Galaxy Digital Sells Stake in Block.one

Galaxy Digital, founded by former hedge fund manager Michael Novogratz, has received $71.2 million after selling its shares in Block.one, according to reports on May 21st.

According to the announcement, Galaxy Digital accepted a tender offer on its ordinary shares in Block.one, closing the transaction on Monday.

Galaxy Digital has reported the sale of its shares, claiming it generated a 123% return on its realized investment and following the transaction, its remaining shares in Block.one “will no longer maintain a material investment position.

Galaxy Digital and Block.one had partnered up in a joint venture in 2018 to invest $325 million into the EOS ecosystem. Block.one is the main development company behind the EOS protocol.

The crypto merchant bank received $71.2 million in the deal, relinquishing its material investor position. Such labelling usually means a position of more than $100 million. However, the company stated that it takes multiple factors into account to determine whether a position is material.

Michael Novogratz, CEO and founder of Galaxy Digital, has stated that the acceptance of the tender offer was a decision made in order to rebalance and appropriately diversify its portfolio as a result of the shares substantially outperforming other areas. He further added that this development does not mean the end to Galaxy’s partnership with Block.one.

According to the Novogratz, both companies will continue to work on other projects such as the Galaxy EOS VC Fund, which primarily backs startups that are developing applications on the EOS blockchain network.

We continue to work closely with Block.one as a key partner across a number of our business lines, including the Galaxy EOS VC Fund, which invests in companies building on the EOS.IO protocol, and remain excited about the EOS.IO protocol,” he said in a statement.

Meanhwile, in July of last year, Block.one received financing from a number of big-name investors such as PayPal co-founder Peter Thiel and Bitmain co-founder Jihan Wu.

Galaxy Digital’s exit comes as part of Block.one’s buyback program of 10 percent of its company shares.

According to a report from Bloomberg, Block.one’s shares repurchase offer is valued at around $2.3 billion, up nearly 66 times from what it was valued at back in 2017 at the funding round. Currently, the repurchase price for the buyback is approximately $1,500 per share, whereas during the 2017 funding round it was offered at $22.5 per share.

The report further revealed that Block.one had about $3 billion in assets including cash and investments at the end of February, according to data sent by Block.one sent to shareholders and the news outlet. In addition to that, Block.one owns as many as 140,000 Bitcoin (BTC).

Blockchain-Based Exchange Set to List First Company in June

SprinkleXchange, a blockchain-based stock exchange, is aiming to list its first company next month, according to a Bloomberg report.

The Bahrain-based trading platform is developed on Ethereum’s blockchain platform and uses its smart contracts feature for trade settlements.

According to the report, the exchange claims its blockchain-focused approach offers time and cost savings in comparison to traditional stock exchanges given that the exchange operates within a regulatory sandbox created by the Bahrain’s central bank and uses a decentralized clearing and settlement system that uses automation.

Currently, the exchange has been given permission to list a maximum of 10 companies. In addition to that, prices will be set using the Dutch auction method, with the exchange taking a 1% fee.

Apart from listing stocks from companies, the blockchain-based exchange will also offer trading options with digital currencies and, similar to other crypto exchanges, will operate around the clock for both stocks and digital assets. The exchange plans to add exchange-traded funds (ETFs) in the future.

The CEO has revealed as well that the platform is only approaching small-cap companies with a market cap between $20 million to $200 million across all sectors.

CEO Alexander Wallin, has revealed that the exchange is aiming to bring around 35 companies within the next 12 months and expecting to list 1,000 companies over the next 3 to 4 years. Wallin further added that:

We have the luxury of being first with this, but we’re aware that it will become a crowded market. It’s like moving from VHS to streaming; Netflix did it nicely and was first, but now there are lots of streaming sites.”

A number of traditional stock exchanges are currently moving to integrate blockchain tech in their platforms. For instance, Switzerland’s top stock exchange, SIX, is also planning to launch a blockchain-powered exchange platform later this year, which will be powered by blockchain consortium R3’s Corda Enterprise platform.

Meanwhile the Gibraltar Stock Exchange has recently started allowing the listing of tokenized securities. The Australian Securities Exchange is notably rebuilding its ageing CHESS settlement platform using blockchain tech provided by Digital Asset. Other stock exchanges, including in Jamaica, Thailand and Spain, have announced as well initiatives involving blockchain technology and crypto assets.

A Group of Banks Working on Digital Cash System Based on Blockchain

A slew of banks, including some of the largest in the world, are working together to develop a digital cash system that relies on blockchain technology to settle transactions. The total investment in the project is said to be close to $50 million.

According to a report from Reuters, citing “people familiar with the plans,” a list of unspecified banks is involved in the project.

The participating banks will be setting up a new entity called Fnality for the project, which could launch as early as 2020. Clearmatics seems to have filed a trademark application for the word “Fnality,” according to information from trademark service Justia Trademarks.

Previously known as the Utility Settlement Coin (USC), it was first proposed by Swiss bank UBS Group and technology startup Clearmatics in 2015. The aim of the project was to implement a more effective system for clearing and settlement in financial markets.

The utility settlement coin, which would likely be known as Fnality is one of the most ambitious projects, with investments of up to $50 from participating banks.

The coin would be a digital cash equivalent of central bank-backed currencies like the dollar or euro that would run on blockchain-based technology. Spending the digital coin would be the same as spending the fiat currency it is paired with.

According to the Reuters report, Bank of New York Mellon Corp, State Street Corp, Credit Suisse Group, Barclays, HSBC Holdings and Deutsche Bank are among the partners working on the project. The group of banks has previously said it had been in discussion with central banks and regulators to ensure the project’s structure was compliant.

A Barclays spokeswoman told Reuters:

“We are a member of the USC Project and can confirm that the Research & Development phase is coming to an end.”

The news comes soon after investment banking giant JPMorgan revealed its own cryptocurrency, dubbed JPM Coin, to settle some of its transactions between clients of its wholesale payments business in real time.

Microsoft Unveils Development of ION – A Decentralized Identity Network

Microsoft revealed that it is building a decentralized identity (DID) network on top of the Bitcoin network.

Announced in a blog post, the layer known as the Identity Overlay Network (ION) is based on a set of open standards developed in collaboration with the Decentralized Identity Foundation. Microsoft is one of the partners of the Decentralized Identity Foundation.

The project aims to deal with how underlying networks communicate to each other. The goal is to make user names obsolete. Instead of logging into Facebook, email or any other application with a username, users can use a digital decentralized ID (DID) instead. In this case, ION handles the decentralized identifiers, which control the ability to prove the user owns the keys to this data.

Individual ION nodes on the secondary network will be responsible for keeping track of these DIDs and inscribing them into the Bitcoin blockchain for attestation.

In explaining the rationale behind ION, the blog post added:

“We believe every person needs a decentralized, digital identity they own and control, backed by self-owned identifiers that enable secure, privacy preserving interactions. This self-owned identity must seamlessly integrate into their lives and put them at the center of everything they do in the digital world.”

Microsoft claims its approach also deals with the throughput issues, as public blockchains would have speed issues in a world where DIDs being used. The company says its network layer will be able to achieve tens of thousands of operations per second.

Microsoft aims to create an ecosystem where “billions of people and countless devices can securely interact over an interoperable system built on standards and open-source components.”

To that scope, Microsoft wants to cooperate with open-source contributors so ION can publicly launch on the Bitcoin mainnet in the coming months. While Microsoft has been behind the development, it’s open source and anyone can run a node.

According to the post, several companies have shown interest in running ION nodes, including Bitcoin hardware and security firm Casa and internet security company Cloudflare.

ION is not Microsoft’s first blockchain initiative. Earlier this month, it released a new Azure Blockchain Development Kit for the Ethereum blockchain, with Starbucks implementing this service to track coffee production.

HTC Will Release Mobile Device Capable of Running a Bitcoin Node

Taiwanese electronics company, HTC, has revealed recently that it will be releasing a new smartphone – The EXODUS 1s – that will include advanced blockchain capabilities. In addition to built-in key storage and wallets, the new smartphone will include a full Bitcoin node, allowing users to directly interact with the largest blockchain network just by using their phones.

Following this news, HTC marks the biggest step yet seeking to integrate mobile technology with blockchain technology and cryptocurrency.

According to the press release, Phil Chen – HTC’s first Decentralized Chief Officer – has explained that the full node capabilities integrated within the new phone will allow app developers new opportunities to connect directly to decentralized networks, which are more resistant to censorship and capable of giving users more control and privacy over their money and their identity.

Chen has stated that the new phone had been designed with the goal “empower the user.” Respectively, the EXODUS 1s will be the first smartphone to ever to have full node capabilities. He further noted:

 “We gave users the ability to own their own keys, and now we’ve gone one step further to allow users to run their own full node. We are democratizing access to the technology for a free world. Full nodes are the most important ingredient in the resilience of the Bitcoin network and we have lowered the barrier to entry for any person to run a node.

Running a full node is the only way Bitcoin (BTC) can be used in a trustless way. This way one can know for sure that all the rules of BTC are being followed; for instance, that no BTC are spent not belonging to the owner, that no coins were spent twice etc. Full nodes are currently the most private way to use BTC as well as the most secure as they do not suffer from many attacks that affect lightweight wallets.

At the moment, there are only about 9,000 active bitcoin full nodes verifying blockchain transactions. According to Chen, each node includes the entire bitcoin history going back to the first transaction and requires as much as 200 gigabytes of storage, increasing at a rate of about 60 gigabytes a year. The new device will support a lighter version of the full node that requires just 10 gigabytes of storage, however each phone will be equipped with an extra SD card designed to support complete full-node services. Notably, the full nodes do not enable bitcoin mining, however the company said it may happen in the future.

Similarly to the Exodus 1, the new phone comes with a built-in hardware wallet, known as the Zion Vault, which stores cryptocurrency keys in a trusted execution environment, thereby allowing users to easily own and spend cryptocurrencies without exposing them to malicious content.

In contrast to the original Exodus, the new version of the phone will enable developers to build a wide range of decentralized applications on top of Zion, which supports Bitcoin, Ether and Litecoin, using the newly open-sourced developer kit.

In addition to that, the 1s will include Qwant – an internet search engine that doesn’t track searches or filter results, and like its predecessor, it will offer a social key-recovery system that doesn’t rely on a bank or other central authority.

The new device is expected to launch by third quarter, and whilst it has yet to be confirmed, the price will range between $250- $300. Customers can purchase the phone with Bitcoin, Ether, Litecoin or other supported currencies.