O3 Swap

Casey Wagner

Cryptos extended their rally Friday as stocks traded sideways. Analysts say the bull run for bitcoin is beginning.&nbsp;



Bitcoin was back in the green Friday after a slight dip Thursday. The largest crypto was trading around $43,700 at time of publication after briefly surpassing $44,000 yet again.&nbsp;



Ether was trading mostly flat Friday, but maintained its monthly gains of nearly 25% over the past 30 days. As 2023 comes to a close, ether is up around 95% year-to-date.&nbsp;



Equities posted mild gains, with the S&amp;P 500 and Nasdaq Composite indexes gaining around 0.2% each midway through the trading session Friday.&nbsp;



With bitcoin’s next halving slated for April 2024, coinciding with a potential policy shift from the Federal Reserve, investors may be in for the perfect storm Thomas Perfumo, head of strategy at Kraken, said.&nbsp;



Read more: <a href="https://blockworks.co/news/bitcoin-price-mirrors-2012-halving">Bitcoin flirts with breakout, price mirrors lead-up to 2012 halving</a>



“This is going to be the fourth halving and pretty much every single one has kicked off a bull cycle where the top has come in about 18 months or so after the halving event,” Perfumo said.&nbsp;



&#8220;This <a href="https://blockworks.co/tag/bitcoin-halving">halving</a> is special in the sense that you&#8217;re going to have inflation in bitcoin&#8217;s circulating supply drop below 1% for the first time in history,” he added. “That&#8217;s basically crossing that threshold that gold has historically served as this kind of bellwether-sound currency where the supply growth of gold is something that&#8217;s been north of 1%, but very steady and very low single-digits.&#8221;&nbsp;



The catalyst for the rally, which has seen both bitcoin gain more than 56% since the start of October 2023, was <a href="https://blockworks.co/news/bitcoin-ether-trading-stock-markets">optimism about a bitcoin exchange-traded fund</a> finally hitting the market in the US, Luke Nolan, research associate at CoinShares, said.&nbsp;



“People [are] frontrunning what they believe will be significant flows stemming from the potential launches of the ETFs,” Nolan said. “If the SEC approves a spot bitcoin ETF, there is a ‘stamp of approval’ for the asset class from the largest capital market regulator in the world.”&nbsp;



As traders wait anxiously for the first <a href="https://blockworks.co/tag/etfs">ETFs</a> to hit the market, Perfumo said the rally for spot bitcoin prices shouldn’t stop there.&nbsp;



Read more: <a href="https://blockworks.co/news/spot-btc-etf-applicants-status-update">Lucky 13? Where spot bitcoin ETF proposals stand ahead of judgment day</a>



&#8220;That&#8217;s positive for prices, generally speaking,” Perfumo said. “What I mean by that is one of the biggest barriers for the US specifically when it comes to investment has been the accessibility of crypto in retirement accounts. Having crypto in a securitized format via an ETF, which is a very commonly understood product nowadays, even by consumer investors, I think that&#8217;s a really powerful statement.&#8221;&nbsp;



JTO, the governance token for Solana-based staking project Jito, <a href="https://blockworks.co/news/jto-airdrop-market-reaction">made its debut via an airdrop Thursday</a>. Close to $110 million was up for grabs when the airdrop hit Thursday morning, and by Friday, JTO was trading more than 180% higher than its initial price of $1.20.&nbsp;



Solana (<a href="https://blockworks.co/price/sol">SOL</a>) apparently riding the JTO wave, posted gains Friday as well, up more than 11% over the past 24 hours at time of publication. 



“If history repeats itself, what you tend to see is the smart contract platforms pick up and then the dapps and whatnot that are subject to higher levels of volatility — because they&#8217;re smaller assets in general — tend to follow,” Perfumo said. “I can definitely see a situation where Bitcoin leads into a cycle for Ethereum, Solana and some of the other alts.”



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Macro conditions, ETF optimism collide at the right time ahead of bitcoin halving

Made some money off of Jito’s airdrop Thursday? If you’re a US taxpayer, you’d better report it to the IRS, experts say.



Jito, a staking project built on Solana, released its JTO token via an airdrop at 11 am ET Thursday. The claim window for those eligible is 18 months.&nbsp;



By 11:45 am ET Thursday, around 30% of the airdrop had been claimed. Of the top 15 wallets who had claimed the most JTO in the airdrop, only three had sold any as of Friday morning, according to a Flipside Crypto <a href="https://flipsidecrypto.xyz/marqu/jito-jto-airdrop-claim-progress-cex-supply-jito-jto-airdrop-claim-progress-cex-supply-8isZkm">dashboard</a>.&nbsp;



While holders took to X, formerly Twitter, to discuss their profits, tax experts advise airdrop recipients, at least those in the US, to be aware of their obligations.&nbsp;



Read more: <a href="https://blockworks.co/news/jito-airdrop-value">What to know about Jito’s $165M JTO airdrop</a>



“The <a href="https://blockworks.co/tag/irs">IRS</a> has been very clear in numerous documentation that digital assets received via an airdrop are to be recognized as ordinary income once received,” said Gabriel Brin, vice president of tax and accounting product at Ledgible.



This means anyone who receives any assets via <a href="https://blockworks.co/tag/airdrop">airdrop</a> must report it as income, based on the assets’ value when received, on their tax returns for that year, even if the assets are never converted to USD or fiat currency. The income tax rate collected on the initial airdrop will follow the holder’s typical tax bracket, based on income, Brin said.&nbsp;



But determining the exact moment a taxpayer received the airdrop can be complicated, Miles Fuller, director of government solutions at TaxBit, said.&nbsp;



“Time of receipt is not necessarily easily defined because it depends on where you might be holding,” Fuller said. “You probably get the airdrop because you have some holdings of some underlying native coin or some other engagement, and those holdings that are the basis for you getting the airdrop could be held on something that&#8217;s on a custodial exchange or in a personally controlled wallet, and that’s important.”&nbsp;



Read more: <a href="https://blockworks.co/news/irs-rising-crypto-tax-evasion-cases">Crypto tax evasion cases are on the rise: Bloomberg</a>



If the airdropped assets are sent to an account on a centralized exchange, like Coinbase or Gemini, the recipient may not immediately get access to these assets, Fuller said.&nbsp;



“In the tax world, receipt is defined as when a user is in control over the asset, really meaning that the user would be in a position to sell, dispose or rehypothecate that asset,” Fuller said. “It’s not just a matter of saying ‘the airdrop happened,’ it&#8217;s ‘when did the taxpayer get to be in control or the asset?’”&nbsp;



Read more: <a href="https://blockworks.co/news/jto-airdrop-market-reaction">Jito’s JTO soars hours into airdrop, analysts say altcoin rally has steam left&nbsp;</a>



For JTO, those who used the Jito protocol prior to Nov. 25, 2023 were eligible. Users who claimed the airdrop had assets sent to the address that signed the transaction.&nbsp;



The top two wallets that claimed the most JTO via airdrop each collected tokens worth around $480,000, according to network data. If these holders are single filers in the US currently making less than $578,126 in income for the 2023 tax year, this airdrop would bump them into a higher federal tax bracket.&nbsp;



To prevent double taxing when calculating capital gains or losses, the value of the airdrop reported when reporting the income is used as the cost basis for determining the tax rate, Fuller said.&nbsp;



Any assets received via airdrop that are later sold or traded for a profit would then be taxed based on standard capital gains taxes, Brin explained. The holding period, which would determine whether long or short term gains should be taxed, begins at the time of airdrop, he added.&nbsp;



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Claimed your JTO? Time to report it to the IRS, experts say

Ben Strack

An ETF issuer is prepping a new way for investors to get exposure to the stock price of the largest publicly traded holder of bitcoin.&nbsp;



MicroStrategy, founded by bitcoin proponent Michael Saylor, currently holds 174,530 bitcoins. The company most recently <a href="https://blockworks.co/news/microstrategy-buys-bitcoin">revealed buying 16,130 BTC</a> between Nov. 1 and Nov. 29.&nbsp;



Fund group YieldMax seeks to generate monthly income by selling and writing call options on single company stocks. The firm first <a href="https://www.sec.gov/Archives/edgar/data/1924868/000138713123007093/yieldmax-485apos_053123.htm">proposed</a> the YieldMax MSTR Option Income Strategy ETF (MSTY) earlier this year. It already has similar funds focused on Tesla, Coinbase, Amazon, Google and others.



“Because they are such volatile stocks, writing call options on TSLA and COIN generates a significant amount of yield for the ETFs,” said Sumit Roy, senior analyst for ETF.com. “The same would hold true for this new fund focused on MicroStrategy.”



Read more: <a href="https://blockworks.co/news/microstrategy-bitcoin-buying">Will MicroStrategy ever stop buying bitcoin?</a>



The proposed actively managed ETF provides “indirect exposure” to MicroStrategy’s share price via a synthetic covered call strategy, according to a Thursday <a href="https://www.streetinsider.com/SEC+Filings/Form+485APOS+Tidal+Trust+II/22503652.html">filing</a>. MSTY would limit its potential gains, seeking to capture no more than 15% of MSTR’s share price appreciation in a given month.



It does not hold <a href="https://blockworks.co/tag/microstrategy">MicroStrategy</a> shares directly.



The fund would use this strategy “regardless of whether there are periods of adverse market, economic, or other conditions,” the disclosure adds — and “will not take temporary defensive positions” at such times. It plans to launch in 2024.



YieldMax did not return a request for comment.&nbsp;



Roy noted that investors of <a href="https://blockworks.co/tag/etfs">ETFs</a> using covered call strategies trade upside price appreciation potential in the stock for guaranteed yield in the form of options premiums received. Such funds tend to outperform when the underlying stocks are flat or down, while they underperform when the share prices rise rapidly.



“Some might argue that covered call strategies don&#8217;t make sense in volatile single stocks like Tesla, <a href="https://blockworks.co/tag/coinbase">Coinbase</a> and MicroStrategy because the point of those single stocks is to potentially capture big upside in exchange for taking on big risk,” he told Blockworks. “By writing calls, you are giving up most of the upside potential while keeping most of the downside risk.”



The filing comes about a month before the US Securities and Exchange Commission is expected to rule on a spot bitcoin ETF proposed by Ark Invest and 21Shares by June 10. Industry watchers expect the regulator could also approve or deny <a href="https://blockworks.co/news/spot-btc-etf-applicants-status-update">a dozen or so other similar products</a> at that time.&nbsp;



StoneX research head Matthew Weller previously told Blockworks that a low-cost spot bitcoin ETF could cause demand for MicroStrategy stock — historically used by some as a proxy for bitcoin — to “dry up.”&nbsp;&nbsp;



But MicroStrategy’s Saylor said during the company’s earnings call in November that the approval of spot bitcoin ETFs would be “a catalytic event” set to benefit various players in the space, including MicroStrategy.



Saylor argued at the time that, while certain types of investors would gravitate toward bitcoin ETFs, MicroStrategy stock offers a way to get bitcoin exposure <a href="https://blockworks.co/news/microstrategy-q3-earnings-results">with benefits such funds won’t offer</a>.



MicroStrategy’s stock has risen roughly 25% in the last month, as of 3:30 pm ET Friday. Bitcoin’s (<a href="https://blockworks.co/price/btc">BTC</a>) price is up nearly 24% over that span.



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YieldMax preps ETF focused on MicroStrategy exposure

David Canellis

Raging crypto prices might have you gripped by fear of missing out. But no matter the frustration you’re feeling, Sam Bankman-Fried likely has it much worse.



The disgraced FTX founder has been holed up in the infamous Brooklyn Metropolitan Detention Center since he was found guilty of a mess of fraud charges last month — the same jail currently housing R. Kelly, Fetty Wap and the New York City subway attacker.



No doubt Bankman-Fried found trading crypto difficult since FTX went bust. Bail conditions meant he’d only have access to a flip phone that couldn’t connect to the internet and a laptop with limited functionality.



Before his $250 million bail was revoked in August due to suspected witness tampering, Bankman-Fried had spent nine months on house arrest at his parents’ multi-million home in Palo Alto.



Bankman-Fried also couldn’t open any credit lines, start a business or transact anything more than $1,000 (outside of settling legal fees).



Read more: <a href="https://blockworks.co/news/ftx-meltdown-timeline">FTX began to unravel one year ago today: A timeline</a>



The price of bitcoin exploded about two weeks after Bankman-Fried touched down in New York, having been extradited from the Bahamas just before Christmas.



Bitcoin (<a href="https://blockworks.co/price/btc">BTC</a>) is now up about 160% since then and the total crypto market cap has swelled by nearly $900 billion.



Bankman-Fried faces perhaps more than 100 years in jail. But while he waits for his sentencing next March, he could very well be wondering: What if his risky bets actually paid off?&nbsp;



<h2 class="wp-block-heading">What if FTX survived to see Bitcoin retake $44,000?</h2>



Just one day before <a href="https://blockworks.co/news/whats-next-for-ftx-and-its-customers-after-bankruptcy-filing">FTX filed for bankruptcy protection</a> and about a week after a $5 billion bank run, Bankman-Fried mapped out the crypto exchange’s balance sheets in a table that was later <a href="https://www.ft.com/content/0c2a55b6-d34c-4685-8a8d-3c9628f1f185">shared</a> by the Financial Times.



The sheet, reportedly dated Nov. 10, 2022, shows FTX assets worth almost $9.6 billion, with about two-thirds ($6.4 billion) able to be easily backtested.



<ul>
<li>Crypto made up $4.9 billion with an additional $631 million in stablecoins.</li>



<li>Serum (SRM) made up around half of FTX’s crypto. The token is tied to the decentralized exchange on Solana, which Bankman-Fried founded.</li>



<li>Cash and stocks worth $827 million made up about 9% of the total sheet.</li>
</ul>



Turns out, FTX would be close to 40% up on its measurable portfolio, which would be now worth $9 billion — potentially up to $2.6 billion ahead. That’s despite a near 90% crash in serum (<a href="https://blockworks.co/price/srm">SRM</a>), by far FTX’s biggest holding as it entered bankruptcy, per the sheet.&nbsp;



<figure class="wp-block-embed is-type-wp-embed is-provider-flourish wp-block-embed-flourish"><div class="wp-block-embed__wrapper">
<iframe class="wp-embedded-content" sandbox="allow-scripts" security="restricted" title="Interactive or visual content" src="https://flo.uri.sh/visualisation/16069640/embed#?secret=kRviVyT3iI" data-secret="kRviVyT3iI" frameborder="0" scrolling="no" height="575" width="700"></iframe>
</div><figcaption class="wp-element-caption">Goodbye serum, hello solana</figcaption></figure>



<a href="https://blockworks.co/tag/sam-bankman-fried">Bankman-Fried</a>’s sheet doesn’t list token prices, only US dollar values, which makes it difficult to calculate the exact number of tokens on FTX’s balance sheet. There’s no guarantee the spreadsheet is complete or even totally correct (the firm’s GBTC holdings were later found to be much higher, for example).&nbsp;



It’s also not feasible to properly value some of more illiquid assets, such as FTX’s $1.5 billion venture capital portfolio and his half-billion stake in AI startup Anthropic.&nbsp;



Read more: <a href="https://blockworks.co/news/sbf-trial-sentencing-predictions">How long could Bankman-Fried go to jail following trial?&nbsp;</a>



Still, enough details lineup with bankruptcy filings that we can roughly gauge the general health of FTX’s treasury then and now.



If we take prices around those days and compare them to now, it’s clear that solana (<a href="https://blockworks.co/price/sol">SOL</a>) would have made all the difference (and presumably has benefitted the bankruptcy estate extremely well).&nbsp;&nbsp;



Thanks to a stellar 400% recovery, from $14 to beyond $70 today, FTX’s $982 million SOL stake could be worth over $5 billion. The irony is that those gains have come, in part, due to Solana shaking the funk of its association with Bankman-Fried, who was one of the ecosystem’s biggest and loudest backers.



<h2 class="wp-block-heading">Now FTX just has to sell it</h2>



Aptos, the layer-1 blockchain repurposed from Meta’s failed project Diem, would’ve also helped with $312 million after its APT token more than doubled. FTX’s position would have climbed from $375 million to $690 million as a result.



Another $100 million came from gains in Robinhood stock (in real life, the latter was bought back by the online brokerage in September).



Worst performers would’ve been ascendex (<a href="https://blockworks.co/price/asd">ASD</a>) — down 42% to lose $14 million — and oxygen (<a href="https://blockworks.co/price/oxy">OXY</a>), on which he’d lose $45 million.&nbsp;



Another $69 million was sunk with the collapse of Fantom algorithmic stablecoin USD Balance, which lost its dollar peg in June. Not to mention the $2 billion in bitcoin and ether (<a href="https://blockworks.co/price/eth">ETH</a>) liabilities, those have surely ballooned due to their own price rallies.



After Bankman-Fried stepped down, FTX was taken over by storied bankruptcy guru John J. Ray III, who handled Enron after its own sprawling fraud scandal. The plan for FTX is to refund 90% of recovered assets to creditors out of $8.7 billion owed in total.



<figure class="wp-block-embed is-type-wp-embed is-provider-flourish wp-block-embed-flourish"><div class="wp-block-embed__wrapper">
<iframe class="wp-embedded-content" sandbox="allow-scripts" security="restricted" title="Interactive or visual content" src="https://flo.uri.sh/visualisation/16070214/embed#?secret=y2y563OO6R" data-secret="y2y563OO6R" frameborder="0" scrolling="no" height="575" width="700"></iframe>
</div><figcaption class="wp-element-caption">The ‘Bankman-Fried’ line shows the performance of his Nov. 10 balance sheet, minus his venture capital portfolio and private equity stakes</figcaption></figure>



Despite his attempts to maintain innocence, <a href="https://blockworks.co/news/sam-bankman-fried-found-guilty">Bankman-Fried’s jury found him guilty on all seven criminal fraud counts</a>.



He was legally (and morally) responsible for siphoning billions from FTX user accounts to prop up his failing hedge fund, Alameda Research, so it’s more than likely the crypto on Bankman-Fried’s balance sheet technically belonged to its users.



<a href="https://blockworks.co/tag/ftx">FTX</a> has now been cleared to sell billions of dollars in crypto alongside large sums in crypto stocks like Grayscale’s bitcoin and ether trusts.



So, while Bankman-Fried sits in jail and perhaps thinks about whether his dumb bets would’ve paid off (which it sorta seems they would have), all we can do is hope John J. Ray and the FTX estate don’t fumble the bag.



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Bankman-Fried’s crypto portfolio would be up billions this year — thanks to Solana

Katherine Ross

Lucky 13? Where spot bitcoin ETF proposals stand ahead of judgment day

Macauley Peterson

Starknet, a zk-proof-based Ethereum layer-2, is taking a significant step towards decentralizing its network and fostering community engagement.



The Starknet Foundation outlined its plan to distribute over 1.8 billion STRK tokens through various initiatives aimed at driving adoption and growth on its blockchain platform.



The token, which is not currently transferable or tradable, was first <a href="https://www.starknet.io/en/posts/governance/starknet-token-is-deployed-on-ethereum">deployed</a> on Ethereum in November 2022, and ever since speculation has been rife that the network would eventually conduct an aggressive program of community incentives and a retroactive airdrop targeting active Starknet users.



An X <a href="https://x.com/StarknetFndn/status/1733101666357100992?s=20">thread</a> on Friday from the Starknet Foundation brought the contours of this eventual distribution into clearer relief.



At the heart of the initiative is a “provisions committee,” entrusted with the responsibility of allocating 900 million STRK tokens. This committee&#8217;s goal is to ensure a “fair, decentralized and transparent distribution of STRK over multiple programs and phases,” according to the Foundation.



Its objective is to distribute ownership of the network’s native token and to reward past and future contributions.



How exactly this will be done remains to be seen, and a <a href="https://blockworks.co/tag/starkware">Starkware</a> spokesperson declined to comment further.



The Starknet Foundation, incorporated in the Cayman Islands, is independent of Starkware&nbsp; Industries, which is headquartered in Netanya, Israel, but its seven person board <a href="https://starkware.co/resource/introducing-the-starknet-foundation/">includes</a> both Starkware co-founders Eli Ben-Sasson and Uri Kolodny.



The company was valued at $8 billion <a href="https://blockworks.co/news/ethereum-layer-2-developer-starkware-valued-at-8b-following-100m-raise">following its 2022 Series D</a> fundraise.



In addition to rewarding contributions, the Starknet Foundation aims to reward users for their transactions on the Starknet network, such as offering rebates for transaction fees.



Starknet fees are denominated in ether, and the network posts <a href="https://app.blockworksresearch.com/glossary#zero-knowledge-proof-zkp">zero-knowledge proofs</a> of execution of transaction batches to Ethereum mainnet — a security and scaling mechanism.



Read more: <a href="https://blockworks.co/news/layer-2-secured-by-ethereum">So your layer-2 is ‘secured by Ethereum’ — what does that mean?</a>



The Starknet Foundation is also exploring ways to incentivize activity in the decentralized finance (DeFi) sector, working with an initial allocation of 50 million STRK tokens. A <a href="https://www.starknet.io/en/posts/757155c6-ce07-49f1-af21-907b7e0b1cb1/defi-committee-launch-advancing-starknets-defi-progress">six-member</a> “DeFi Committee,” currently concluding its research phase, will soon start implementing strategies to enhance liquidity, trading volume and overall growth of DeFi protocols on Starknet.



Read more: <a href="https://blockworks.co/news/starkware-appchain-defi-cefi">Starkware’s new appchain attracts DeFi derivatives dex with CeFi liquidity</a>



Starknet teased that further details on its incentive mechanism aimed at developers and decentralized applications (dapps) on the Starknet network would be forthcoming next week.



Since the token currently has no secondary market, it’s challenging to ascribe a value to the planned distribution, but layer-2 peers Polygon, Optimism and Arbitrum currently boast fully-diluted markets caps of between $8 billion and $11 billion.



The total supply of STRK tokens is 10 billion, of which 5 billion were allocated to the Starknet Foundation.



The airdrop is <a href="https://blockworks.co/news/airdrop-farming-ethereum-layer-2-activity">one of many anticipated</a> in 2024 related to Ethereum <a href="https://blockworks.co/tag/layer-2-2">layer-2</a> networks, such as <a href="https://twitter.com/LayerZero_Labs/status/1732862812710449466">LayerZero</a> and <a href="https://blockworks.co/news/polygon-and-matter-labs-compete-on-zkevm-rollups">zkSync</a>.



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Starknet Foundation teases STRK token airdrop

Former Binance CEO Changpeng Zhao will remain in the US until his sentencing date, a judge ruled Thursday.



Judge Richard Jones sided with the government’s motion to prevent Zhao from returning to the United Arab Emirates — where he resides with his partner and children. Originally, Magistrate Judge Brian Tsuchida leaned towards letting Zhao return to the UAE until his sentencing hearing.&nbsp;



However, Judge Jones put a <a href="https://blockworks.co/news/binance-changpeng-zhao-us">temporary hold on the decision</a> until the government could file its motion. The government, in its filing, argued that while they don’t believe that Zhao needs to be detained while he awaits sentencing, the US does not have an extradition treaty with the UAE.&nbsp;



“The government contends that the absence of an extradition treaty with the UAE, combined with the defendant’s significant assets and strong connections to the UAE, would allow him to evade his obligation to return to the United States for sentencing,” the filing said.&nbsp;



Read more: <a href="https://blockworks.co/news/binance-changpeng-zhao-deal-unpacked">Here are the details of Binance and Changpeng Zhao’s plea deal</a>



The government is also under the belief that the UAE offered Zhao citizenship and wouldn’t be inclined to extradite Zhao.



Zhao’s legal team argued that he self-surrendered to the government and took “full responsibility for past actions” with his plea agreement. He also has no prior criminal history.



The bail package, which was originally set by Judge Tsuchida and would have allowed <a href="https://blockworks.co/tag/changpeng-zhao">Zhao</a> to leave the country, is hefty but not enough to prevent Zhao from leaving and not returning, Judge Jones ruled.



Zhao’s sentencing is set for Feb. 23.



The former CEO, who has a very active presence on X, has been giving little updates on what’s next for him. Earlier this week, he <a href="https://twitter.com/cz_binance/status/1732260036834099258">posted</a> “learning again, by meeting founders.”



When <a href="https://blockworks.co/news/changpeng-zhao-binance-steps-down#:~:text=Binance%20CEO%20Changpeng%20Zhao%20reportedly,dollar%20settlement%20with%20US%20regulators.">Zhao announced his resignation</a> as part of his plea deal, he <a href="https://twitter.com/cz_binance/status/1727063503125766367">posted</a> that he would be taking a break and then would “probably do some passive investing, being a minority token/shareholder in startups in areas of blockchain/Web3/DeFi, AI and biotech.”



“I am happy that I will finally have more time to spend looking at DeFi,” he added.



The government announced plea agreements with both Zhao and Binance at the end of November. As part of the agreement, Zhao is banned from operating or managing the exchange for a period of three years. He pleaded guilty to violating the Bank Secrecy Act.&nbsp;



<a href="https://blockworks.co/news/doj-indictment-binance-changpeng-zhao">Binance paid a $4.3 billion settlement</a> to the US, and pleaded guilty to operating as an unlicensed money transmitting business.



In addition to the plea agreements, <a href="https://blockworks.co/tag/binance">Binance</a> and Zhao still face a lawsuit from the US Securities and Exchange Commission, which claims that the exchange and its former executive <a href="https://blockworks.co/news/binance-sec-no-evidence-of-commingling">commingled funds as well as offering</a> and selling unregistered securities.&nbsp;



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It’s official: Former Binance CEO must stay in US until sentencing

Jack Kubinec

Jito, the Solana-based liquid staking protocol, opened an airdrop for users to claim 90 million of its JTO governance tokens starting Thursday morning — an amount worth around $165 million at the time of publication.&nbsp;



Jito sent tokens based on how much of its JitoSOL liquid staking token the addresses held and lent to DeFi protocols, alongside rewards for validators and MEV searchers. According to the protocol’s developers, the JTO tokens will be used to govern the DAO and treasury for the staking platform.&nbsp;



Jito lets users stake their Solana (<a href="https://blockworks.co/price/sol">SOL</a>) in exchange for the protocol’s JitoSOL token, which can then be traded or used as collateral — similar to how Lido’s staked ether (<a href="https://blockworks.co/price/steth">stETH</a>) product works.&nbsp;



Jito and a protocol named Marinade are essentially tied as Solana’s largest liquid staking providers, with around $425 million each in total value locked (TVL) <a href="https://defillama.com/protocols/liquid%20staking/Solana">according</a> to DeFiLlama. For context, Lido boasts a TVL of $21.45 billion.&nbsp;



Read more: <a href="https://blockworks.co/news/jto-airdrop-market-reaction">Jito’s JTO soars hours into airdrop, analysts say altcoin rally has steam left&nbsp;</a>



Thanks to the airdrop, Jito’s DAO now has a governance token — and $490 million Jito (<a href="https://blockworks.co/price/jto">JTO</a>) in its <a href="https://gov.jito.network/dao/Jito">treasury</a>.&nbsp;



Based on Jito’s “<a href="https://www.jito.network/blog/introducing-jito-points-powering-the-jito-ecosystem/">points</a>” system for allocating the airdrop, Dan Smith from Blockworks research <a href="https://twitter.com/smyyguy/status/1732814474673795533">wrote</a> on X that moving $40 of JitoSOL around could have netted users nearly $10,000 in JTO.&nbsp;



On the whole, the Jito team followed on a well-trodden path of upstart protocols airdropping governance tokens to their users.&nbsp;



Other examples include the blue-chip DeFi protocol Uniswap’s airdrop of 150 million of its UNI governance token to users in September 2020, worth over $900 million at today’s <a href="https://blockworks.co/price/uni">prices</a>. A large majority of the UNI airdrop recipients ultimately sold their tokens, but the wealth effect may have still fueled Uniswap development. Syncracy Capital’s Ryan Watkins <a href="https://twitter.com/RyanWatkins_/status/1306432490656145408">likened</a> the UNI airdrop to a stimulus check at the time. 



The JTO drop is drawing similar <a href="https://x.com/MikeIppolito_/status/1732819015695794413?s=20">comparisons</a> as potential fuel for a recent resurgence in activity on Solana. The token recovered from its <a href="https://blockworks.co/news/solana-community-remains-bullish-despite-ftx-fallout">association with FTX</a> to more than quadruple in price over the past year. <a href="https://blockworks.co/news/solanas-nft-marketplace-tensor">Solana’s NFT market</a> has seen positive signs, and Solana decentralized exchanges churned $7.3 billion in <a href="https://defillama.com/dexs/chains/solana">volume</a> in November, by far their busiest month ever. 



Wallet owners have 18 months in which to claim the JTO airdrop. This would allow users to defer their claims —&nbsp;<a href="https://blockworks.co/newsletter/issue/33615213">and any accompanying tax implications</a> — into 2024, Ryan West from Blockworks Research wrote about the airdrop.&nbsp;



Despite the long claim window, 54 million out of 90 million of the newly available tokens, or 60%, were <a href="https://flipsidecrypto.xyz/marqu/jito-jto-airdrop-claim-progress-cex-supply-jito-jto-airdrop-claim-progress-cex-supply-8isZkm">claimed</a> within four hours of the airdrop, according to a Flipside Crypto dashboard.&nbsp;



JTO whales appeared to stay put in the wake of the airdrop — the same dashboard shows only three of the 20 largest recipients sold their tokens. 



Another Solana DeFi protocol named <a href="https://blockworks.co/news/solana-jupiter-token-airdrop">Jupiter announced a token last month</a>, saying 40% of the supply would be airdropped to the community.



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What to know about Jito’s $165M JTO airdrop

Investing app Robinhood has expanded its crypto trading offering to the European Union, though analysts note it is entering a crowded market.&nbsp;



The platform supports 25 cryptocurrency assets. Customers receive a monthly bitcoin rebate, based on a percentage of their total trading volume, as announced by the company on Thursday.



Owen Lau, executive director at Oppenheimer &amp; Co., called the EU “a competitive market” — noting existing players serving the region include Bybit, OKX, Kraken, Coinbase, eToro, Crypto.com and Binance.&nbsp;&nbsp;



But after the collapse of crypto exchange FTX last year and <a href="https://blockworks.co/news/binance-settlement-message-to-crypto-industry">Binance’s settlement with the US Department of Justice</a>, some customers may look to move funds to a more reputable platform, he added.&nbsp;&nbsp;&nbsp;&nbsp;



Robinhood noted in its Monday blog <a href="https://newsroom.aboutrobinhood.com/robinhood-launches-crypto-trading-in-the-eu/">post </a>that it has chosen to take “a more conservative approach” than competitors when it comes to supporting digital assets.



“[As] a public company listed in the US, it may give them an advantage to take some share in the EU,” Lau said. “But it is unclear how much return on investments they can generate from this expansion.”



Robinhood CEO Vlad Tenev said during the company’s earnings call last month that crypto benefits from “a relatively clear regulatory framework” in the EU.



Read more: <a href="https://blockworks.co/news/ireland-crypto-vasps-coinbase">Why crypto companies are flocking to Ireland ahead of MiCA</a>



Launching in Europe “will expand the addressable market of customers that we serve by hundreds of millions,” Tenev added at the time.&nbsp;



The launch comes after Robinhood’s transaction-based revenues on cryptocurrencies <a href="https://blockworks.co/news/robinhood-earnings-q3-2023">declined to $23 million during the third quarter</a> — a 55% quarter-over-quarter drop.&nbsp;



It wasn’t the only company to see such a slowdown. In Q3, <a href="https://blockworks.co/news/coinbase-q3-earnings-analysis">Coinbase’s total transaction revenue</a> fell 12% from the prior three-month period. Analysts pointed to weakness in cryptocurrency markets and low volatility as reasons for such declines.



Robinhood has reported more recent momentum on the digital asset front amid a crypto rally in recent weeks. Its November crypto notional trading volumes were roughly 75% above their October levels, according to a Monday <a href="https://d18rn0p25nwr6d.cloudfront.net/CIK-0001783879/3ee2f926-14be-4eb7-b14f-5a7e773073d8.pdf">filing</a>.&nbsp;



Morningstar analyst Michael Miller noted <a href="https://blockworks.co/tag/robinhood">Robinhood’s</a> launch of EU crypto trading is part of a broader expansion. The company last week rolled out brokerage services for customers in the United Kingdom.



“I would see the two moves as being tied together,” Miller indeed. “That said, it’s hard to tell how successful this will be for the company since it is entering a crowded market as a relative newcomer.”



Miller added that crypto trading revenue made up roughly 7% of Robinhood’s net revenue in the first nine months of this year.&nbsp;



“So being able to expand its cryptocurrency business to the EU would be helpful,” the analyst said. “But I don’t know if the impact would be that dramatic unless it significantly outperformed its US operations.”



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Robinhood looks to jumpstart crypto trading revenue via EU expansion

After an explosive week for bitcoin, traders turned their attention to JTO, Solana-based Jito’s new governance token, which gained as much as 75% upon its launch Thursday.&nbsp;



Jito, a staking project built on Solana, released its JTO token at 11 am ET Thursday. By 11:45 am ET, around 30% of the airdrop had been claimed, and none of the top 14 claiming addresses by size had sold.



Eligible recipients have 18 months to collect their assets, making the claim window unusually large for an airdropped token. Typical windows tend to give users 30 to 90 days to make their claims.&nbsp;



<a href="https://blockworks.co/price/jto">JTO’s</a> market capitalization at time of publication was around $211 million.&nbsp;



Read more: <a href="https://blockworks.co/news/bitcoin-rallied-whats-next">Bitcoin has rallied. But where is the price going next?</a>



Decentralized exchange Aevo practically crashed after a surge of futures market activity around the time of the airdrop. Coinbase and Binance also announced plans to list the token.&nbsp;



JTO’s launch comes as <a href="https://blockworks.co/news/bitcoin-ether-altcoins-etf">altcoins continue to soar this year</a>. Solana’s native token (<a href="https://blockworks.co/price/sol">SOL</a>) is up more than 550% year-to-date. Polygon (<a href="https://blockworks.co/price/matic">MATIC</a>) and Chainlink (<a href="https://blockworks.co/price/link">LINK</a>), which both posted rallies last month, still each maintained around a 16% gain over the month Thursday.&nbsp;



Bitcoin (<a href="https://blockworks.co/price/btc">BTC</a>) pulled back Thursday to around $43,100, after surpassing $44,000 earlier in the week. Ether (<a href="https://blockworks.co/price/eth">ETH</a>) on the other hand extended its rally Thursday, gaining an additional 4.2% over the past 24 hours.&nbsp;



<a href="https://blockworks.co/tag/altcoins">Altcoin</a> market share of total crypto trade volume surged to 67% last week, its highest level since March 2022, analysts from crypto research firm Kaiko found.



“Daily altcoin trade volume spiked above $20 billion in early November for the first time since April 2023,” Kaiko analysts added. “While altcoin volumes continue to be driven by offshore markets, Binance’s influence has shrunk, with its market share of global altcoin volume dropping to 46% last week, down from 60% in September 2022.”



It’s not just crypto-native traders taking an interest in altcoins, either. Exchange-traded products (<a href="https://blockworks.co/tag/etps">ETPs</a>) holding Solana increased 99% in assets under management last month, according to research from crypto investment firm Fineqia.



Read more: <a href="https://blockworks.co/news/solanas-nft-marketplace-tensor">Solana’s NFT marketplace booms, with Tensor in top spot</a>



“This follows the 172% growth recorded in October,” Fineqia analysts added. “In the last two months, ETPs holding SOL as underlying [assets] increased by 443%, representing 77% of the altcoins index assets under management growth.”



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Jito’s JTO soars hours into airdrop, analysts say altcoin rally has steam left 

Much has been said of Solana’s recovery since the whole Sam Bankman-Fried thing. But one of the network’s primary rivals, Avalanche, is also having a bit of a moment.



Blink and you might have missed it: Avalanche (<a href="https://blockworks.co/price/avax">AVAX</a>) has flipped bitcoin cash (<a href="https://blockworks.co/price/bch">BCH</a>), polygon (<a href="https://blockworks.co/price/matic">MATIC</a>), polkadot (<a href="https://blockworks.co/price/dot">DOT</a>), tron (<a href="https://blockworks.co/price/trx">TRX</a>) and chainlink (<a href="https://blockworks.co/price/link">LINK</a>) over the past two weeks.



At $9.8 billion, AVAX is now a top-10 cryptocurrency by market cap (if you don’t count Lido Staked ETH), its highest rank all year.&nbsp;



In US dollar terms, AVAX has jumped 150% year to date — almost all of it over the past month. Bitcoin (<a href="https://blockworks.co/price/btc">BTC</a>) has returned slightly more, with <a href="https://blockworks.co/news/bitcoin-price-bull-market-compare">BTC’s rallies largely credited with</a> turning crypto into a sea of green after a dark, lengthy bear market.



<figure class="wp-block-embed is-type-wp-embed is-provider-flourish wp-block-embed-flourish"><div class="wp-block-embed__wrapper">
<iframe class="wp-embedded-content" sandbox="allow-scripts" security="restricted" title="Interactive or visual content" src="https://flo.uri.sh/visualisation/16049872/embed#?secret=vYlNRrwxMF" data-secret="vYlNRrwxMF" frameborder="0" scrolling="no" height="575" width="700"></iframe>
</div><figcaption class="wp-element-caption">Hit play to see Avalanche flip its way into the top 10</figcaption></figure>



Avalanche’s outsized gains are more apparent when tracking its price against bitcoin. Of the top 30 or so cryptocurrencies, AVAX’s bitcoin ratio is the second-best performer over the past three months, having risen 60%, trailing Solana’s, which nearly doubled.



That means a hypothetical crypto trader who sold BTC for AVAX three months ago could now get 60% more bitcoin back on that play — all while BTC itself has rallied 70% against the US dollar.



As of earlier today, ether’s bitcoin ratio had meanwhile slipped by about one-fifth — half as bad as Binance’s BNB. Anyone who sold bitcoin for ether (<a href="https://blockworks.co/price/btc">ETH</a>) at the start of September would get almost 20% less BTC if closing those positions today. 



<figure class="wp-block-embed is-type-wp-embed is-provider-flourish wp-block-embed-flourish"><div class="wp-block-embed__wrapper">
<iframe class="wp-embedded-content" sandbox="allow-scripts" security="restricted" title="Interactive or visual content" src="https://flo.uri.sh/visualisation/16050430/embed#?secret=RDr3YwMZAH" data-secret="RDr3YwMZAH" frameborder="0" scrolling="no" height="575" width="700"></iframe>
</div><figcaption class="wp-element-caption">Notice how SOL and LINK’s bitcoin ratios pumped first, with AVAX following a few weeks later?</figcaption></figure>



Much like Solana, Ethereum, Tron and Polygon, Avalanche is a <a href="https://blockworks.co/news/the-investors-guide-to-avalanche-avax">layer-1 blockchain</a> that supports stablecoins, DeFi applications, memecoins and even <a href="https://blockworks.co/news/avalanche-ordinals-asc20-transaction-record">Ordinals-like inscriptions</a>.&nbsp;



Still, why are markets favoring Avalanche?&nbsp;



Vivek Raman, head of proof of stake at boutique digital asset unit BitOoda, pointed out that all the “alternative layer-1” networks outside of Ethereum are having tremendous runs.



“Solana is up more than seven times from its cycle lows after dropping 95% from its 2021 peak,” Raman said.



“Avalanche is the next major layer-1 that is having a mean reversion bounce and is therefore outperforming right now,” Raman continued. “The major two crypto assets — ETH and BTC — were down much less than altcoins, and this Avalanche move is simply part of a catchup move.”



<figure class="wp-block-embed is-type-wp-embed is-provider-flourish wp-block-embed-flourish"><div class="wp-block-embed__wrapper">
<iframe class="wp-embedded-content" sandbox="allow-scripts" security="restricted" title="Interactive or visual content" src="https://flo.uri.sh/visualisation/16056295/embed#?secret=1ex1tN93HP" data-secret="1ex1tN93HP" frameborder="0" scrolling="no" height="575" width="700"></iframe>
</div><figcaption class="wp-element-caption">Avalanche is still down more than 80% from all-time high set in November 2021</figcaption></figure>



Avalanche’s tech stack was also used for a recent Project Guardian pilot, led by JPMorgan Onyx, which explored the potential benefits of tokenized investment portfolios.&nbsp;



The actual Avalanche mainnet wasn’t used, though, with the banks <a href="https://blockworks.co/news/avalanche-ordinals-asc20-transaction-record">playing around with a fresh permissioned (private) version</a> of the blockchain.&nbsp;



Still, Raman reasoned that JPMorgan’s tests&nbsp; “could be a fundamental driver for the [Avalanche] ecosystem.”



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Avalanche flips MATIC, TRX and LINK to become a top-10 crypto

Ark Invest has sold nearly $59 million of Coinbase from various funds this week.



The sum comes after three days of sales with Ark selling roughly $1.4 million in Coinbase stock on Monday. And on Tuesday and Wednesday, Ark sold around $33 and $24 million respectively.&nbsp;



Looking at the sales in stock, Ark sold a little over 10,000 shares on Monday, 230,000 shares from various funds on Tuesday and 180,000 shares on Wednesday according to <a href="https://ark-funds.com/funds/arkf/?utm_campaign=idt_arkf&amp;utm_medium=email&amp;_hsmi=285522351&amp;_hsenc=p2ANqtz-_FiRfM5aN1jyFtuVwLoRRMvKmJFERKbtB8FkmDbMenYMyzrHyMyIFUMAd5ldZ9Ptr9sl7FFdwjAaW52bRJ41UjfBl4-w&amp;utm_content=idt_1262023&amp;utm_source=IDT">filings</a>.



But when looking at the funds and the overall portfolio weights, Ark could be selling to balance the fund. The asset manager has Coinbase in three funds — the ARK Fintech Innovation ETF (ARKF), ARK Next Generation Internet ETF (ARKW) and the ARK Innovation ETF (ARKK).&nbsp;



As of Dec. 7, Ark holds 6.7 million shares of Coinbase in ARKK, over 949,000 shares in ARKF and 1.3 million shares in ARKW.



Coinbase dominates as the top holding in each of those funds, according to their <a href="https://ark-funds.com/funds/arkk/?utm_campaign=idt_arkk&amp;utm_medium=email&amp;_hsmi=285522351&amp;_hsenc=p2ANqtz--QBks9AkyYmMMOO52D2aStKlHjN5Jiyap2kHeKgpYJh27djTULECN8iv-G5BpgSeyTIYlPFpZQymaJnDoJWPbKwlzjsA&amp;utm_content=idt_1262023&amp;utm_source=IDT">pages</a>.&nbsp;



<a href="https://blockworks.co/tag/ark-invest">Ark</a> unloaded Coinbase throughout the last week as well, selling roughly $15 million of stock as the stock benefited from the recent bitcoin rally.&nbsp;



Read more: <a href="https://blockworks.co/news/cathie-wood-spot-btc-etf">Spot bitcoin ETF would be ‘final seal of approval’ for institutions: Cathie Wood</a>



The stock has been climbing towards its 52-week high of $147 throughout the week, though it’s currently hovering around $135 at time of publication. It closed at $134 on Wednesday. Year-to-date, the stock is up roughly 284%.



Ark’s last purchase of <a href="https://blockworks.co/tag/coinbase">Coinbase</a> shares happened back in June after the US Securities and Exchange Commission filed a lawsuit against the crypto exchange, which sent its shares lower.



Outside of Coinbase, Ark has also been actively selling its shares of Grayscale bitcoin trust (<a href="https://blockworks.co/tag/gbtc">GBTC</a>). It’s sold roughly 267,700 shares of GBTC since Tuesday, for a combined total of $9.4 million. Shares of the trust are held by the ARK Next Generation Internet ETF, which has over 4 million shares according to recent data.&nbsp;



GBTC also benefited from the price surge in bitcoin (<a href="https://blockworks.co/price/btc">BTC</a>) which is currently trading at $43,000 at the time of publishing. GBTC is trading around $34.



Bloomberg Intelligence analysts Eric Balchunas and James Seyffart have previously said that there’s a possibility that Ark <a href="https://blockworks.co/news/ark-invest-21shares-gain-edge-bitcoin-etfs">chooses to offload its shares of GBTC</a> to port the assets over the ARKB, if the SEC gives its spot bitcoin ETF application the green light.



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Ark funds sell $59M worth of Coinbase shares as stock dominates funds

While Marathon Digital extended its hash rate lead on North American competitors in the past month, Riot Platforms and Bitfarms are among those looking to catch up via major machine buys ahead of the bitcoin halving.



Meanwhile, Hut 8 recently closed its merger with US Bitcoin Corp in a move executives have said helps the firm not only boost mining capacity, but further diversify its revenue streams.&nbsp;



The plethora of miner moves comes as <a href="https://blockworks.co/news/anniversary-of-2016-btc-halving">the next bitcoin halving looms</a>. Slated for April, industry watchers expect the event that cuts per-block miner awards from 6.25 bitcoin (<a href="https://blockworks.co/price/btc">BTC</a>) to 3.125 BTC to put stress on industry players.



“It seems like the upcoming halving and this year’s market rebound from the 2022 bottom has bolstered mining companies’ capital expenditure,” BlocksBridge Consulting said in a Thursday research <a href="https://theminermag.com/news/2023-12-07/miner-weekly-bitcoin-halving-investment?utm_source=substack&amp;utm_medium=email">post</a>.&nbsp;



This year, a dozen public mining companies have placed orders for Bitcoin (BTC) mining machines. According to data from BlocksBridge&#8217;s resource The MinerMag, these orders total more than 70 exahash per second (EH/s) in capacity.



The commitments made in 2023 amount to roughly $1.2 billion, with about $750 million in deals inked over the past two months.&nbsp;



<figure class="wp-block-image size-large"><img decoding="async" loading="lazy" width="1480" height="1118" src="https://blockworks-co.imgix.net/wp-content/uploads/2023/12/MinerMag-Chart.jpg?w=1024&amp;h=1024" alt="" class="wp-image-75225" srcset="https://blockworks-co.imgix.net/wp-content/uploads/2023/12/MinerMag-Chart.jpg?w=1480 1480w, https://blockworks-co.imgix.net/wp-content/uploads/2023/12/MinerMag-Chart.jpg?w=300 300w, https://blockworks-co.imgix.net/wp-content/uploads/2023/12/MinerMag-Chart.jpg?w=1024 1024w, https://blockworks-co.imgix.net/wp-content/uploads/2023/12/MinerMag-Chart.jpg?w=768 768w, https://blockworks-co.imgix.net/wp-content/uploads/2023/12/MinerMag-Chart.jpg?w=340 340w, https://blockworks-co.imgix.net/wp-content/uploads/2023/12/MinerMag-Chart.jpg?w=346 346w, https://blockworks-co.imgix.net/wp-content/uploads/2023/12/MinerMag-Chart.jpg?w=290 290w, https://blockworks-co.imgix.net/wp-content/uploads/2023/12/MinerMag-Chart.jpg?w=80 80w" sizes="(max-width: 1480px) 100vw, 1480px" /></figure>



<h2 class="wp-block-heading">Who has been most aggressive?</h2>



Dan Weiskopf, a co-portfolio manager of the Amplify Transformational Data Sharing ETF (<a href="https://blockworks.co/tag/blok">BLOK</a>), previously told Blockworks that large-scale miners “need to be bold and think two steps ahead of [their] peers” — adding some in the space “will not survive the halving.”



<a href="https://blockworks.co/news/riot-plots-hash-rate-growth">The largest miner purchase of the year came from Riot Platforms</a> on Monday, in the form of 66,560 MicroBT machines for $290.5 million. The largest hash rate purchase in the company’s history, it amounts to about 18 EH/s of mining capacity, Riot said.&nbsp;



Riot’s deployed hash rate was 12.4 EH/s at the end of November, the company said Wednesday.&nbsp;



The company can purchase up to 265,000 more MicroBT miners on the same terms in the future, which would add 75 EH/s to the company’s self-mining capacity.



Bitfarms has also added miners, last week buying nearly 36,000 Bitmain T21 miners as part of “a transformative fleet upgrade plan.” The buy, as well as an option to purchase offer a pathway to increase the miner’s hashrate — at 6.3 EH/s on Nov. 27 — to 17 EH/s by the latter half of next year.



“This strategy is expected to significantly increase efficiencies along with lower unit production costs and dramatic hashrate growth, positioning us well for the upcoming halving and beyond,” Bitfarms CEO Geoff Morphy said in a statement.



CleanSpark is another miner set to add substantial hash rate, making a deal in October to buy 4.4 EH/s worth of Antminer machines. The company reported a hashrate of about 10.1 EH/s at the end of November and expects to start adding the recently acquired machines in January.&nbsp;



Hut 8 and US Bitcoin Mining Corp is now one company with an installed hash rate capacity of 7.5 EH/s. But Hut 8 CEO Jaime Leverton has said the company is “not here to simply chase exahash,” noting <a href="https://blockworks.co/news/hut8-mining-q2-earnings-revenue">its focus on diversifying the business</a>.



Read more: <a href="https://blockworks.co/news/new-look-hut-8-eyes-ai-related-opportunities-after-merger">New-look Hut 8 eyes AI-related opportunities after merger</a>



<h2 class="wp-block-heading">Marathon, Core Scientific in the lead&nbsp;</h2>



While others look to quickly add hash rate, Marathon Digital continues to lead its North American rivals in that category. Core Scientific, which is expecting an <a href="https://blockworks.co/news/core-scientific-new-ceo-2">exit from its bankruptcy</a> by year’s end, is close behind.&nbsp;&nbsp;&nbsp;



Marathon increased its domestic energized hash rate by 20% in November to 23.1 EH/s.&nbsp;&nbsp;



The company, which has focused on <a href="https://blockworks.co/news/marathon-mining-bitcoin-halving">expanding globally and diversifying its mining methods</a>, has 2.5 exahash and 0.2 exahash online in Abu Dhabi and Paraguay, respectively.&nbsp;



Core Scientific’s energized hash rate stood at 21.6 EH/s on Nov. 30.



<a href="https://blockworks.co/news/core-scientific-bitmain-bitcoin-mining-business">Bitmain agreed to invest $53 million in the company</a> in September as part of a deal that supplies Core Scientific with 27,000 Bitmain S19J bitcoin mining servers, or 4.1 EH/s of hashrate.&nbsp;



Core Scientific CEO Adam Sullivan said in a statement, “we remain very well positioned for growth and value creation after our planned emergence from reorganization next month.” This comment comes as the company anticipates receiving 6.6 EH/s worth of bitcoin miners over the next seven months.



Marathon Digital and Core Scientific last month produced 1,151 BTC and 954 BTC, respectively. CleanSpark generated 666 bitcoins, while Riot followed with 552 BTC.



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Crypto miners keep busy ahead of halving with accelerated machine buys

There are some pretty weird things being brought on-chain nowadays.



Real-world-asset (RWA) tokenization is one of the hottest topics in crypto as industry participants eye the impending bull run. With how rapidly the RWA market is growing, now is the opportune time for crypto enthusiasts to begin exploring the topic.



<figure class="wp-block-image"><img decoding="async" loading="lazy" width="1183" height="638" src="https://blockworks-co.imgix.net/wp-content/uploads/2023/12/image-1.png" alt="" class="wp-image-75219" srcset="https://blockworks-co.imgix.net/wp-content/uploads/2023/12/image-1.png?w=1183 1183w, https://blockworks-co.imgix.net/wp-content/uploads/2023/12/image-1.png?w=300 300w, https://blockworks-co.imgix.net/wp-content/uploads/2023/12/image-1.png?w=1024 1024w, https://blockworks-co.imgix.net/wp-content/uploads/2023/12/image-1.png?w=768 768w, https://blockworks-co.imgix.net/wp-content/uploads/2023/12/image-1.png?w=428 428w, https://blockworks-co.imgix.net/wp-content/uploads/2023/12/image-1.png?w=470 470w, https://blockworks-co.imgix.net/wp-content/uploads/2023/12/image-1.png?w=389 389w, https://blockworks-co.imgix.net/wp-content/uploads/2023/12/image-1.png?w=80 80w" sizes="(max-width: 1183px) 100vw, 1183px" /><figcaption class="wp-element-caption">The value of RWAs on-chain crossed $3 billion in August | Source: <a href="https://x.com/glxyresearch/status/1697617833075568977?s=20">Galaxy Research</a></figcaption></figure>



RWA tokenization brings crypto into the real world, drastically expanding crypto utility across various use cases, the most prominent of which are financial assets, including precious metals and real estate.



Outliers are currently being tokenized as well. This article explores some of the strangest.



<h2 class="wp-block-heading">From NFTs to glasses clinking&nbsp;</h2>



Fine wine and spirits producers seek three key insights to connect with customers better: buyer identity, current owner, and consumption history. That’s according to <a href="https://www.linkedin.com/in/jamie-ritchie-8a289214?original_referer=https%3A%2F%2Fwww.google.com%2F">Jamie Ritchie</a>, former worldwide chair of wines and spirits at Sotheby’s, who left the auction house to join <a href="https://blockbar.com/">BlockBar</a> in the Web3 industry.&nbsp;



Through BlockBar&#8217;s blockchain marketplace, fine alcohol producers can now sell directly to clients, eliminating middlemen.



Here’s how it works.



Every bottle is tokenized with an NFT issued to the purchaser. The bottle is stored in a fully insured, temperature-controlled environment until clients decide they want it. When they do, they trade in the NFT and BlockBar transports the bottle.



<blockquote class="wp-block-quote">
“The distribution model of wines and spirits, particularly at the higher end, isn’t working well. The bottles aren’t getting to the right people – the people who appreciate them – before they go through too many different steps. It’s better to reduce those steps. Let’s say you’re consuming 10 [bottles a year], and I’m consuming none, but I’m the one buying from the producer – where does the producer want to focus their efforts? If we can give them that information, which blockchain enables, they’re going to be happy.”
<cite>— Jamie Ritchie, COO of BlockBar</cite></blockquote>



Tokenization plays a crucial role in ensuring authenticity as well.



Sotheby&#8217;s rare bottle auctions require stringent authenticity checks to combat forgers, but the risk of counterfeit or tampered bottles increases the more times bottles change hands. Bottles could also have been kept in suboptimal conditions. 



With BlockBar, bottles move directly from the producer to storage, guaranteeing authenticity so long as they remain stored. While stored, owners can sell or gift bottles via the NFT. The NFT&#8217;s journey is recorded on the blockchain, offering producers valuable insights into bottle consumption.



<h2 class="wp-block-heading">Tokenization transforms nuclear and solar energy</h2>



Currently, about <a href="https://world-nuclear.org/information-library/current-and-future-generation/plans-for-new-reactors-worldwide.aspx">440 nuclear reactors supply 10% of global electricity</a>, with 60 more under construction.



While nuclear power is seen as the future of clean energy, uranium trading has traditionally been opaque due to safety concerns and trade restrictions.



<figure class="wp-block-image"><img decoding="async" loading="lazy" width="750" height="520" src="https://blockworks-co.imgix.net/wp-content/uploads/2023/12/image.png" alt="" class="wp-image-75218" srcset="https://blockworks-co.imgix.net/wp-content/uploads/2023/12/image.png?w=750 750w, https://blockworks-co.imgix.net/wp-content/uploads/2023/12/image.png?w=300 300w, https://blockworks-co.imgix.net/wp-content/uploads/2023/12/image.png?w=371 371w, https://blockworks-co.imgix.net/wp-content/uploads/2023/12/image.png?w=376 376w, https://blockworks-co.imgix.net/wp-content/uploads/2023/12/image.png?w=316 316w, https://blockworks-co.imgix.net/wp-content/uploads/2023/12/image.png?w=80 80w" sizes="(max-width: 750px) 100vw, 750px" /><figcaption class="wp-element-caption">Historical price of uranium | Source: <a href="https://tradingeconomics.com/commodity/uranium">Trading Economics</a></figcaption></figure>



Typically, uranium attracts buyers like utility companies, governments, and trading houses, with retail investors being left out of the equation. $U, a uranium-backed fungible token from <a href="https://twitter.com/Uranium3o8">Uranium3o8</a>, aims to change that.&nbsp;



“Other than buying uranium directly from a miner like Madison on a sales contract basis, the only other way ‘Joe Retail’ could play in uranium as a commodity was through either a participation agreement or through the purchase of futures.” Duane Parnham, CEO of Madison Metals



The initiative is being supported by <a href="https://www.juniorminingnetwork.com/junior-miner-news/press-releases/3155-cse/gren/148046-uranium3o8-tokenizes-uranium-to-democratize-commodity-access-and-ownership.html#:~:text=Uranium3o8%20is%20now%20possible%20due,Madison%20and%20Sanmiguel%20Capital%20Investment">Madison Metals Inc.</a>, a leading mining firm with several decades of experience.



Uranium isn’t the only renewable energy source being tokenized; through the efforts of companies like <a href="https://auroralabs.dev/">Aurora Labs</a>, solar energy is also being brought into this new reality.



Instead of tokenizing the energy itself, Aurora’s technology is being used by <a href="https://www.powergold.tech/#presale">PowerGold</a>, an Enpower affiliate specializing in green energy investments, to tokenize their energy company. The move offers an investment opportunity (currently in the private sales stage) that was once exclusive to institutions and high-net-worth individuals. This innovative approach aligns people&#8217;s actions with their sustainability goals, democratizing access to green energy investments.&nbsp;



Leveraging, <a href="https://auroracloud.dev/?utm_source=blockworks&amp;utm_medium=pr&amp;utm_campaign=cloud_launch">Aurora Cloud</a>, PowerGold was able to tackle the regulatory challenges associated with its token sale and successfully achieved its objective of facilitating seamless ENP token transactions within a secure and compliant network. PowerGold is poised to revolutionize the renewable energy investment sector, with a strong emphasis on transparency, compliance, and, most importantly, accessibility—all made possible with the support of Aurora Cloud.



Tokenizing the energy company itself, as exemplified by Aurora and PowerGold, offers a new paradigm in the renewable energy industry. It enables individuals to invest in sustainable energy ventures, contributing to a more environmentally conscious future. This transformative approach, in combination with other efforts and innovations related to Solar tokenization, is set to reduce energy costs, enhance availability, and evolve supply chains to better manage energy surpluses, among other pivotal aspects of the energy landscape.



<h2 class="wp-block-heading">Breaking boundaries through tangible assets</h2>



Crypto’s expansion outside of the typical DeFi utilities that the industry has grown accustomed to marks the start of an impactful new era.



Whether real estate, diamonds, or crazy assets like booze, solar companies and energy, and uranium, crypto has an abundance of opportunities ahead of it through RWA tokenization. It’s a play that brings crypto from URL to IRL, with the power to rapidly accelerate adoption by touching the lives of millions globally.



<hr class="wp-block-separator has-alpha-channel-opacity"/>



This content is sponsored by <a href="https://auroralabs.dev/">Aurora Labs</a>.



The RWA crypto movement is exactly what Aurora is bringing value to through Aurora Cloud, a fully integrated suite of blockchain products aimed to help businesses leverage the power of blockchain. Over 260 applications are already benefiting from the Aurora network, with use cases in supply chain management, gaming, customer loyalty programs, and much more.



<a href="https://auroracloud.dev/?utm_source=blockworks&amp;utm_medium=pr&amp;utm_campaign=cloud_launch">Learn more about Aurora Cloud</a>.



<hr class="wp-block-separator has-alpha-channel-opacity"/>



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Uranium, booze and blockchain

Preorders for Block’s self-custody bitcoin wallet Bitkey launched across the world on Thursday.



According to a press release, the wallet can be preordered in 95 countries, with shipping set to start in early 2024.



“Bitkey includes a mobile app, hardware device and a set of recovery tools in case the customer loses the phone, their hardware, or both,” the release <a href="https://www.businesswire.com/news/home/20231207228680/en/Self-Custody-Bitcoin-Wallet-Bitkey-Built-by-Block-Inc.-Launches-Globally-Widening-Access-to-True-Financial-Ownership">said</a>.



It uses three keys to secure bitcoin in the wallet, though a customer can use any two of those keys to access and change security settings, launch a recovery or transfer bitcoin. The app acts as one key, and the hardware device acts as a second key. The final key is on the Bitkey server, and is the only one the company has access to.



The Bitkey wallet also allows users to set an optional daily spending limit on their phones. This feature utilizes the mobile key in conjunction with the server key to co-sign transactions up to the set daily limit. The intent is to provide security and convenience, enabling users to spend safely on the go without making it necessary to carry their hardware device everywhere. This system ensures that even if someone gains access to the user&#8217;s phone, they cannot access all of the user&#8217;s funds.



Read more: <a href="https://blockworks.co/news/blocks-cash-app-bitcoin-revenue-up-investment-holdings-now-above-breakeven">Block’s Cash App bitcoin revenue up, investment holdings now above breakeven</a>



The hardware gives “an extra layer of security to co-sign money movements (based on a customer-set limit); and enables recovery when customers lose their phone.”



Bitkey’s global beta launched back in June. Beta testers were able to test out the hardware device and mobile app.



At the time of the beta launch, it also <a href="https://blockworks.co/news/coinbase-bitkey-partnership">announced a Coinbase partnership</a>. Users were able to buy bitcoin on Coinbase and initiate the transfer through Coinbase Pay.



<a href="https://blockworks.co/tag/cash-app">Cash App</a>, which is also in Block’s portfolio, will also integrate its product into the Bitkey app. Cash App was launched by Square — now Block — back in 2013. In August, Cash App noted that the amount of <a href="https://blockworks.co/news/block-earnings-cash-app-bitcoin">bitcoin sold to customers during the second quarter</a> of 2023 jumped up to $2.39 billion. This marked a year-over-year increase of 34%.



When customers receive their wallets, they’ll be able to transfer bitcoin from both Cash App and Coinbase though the ability to transfer bitcoin from other places and the buy and transfer features will be rolled out in a “staggered” approach.



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Block announces preorders for Bitkey bitcoin wallet

Former Terraform Labs CEO Do Kwon may be on his way to the US, according to a report from the Wall Street Journal.



The Journal <a href="https://www.wsj.com/livecoverage/stock-market-today-dow-jones-12-07-2023/card/exclusive-montenegro-plans-to-extradite-fallen-crypto-tycoon-do-kwon-to-u-s--go9pVSEoANWEjPKGAfD6?page=1">reports</a> that Montenegro plans to extradite Kwon to the US rather than South Korea. Kwon faces charges in both countries.



Kwon has been held in prison in Montenegro since March after authorities alleged that he falsified travel documents. He was sentenced to four months in prison back in June.&nbsp;



The US Securities and Exchange Commission has an open case against both Kwon and Terraform Labs, alleging the offer and sale of unregistered securities. South Korea charged Kwon with fraud and violations of the country’s capital markets laws.&nbsp;



Both the company and Kwon faced scrutiny from regulators after the collapse of the algorithmic stablecoin TerraUSD (UST). The stablecoin’s failure triggered a $40 billion crash in the crypto market and spurred the bankruptcies of multiple lenders with exposure to UST, including Celsius and Voyager.&nbsp;



Kwon’s extradition was approved by a court last month. Justice Minister Andrej Milovic was given the decision on where to send Kwon. According to <a href="https://rtcg.me/vijesti/drustvo/495069/stigla-zalba-na-odluku-o-izrucenju-do-kvona.html">local media reports</a> in Montenegro, Kwon attempted to appeal the extradition.



The Journal report cites unnamed sources and quotes Milovic as saying that the “public will be informed of the decision in a timely manner.”



In the US, the SEC and Terraform have gone back and forth in regards to a deposition from Kwon — <a href="https://blockworks.co/news/do-kwon-us-deposition-impossible">which Kwon’s lawyers argued was “impossible”</a> — and a summary judgment from Judge Jed Rakoff.&nbsp;



The SEC wants Rakoff to rule on whether or not the tokens offered were indeed securities, as the regulator alleges, so that the <a href="https://blockworks.co/news/sec-judge-oversee-terrform-ruling">decision is not up to a jury</a>.



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