Author: Michelle Lazo

Riot Platforms Inc. (NASDAQ:RIOT) has made an unsolicited $950 million bid to acquire Bitfarms Ltd. (NASDAQ:BITF), following the smaller Bitcoin miner’s rejection of a previous takeover proposal last month.

Riot offered $2.30 per share in cash and stock for Bitfarms, representing a 20% premium over Bitfarms’ trading price before Riot’s initial April offer, which was privately submitted to the board.

Riot has accumulated a 9.25% stake in Bitfarms, becoming its largest shareholder, according to a statement on Tuesday that confirmed an earlier Bloomberg News report.

Citing recent management turnover at Bitfarms as evidence of corporate governance issues, Riot announced plans to call for a shareholder vote to add new directors to Bitfarms’ board.

This bid is part of a trend of consolidation in the cryptocurrency mining sector, spurred by a Bitcoin code update known as “the halving,” which is expected to reduce revenue for miners significantly. Large-scale mining companies are seeking acquisitions to expand their operations and adapt to the industry’s evolving economics.

If successful, the merger would create the world’s largest Bitcoin miner based on projected computing power growth, significantly increasing Riot’s Bitcoin production capabilities alongside major players like Marathon Digital Holdings Inc. (NASDAQ:MARA) and CleanSpark Inc. (NASDAQ:CLSK).

Bitfarms shares rose 3.3% in Toronto on Monday to C$2.86, approximately $2.10 USD, giving the company a market value of about $750 million. Riot’s shares rose 4% in New York on Friday, with a market capitalization of around $3 billion.

Management Changes

The potential deal follows Bitfarms’ dismissal of interim CEO Geoffrey Morphy, who has filed a lawsuit against the company seeking $27 million in damages for breach of contract.

Riot’s offer, made on April 22, was rejected by Bitfarms’ board without engaging in substantive discussions, according to Riot. Under the proposed terms, Bitfarms shareholders would own approximately 17% of the combined entity.

Riot also plans to request a special shareholder meeting to consider appointing new independent directors after Bitfarms’ annual meeting on May 31.

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Renowned Portuguese footballer Cristiano Ronaldo has announced a collaboration with Binance for the launch of his fourth non-fungible token collection. This new collection, set to debut on May 29 on the Binance NFT Marketplace, will celebrate highlights from Ronaldo’s storied football career.

Ronaldo expressed excitement about this project, emphasizing his journey across the globe and his tenure with some of the world’s most prestigious football clubs.

Details of the New Collection

The exact number of NFTs in this collection remains undisclosed, and pricing details have not yet been revealed. It is known that each “Normal NFT” will have a uniform price, while the final Super Rare NFT will have a unique pricing structure. Previous NFT collections involving Ronaldo have included exclusive opportunities for holders, such as playing football with the legendary player as part of Binance promotions.

However, this collaboration is not without its complications. Ronaldo is currently involved in a legal battle over his participation in NFT sales with Binance. In November 2023, he faced a class-action lawsuit in a U.S. district court in Florida. The plaintiffs alleged that Ronaldo was involved in offering and selling unregistered securities with Binance and should have been aware of Binance’s activities.

Trends in the NFT Space

There has been a noticeable trend of companies withdrawing from the NFT market. In March, Starbucks (NASDAQ:SBUX) terminated its NFT rewards program. Similarly, GameStop (NYSE:GME) closed its NFT marketplace in January after reducing its crypto services over the past two years. More recently, X  under Elon Musk discontinued a feature that allowed premium users to use NFT images as profile pictures.

Binance’s Regulatory Troubles

The legal issues surrounding Ronaldo coincide with increasing regulatory scrutiny on Binance globally. Last year, the Commodity Futures Trading Commission charged Binance with operating an illegal digital asset derivatives exchange and evading federal laws. The U.S. Securities and Exchange Commission also charged Binance Holdings LTD and former CEO Changpeng Zhao with operating unregistered exchanges and the unregistered offer and sale of securities.

Binance and CZ pleaded guilty to several federal charges, including anti-money laundering violations and unlicensed money transmission, on November 21, 2023. As part of an agreement with the Department of Justice, CZ resigned as CEO of Binance.

In March, a group of investors seeking to sue Binance, its former CEO, and other executives were given a new opportunity to pursue their case.

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Ethereum core developers have announced that the highly anticipated Pectra upgrade will be launched by the end of Q1 2025. This decision follows the successful deployment of the Dencun upgrade in March 2024 and aims to avoid rushing the release, allowing for the inclusion of more impactful user features.

Strategic Planning for Pectra Upgrade

Developers have considered various timelines for the Pectra upgrade, ultimately deciding to delay it until after the Devcon developer summit in November 2024 in Bangkok. This strategic delay will provide a more measured development process and enable the addition of features that enhance user experience.

In a recent document, Ethereum developers expressed their preference for a Q1 2025 release, noting that delaying the upgrade has minimal impact on users and allows for an expanded scope to include more significant features.

The Dencun upgrade deployment on the Goerli testnet highlighted the importance of timing and thorough preparation. Developers faced challenges achieving consensus within the expected timeframe but ultimately resolved these issues, emphasizing the need for careful planning for the Pectra upgrade.

Focus Areas for Pectra Upgrade

The Pectra upgrade will enhance both the consensus and execution layers of Ethereum. A key improvement will be the integration of PeerDAS, which aims to boost Ethereum’s data availability capacity ahead of the Osaka upgrade.

The Osaka upgrade, a future hard fork, is expected to include features initially planned for Pectra, such as Verkle Trees, a new data structure designed to improve Ethereum’s scalability and decentralization.

During the Execution Layer Meeting, developers discussed supporting longstanding authorization use cases in Ethereum’s account management system, including mechanisms to keep authorizations active during transactions and potential replacements for EIP-3074 with EIP-7702 to achieve better account abstraction compatibility.

The team also considered including the Ethereum Object Format to enhance smart contract security and the developer experience. They decided to include EIP-7702 in the next development net and remove EIP-3074, while also discussing the implementation status of various other Ethereum Improvement Proposals.

Ethereum Layer 2 Networks Reach New TVL High

According to L2BEAT, the total value locked in Ethereum Layer 2 networks has reached a record high of $47.45 billion. Arbitrum One leads with a TVL of $19.3 billion, followed by OP Mainnet at $7.88 billion and Base at $6.94 billion. Other blockchains with over $1 billion in TVL include Blast, Mantle, Linea, and Starknet. Overall, Ethereum Layer 2 TVL has surged by 17.39% in the past week.

This bullish trend is driven by the U.S. Securities and Exchange Commission’s approval of spot Ethereum exchange-traded funds on May 23, along with ETF applications from issuers such as BlackRock (NYSE:BLK), Fidelity, Grayscale, and VanEck. This marks the second spot digital asset ETF approval in the U.S., following the spot Bitcoin ETFs in January. These issuers are currently submitting S-1 forms, with launches expected within weeks.

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Traditional banks may still lead the financial industry in terms of assets, but credit unions are gaining popularity among eligible Americans.

Recent data reveals approximately 4,600 credit unions in the United States. A September 2023 report from the National Credit Union Administration  highlighted that nearly 139 million Americans were members of federally insured credit unions, marking a 20% increase over the past five years.

Additionally, the credit union market size measured by revenue totaled $126.2 billion last year.

John Wingate, CEO of financial platform BankSocial, explained to Cryptonews that a credit union operates as a member-owned bank. “Unlike for-profit banks owned by shareholders, credit unions are owned by the members, one member, one share, one vote,” said Wingate. “This aligns perfectly with the decentralized finance ethos.”

Despite this alignment, credit unions face challenges that could hinder future growth. Kyle Hauptman, Vice Chairman of the NCUA, noted that credit unions often engage in a cumbersome process called ‘loan participations,’ where ownership interests in a loan are divided and sold. This process can be complex, as the credit union purchasing a participation stake may not know if payments have been made or if the selling credit union will pay the required portion.

Hauptman suggested that tokenizing smaller loans could address these challenges. “A smart contract would automatically pay the buying credit union their share,” he said, eliminating the need for the purchasing credit union to inquire about payments.

Ravi de Silva, Managing Partner at de Risk Partners, mentioned that tokenization could enhance compliance risk management by providing greater transparency, security, and efficiency. He pointed out that tokenization could be beneficial for Anti-Money Laundering (AML) purposes by enabling efficient analysis of transactional data and improving customer due diligence processes.

Given these benefits, some credit unions have begun implementing tokenization solutions. BankSocial is working with several credit unions to tokenize identity and transactional data through hashing. Wingate noted that BankSocial’s solutions use Hedera Hashgraph’s distributed ledger technology  to tokenize payments and deposits for peer-to-peer transactions on the Hedera network.

Additionally, Metallicus, through its Metal blockchain, is collaborating with credit unions like Vibrant, Meritrust Credit Union, and Fairwinds to develop blockchain-based solutions. According to Marshall Hayner, COO of Metallicus, the Metal blockchain enables financial institutions to create interoperable ledgers for seamless communication.

Despite these advancements, regulatory concerns persist. Hauptman mentioned that credit unions are uncertain whether tokens might be deemed securities. While the NCUA has provided guidance for tokenization use, other regulatory concerns remain, including KYC processes and the custodianship of tokens.

Nevertheless, Hauptman believes that U.S. credit unions are better positioned to implement tokenization compared to banks, thanks to NCUA’s regulatory clarity. For example, in July 2021, the NCUA published a “Request for Information and Comment on Digital Assets and Related Technologies” report, followed by guidance documents on digital assets and distributed ledger technologies.

De Silva emphasized the importance of credit unions working closely with compliance teams to adopt industry best practices for tokenization. “It’s crucial to establish a robust framework that aligns tokenization practices with regulations while prioritizing the security and privacy of customer data,” he said.

With continued collaboration and adherence to regulatory guidelines, credit unions can successfully navigate the complexities of tokenization and harness its potential benefits.

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Popular canine-themed meme coins, Dogecoin (DOGE) and Shiba Inu (SHIB), experienced a significant spike on Friday following a tweet from Elon Musk about the passing of Kabosu, the dog that inspired these tokens.

DOGE surged by as much as 5%, reaching a session high of 17.3 cents within minutes of Musk’s tweet, while SHIB increased nearly 3% during the same timeframe. Despite these gains being short-lived, with both cryptos pulling back, DOGE remained up 6% and SHIB up 1% over the past 24 hours, outperforming the mostly flat CoinDesk 20 Index.

This market activity highlights Musk’s influential impact on memecoins, sparking speculation among crypto enthusiasts about his potential role as one of the largest Dogecoin holders and the possibility of integrating the token into a payment system for X (formerly known as Twitter, now owned by Musk).

Kabosu, the Shiba Inu that became the face of Dogecoin and other meme tokens, passed away early Friday, according to a blog post by her owner. Kabosu was over 17 years old.

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