Crypto News Headlines (11-May-2022)

Townsquare Media, a New York-based digital marketing and radio station company, is the latest business to back the original cryptocurrency with its addition of $5 million worth of Bitcoin (BTC) to its balance sheet.

A filing with the United States Securities and Exchange Commission (SEC) disclosing Townsquare’s purchase of Bitcoin was first picked up by Macroscope, a Twitter account that focuses on institutional trading, posted the find on Monday.

According to the filing, the company “invested an aggregate of $5 million into Bitcoin” during the first quarter of 2021 and provided an explanation for why it chose a crypto investment, stating:

“The Company believes in the long-term potential of digital assets as an investment. The Company may increase or decrease its holdings of digital assets at any time based on our view of market conditions.”

Founder and CEO of business-intelligence software firm MicroStrategy (MSTR) Michael Saylor took to Twitter on Tuesday morning in an attempt to clarify the company’s obligations with respect to its bitcoin-backed loans.

“MicroStrategy has a $205 million term loan and needs to maintain $410 million as collateral,” said Saylor. Linking to his company’s Q1 investor presentation, Saylor noted that of MicroStrategy’s 129,218 bitcoin (BTC) stash, 115,109 (or more than $3 billion at current prices) remains unencumbered.

Bitcoin would need to fall all the way to $3,562 before the company would run out of enough of the crypto to pledge for that loan, but even at that point MicroStrategy could post some other collateral, said Saylor. His implication is that theoretically there’s almost no price low enough at which his firm would need to be a forced seller of bitcoin.

Chainalysis, one of the world’s largest crypto and blockchain intelligence firms, has reportedly raised $170 million in a Series F funding round led by GIC, a Singapore-based sovereign wealth fund.

The news was first reported by The Information, citing a person with direct knowledge of the matter.

Founded in 2014, Chainalysis provides software tools that allow government agencies, financial institutions and private companies, including crypto exchanges and wallet providers, to detect and prevent crypto-related crime and money laundering.

The source said that the fresh funding doubles Chainalysis’ valuation, bringing it to a whopping $8.6 billion, including the investment.

In March 2021, Chainalysis raised $100 million in a Series D funding round, propelling its valuation above $2 billion, followed by a $100 million Series E financing last June, which brought the crypto sleuthing firm’s valuation to $4.2 billion.

The total amount the firm raised to date is now standing at $536 million, per Crunchbase.

The U.K. government outlined its legislative agenda for the next parliamentary year in the Queen’s Speech delivered Tuesday by Prince Charles, the monarch’s son and first in line to the throne. The Queen’s Speech is written by the government and read out by the monarch as part of the official state opening of parliament.

Speaking to both the House of Lords and the House of Commons, Prince Charles detailed numerous commitments that Her Majesty’s government will carry out. He mentioned that 22 bills will be introduced, telling parliament that the government’s “priority is to grow and strengthen the economy and help ease the cost of living for families.”

One of the bills is the “Financial Services and Markets Bill,” according to the background and briefing notes of the Queen’s Speech posted on the government’s website. The purpose of this bill is to “maintain and enhance the U.K.’s position as a global leader in financial services” and “seize the benefits of Brexit,” the document details.

Among the benefits of this bill is:

Harnessing the opportunities of innovative technologies in financial services, including supporting the safe adoption of cryptocurrencies and resilient outsourcing to technology providers.

Superscript, a U.K. startup and Lloyd’s of London insurance market broker, has launched a dedicated product for crypto businesses.

“Daylight,” as the new insurance offering for digital-asset firms is called, begins with technology liability and cyber insurance, which serve as protection against everything from ransomware attacks to unintentional copyright infringement.

In recent years, cryptocurrency and insurance have been uneasy bedfellows, with a shortage of capacity in the market and many large crypto exchanges simply opting to self-insure, holding reserves of Bitcoin to cover their losses, typically in case of a hack of “hot” wallets, or those connected to the internet.

“I guess we have a concern that [the Reserve Bank of India] may be actually in violation of the Supreme Court ruling,” said Coinbase CEO Brian Armstrong.

Just three days after debuting in the Indian market, United States-based crypto exchange Coinbase abruptly stopped using United Payments Interface (UPI), the most popular payment service in the region. Coinbase CEO Brian Armstrong later revealed that the service disruption was due to an “informal pressure” from India’s central bank.

During Coinbase’s 2022 Quarterly Earnings call, Armstrong spoke about the company’s global expansion plans while acknowledging Coinbase’s role in starting the conversation with regulators related to crypto adoption. When asked about the impact of the recent disruption related to offering payment services in India, Armstrong stated:

“So a few days after launching, we ended up disabling UPI because of some informal pressure from the Reserve Bank of India (RBI), which is kind of the Treasury equivalent there.”

Trust Wallet said on Monday that it is one of three initial launch partners for Instagram’s integration of non-fungible tokens.

Instagram unveiled its “Digital Collectibles” product at the start of this week as part of a creator monetization strategy. Trust Wallet said that with a few taps, creators and collectors can easily start sharing their NFTs on Instagram.

Trust Wallet is Binance’s official cryptocurrency wallet, and boasts over 25 million users. It bills itself as an inclusive wallet, with support for over 53 blockchains and over 1 million assets.

Coinbase delivered disappointing results on Tuesday, causing its stock to plunge, but top executives suggested on an earnings call that the company has no major moves planned—such as acquiring or merging with Robinhood.

COO Emilie Choi gave short shrift to the idea of a tie-up with the trading app, a topic that was the most upvoted item on a discussion board for investors that Coinbase uses to inform its investor calls. (The idea is seen by some as a quick way for Coinbase to offer stock trading, which is at the heart of Robinhood’s business.)

“We are a crypto company, crypto is in our DNA and everything we do is in service of building the crypto economy and increasing economic freedom, so we don’t plan on offering traditional securities unless it would massively accelerate crypto adoption,” said Choi.

Instead, Choi talked up the numerous investments made by the company’s venture capital arm, which have given it a stake in many of the leading firms in Web3, such as Alchemy and Uniswap.

Bitso, one of the biggest cryptocurrency unicorns in Latam, is expanding its services offerings by introducing new yield services for customers. A new program, called Bitso+, will offer users different yield plans according to the cryptocurrency and the quantities present in the wallet of the exchange.

This program, which was available to many users before and is now open for all users, offers up to 6% yield for bitcoin deposits, and up to 15% yield in stablecoins. However, this depends on the amount that the user has in the exchange wallet. For example, for bitcoin, the 6% yield applies for the first 0.4 BTC, and then 3.5% applies for the BTC outside of that range. In the same way, if the stablecoins invested go above $1,000, the yield goes down to 10%, and from $20,000 and up, a 7% yield applies.

David Álvarez, from Bitso+, remarked on the importance of USD-pegged stablecoins in this system for the early adopters. Álvarez stated:

It will be a dollar and it is an easier way to understand the benefits of cryptocurrencies.

Coinbase founder and CEO Brian Armstrong said in a tweet Wednesday that new language found in its latest 10-Q filing is simply a new requirement of the U.S. Securities and Exchange Commission and that Coinbase is in no danger of bankruptcy.

Armstrong said the exchange had “included a new risk factor based on an SEC requirement called SAB 121, which is a newly required disclosure for public companies that hold crypto assets for third parties.”

The 10-Q, filed with the SEC Tuesday, says: “Because custodially held crypto assets may be considered to be the property of a bankruptcy estate, in the event of a bankruptcy, the crypto assets we hold in custody on behalf of our customers could be subject to bankruptcy proceedings and such customers could be treated as our general unsecured creditors,” Coinbase wrote in its recent filing.

Coinbase also disclosed that this means that customers may believe keeping their coins on the platform would be considered “more risky,” which would in turn materially impact its financial position.

In the event of bankruptcy, a general unsecured creditor would be considered having the most to lose, as they are last in line for claims.