Block by Block Weekly Newsletter #38

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News of the Week

😞 Bakkt Delays Bitcoin Futures Launch

Intercontinental Exchange’s bitcoin futures trading platform is delaying its formal launch.

Announced Tuesday via a company blog post, Bakkt’s first product, unveiled in August, has now been postponed to Jan. 24, 2019. Trading and warehouse operations are both expected to begin on that date.

The platform explained that “the new listing timeframe will provide additional time for customer and clearing member onboarding prior to the start of trading and warehousing of the new contract.”

In an announcement on Medium, Bakkt CEO Kelly Loeffler expanded on this statement, saying that the “volume of interest” in the company and the “work required to get all the pieces in place” contributed to the delay.

⛏️ Bitcoin Mining Firm Giga Watt Declares Bankruptcy

U.S.-based bitcoin mining firm Giga Watt has declared bankruptcy with millions still owed to creditors.

The firm filed for Chapter 11 bankruptcy at a court in the Eastern District of Washington on Monday, revealing that it still owes its biggest 20 unsecured creditors nearly $7 million in court documents seen by CoinDesk.

Creditors include the utilities provider in its Douglas County base, having a claim of over $310,000, and electricity provider Neppel Electric, which is owed almost half a million dollars.

Giga Watt has estimated assets worth less than $50,000, whereas estimated liabilities are in the range of $10–50 million, according to the court documents.

👍 Major Swiss Stock Exchange SIX Lists World’s First Multi-Crypto ETP

Switzerland’s principal stock exchange SIX Swiss Exchange will list the world’s first multi-crypto-based exchange-traded product (ETP) next week.

Backed by the Swiss startup Amun AG, the first global multi-crypto ETP will be listed under index HODL, and will track five major cryptocurrencies: Bitcoin (BTC), Ripple (XRP), Ethereum (ETH), Bitcoin Cash (BCH), and Litecoin (LTC).

According to the article, each cryptocurrency will acquire a certain market share within the upcoming ETP, with Bitcoin accounting for around half of the ETP’s assets. The rest are set to be divided in fractions, with 25.4 percent in cryptocurrency XRP, and 16.7 percent in Ethereum, while Bitcoin Cash and Litecoin will acquire 5.2 and 3 percent of the market, respectively.

🤝 Crypto Trading Firms Teaming Up

A band of cryptocurrency trading desks is opening up their books to help institutions better understand the price of bitcoin — and they’re hoping the move will take the floundering market to the next level.

Three major cryptocurrency over-the-counter traders — Genesis Trading, Cumberland, and Circle Trade — announced they would provide data for a new index, dubbed MVIS Bitcoin US OTC Spot Index. The new product, which is run by MVIS, a division of asset manager VanEck, is a standout given it draws data from OTC desks as opposed to exchanges, such as Coinbase and Kraken. “Transparency is coming to the over-the-counter market,” Gabor Gurbacs, head of digital asset strategy at VanEck said in an exclusive interview with The Block. “Before this no one would publish the price and it happened behind the scenes.”

🤯 Ohio Becomes First State to Accept Bitcoin for Tax Payments

Starting this week, Ohio businesses will be able to register with the state government to pay some taxes with bitcoin by visiting OhioCrypto.com. The idea to pay taxes with bitcoin comes from the state’s Treasurer Josh Mandel. Mandel believes the new program is both convenient for tax filers and helps in ‘planting a flag’ for Ohio’s cryptocurrency adoption.

‘I do see [bitcoin] as a legitimate form of currency,’ Mr. Mandel said. The state of Ohio will use bitcoin payment processor, BitPay, to help process the tax payments. Ohio filers will send their tax payments to BitPay, which will convert the bitcoins to dollars for the state treasurer’s office.

⚖️ Bitcoin-Rigging Criminal Probe Focused on Tie to Tether

As Bitcoin plunges, the U.S. Justice Department is investigating whether last year’s epic rally was fueled in part by manipulation, with traders driving it up with Tether — a popular but controversial digital token.

While federal prosecutors opened a broad criminal probe into cryptocurrencies months ago, they’ve recently homed in on suspicions that a tangled web involving Bitcoin, Tether and crypto exchange Bitfinex might have been used to illegally move prices, said three people familiar with the matter.

Bitfinex has the same management team as Tether Ltd., a Hong Kong-based company that created the namesake cryptocurrency. When new coins come to market, they’re mostly released on Bitfinex.

The Justice Department’s probe adds to an existing inquiry into possible misconduct. Both Tether Ltd. and Bitfinex received subpoenas last year from the U.S. Commodity Futures Trading Commission, Bloomberg reported in January. The Justice Department and CFTC are coordinating their examinations, the people said.

🤔 Overstock Goes All in On Crypto

Overstock plans to sell its decades-old retail business in the next few months to make way for a full-blown bet on crypto. The previously announced sale plans could go through as soon as February.

Overstock founder and CEO Patrick Byrne — an ardent believer in the technology that underpins bitcoin and other cryptocurrencies — declined to name any of the potential buyers.

Shares of Overstock surged as much as 26 percent Friday but the stock is down 66 percent this year.