD followed by a significant sale of $850,000 worth of tokens in the subsequent days.
This led another crypto investigator, Coffeezilla, to describe KSI’s actions as a classic “pump and dump.”
Bell issued a response the following day, asserting KSI’s right to sell his tokens.
On February 15th, Bell stated in a post that KSI had been a major contributor to their platform, providing valuable input and introductions.
He argued that while KSI sold some tokens, he had also bought a substantial amount, refuting the notion of a pump and dump.
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Bell directly refuted the allegations, maintaining that KSI had not engaged in a pump and dump with XCAD. He highlighted KSI’s continued involvement as an investor and supporter.
In addition to Bell’s defence, a devoted fan named Vibhor released a 36-page document supporting KSI. Vibhor, admittedly biased towards KSI, stated that the YouTuber shares his crypto activities openly and is known for quickly changing his positions.
The fan likened KSI’s influence on crypto to that of CNBC host Jim Cramer, whose actions sometimes have an inverse effect on assets.
However, Coffeezilla remains unconvinced by these arguments.
n a response video, he contended that KSI’s actions of trading contrary to his public statements are indicative of unethical behaviour, akin to a pump and dump.
Amidst the controversy, some community members believe KSI acted with malice, while others attribute his behaviour to his association with Logan Paul, who faces legal issues over a nonfungible token collection.
In the ever-evolving landscape of cryptocurrency, two main types of exchanges have emerged as the primary platforms for trading digital assets: centralized exchanges (CEXs) and decentralized exchanges (DEXs). Both serve the fundamental purpose of facilitating the buying and selling of cryptocurrencies, but they operate on vastly different principles and infrastructures.
These exchanges are essential to the buying and selling of crypto coins and tokens, such as Bitcoin.
Centralized Exchanges (CEXs)
Centralized exchanges are platforms that act as intermediaries between buyers and sellers, much like traditional stock exchanges. These platforms are operated by specific companies or organizations that maintain full control over the exchange operations. Some of the most well-known centralized exchanges include Coinbase, Binance, and Kraken.
Advantages of CEXs
- User-Friendly Interfaces: CEXs often provide more user-friendly interfaces, making it easier for newcomers to navigate the complexities of cryptocurrency trading.
- High Liquidity: Due to their centralized nature, these exchanges can offer higher liquidity, facilitating quicker trades and better prices for users.
- Fiat-to-Crypto Transactions: Many centralized exchanges allow users to buy cryptocurrencies directly with fiat currencies, providing a critical entry point for new users into the crypto ecosystem.
- Customer Support: CEXs usually offer customer support services to assist users with any issues, adding an extra layer of user assurance.
Disadvantages of CEXs
- Security Risks: Centralized platforms can be prime targets for hackers, as they hold a significant amount of user funds and data.
- Regulatory Oversight: Being centralized entities, these exchanges are subject to regulatory scrutiny, which can lead to sudden changes in operations or even shutdowns.
- Limited Anonymity: CEXs often require users to undergo KYC (Know Your Customer) procedures, which can deter users seeking anonymity.
Decentralized Exchanges (DEXs)
Decentralized exchanges operate without a central authority, facilitating direct peer-to-peer transactions on a blockchain. DEXs are built on the principle of eliminating intermediaries, thereby promoting a more open and unrestricted environment for trading. Examples of decentralized exchanges include Uniswap, Sushiswap, and PancakeSwap.
Advantages of DEXs
- Enhanced Security: Without a central point of failure, DEXs are less susceptible to large-scale hacks that plague centralized platforms.
- Anonymity: Users can trade directly from their wallets without needing to provide personal information, thus preserving their privacy.
- Censorship Resistance: DEXs operate on a global scale without central oversight, making them resistant to censorship and regulatory interference.
Disadvantages of DEXs
- Complex User Experience: The lack of a centralized entity means users must navigate more complex interfaces and manage their own security, such as private keys.
- Lower Liquidity: DEXs typically have lower liquidity than their centralized counterparts, which can lead to higher slippage and less favorable trade prices.
- Limited Features: Compared to CEXs, DEXs often offer fewer features, such as advanced trading tools and customer support.
Security Aspects
Security is a paramount concern in the world of cryptocurrency trading. Centralized exchanges, despite their efforts to bolster security through measures like cold storage and two-factor authentication, have suffered from significant breaches. Decentralized exchanges, by design, mitigate some of these risks by allowing users to retain control of their private keys. However, they are not entirely immune to risks, such as smart contract vulnerabilities.
User Experience
The user experience between CEXs,, like Binance or Coinbase, and DEXs can differ greatly. Centralized exchanges offer a more curated experience, with user-friendly platforms, customer support, and additional services like staking and lending. Decentralized exchanges prioritize autonomy and privacy but require a higher level of technical knowledge from their users.
Impact on the Cryptocurrency Market
Both CEXs and DEXs play critical roles in the cryptocurrency market. Centralized exchanges have been instrumental in introducing and providing access to cryptocurrencies for a broader audience. They have facilitated the growth of the crypto market by providing liquidity, fiat gateways, and a sense of security for new entrants. On the other hand, decentralized exchanges embody the decentralized ethos of cryptocurrency, offering alternatives that prioritize security, privacy, and resistance to censorship. DEXs have also spurred innovation in the space, particularly in the realm of DeFi (Decentralized Finance), pushing the boundaries of what is possible within decentralized ecosystems.
Summary
The choice between centralized and decentralized exchanges depends on individual preferences, trading needs, and priorities such as security, privacy, ease of use, and access to specific cryptocurrencies. Centralized exchanges offer a more straightforward entry point for newcomers, with higher liquidity and customer support, but at the cost of privacy and central point of failure risks. Decentralized exchanges, while catering to users seeking privacy and control over their funds, come with their own set of challenges, including lower liquidity and a steeper learning curve.
As the cryptocurrency market continues to mature, we may see further innovations and improvements in both CEXs and DEXs, potentially leading to hybrid models that combine the best aspects of both worlds. The ongoing development of these platforms will play a crucial role in shaping the future of cryptocurrency trading and the broader adoption of blockchain technology.
A bankruptcy adjudicator has granted Genesis Global Holdco permission to liquidate approximately £1.3 billion worth of Grayscale Bitcoin Trust (GBTC) shares as part of endeavours to reimburse investors.
During a hearing on 14th February at the United States District Court for the Southern District of New York, conducted via Zoom, Judge Sean Lane endorsed an order allowing Genesis to divest a portion of its investments from Grayscale.
Documents filed in February indicated that Genesis held about £1.6 billion worth of shares in GBTC, Grayscale Ethereum Trust (ETHE), and Grayscale Ethereum Classic Trust (ETCG).
According to Genesis’s bankruptcy filings, it claimed to possess around 35 million GBTC shares and 11 million ETHE and ETCG shares.
Grayscale lodged a restricted objection to the proposal for the company to liquidate the trust assets on 9th February, asserting that the sales were “subject to written approval” by the investment firm but did not aim to “delay, impede, or obstruct the Debtors’ sale or transfer of Trust Assets.”
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On 10th January, the U.S. Securities and Exchange Commission (SEC) sanctioned the conversion of Grayscale’s GBTC to a spot Bitcoin exchange-traded fund for listing and trading on U.S. exchanges, alongside offerings from 10 other asset managers.
Genesis remarked that the SEC’s approval would ease the redemption of shares in cash.
Genesis disclosed a £21 million settlement with the SEC on 31st January over its purported involvement in offering and vending unregistered securities through the Gemini Earn program.
The company operates independently from Genesis Global Trading, which encountered enforcement proceedings initiated by the New York Department of Financial Services in January.
The Uniswap Foundation, backers of the decentralised finance (DeFi) protocol Uniswap, have revealed the launch date for the protocol’s v4 subsequent to the forthcoming Dencun upgrade on Ethereum.
In a statement on X, the foundation shared a roadmap outlining its intentions for the forthcoming rollout.
The organisation emphasised that it is presently in the “Code Freeze” phase, where it is finalising core code, conducting testing, optimising gas, enhancing security, and completing peripheral tasks.
The launch of Uniswap v4 is provisionally scheduled for Q3 2024.
Following this, the Uniswap Foundation team will engage audit firms and hold a community audit contest to review v4’s code.
The team is confident that Uniswap v4 will feature the “most rigorously audited code ever deployed on Ethereum.” Concurrently, the decentralised exchange will be deployed to the testnet as final adjustments are made.
As per the Uniswap Foundation, the third phase will see Uniswap v4 go live on the Ethereum mainnet in the third quarter of 2024.
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The organisation noted that this is a tentative date, contingent upon the status of the impending Dencun upgrade on Ethereum.
As previously reported by Cointelegraph, the Ethereum network’s Dencun upgrade was activated on the Goerli testnet on Jan. 17.
The upgrade introduces various Ethereum Improvement Proposals (EIPs), including EIP-4844, which enables proto-danksharding, a feature aimed at reducing layer2 transaction fees.
The Goerli deployment for the Dencun upgrade experienced a four-hour delay. Nonetheless, the upgrade’s deployment on the Sepolia testnet — the second of three Ethereum testnets — was completed without incident on Jan. 31.
Subsequent to the second testnet, the Dencun upgrade concluded the third phase of testing following its deployment to the Holesky testnet on Feb. 7.
On Feb. 8, Ethereum developer Tim Beiko announced that the upgrade is scheduled for the mainnet at “slot 8626176.” Blockchain research firm Nethermind noted that this will occur on March 13, 2024, at 1:55:35 pm UTC.
The date was established by Ethereum developers in a call on Feb. 8, subsequent to the successful deployment to the Holesky testnet.