Coinbase crypto exchange to close San Francisco headquarters in 2022
May 6, 2021 9:09 am

Coinbase is taking measures to ensure that no office becomes an unofficial headquarters.

Nasdaq-listed cryptocurrency exchange Coinbase is going completely remote and closing is its head offices in San Francisco.

Coinbase announced Wednesday that it will shut down its former headquarters in the Golden Gate City in 2022 as part of its commitment to “being remote first.”

“We’ve committed to having no HQ, and it’s important to show our decentralized workforce that no one location is [more] important than the another,” Coinbase noted. According to the company, the upcoming closure will be an important step in ensuring that no office becomes an unofficial headquarters. “Instead, we will offer a network of smaller offices for our employees to work from if they choose to,” the firm stated.

Coinbase CEO and co-founder Brian Armstrong officially announced the firm's intention to become remote-first and decentralized in February 2021. At the time, 52% of Coinbase employees were those who joined the company in a post-office world, the firm said. Coinbase stressed that about 95% of its employees will still have the option to work at home.

“We now have employees, many who originally worked in San Francisco, all over the country and world. Since January 2020, nearly 250 employees have relocated worldwide, and more than 150 have left San Francisco, representing about 21% of our global and 29% of our San Francisco workforce during that time,” Coinbase wrote.

Coinbase’s move into being remote-first echoes a similar no-headquarters stance by competitor Binance, the world’s largest cryptocurrency exchange. Binance CEO Changpeng Zhao said back in 2019 that office and headquarters are “old concepts like SMS and MMS.”

Bitcoin Cash price jumps 68%: Looming hard fork to boost BCH user base?
May 6, 2021 8:39 am

Bitcoin Cash is on the march ahead of its upcoming network upgrade.

Bitcoin Cash (BCH) burst back into the market capitalization top 10 rankings on Thursday after a 36% overnight surge compounded 68% growth for the week. The per coin valuation of BCH climbed from $1,068 to $1,462 in under 24 hours leading into May 6, adding to a notable increase from its weekly low in the $800 range.

The resurgence of what was once a mainstay of the top-10 lineup comes just over a week ahead of Bitcoin Cash’s scheduled bi-annual hard fork on May 15, which will introduce two small, but not insignificant tweaks to the network.

One sees the removal of Bitcoin Cash’s unconfirmed transaction chain limit, allowing for more micro-transactions to be broadcasted without having to wait for a block confirmation.

Blocks are mined every 10 minutes on Bitcoin Cash, and the old unconfirmed chain limit was capped at 50 transactions. This allowed for high-volume applications to make 50 near-instant transactions before requiring confirmation in a block. This cap will be removed entirely in the upcoming hard fork.

The other major change scheduled for May 15 will see the introduction of multiple “OP_RETURN” outputs. Put simply, the Bitcoin Cash blockchain currently allows for the insertion of miscellaneous data into a transaction, such as text, images and other data types. At present, only one “OP_RETURN” output can be included in a transaction, i.e., one image, text, etc. The upcoming network upgrade will allow for multiple pieces of miscellaneous data to be included in a single transaction.

Both changes feasibly open up Bitcoin Cash to higher volume usage, as well as making it more amenable to current and popular applications such as NFTs. Businesses and app developers stated they specifically wanted to see the changes introduced to expand the blockchain’s capabilities with nonfungible tokens in particular, as noted in the upgrade’s documentation.

Bitcoin Cash’s market price has been on the rise since the start of the year along with the rest of the cryptocurrency sphere. So too has its overall usage according to on-chain data from Bitinfocharts.

The number of daily Bitcoin Cash transactions rose from 20,000 in December to over 150,000 at the time of publication — a 650% increase. Between February and April, Bitcoin Cash regularly processed more transactions on a daily basis than Bitcoin (BTC), peaking at 414,000 to Bitcoin’s 229,000 on March 21.

However, the same data source shows less growth in the number of transactions coming from unique addresses, which only increased 25% from 40,000 to 50,000 — a figure one-fifth of that seen on Bitcoin.

Kazakhstan opens public consultation for central bank digital currency
May 6, 2021 8:24 am

The potential national digital currency in Kazakhstan is not intended to replace either cash or cashless payments, the central bank stressed.

Kazakhstan’s central bank is planning to examine the potential benefits and risks of adopting a state-backed digital currency.

The National Bank of Kazakhstan, or NBRK, published Wednesday a report on a digital tenge pilot project and opened a public consultation on the potential central bank digital currency, or CBDC.

According to the report, the digital tenge would be a new form of money issued by the NBRK to enable the “further development of the national payment system and reduce reliance on cash settlement using unique technical features.” The bank emphasized that the CBDC is not intended to replace either cash or cashless payments, but would rather be an alternative used in parallel with existing payment solutions.

The NBRK noted that the digital tenge would improve competitiveness in the payment market, strengthen the stability of the financial system, as well as contribute to increasing public trust in state-backed payments. “The technology will meet the highest cybersecurity standards. [...] The bank will pay special attention to consumer protection and the privacy of digital tenge users,” the NBRK stated.

The bank will first conduct a comprehensive study of benefits and risks related to a potential CBDC. In collaboration with financial market players and global partners, the NBRK also plans to define the digital tenge's objectives, issuance and distribution methods, the applied technology, and the potential impact on monetary policy, financial stability and the payment ecosystem.

As previously reported, Kazakhstan authorities initially announced that the government started considering a national digital currency in July 2020 alongside plans to increase investment in cryptocurrency mining. Local officials subsequently pointed out the digital tenge’s potential to become a crucial tool in fighting corruption in Kazakhstan.

South Korean regulators tell banks to open the books on cryptocurrency exchanges
May 6, 2021 8:16 am

Authorities are looking to tighten their grip on the cryptocurrency industry.

Financial regulators in South Korea have asked banks to provide information on their dealings with cryptocurrency firms, a local outlet reported on Wednesday, as authorities seek to determine how many cryptocurrency exchanges operate within the country’s borders.

An unnamed regulatory body has requested that banks reveal the corporate accounts of cryptocurrency exchanges that haven’t already implemented real-name accounts for its cryptocurrency customers. Only the four largest exchanges in South Korea have thus far set up real-name accounts, while the rest have until now been operating under the radar.

“Currently, cryptocurrency exchanges can operate without permission from the government, which is why it is difficult to identify the exact number of cryptocurrency exchanges. One way to find out is to track corporate bank accounts that collect customers’ funds,” an anonymous exchange official explained to The Korea Herald.

Estimates suggest there are between 100–200 cryptocurrency exchanges that remain outside the purview of the government. Any businesses which still haven’t registered their activities by Sept. 24 will be liable to fall foul of the revised Act on Reporting and Using Specified Financial Transaction Information, and could face up to five years in prison.

The revised law will require cryptocurrency exchanges to establish appropriate security management systems, form transparent partnerships with local banks, and lodge reports with government authorities.

Early Bitcoin bull market buyers are hodling strong, but short term trading increasing
May 6, 2021 5:54 am

Data from Glassnode shows that bulls who accumulated during the second half of 2020 are still holding strong, despite a surge in short-term speculation this year.

Bitcoin buyers from the early phases of the bull run are still hodling despite BTC’s meteoric surge into new all-time highs, according to data shared by Glassnode.

The on-chain analytics provider shared its “Realized Cap HODL Waves” chart, noting that the number of coins that were last realized on-chain in the past six months has nearly doubled from roughly 40% to 80% since the third quarter of 2020 — showing that much of the BTC purchased during this period has not been touched since.

HODL Waves are used to estimate the time since BTC coins last moved on-chain, while the realized price is derived from the price the coins were last moved at, rather than the current price. As such, the colored bands shown in the Realized Cap HODL Waves chart increase in thickness “as coins mature or are spent into different age bands.”

The data evidences that a large number of BTC purchased during 2020’s later months have not since been traded, with the chart showing coins progressively maturing from the fourth-quarter 2020 onwards.

Analyzing the chart in its May 3 Weekly On-chain report, Glassnode stated: “These are coins accumulated in the early bull market that have remained dormant since.”

Short term

However, the chart also shows that the share of Bitcoin’s supply represented by coins last active between six months and three years ago has plummeted since mid-2020, dropping from more than 55% in July 2020 to around 10% now. This means long-term investors have been capitalizing on Bitcoin’s all-time highs and realizing profits on multi-year positions.

Short-term speculation also appears to have surged since November, peaking with roughly half of Bitcoin’s supply having been realized in the past three months. This suggests short term traders are driving the markets.

Much DAO: Open DeFi unveils DAO to support the entire ecosystem
May 6, 2021 5:26 am

Open DeFi’s new DAO will be community governed through a governance token.

Decentralized finance alliance, Open DeFi, has announced it will create a decentralized autonomous organization, or DAO, to support its vision for an open and global cross-chain DeFi ecosystem.

The alliance launched in late 2020 with the goal of bringing together Western and Eastern DeFi projects and has since seen some of the sector’s top projects join its ranks including as Aave, Synthetix and Balancer.

The responsibilities of the Open DeFi DAO, or OD DAO, will include launching DeFi products across multiple layer-one networks, and exploring multi-chain applications for emerging decentralized assets, including data tokens and nonfungible tokens.

The DAO will also incubate early-stage protocols and infrastructure, and seek to “generate long-term value through community-based strategies.” Open DeFi’s Marek Laskowski stated:

“The goal of Open DAO is to develop a truly integrated multi-chain DeFi ecosystem that will open up liquid markets and establish a new operating system for finance. With the support of our members and our community of more than 10,000 DeFi developers and strategists worldwide, we look forward to accelerating the next generation of DeFi.”

The DAO will be community governed through a governance token, with an announcement emphasizing that “anyone can join” the permissionless organization.

To celebrate the new DAO and support DeFi decentralized finance development, Open DAO and Gitcoin launched a hackathon on May 3. The event has been sponsored by more than 20 major DeFi projects including Uniswap and Polygon, with more than $100,000 in prizes to be awarded to the hackathon’s winners.

Open DeFi was launched by blockchain startup Conflux Network in September 2020 with support from the Chinese central government’s Shanghai and Technology Committee, describing its mission as bridging the Eastern and Western decentralized finance markets. By November, the alliance had doubled its membership to span 16 firms, including four of the 20-largest DeFi protocols by total value locked.

In addition to several decentralized finance heavyweights, Open DeFi’s membership currently includes notable actors within the broader crypto sector including fundraising platform Gitcoin and venture capital firm Sequoia Capital.

Decentralized autonomous organizations have seen tremendous growth over the past six months, with the combined assets under management, or AUM, of the DAO ecosystem increasing more than 600% from $140 million as of Nov. 5, 2020, to roughly $1 billion today, according to data provider, DeepDAO.

DeepDAO currently tracks 108 different DAOs, of which 24 hold more than $1 million in assets, and 17 comprise more than 100 members.

Court orders Kraken to provide information on user transactions to the IRS
May 6, 2021 4:57 am

A court in northern California has ordered Kraken to provide info on users who traded more than $20,000 between 2016 and 2020 to the IRS.

Kraken has been ordered to provide information on its users to who conducted the equivalent of $20,000 in crypto transactions in any one year, between 2016 and 2020, to the Internal Revenue Service.

A federal court in northern California authorized the IRS to serve a “John Doe summons” on Kraken yesterday. The exchange is not alleged to have done anything wrong.

The IRS is after the records of an “ascertainable group or class of persons” who may have failed to comply with tax reporting and internal revenue laws

In addition, the IRS will check if Kraken has been compliant with its record-keeping obligations such as the Know-Your-Customer rules.

“This John Doe summons is part of our effort to uncover those who are trying to skirt reporting and avoid paying their fair share, ” said IRS Commissioner Chuck Rettig in the court’s press release.

Acting Assistant Attorney General David Hubbert of the Justice Department's Tax Division said:

"Those who transact with cryptocurrency must meet their tax obligations like any other taxpayer."

A John Doe summons is used by the IRS to get the names and information about all taxpayers from a specified description, such as the '$20,000 and over' class stated in the latest summons.

According to the supporting declaration, the IRS is after information on five different classes of U.S taxpayer. Some of the activities the IRS are looking into, include: reporting limited income despite trading crypto between a range of $5 million to $56 million, operating multiple accounts while exchanging fiat currency to digital assets and back to fiat for no apparent economic benefit.

The IRS is also keeping an eye on people who submitted delinquent tax returns in 2017 and 2018 with income more than $2 million each year, with activity consisting of more than $23 million in deposits and withdrawals at various crypto exchanges.

The road to this latest fishing expedition was reportedly paved by the first John Doe summons on Coinbase in 2016, in which the IRS obtained the information of 13,000 Coinbase customers.

Coinbase has been under scrutiny ever since, and in November 2020 tax lawyers of Coinbase warned customers that it had been tracking an increase in IRS enforcement against users who fail to comply with tax and reporting requirements.

Cointelegraph reported on April 18 that a Massachusetts federal court had entered an order authorizing the IRS to serve a “John Doe summons” on Circle Internet Financial Inc.

Signs the Bitcoin hashrate is starting to move away from China
May 6, 2021 4:52 am

The U.S. is slowly increasing its share of the Bitcoin hashrate.

Although the majority of Bitcoin mining is still based in China, there are signs it is beginning to shift elsewhere.

Chun Wang, the co-founder of one of Bitcoin’s largest mining pools, F2Pool, reported that China represented less than half of its hash rate during April 2020. Wung noted it was the first time the pool had seen Chinese miners represent a minority of hash rate in its eight years of operation. "The shifting is real," he said.

Wang reposted data published April 22 by Digital Currency Group’s Barry Silbert, which revealed that the U.S.-based Bitcoin mining pool, Foundry, had climbed to rank among the top 5 pools globally during April, commanding a 7.6% share of the hashrate.

“Bitcoin hashrate is quickly shifting from China to North America,” Silbert claimed. The leading pool remains AntPool, which is operated by Chinese mining hardware manufacturer Bitmain, with an 18.6% share of the total hashrate.

The University of Cambridge calculated that China’s mining dominance was around 65% in April 2020.  Noting those figures in January 2021, BTC mining publication Miner Daily estimated China's share had fallen to 55% of BTC hashing power by the start of this year, with the U.S. accounting for 11%.

On April 30, Cointelegraph reported that China’s crypto mining operations may be set for stricter regulations in the future, which could further fuel the country's hashrate exodus. China has also recently been examining miners' power usage in light of its own carbon commitments.

In late February, it was reported that authorities of the Chinese autonomous region of Inner Mongolia proposed closing down all local mining facilities to reduce energy consumption in the region. The region accounts for as much as 8% of global hash.

In an article on May 5, Bitcoin podcast host Marty Bent said that the F2Pool findings are a confirmation of a trend in the mining world of hashrate production becoming more geographically distributed.

He added that this would help dissipate some of the “China controls mining” FUD surrounding the potential for the country's central government to attack the network.

“It is great to have some data coming from Chinese pools that proves the percentage of overall hashrate production is being reduced within China's borders.”

The FUD surrounding Bitcoin’s energy consumption and environmental impact may also reduce as more mining operations switch to renewable energy, especially in the U.S. which has tighter regulations.

According to a Nasdaq report on May 4, Texas has become a mecca for Bitcoin mining farms due to its low energy costs and the fact that the majority comes from renewables such as wind and solar.

VanEck and BetaShares apply for Aussie crypto ETFs as family offices snap up BTC
May 6, 2021 2:51 am

Numerous institutional crypto product applications have been lodged as Australians buy more Bitcoin.

Family offices in Australia are reportedly piling into digital assets as fund managers compete to list the country’s first cryptocurrency-backed exchange-traded fund.

VanEck and BetaShares have each lodged submissions with the Australian Securities Exchange (ASX) following a rejection of industry speculation in March that the exchange was opposed to such products. The ASX confirmed that had received formal applications from several other investment managers eager to launch their own Bitcoin ETFs.

Earlier this week VanEck Asia-Pacific chief executive Arian Neiron stated that the crypto asset movement had become more mainstream and thaa Bitcoin ETF on the ASX could democratize crypto assets for all types of investors.

Australian ETF provider BetaShares also confirmed an ASX application but did not specify whether it was planning a Bitcoin product or one more broadly backed by digital assets.

Managing director Alex Vynokur stated that there was significant demand for such products, adding:

“From our perspective, a regulated structure of an ETF is the more appropriate structure for a significant number of investors, rather [than] buying Bitcoin or other cryptocurrencies on unregulated exchanges.”

The ASX declined to speculate or comment on the applications but stated that it is closely monitoring developments in relation to listed investments involving Bitcoin and other cryptocurrencies.

The moves have been viewed as bullish by investors down under as Australia’s wealthiest families begin to diversify their portfolios with crypto assets.

According to a Business Insider Australia report, listed blockchain investment company DigitalX has been offering assistance to increasing numbers of family offices eager to invest in the maturing digital asset space. Executive director Leigh Travers said that investors are replacing their gold portions of portfolios with Bitcoin, adding:

“The biggest change has been around institutional interest which has helped evolve it from a speculative asset to an asset that is part of a diversified portfolio and has the strongest macro winds of any investment possible I think,”

Travers cited DeFi as being one factor that has made this bull run different from the previous one in 2017/18.

The report revealed that the average family office in Australia and New Zealand controls more than $600 million each and the moves into crypto assets signal just how ubiquitous the asset class is becoming.

As reported by Cointelegraph, Australia’s securities regulator (ASIC) wants crypto firms to engage with them to help them foster innovation in the region.

In late April, the U.S. SEC delayed the decision on VanEck’s Bitcoin ETF until June 17.

PayPal says its crypto efforts are producing 'really great results' on earnings call
May 6, 2021 2:44 am

PayPal’s CEO believes crypto assets are forging a more equitable and inclusive financial system.

During PayPal's Quarter 1 2021 investor update call, president and CEO, Dan Schulman said digital assets had performed strongly for the company and that he believes crypto and central bank digital currencies will be a driving force in forging “a more equitable financial system.”

Following the success of PayPal’s move to embrace crypto assets, much of the call centered around the firm’s recent and future plans for digital assets.

“We believe the current technological underpinnings of our financial system will be substantially upgraded over the coming years,” Schulman said, adding this would help efforts to recover from the pandemic:

“Both cryptocurrency and central bank-issued digital currencies can play a critical role in shaping a more inclusive recovery and a more equitable financial system.”

The CEO stated the payments provider has an extensive crypto roadmap planned, noting its digital asset innovations will be pursued “in partnership with governments and in compliance with local, national and global regulatory frameworks.” 

“We’ve got a tremendous amount of really great results going on tactically with our crypto efforts,” he added.

The firm’s shares rose by more than 5% on Wednesday, April 5 in response to the earnings update, after PayPal revealed its per-share earnings had outperformed expectations by more than 20%, coming in at $1.22 each adjusted. PayPal’s $6.03 billion in revenue also exceeded predictions by 2%.

Total payment volume was $20 billion more than expected, finishing the quarter at $285 billion. The firm also added 14.5 million new active accounts, bringing its user base to 392 million.

Schulman asserted PayPal’s adoption of digital assets “has been widely embraced,” noting productive conversations with “central banks, regulators and government officials around the world.”

The firm described its adoption of digital assets as bolstering the utility for cryptocurrency by enabling “millions of merchants around the globe” to accept crypto payments. However, transactions made in digital assets within PayPal’s merchant network are currently settled in fiat currency.

PayPal’s Venmo app also introduced buy, hold, and sell capabilities last month. PayPal noted that its 2020 Venmo Customer Behavior Study found that 30% of customers had already begun purchasing crypto assets — of which 20% began buying amid the coronavirus pandemic.

Schulman also noted the firm closed its acquisition of crypto asset custodian, Curv, last month, stating: “Curv's talented team will bolster our existing technology resources and accelerate our efforts to shape a new financial infrastructure that is efficient, low cost and inclusive.”

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