DraftKings CEO Jason Robins said he has looked into adding cryptocurrencies as a form of payment for his online sports betting company but admitted that the current regulations prevented him from pursuing the matter further.
“The payment methods we can accept are determined by the individual state regulators and, as of now, crypto is not an approved payment type in any of the states where we’re live,” Robins said during a live town hall hosted by stock trading app Public Wednesday.
The chief executive added that cryptocurrencies will “likely transform some entire industries and portions of others.”
Cryptocurrency regulation – or a lack of – has been in the spotlight recently. On Tuesday, the Internal Revenue Service asked lawmakers to give the agency more authority and funding to regulate the rapidly evolving industry.
In cryptocurrencies, bitcoinslipped as much as 8% after Elon Musk signaled a potential breakup with the digital asset by posting a broken-heart emoji and a reference to a popular Linkin Park song. Bitcoin has fallen more than 40% since its April record high of near $65,000.
Chinese trading apps Futu and Tiger Brokers are working to bring cryptocurrency trading to customers in the US and Singapore, even as regulators in their home country crack down on digital assets.
The Robinhood rivals said in their most recent earnings calls that they will apply for digital currency trading licenses in both countries. Futu also applied in Hong Kong.
“What we know for sure is that we will not offer digital currency trading services to mainland China users,” said Futu Senior Vice President Robin Li Xu, according to a transcript from the Motley Fool. Tiger Brokers chief executive officer said the same, according to a Seeking Alpha transcript.
Chinese regulators and institutions have cracked down on cryptocurrencies recently. The country said it would thwart mining operations in order to reduce carbon emissions, and it even set up a reporting system for the general public to report suspected mining activity.
Robinhood, which opened up crypto trading in early 2018, had 13 million users at the end of 2020. Futu said it has tripled its number of users in a year to 789,652, and Tiger has doubled customers in the first quarter from a year ago to 376,000, CNBC reported, noting that both companies are increasingly focused on customers outside China.
Futu’s chief financial officer told CNBC previously that the company has heard interest from users worldwide around crypto and he’s listening. On the earnings call, Futu said it aimed to offer crypto trading at some point in the second half of the year.
When police in West Midlands, UK were getting ready to raid what they suspected was a cannabis farm on May 18, they instead discovered a cryptocurrency mine that was stealing thousands of pounds worth of electricity from the main supply.
“It’s certainly not what we were expecting,” Sandwell Police Sergeant Jennifer Griffin, said in a statement.
British police were alerted of numerous people visiting the location at different times of the day. Wiring and ventilation ducts that were visible and voluminous also raised concerns. Following these suspicions, the police flew a drone above the location, which picked up a considerable heat source from above.
“It had all the hallmarks of a cannabis cultivation set-up,” Griffin said.
But upon entry, they discovered a bank of around 100 computer units as part of what’s understood to be a bitcoin mining operation. Griffin said this is believed to be the only second such crypto mine British police have encountered in the region.
“We’ve seized the equipment and will be looking into permanently seizing it under the Proceeds of Crime Act,” Griffin said. “No one was at the unit at the time of the warrant and no arrests have been made – but we’ll be making enquiries with the unit’s owner.”
Cryptocurrency mining has long been criticized due to its heavy energy use and environmental impact. Various research, including a study from Cambridge University, has shown that bitcoin mining around the world uses more energy each year than some entire nations.
“My understanding is that mining for cryptocurrency is not itself illegal but clearly extracting electricity from the mains supply to power it is,” Griffin said.
Western Power, the electricity distribution operator for the Midlands, revealed that thousands of pounds worth of energy had been stolen to power the mine, bypassing the normal electric supply.
More and more governing bodies have raised concerns about the massive energy consumption needed to mine cryptocurrencies.
When Taub bought his tickets eight years ago with 0.7688 bitcoin, one token was valued at about $730. But at the time of writing, one bitcoin is worth $33,730, making the value of those tickets fall within the $30,000 range.
Taub, CEO of professional networking startup, Upstream, told CNBC that at the time, buying the prized Christmas Day tickets without spending any cash gave him the feeling that he was getting into Madison Square Garden for free.
Years later, he was struck with the realization of the deal he made with his friend. In 2017, Taub tweeted that the tickets were “looking like they could become the most overpriced tix of all time” when he noticed they worth $5,000.
Time continues to make the transaction increasingly unbalanced. When bitcoin soared at an all-time high price of $64,829 earlier this year, the bitcoin Taub traded for seats was valued at $49,840, CNBC reported.
“In hindsight, clearly it would be nice to have the money,” he told the outlet. “But at the same time, if you start to harp on this stuff you’re going to be immobilized, you’re going to be frozen and not be able to function.”
When asked if he’ll ever pay with crypto again, he said it’s “not happening.”
“I will not be using speculative currency to buy Knicks tickets again,” he added.
The Treasury Department detailed plans to have any cryptocurrency transfers of at least $10,000 to be reported to the Internal Revenue Service in a report on Thursday.
Bitcoin pared its gains and fell by as much as 6% in afternoon trading following the release of the report, adding to the cryptocurrency’s volatile week of trading in which it fell more than 30% in a day.
“As with cash transactions, businesses that receive cryptoassets with a fair-market value of more than $10,000 would also be reported on,” the Treasury Department said in the report. The report is part of the Biden administration’s plans to beef up the IRS in hopes of collecting more tax revenue that otherwise goes unreported.
The IRS first began asking individuals if they ever bought or sold virtual currencies in 2020, and now requires individuals to report capital gains realized from any cryptocurrency transactions.
The Treasury Department said that reporting the crypto transactions is necessary “to minimize the incentives and opportunity to shift income out of the new information reporting regime,” according to the report.
“Cryptocurrency already poses a significant detection problem by facilitating illegal activity broadly including tax evasion,” the Treasury added in its report.
Elon Musk’s abrupt reversal on bitcoin Wednesday evening conflicts not only with his previous stance by holding bitcoin himself and investing for Tesla but also with research from Cathie Wood’s Ark Invest.
The star stock picker’s firm in April argued that mining bitcoin is actually environmentally beneficial.
Mining cryptocurrencies, bitcoin included, can increase the overall share of renewable energy provision to the grid, according to an April post from Ark research director Brett Winton and co-authors Yassine Elmandjra and Sam Korus, as first reported by Bloomberg.
“Bitcoin mining could encourage investment in solar energy systems, enabling renewables to generate a higher percentage of grid power with no change in the cost of electricity,” the authors said in the post.
Without bitcoin mining, they added, “solar could supply only 40% of grid power before utilities would face the need to fund significant investments with higher electricity prices.”
Wood doubled down on her stance by tweeting to her nearly 900,000 followers in April that she is collaborating with Square to debunk the idea that bitcoin mining is detrimental to the environment.
“We are concerned about the rapidly increasing use of fossil fuels for bitcoin mining and transactions, especially coal, which has the worst emissions of any fuel,” Musk said in a tweet.
Musk did clarify that Tesla will not sell its bitcoin holdings, and instead, will use the digital currency for transactions as soon as “mining transitions to more sustainable energy.”
But as Bloomberg reported, Ark has a profit motive in promoting the positive environmental impacts of bitcoin. Ark is invested in Coinbase and Square, companies tied to the success of cryptocurrencies and which have slumped following Musk’s announcement.
The state AG alleges that Coinseed allocated investors’ money into dogecoin without permission.
Per the filing first viewed by Bloomberg, Coinseed on April 16 converted all investor assets into bitcoin “without notice or authorization” and disabled all functionality in the application, so that they will not be able to withdraw their money.
In the evening of the same day, Coinseed traded the bitcoins for dogecoin, described as “an extremely volatile virtual currency” in the filing, and which at that time was experiencing a sharp selloff.
“[The Office of Attorney General] has received dozens of complaints from investors describing that [Coinseed] conducted these unauthorized trades and transferred all investor assets into dogecoin,” the filing said.
An example of an investor complaint on April 17 was included. The investor alleged that Coinseed transferred all his cryptocurrency to dogecoin without his permission and blocked his ability to withdraw his money. From a $20,000 balance the night before, he said the transfer to dogecoin immediately dropped his balance to $7,000.
Four other complaints followed a similar narrative.
“Unregulated and fraudulent virtual currency trading platforms have no place in New York,” the Attorney General said in a statement.
She continued: “Three months ago, we filed this case against Coinseed and its executives alleging that they violated New York state laws and illegally squandered investors’ monies. However, in the months since we filed our suit, the greed perpetrated by Coinseed and its CEO has not only continued but grown.”
But in the last month, dogecoin has had a stellar performance. It is up more than 70% since the middle of April and is now the fifth-largest cryptocurrency by market capitalization according to CoinGecko. It may also be enjoying institutional backing soon.
Still, James has alleged in her filing that Coinseed has “drained both bank and virtual currency accounts that held investor deposits and moved investor assets overseas.”
The AG said that in the nearly three months since James filed her lawsuit, they received over 130 complaints from investors regarding Coinseed’s conduct.
The Office has therefore asked the court to issue a temporary restraining order and a preliminary injunction. They have also asked the court to appoint a receiver to oversee all assets in an effort to safeguard investments as the lawsuit proceeds.
Coinseed CEO Delger Davaasambuu, however, told The Block that the complaints were “full of false accusations.” The CEO maintained that Coinseed left New York in 2019 and has not accepted any users from New York since 2018.
As the meme cryptocurrency with the Shiba Inu as its mascot skyrocketed an astronomical 10,000% year-to-date, more and more people are jumping in.
Cryptocurrency exchange Gemini said its customer can trade dogecoin starting Tuesday, joining a growing list of platforms showing support for the meme-inspired cryptocurrency that was started as a joke in 2013.
“Dogecoin is the people’s money,” Tyler Winklevoss, Gemini CEO, said in a statement. “It’s organic, irreverent, and fun.”
He said he acknowledged that dogecoin is a meme coin, but that money also operates like a meme.
“Over the multi-millennia history of money, the majority of money (be it shells, beads, precious metals, etc.) has been what we the people say it is and believe it is,” he said.
But some, such as billionaire and bitcoin bull Mike Novogratz, don’t believe the hype.
“No, you shouldn’t buy dogecoin,” he said in an April interview with Earn Your Leisure. “You should sell dogecoin probably now that it’s gone up to 42 cents. But there’s a lot of uneducated investors that feel the energy of this moment and want to participate.”
As of Tuesday, dogecoin jumped to a new all-time high above $0.58, soaring more than 19,200% over the last year and 760% over the last 30 days. It boasts of a $70 billion market capitalization as of Tuesday, making it the fourth largest cryptocurrency, just after bitcoin, ether, and Binance coin, according to CoinGecko.
While dogecoin protocol issues a fixed amount of 5 billion tokens every year, Winklevoss said this fixed and annual issuance will represent a much smaller percentage of dogecoin’s overall money supply.
“In other words, Dogecoin’s money supply is disinflationary,” Winklevoss said, comparing it to ether. “Recently, demand for dogecoin has outstripped its supply. As a result, its price has been mooning.”
The Shiba Inu-themed token has also benefitted from huge amounts of stimulus from governments and during the COVID-19 crisis as well as pandemic-stricken boredom in retail investors.
“Momentum in online forums has caused a flurry of investment as people aim to pump doge to the price of $1,” said Ben Weiss, CEO at CoinFlip, which itself added dogecoin to its network in March.
But Weiss added: “Major players and corporations are unlikely to buy in and manipulate the market or understand that it could be a viable currency.”
Cryptocurrency trading platform Coinbase – which has a over $100 billion valuation – said Satoshi Nakamoto could topple an over $1 trillion bitcoin market.
Coinbase will go public on Wednesday as a direct listing on the Nasdaq. The company has been assigned a reference price of $250 per share, according to NasdaqTrader.
In the documents the company released in February for its public debut, Coinbase said Satoshi Nakamoto – the pseudonym used by the individual or group of people who developed bitcoin – could cause significant damage to the company.
If the identity of the creator was revealed, it could cause bitcoin prices to deteriorate, according to the filing.
The creator was the first entity to ever mine for bitcoins, and Nakamoto’s stake in the digital currency accounts for nearly 5% of the entire bitcoin market, as there are only 21 million bitcoins that can be mined. The entire bitcoin market is worth over $1 trillion.
Bitcoin’s value has largely been driven by its deflationary tendencies. If 1.1 million bitcoins were released into the market, the digital currency’s price would almost surely fall.
Similarly, Bitcoin has been praised for its decentralized nature. The currency is not beholden to any institutions or individuals. If Nakamoto was unmasked, that would place the currency under a single entity, which could discourage traders that bought into the currency for its decentralization.
Coinbase’s success is largely tied to Bitcoin’s rise
“When I first read the Bitcoin whitepaper back in 2010, I realized this computer science breakthrough might be the key to unlock this vision of the future,” Armstrong said. “Cryptocurrency could provide the core tenets of economic freedom to anyone: property rights, sound money, free trade, and the ability to work how and where they want.”
Nakamoto’s name first came to public attention after the white paper was released. The paper outlined the principles of a decentralized peer-to-peer digital payment system. In 2011, the creator moved on from the system but has remained a figure of public interest.
The unveiling would also violate one of bitcoin’s founding principles that was outlined in its white paper. If a creator was unmasked, it would pose a threat to the decentralized nature of the currency – a tenet Nakamoto put at the center of his plans for Bitcoin.