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If someone steals your private key or cracks your cryptocurrency exchange password, your holdings are toast. This ever-present threat wards off institutional investors from investing big sums in crypto, says Anthony Foy, CEO of London-based Qredo.

“Existing custodial models are fundamentally broken. Institutions have to choose from retail wallet solutions, vulnerable centralized databases, or cold storage devices—often shared between multiple employees. These solutions are unfit for purpose,” Foy told Decrypt.

He says that his company has created a piece of technology that could provide large investors with the confidence to jump deeper into crypto.

To do so, he’s just raised $11 million in a seed round from backers such as Celsius, Wintermute, Deribit and a bunch of blockchain capital funds. More than half of the investment came from companies that would use this technology, he said.

Qredo offers a decentralized version of MPC, the technology that companies like Fidelity-backed Fireblocks serve up to institutional investors to help them navigate massive crypto trades.

MPC stands for multi-party computation. The basic premise is that people who secure their funds with MPC don’t have to worry about private keys or exchange passwords, since the MPC handles all that on their behalf. Think of it like the LastPass of crypto.

By decentralizing custody and securing it with MPC, it allows investors to trade crypto between different exchanges without constantly logging-on, or working through crypto’s complex back-end system. They can quickly place more complicated trades, allowing them to respond to shifts in the market.

“Those pioneers that do invest in digital assets are then constantly bogged down by the need to protect their private keys, preventing them from acting as nimbly as individuals and scouting out lucrative yield opportunities in DeFi,” said Foy.

Fireblocks already surpassing $30 billion in transfers secured with this technology. But Foy says Qredo has a competitive edge on a few counts.

First, Qredo wants to decentralize the whole thing. Fireblock’s MPC tech is currently centralized, as per the industry standard. By contrast, Qredo’s MPC nodes are distributed across a decentralized network, and the protocol will eventually be governed through a DAO, or decentralized autonomous organization. A community of validators oversees operations.

Next, Qredo lets people trade across blockchains, without having to resort to wrapped assets (like wrapped Bitcoin, a synthetic, Ethereum-based version of Bitcoin that maintains a peg to Bitcoin). This reduces complexity, said Foy, plus avoids the risk that Wrapped Bitcoin may one day mess up.

“So, without having to create any kind of additional vulnerability or operational complexity over the assets, you and I would be able to swap Bitcoin for Ethereum without having to have that put into a smart contract,” he said.

Qredo also does this all on Layer 2 technology, which means, practically, that transactions are processed on 32 nodes in 4 data centres scattered across the world. This cuts some of the huge transaction fees that plague crypto right now, but sacrifices some of the decentralization (at least for now).

“Moving into a fully decentralized network can be a very unforgiving exercise, so we’re taking all the precautions because the idea is that there’s going to be lots of money running through this network,” Foy told Decrypt.

The Turkish government has added cryptocurrency exchanges to the list of firms subject to the country’s anti-money laundering and terrorism financing (AML-TF) regulations.

The regulatory change took immediate effect after the presidential decree—similar to an executive order in the US—was published in the Official Gazette today.

By applying those rules to crypto, the government now subjects the 31 crypto exchanges that operate in the country to the stringent regulation set by the financial watchdog, MASAK.

Vetting customers “like banks”

MASAK has occasionally requested a list of customers from the country’s cryptocurrency exchanges, but otherwise left crypto exchanges alone.

Now MASAK will treat crypto exchanges “just like banks,” Mehmet Türkarslan, legal counsel at a major Turkish crypto exchange, told Decrypt.

Starting today, exchanges have to demand proof of residency and identity documents (far from the norm in Turkey), and periodically check the validity of those documents.

Exchanges must also block any customer blacklisted by the government in sanctions lists, report any suspicious trading activity, and brief the government on any services provided to institutional customers.

“The list goes on and on, and we’re currently trying to figure it all out,” Agah Selim Sesli, a senior researcher at crypto exchange Bitexten, told Decrypt.

A patchwork of regulations

Today’s regulation is the first in a series of anticipated crypto regulations that the government says will come by the end of next week. Sesli expects that such regulation may include rules on taxation and, like in the US, declaration of private wallets.

This regulatory spree builds on prior regulation. Three weeks ago, the central bank banned the use of crypto in everyday payments, and restricted PayPal-like payment processors from dealing with crypto.

The flurry of regulation has caused confusion. “The government hasn’t even defined crypto assets, let alone crypto asset service providers,” Osman Gazi Güçlütürk, head of the department IT Law at Kırklareli University, told Decrypt. “These clarifications matter a lot in law.”

The government, which had never before explicitly referenced cryptocurrency exchanges, started introducing regulation on “crypto asset platforms”, and now “crypto asset service providers,” Türkarslan said. “We just assume it means crypto exchanges and act accordingly.”

“Crypto asset service provider” is a reference to the Financial Action Task Force’s description of crypto exchanges as virtual asset service providers (VASP), explained Güçlütürk.

The European Union relied on that term when deciding how to regulate crypto. But the EU has elaborately defined crypto asset providers before publishing regulations applying to them—unlike the Turkish government, which has dropped the term out of the blue.

The regulation follows the sudden shutdown of two major crypto exchanges that operate in the country. Thodex and Vebitcoin vanished overnight last week, locking up the funds of their customers.

Mertcan Bayraktar, a lawyer who represents several people in a case against Thodex, told Decrypt that regulating crypto exchanges is “of course a good thing,” but the government’s risk-averse approach may dissuade crypto traders from using the platforms.

“Crypto, or blockchain in general, offers amazing opportunities,” he said. “Deterring people from investing or trading crypto when it’s continuously portrayed in a negative light is also a potential risk.”

Visa chairman and CEO Al Kelly said in a quarterly earnings call on April 27 that the company has ambitious plans for digital currencies.

“I would say that this is a space that we are leaning into in a very, very big way and I think are extremely well-positioned,” Kelly said.

But how, precisely, is Visa planning to pull off its grand crypto plans? Here are the five things Kelly said Visa’s focusing on.

First, Visa wants to make it easier for people to use Visa cards to buy crypto. In the earnings call, Kelly reported an increase in the volume of crypto purchases with Visa cards (from exchanges or peer-to-peer platforms, but didn’t say by how much.

Kelly described Bitcoin as “digital gold”; the coin is one of the company’s top priorities. On a Fortune podcast in March, Kelly said his aim is to make it possible for Visa customers to buy Bitcoin directly, and work with Bitcoin wallets to “allow the Bitcoin to be translated into a fiat currency.”

On the Fortune podcast, Kelly said that small businesses hurt by COVID could benefit from Bitcoin payments. “It is time for real change where everybody is accepted on equal footing, with no questions asked,” he said.

Helping you spend crypto

Second, Kelly said the payments giant eyes an opportunity in converting crypto to fiat, and using crypto for shopping. Instant conversions, said Kelly on the Fortune podcast, would mean that approximately 70 million merchants could accept Bitcoin as payment.

“And we’re the clear leader here,” said Kelly in the earnings call. We’ve got over 35 digital-currency platforms and wallets that have chosen to work with us.” He mentioned Coinbase, Crypto.com, BlockFi, Fold, and Bitpanda.

There’s certainly demand. In a March survey, Visa found that 25% of Latin Americans would like to experiment with cryptocurrency payments. Plus, 78% expect that new technology, including crypto, is likely on the way.

Crypto in everyday finance

Kelly said the third area for Visa is helping financial institutions and fintechs to offer crypto to their customers. He said the company has created APIs to allow customers of financial institutions to buy, store or trade digital currencies held by Anchorage.

Visa has also worked with First Boulevard, “a digital neobank.” The neobank’s mission is to promote generational wealth in the black community, and customers can buy and sell Bitcoin.

Settlement of crypto

Next up is the settlement of crypto.

Kelly boasted that Visa’s infrastructure lets financial institutions settle transactions in the US dollar-pegged stablecoin, USDC.

In December 2020, Visa partnered with Circle, the company that creates USDC along with Coinbase, to integrate USDC. Later, Visa conducted a trial with Crypto.com, which sent USDC to Visa’s Ethereum address at crypto custody service Anchorage. Visa announced on March 29 that the company completed its first USDC transaction on the Ethereum blockchain.

Settling in USDC adds to the 160 currencies the company transacts in each day, and the 25 currencies in which the company settles transactions each evening, Kelly said in the earnings call.

He added that that “settling in USDC is pretty similar to settling in U.S. dollars,” but the technical details differ and require working closely with crypto custodians..

Central bank digital currencies

Many central banks around the world are mulling the launch of digital versions of their fiat currencies. They’re known as central bank digital currencies (CBDCs). Visa wants to ride that wave, and is busy trying to source central banks as clients, Kelly said.

“We’re talking to central banks about the criticality of public-private partnership […] because for these central bank digital currencies to have value, they’re going to have to both be secure in the minds of consumers, and that’s something we have a long track record with and could help,” he said.

The company released a research paper in December 2020 that made the case for offline CBDCs. An offline payment system “creates an experience similar to physical cash,” said Visa in the paper. “But instead of paper in your wallet, it’s bits and bytes in your phone.”

In its next quarterly earnings call, Visa might disclose how those bits and bytes convert to dollars and cents.

Sega, the video game giant behind Sonic the Hedgehog, is making a move into the NFT industry.

According to a Twitter post by Sega, the Tokyo-based developer is partnering with blockchain startup double jump.tokyo to create NFTs based around Sega’s IP.

Per Ledger Insights, double jump.tokyo has received an investment from Sega’s holding company for the development of the NFTs.

Sonic boom

Sega is a Tokyo-based game developer best known for creating the game Sonic the Hedgehog. First launched on the Sega Mega Drive in 1991, the spiky blue icon is widely regarded as being second only to Nintendo’s Mario in the pantheon of video game characters; in 2020, a Sonic the Hedgehog film was released by Paramount Pictures, with a sequel in development.

Non-fungible tokens (NFTs) are unique crypto assets that can represent artwork, audio, video, or any other form of digital or physical content. They’re typically built on the Ethereum blockchain, where they can be transferred or sold to other people.

Double Jump.Tokyo is an NFT and blockchain game creator that’s behind digital trading card games including My Crypto Heroes and My Crypto Saga.

The NFT startup recently announced a move away from the Ethereum blockchain. It will start building projects on the Flow blockchain, which was created by Dapper Labs—founder of both digital cat collecting game CryptoKitties and baseball trading card game NBA Top Shot. The move was prompted by scaling issues on Ethereum; the company intends to migrate some of its existing games over to Flow to enable them to grow.

Sega joins a wide range of other game companies and digital artists who have created their own NFTs to ride the current wave of hype. For example, video game publisher Ubisoft has created a fantasy soccer experience called One Shot League in partnership with football trading card game Sorare. But the NFT hype train might be losing its momentum—NBA Top Shot volumes declined 50% in the last month.

Hasbro CEO Brian Goldner has said that the toy and game manufacturer is considering incorporating non-fungible tokens (NFTs) into brands such as Magic: The Gathering—a world famous collectible card fantasy game.

“We’ll continue to monitor and look at what appears to be an accelerating Magic business,” Goldner said during a quarterly earnings call, adding, “The NFT is a real opportunity for us.”

Goldner added that Hasbro has “many brands that really operate on multiple demographic levels,” including Magic: The Gathering and G.I. Joe. “We have really our arms around this and see multiple opportunities on the NFT side,” Goldner said. “You’ll hear more about that as we move forward.”

NFTs, or non-fungible tokens, are cryptographically-unique tokens that represent digital content such as artwork, videos or items in video games. The NFT market has boomed in recent months, with volumes on marketplaces surging as brands and celebrities have scrambled to launch their own NFTs.

A kind of Magic

Speaking on the earnings call, Goldner said that revenue from the company’s gaming platforms—including Magic—rose by 7% as “gaming continued to be a focal point for players, consumers and retailers.”

Some of that increased revenue may be down to the ongoing COVID-19 pandemic. Goldner said that Magic is “allowing people to play at a distance who have never been able to reconnect with friends or family before.”

Magic: The Gathering is a card trading game with over 35 million players worldwide. Players take on the role of a Planeswalker, battling other players using collectible cards to represent spells, magical artifacts and fantasy creatures.

Sales of individual Magic: The Gathering cards have reached thousands of dollars, with an autographed copy of the rarest card in the game, the Black Lotus, selling for over half a million dollars at auction.

Indeed, big-ticket sales of Magic: The Gathering cards pre-empted the recent NFT collectibles boom, in which individual NFTs have sold for thousands or even millions of dollars. The combination of collectible cards and game mechanics is also one that NFT developers have explored in games such as Gods Unchained (which has seen individual NFT cards auctioned for tens of thousands of dollars).

The wider NFT boom

Elsewhere, the NFT market continues to break new ground.

This week, crypto exchange Binance announced that it will be launching Binance NFT, an NFT marketplace, in June of this year.

Gaming brands are also exploring NFTs, with Assassin’s Creed publisher Ubisoft releasing NFTs that can be swapped between games and plunging $2.5 million into a dev fund for open-source game Nine Chronicles.