Gravity Reports Strong Q2 Revenues, Outlining Blockchain Game Roadmap

While many people assumed that Bitcoin hashrate had moved overseas once China implemented a Bitcoin mining ban in 2021, miners within mainland China still dominate the activity. 55% of hashrateThat’s according to a report on X by Ki Young Ju, the founder and CEO of crypto data analytics firm CryptoQuant. Taking to the social media platform on September 23, the CryptoQuant CEO claimed that Chinese mining pools account for 55% of all Bitcoin mining activity.  Since the 2021 ban, an increasing proportion of hashrate has been accounted for elsewhere, including the United States. Ju clarifies that U.S.-based mining pools now account for 40% of Bitcoin hashrate. He added:”U.S. pools primarily cater to institutional miners in America, while Chinese pools support relatively smaller miners in Asia.”Photo by Joshua Sortino on UnsplashShift towards U.S.-based miningWhile the majority of Bitcoin mining is accounted for within China’s borders, Ju acknowledges a growing shift towards U.S.-based mining. Some commentators have speculated that while officially a ban was put in place, in reality the ban presented an opportunity to jettison inefficient mining equipment, selling it on overseas, while maintaining only the most efficient miners within China. Others such as Daniel Batten, an advisor to Nasdaq-listed Bitcoin miner Marathon Digital, went further in suggesting that the reporting of a blanket ban on Bitcoin mining within China was misleading. Instead, he believes that mining was suspended for a time and then rebooted. Taking to X in June, Batten wrote: “Stop referring to it as a ban. It wasn't and it plays into [mainstream media] narratives of Bitcoin mining being unwelcome by nation states.” At the time, rather than Ju’s 55%, Batten estimated that 15% of overall hashrate was accounted for by Chinese miners. Profitability challengesIn the months following the halving of the Bitcoin mining reward, miners have been struggling to maintain profitability. Bitbo data indicates that miner revenue weighed in at $827.56 million in August, representing a 10.5% drop when compared with $927.35 million in July. The situation has raised questions about the ongoing sustainability of securing the Bitcoin network via the current mining model.  Yet despite these adverse conditions, miners have been maintaining the high hashrate level. JPMorgan analysts recently indicated that the Bitcoin hashrate has recovered to pre-halving levels. A report by Decrypt earlier this month claimed that some miners are aggressively purchasing new mining equipment while maintaining significant holdings of Bitcoin rather than selling it off. Alongside what was perceived to be a ban on Bitcoin mining in 2021, China prohibited the trading of cryptocurrencies. Notwithstanding that, it’s thought that many Chinese residents have access to crypto via bank accounts in Hong Kong, connected with global crypto exchanges. Hong Kong is perceived to be China’s sandbox for crypto with many speculating that the current pro-crypto stance taken within the Chinese autonomous territory had been approved by the authorities in mainland China. Whether China will lift its ban on crypto trading remains the subject of ongoing speculation. 

FPG Halts Withdrawals Following HackFloating Point Group (FPG), a prominent crypto prime brokerage platform, has temporarily halted trading, deposits, and withdrawals following a cyber security incident that occurred on Sunday.Photo by Thom Milkovic on UnsplashIncident responseFPG, headquartered in Singapore while maintaining a base in Hoboken, New Jersey in the United States, manages over $50 billion in assets. The firm took immediate action upon discovering the incident by engaging third-party forensics experts and law enforcement agencies.The company acknowledged the problem publicly via a tweet thread on Twitter on Wednesday. FPG stated that the company has locked all third-party accounts and secured its wallets while it investigates the extent and details of the breach. Although the full extent of the loss is still under investigation, the current estimate stands at approximately $15 million to $20 million in lost cryptocurrencies.Investigative cooperationIn response to the incident, FPG is collaborating with the FBI, the Department of Homeland Security, regulatory bodies, and Chainalysis to comprehend the nature of the attack and initiate asset recovery measures. As the investigation involving those entities is ongoing, specific details are not being disclosed at this stage, but FPG has pledged to provide updates as new information becomes available.The cyber security incident comes six months after FPG obtained a SOC 2 certification, which verifies the implementation of robust security, privacy, and control measures by service organizations to ensure the reliable handling of sensitive data and systems.Originally founded in 2018 at the Massachusetts Institute of Technology (MIT) in the US, FPG functions as both a crypto prime brokerage platform and an agency trading desk for asset managers, offering access to liquidity across various markets. In December, FPG announced that its blockchain foundation customers accounted for 5% of the total treasury management market.Backed by prominent investors such as Coinbase Ventures, Anthony Scaramucci of SkyBridge Capital, and Naval Ravikant, the founder of AngelList, FPG has raised a total of $12 million in funding thus far.In August of the previous year, FPG successfully registered as a virtual asset service provider (VASP) in the Cayman Islands. This registration ensured the secure custody of customer assets and safeguarded them from the company’s creditors in the unlikely event of bankruptcy.Broader crypto issuesIt has not been a good couple of weeks for the crypto sector relative to hacks and platform withdrawal pauses. Within the past twenty four hours, two Asia-based crypto lending platforms, Haru Invest and Delio, have suspended withdrawals. In those cases, the issue is suspected to relate to platform contagion and solvency issues.Earlier this month, the Atomic Wallet platform was hacked despite the understanding that the project offered self-custodial wallets. Originally, the loss was estimated at $35 million, but more recent reports are now estimating that figure to be in excess of $100 million.As FPG continues its efforts to mitigate the aftermath of the cyber attack, industry participants eagerly await further updates and measures undertaken by the company to recover from this incident and restore trust among its clients.

Monthly Active Users of Binance in South Korea Surpasses 230,000The monthly active user (MAU) count for the virtual asset exchange app Binance has surpassed 230,000 in South Korea, according to a recent analysis reported by local news outlet Etoday. This places Binance as the fourth-largest exchange in terms of user base, following more prominent local won-denominated exchanges Upbit, Bithumb, and Coinone.Photo by Vadim Artyukhin on UnsplashSoaring numbersAccording to data from the insights platform Mobile Index, the MAU for the Binance app in Korea averaged 230,965 users from February to July this year. Starting from 238,487 users in February, the number peaked at 240,000 in April, followed by a slight decrease to 219,010 in June and 215,743 in July. These figures significantly outpace the 131,799 average for Korbit and 36,123 for Gopax, recorded over the past six months.The abundance of users is also reflected in the app’s high trading volume in Korea. In May this year, Binance reportedly accounted for around $58.3 billion in trading volume from Korean users, representing approximately 13% of the total trading volume, according to the Wall Street Journal. This makes Korea the app’s second-largest market after China in terms of trading volume.These statistics are notable considering the fact that Binance does not support won-denominated trading nor has a Virtual Asset Service Provider (VASP) license for Korean operations. They can thus be attributed to the availability of futures trading, which is not offered by local exchanges. According to the Journal, futures trading accounts for 98% of the transactions conducted by Korean users.Regulatory validationMoreover, Binance is registered on the travel rule whitelists of three of the country’s largest exchanges: Upbit, Bithumb, and Coinone. This travel rule regulation was put into effect last year, requiring financial institutions to share data on cryptocurrency transactions.Being whitelisted means that users of the aforementioned exchanges can easily make trades on Binance after completing Know Your Customer (KYC) identification procedures.Each exchange follows its own criteria to add virtual asset service providers to its whitelist, allowing only whitelisted entities to send and receive transactions.Industry experts claim that this is yet another depiction of just how lucrative Korea’s crypto market is, as is the case with the significant trading volumes recorded by domestic exchanges. This is likely driving the active efforts of foreign exchanges, including Binance, to penetrate the market.Binance’s ongoing regulatory challengesEarlier this year, Binance acquired a majority stake in Streami, the operator of Korea’s KRW-to-crypto exchange Gopax, aiming to solidify its presence in the Korean market. Following this acquisition, Streami underwent leadership transitions that saw Lee Joon-haeng step down, making way for Binance’s APAC head Leon Sing Foong. Subsequently, the leadership baton was passed to Lee Joong-hoon, the former Vice President of Gopax.For these shifts in leadership, Streami submitted reports to the Financial Intelligence Unit (FIU) under the Korean Financial Services Commission (FSC) to inform the regulatory body about changes in company representatives. However, despite these notifications, the financial regulator has not yet granted its approval, likely influenced by the ongoing legal challenges Binance is facing in multiple jurisdictions, including that of the United States.In a seeming effort to address this regulatory impasse, Streami has recently decided to undergo yet another change in its CEO position. This marks the third leadership alteration within a span of six months. Meanwhile, the identity of the incoming CEO is yet to be disclosed.Oscillating trends of growth and declineIn related news, Mobile Index also reported that Upbit had the highest MAU among virtual asset exchange apps in Korea. From February to July, Upbit averaged an MAU count of 3,280,746, surpassing the 1,005,432 average for Bithumb, marking a threefold difference. Coinone’s average MAU during this period was calculated at 316,277.However, over the same six-month period, all won-denominated exchanges except for Korbit experienced a decline in MAU. Gopax witnessed a 22.3% drop from 42,556 users in February to 33,059 users in July. This was followed by 20%, 14.8%, and 6.8% declines for Coinone, Bithumb, and Upbit, respectively. Binance also experienced a 9.5% dip.In contrast, Korbit saw a 16.5% increase, rising from 118,816 MAU in February to 131,799 in July.