Blockchain Bites: ConsenSys Cuts, dForce Doomsday and Bitcoin ATMs Boom

A weekend hack drained funds from a popular decentralized finance application, Ethereum incubator ConsenSys is laying off about 90 employees and bitcoin ATMs are seeing growth during the coronavirus contagion event.

In a breaking story, ConsenSys has confirmed to CoinDesk that due to coronavirus-led market turmoil, the firm will cut approximately 14 percent of its headcount. The move follows a round of layoffs announced in February, and leaves the firm with just over 550 employees. “All key operational aspects of the business are preserved to ensure the development and service of key products and solutions,” the company said in its statement. Here’s the story:

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Top Shelf

DeFi Disaster

Decentralized finance protocol dForce is insolvent following a late-night weekend exploit. While the perpetrator is unknown, the hack exploited a known vulnerability of the ERC-777 standard. Due to the way dForce lending program Lendf.Me’s smart contract is set up, the hacker was able to continually withdraw funds without the program’s balance updating, eventually scoring 99 percent of the assets – more than $25 million – locked within. The Multicoin Capital-backed dForce had been accused of cribbing code from competing application Compound. 

The hackers allegedly returned $126,014 back to Lendf.Me with a note saying, “Better luck next time,” according to Chain News.

ConsenSys Cuts

Ethereum incubator ConsenSys is laying off “just over 90” staffers, or about 14 percent of the firm’s headcount. “The global COVID-19 pandemic has deeply impacted the world’s health and livelihood,” a company spokesperson told CoinDesk. “ConsenSys has carefully analyzed its business in relation to what is occurring globally. Like most of its peers, the company is seeing extraordinary uncertainty in the market, with businesses rebalancing priorities and reevaluating timelines.”

Bitcoin Futures

Renaissance Technologies $10 billion Medallion fund is considering jumping into bitcoin futures, recent regulatory filings show. The firm has “permitted” the Medallion fund to enter the Chicago Mercantile Exchange’s (CME) cash-settled bitcoin futures market, a financial instrument widely considered to be a proxy for institutional interest in bitcoin.

Hong Kong’s securities regulator has approved the jurisdiction’s first-ever bitcoin index fund designed for institutional investors. Arrano Capital, the blockchain investment arm of asset management firm Venture Smart Asia, hopes to surpass $100 million in total assets under management through a fund tracking bitcoin prices.

Movers & Shakers 

Coinbase has hired former Barclays markets veteran, Brett Tejpaul, to head up institutional coverage at the San Francisco-based crypto exchange. Tejpaul spent 17 years at Barclays in various leadership roles including global head of sales, global head of credit and commodities, and Barclays’ first “head of digital” role, which included managing fintech venture investments. 

Calibra, a Facebook subsidiary helping to develop the blockchain-based Libra currency, is looking to hire 50 people in Ireland. (The Irish Times)

20K, 2 Days

Topaz, the Ethereum 2.0 testnet, has garnered nearly 20,000 validators two days after its April 18 debut. “One of the key goals for Topaz is to test the Phase 0 proof-of-stake (PoS) protocol implementation on Ethereum 2.0, to which the network will eventually transfer from the current computationally-intensive proof-of-work consensus mechanism,” Decrypt’s Liam Frost reports. 

Cash Doings

Crypto exchanges like Coinbase and Binance.US are reporting a spike in the number of buys and deposits of $1,200, the amount gifted to some U.S. citizens as part of a Federal government’s financial stimulus during the coronavirus-led downturn. “People do seem to have deposited exactly $1,200 into Binance.US in the past couple of days,” a Binance.US representative said, adding that the transactions coincided with the date the checks were cut. 

Meanwhile, Russians are stocking up on cash. One trillion rubles ($13.6 billion) were issued from ATMs and banks through March – more than for all of 2019, according to a report by BNN Bloomberg.

Airdrop Regulation From Up High

Singapore’s tax authority will not take a cut of airdropped cryptocurrency so long as the recipient gets it for free, according to an income tax treatment guide published Friday.

Bitcoin ATMs

Some bitcoin ATM operators are reporting an increase in transactions while others are taking advantage of shelter-in-place rulings to expand their networks. The number of bitcoin ATMs in the United States increased 5.6 percent from March to April, as companies like LibertyX and DigitalMint expanded into new markets. And as interest in Bitcoin soars during COVID-19, other crypto ATMs are experiencing their highest ever amount of transaction volumes.

Asian Expansion

Institutional custody startup Curv has expanded into Asia with an office in Hong Kong and a partnership with Japan-based Crypto Garage, the companies announced Friday. The startup will help Asian exchanges self-custody various cryptocurrencies with its multi-party computation (MPC) technology. CEO Itay Malinger said Asia has more exchanges per capita than other parts of the world, and are more likely to self-custody.

Olympic Use Case

The People’s Bank of China (PBOC) said that its digital currency could be used in the 2022 Winter Olympics event. (The Block)

Opinion: Dai Should Consider Negative Interest Rates

On March 12, U.S. equity prices plunged 10 percent, bitcoin and ethereum prices plummeted almost 50 percent, and dai – a stablecoin pegged to the U.S. dollar – skyrocketed as high as $1.50. “This shouldn’t have happened,” CoinDesk columnist J.P. Koning writes in his latest op-ed, which raises the question if MakerDAO should have negative interest rates for dai. “It’s role is to mimic the performance of an underlying national currency, in this case the U.S. dollar. But at $1.50, dai was suddenly worth one-and-a-half U.S. dollars. It didn’t look very stable at all.”

CoinDesk Live

CoinDesk Live: Lockdown Edition continues its popular twice-weekly chats with Consensus speakers via Zoom and Twitter. Here you’ll get a preview of what’s to come in Consensus: Distributed, our first fully virtual – and fully free – big-tent conference May 11-15. 

On the show, we’ll chat with developers from the most exciting crypto projects, unpack the basics – and not so basics – of the industry and hear from entrepreneurs disrupting traditional industries. Then we’ll open the floor for you to ask questions directly to our guests.

Register to join our second session Tuesday, April 21, with Foundations speakers Priyanka Desai and Aaron Wright from The Lao to discuss for-profit DAOs.

Market Intel

Easing Volatility

Bitcoin market volatility has hit three-month lows, marking a price squeeze that could soon pave the way for a big move on either side. The spread between bitcoin’s Bollinger bands – volatility indicators that often indicate an impending price swing – narrowed to $895 on Monday, the lowest level since Jan. 6. “When it tightens, it is because we have been consistently trading in a narrower range for a prolonged period and we should see a breakout very soon,” said Chris Thomas, head of digital assets at Swissquote.

Testing, Testing

Bitcoin appears on track to test the psychological hurdle of $8,000, having found acceptance above a key hurdle last week. The cryptocurrency closed last week above the horizontal 100-week average resistance, which has consistently capped upside the preceding four weeks, part of an ongoing rally from the March low of $3,856. 

Halving Webinar

Join CoinDesk’s Noelle Acheson and Christine Kim for a chat about the upcoming bitcoin halving. They’ll talk about their recent report which explains what it is, why it matters and what its impact on the sector and the bitcoin price could be. We attempt to reconcile the various models and theses around the potential bitcoin price reaction as the adjustment approaches, and look at metrics that will shed light on the technological impact.

CoinDesk Podcasts

Chia’s Cohen

CoinDesk reporter Leigh Cuen sits down with Bram Cohen, author of the BitTorrent protocol and CEO of Chia. In this wide-ranging interview, they talk about Cohen’s early interest in “hard problems,” his unexpected ascent from sketchy to celebrity and why getting rich is a terrible metric of success.

Who Won #CryptoTwitter?

Blockchain Bites is CoinDesk’s daily news roundup of the most important stories in blockchain tech from this site and around the web. You can subscribe here.