Cardano user Adam Dean, who flagged some testnet issues in the upcoming Vasil hard fork, has shared a screenshot of his most recent Vasil testing, which he tagged “Building, together, stronger, better than ever.”
As reported earlier, Adam Dean highlighted critical issues with the previous Vasil node 1.35.2, sparking a debate within the community. Dean indicated then that the Vasil upgrade was being rushed, which led to technical issues.
After hard forking the Cardano testnet to Vasil functionality with the initial Vasil node 1.35.0, the IOG teams proceeded to work on v1.35.1 and 1.35.2 as a result of the bugs discovered.
The team then released the Vasil node 1.35.3, which the Cardano creator, Charles Hoskinson, noted was “heavily tested” after earlier urging SPOs to upgrade to the node. Stake pool operators confirm “fix” According to Cardano pool operator, Andrew Westberg, “the fix to the issues pointed out earlier in the v.135.3 was successful and was confirmed by other SPOs.”
A Twitter user who goes by the name “the Ancient Kraken” also gives a green light on the Vasil node 1.35.3: “I think I properly reproduced the bug that was in 1.35.2 that caused issues for testnet on the spo dev net going on right now.
As of now, it does seem like 1.34.1 and 1.35.3 behave as expected in terms of smart contract usage. Everything is looking good.” Adahandle cofounder, “Conrad,” also tweeted a confirmation of this: “Retweeting this to confirm that, as of now, all tests demonstrate that 1.35.3 is, in fact, ready to go. All issues detected on 1.35.0, 1.35.1, and 1.35.2 could NOT be recreated.”
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FTX rode the crypto craze to a billion dollars in revenue last year while expanding its global footprint through a flurry of acquisitions, according to internal documents seen by CNBC.
The audited financials give a rare glimpse into the privately held company’s finances. FTX was profitable, quickly expanding across the globe and saw breakneck growth.
The crypto exchange’s revenue soared more than 1,000% from $89 million to $1.02 billion in 2021. Its profitability, like many start-ups, depends on how you measure it. Operating income was $272 million, up from $14 million a year earlier. FTX saw net income of $388 million last year, up from just $17 million a year earlier.
FTX declined to comment on the leaked financial documents.
The company brought in $270 million in revenue in the first quarter of 2022, and was on track to do roughly $1.1 billion in revenue in 2022, according to an investor deck shared with CNBC. But it’s unclear how FTX held up in the second quarter as crypto prices plunged during the recent so-called “Crypto Winter.”
By way of comparison, publicly traded Coinbase also experienced a cash boom during crypto’s bull market, with $7.4 billion in revenue and $3.6 billion of net income last year. But in the second quarter of this year, it reported $808.3 million in revenue, a decline of 64% from the year-ago quarter, and a surprise net loss of $1.1 billion, compared with $1.59 billion in net income a year earlier, as retail trading volumes cratered.
FTX was founded three years ago by former Wall Street quant trader Sam Bankman-Fried. The 30-year-old CEO has recently stepped in as the industry’s lender of last resort, looking to backstop companies as liquidity dried up. On top of multiple loans of hundreds of millions of dollars, Bankman-Fried’s companies also looked to acquire distressed assets. In July, FTX signed a deal that gives it the option to buy lender BlockFi and was in discussions to acquire South Korean Bithumb. FTX also offered to buy Voyager in August but was turned down for what the company claimed was a “low ball bid.”
FTX had roughly $2.5 billion in cash at the end of last year and 27% profit margins, according to the documents. Margins were closer to 50% if advertising and “related party” expenses are stripped out. It last raised money in January, collecting $400 million from investors like SoftBank’s Vision Fund 2 and Tiger Global, at a $32 billion valuation.
Global footprint
FTX was founded at a time when Coinbase and Binance had solidified themselves as the world’s largest trading venues. Coinbase still operates largely within the U.S. Binance, the largest exchange by trading volume got its start in China, later moved its headquarters to the Cayman Islands and is now making a push for the U.S. market with an American subsidiary.
FTX has been quietly building its own fleet of global subsidiaries to compete.
FTX Trading Ltd. is headquartered in Antigua, with FTX Derivatives Markets based in the Bahamas, where Bankman-Fried lives. FTX Trading recently bought Digital Assets DA AG, out of Switzerland, as well as IFS Group and Hive out of Australia – bringing the total to 15 smaller companies across the world. Its portfolio companies span Cyprus, Germany, Gibraltar, Singapore, Turkey and the United Arab Emirates, among other countries, according to the documents. Crypto companies often acquire start-ups to quickly get the proper regulatory licenses to set up shop in a new country.
Bankman-Fried also founded trading firm Alameda Research, which accounts for about 6% of FTX’s exchange volumes, according to the documents.
FTX’s U.S. business is technically owned by a parent company, West Realm Shires Inc. As of 2021, FTX U.S. made up less than 5% of FTX’s total revenue. Still, the company is making a push to expand in the U.S. with a series of high-profile ads and sponsorships.
FTX spent roughly 15% of revenue on advertising and marketing in 2021, according to the documents. That may account for its 2022 Super Bowl ad with actor Larry David and high-profile celebrity endorsements by Tom Brady and Giselle Bündchen, who are also equity investors in the company. FTX also bought the naming rights to Miami’s NBA arena, formerly the American Airlines Arena. FTX planned to spend an estimated $900 million in advertising in the coming years, according to the documents.
The crypto exchange is also expanding into stock trading. It launched equities trading weeks after Bankman-Fried took a 7.6% passive stake in Robinhood, fueling speculation that FTX is looking to buy the trading app in a landgrab for U.S. retail accounts. Robinhood and Bankman-Fried have denied that a deal is in the works.
FTX has certainly ramped up its retail expansion efforts. But the documents show that it’s still mainly a venue for more sophisticated traders using derivatives – either futures, or options. About two-thirds of revenue came from futures trading fees, while roughly 16% came from so-called spot trading. Futures and derivatives trades tend to be more lucrative for exchanges.
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Bitcoin slumped about 8% on Friday as markets and investors took in Fed comments that suggested a dovish pivot remained unlikely to happen soon.
The crypto traded at $21,438 Friday at 8:30 a.m. ET, and the decline of $1,751.40 marked its biggest single-day drop in a month, according to CoinDesk data. Friday’s move also continued a five-day decline for the world’s biggest cryptocurrency, which hovered near $25,000 before the sell-off. On the year, bitcoin has dropped over 54%.
Meanwhile, ether dropped nearly 10% over the last 24 hours, trading at $1,690.38. Similar to bitcoin, the token has shed approximately 55% in 2022.
The crypto retreat mirrored an overall risk-off trend, with stocks also selling off, after Fed officials dashed hopes for relief from rate hikes anytime soon.
St. Louis Fed President James Bullard said he’d prefer a 75-basis-point hike next month, which would mark the third straight increase of that size, and said he isn’t ready to say inflation has peaked.
“We should continue to move expeditiously to a level of the policy rate that will put significant downward pressure on inflation,” Bullard told the Wall Street Journal Thursday.
Also on Thursday, San Francisco Fed President Mary Daly told CNN that a September rate hike of 50 or 75 basis points would be “reasonable” and predicted increases will continue into at least 2023, pushing back against calls for a dovish pivot by then.
Meanwhile, the US dollar index notched a fresh one-month high Friday as the central bank signaled its committement to more rate hikes.
As investors pile into the safe haven, the index moved above 107, it’s highest since July 18 and on pace for the largest weekly gain since March 2020.
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Since finding a bottom in mid-June, ether has massively outperformed bitcoin as investors anticipate a major upgrade to the ethereum blockchain.
Bitcoin hit a low of $17,601 on June 19 and is up around 31% since then as of Friday’s trading price, according to CoinDesk data.
Ether also hit its recent low on June 19 at $880.93, but has surged 106% since then.
The huge divergence in performance in the two cryptocurrencies come down to one major factor: a big upgrade in the ethereum blockchain. Ether is the native cryptocurrency of the ethereum network.
Ethereum’s upgrade, called the “merge,” is slated to take place on Sept. 15 after numerous delays. The blockchain will change from a so-called proof-of-work system to a model called proof-of-stake. A full explanation of the merge can be found here.
Proponents say that the move will make the ethereum network faster and more energy-efficient.
“The upcoming Ethereum Merge is the biggest narrative in crypto right now and explains why Ether has left Bitcoin in its wake in the past month,” Antoni Trenchev, co-founder of crypto trading platform Nexo, told CNBC via email.
“A blockchain that pitches itself as being energy efficient will always capture the imagination of the masses and that’s why Ether has the wind in its sails ahead of the Merge, a move to proof of stake.”
Sustainable rally?
Both bitcoin and ether are still more than 60% off their all-time highs — which were reached in November — as a result of a crash in the crypto market this year.
The industry has been plagued by a swathe of bankruptcy and liquidity issues and failed projects which led to nearly $2 trillion of value wiped off the entire market since the peak in mid-November.
But the recent ether rally, which has seen its price double in the space of two months, has been rapid.
One analyst said that the rally could continue but there may be some resistance at around the $2,000 mark. Ether was trading at $1,814 on Friday.
Jacob Joseph, research analyst at data service CryptoCompare, said that with no Federal Open Market Committee meeting scheduled for August and stocks seeing a rebound, “it is reasonable to believe Ethereum can still rally as we edge closer to the Merge.”
“However … $2,000 has proved to be a major resistance for Ether and the asset needs more wind behind its sail to break that level.”
Joseph added that bitcoin is unlikely to outperform ether in the near term.
There are risks to the ether price rally, according to Trenchev.
“Any further (unlikely) delays to the mid-September Merge will see an unwind in a large portion of Ether’s 50% rally since mid-July,” he said.
There is always the chance that traders take profits too on the huge rally, Trenchev said.
“The Merge, if successful, might well prove to be a ‘buy the rumour sell the news’ type event, given the jaw-dropping gains we’ve seen in Ether,” Trenchev added.
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The amount stolen in cryptocurrency heists is up 60% this year according to a report by Chainalysis, which estimates the industry has lost $1.9 billion in hacks from January to July of this year.
That’s up from $1.2 billion reported in hacks the year prior.
“No area of cryptocurrency-based crime is bucking the 2022 trend of declining revenue like stolen funds,” the blockchain analytics firm said in a blog post on Tuesday.
The upward trend is also likely to continue, given the increasing severity of crypto hacks this year. $192 million was just stolen this month in a hack on Nomad bridge alone, followed by another $200 million stolen from 8,000 hacked Solana wallets later in the same week.
Much of that is largely due to DeFi protocols, which hackers have been targeting since 2021, Chainalysis said. Protocols, which are programs that connect crypto transactions without a middleman, can make users vulnerable to hackers, as they’re based on open-source code that can be studied by would-be thieves before executing a heist.
The research firm added that cyberattacks have largely come at the hands of North Korean hackers, who US authorities alleged stole at least $1 billion in crypto hacks and laundered money via Tornado Cash, a so-called crypto mixed which the Treasury Department sanctioned this month. Chainalysis estimated those heists likely stemmed from hackers finding an in through DeFi protocols.
Surprisingly, crypto scams are down this year, despite a big rise in 2021. The amount stolen in scams fell 65% to $1.6 billion, which Chainalysis said is in tandem with the fall in the price of bitcoin, which is down about 50% since January.
“Nobody likes a crypto bear market, but the one silver lining is that illicit cryptocurrency activity has fallen along with legitimate activity … Still, with huge increases in stolen funds, we can’t afford to rest on our laurels,” the research firm warned, pointing to the need for increased regulation in the blockchain.
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A special committee for bankrupt crypto lender Celsius is investigating “allegations of misconduct,” at the company, a lawyer for Celsius said Tuesday.
Joshua Sussberg of Kirkland & Ellis, the lawyer representing Celsius, said in a bankruptcy hearing that the two new board directors that Celsius appointed this summer — David Barse, the former CEO of Third Avenue Management, and Alan Carr, the founder of restructuring services firm Drivetrain — could “take remedial action” depending on the findings of their investigation.
The Celsius bankruptcy docket has swelled with hundreds of letters from Celsius users — its 1.7 million customers are its creditor base in the bankruptcy — with many suggesting they felt defrauded by the positive messaging of founders Alex Mashinsky and Nuke Goldstein.
Those letters pointed to cheery missives like a blog post from June titled, “Damn the Torpedoes, Full Speed Ahead,” which assured Celsius users that the company “has the reserves” to serve them, that they can make withdrawals, and that the company has a “world-class risk management team.”
“We try to read every one of these letters, and we take the accusations therein, as the court does, very seriously,” Sussberg told the court. “If there’s a there there, we are going to find out, and an investigation is being conducted.”
Gregory Pesce of White & Case, who represents the creditors committee (which is made up of a group Celsius customers), told the court about its own investigation. The committee has enlisted M3 Partners as its financial advisors, and hired Elementus, a boutique blockchain consultant to aid its inquiry, Pesce told the court.
Elementus will “help us with the important task of tracking the movements of cryptocurrency on the blockchain so we can find out where the coins went and when, and find out if there’s a way to bring them back to Celsius,” Pesce said.
Celsius is also fielding inquiries from US state and federal agencies and foreign regulators, who are looking into the company’s compliance with state and federal securities laws, Sussberg said. The company has also been cooperating with state lending and money transmitter authorities, he said.
Celsius faces an uncertain road ahead in the Chapter 11 bankruptcy process, where it could pursue a full scale reorganization, a potential sale of assets through bankruptcy, or a combination of both.
At Tuesday’s hearing, Martin Glenn, chief judge of the US Bankruptcy Court for the southern district of New York, also acknowledged broader existential questions facing Celsius, as bereft customers clamored about lost savings. One customer told the court that he had less than $500 left in his checking account, having put most of his savings in Celsius.
“I know this case has generated a great deal of interest, and I think it’s very important that the creditors, whether they’re represented by counsel or not, have an opportunity to make their views known,” Glenn said.
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Dog-themed cryptocurrencies jumped on Monday as broader retail-investor enthusiasm hit the market, particularly as Ethereum works towards its much-anticipated software upgrade.
Dogecoin is up about 14 per cent over the past five days, while Shiba Inu has gained almost 40 per cent, according to pricing data compiled by Bloomberg. The meme tokens are holding their gains even as Bitcoin hovers around $25,000 and Ether is at about $2,000 amid optimism surrounding its upgrade, known as merge, now expected about September 15.
“Dogecoin and Shiba Inu have both broken out over the weekend, clear evidence that the retail investor is back,” said Hayden Hughes, chief executive of social-trading platform Alpha Impact.
There is optimism that both coins will gain as Ethereum did because both are due for upgrades as well, he said.
The crypto market has shown some signs of recovery with its total market cap now at about $1.2 trillion, after having dropped to about $875 billion as of June 19, according to data from CoinGecko.
Lower-than-expected inflation prints out of the US last week boosted hopes that the Federal Reserve might be able to ease off its pace of rate increases, helping riskier assets like crypto.
Ethereum has also been supported after a final test stage before the merge upgrade, which co-founder Vitalik Buterin estimates will occur by about the middle of next month.
Still, not everyone is all-in on the memecoin trend just yet.
“These coins don’t have the depth of market at times like Ether or Bitcoin, so when a bit of demand comes through, they hit a liquidity pocket and fly up, drawing in more speculators,” said Cici Lu, chief executive officer at consulting company Venn Link Partners.
Alpha Impact’s Mr Hughes also sounded a note of caution about the rally.
As the financial world appears to have fallen out of love with bitcoin, the Channel Islands – a string of small British overseas territories – are quietly offering crypto investors incentives to move their money from more traditional tax havens.
Jersey and Guernsey – located off the French coast – are attracting crypto, blockchain, and other fintech firms thanks to their favorable tax laws.
Neither island has capital gains or inheritance tax, making them attractive locations for investment firms.
And even before crypto entered the mainstream, both islands had started competing for the booming asset class. Edmund Hatton, a fintech lead at Digital Jersey, said he first noticed clients discussing bitcoin and crypto back in 2011.
Jersey has attracted firms including CoinShares, which manages assets worth around $3 billion. The Swiss-based group used Jersey to establish its crypto-backed Physical Bitcoin exchange-traded product in January 2021.
Meanwhile, Guernsey Finance’s chief executive made a recent trip to Miami, which has established itself as one of the US’s best-known crypto hubs.
It’s part of an effort to lure western crypto investors to the island and away from rival tax havens like the Cayman Islands, according to Barney Lewis, a Guernsey-based fund manager at the investment firm ZEDRA.
“We’re competing directly against Cayman, and we’re seeing the migration of US funds out of there,” he told Insider. “Brazilian and South American investors have fallen out of love with Cayman, and are moving capital to Guernsey.”
The Channel Islands’ push to lure crypto investors has coincided with a widespread retreat from digital assets over the last nine or 10 months.
Bitcoin has plunged 49.7% to just under $24,000 so far in 2022, while fellow large-cap token ethereum has slid 49.8% to below $1,900 – a far cry from their respective all-time highs of $69,000 and $4,867 less than a year ago.
Stocks have also plummeted in 2022, meaning that traditional investors are starting to doubt crypto’s effectiveness as a potential portfolio diversifier, particularly as consumer inflation has rampaged to multi-year highs around the world.
“Six months ago, you’d see portfolios with traditional equity, fixed income, and then maybe 2.5 to 5% crypto as an inflation hedge,” Lewis said. “But it looks like a terrible inflation hedge now.”
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Ripple Labs Inc, which is embroiled in a high-profile battle with the U.S. securities regulator, is interested in potentially purchasing assets of bankrupt crypto lender Celsius Network, according to a company spokesperson.
“We are interested in learning about Celsius and its assets, and whether any could be relevant to our business,” the spokesperson said, declining to say if Ripple was interested in acquiring Celsius outright.
Ripple has continued to grow through the crypto market turmoil and “is actively looking for M&A opportunities to strategically scale the company,” the spokesperson said.
New Jersey-based Celsius froze withdrawals in June citing “extreme” market conditions and filed for bankruptcy in New York last month, listing a $1.19 billion deficit on its balance sheet.
Last week, lawyers for Ripple submitted filings to the bankruptcy court seeking to be represented in the proceedings. The court approved the filing earlier this week. Ripple is not among Celsius’ major creditors, Celsius’ bankruptcy filings show. Ripple provided the comment in response to Reuters’ queries regarding the court filings.
A lawyer approved to represent Ripple declined to comment. Celsius did not immediately respond to a request for comment.
Cryptocurrencies have had a rocky year, with the world’s largest, bitcoin, down nearly 70% from its all-time high of $69,000 in November. Markets were shaken by the collapse of the popular terraUSD and luna tokens in May, which caused widespread losses for several major industry players.
According to bankruptcy filings, Celsius’ assets include digital assets held in custody accounts, loans, a bitcoin mining business, the company’s own CEL token and bank cash and cryptocurrencies that Celsius has on hand.
Privately owned Ripple has not previously done any major deals. It was valued at around $15 billion following a private stock buyback in January, the company said, although industry valuations have fallen significantly during a cryptocurrency price crash over the past few months that helped topple Celsius and other cryptocurrency firms.
Ripple’s total sales of its cryptocurrency XRP, net of purchases, were $408.9 million in the second quarter, compared with $273.27 million in the first quarter, according to a report the company put out in July.
The company was sued by the U.S. Securities and Exchange Commission (SEC) in 2020 over XRP. The agency alleges that Ripple and its current and former chief executives have been conducting a $1.3 billion unregistered securities offering by selling XRP, which Ripple’s founders created in 2012.
Ripple and the executives have denied the allegations, and the company has argued that XRP has traded and been used as a digital currency.
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America’s largest cryptocurrency exchange Coinbase has reported a massive loss in both revenue and profit in the June quarter – logging $1.1 billion in net loss as revenue declined from $2.033 billion to $803 million from a year-ago quarter which is a drop of nearly 60 percent.
In quarterly terms, net revenue of Coinbase was down 31 percent compared to Q1, driven by lower trading volume.
“Q2 was a tough quarter, with trading volume and transaction revenue each down by 30 percent and 35 percent sequentially, respectively. Both metrics were influenced by a shift in customer and market activity, driven by macroeconomic and crypto credit factors alike,” the company said after reporting its Q2 results late on Tuesday.
“On the expense side, we’ve taken several steps to streamline our cost structure, including an 18 percent employee reduction in June,” it revealed.
“The current downturn came fast and furious, and we are seeing customer behaviour mirror that of past down markets,” the company said in its shareholder letter.
Total trading volume declined to $217 billion, down 30 per cent compared to Q1. In contrast, total crypto spot trading volume declined 3 percent on a sequential basis, resulting in lower trading volume market share, said the company.
“Q2 was a test of durability for crypto companies and a complex quarter overall. Dramatic market movements shifted user behavior and trading volume, which impacted transaction revenue, but also highlighted the strength of our risk management programme,” said Coinbase.
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