May 11, 2022
Photo: Robert Nickelsberg/Getty Images
Good morning, and welcome to Protocol Fintech. This Wednesday: Coinbase’s contrarian hiring spree, the run on UST, and the U.K.’s new plan to fight ransomware.
What happened to the trend of mayors taking their paychecks in bitcoin? For one thing, it never actually happened: New York City Mayor Eric Adams got paid in fiat, direct-deposited the dollars to a Coinbase account, then bought bitcoin and ether with it. I wonder if he and Miami Mayor Francis Suarez are regretting their investment decision, since bitcoin’s worth has been chopped in half since they made that pledge.
— Owen Thomas (email | twitter)
Coinbase’s first-quarter results confirmed what many analysts know to be true: When the digital-assets markets slump, its core retail crypto-trading business is going to take a hit.
But while rival Robinhood is slashing costs and other startups resort to layoffs, Coinbase is not making drastic cuts. It’s even been hiring more people.
It’s a contrarian bet. And in these uncertain times for crypto, a risky one.
“We remain focused on the long term,” Coinbase told shareholders as it reported results that sent its stock tumbling on Tuesday after hours.
Coinbase is making the most of bad times. Despite the market uncertainty, Coinbase is not pulling back. In fact, the company sees ”down periods as a big opportunity,” Armstrong said on the call.
“We’re greedy when others are fearful,” Armstrong said. Downturns, when “others typically get distracted,” are a good time to invest, including in great talent, he said. “We tend to do our best work in down periods.” The thing is, as a public company, Coinbase doesn’t get to grade its own work. Wall Street is doing that, and it’s not impressed.— Benjamin Pimentel (email | twitter)
Data-visualization platforms make complex information and insights easier to understand and ultimately react to. You’ll see companies that adopt data visualization are empowered and can spot emerging trends and speed reaction time.
KuCoin raised $150 million, putting its valuation at $10 billion. The crypto exchange’s pre-series B round was led by Jump Crypto, with participation from Circle Ventures, IDG Capital and Matrix Partners.
Bolt allegedly overstated its tech capabilities and misrepresented its customer list to investors. According to reporting by the New York Times, the payments startup would often present merchants to investors before confirming that they were even able to use Bolt’s technology. Other customers have accused it of not delivering on its tech promises.
Chainalysis is now worth $8.6 billion. GIC, Singapore’s sovereign wealth fund, reportedly led a $170 million funding round in the blockchain analytics startup.
The U.K. is planning on introducing crypto legislation to seize ransomware profits. Included in the “Queen’s Speech” address were two new bills that aim to support “the safe adoption of cryptocurrencies” and "powers to more quickly and easily seize and recover crypto assets.”
A group of environmental NGOs wants the White House to do something about bitcoin mining. A letter, signed by the Environmental Working Group, Greenpeace and others, has been sent to the Biden administration, asking for the implementation of stringent reviews on the impact of bitcoin mining on local communities and their environments.
FTX.US is launching a supplemental-income pilot program in Chicago. At the opening of its new headquarters in Chicago, the crypto exchange giant announced a program in partnership with the city to sponsor 100 residents in a yearlong initiative.
Treasury Secretary Janet Yellen is concerned about UST, a stablecoin that has lost its dollar peg twice in recent days. She said UST had "experienced a run" at a Senate Banking Committee hearing Tuesday.
The algorithmic stablecoin UST, which is on the Terra network, is designed to keep a one-to-one peg with the U.S. dollar. But the stablecoin dropped as low as $0.60 over the weekend and was trading around $0.78 Tuesday evening. It's not clear what caused the stablecoin to lose its peg.
Stablecoins have come under increasing scrutiny by regulators because of their growth and potential to cause a systemic risk to the financial system.
Over the weekend, Luna Foundation Guard, a nonprofit that supports the network and includes Jump Crypto as a backer, responded to the depeg by saying it would loan bitcoin and UST funds to defend UST's peg to the dollar.
The SEC has previously issued a subpoena for Terraform Labs, the creator of Terra, and its CEO Do Kwon.
— Tomio Geron (email | twitter)
A version of this story first appeared on Protocol.com. Read it here.
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