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| Here's your daily Inside Cryptocurrency briefing: - 💰 Coinbase's plans to offer $1B convertible senior notes for its existing debts and general corporate purposes,
- 👨⚖️ A U.S. judge approving Terraform Labs to hire the law firm Dentons to be defended in a lawsuit filed by the top U.S. securities regulator,
- ✅ OKX's in-principle approval in Singapore, and more.
Enjoy your reading! Doğa
p/dogayurduneri | |
| 1 | | Coinbase, the largest U.S. crypto exchange, has announced that it will offer $1B in convertible senior notes. The firm said it would use the proceeds from the sales of the notes to pay its existing debts and for general corporate purposes, such as working capital and capital expenditures, the cost of the potential capped call transactions, and the new acquisitions. More: - The notes will fall due in 2030, meaning that the purchasers will be able to convert the notes as of that year.
- Coinbase will sell the notes only to institutional investors through a private offering.
- The purchasers will be able to convert the notes into cash, shares of Coinbase's Class A common stock, or a combination of these two options.
- The firm will also offer an option allowing buyers to purchase up to an additional $150M of the securities within the first 30 days.
- The company plans to repay the proceeds at maturity or repurchase or redeem the notes before maturity.
Zoom Out: - Convertible senior notes are a type of security that allows the purchaser to convert the note into a predefined amount of the issuer's shares or cash.
- The U.S.-based business intelligence firm MicroStrategy, the largest corporate Bitcoin holder, also recently offered convertible senior notes to buy more Bitcoin (BTC), boosting its existing digital asset reserves.
- Following the offering, the firm bought an additional 12,000 Bitcoin for $821.7M and brought its reserves to 205,000 tokens worth over $14B under current prices.
- The $800M of the purchase was funded with the proceeds from the convertible senior note offering.
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What the numbers say: The native tokens of the Layer-2 Ethereum scaling networks, including Optimism, Arbitrum, and Polygon, experienced notable price increases on Wednesday. Optimism's native token, OP, reached as much as $4.57, increasing 7% from the $4.20 level a day earlier. Arbitrum and Polygon's native tokens, ARB and MATIC, also saw a similar surge in value, increasing by 15% and 12% over the past 24 hours, respectively. Relevance: The sudden jump in the tokens' prices came shortly before the long-awaited Dencun upgrade on the Ethereum blockchain network. The upgrade successfully went live on the main network on Wednesday. It was considered the biggest improvement on Ethereum since the Merge upgrade in September 2022 and the Shangai upgrade in April 2023. The move has brought a new feature to the network, improving the transactions' cost, speed, and scalability. A key element of the upgrade has become adding a new space dubbed blobs to the blockchain for storing data on the network at a lower cost, separately from regular transactions. The native tokens of Ethereum-based Layer-2 solutions reacted to the upgrade positively as the crypto community expects the improvement to enable mass scalability through the Layer-2 solutions by minimizing expenses related to data availability. What it means: Layer-2 networks refer to the blockchain ecosystems that aim to improve speed and reduce transaction fees on the main network. These networks remove transaction data from the main blockchain, compress it, and then re-post it to the original chain. | | | |
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| 3 | | U.S. Bankruptcy Judge Brendan Shannon has approved Terraform Labs, the firm behind the collapsed Terra ecosystem, to hire the law firm Dentons to be defended in the lawsuit filed by the U.S. Securities and Exchange Commission (SEC). During a recent hearing, Shannon ruled that Terraform Labs' legal spending on Dentons was necessary and appropriate, even though it was funded through the firm's limited resources. More: - The move came several weeks after Terraform Labs' creditors, the SEC, and the Office of the U.S. Trustee, which is the U.S. Department of Justice's (DOJ) bankruptcy watchdog, objected to the retainer paid by the firm to Dentons.
- At the time, the objectors argued that Terraform Labs used a large portion of its available cash, which could be distributed to creditors, without the content of its creditors and outside of the bankruptcy court oversight.
- The objection pointed out that the firm sent a total of $166M to Dentons since the beginning of 2023, and the law firm still held more than $70M in advance legal fees.
- Dentons agreed to send $48M back to Terraform Labs to resolve these concerns, pledging to conduct its future legal work under the oversight of the bankruptcy court.
- However, the law firm will keep the remaining retainer and use it to pay legal costs resulting from the SEC's lawsuit against Terraform Labs.
- The SEC sued Terraform Labs and its co-founder Do Kwon in February last year, accusing the two of defrauding customers and selling billions of dollars in digital assets that were unregistered securities.
- An upcoming trial will aim to determine the amount of fee to be paid by Terraform Labs to settle securities fraud charges of the SEC.
- Terraform Labs filed for Chapter 11 bankruptcy protection in the U.S. in January this year, stating that the bankruptcy filing would help it appeal the SEC's lawsuit.
Zoom Out: - The multibillion-dollar Terra ecosystem collapsed in 2022 after the prices of its native tokens, Luna and TerraUSD, plummeted nearly to zero in May and lost all their value against the U.S. dollar (USD).
- The downfall caused over $60B to be wiped off the crypto market, triggering a prolonged crypto winter.
- Do Kwon is currently serving his prison sentence for document forgery in Montenegro, where he was arrested in March last year, and awaiting his extradition to the U.S. or his native South Korea.
- The co-founder faces various charges in both countries, including fraud, securities law violations, deceiving investors, racket collecting, and building a Ponzi scheme.
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| 4 | | Twitter founder Jack Dorsey's digital payments company, Block, has started shipping its much-hyped self-custody Bitcoin (BTC) wallet, BitKey. The move came nearly three months after the firm opened pre-orders for the device in 95 countries. More: - BitKey allows users to store and fully control their crypto assets without needing any third party.
- The hexagon-shaped device can connect crypto exchanges and payment services, including Coinbase and Cash App, to transfer assets between different platforms and allow users to purchase and sell Bitcoin within its app.
- The device uses three private keys that offer users access to their digital assets, with two held by customers and one residing on BitKey's servers.
- Users hold one of the keys in the mobile app while the other one is stored in the wallet offline, providing recovery if the mobile phone is lost.
- On the other hand, the third key kept in servers offers assistance when an additional layer of security is needed or if customers lose both the phone and the wallet itself.
Zoom Out: - Jack Dorsey first disclosed that Block was working on a new hardware wallet in 2021.
- The device was officially launched in December last year after a beta testing phase in the summer.
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| 5 | | Seychelles-based crypto exchange OKX has obtained in-principle approval for a major payment institution license in Singapore through its local subsidiary, OKX SG. The approval was granted to the firm by the Monetary Authority of Singapore (MAS), the city-state's financial market regulator. More: - The firm must demonstrate its commitment to complying with the strong anti-money laundering measures before obtaining the full license in the city-state.
- The full approval will allow OKX to offer its digital asset services in the region, with permission to exceed the $2.2M limit for any payment services and the monthly $4.4M limit for two or more payment services.
- OKX President Hong Fang said Singapore was always a priority market for them in terms of their global strategy, and they have been investing in the region for some time.
- Fang also described the city-state's regulatory framework as clear and thoughtful.
- OKX will first focus on offering its spot trading products in Singapore.
- The platform will later work on bringing local banking connections to its customers in the region and expand its offerings.
- The in-principle license in Singapore came shortly after OKX expanded its services to several other markets, including Brazil, Argentina, and Turkey.
- The platform is also operational in Hong Kong, the United Arab Emirates (UAE), the Bahamas, and France.
Zoom Out: - The MAS is most famous for its strict stance on the crypto market and stingy attitude toward approving a license.
- Several other crypto-related firms have also managed to obtain full or in-principle approval in the city-state so far, including Upbit, BitGo, Bitstamp, Revolut, Coinbase, Crypto.com, Blockchain.com, Paxos, Ripple, and Circle.
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| 6 | | Tensor, an NFT marketplace for trading the Solana blockchain network-based NFTs, has announced that it will soon issue a governance token under the ticker TNSR. The platform has yet to disclose if it will launch an airdrop for the upcoming token. More: - Tensor pointed out that it will share more details about the token's release at a later date.
- The announcement also revealed that all the Tensor protocols will now be adopted by the Tensor Foundation, a new organization dedicated to supporting the Tensor ecosystem.
- The marketplace said the Tensor community will use the TNSR token to govern the protocols.
- Tensor, launched in 2022, currently has a 33.49% market share in the NFT trading industry.
- The Tensor protocols have traded more than $2B of Solana-based NFTs so far and facilitated over 70% of the NFT trading on the Solana network in the last 90 days.
Zoom Out: - Governance tokens refer to cryptocurrencies that give holders voting rights over proposed revisions and changes in blockchain-based protocols and smart contracts.
- Mostly, those who have used the protocol heavily receive bigger allocations of the token.
- In March 2022, Tensor raised $3M in funding in an investment round led by the venture capital (VC) firm Placeholder.
- At the time, the platform labeled itself as the Blur of Solana, referring to the Blur NFT marketplace targeting professional traders.
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- Bitcoin (BTC), the largest cryptocurrency by market cap, surpassed the $73,000 level on Wednesday, hitting another new all-time high.
- The Nigerian government has requested Binance, the largest crypto exchange by trading volume, to provide information on its top 100 users in the country, increasing its crackdown on the platform further.
- A 112-page study by the U.S. Patent and Trademark Office (USPTO) and the U.S. Copyright Office has concluded that there is no need for NFT-specific legislation, and the current intellectual property laws are adequate to deal with issues related to NFT copyright and trademark infringement.
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 | Staff Writer | | Doga is a tech and science editor who has been writing news for nearly 10 years. She worked for leading tech platforms and mainstrem media channels as an editor and presenter throughout his career. Then, she carried her know-how to more than one platform. She is a part-time cat lover and binge-watcher, and also fond of science, space, and emerging tech. She always has a story to tell. She is a bit addict to the laughter and -unfortunately- the '90s culture. | | This newsletter was edited by Aaron Crutchfield | |
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