Disney

Crypto Biz: A spotlight on Binance, Galaxy Digital swings to profit, China’s blockchain push

Binance handles fear, uncertainty and doubt surrounding its business future following a lawsuit from U.S. authorities.

Regulators in the United States have a fresh target on their radar: Binance. The Commodity Futures Trading Commission (CFTC) has sued the world’s biggest crypto exchange by trading volume for regulatory violations. Accusations range from insider trading to concealing office locations around the world to evade authorities’ oversight.

Binance denies the claims, suggesting another court battle between crypto firms and U.S. regulators is just around the corner. On another front, Binance’s U.S. arm must wait to close its $1 billion deal for Voyager Digital’s assets until the Department of Justice decides whether to appeal to Voyager’s bankruptcy plan.

Beyond the courts, signs that the crypto winter is fading away are on the horizon. Billionaire Mike Novogratz’s Galaxy Digital turned a profit after a $1 billion loss in 2022. Meanwhile, China keeps developing its fintech industry, with a strong emphasis on blockchain.

This week’s Crypto Biz examines how Binance is coping with ongoing fear, uncertainty and doubt (FUD) about its business, and how companies are navigating Web3 opportunities and challenges.

Binance CEO CZ rejects allegations of market manipulation

Binance CEO Changpeng “CZ” Zhao rejected accusations of market manipulation in response to a CFTC lawsuit, labeling it “an incomplete recitation of facts.” According to Zhao, Binance “trades” in several situations, mainly to convert its crypto revenue to cover expenses in fiat or other cryptocurrencies. The exchange’s CEO also acknowledged that he has two personal accounts at Binance: one for Binance Card and one for crypto holdings. “I eat our own dog food and store my crypto on Binance.com. I also need to convert crypto from time to time to pay for my personal expenses or for the Card,” he added. Zhao said Binance has a 90-day no-day-trading rule for its staff and refuted claims that they engage in insider trading.

My Response to the CFTC Complaint | Binance Blog https://t.co/TadyotM7HN

— CZ Binance (@cz_binance) March 27, 2023

Galaxy Digital swings to profit after $1B net loss in 2022

Galaxy Digital, the digital asset investment firm founded by billionaire Mike Novogratz, has swung to a profit after a net loss of $1 billion in 2022, with a preliminary pre-tax income of $150 million from Jan. 1, 2023, to March 24, 2023, according to the company. Novogratz says the results are from strategic moves “opportunistically” taken during the past months and Bitcoin’s (BTC) price recovery. Similarly to other companies operating in the crypto space, Galaxy found 2022 to be a challenging year. In August, it dropped plans to go public in the United States after terminating a $100-million deal to acquire digital asset custodian BitGo. Later in November, the firm disclosed $77 million of exposure to bankrupt cryptocurrency exchange FTX, with $48 million likely locked in withdrawals.

Disney reportedly scraps its metaverse division

The metaverse is on its way out, at least for Disney. A restructuring plan designed to cut operating expenses by $5.5 billion and lay off 7,000 employees over two months led the entertainment giant to ditch its metaverse division. All of the metaverse division’s 50 or so members will not be offered new employment contracts, except for Michael White, who led the broader consumer products unit. Unfavorable economic conditions and increased competition in the streaming sector were two main factors that led to the decision. Disney’s former and current chief executives, Bob Chapek and Robert Iger, once considered the metaverse a bullish investment opportunity.

Disney has abandoned a plan to develop its own membership program like Amazon Prime, according to @RWhelanWSJ.

Disney has also eliminated the division that was developing metaverse strategies, according to the report. https://t.co/mSm92XtqE0 pic.twitter.com/e2KqbxAC8i

— Scott Gustin (@ScottGustin) March 28, 2023

China to upgrade national blockchain standards by 2025

Despite China’s stance on cryptocurrencies, the country’s officials have been actively developing its fintech industry, with a strong focus on blockchain technology. The Ministry of Industry and Information Technology, a watchdog for the Chinese fintech industry, has announced its plan to improve standards for blockchain technology development by 2025. The ministry has published a draft of its guidelines and invites public opinions on the blockchain development from “all walks of life.” This move aligns with China’s five-year plan for “National Economic and Social Development and Vision 2035,” in which blockchain is listed as a target to “grow stronger.”

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Disney brings back Bob Iger as CEO: Here’s the crypto connection

Since leaving The Walt Disney Company, Bob Iger has been acting as an adviser and board member for the digital avatar platform Genies.

Metaverse-backer Bob Iger has announced a surprise return to his former role as CEO of Disney, taking over from now-former CEO Bob Chapek.

While Iger is most well known for serving 15 years as the CEO of the global entertainment conglomerate, the Disney executive became known in the crypto community after becoming a director, adviser and investor in Genies, a digital avatar platform running on Dapper Labs’ Flow blockchain.

“Thrilled to be joining the Genies Board of Directors to help Akash Nigam and company empower humans to create the ‘mobile apps of Web3’: avatar ecosystems,” Iger said at the time.

Iger was still at Disney as an executive and board chairman when the company filed for a metaverse-related patent on Dec. 28.

The patent was for a “virtual-world simulator in a real-world venue,” and according to the filing, would allow visitors to Disney theme parks to use mobile phones to generate and project personalized 3D effects onto nearby physical spaces, such as walls and other objects.

However, Disney said at the time there were “no current plans” to use the “virtual-world simulator” patent, and the company has yet to announce any products related to the patent.

According to the Hollywood Reporter, Iger’s return will reportedly only be temporary, though, with Iger only agreeing to serve as Disney’s CEO for the next two years.

During his new term as CEO, Iger will reportedly work with the board to set the strategic direction for the company and work to develop a successor.

In his absence, Disney has continued to work toward projects involving the metaverse, nonfungible tokens (NFTs) and blockchain throughout the year.

In September, Disney started hiring a principal counsel to work on transactions involving NFTs, the metaverse, blockchain and decentralized finance (DeFi).

Specifically seeking someone to provide “full product life cycle legal advice and support for global NFT products” and ensure they comply with all current laws and regulations on United States soil and internationally.

Silicon Valley tech CEOs are not big fans of metaverses

Disney’s CEO said the company doesn’t tend to use the word metaverse, as it believes it’s a very broad term.

During a Wall Street Journal event, Microsoft gaming chief Phil Spencer and Snap CEO Evan Spiegel revealed that they are not big fans of the metaverse in its current form.

Spencer called the metaverse’s current iteration a “poorly built video game,” referring to the ecosystem’s bad graphics and low-quality interfaces.

The Microsoft gaming chief noted that the gaming world still has an advantage over the metaverse in creating different engaging virtual worlds. At the same time, he compared most of the current metaverse projects to virtual reality room meetings and explained:

“Video game creators have an amazing ability to build compelling worlds that we want to go spend time in. […] For me, building a metaverse that looks like a meeting room… I just find that’s not where I want to spend most of my time.”

Spiegel, on the other hand, compared the metaverse experience to “living inside a computer” and hinted that the current iterations of the concept are very basic, and he won’t feel like spending time inside it after a long day of work.

He added that Snap is more focused on minimizing the hardware and bringing the experience to the real world through augmented reality (AR), taking a swipe at the virtual reality (VR) hardware trend in the metaverse.

VR creates an immersive virtual environment, while AR augments a real-world scene. VR requires a headset device, while AR does not. VR users move in a completely fictional world, while AR users are in contact with the real world.

Apple senior vice president of worldwide marketing Greg Joswiak said that the metaverse is “a word I’ll never use,” reflecting on Apple’s focus on AR over VR. While Disney CEO Bob Chapek said the company tends “not to use” the word metaverse “because, for us, that’s a big, broad term. For us, it’s next-generation storytelling.”

Metaverse as a concept became the next big thing in the Web3 ecosystem during the peak of the bull run, with Facebook even rebranding itself to Meta to showcase its focus on becoming a leader in the nascent tech ecosystem. However, Meta’s metaverse bet has proved costly for the Fortune 500 company, as the firm posted a $3.67-billion loss for the third quarter of 2022, stating those losses will further deepen next year.

Disney seeks corporate lawyer for ’emerging technologies’ and NFTs

The role includes “full product life cycle legal advice and support for global NFT products,” among other responsibilities.

The Walt Disney Company could be on the verge of expanding into the crypto space after posting a new job for an “experienced corporate attorney” to work on “emerging technologies” such as nonfungible tokens (NFTs) and the Metaverse.

According to the Sept. 23 listing on the Disney careers website, the company is hiring for a “Principal Counsel — Corporate Transactions, Emerging Technologies & NFTs” to work on transactions involving NFTs, the Metaverse, blockchain, and decentralized finance (DeFi).

Specifically the entertainment conglomerate is seeking someone to provide “full product life cycle legal advice and support for global NFT products” and ensure they comply with all current laws and regulations on U.S. soil and internationally.

Other duties include “due diligence for NFT, blockchain, third-party marketplace and cloud provider projects,” as well as providing regular legal advice on cryptocurrency-related matters, and digital currency and guiding Disney’s efforts in relation to emerging technologies.

The new role comes as The Walt Disney Company has been slowly positioning itself around the crypto, blockchain, and Metaverse space.

During the company’s fourth-quarter earnings call in November 2021, CEO Bob Chapek said the firm was preparing to blend physical and digital assets in the Metaverse.

Weeks later the company filed a patent for a “virtual-world simulator” referring to a potential theme-park metaverse.

According to the patent application, Disney’s possible foray into the Metaverse could involve visitors to their theme parks using mobile phones to generate and project personalized 3D effects onto nearby physical spaces, such as walls and other objects.

At the time it was reported there were “no current plans” to use the”virtual-world simulator” patent, however, the recent job listing could be a sign that this may be changing.

Earlier this year, the company focused on augmented reality (AR), nonfungible tokens (NFTs) and artificial intelligence (AI) in its 2022 Disney Accelerator Program, which selected six “growth-stage” companies to benefit from its business development platform.

Companies selected for the program this year included layer-2 scaling platform Polygon, along with two other Web3 projects — Flickplay, a Web3 application that allows users to discover NFTs via augmented reality (AR), and Lockerverse, a Web3 storytelling platform that connects creators and brands.

Disney seeks corporate lawyer for ‘emerging technologies’ and NFTs

The role includes “full product life cycle legal advice and support for global NFT products,” among other responsibilities.

According to the Friday listing on the Disney careers website, the company is hiring for a “Principal Counsel — Corporate Transactions, Emerging Technologies & NFTs” to work on transactions involving NFTs, the Metaverse, blockchain and decentralized finance (DeFi).

The new role comes as The Walt Disney Company has been slowly positioning itself around the crypto, blockchain and metaverse space.

During the company’s fourth-quarter earnings call in November 2021, CEO Bob Chapek said the firm was preparing to blend physical and digital assets in the Metaverse.

Weeks later the company filed a patent for a “virtual-world simulator,” referring to a potential theme-park metaverse.

At the time it was reported, there were “no current plans” to use the “virtual-world simulator” patent. However, the recent job listing could be a sign that this may be changing.

Earlier this year, the company focused on augmented reality (AR), NFTs and artificial intelligence (AI) in its 2022 Disney Accelerator Program, which selected six “growth-stage” companies to benefit from its business development platform.

Polygon gains 83% in a month, but data show project has been losing traction

MATIC’s market cap is 69% below its all-time high, and the network’s TVL and DApp data haven’t picked up recently.

Polygon (MATIC) had a promising July, gaining an impressive 83% in 30 days. The smart contract platform uses layer-2 scaling and aims to become an essential Web3 infrastructure solution. However, investors question whether the recovery is sustainable, considering lackluster deposits and active addresses data.

According to Cointelegraph, Polygon rallied after being selected for the Walt Disney Company’s accelerator program to build augmented reality, nonfungible token (NFT) and artificial intelligence solutions.

Polygon announced on July 20 plans to implement a zero-knowledge Ethereum Virtual Machine (zkEVM), which bundles multiple transactions before relaying them to the Ethereum (ETH) blockchain. In a recent interview with Cointelegraph, Polygon co-founder Mihailo Bjelic stated this solution would slash Ethereum fees by 90% and boost throughput to 40–50 transactions per second.

Another reason for Polygon’s rally was the growing number of platforms that started to offer liquid staking for MATIC tokens, which enabled holders to earn additional rewards. Examples include Lido Finance, Balancer, Meshswap and Ankr Staking, according to DeFi Pulse.

Despite currently being 69% below its -time high, Polygon remains a top-12 token by capitalization rank. Moreover, the network holds $1.72 billion worth of deposits locked on smart contracts, known in the industry as total value locked, or TVL.

Polygon’s Ethereum-compatible scaling is fully functional, hosting decentralized applications (DApps) that vary from decentralized exchanges (DEXs), collateralized loan services, yield aggregators, NFT marketplaces and games.

Polygon smart contracts deposits dropped 42%

Despite Polygon’s 83% rally in 30 days, the network’s TVL measured in MATIC tokens dropped by 42% in the same period. As a comparison, Fantom (FTM) scaling solution declined by 14% in 30 days and Klaytn (KLAY) increased by 11%.

*Polygon Total Value Locked, MATIC. Source: DefiLlama*

In dollar terms, Polygon’s current TVL of $1.42 billion is 67% lower year-to-date. Still, such a number is not distant from Solana’s (SOL) $2.08 billion, or Avalanche’s (AVAX) $2.52 billion, according to DeFi Llama data.

To confirm whether Polygon’s TVL decline is caused by fading adoption, one should analyze DApp usage metrics. Nevertheless, some DApps, such as games and NFT marketplaces, do not require large deposits, so the TVL metric is irrelevant in those cases.

*Polygon DApps 30-day usage metrics. Source: DappRadar*

As shown by DappRadar, on August 1, on average, the number of Polygon network addresses interacting with decentralized applications decreased by 19% versus the previous month.

Considering Polygon’s TVL has declined by 42%, the network lacks a more substantial user base growth to support further MATIC token price momentum. Still, Quickswap, the leading DApp, presented 138,530 active addresses over the past 30 days. As a comparison, the leading Ethereum application OpenSea held 299,910 users in the same period.

The above data suggest that Polygon has lost some of its traction in the market for scaling solutions. However, the project’s recently announced zero-knowledge is yet to be implemented, but its benefits could drive MATIC above $1.

The views and opinions expressed here are solely those of the author and do not necessarily reflect the views of Cointelegraph. Every investment and trading move involves risk. You should conduct your own research when making a decision.

Polygon selected to participate in Disney’s 2022 Accelerator Program

Ethereum scaling solution Polygon has been selected to participate in Disney’s Accelerator Program to further Polygon’s development of Web3 experiences.

Layer-2 scaling platform Polygon has been selected to partake in Disney’s 2022 Accelerator Program to build on Polygon’s Web3 technology, which will commence this week.

The Ethereum scaling platform is one of six projects to be accepted into the Accelerator Program, which is focused this year on augmented reality (AR), nonfungible tokens (NFTs) and artificial intelligence (AI), according to a statement from The Walt Disney Company on Wednesda.

Polygon CEO Ryan Watt noted on Wednesday that Polygon was “the only blockchain selected” to Disney’s prestigious Accelerator program.

The hits keep on comin’!@0xPolygon has been invited to @Disney’s prestigious Accelerator program.

We were the only blockchain selected.

It speaks volumes to the work being done here, and where we’re going as a company.

“It’s kind of fun to do the impossible.” – Walt Disney https://t.co/grpPIFz5Tg pic.twitter.com/2NOedF5pUE

— Ryan Wyatt (@Fwiz) July 13, 2022

He added that being selected “speaks volumes to the work being done [at Polygon], and where we’re going as a company.”

Applications for the accelerator program began on April 22, with applications closed on May 13, 2022. At the time, Disney said the accelerator would be looking to attract “growth-stage companies with a vision for making an impact on the future of technology and entertainment.”

Two other Web3 projects were selected this year as well, including Flickplay, a Web3 application that allows users to discover NFTs via augmented reality (AR), and Lockerverse, a Web3 storytelling platform that connects creators and brands.

Other companies include AR company Red 6, 3D virtual e-commerce company Obsess and AI-powered virtual character creation company Inworld.

Disney’s accelerator program was first launched in 2014, the program allows participants to receive mentorship from the Disney Accelerator Team and guidance from Disney’s own leadership team itself.

Participants will reportedly also be provided with additional investment capital and have access to co-working space at Walt Disney’s Los Angeles campus. The program will conclude with an on-campus Demo Day.

Polygon, once known as the Matic Network, is an interoperability-focused blockchain framework with a suite of scalability tools used to build Ethereum-compatible decentralized applications (DApps). Polygon’s scalability solutions have been constructed to address the limitations of the Ethereum mainnet, such as slow transaction speed (TPS) and high transaction fees.

Following the news, Polygon (MATIC) increased 16% over the last 24 hours.