2024-09-06 16:31

As recently as March 2022 – when the price of Ethereum's native cryptocurrency, ether (ETH), was higher – the foundation's treasury held about $1.3 billion of ETH. The Ethereum Foundation, the main non-profit organization supporting the Ethereum blockchain, is set to release an updated financial report “soon,” according to a top official who also revealed that the organization's main Ethereum wallet currently holds about $650 million. Justin Drake, a prominent researcher at the Ethereum Foundation (EF) wrote during a typed ask-me-anything, on an Ethereum subreddit under the handle "bobthesponge1," that the EF spends roughly $100 million per year and currently has roughly a 10-year runway, depending on the price of ether (ETH), the blockchain’s native token. Drake confirmed to CoinDesk that bobthesponge1 is his Reddit account. "The EF has a fiat buffer to cover a couple of years of runway," he wrote in the AMA session. "ETH sales were temporarily paused for regulatory reasons so the buffer wasn't replenished until recently." The last time the EF released insights on its financial holdings was in March 2022, at which point the EF treasury reported a balance of about $1.6 billion. That included $1.3 billion of ETH and about $11 million of "other crypto." At the time, the ETH price was $3,283. It's down about 30% since then, to $2,296. Over the last two years, due to the burn rate and price decreases, the funds have significantly decreased. A redditor followed up, asking about if there was a sustainability plan in place, in the event that the EF runs out of funds. “I'm not aware of any plan to sustainability :),” Drake responded. The news was first reported by The Block. https://www.coindesk.com/tech/2024/09/06/ethereum-foundations-main-wallet-down-to-about-650m-top-official-says/

2024-09-06 16:18

Adult entertainment websites usually pay credit card companies through the nose. MyPeach.AI has found a stablecoin-powered workaround. SALT LAKE CITY – Internet users love them. But mainstream payment processors hate working with them. Adult websites exist in an economic purgatory that, at best, makes them harder and costlier to connect to the conventional banking system than most other online businesses. Which is why Crass Kitty, the pseudonymous founder of artificial intelligence-powered sexting website MyPeach.AI, is turning to crypto. MyPeach.AI users might not realize that when they're, say, flirting with an AI-generated clone of an OnlyFans girl or paying for an alluring (also AI-generated) personalized image. Many of them will likely be paying by credit card, after all. Invisible to them, however, is that they're actually buying stablecoins. Those go to MyPeach.ai to cover the startup's payroll, the high cost of generating AI content and the real-life OnlyFans models who agreed to let the website train its AI models on their images, voice and personality. Kitty says payment processors charge a 3-5% fee when customers use a card to buy crypto. For adult entertainment purchases, it's 10-15% – an exorbitant amount, Kitty says. "There's a real incentive to build on crypto," she said. So, to be clear, MyPeach.AI's customers are getting adult content. And some of them may be using a credit card to pay for it. If they do, behind the scenes, what's really happening is they're purchasing a stablecoin and sending it to MyPeach.AI – all because payment processors charge through the nose for adult entertainment. Porn sites notoriously suffer high rates of chargebacks that have prompted card processors to impose higher-than-normal transaction fees. This puts a squeeze on the business owners: They're not making as much money from their customers. Crypto isn't a catch-all solution. As Kitty found in her previous adult-themed crypto business – a marketplace for buying and selling NFTs of porn stars – newbies seldom tolerate setting up wallets, acquiring tokens and then sending them to addresses. It's just too much friction. Kitty is developing her site at the mtnDAO hacker house in Salt Lake City. At a previous mtnDAO, Kitty decided to pivot to AI. Her bet was that people would flock to the tailored experiences that large language models can be trained to create. As OnlyFans has shown, they're also willing to pay a premium for personalized sexual content. MyPeach.AI combines both with a bit of crypto. It incentivizes users to exchange flirty texts with AI personas – either trained to their sexual preferences or to mimic real-life models – by paying them PEACH tokens. The users can pay PEACH tokens in exchange for AI-generated images. If they don't have enough tokens, they can top up with a credit card (that's where the stablecoin workaround comes in). According to Kitty, a handful of banks are willing to work with crypto companies. A few are also willing to work with adult entertainment businesses. But none seem willing to work with crypto-powered adult entertainment businesses. "Being able to have most of our treasury on-chain means we don't have to worry about, if our banks shut us down, losing all of our funds," she said. Kitty's been coming to mtnDAO since the August 2022 edition. The bustling and loud hacker house is a change of pace from her normal cadence of working from home in a Seattle apartment. In Salt Lake City, she said, it's "been very helpful to have live feedback from the audience at mtnDAO – from a bunch of dudes." https://www.coindesk.com/business/2024/09/06/legacy-payment-processors-charge-adult-sites-a-fortune-mypeachai-found-a-crypto-solution/

2024-09-06 16:12

Both stocks opened the day higher after the British bank published its upgrade overnight. Barclays has upgraded both Coinbase and Robinhood to equal weight from underweight. Analysts at the British bank argued that both companies have "matured meaningfully." Coinbase, in particular, could profit from a friendlier regulatory environment as a result of the presidential election in November, Barclays said. British banking giant Barclays has upgraded both Coinbase (COIN) and Robinhood (HOOD) to equal weight from underweight, citing better business models. Both company’s stocks opened the day higher on Friday after the report was sent out overnight. The stocks later dropped more than 3% as bitcoin (BTC) and broader crypto market index CoinDesk 20 fell. According to Barclays analyst Benjamin Budish, both companies have “matured meaningfully,” particularly because of their product expansion and more positive financial outlook. Coinbase, in particular, could profit from a friendlier regulatory environment, given that both presidential candidates have taken an increasingly friendly stance towards the digital asset industry, and with the approval of several spot crypto exchange-traded funds (ETFs), Barclays said in the note. “While we continue to see risks for Coinbase, we think the improving environment, P&L profile, gradual but ongoing diversification, clear industry leadership in the US, and recent share performance point to a more balanced risk/reward, and we move to Equal Weight,” the analyst wrote. The crypto industry has been through a lot since the collapse of FTX and some other then-major crypto companies in 2022 and 2023, but Coinbase has been resilient, the report stated. Budish applauds the company for keeping costs low, specifically related to its workforce even as activity has picked up in 2024. “Management has been disciplined in their hiring and costs have grown much more modestly vs. prior, allowing the model to enjoy more incremental margin from this leverage,” Budish said. He also mentioned Coinbase’s increasingly diverse sources of income. While the exchange still gets most of its revenue from trading fees and interest income, it has started seeing other areas of the business become a meaningful contributor, including Blockchain rewards, custody revenues and other transaction fees, Barclays said. The analysts warn that while many things seem to be moving in the right direction for Coinbase, there remains uncertainty in the space, including the broader macroeconomic environment and regulatory unclarity regarding several assets being securities and the Securities and Exchange Commission’s (SEC) suit against Coinbase which has yet to be resolved. 'Increasingly turning around' The analysts also see similar positive developments in Robinhood’s business model which could lead to future upside. The main reasons for his positive stance include new products, the firm’s expansion in the UK and Europe and new potential customers coming from the pending acquisition of Bitstamp. “The factors that drove our Underweight ratings are increasingly turning around, and we now see the risk/reward for both stocks as more balanced,” Barclays said. https://www.coindesk.com/markets/2024/09/06/coinbase-robinhood-upgraded-by-barclays-analyst-citing-matured-business-models/

2024-09-06 15:56

Chris Larsen's endorsement comes as Ripple has emerged as one of the biggest donors in the 2024 U.S. elections, though his choice may be at odds with the company CEO's support of Senate Republicans. Ripple Co-Founder and Executive Chairman Chris Larsen is among the 88 corporate leaders who endorsed Vice-President Kamala Harris to be the future president of the United States in a letter. Crypto companies have been very active in the current U.S. presidential election run, building a $169 million war chest at the Fairshake PAC, for which Ripple is one of the top contributors. Apart from Fairshake, Ripple has sought to combat at least one prominent Democrat, and CEO Brad Garlinghouse has contributed to a PAC favoring Senate Republicans. Ripple Co-founder and Executive Chairman Chris Larsen is among the 88 corporate leaders who endorsed Vice-President Kamala Harris to be the next U.S. president in a letter on Friday, revealing potential differences among company leaders. While Larsen joined, other high-profile CEO's come from the likes of review site Yelp, cloud storage company Box and social media platform Snapchats Snap and more, according to the letter CNBC was first to report, Ripple and CEO Brad Garlinghouse have targeted prominent Democrats in their campaign contributions. The majority of the company's contributions have gone to pro-crypto super political action committees (PACs) like the Fairshake political action committee, which is focused on getting crypto-friendly candidates elected from both major parties. Ripple Labs has been among the chief backers of Fairshake and its affiliates, giving about $48 million to influence the 2024 elections. While the industry's combined effort has tried to walk a tightrope between the two major political parties, Ripple's giving has leaned into the Republican side in one key situation: trying to defeat crypto critic Sen. Elizabeth Warren (D-Mass.) Garlinghouse, the company's CEO, has also personally given $50,000 to a super-PAC aimed at building a Republican majority in the Senate, according to disclosures to the Federal Elections Commission. So his political sympathies may be at odds with the letter Larsen signed, which favors a Democratic administration under Harris. The letter argued Harris would "continue to advance fair and predictable policies that support the rule of law, stability, and a sound business environment." Ripple has been in a protracted fight with the U.S. Securities and Exchange Commission over accusations the company violated securities laws in its sales of the token (XRP), and the case has represented one of the foundational battles between the industry and the regulator over how cryptocurrencies should be overseen by the U.S. government. The thinking of SEC Chair Gary Gensler is seen by the industry as being in line with Warren's. Though the crypto sector has pumped unprecedented levels of money into the congressional and presidential races this year, the emerging view of digital assets businesses and enthusiasts has favored the candidacy of former President Donald Trump, who has strongly embraced crypto after years of previous suspicion. Trump reiterated during a speech in New York on Thursday that he wants to make the U.S. the crypto capital of the world if re-elected as president. Harris has not been as open about her crypto policy stance in the same way her rival Donald Trump has. Her top campaign officials have signalled she will support policy efforts to encourage the growth of the crypto industry. And there have been recent moves by one of her supporting PACs to allow digital assets giving to her campaign. "Coinbase can confirm that the Future Forward PAC has onboarded with Coinbase Commerce to accept crypto donations," a spokesperson told CoinDesk earlier this week. Future Forward USA is a major source of support for Harris, and this step may signal that the Democrats are warming to crypto. https://www.coindesk.com/policy/2024/09/06/ripple-co-founder-among-kamala-harris-new-corporate-endorsers/

2024-09-06 15:40

Salame and his lawyers knew his guilty plea would not resolve the criminal investigation into his partner, Michelle Bond, prosecutors told the judge. Federal prosecutors have fired back against Ryan Salame’s allegations that they reneged on agreements made in the former FTX executive’s plea deal – namely, that they would cease criminal investigations into Michelle Bond, Salame’s longtime partner and the mother of his child. But prosecutors say they never made Salame any such promises, either formally or informally, and that their prosecution of Bond is fair game. In a scathing 32-page memorandum filed Thursday, prosecutors urged U.S. District Court Judge Lewis Kaplan of the Southern District of New York (SDNY) to reject Salame’s recent petition asking for the conditions of his plea deal either be enforced or that his plea be thrown out and his sentence vacated, calling it a “shameless and self-serving attempt to renege on his guilty plea and conviction…and to undermine the lawful prosecution of Michelle Bond.” Bond, a former U.S. Securities and Exchange Commission (SEC) lawyer who spent years leading a D.C.-based crypto lobbying group, has been charged with violating campaign finance laws for taking illegal campaign contributions from Salame and other FTX employees during her failed 2022 run for Congress. She faces a maximum of 20 years in prison if convicted of all counts. The day prosecutors indicted Bond, Salame’s lawyers filed a petition with the court alleging that “the Government failed to honor its implied commitment not to pursue the campaign-finance charges against Bond.” On Aug. 29, Salame moved to withdraw his petition in order to allow Bond to bring up the issue in her own case. However, Judge Kaplan ruled that he would still hold a hearing on the original petition regardless of Salame’s motion to withdraw it, and mandated Salame’s attendance as part of his bail conditions. Salame is set to self-surrender himself to prison to begin his sentence in late October. Prosecutors have urged Kaplan to reject the petition without a hearing. In their memo, prosecutors called Salame’s assertions “inaccurate, incomplete, and outright false” and denied that they breached their plea agreement with Salame, noting that there was “nothing in Salame’s plea agreement that suggested that the U.S. Attorney’s Office for the Southern District of New York would not criminally prosecute any of Salame’s criminal co-conspirators in consideration of his guilty plea.” Salame and Bond’s lawyers both knew that his guilty plea had no bearing on Bond’s prosecution, prosecutors argued, detailing conversations dating back to May 2023 where they claim to have explicitly told the defendants lawyers that “a Ryan disposition will not resolve investigation of Michelle’s conduct.” A hearing on the matter is slated for Sep. 12, 2024. https://www.coindesk.com/policy/2024/09/06/prosecutors-tell-ny-court-they-didnt-renege-on-ftx-exec-ryan-salames-plea-deal/

2024-09-06 14:43

The price swing liquidated nearly $50 million of leveraged derivatives positions across all cryptocurrencies in one hour, CoinGlass data shows. The broad-market CoinDesk 20 index was down 3% over the past 24 hours, with BTC, ETH, XRP, ADA posting declines of as much as 4%. Fed governor Waller said he will advocate for "front-loading rate cuts if that is appropriate." A smaller, 25 basis-point cut would be more beneficial for asset prices, Fundstrat's Sean Farrell noted. The brief rally in the cryptocurrency markets following Friday's U.S. jobs report quickly reversed in volatile trading, sending bitcoin (BTC), the largest cryptocurrency, to its lowest in a month. Bitcoin (BTC) jumped to $57,000 following the report, only to erase the gain and tumble below $54,000 to the lowest since Aug. 5. It is down nearly 3% over the past 24 hours. Major altcoins also slid. Ether (ETH), solana (SOL), Ripple's XRP (XRP) and cardano (ADA) all posted 2%-4% losses over the same period. The CoinDesk 20 Index was down 2.7%. The price swing triggered nearly $50 million liquidations in just one hour on crypto derivatives markets as the volatility caught leveraged traders off-guard, predominantly longs betting on a continued price advance, CoinGlass data shows. The more than $3,000 spread between the day's high and low was the widest since Aug. 28. Key U.S. equity indexes also turned lower early in their trading sessions. The Nasdaq Composite Index fell 2.5% and the broad-based S&P 500 Index lost 1.6% by midday. Eyes on Fed rate cuts The widely anticipated U.S. nonfarm payrolls report showed the world's largest economy added 142,000 jobs in August, slightly fewer than analyst forecasts, while the lower unemployment rate fell to 4.2% from July's 4.3%. The release left market watchers contemplating the Federal Reserve's pace to lower interest rates, which it's expected to do later this month. Most recently, traders assigned a probability of more than 70% to a 25 basis-point cut and almost 30% for a larger, 50 bps cut at the Federal Open Market Committee meeting on Sept. 18, according to the CME FedWatch Tool. Later in the morning, Fed Governor Christopher Waller said in a speech at Notre Dame University that the "time has come" to lower interest rates and he will advocate for "front-loading rate cuts if that is appropriate." Some observers argued that a smaller cut would be more beneficial for risk assets, as a 50 bps cut might signal that the Fed is increasingly concerned about the U.S. economy falling into a recession. "Ultimately, the nature of the cut (bullish or bearish) depends on economic data and Fed commentary, but all things being equal I still view 25 bps as better for asset prices than 50 bps," said Sean Farrell, digital asset research head at Fundstrat. https://www.coindesk.com/markets/2024/09/06/bitcoin-pumps-then-dumps-below-55k-as-jobs-report-spurs-crypto-volatility/