Charles Morgan Crypto’s Phantom Money Machine | Coinbase Wins Court Round Against SEC

From: Forbes Crypto Confidential - Saturday May 06, 2023 06:00 pm

WE NEED TO TALK ABOUT LIQUID STAKING

Coinbase is sitting on a $1.5 billion pile of phantom crypto pegged to the price of ether. Binance has a similar $750 million stash. These tokens, created to be used in what are essentially lending programs, are just entries in these exchanges’ computers, but to outside observers they appear as assets sitting in their corporate crypto wallets. Welcome to the fast-growing world of liquid staking, the latest addition to a long list of dubious crypto industry innovations that have included initial coin offerings, algorithmic stablecoins and decentralized finance. Read more.

COINBASE SEES FLURRY OF ACTIVITY

It’s been a busy week for the only publicly listed cryptocurrency company in the United States. Along with the opening of a new international branch in Bermuda, a federal appeals court in Texas ordered the Securities and Exchange Commission to provide an answer to Coinbase’s petition to the agency to clarify rules for digital assets and cryptocurrencies. The victory is a minor one, however, as the SEC is unlikely to give in without a fight.

On Thursday, the exchange reported first-quarter earnings that beat revenue expectations, coming in at $772.5 million, and posted a narrower-than-expected loss of $79 million, far milder than analysts’ expectations of $330 million.

Source: Forbes Digital Assets. Prices as of 4:00 p.m. on May 5, 2023.

DORSEY DONATES $10 MILLION TO BOOST BITCOIN, NOSTR

Twitter and Block cofounder Jack Dorsey has again proved just how serious he is about bitcoin and the future of social networks with a $10 million donation to the non-profit OpenSats, which says it will use 100% of the funds for both purposes, without taking a cut for itself.

Dorsey announced the donation—$5 million of which is set aside to fund development of a social protocol called Nostr—on Nostr itself. After being quietly developed by a creator known only as @Fiatjaf, the network has exploded to 16 million users, thanks in part to a new ability for software developers to integrate bitcoin payments into their applications.

Meanwhile, Dorsey’s money-transfer company Block beat analysts’ estimates for first-quarter results on Thursday as its Cash App digital wallet contributed to a 26% revenue increase to $4.99 billion. The company has made investments to expand outside of its core payments business, particularly in bitcoin. Last month, Block purchased what it described as “a large volume” of semiconductors from Intel, which it will use to accelerate a program to make bitcoin mining equipment aimed at encouraging new entrants into that business. The company is also working to produce its own chips.

Forbes Crypto Asset & Blockchain Advisor Subscriber-Only Event

After years of dancing around each other, crypto and its enforcers have reached a fork in the road. Join us for a virtual event on Thursday, May 11th at 1:00 pm ET as CryptoAsset & Blockchain Advisor Editor Steven Ehrlich discusses what to expect in the coming months.

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ELSEWHERE

Voyager Could Distribute Cash And Crypto To Creditors In ‘Next Few Weeks’ [The Block]

New York Attorney General Seeks New Crypto Powers For State Regulators [CoinDesk]

Israel Seized Binance Crypto Accounts To ‘Thwart’ Islamic State, Document Shows [Reuters]

Steven Elrich
Nina Bambysheva
Reporter
Forbes Money & Markets

Steven Elrich
Steven Ehrlich
Editor
Forbes CryptoAsset & Blockchain Advisor

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Charles Morgan Crypto’s Phantom Money Machine | Coinbase Wins Court Round Against SEC