Last week saw the crypto market shrug off uncertainty from Washington to break the $2T market cap barrier for the first time since May as well as news of the largest crypto hack to date which the broader market seemed to have little reaction to. We dive into these and the other industry news highlights.
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FALCONX, BUOYED BY INSTITUTIONAL CRYPTO DEMAND, RAISES $210 MILLION
Last Tuesday, FalconX, one of several platforms seeking to draw major investors to the cryptocurrency market, announced a a Series C funding round with a valuation of $3.75 billion. The round will help FalconX further scale its business, helping its clients adjust to operating in the 24-7 market and explore new opportunities in decentralised finance and stablecoins. Their Series B round valued the firm at $675 million.
Investors in the round included Tiger Global, Alimeter Capital, B Capital and Sapphire Ventures. American Express’ venture arm and Mirae Asset also participated.
CEO Raghu Yarlagadda said in an interview with The Block that “institutions were coming in with bitcoin as an inflation hedge,” referring to the environment when it raised this spring. Since then, clients have expanded their scope, according to Yarlagadda:”They are going a lot deeper. There is new interest in Ethereum…Definitely a lot of questions on DeFi and yield generation.”
CoindeskTV’s First Mover includes Raghu Yarlagadda’s explanation of the latest funding round, plus takes a look at the surge of institutional interests in crypto as record crypto and blockchain investments in 2021 have already exceeded last year’s total.
OFFICIALS TO CLARIFY CRYPTO TAX REPORTING RULES IN INFRASTRUCTURE BILL
The United States Treasury Department is reportedly seeking to clarify the definition of brokers in the bipartisan infrastructure bill passed by the Senate last week, offering cautious reassurance that the new legislation won’t impact innovation and growth in the blockchain industry.
As reported by Bloomberg, the Treasury Department is preparing guidance on what types of crypto companies will be required to comply with new IRS reporting requirements. The report indicated that the definition of “broker” could be narrowed from what many fear would include protocol developers and wallet providers that currently operate in the cryptocurrency industry. At the time of writing, the Treasury Department has yet to confirm publicly whether these plans are true.
POLY NETWORK LOSES $611 MILLION OF USER FUNDS IN LARGEST HACK IN DEFI HISTORY
On Tuesday, hackers perpetrated the biggest theft in the world of DeFi, stealing more than $600m in cryptocurrency from the interoperability protocol, Poly Network.
More than $250m was stolen from Binance Smart Chain, over $85m in USDC was taken from the Polygon network and approximately $270m from the Ethereum network. But then, in an unusual twist, the attacker returned a substantial amount of the stolen funds, commenting in messages shared by Elliptic that they had perpetrated the attack ‘for fun’, and would be returning all the tokens. Some blockchain analysts have speculated that the hacker may have found it too difficult to launder stolen cryptocurrency on such a scale.
COINBASE’S IMPRESSIVE EARNINGS REVEALED AFTER RECORD QUARTER
Coinbase posted record 2021Q2 earnings on Tuesday, beating revenue and volume predictions by over 18%, due mainly to a strong yet volatile second quarter in the crypto markets which fuelled trading activity. In order to diversify its revenue streams, Coinbase shared plans to add services such as lending and custody.
Here Sam Bankman-Fried unpacks Coinbase’s Q2 results.
WEALTH MANAGERS GAIN EXPOSURE TO BITCOIN VIA GRAYSCALE
According to new SEC filings, the Grayscale Bitcoin Trust, which trades under the ticker symbol GBTC, is being snatched up by institutional managers looking for more traditional exposure to digital assets.
Four wealth management companies have acquired shares of Grayscale’s Bitcoin Investment Trust, offering further evidence of institutional adoption of digital assets.
Clear Perspective Advisors, an Illinois-based wealth manager, revealed direct ownership of 7,790 GBTC shares on Friday. Ohio-based Ancora Advisors scooped up 13,945 shares of GBTC at the end of June and two additional firms added to their GBTC holdings for the 30th June reporting period. Boston Private Wealth, which had previously reported 88,189 GBTC shares as of 31st March, increased its exposure to 103,469 shares. Ohio-based manager Parkwood increased its holdings to 125,000 shares from 93,000 at the end of March.
CARDANO’S ALONZO UPGRADE DATE REVEALED
Over the past week, the price of ADA has climbed 50% and even briefly overtook BNB on Friday, spiking over the $2 handle nearing the crypto asset’s all-time high that took place three months ago. The cryptoasset’s recent performance can be attributed to the announcement of the Alonzo upgrade, which is set to take place on 12th September. The highly anticipated “Alonzo Purple” upgrade aims to boost the Cardano project with fully functional, advanced smart contract solutions, as revealed by IOHK, the blockchain development team behind Cardano.
Providing all goes well in September, smart contract functionality has the potential to take Cardano to the next level.