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).

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.

SEC Delays Decision on Bitwise Bitcoin ETF

The United States Securities and Exchange Commission (SEC) has delayed its decision on cryptocurrency index fund provider Bitwise Asset Management’s bitcoin (BTC) exchange traded fund (ETF).

SEC Looks for Public Comments

In its recent filing, the SEC stated that it has delayed its decision on the approval of the Bitwise ETF, and has also requested for public comments from interested parties.

As such, the Bitwise Bitcoin ETF decision was delayed for another five weeks. According to the published filing, it seems the SEC is still unsure that Bitcoin is resistant to price manipulation, along with several other issues.

Bitwise initially filed for an ETF with the SEC in February. The proposed Bitcoin ETF differs from other previously proposed Bitcoin ETFs in that it draws prices from a list of reputable cryptocurrency exchanges, with the goal of better representing the market. The Bitwise team had also provided the SEC and the public with a detailed research on cryptocurrency exchange volume and possible fake trade volume on more obscure platforms.

According to Bitwise, the ETF will satisfy the rules of the NYSE Arca, providing evidence that the ETF will be accurately priced and resistant to price manipulation. The company wants to achieve this by sourcing the price from the most reliable cryptocurrency exchanges.

Bitwise Targeting Insitutional Investors

The objective of the Bitwise Bitcoin ETF is to broaden access to the crypto-asset to institutions.

Bitwise plans to process all share creation and redemption, and accrue all fees, in Bitcoin rather than fiat. Trading activity of the ETF may have a greater impact on the supply and demand of the coin, unlike other cash-settled alternatives.

In their initial proposal Bitwise noted:

“Having a regulated bank or trust company hold physical assets of a fund has been the standard under U.S. fund regulation for the last 80 years, and we believe that is now possible with Bitcoin,”

Тhe SEC had first delayed its decision on the Bitwise ETF application in March. Following the decision, the SEC was obligated to come to a decision on whether to approve the rule change by May 16, 2019.

Per today’s filing, the public comment period will last three weeks after the most recent amendments to the Bitwise ETF application are published in the Federal Register.

Bakkt Acquires Digital Asset Custody Service DACC

ICE’s major institutional cryptocurrency trading platform Bakkt has announced the аcquisition of crypto custodian service – the Digital Asset Custody Company (DACC), as reported by the company itself on April 29th.

Former Coinbase executive turned Bakkt COO Adam White, wrote in a blog post Monday that it had acquired DACC with the aim to continue developing a secure digital asset storage solution. No details about how much the acquisition cost have been revealed. Furthermore, the post also stipulates a number of new measures in an effort to stimulate regulatory feedback.

The entire team at DACC will be joining the company, as the team shares Bakkt’s security-first mindset and will bring experience in building its own secure and scalable custody solutions.

White further added that DACC’s native support of 13 blockchains and more than 100 assets will contribute greatly to the scaling of the platform as well as adding support for other cryptocurrencies beyond Bitcoin (BTC).

In the same blog post, it was disclosed that the exchange platform has been working closely with global bank BNY Mellon on developing and establishing a geographically-distributed private key storage, in order to provide more storage solutions to its clients.

On another note, Bakkt has secured as well insurance for funds, which are stored offline.

According to White, the exchange uses both warm (online) and cold (offline) wallet architecture to secure customer funds. Thus, the majority of assets are stored offline “in air-gapped cold wallets that are insured with a $100,000,000 policy underwritten by leading global insurance carriers,” however the COO has offered no names for who these insurance carriers might be.

Meanwhile, the COO has also revealed that the exchange has filed an application with the New York Department of Financial Services (NYDFS) to operate as a trust fund.

If granted, the exchange would be able to offer a regulated custody for any crypto assets that it holds, which may facilitate the launch of physical bitcoin future contract. Respectively, Bakkt stated that the company is seeking to launch physically-delivered BTC futures, with contracts set to be traded on ICE Futures US (IFUS) and cleared on ICE Clear US (ICUS), which is a federally regulated exchange and clearinghouse overseen by the United States Commodity Futures Trading Commission (CFTC).

ICE – operator of 23 major global exchanges, including the New York Stock Exchange (NYSE), had first announced the launch of the Microsoft cloud-powered “open and regulated, global ecosystem for digital assets” Bakkt back in August of 2018. The launch date had been initially set for January 2019, however due to the pending approval from the CFTC, Bakkt postponed the launch to later within the year.

Samsung Makes Sizable Investment In Hardware Wallet Manufacturer Ledger

Most recently, South Korean technology behemoth Samsung has invested 2.6 million Euro ($2.9 million) into hardware wallet manufacturer – Ledger.

French business magazine Capital reported the news on April 24th, stating that a spokesperson for Ledger had confirmed the investment. However, the representative provided no further details beyond the amount invested into the startup.

The news follows the recent appointment of Pascal Gauthier – the company’s former president – as the new CEO. The previous CEO, Eric Larchevêque, will serve now as Executive Chairman of the Ledger’s Board.

Larchevêque has confirmed the news as well, tweeting out that “we will always need hardware wallets, but to accompany a revolution crypto based on a personal sovereignty accessible to all, the smartphone will actually play a central role.”

At present, the startup is in partnership with several other financial institutions with the goal to establish and offer a number of custody alternatives. For instance, their custody venture with Nomura – a Japanese bank – is expected to launch by 2020. Similarly, Ledger is also working on custody services for Ethereum-based tokens with Hong Kong legacy Trust.

Meanwhile, Samsung has recently broken into the crypto and blockchain industry. Recently, the company announced that a new line of flagship smartphones – the Galaxy S10 series – will come out including new functional features such as a crypto wallet.

In addition to that, Ledger has had previous funding rounds, including a $7 million Series A fund raise in 2017 and a $75 million Series B in 2018. Many speculate this could be part of a larger funding round from Samsung, however it currently remains unclear.

An anonymous source has tipped local news off that Samsung may be working on the development of a public-private blockchain platform as well as its own Ethereum-based token, dubbed the Samsung Coin. The person claimed “we expect Samsung Coin to come out in the market, but the direction has not yet been decided.

However earlier this week, Samsung has announced the delay of the official launch of its $2,000 folding phone dubbed Galaxy Fold after a series of breakage issues had been reported. Many tech reviews reported the inside screens flickering, freezing, and ultimately dying on their test phones within the first few days. The reviews revealed as well that substances found inside the device affected the display performance.