As bitcoin, ethereum and other cryptocurrencies get increasing attention from investors, Wall Street and its traditional banks continue to adjust to the shift. Catch up on this week’s top stories highlighting the intersection of these old guard and new school areas of finance with this recap compiled by The Fly.
COINBASE TO POTENTIALLY CONSIDER MOVE FROM U.S.: Coinbase (COIN) CEO Brian Armstrong has indicated that if the U.S. regulatory environment for the industry does not become clearer, the crypto exchange will consider moving away from the U.S., CoinDesk’s Jamie Crawley reported Tuesday. "Anything is on the table, including relocating or whatever is necessary… I think the U.S. has the potential to be an important market for crypto, but right now we are not seeing that regulatory clarity that we need. I think in a number of years if we don’t see that regulatory clarity emerge in the U.S. we may have to consider investing more elsewhere in the world,” Armstrong said. He spoke of the advantages of the U.K.’s scope for greater regulatory clarity, since there is only one regulator responsible for commodities and securities.
Additionally, in a blog post on Wednesday, Coinbase disclosed that it has received a license to operate in Bermuda. The company said: "Bermuda was chosen as one of our international hubs as the BMA is a highly respected and experienced financial regulator that is led by a world-class executive team and board of directors."
Following the news, Barclays analyst Benjamin Budish said that days after Armstrong suggested the company could leave the U.S., the company updated its international strategy. Coinbase released a post updating the strategy, including an announcement that a subsidiary had received a Class F license from the Bermuda Monetary Authority, in addition to hires and/or product launches in Canada, Brazil, and Singapore, and a potential license for a regulated exchange in Abu Dhabi, the analyst tells investors in a research note. Media reports also suggest the company is on the cusp of launching an offshore derivatives exchange, which would increase its competitive positioning overseas, although competition is intense, said the firm. If Coinbase were to launch an overseas exchange, the revenue uplift "could be quite meaningful," said Barclays. The firm kept an Equal Weight rating on the shares with a $74 price target.
SEC CHARGES CRYPTO TRADING PLATFORM BITTREX: The Securities and Exchange Commission charged crypto asset trading platform Bittrex on Monday and its co-founder and former CEO William Shihara for operating an unregistered national securities exchange, broker, and clearing agency. The SEC also charged Bittrex’s foreign affiliate, Bittrex Global GmbH, for failing to register as a national securities exchange in connection with its operation of a single shared order book along with Bittrex.
The agency said, "Since at least 2014, Bittrex has held itself out as a platform that facilitated buying and selling of crypto assets that the SEC’s complaint alleges were offered and sold as securities. From 2017 through 2022, Bittrex earned at least $1.3N in revenues from, among other things, transaction fees from investors, including U.S. investors, while servicing them as a broker, exchange, and clearing agency without registering any of these activities with the Commission. The complaint further alleges that Bittrex and Shihara, who was the company’s CEO from 2014 to 2019, coordinated with issuers who sought to have their crypto asset made available for trading on Bittrex’s platform to first delete from public channels certain ‘problematic statements’ that Shihara believed would lead a regulator, such as the SEC, to investigate the crypto asset as the offering of a security. For example, in an effort to avoid regulatory scrutiny, before Bittrex would make an asset available on its platform, Bittrex and Shihara instructed issuer-applicants to delete statements related to ‘price prediction,’ ‘expectation of profit,’ and other ‘investment related terms.’"
MAWSON INFRASTRUCTURE SELLS TEXAS SITES: Mawson Infrastructure (MIGI) announced Wednesday that it has signed and closed a binding sale agreement for Mawson’s greenfield sites in Midland, Texas, effective April 18. The sale price was $8.5M in cash and stablecoins. The transaction involved the sale of 100% of Mawson’s subsidiary Luna Squares Texas, which held the relevant lease agreements and related contracts. In addition, Mawson sold 59 transformers which were earmarked for these Texas sites. The buyer is a fund managed by Mainnet Capital, a Singapore-based fund manager, called M Turing VCC Oracle Phase 1 Fund. The sale of the Texas sites allows Mawson to focus all attention on its current 240 MW of facilities in Pennsylvania. The proceeds of the sale will be used for further debt reduction, as well as funding future expansions across Mawson’s other sites, including the acquisition of additional ASIC miners. Mawson is scheduled to turn on an added 70 MW at its Midland, PA site, and an initial 12 MW at its Sharon, Pennsylvania site in Q2. Mawson expects to have 132 MW online during Q2, representing enough power for up to 38,808 ASIC miners, operating at approximately 4.2 EH/second.
STRONGHOLD PURCHASES ADDITIONAL MINERS: Stronghold Digital (SDIG) announced Friday it has entered into a Master Sales and Purchase Agreement to acquire 5,000 new, latest-generation MicroBT Whatsminer M50 miners for $15.50 per terahash per second, including shipping. The M50 Miners have an average hash rate of 118 terahash per second and energy efficiency of 28.5 joules per terahash. This addition of approximately 600 petahash per second of hash rate capacity is expected to grow Stronghold’s total delivered hash rate capacity by over 20% to over 3.2 exahash per second and to approximately 3.5 EH/s with all remaining contracted miners delivered. The company expects to receive and install the M50 Miners in May 2023. The company continues to believe that it is on track to meet its previously disclosed 4 EH/s guidance for 2023, which represents the approximate capacity of its existing data centers at its wholly owned Panther Creek and Scrubgrass plants.
IRIS ENERGY INCREASES HASHRATE TO 4.6 EH/S: Iris Energy (IREN) provided a Thursday update on the installation of its 5.5 EH/s of operating capacity. Iris Energy has increased its operating hashrate from 3.6 EH/s to a current level of 4.6 EH/s. All remaining 0.9 EH/s of miners have been delivered and are pending installation. 160MW of data centers is available immediately, with commissioning of the first 20MW at Childress expected imminently. The company has also been refunded $18.4M in deposits by AEP Texas. These deposits were previously paid by the company to AEP Texas and have now been released following energization of the 600MW bulk power substation at Childress and completion of the connection of the site to the ERCOT grid.
CRYPTO STOCK PLAYS: Cryptocurrency revenues have been pointed to as reasons to be bullish on Advanced Micro Devices (AMD) and Nvidia (NVDA) in select research. Ideanomics (IDEX), Riot Platforms (RIOT), Overstock (OSTK), and SRAX (SRAX) are other stocks that have been touted, or promoted themselves, as a way to play the crypto theme.
PRICE ACTION: As of time of writing, bitcoin dropped roughly 8% this week to $28,297 in U.S. dollars, according to TradeBlock.
Published first on TheFly
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