Author: Reuters

By Medha Singh

(Reuters) – Crypto assets bled nearly $800 billion in market value over the past month, touching a low of $1.4 trillion on Tuesday, according to data site CoinMarketCap, as the end of easy monetary policy diminishes appetite for risk assets.

Bitcoin, which makes up for nearly 40% of the crypto market, hit a 10-month low earlier on Tuesday, before rebounding to $31,450, just six days after touching $40,000. It was more than 54% below its Nov. 10 all-time high of $69,000.

Digital asset prices have slumped, mirroring a plunge in equities on fears of aggressive interest rate hikes across the globe to stave off decades-high inflation. The tech-heavy Nasdaq was down 28% from its November 2021 record high.

Total crypto market value was at $2.2 trillion on April 2, well off of its all-time peak of $2.9 trillion in early November, as per CoinMarketCap.

“Bitcoin remains highly correlated to the broader economic conditions, which suggest the road ahead may unfortunately be a rocky one, at least for the time being,” blockchain data provider Glassnode said in a note.

Signs of weakness in stablecoins, typically a safer crypto currency, further spooked investors. TerraUSD, the world’s fourth-largest stablecoin, lost a third of its value on Tuesday as it lost its peg to the dollar.

Despite bitcoin’s price slump, funds and products linked to it posted inflows of $45 million last week as investors took advantage of price weakness, according to digital asset manager Coinshares in a report released on Monday.

“Enormous amount of liquidity that has inflated some of these cryptocurrencies,” said Sebastien Galy, senior macro strategist at Nordea Asset Management. He expects crypto, also correlated to high-growth stocks, to come under pressure as several central banks tighten their monetary policy.

(Reporting by Medha Singh and Sruthi Shankar in Bengaluru; Editing by Shinjini Ganguli)

LONDON (Reuters) – British Prime Minister Boris Johnson will introduce a new economic crime bill to crack down on illicit finance, looking to strengthen laws that have empowered its Russian sanction regime and empower authorities to seize cryptocurrency assets.

The government said that the bill would be aimed at driving kelptocrats and dirty money out of Britain, ensuring that people such as associates of Russian President Vladmir Putin do not benefit from Britain’s economy.

“A bill will be brought forward to further strengthen powers to tackle illicit finance, reduce economic crime and help businesses grow,” Prince Charles said in a speech on Tuesday setting out the legislative agenda of Johnson’s government.

Britain in March passed an Economic Crime Act, and subsequently sanctioned hundreds of Russian individuals and entities, catching up with similar measures imposed by the European Union and United States.

The government said that the new bill would build on that act by introducing identity verification for people who control companies in the United Kingdom, improving the reliability of data held by the Registrar of Companies and giving Companies House more effective investigation and enforcement.

It also said the bill would empower authorities to more quickly and easily seize and recover crypto assets.

(Reporting by Alistair Smout. Editing by Andrew MacAskill)

By Lisa Pauline Mattackal and Medha Singh

(Reuters) – Bitcoin has scant experience with rising interest rates, posing perils for investors looking to capitalize on its dramatic drop.

The cryptocurrency has tanked along with other risk assets such as tech stocks after the Fed amped up rates last week, sending them on a trajectory that’s expected to pass 3% early next year.

Bitcoin was an awkward child on the fringes of finance during the Fed’s previous tightening cycle, from 2016 to 2019, and was barely correlated with stocks. The last time interest rates hit 3%, in 2008, it was but a gleam in the eye of Satoshi Nakamoto.

Crypto price moves are baffling at the best of time, let alone when the market’s entering uncharted waters, upping the risk level for traders pondering buying the dip.

Bitcoin fell to $29,731 on Tuesday, its lowest level since July 2021, after dropping nearly 12% last week, its worst weekly loss since January.

“This isn’t the first time that we’ve reached this level, and the risk-reward ratio for picking up bitcoin here has been very good in the past year or so, but we are seeing a different macro backdrop,” said Matt Dibb COO of Stack Funds, a Singapore-based crypto platform.

“The concern is this time is different with respect to whether we will see continued weak sentiment in traditional financial markets, which is likely given the inflation outlook and the likelihood of increased rates in the next few months or years.”

The Fed’s rate rise of by 50 basis points last week was its largest in 22 years. Further 50 bps hikes are expected in both June and July, with the possibility of a fourth move in September according to CME group’s FedWatch tool.

“The era of free money is over. There’s a large adjustment of investor appetite happening right now,” said Chris Kline, COO and co-founder of Bitcoin IRA in Los Angeles.

Ether, the world’s second largest cryptocurrency fell to $2,360 on Monday, its lowest mark since February, and smaller coins, or “altcoins”, have sold off more aggressively.

“The more speculative altcoins are going to struggle, as we’ve seen in past volatile times in the crypto space. Bitcoin is considered risky, but some altcoins are at an even higher risk and those will have even larger sell-offs,” said Kline.

“The question mark is, will people see (crypto) as a diversification tool in bad economies? Or is it just something to have when times are good?”

WHAT HAPPENS IN A RECESSION?

It is not just crypto markets that are tumbling. Equity markets have also plunged as investors fear global central banks are willing to push economies into recession, if necessary, to rein in inflation.

“What’s interesting is that bitcoin itself hasn’t declined quite as much as the Nasdaq and some other asset classes, but the correlation has tightened between them. It’s certainly a higher correlation than we’ve seen in the past,” said Benjamin Dean, director of digital assets at WisdomTree in London.

The Nasdaq and S&P 500 posted their fifth straight week of declines last week and the Dow Jones its sixth. It was the longest losing streak for the S&P 500 since mid-2011 and for the Nasdaq since late 2012.

Crypto’s correlation with stocks is one reason for its recent crypto sell-off.

“We are getting feedback from investors in some family offices that are liquidating crypto because they are liquidating other assets, and they need to make it up on their book for this quarter to show that they’re not dying in everything and they’ve got some money on the side to get back into equities when they bottom out,” said Dibb of Stack Funds.

Some also note that sell-offs happen periodically in markets.

“From my perspective, two-way price action and occasional washouts are healthy for markets, including crypto,” said Brandon Neal, COO of Euler, a project that allows lending and borrowing of crypto assets.

He added a note of caution, though.

“We’ve never seen crypto in a recession, and it’s anyone’s guess what will happen.”

(Reporting by Medha Singh and Lisa Pauline Mattackal in Bengaluru; Editing by Alun John and Pravin Char)

By Alun John, Elizabeth Howcroft and Gertrude Chavez-Dreyfuss

HONG KONG/LONDON/NEW YORK (Reuters) – Bitcoin plunged to its lowest level since July 2021 on Monday, dropping in tandem with slumping U.S. equity markets amid concerns about the Federal Reserve’s aggressive tightening path.

The world’s largest cryptocurrency by market capitalization, bitcoin dropped to as low as $30,331.28, falling for a fifth consecutive session. Bitcoin was last down 9.8% at $30,724.

Bitcoin has dropped 19% so far in May, losing more than half its value since hitting an all-time high of $69,000 in November last year.

The S&P 500 on Monday hit its lowest since April 2021, led by declines in mega-cap growth shares. Nasdaq was down more than 3%, while Apple shares also fell more than 3% and were the biggest weight on the Nasdaq and S&P 500.

Alex Miller, chief executive officer of Hiro, believes “volatility in the market stems from speculation. And because bitcoin is so speculative, its price and the rest of the crypto market is dropping alongside the general markets.”

Hiro builds developer tools for Stacks, the network enabling applications and smart contracts for bitcoin.

Ether, the world’s second-largest cryptocurrency used for the Ethereum blockchain, fell as low as $2,245, its lowest since late January.

“The most important thing to do to prep for bear markets is to have maintained a balanced portfolio and not overinvest in assets that you can’t afford to wait out a crypto winter with,” Miller said. “As we’ve seen from every downturn ever, the best thing you can do with long-term assets like bitcoin is hold, or even increase your position if you’re set up to do that.”

Despite bitcoin’s price weakness, funds and products linked to it posted inflows last week of $45 million, according to digital asset manager Coinshares in a report released on Monday.

CoinShares investment strategist James Butterfill said investors took advantage of bitcoin’s price declines.

The crypto sector overall also posted inflows of $40 million, the CoinShares report showed.

Matt Dibb, chief operating officer of crypto platform Stack Funds, said other factors in bitcoin’s decline came over the weekend during the crypto market’s notoriously low liquidity.

There were also short-lived fears that algorithmic stablecoin Terra USD (UST) could lose its peg to the dollar, Dibb noted.

Stablecoins are digital tokens pegged to other traditional assets, often the U.S. dollar.

UST is closely watched both because of the novel way in which it maintains its 1:1 dollar peg and because its founders have set out plans to build a reserve of $10 billion worth of bitcoin to back the stablecoin, meaning volatility in UST could potentially spill over into bitcoin markets.

Graphic: Bitcoin – https://fingfx.thomsonreuters.com/gfx/mkt/gkplgkerqvb/Bitcoin.png

(Reporting by Alun John in Hong Kong, Elizabeth Howcroft in London, and Gertrude Chavez-Dreyfuss in New York; Editing by Kim Coghill and Will Dunham)

(Reuters) – Bitcoin dropped 7.81% to $31,333.41 at 20:03 GMT on Monday, losing $2,655.98 from its previous close.

Bitcoin, the world’s biggest and best-known cryptocurrency, is down 35% from the year’s high of $48,234 on March 28.

Ether, the coin linked to the ethereum blockchain network, fell 9.02% to $2,295.06 on Monday, losing $227.61 from its previous close.

(Reporting by Anirudh Saligrama in Bengaluru; Editing by Chris Reese)

WASHINGTON (Reuters) – Nvidia Corporation has agreed to pay $5.5 million to settle civil charges that the technology firm did not properly disclose the impact of cryptomining on its gaming business, the U.S. Securities and Exchange Commission (SEC) said on Friday.

Nvidia failed to disclose that cryptomining was a “significant element” of its revenue growth during back-to-back quarters in fiscal 2018 despite having information that showed the increase in its gaming sales was driven in part from it, the SEC said in a statement and charging order.

Nvidia’s failure to disclose material information misled investors and analysts who were interested to understand the impact of cryptomining on Nvidia’s business, the SEC said.

The firm, which did not admit or deny the SEC’s findings, agreed to pay a civil penalty of $5.5 million. A spokesperson for Nvidia did not respond immediately to request for comment.

Cryptomining is the process of obtaining crypto rewards in exchange for verifying crypto transactions on distributed ledgers, according to the SEC website.

(Reporting by Kanishka Singh and Chris Prentice in Washington; Editing by Hugh Lawson and Marguerita Choy)

By Echo Wang

(Reuters) – Elon Musk’s decision to accept some foreign investors as part of his $44 billion buyout of Twitter Inc runs the risk of inviting the kind of regulatory scrutiny over U.S. national security that social media peer TikTok faced, legal experts say.

Musk disclosed on Thursday that Saudi Arabia’s Prince Alwaleed bin Talal, Qatar’s sovereign wealth fund and Binance, the world’s biggest cryptocurrency exchange founded by Chinese native Changpeng Zhao, were part of a group of investors that will help him fund the acquisition of Twitter.

This could give the Committee on Foreign Investment in the United States (CFIUS) an opening to scrutinize the deal for potential national security risks, six regulatory lawyers not involved in the transaction and interviewed by Reuters said. CFIUS is a panel of government agencies and departments that reviews mergers and acquisitions for potential threats to U.S. security.

“To the extent that Musk’s proposed acquisition of Twitter includes foreign investment, it very well could fall under CFIUS jurisdiction,” said Chris Griner, chair of law firm Stroock & Stroock & Lavan LLP’s national security practice.

A spokesperson for the U.S. Treasury Department, which chairs CFIUS, declined to comment on whether the national security panel planned to scrutinize Musk’s Twitter deal.

Spokespeople for Musk, bin Talal, Qatar and Binance did not immediately respond to requests for comment.

Former President Donald Trump’s administration turned to CFIUS in 2020 in a bid to force TikTok’s Chinese parent ByteDance to divest the short video app. His successor Joe Biden abandoned that effort after ByteDance agreed to changes on how the data of U.S. users are stored and protected.

The regulatory lawyers interviewed by Reuters said the risk of CFIUS blocking Musk’s deal is small because he will control Twitter under the proposed takeover and the foreign investors are acquiring relatively small stakes.

They added that their assessment would change were Musk to give the foreign investors influence over the company, through a seat on its board or other means.

The risk is not negligible, however, given that the business of handling personal data by social media companies such as Twitter is typically viewed as critical infrastructure by CFIUS, the lawyers said.

“One of the items that’s considered sensitive personal data, is non-public electronic communications. So that would be email, messaging or chat communications between users. Twitter allows you to do that,” law firm Vinson & Elkins LLP partner Richard Sofield said.

One area of potential scrutiny for CFIUS, the lawyers said, could be Musk’s business dealings with foreign governments hostile to free speech or keen to overtake the United States technologically. Tesla Inc, the electric car maker he leads, relies heavily on China, for example, to manufacture and sell its vehicles.

China blocked Twitter in 2009 but many Chinese officials have been active on the social media platform. Some of them have complained that the company’s efforts to restrict misinformation have targeted them unfairly.

“One of the considerations would be whether or not there will be an opportunity for China to leverage its business activity in order to achieve a desired outcome,” Sofield added.

BROADCOM PRECEDENT

There is precedent for CFIUS shooting down a deal based on the risk that an acquirer’s business ties could compromise them, the lawyers said. Trump blocked chip maker Broadcom Inc’s $117 billion acquisition of U.S peer Qualcomm Inc 2018 after CFIUS raised concerns about the deal.

Broadcom was a publicly listed company with U.S. shareholders that was headquartered in Singapore, but the White House fretted that Broadcom’s relationship with “third-party foreign entities” would set the U.S. back in its technology race with China.

Nevena Simidjiyska, a regulatory lawyer at law firm Fox Rothschild LLP, said it was possible CFIUS would look into whether Musk or other U.S. investors in the Twitter deal can be influenced by foreign entities in a similar way.

“CFIUS may determine that even U.S. investors in Twitter fall under CFIUS review if they are controlled by foreign parties,” Simidjiyska said.

Musk’s Twitter deal does not face the most common type of regulatory risk seen in mergers and acquisitions — pushback from antitrust regulators. The world’s richest man has no media holdings, and regulatory experts have said they do not expect the deal to face significant antitrust scrutiny.

(Reporting by Echo Wang in New York; Additional reporting by Alexandra Alper in Washington, D.C.; Editing by Greg Roumeliotis and Lincoln Feast)

(Reuters) – Block Inc, the fintech firm led by Twitter co-founder Jack Dorsey, said on Thursday it had not seen a decline in overall consumer spending through April, after reporting a first-quarter operating profit that topped Wall Street targets.

Block’s shares rose 10% in extended trading even though the company, formerly known as Square, reported a lower-than-anticipated adjusted profit as demand for bitcoin weakened due to a decline in cryptocurrency prices.

The company, which offers merchant payment services and an app that lets people trade the cryptocurrency, closed its $29 billion acquisition of Australian buy-now-pay-later pioneer Afterpay Ltd during the quarter.

The deal created a transaction giant that competes with banks and tech firms in the financial sector’s fastest-growing business.

Afterpay contributed $92 million to the first quarter’s gross profit, which was recorded under the Square and Cash app units. That helped Cash App – a service that lets individuals send payments including in bitcoin – post a 26% jump in gross profit.

“We expect Cash App and Square to sequentially grow gross profit each quarter throughout the year, even excluding Afterpay, assuming the macroeconomic environment remains stable,” Chief Financial Officer Amrita Ahuja said.

“Through April, we have not yet seen a deterioration in overall consumer spending,” she said, adding that Afterpay’s gross merchandise value – the value of all goods sold – was expected to rise 15% in April.

Block posted operating earnings, known as adjusted EBITDA, of $195 million, ahead of the Wall Street average expectation of $136 million, according to IBES data from Refinitiv.

In the three months ended March 31, revenue fell 22% to $3.96 billion. The company earned an adjusted profit of 18 cents per share, below analysts’ estimates of 21 cents.

The company’s bitcoin revenue halved to $1.73 billion, hit by a drop in interest from retail traders as prices of the cryptocurrency retreated after a sharp rally last year that was fueled by its rising acceptance in the mainstream.

(Reporting by Manya Saini, Ankur Banerjee and Niket Nishant in Bengaluru; Editing by Aditya Soni and Subhranshu Sahu)

(Reuters) – The U.S. District Court for the Southern District of New York ordered the co-founders of cryptocurrency platform BitMEX to pay a combined $30 million fine in connection with a 2020 complaint from the Commodity Futures Trading Commission.

The CFTC alleged that Arthur Hayes, Benjamin Delo and Samuel Reed were illegally operating BitMEX in the U.S. while conducting a significant portion of the company’s business overseas. The CFTC entered into a consent order with BitMEX in August 2021 and fined the firm $100 million.

(Reporting by Hannah Lang in Washington; Editing by Leslie Adler)

(Reuters) – Gucci’s high-end handbags and other luxury products can now be bought using cryptocurrencies, including bitcoin, in some U.S. stores, the Italian company said, as digital currencies move to broader acceptance.

Starting later this month, customers can pay with crypto at some of Gucci’s flagship stores, including Rodeo Drive in Los Angeles and Wooster Street in New York, the company said.

Gucci, owned by France’s Kering SA, plans to expand the service to its directly operated North America stores in the near future.

A growing number of companies have started to accept virtual currencies, bringing an asset class shunned by major financial institutions until a few years ago closer to the mainstream.

Fashion label Off-White, in which French luxury group LVMH took a majority stake last year, has started accepting crypto in its London, Paris and Milan flagship stores, Vogue Business reported in March.

Gucci said on Wednesday it would accept multiple digital assets, including ethereum, dogecoin, shiba inu, litecoin, and a few U.S. dollar-pegged stablecoins.

(Reporting by Akriti Sharma, Silvia Aloisi and Shivam Patel; Editing by Sriraj Kalluvila)

(Reuters) – Bitcoin rose 5.7% to $39,862.84, on Wednesday, adding $2,102.94 to its previous close.

Bitcoin, the world’s biggest and best-known cryptocurrency, is up 20.9% from the year’s low of $32,950.72 on January 24.

Ether, the coin linked to the ethereum blockchain network, surged 6.27 % to $2,954.49 on Wednesday, adding $174.32 to its previous close.

(Reporting by Rhea Binoy in Bengaluru; editing by Diane Craft)

LONDON (Reuters) – Cryptocurrency exchange Binance has registered with France’s market regulator, Chief Executive Officer Changpeng Zhao said in a tweet on Wednesday, advancing the company’s plan to make Paris its European base.

Cryptocurrency exchanges such as Binance are required in France to register with the regulator, AMF, to operate there. But even before its registration, Binance said it was the top cryptocurrency exchange in France.

Binance now has the option to ask for a formal license, which would be required in order to open a regional headquarters in France.

“There will be no immediate change to the user experience, but French users can be reassured that Binance complies with regulatory requirements that help to protect them and their assets,” a spokesperson for Binance said.

Last year Binance received warnings from more than a dozen national regulators, including those in Germany, Italy and Britain. Some said it was operating without a licence in their jurisdictions. Others cautioned against using its services.

Binance’s CEO, widely known by his initials “CZ”, last month pledged to invest 100 million euros ($105.51 million) in France and said he would grant 2 million euros for the restoration of a room at Chateau de Versailles. He also tweeted in support of French President Emmanuel Macron’s re-election bid.

In March, Binance gained licenses from Dubai and Bahrain.

Since its launch in Shanghai in 2017, Binance has aggressively expanded in markets around the world, overtaking its crypto rivals.

A Reuters investigation published last month showed that in Russia, where Binance dominates the crypto market, the exchange expanded its business while building ties with Russian government agencies.

Binance has said it is committed to regulatory compliance.

($1 = 0.9478 euros)

(Reporting by Elizabeth Howcroft; Additional reporting by Mathieu Rosemain; Editing by Richard Chang)

By Medha Singh and Lisa Pauline Mattackal

(Reuters) – Venture capital is making a big move on crypto in 2022.

Scared of being left in the digital dust, private equity investors are stampeding towards crypto projects – blockchain-based apps and platforms fuelled by cryptocurrencies that are native to the virtual economies of the metaverse and Web3.

VC investment in such projects totalled $10 billion globally in the first quarter of this year, the largest quarterly sum ever and more than double the level seen in the same period a year ago, according to data from Pitchbook.

A trickle has become a torrent: the full-year totals for 2019, 2020 and 2021 were $3.7 billion, $5.5 billion and $28 billion.

“You’re seeing a lot of VC investment into a lot of protocols because they all believe, as we do, that some of these protocols are the infrastructure of the future,” said Steve Ehrlich, CEO of crypto brokerage firm Voyager Digital.

Such projects, which can range from crypto and NFT exchanges to decentralized finance applications and token issuers, are often known as protocols in reference to the rules embedded in their computer code.

The recent action is different from the past when venture investment levels tended to track the price of bitcoin, albeit with a short delay, according to Alex Thorn, head of firmwide research at blockchain-focused bank Galaxy Digital in New York.

Investment levels in crypto have continued to grow during a bitcoin price slump this year – it’s down about 16% – as well as during another decline last summer, Thorn notes.

“This decoupling is demonstrative of investors’ disbelief that a prolonged bear market in digital assets is forthcoming, as well as the significant amount of dry powder held by funds seeking to allocate to the sector,” he wrote last week.

The VC crypto craze in 2022 has also coincided with a slump in the tech-heavy Nasdaq benchmark, which is down 21%.

Average crypto fund size (2016-YTD) https://graphics.reuters.com/CRYPTO-INVESTMENTS/byprjnezxpe/chart.png

VC MEETS WEB3

The number of M&A deals involving crypto target companies is also ballooning globally as the buzz grows around the metaverse of virtual worlds and the Web3 decentralized online utopia.

The have been 73 deals sealed so far in 2022 with a combined deal value of $8.8 billion, according to Dealogic, versus 51 deals worth $6.8 billion for the whole of last year.

The funding rush means crypto firms can afford to be picky, said Mildred Idada, founding partner at blockchain venture fund and accelerator Open Web Collective.

“Founders are saying, ‘There’s five funds that want to invest in us, which one is going to bring the most value?’,” she said.

In many cases, blockchain tech firms are interested in the brand value of backing from established players and increasing integration with the financial system, Idada added.

Some firms have been creative in how they raise money. For example Polygon, a platform for developing and scaling applications on the Ethereum blockchain, raised $450 million in February through a private sale of its cryptocurrency to investors including SoftBank’s Vision Fund 2.

“The larger reason for that raise was to get the institutions on our side and increase the visibility of Polygon,” said co-founder Sandeep Nailwal.

Yet the entrance of traditional venture investors accustomed to red-carpet treatment into online developer communities pushing for decentralisation isn’t without culture clashes.

Many deep-pocketed venture capitalists find themselves forced to woo those developer communities behind potential targets, according to Alexandra Bertomeu-Gilles, risk manager at decentralized finance (DeFi) firm Aave.

“Some founders now … when they take money from investors, are creating agreements so that the investors don’t have an outsized say in the governance of the company, or they can’t overrule something that the majority of the rest of the community wants,” she said.

(Reporting by Lisa Pauline Mattackal and Medha Singh in Bengaluru; Editing by Alun John and Pravin Char)

By John McCrank

NEW YORK (Reuters) – Ken Griffin, the billionaire founder of Citadel Securities, one of the world’s biggest market-making firms, said on Monday he envisions the company entering the cryptocurrency market as a combination of a liquidity provider and an exchange.

“Given the institutional increase in interest in cryptocurrency, I think it’s reasonable to expect to see us be more involved in the crypto space providing liquidity to institutional and potentially retail investors,” Griffin said at the Milken Institute Global Conference in Los Angeles.

While some market makers – firms that provide market liquidity by streaming buy and sell quotes for others to trade against – such as Virtu Financial, Jump Trading and DRW, have embraced the nascent asset class, Citadel Securities has largely stayed on the sidelines.

Griffin in October called cryptocurrencies “a jihadist call that we don’t believe in the dollar.”

But on Monday he said that while he is skeptical about cryptocurrencies, he has to live with the reality that an asset is worth what people perceive it is worth.

“I also collect American abstract art,” he said. “Why is a painting worth $10 million? It’s oil on canvas. So value is in the eyes of the beholder.”

Citadel Securities, which after a funding round in January was valued at nearly $22 billion, is not rushing its entry into the crypto market, because it wants to ensure very high standards around things like anti-money-laundering, Griffin said.

The company will aim to provide liquidity to the crypto market, but Griffin also said Citadel Securities believes crypto exchange technology is “very important” in helping to bring buyers and sellers together.

(Reporting by John McCrank in New York; Editing by Matthew Lewis)

By Elizabeth Howcroft

LONDON (Reuters) – The company behind the “Bored Ape” series of NFTs has raised around $285 million worth of cryptocurrency by selling tokens which represent land in a virtual world game it says it is building.

Last year, U.S. start-up Yuga Labs created the Bored Ape Yacht Club NFTs, blockchain-based tokens representing a set of 10,000 computer-generated cartoon apes.

As non-fungible tokens (NFTs) – crypto assets that represent digital files such as images, video, or items in an online game – exploded in popularity, Bored Ape prices surged to fetch hundreds of thousands of dollars each.

They became one of the most prominent NFT brands, with Apes sold at top auction houses and owned by celebrities including Paris Hilton and Madonna.

Now, Yuga Labs – which raised $450 million in March in a funding round led by Andreessen Horowitz – has set its sights on the so-called “metaverse”.

In an online sale on April 30, Yuga Labs sold NFTs called “Otherdeeds”, which it said could be exchanged as plots of virtual land in a future Bored Ape-themed online environment called “Otherside.”

The “Otherdeeds” could only be bought using the project’s associated cryptocurrency, called ApeCoin, which launched in March.

There were 55,000 Otherdeeds for sale, priced at 305 ApeCoin each, and the company wrote on Twitter that these had sold out.

This means the sale raked in 16,775,000 ApeCoin, worth around $285 million as of Sunday, according to Reuters calculations based on the price of ApeCoin on cryptocurrency exchange Coinbase at 1210 GMT.

It was not clear how the funds would be distributed, although the company said the ApeCoin would be “locked up” for one year.

The sale indicates the continued high demand for speculative, high-risk crypto assets related to online virtual worlds. NFTs are largely unregulated, and reports of scams, fakes and market manipulation are common.

While many are baffled by the idea of paying real money for land which does not physically exist, some virtual land NFTs have already fetched millions of dollars.

The Otherside metaverse will be a multi-player gaming environment, according to its website, which says it is currently under development.

Yuga Labs declined to say how many people were working on building Otherside or when it would be launched.

Yuga Labs’ Otherdeeds sale comes shortly after the Bored Ape Yacht Club official Instagram account was hacked and a phishing link posted, allowing scammers to steal victims’ NFTs.

(Reporting by Elizabeth Howcroft; Editing by Hugh Lawson)

By Gertrude Chavez-Dreyfuss

NEW YORK (Reuters) – Speculators’ net long positioning on the U.S. dollar rose in the latest week, according to calculations by Reuters and U.S. Commodity Futures Trading Commission data released on Friday.

The value of the net long dollar position climbed to $13.92 billion for the week ended April 26, from $12.91 billion the previous week. This week’s U.S. dollar net long positioning was the largest since early April, and the first increase in four weeks.

The dollar gained sharply in the month of April, surging nearly 5% for its largest monthly percentage gain since January 2015.

“There remain some rather surprising aspects of the data, however, which – at the very least – suggest that the U.S. dollar’s bull move may have further to run because it does not appear as if investors have fully participated in the dollar’s near 5% rally over the past month,” said Scotiabank in a report after the release of the CFTC data.

The greenback has benefited from safe-haven bids in the midst of the war in Ukraine, lifted as well by higher U.S. interest rates as the Federal Reserve embarks on an aggressive rate tightening cycle to stamp out inflation.

Data also showed euro net longs fell in the latest week to 22,201 contracts, which Scotiabank said was a surprise given the geopolitical and monetary policy risks in the euro zone. The single European currency dropped 4.7% for the month of April, its worst monthly performance since January 2015.

In cryptocurrencies, bitcoin futures posted their largest net long position since the contract was launched in 2018. For the week of April 26, net longs in bitcoin rose to 412 contracts, compared with net shorts of 194 in the previous week, CFTC data showed.

Bitcoin has stabilized within the $37,000-$40,000 range, with the Ukraine war, soaring inflation, and Fed rate hikes as backdrop. The world’s largest cryptocurrency in terms of market capitalization has behaved more like a risk asset.

So far this year, bitcoin has fallen roughly 17% versus the dollar. It was last down 3.1% at $38,532.

Japanese Yen (Contracts of 12,500,000 yen)

$9.387 billion

26 Apr 2022 Prior week

week

Long 14,269 12,723

Short 109,804 119,910

Net -95,535 -107,187

EURO (Contracts of 125,000 euros)

$-2.952 billion

26 Apr 2022 Prior week

week

Long 222,993 221,003

Short 200,792 189,702

Net 22,201 31,301

POUND STERLING (Contracts of 62,500 pounds sterling)

$5.47 billion

26 Apr 2022 Prior week

week

Long 40,436 36,811

Short 110,057 95,725

Net -69,621 -58,914

SWISS FRANC (Contracts of 125,000 Swiss francs)

$1.671 billion

26 Apr 2022 Prior week

week

Long 4,455 2,900

Short 17,324 14,350

Net -12,869 -11,450

CANADIAN DOLLAR (Contracts of 100,000 Canadian dollars)

$-1.628 billion

26 Apr 2022 Prior week

week

Long 48,787 44,063

Short 27,906 22,837

Net 20,881 21,226

AUSTRALIAN DOLLAR (Contracts of 100,000 Aussie dollars)

$1.969 billion

26 Apr 2022 Prior week

week

Long 47,105 39,201

Short 74,756 68,038

Net -27,651 -28,837

MEXICAN PESO (Contracts of 500,000 pesos)

$-0.493 billion

26 Apr 2022 Prior week

week

Long 67,389 73,710

Short 47,263 52,046

Net 20,126 21,664

NEW ZEALAND DOLLAR (Contracts of 100,000 New Zealand dollars)

$-0.004 billion

26 Apr 2022 Prior week

week

Long 22,085 19,081

Short 22,019 18,716

Net 66 365

(Reporting by Gertrude Chavez-Dreyfuss, Editing by Rosalba O’Brien)

(Reuters) – The Reserve bank of New Zealand (RBNZ) said on Friday it had not yet taken a decision on a potential central bank digital currency (CBDC) but would continue to explore the option.

The RBNZ had announced in September last year that it was seeking input from the public on the potential use of a CBDC – which is the digital form of an existing currency.

Several countries are exploring the use of CBDCs, with the U.S. Federal Reserve releasing a much-anticipated paper on the pros and cons of adopting a digital dollar earlier this year.

The RBNZ said feedback from the public had helped affirm the importance of privacy and autonomy when it comes to a CBDC and that this would be a focus of further policy work.

“Our view is that CBDC and cash would be complementary, rather than conflicting,” the central bank said in a statement.

Ian Woolford, the RBNZ’s director of Money and Cash, added that the central bank was particularly focused on progressing concrete steps to improve resilience and efficiency in the cash system.

(Reporting by Harish Sridharan in Bengaluru; Editing by Aditya Soni)

By Judicael Yongo, Tom Wilson and Rachel Savage

BANGUI (Reuters) – Central African Republic’s adoption of bitcoin, while many of the world’s largest economies stay wary of it, has puzzled the cryptocurrency world and residents of the gold and diamond-producing country, and prompted caution from the IMF.

Using bitcoin, a digital currency that exists on a shared ledger across a global network of computers, to buy and sell goods and services relies on reliable, fast internet and widespread access to computers or smartphones.

Yet Central African Republic has internet penetration rates of just 11%, equal to some 550,000 people online last year, the DataReportal website estimates. Meanwhile only around 14% of people have access to electricity and less than half have a mobile phone connection, the Economist Intelligence Unit says.

Four analysts and crypto experts said great challenges lie ahead in adopting bitcoin in one of the world’s poorest countries with low internet use, widespread conflict, spotty electricity and a population mostly unfamiliar with crypto.

Central African Republic provided few details in its statement on Wednesday on how it plans to address these challenges. It did not respond to Reuters requests for comment.

The government’s statement said the move made Central African Republic one of the world’s “most visionary countries”, but residents in the capital Bangui, where most are familiar with mobile money to buy goods and pay bills, were baffled.

“Bitcoin. What is it?!” Auguste Agou, who runs a local timber company in Bangui, said on Thursday, adding: “What can bitcoin bring to our country?”

The African country of 4.8 million people is the world’s second to turn to bitcoin, after El Salvador.

When the Central American country adopted bitcoin as legal tender in June, a small but growing community of business and individual crypto users already existed. Yet its use in commerce has been stymied by internet glitches.

“Given the enormous barriers to adoption and risks associated with use, and seemingly limited upsides, we do not expect widespread adoption of cryptocurrencies in the country,” said Nathan Hayes, an analyst at Economist Intelligence Unit.

U.S. blockchain researcher Chainalysis, which tracks crypto usage, had no data on Central African Republic, which has been gripped for years by violence and is home to Russian mercenaries helping the government overcome rebel groups.

IMF CAUTION

Some said that by adopting bitcoin, Central African Republic is sending a message about the Central African CFA franc, a regional currency used by six states which is governed by the Bank of Central African States (BEAC) and pegged to the euro.

The BEAC must through the monetary union maintain at least 50% of foreign assets with the French Treasury, an arrangement that has been criticised as holding back economic development.

Bangui’s crypto move “reflects regional disquiet over the use of the CFA franc, with its colonial overtones,” Rahul Shah, head of financials equity research at Tellimer, said.

Other crypto advocates said it was a rebuke to the CFA franc.

“Central Africa is extremely far behind in terms of development,” said Chris Maurice, CEO of crypto exchange Yellow Card Financial, which has around a million users in 16 African countries and is licensed to operate in the CFA franc area.

“It’s a big middle finger to the French economic system.”

A BEAC spokesperson told Reuters on Wednesday it had not been told in advance, and did not yet have any response. The BEAC did not reply to requests for comment on Thursday.

The International Monetary Fund (IMF), which in January urged El Salvador to do away with its move to make bitcoin legal tender, voiced caution on Central African Republic’s move.

“It’s really important to not see such things as a panacea for economic challenges our countries face,” IMF Africa Department Director Abebe Aemro Selassie told a press briefing on its economic outlook for Sub-Saharan Africa.

“You have to make sure that the legislative framework, in terms of the transparency of financial flows, the governance framework around it is all robustly in place.”

(Reporting by Judicael Yongo in Bangui, Tom Wilson and Rachel Savage in London; Editing by Alexander Smith)

By Steve Scherer and Julie Gordon

OTTAWA (Reuters) – The front-runner to become the next leader of Canada’s opposition Conservatives said on Thursday he would ban the Bank of Canada from issuing a central bank digital currency if he became prime minister.

Pierre Poilievre, who is campaigning on a vow to make Canada the blockchain capital of the world, also said he would ensure the central bank faces regular scrutiny of its balance sheet, including an audit of its COVID pandemic bond-buying program.

“A Poilievre government will ban a central bank digital currency and allow Canadians to have the economic and financial liberty that they deserve,” he told reporters gathered outside Canada’s central bank building in Ottawa.

Poilievre, a Conservative member of parliament since 2004, is leading all polls ahead of a September vote to pick a new leader for Canada’s main opposition party. If elected, he will likely have to wait until 2025 for the next federal election, as Prime Minister Justin Trudeau’s Liberals have a political support deal with the New Democrats, a smaller left-leaning party.

The leadership race was triggered in early February when Erin O’Toole was ousted as Conservative leader after failing to beat Trudeau in last year’s election.

Poilievre, in his campaigning, has blamed Canada’s high inflation rate on the central bank’s pandemic purchases of government bonds and said cryptocurrencies, like Bitcoin, are a good way to “opt-out of inflation.”

Central bank officials, this week, pushed back on those claims.

“We don’t see cryptocurrencies as a way for Canadians to opt out of inflation or as a stable source of value,” Bank of Canada Senior Deputy Governor Carolyn Rogers told lawmakers on Monday.

Governor Tiff Macklem added that he foresees the Canadian dollar remaining at the center of the country’s financial system.

The Bank of Canada had no immediate response on Thursday.

The central bank has been working on a digital currency (CBDC) for a number of years. The CBDC is currently in the development stage, though a final decision on its launch is up to the federal government.

Inflation in Canada hit a 31-year high at 6.7% in March. Countries around the world are grappling with runaway prices amid strong demand and supply chain constraints. Russia’s invasion of Ukraine has pushed up commodity prices, adding to the pinch.

(Reporting by Steve Scherer and Julie Gordon in Ottawa; Editing by Paul Simao)

By Lisa Pauline Mattackal

(Reuters) – Crypto exchange FTX’s move to seek regulatory approval for direct trading in cryptocurrency derivatives will leave the door open for more oversight of the business in the United States, the company’s chief executive officer said.

The U.S. Commodity Futures Trading Commission (CFTC) is currently considering an application from FTX US to offer “non-intermediated” margin trades for cryptocurrency derivatives, meaning the exchange would bypass the financial companies that currently facilitate such trades.

“There has been missing federal oversight of (crypto) exchanges in the U.S., we see this as a way to bring our platform under a regulatory agency,” FTX CEO Sam Bankman-Fried said on Wednesday.

Clearing houses including the CME Group say they will oppose FTX’s proposal.

Regulators globally have struggled with how best to oversee skyrocketing growth in crypto markets. The CFTC has scheduled a public roundtable to discuss direct trading on May 25.

FTX is open to discussing and implementing additional protective measures, Bankman-Fried said.

The company is the world’s fifth-largest cryptocurrency derivatives exchange by trading volume, as per CoinMarketCap, and was recently valued at $32 billion.

Separately, the company announced on Thursday it would donate up to $1 billion for causes including climate-change mitigation and pandemic preparation.

“We are approaching donations of $100 million this year, ultimately the amount will depend on how well we do as a company,” Bankman-Fried said, adding the company is pushing for more sustainable methods of crypto mining and blockchain scaling.

(Reporting by Lisa Pauline Mattackal in Bengaluru; Editing by Anil D’Silva)