The price of Bitcoin is $47,806 at the time of publication, making MicroStrategy's current 125,051 BTC holdings worth roughly $6 billion.
MacroStrategy, a subsidiary of business intelligence firm MicroStrategy, said it will purchase Bitcoin after obtaining a multimillion dollar loan from Silvergate Bank.
In a Tuesday announcement, MicroStrategy said Silvergate issued a $205 million loan “secured by certain Bitcoin held in MacroStrategy’s collateral account.” The firm's subsidiary MacroStrategy will be using the proceeds of the loan to purchase Bitcoin (BTC), pay fees and interest related to the loan, and handle general corporate expenses.
“The SEN Leverage loan gives us an opportunity to further our position as the leading public company investor in Bitcoin,” said MicroStrategy CEO Michael Saylor. “Using the capital from the loan, we’ve effectively turned our Bitcoin into productive collateral, which allows us to further execute against our business strategy.”
Launched in 2020, the Silvergate Exchange Network leverage service allows firms to secure BTC-collateralized loans for U.S. dollars. According to the bank, it had roughly more than $570 million in commitments as of Dec. 31.
Since making a $250-million BTC investment in August 2020, MicroStrategy now holds billions in the crypto asset following separate buys using the company’s cash on hand and proceeds of sales of convertible senior notes in private offerings to institutional buyers. With the BTC price $47,806 at the time of publication, the firm’s 125,051 coins are worth roughly $6 billion.
Silvergate has helped provide capital to many companies involved in the crypto and blockchain industry. In October, the bank issued a $100-million credit line to crypto mining firm Marathon Digital to be used for funding its operations as well as expanding the number of BTC miners. Crypto.com announced a partnership with Silvergate in November aimed at allowing institutional clients to deposit and withdraw from the crypto exchange using U.S. dollars.
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"We are in touch with security teams at major exchanges and will be reaching out to all in the coming days," said the team at Ronin.
According to Axie Infinity's official Discord and Ronin Network's official Twitter thread, along with its Substack page, the Ronin bridge and Katana Dex have been halted after suffering an exploit for 173,600 Ethereum (ETH) and 25.5 million USD Coin (USDC), worth a combined $612 million at Tuesday's prices. In a statement, its developers said they are "currently working with law enforcement officials, forensic cryptographers and our investors to make sure that all funds are recovered or reimbursed. All of the AXS, RON and SLP [tokens] on Ronin are safe right now."
As told by Ronin developers, the attacker used hacked private keys in order to forge fake withdrawals, draining the funds from the Ronin bridge in just two transactions. More importantly, the hack occurred on March 23 but was only discovered on Tuesday after a user allegedly uncovered issues after failing to withdraw 5,000 in ETH from the Ronin bridge. At the time of publication, RON, Ronin's primary governance token, has fallen nearly 20% to $1.88 in the past hour.
Sky Mavis’ Ronin chain currently consists of nine validator nodes, of which at least five signatures are needed to recognize a deposit or withdrawal event. The attacker managed to gain control over five private keys, consisting of Sky Mavis’s four Ronin validators and a third-party validator run by Axie Decentralized Autonomous Organization, or DAO. Obtaining unauthorized access to the latter was especially time-consuming.
Last November, when Sky Mavis, the developer of the Axie Infinity and Ronin ecosystems, requested help from the Axie DAO, to distribute free transactions due to a surge in the number of users. The Axie DAO whitelisted Sky Mavis to sign various transactions on its behalf, and the process was discontinued in December. However, access to the whitelist was not revoked.
Once the attacker obtained access to Sky Mavis systems, they acquired the final signature from the Axie DAO validator, thereby completing the node threshold required for the illicit siphoning of funds from Ronin. At the time of publication, most of the hacked funds are still sitting inside the attacker's wallet.
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The fruits of President Biden’s EO will not materialize until months from now, but the need for regulatory change is far-reaching.
United States President Joe Biden’s Executive Order on Ensuring Responsible Development of Digital Assets was widely praised for acknowledging cryptocurrency and blockchain technology’s place in the world and setting the U.S. on a path toward more comprehensive regulation of the sector. The order, or EO, sets a research agenda that encompasses consumer protection, financial stability, crime and national security, U.S. leadership, servicing the underbanked and responsible development.
With a number of reports being commissioned for delivery over the course of months and no specific actions prescribed, it is impossible to gauge the effect the order will ultimately have on the sector, or even foresee how its goals will be met. However, that does not prevent some conclusions from being drawn from other things that are not in the text of the EO.
Tangible effects
Senator Cynthia Lummis, a highly visible proponent of crypto, commented, “I think his executive order misses the fact that the overwhelming majority of digital asset users are law-abiding and trying to make our financial system better.”
Lummis’ comment points to the emphasis in the EO on crime-stopping, with three reports coming out related to that area. Market building received far less explicit attention. Consumer protection was brought to the front and center with the demand for input from the Consumer Financial Protection Bureau. The Commodity Futures Trading Commission was seemingly given a more prominent place in the EO than the Securities and Exchange Commission.
Aaron Cutler, partner at Hogan Lovells and former senior adviser to majority leader Eric Cantor, did not read much meaning into the relative amounts of ink devoted to the various regulatory agencies. Cutler told Cointelegraph:
“The executive order spreads potential regulation around, acknowledging that a lot of agencies have a role here, possibly to the chagrin of [SEC] Chairman Gensler.”
He added that Gensler “has a lot on his plate” already.
The need for regulation is immediate. An editorial in Traders Magazine said the EO “was a meaningful step forward, but the markets need tangible further development for financial institutions to commit more to the space.”
Futures Industry Association president and CEO Walt Lukken spoke in a similar vein at the organization’s annual conference shortly after the release of the EO, saying:
“Several major crypto exchanges have purchased regulated futures exchanges, identifying our markets and its regulatory framework as strategically important. […] We have a resilient and thriving industry because of well-crafted regulation.”
Lukken went on to highlight a non-intermediated derivatives clearing model under consideration by the CFTC that his organization “welcomes.”
Regulators vs. legislators
The current legislative environment — with the Senate closely divided along partisan lines and the Democratic party split internally over its position on crypto — dampens hopes of regulation through legislation. Senator Lummis is expected to introduce a bipartisan bill that will offer regulatory clarity and consumer protections. Representative Don Beyer introduced the Digital Asset Market Structure and Investor Protection Act last summer that will do the same things if it emerges from the committee. Apparently, the agencies called upon in the EO will produce similar results in due course.
A rare piece of bipartisan crypto legislation was the “fix” last year to the section of the Infrastructure Investment and Jobs Law that instituted reporting requirements for certain crypto transactions, beginning in 2026. This provision contributes to compliance and gives clarity to tax requirements. The EO could have addressed implementing the existing tax legislation from the infrastructure law, although historically, EOs have not provided tax legislation. Instead, presidents submit tax proposals to Congress with a budget for tax legislation.
Tax guidance is another gap in the crypto playbook. “What we have now is guidance in the form of notices and FAQs on the IRS website, while we wait for future judicial decisions and code sections to establish formal tax guidance,” Jesse Rodriguez, a certified public accountant at Kaufman Rossin, told Cointelegraph. “There is no timeline available on the expected formal guidance.”
Treasury to IRS
The Treasury Department is one of the busiest agencies under the EO, taking the lead on five reports, including one on regulatory gaps, and providing support for many of the other eight, including central bank digital currency research. So, more complete Internal Revenue Service guidance might be in the works as well.
Rodriguez was stoic about tax guidance. “I don’t find it incredibly challenging to follow the reporting requirements and navigate the income reporting issues,” he said. “The general framework of tax principles that apply to property can be applied in this current environment of uncertainty.”
Things can be tougher for crypto users. The use of cryptocurrency in retail will remain “an overwhelming administrative burden on brokers until there is clarity provided through legislation,” Rodriguez said. But “crypto tracker software applications are a great approach to the basis tracking and reporting requirements for customers.”
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The blockchain technology landscape is shifting in Austria, with public institutions and private firms experimenting with the tech.
Austria has been actively transforming into an attractive location for providers of blockchain-based products, with the government itself experimenting with the technology and trying to create a legal basis upon which companies can use it.
With regard to blockchain-based applications in the economy, however, Austria is still in the experimental phase, with most firms still running pilot projects. Still, politicians and economists alike see potential for select industries.
Public administration reform via blockchain
The Austrian government is quite open to blockchain innovations, cryptocurrencies aside, and has supported various projects in the public and private sectors.
In 2019, a consortium of public administration institutions founded the Austrian Public Service Blockchain (APSB). Active participants in the APSB — i.e., operators of their own blockchain nodes — include the Austrian Economic Chamber, City of Vienna, Federal Computing Center, and Vienna University of Economics and Business Administration. One participant, Kontrollbank, is still in the set-up phase.
Meanwhile, private sector blockchain infrastructure is developing in parallel, and the Blockchain Initiative Austria (BIA) association was founded at the beginning of 2021 to advance this purpose. Austriapro — a developer of electronic business standards — is working together with the Austrian Blockchain Center to support the establishment of a secure infrastructure for private-sector blockchain use in Austria. Association members will jointly operate the blockchain nodes in the form of a “consortium chain.”
The first pilot project of the APSB and BIA involves data certification and notarization. Here, digital fingerprints of files are placed on the blockchain to be able to prove the unaltered nature of the data at a later point in time.
In addition, the Austrian Economic Chamber has provided companies and startups with information about blockchain tech, including a detailed guidebook to help determine whether blockchain makes sense for specific applications.
To more strongly promote the technology in the economy, the Austrian Economic Chamber set up a blockchain working group. Its participants primarily exchange information on blockchain topics, discuss current initiatives and best practices, and regularly organize events.
Increasing interest from traditional financial institutions
The blockchain market in Austria and its areas of application are constantly changing. In addition to the government, fintech companies and small financial institutions are also pushing ahead with the technology.
Areas of application include, but are not limited to, crypto trading, mining, and custody and payment services, as well as financing via initial coin offerings, initial token offerings and security token offerings.
Recently, however, the decentralized technology has also piqued the interest of traditional financial institutions. For example, Raiffeisen Bank — Austria’s second-largest bank — began experimenting with its own euro-pegged stablecoin in the fall of 2020. Employees can already use it to make purchases at the company’s in-house cafeteria.
Raiffeisenbank cooperative banks are also big on innovation. Volksbank Raiffeisenbank Bayern Mitte, for example, has been offering Bitcoin (BTC) investment consultants since 2021. It also intends to offer cryptocurrency trading services to clients sometime this year.
A ski-jumper in Innsbruck, Austria. Source: Rubblebutz.
Oesterreichische Nationalbank (OeNB), Austria’s central bank, is also experimenting with blockchain. In 2021, a new research project known as the Delivery vs. Payment Hybrid Initiative, or DELPHI, launched in Austria. Its goal is to test the issuance of federal bonds against the issuance of a digital euro. Participants in DELPHI include the OeNB; the Austrian Federal Financing Agency, which manages the country’s public debt; and OeKB CSD, which specializes in the central custody of securities and is a subsidiary of credit institution Oesterreichische Kontrollbank.
In the process, Austrian financial institutions are researching how to onboard and settle federal bonds using blockchain technology. The OeNB also plans to develop a central bank digital currency.
The listing of a Bitcoin product on the Vienna Stock Exchange in September 2020 was another important step, marking the world’s third official regulated market to list such a product. As a result, both Bitcoin and Ether (ETH) products from the Swiss issuer 21Shares AG can be traded on the exchange. In August 2021, the Vienna Stock Exchange also announced the listing of crypto exchange-traded products from ETC Group.
Electricity sharing as the energy model of the future
Wien Energie, Austria’s largest energy supplier, is currently testing the possible uses of blockchain and smart contracts in electricity sharing models. Together with the startup Riddle & Code, the Austrian electricity provider developed blockchain infrastructure in June 2021 that enables the peer-to-peer trading of electricity.
People can join together to form a residential P2P energy community and sell their self-produced solar electricity to each other via the blockchain. Typically, the feed-in, distribution and resale of energy via the electricity grid see high fees charged. But with the electricity sharing model, this process can take place without intermediaries, thanks to the blockchain.
Wien Energie plans to expand its solution through smart grids, which decentralized suppliers will use to feed in energy based on the determined supply and demand within a grid.
Salzburg AG and Verbund AG, two leading energy companies in Austria, are also working on blockchain-based peer-to-peer trading solutions.
Crypto tax reform on the rise
Austrian crypto investors are facing new tax regulations. A tax exemption that investors previously enjoyed disappeared on March 1, and crypto income will now incur a 27.5% tax, regardless of how long the assets are held. The new tax applies to all cryptocurrencies acquired since Feb. 28, 2021.
Austrian crypto investors are facing new tax regulations. A tax exemption that investors previously enjoyed disappeared on March 1, and crypto income will now incur a 27.5% tax, regardless of how long the assets are held. The new tax applies to all cryptocurrencies acquired since Feb. 28, 2021.
The new crypto tax reform is another step toward treating cryptocurrencies the same way as the traditional stock and bond markets. With these new regulations, the state wants to create more legal clarity for investors and, thus, inspire confidence in the new technology. However, it remains to be seen whether the Austrian government will succeed in pushing forward new business models and applications in the blockchain sector.
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LBMA CEO Ruth Crowell said the new blockchain-based initiative can help to promote “confidence” in the “integrity and accountability” of the gold that is traded.
Some of the most prominent organizations in the gold industry have joined forces to launch a new “integrity program” that utilizes blockchain technology for supply chain management — a move that’s intended to help market participants verify the authenticity of their bullion.
London Bullion Market Association (LBMA) and the World Gold Council (WGC) announced Monday that they are collaborating to develop an “international system of gold bar integrity, chain of custody and provenance” that’s based on blockchain technology developed by companies aXedras and Peer Ledger. The ledger will be used to register and track gold bars at each stage of the production and distribution cycle, including mining, vaulting and purchase by jewelry manufacturers.
The so-called Gold Bar Integrity Programme is being supported by organizations such as CME Group, Metalor, Barrick Gold, Brinks, Royal Canadian Mint, Newcrest Mining, Hummingbird Resources, Argos Heraeus SA, Asahi, Aura Minerals, Perth Mint and others.
Initially developed as a pilot, the program will eventually be promoted for use across the gold industry, LBMA and WGC said.
Supply chain management is cited as one of the most promising use cases of blockchain technology. As Cointelegraph reported, more than half of the companies added to Forbes’ 2021 Blockchain 50 list were enterprises actively using distributed ledger technology to solve their supply chain and logistics issues. In April 2021, American defense contractor Lockheed Martin said it was using blockchain technology for supply chain management in Switzerland.
Our CEO David Tait and LBMA CEO Ruth Crowell today announce the launch of a new Gold Bar Integrity Programme. Together with @lbmaexecutive, we will develop and implement an international system of gold bar integrity, chain of custody and provenance: https://t.co/jcZ6V1wYLBpic.twitter.com/x7klqZ8WTL
Issues such as illegal mining, laundered gold, fake bullion bars and human rights abuses have made the gold industry especially vulnerable to supply chain opacity. In 2020, the Organization for Economic Cooperation and Development released a report that provides guidance on how gold producers could avoid contributing to “serious abuses” in the mining and production process.
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“Owning a Mt. Gox NFT proves you’re OG... you were there in the early days of Bitcoin, and now you can prove it on the blockchain," said the project's whitepaper.
The former CEO of thnow-defunct crypto exchange Mt. Gox has announced that certain users will be eligible to receive commemorative nonfungible tokens, or NFTs.
In a Monday announcement on Twitter, Mark Karpelès said that crypto users who were Mt. Gox customers between 2010 and 2014 — during which time the exchange was hacked and subsequently declared bankruptcy — could register to claim a free NFT. According to the CEO, the offer extends to users who had a balance or have claimed losses from the defunct exchange.
“Mt. Gox customers are early adopters, some of them were on BitcoinTalk when Satoshi Nakamoto was still posting,” said the project website. “A new token or NFT airdrop is a great way to engage users and at the same time erase a bit of the loss incurred in Mt. Gox.”
You can claim your @MtGox NFT on https://t.co/uUVPsXtCYC if you were a MtGox customer between 2010 and 2014. The NFT is airdropped for free, and available no matter if you had a balance or filed a claim with the bankruptcy.
Mt. Gox users are required to verify they were customers of the exchange who registered accounts before Feb. 25, 2014. The NFTs will be ERC-721 compliant, issued on the Polygon blockchain and identified according to users’ Mt. Gox account numbers as well as their remaining balances in Bitcoin (BTC) and Japanese yen — though including the balance is optional.
“A hardcoded limit will prevent any NFT from being created outside the range of Mt. Gox accounts. This minting method will not have owner-only limitation, but instead will require an externally signed token to be issued to users who have completed verification.”
First launched in 2010 by programmer Jed McCaleb and later purchased by Karpelès, Mt. Gox was once one of the largest exchanges in the world. However, a 2011 hack, which resulted in the loss of 850,000 BTC — $460 million at the time and roughly $40 billion at the time of publication — as well as the exchange’s collapse, left thousands of crypto holders out of pocket.
Nobuaki Kobayashi, the trustee for Mt. Gox, has worked to compensate creditors of the exchange for years, announcing in November 2021 that a rehabilitation plan filed in the Tokyo District Court had become “final and binding.” However, according to the commemorative NFT website, the NFTs are “fully independent” from the Mt. Gox bankruptcy case and “100% self-funded.”
Though the recently announced NFTs are seemingly the only "official" ones to have come out of the Mt. Gox collapse, some crypto users have latched onto the controversy surrounding the exchange’s hack and bankruptcy since 2014. One of the cards from Spells of Genesis, a blockchain-based game featuring trading cards, parodies a photo of crypto trader Kolin Burges protesting outside the exchange’s Tokyo headquarters in 2014 with a sign asking “Where is our money?” The game issued 700 of the "Gox, the Fallen Mountainlord" cards in 2015.
The project’s whitepaper also said the NFTs could be modified to include art after being published and hinted at other use cases:
“Owning a Mt. Gox NFT proves you’re OG. You were there in the early days of Bitcoin, and now you can prove it on the blockchain [...] it is possible to leverage this in the future in ways that aren’t known yet.”
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STG price rallied after excited investors piled into Stargate Finance, an interoperability-focused multi-chain DeFi platform.
"Stargate Finance" has been trending on Twitter for the past week and while it's too early to call for a full-blown DeFi bull market, traders have been shoveling funds into the project, which claims to be a “composable omni-chain native asset bridge.”
Data from Cointelegraph Markets Pro and TradingView shows STG was listed on exchanges on March 17 and its price has climbed 438% from a low of $0.665 to a high of $3.58 on March 25.
STG/USDC 1-hour chart. Source: TradingView
Here’s a look at some of the developments with the protocol that have attracted DeFi users and boosted the price of STG ahead of its initial community auction.
Cross-chain composability
Interoperability has been a growing theme across the cryptocurrency ecosystem and this theme continues to expand as investors realize that the future Metaverse will be comprised of multiple interconnected blockchains.
While many of the older DeFi protocols have yet to develop a plan to integrate the most popular chains, Stargate was designed with cross-chain composability as its main feature. This allows a cross-chain transfer to be composed with smart contracts on the destination chain.
According to Startgate Finance, this helps to simplify the swap process and maximizes the degree of flexibility by making the process more convenient for users and opening new opportunities for cross-chain applications.
The project also offers instant guaranteed finality, which ensures that any transfer request committed on the course chain will also be committed on the destination chain as well. Unified liquidity eliminates the need for intermediate tokens as each supported chain has a pool of liquidity for the supported native assets.
The networks currently supported by Stargate F include Ethereum (ETH), BNB Smart Chain (BSC), Polygon (MATIC), Avalanche (AVAX), Arbitrum, Optimism and Fantom (FTM).
Hype builds over community auctions
A community auction begins on March 30 and users that obtained pre-approval for their wallets or bonded funds before March 17 are eligible for SGT tokens at a price of $0.25. Tokens bought during the auction include a one-year lock-up, followed by a linear unlock period that lasts six months.
Pre-approved accounts are able to purchase a maximum of 18,657 STG, while those that bonded can obtain up to 4,668 STG. Any tokens that remain after Round 1 will be split equally and made available to buy in Round 2 for those who obtained the maximum eligible amount during Round 1.
A third factor helping to attract attention and users to Stargate Finance are the attractive stablecoin farming yields across its supported networks.
Top yielding stablecoin farms on Stargate. Source: Stargate
The high yields on stablecoins have already managed to attract $2.95 billion in liquidity locked on the protocol, according to data from Defi Llama, which makes Stargate Finance the thirteenth largest DeFi protocol by TVL.
Total value locked on Stargate. Source: Defi Llama
While it's still too early to tell how Stargate Finance will perform in the long term and whether its token price can hold its recent gains, it appears as though interoperability and a focus on stablecoin liquidity are the two key factors required for DeFi protocols looking for longevity in the crypto ecosystem.
The views and opinions expressed here are solely those of the author and do not necessarily reflect the views of Cointelegraph.com. Every investment and trading move involves risk, you should conduct your own research when making a decision.
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