🇧🇷BCR #41: Coinbase, Mercado Bitcoin Talks Collapse; Web Summit Coming To to Rio
Binance continues dominance of Brazilian trading volumes; Sweatcoin takes Brazil by storm
👋 bd everyone,
The big news this week is that Coinbase has pulled the plug on reported plans to acquire 2TM Group and, by extension, Mercado Bitcoin. Bloomberg News broke the story, citing two anonymous sources familiar with the deal.
A Coinbase spokesperson told Bloomberg that it remains “committed to the Brazilian market and has local technology and business leadership”.
“Our objective is to attract new talent and, for that, there is nothing better than being receptive and warm with our potential candidates. Thus, we seek to promote initiatives such as these, which bring us closer to people, to simplify the recruitment process and make interviews increasingly effective. We believe that some of the best engineering talent is in Latin America, a strategic region for our growth, and we are excited to promote this event as part of the expansion in Brazil.”
No formal reason was given for the deal’s collapse; however, the drop in Coinbase’s share price from US$280 in December, 2021 - when the talks began - to just over US$100 currently has been cited as a reason. This matters because part of the deal reportedly involved the exchange of Coinbase shares.
Seu Dinheiro reports that there was a lack of understanding between the two parties on the criteria used for valuing 2TM, particularly given the extent that the market has cooled off since the talks began.
This deal would have been a big win for both companies had it been able to get to the finish line. With the deal’s collapse and Coinbase opting to set up a greenfield operation in the country and bootstrap (for the time being), the Brazilian market remains much more open. However, Binance continues to make up half of all bitcoin trading volumes in the country, so the state of the market effectively remains CZ versus the field.
🏦 Brazil’s Central Bank raised its baseline Selic interest rate by 100 basis points to 12.75%. It’s the bank’s 10th straight rate hike, bringing the Selic to a five-year high, as it grapples with stubborn 12% inflation. An unflattering Bloomberg headline captured the sentiment: "Brazil’s Inflation is So Bad Even Central Bank Workers Protest”. Workers went on strike demanding that the institution increase their salaries by 26% to compensate for inflation losses.
🎉 In other more exciting and optimistic news: Rio de Janeiro will be hosting Web Summit, one of the world’s largest tech conferences, May 1-4, 2023 at the RioCentro pavilion in Barra da Tijuca and will have a program spread throughout the city.
The conference will surely aid Rio’s quest to reinvent itself as an innovation hub for Latin America, that will attract people, jobs and opportunities. Mayor Eduardo Paes said that the event is expected to generate an estimated economic impact of R$1bn (US$200m) for the city.
Web Summit’s main event in Lisbon each year draws 70,000 entrepreneurs, investors and developers from around the world. Its CEO Paddy Cosgrave explained his rationale at a press conference:
“We looked at several countries in the world, then we funneled to Brazil and fell in love with Rio.”
🎙Also be sure to check out the most recent BCR podcast with Andres Engler, Latam editor at CoinDesk. We chat about the outlook for crypto M&A in Brazil following the collapse of the Coinbase and Mercado Bitcoin deal, regulation and developments in Argentina and elsewhere in the region. You can listen to the episode in your browser via Substack, on Spotify and on Apple Podcasts.
🙏 Thanks to our partners at HBAR Foundation for supporting 🇧🇷 Brazil Crypto Report! If you're a Latam entrepreneur or developer with an up-and-coming project or idea and need some support, take a look at the HBAR grant program. They're seeding projects focused on DeFi, fintech, NFTs, sustainability and so much more. They also offer a plethora of other resources to help builders bootstrap. Do yourself a favor and check them out! 👊
💣 Trending Cryptos in Brazil
Here’s a weekly snapshot of trending cryptocurrencies in Brazil as of May 7, 2022, per data provider CoinGecko. “Move to Earn” tokens like Stepn and Sweatcoin are surging in interest. CoinTelegraph Brasil reports that the Sweatcoin app was the most downloaded application in Brazil in both the Apple Store and Google Play app stores last week.
🗞Brazil Crypto News Rundown
Brazilians exchanges moved 22,080 bitcoins for the month of April, worth R$4.4bn (US$866m), according to a report from CoinTrader Monitor.
The monthly figure is down 4.75% from March 2022, and down 27% from April 2021.
Binance continued its dominance in the market, accounting for 49.70% of all bitcoin trading during the month. The figure is the highest monthly share by a single exchange ever recorded by CoinTrader Monitor.
Mercado Bitcoin announced a new product that will help investors monitor the performance of MB Digital Assets products vis-a-vis the Selic rate and other indicators, and simulate expected yields from investing in the products. (CoinTelegraph Brasil) (Portal do Bitcoin)
MB Digital Assets made available 25,000 new tokens from 42 consortia on its platform, in conjunction with Consorciei. The tokens, which represent the right to a letter of credit for the acquisition of the asset (usually a vehicle or property) will be available for R$100 and have an expected annual return of 17.22%. (Portal do Bitcoin) (Valor Investe)
BitPreço, one of the largest Brazilian exchanges by trading volume, made available its “crypto-as-a-service” platform that allows financial institutions, brokers, fintechs and other companies make crypto purchases and trades using BitPreço’s security and liquidity. Ney Pimenta, CEO of BitPreço, commented:
“Crypto as a Service is an international trend that is starting to gain ground here, connecting companies to the future of currencies. With the service, companies can offer a new product to customers and generate profit on cryptocurrency trading. For BitPreço, these partnerships open up new sales channels and expand the visibility of our brand.”
99Pay has moved R$50m worth of bitcoin through its digital wallet platform since enabling bitcoin transactions last fall. More than 268,000 transactions have been processed. (Portal do Bitcoin)
Parfin, the Brazil-based crypto and fintech firm, will begin using a new multiparty computing cryptography technology on its custody platform that prevents third-parties, such as employees of Amazon Web Services and Microsoft Azure, from accessing customer data - such as cryptographic keys. The firm has partnered with Anjuna to set up the MPC Custody system. (InfoMoney)
Cryptocurrencies are accepted by more than 900 companies in Brazil, according to a survey by Coinmap. (CoinTelegraph Brasil)
Vórtx QR Tokenizadora, a joint venture between Vórtx and QR Capital, announced the launch of the game Token Experience, which allow investors access to a simulator of the first CVM-certified tokenization platform. The goal of the game is to help investors understand how the digital platform will work once it launches within the CVM’s regulatory sandbox. Juliano Cornacchia, CEO of Vórtx, explained:
“In this first stage of the project, we will represent traditional securities in digital assets (tokens), so that they can be easily traded by anyone. The tokenization process is here to stay and will change the way people make investments. This is an important move towards our purpose of simplifying the capital market.” (CoinTelegraph Brasil) (InfoMoney)
Culte, a startup focused on providing credit to small farms in 20 Brazilian states, announced it will begin issuing bitcoin-collateralized loans. The company has notably received support from the Banco Central. (CoinTelegraph Brasil)
John Blount, a Brazilian entrepreneur from Santa Catarina, is investing up to US$45m in a bitcoin mining operation in Argentina. (Exame)
Dotz, a loyalty program company that went public last year on the B3 exchange, announced that its customers will be able to exchange earned points for Ethereum after a successful rollout of bitcoin rewards. The redemptions are done through the Brazilian exchange Foxbit. (InfoMoney)
GOV Token, a solution to track public spending and fight corruption, will change hands to Blockchain Studios after being developed in partnership with public bodies in Rio de Janeiro and Investtools. (Exame)
🎮 NFTs, Gaming and Metaverse
Brazilian blockchain games and web3 startup DUX received an investment of R$10m (US$1.97m) from Old Fashion Research, a fund formed by ex-Binance executives, and Animoca Brands, and announced its own governance token - DUX. The company has invested around US$1m into Axie Infinity scholarships and has a Star Atlas guild with over 7,000 players and US$700,000 invested. (CoinTelegraph Brasil) (Exame)
Neymar has the 6th most valuable NFT portfolio among global celebrities with an estimated value of US$1.3m, according to DappRadar. He is ahead of artist Beeple and Justin Bieber, though behind Snoop Dogg, Gary Vaynerchuk, Steve Aoki and a few others. (CoinTelegraph Brasil)
Bybit is sponsoring MIBR, one of the largest eSports teams in Brazil. The three year deal provides for education to gamers about crypto assets and eventually launching a cryptocurrency for the community. (CoinTelegraph Brasil)
NFTs commemorating Chorão, lead singer of the band Charlie Brown Jr. who passed away in 2013, are available via auction on OpenSea. (CoinTelegraph Brasil)
Volkswagen Brasil is auctioning off an NFT representing the first generation Gol GTI, which is an iconic symbol for car enthusiasts in Brazil. The auction winner will also be able to visit the Volkswagen Studio Brasil headquarters in São Bernardo do Campo. (CoinTelegraph Brasil)
Music entrepreneur Juan Ganguilhet announced AlcanceNFT, a new platform focusing on music NFTs. The platform will host three types of NFTs, two linked to music royalties and the other to give holders IRL and virtual experiences. (CoinTelegraph Brasil)
Brazilian non-profit Gerando Falcões is launching a metaverse game to help spread awareness and contribute to the needs of favelas. Missão Falvela X aims to make children and young people across Brazil aware of the social challenges found in favelas. (CoinTelegraph Brasil)
The Air Transport Association of Latin America and the Caribbean is creating “NFTickets” on the Algorand blockchain to sell airline products in the region. (CoinTelegraph Brasil)
Marcelo Bonfá, the drummer for Legião Urbana, is releasing NFTs that give holders access to concert VIP areas. (CoinTelegraph Brasil)
Roberto Dinamite, Vasco da Gama’s most famous player, has been memorialized by the football club with an IRL statue and a corresponding NFT that commemorates his first goal, which was scored in 1971. (BeinCrypto)
🏛 Public Policy, Regulation and Enforcement
Federal Police may reopen investigations into the Atlas Quantum case and have requested the names of all alleged victims and amounts invested. The total amount lost is believed to be R$2.8bn (US$551m). The CVM initiated a lawsuit against the company in 2019 for allegedly offering unregistered investment products. (CoinTelegraph Brasil)
Rio de Janeiro is preparing a public notice seeking accredited vendor companies that can convert crypto into reals on the city’s behalf. This accreditation will require registration in Brazil and a partnership with a member bank of Febraban, Brazil’s banking trade group. (CriptoFacil) (InfoMoney)
Ilan Goldfajn, a director at the International Monetary Fund and former president of the Banco Central, argued that digital currencies can be more efficient and inclusive than physical money in a virtual event hosted by Valor Economico. (Valor Investe)
R$30m (US$5.9m) stolen from Gerdau, a Brazilian steel producer, in 2020 ultimately deposited onto Binance and exchanged into bitcoin, according to a new report by Portal do Bitcoin citing Chainalysis data. Santander is now trying to recover the funds and is leading a lawsuit against Binance, through its local operating company B Fintech, in the court system.
Federal Police have issued arrest warrants in São Paulo and Santa Catarina the case of an alleged pyramid scheme involving cryptocurrencies that defrauded 120 people out of R$15m (US$2.95m) dating back to 2019. The operation has been named “Operation Quéphren” in reference to the Khafre pyramid in Egypt, the second highest tallest of the ancient pyramids at Giza. (CoinTelegraph Brasil) (CriptoFacil)
A lawyer who was an alleged victim of the GAS Consultoria pyramid scheme has filed for bankruptcy claiming to be the company’s creditor. Jansens Calil Siqueira claims to have invested R$1.2m (US$236,000) in early 2021, with GAS promising to pay 10% monthly returns. (CoinTelegraph Brasil) (Portal do Bitcoin)
Luiz Capuci Júnior, a Brazilian national, was indicted by the US Department of Justice for allegedly orchestrating a cryptocurrency investment fraud scheme called Mining Capital Coin that raised US$62m. (CriptoFacil)
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