Day: May 29, 2024

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Mastercard (NYSE:MA) is launching a peer-to-peer (P2P) platform for cryptocurrency users in Europe and Latin America. The new network, called Mastercard Crypto Credential, aims to facilitate cross-border digital asset transactions.

In its pilot phase, Mastercard Crypto Credential supports transactions on Bit2Me, Lirium, and Mercado Bitcoin exchanges, enabling cross-border payments between Europe and Latin America. This initiative is part of Mastercard’s strategy to leverage digital assets for cross-border payments, a rapidly growing sector in the payments industry.

“As interest in blockchain and digital assets continues to surge in Latin America and around the world, it is essential to keep delivering trusted and verifiable interactions across public blockchain networks,” said Walter Pimenta, executive vice president of product and engineering for Latin America and the Caribbean at Mastercard.

The P2P network will also feature Mastercard Crypto Credential aliases, which are shorthand labels for crypto wallets. These vanity addresses, similar to those offered by the Ethereum Name Service (ENS) on the Ethereum network, are designed to simplify cross-border payments. This feature is expected to help Mastercard capture market share in the fast-growing remittance services sector, a key focus of the company’s crypto initiatives.

According to data from the United Nations International Organization for Migration, migrants sent an estimated $831 billion in remittances worldwide in 2022, up approximately 16% from the $717 billion sent in 2020.

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Bankrupt crypto lender Genesis and crypto exchange Gemini have successfully returned over $2 billion in cryptocurrency to 232,000 retail customers of their jointly managed Gemini Earn program. This repayment provides customers a 242% return on assets that had been locked up since January 2023, Gemini announced on Wednesday.

Unlike other crypto companies that went bankrupt following the 2022 market crash, Genesis managed to return customers’ crypto assets instead of liquidating them for cash payouts.

Customers who loaned one bitcoin to Genesis will receive one bitcoin back, benefiting from the coin’s substantial price increase since Genesis declared bankruptcy. Bitcoin’s value has more than tripled since January 2023, rising to over $67,000.

“We are thrilled to have been able to achieve this recovery for our customers,” said Gemini co-founder Cameron Winklevoss. “We recognize the hardship caused by this lengthy process and appreciate our customers’ continued support and patience throughout.”

Gemini customers will receive approximately 97% of their repayment immediately, with the remaining amount distributed within 12 months, the company stated.

Previously, Genesis had estimated that its customers, including larger investors not part of the Earn program, would receive a 77% recovery in the bankruptcy. Gemini customers benefited from a $50 million settlement contribution from Gemini and settlements that enabled Genesis to sell shares in Grayscale bitcoin and ethereum trusts.

Participants in the Gemini Earn program loaned their crypto to Genesis and earned interest on their loaned assets. The total value of the Gemini Earn assets was $940 million when Genesis froze customer accounts in November 2022.

New York Attorney General Letitia James has alleged that the Gemini Earn program was a “scam” that misled investors. She has sued Genesis, Gemini, and Genesis’s parent company Digital Currency Group (DCG) over the program.

In February, James reached a settlement with Genesis requiring it to repay Earn customers before other creditors, including New York state and DCG.

DCG had argued that Genesis’s customers should be repaid based on the value of the crypto assets in January 2023. Under this argument, which a judge overruled on May 17, DCG could have taken the “excess” value from the rise in crypto prices rather than returning it to Genesis customers.

James’ lawsuit disrupted Genesis’s efforts to restart its business, ultimately pushing the company toward bankruptcy liquidation.

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Crypto bridging protocol LayerZero is expanding to the Solana blockchain, providing a new pathway for transferring crypto assets between Ethereum and its largest competitor, starting Wednesday.

This integration will allow Solana users to move their assets to Arbitrum, Ethereum, Polygon, and 70 other connected chains, and vice-versa, according to LayerZero Labs, the company behind the bridging protocol.

LayerZero functions as a bridging platform, enabling communication between blockchains that do not naturally interact. In the first quarter of 2024, LayerZero users transferred $6.7 billion worth of cryptocurrencies, generating $11.5 million in revenue, as reported by Messari.

In April, private venture investors valued LayerZero Labs at $3 billion during a significant funding round. The protocol is expected to issue its own token soon.

Solana, whose native token $SOL is the fifth-largest cryptocurrency by market cap according to CoinGecko, already has three major bridging protocols linking it to the larger Ethereum ecosystem, with Wormhole being the most notable.

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The State of Wisconsin Investment Board has become the first public institution in the U.S. to invest in cryptocurrency, putting $187.1 million into bitcoin and related crypto companies, as revealed in a May 14 quarterly filing with the U.S. Securities and Exchange Commission.

SWIB manages the assets of the Wisconsin Retirement System, the State Investment Fund, and other funds, with total assets exceeding $156 billion as of the end of 2023. The cryptocurrency investment represents a small portion—about one-tenth of 1%—of its total assets.

Bob Bukowski, managing partner of Alpha Investing Consulting, described the investment as a speculative bet. He explained, “If bitcoin doubles or triples in value, they can say they were invested. If it goes to zero, the loss is negligible.”

The largest portion of SWIB’s crypto investment is $99.1 million in iShares Bitcoin Trust (NYSEARCA:IBIT), an exchange-traded fund managed by BlackRock (NYSE:BLK), which launched in January after SEC approval. The fund closed at $38.98 on Tuesday, up about 46% from its January launch.

In addition to iShares Bitcoin Trust, SWIB invested $63.6 million in Grayscale Bitcoin Trust and $24.5 million in Coinbase (NASDAQ:COIN), a leading cryptocurrency exchange platform.

Bloomberg Senior ETF Analyst Eric Balchunas noted on Twitter that other public institutions might follow SWIB’s lead, saying, “Expect more, as institutions tend to move in herds.”

When contacted for comment, SWIB stated it “does not comment on specific investments.”

SEC Chair Gary Gensler emphasized caution, noting that bitcoin is a speculative asset often associated with illicit activities. He said, “Investors should remain cautious about the myriad risks associated with bitcoin and products whose value is tied to crypto.”

Bukowski added that the SEC’s involvement is crucial for investor protection, stating, “The SEC now has the authority to monitor how these investments are managed and traded.”

Bitcoin traded between $66,685 and $70,314 per coin over the last five days, closing at $68,305 on Wednesday.

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