TradFi Giants Back Circle In New Raise

The Securities and Exchange Commission (SEC) appears to be cracking down on crypto services that provide yield-bearing products to U.S. citizens. Celsius Network is the latest to join the list of crypto lending companies that have had to restrict access to their platform.  

Per the announcement, Celsius’s Earn product, which enables users to earn interest on crypto, will no longer be available for non-accredited investors in the U.S. by the end of this week. That means coins transferred to interest-earning accounts before Friday will earn rewards, but newly transferred coins from non-accredited investors will be held in custody accounts. The company clarified that only verified accredited investors in the U.S. will be allowed to add coins to their Earn accounts, while users outside of the country will not be affected. To be clear, accredited investors in the United States must have incomes exceeding $200,000 or assets exceeding $1 million to qualify for accreditation.

Celsius blamed the SEC for closing its doors, stating that the changes in the crypto product were a result of “ongoing discussions with United States regulators.” The company is undergoing several investigations from regulators across the U.S. on allegations related to its lending and earning programs. 

Celsius is not the only one on regulators’ radar. For many years, the SEC has been cracking down on crypto lending companies, claiming that these entities offer banking-like interest products without the FDIC insurance that banks must provide. According to the SEC, crypto interest accounts are securities.

Previously, the U.S. regulators have also taken action against crypto lending platform BlockFi over its product. Similarly, the Office of the Attorney General of New York accused Nexo Financial of offering unregistered securities services. In the face of such strict monitoring, it’s not surprising that Celsius decided to close its lending product.

The news impacted its native token, $CEL.X, as well, which lost 12% today, trading at $2.19, according to CoinMarketCap.

You might have heard of play-to-earn games like Axie Infinity ($AXIE.NFT). But what about a game where you earn crypto by walking and working out. Isn’t that a cool idea? You can gain both health and wealth at the same time.

Move-to-earn is simple

Our phones have a variety of apps that measure our steps, exercise, GPS, and heart rate. A number of these apps have even “gamified” fitness with popups congratulating you on hitting step milestones or heart rate goals – but what if you could earn money along with the praise? Move-to-earn applications do exactly this. 

How does this work?

Applications like justmove allow users to earn tokens automatically with each movement. Users need to push themselves for higher goals or intense exercise if they wish to earn more tokens. What’s even better is that if users cycle or walk, they earn more rewards because they are not harming the environment. The rule is simple: go green, and earn more tokens.

Another popular move-to-earn app is STEPN, a Solana-based app, which raised $5 million in seed funding earlier this year. The Australia-based startup enables users to purchase NFTs that expire after a certain period of time. A user can exercise in a certain way during this time to earn $GMT, the platform’s native token. 

In order to use the move-to-earn app, users need to purchase a “sneaker NFT” from the in-app marketplace and deposit Solana’s native $SOL.X token in STEPN’s in-app wallet. Users can choose from three sneaker NFTs: walker, runner, and jogger. They get a certain period of time to do the exercise. For example, a walker sneaker gets about 10 minutes of energy on average. If a walker completes the task on time, he/she gets $GMT in return. STEPN is already gaining popularity, and its native token $GMT has risen 1,276% since it was introduced last month.

The future

The move-to-earn concept is relatively new but has the potential to become a cool trend. Fitness and health have become top priorities for many people, especially after the pandemic. A model like this encourages people to be healthy and earn money. One potential challenge for these apps could be security, as hacking has become a major issue for dApps these days.

Circle, the company behind USD Coin ($USD.X), has secured $400 million in funding from financial giants like BlackRock, Fidelity Management and Research, Marshall Wace, and Fin Capital. The raise underscores healthy interest from traditional finance companies in the nascent DeFi and crypto space. 

In its announcement, BlackRock, the world’s largest asset manager, stated that it “has entered into a broader strategic partnership with Circle, which includes exploring capital market applications for USDC.”

The stablecoin issuer plans to use the funding to boost its growth strategy as the demand for the digital currency will multiply in the coming years. The round is expected to close in the second quarter.

“This is a milestone moment for Circle and part of the coming of age of crypto,” CEO and co-founder Jeremy Allaire said in the statement. 

The latest funding round comes weeks after Circle announced its decision to delay its SPAC merger. That merger, announced in July 2021, was expected to close in Q4 2021. However, Circle was dissatisfied with the original deal, which valued the company at $4.5 billion, and that’s why it terminated its previous agreement with Concord Acquisition Corp., a publicly-traded SPAC. Circle announced in February that its valuation has doubled to $9 billion. The new SPAC merger may close by the end of this year or at the beginning of 2023.

Besides raising capital, BlackRock and Circle have agreed to form a strategic partnership. BlackRock will be Circle’s primary asset manager for USDC cash reserves and explore capital market applications for its stablecoin, among other objectives.

$USD.X, the second-largest stablecoin, closed on a positive note today. With a trading volume of $4 billion in the past 24 hours, it currently holds a market capitalization of $50.83 billion.