Monday, October 12, 2020

🌴Last Week in Crypto🍹9/28/20 - 10/4/20


 



Find the original & subscribe 👉 LWIC Newsletter

LWIC is a weekly rundown posted on Mondays that covers the biggest news from the previous week:

  • What companies raised money?
  • What tokens got all the headlines?
  • What macro news matters?


Welcome to a fresh week folks 👋 

Last week, two legal actions were brought against BitMEX, a large crypto exchange. The U.S. Commodity Futures Trading Commission (CFTC) filed a civil action charging the BitMEX owners with illegally operating a cryptocurrency derivatives trading platform and anti-money laundering violations. Even more eye-opening, the U.S. Attorney’s Office-Southern District of NY announced criminal charges against the BitMEX founder Arthur Hayes & colleagues for violating the Bank Secrecy Act. Keep your eye on how these legal actions impact DeFi over the coming weeks & months. How might DeFi projects be targeted in a similar way? Does this slow down the pace of innovation in DeFi? Do founders shrug it off? A lot remains to be seen.

Go Deeper → Remarks of CFTC Commissioner Brian Quintenz (October 2018), Bloomberg (July 2019), CFTC ReleaseSouthern District NY ReleaseNY TimesThe Block

Now, let’s catch up on what else happened last week in crypto💨

  • 13 New Funding Rounds

  • 2 Tokens to Watch

  • 3 pieces of Macro News


New Funding Rounds 🐦

Token Sales

  • DODO raised $5MM via private token sale, after closing a Seed round in late August led by Framework Ventures. DODO is a decentralized exchange that aims to improve on some of Uniswap’s shortcomings. Get the details in their Medium post.

  • Equilibrium raised $5.5MM via a “token swap.” Equilibrium is a Polkadot-based DeFi platform for buying, selling, lending, and staking tokens.

Seed Rounds

  • Multis raised $2.2MM from White Star Capital, Y Combinator, Coinbase Ventures, eFounders, Greenfield One, Digital Currency Group, Monday Capital and SGH Capital. Multis is building bank accounts to help businesses to manage, store, send and receive cryptocurrencies. 

  • Fluree tacked on $2.5MM to its seed round, now totaling $6.5MM, led by ​4490 ventures​ with participation from Revolution’s Rise of the Rest Seed Fund, Engage Ventures, and others​. Fluree is a data management platform that uses blockchain. 

  • Unilend Finance raised $3.1MM via a mixture of equity & private token sale, with participation by a long roster of investors including Woodstock Fund, Signal Ventures, 3Commas and many others. Unilend Finance is a multi-use decentralized exchange.

  • Persistence raised $3.7MM from a laundry list of investors including Arrington XRP Capital, Spark Capital, Woodstock Fund, Genesis Block HK, and Moonrock Capital. Persistence facilitates the borrowing of cryptoassets using real-world assets as collateral. 

  • Reef Finanace raised $3.9MM with participation by NGC Ventures, AU21 Capital, QCP Capital, Kenetic Capital and Woodstock Fund. Reef Finance is a Polkadot based all-in-one DeFi platform.

Series A

  • Braintrust raised $18MM led by ACME and Blockchange, with participation from Pantera, Multicoin, Omidyar Technology Ventures, Variant and Hashkey. Braintrust is a “labor protocol” that connects organizations with talent, and uses their BTRUST token to align incentives amongst freelancers on the platform.

  • Bitpanda, raised $52MM led by Valar Ventures (Peter Thiel, anyone?). Bitpanda is a Europe-focused crypto exchange that also supports trading of other assets, such as precious metals. Read the announcement on their blog.

Not sure what to call it

  • Bright ID raised an unknown sum from The LAOBrightID is a blockchain-based digital identity solution.

Funds

  • Bitwise, a crypto index fund, added $9MM to its bitcoin fund.

  • Robot Ventures raised $4MM so far for its second fund, led by Galaxy Digital with participation by Paradigm.

  • ParaFi Capital has a new shareholder, Galaxy Digital. ParaFi's other investors include Bain Capital Ventures and Henry Kravis, co-founder of private equity giant KKR & Co. Read an interview with Mike Novogratz (Galaxy) and Ben Forman (ParaFi) on Forbes.com.

Tokens to Watch 🗃

FIL - Late on Sunday 9/27 Filecoin, the decentralized cloud storage protocol, set an expected launch date of October 15 for its long-awaited mainnet launch. Filecoin raised $257MM during the 2017 ICO boom. Since then, competitors like Sia and Storj beat them to launch.

AAVE - As of writing, Aave is about 13% through its token migration from LEND to AAVE, a big step on Aave’s path towards decentralization. The migration started as planned after the Aave community’s vote and approval the move. Aave is a very popular decentralized money market protocol that enables its users to participate as depositors or borrowers.

Macro News 👾

Kucoin exchange hacked: The large, Singapore-based centralized cryptocurrency exchange was hacked to the tune of $281MM starting on Friday, 9/25 but the fallout continued last week, especially around “decentralization theatre.” In response to the hack, many “decentralized” protocols unilaterally froze their tokens or implemented a hard fork to prevent the hacker from selling. Two major takeaways here are that not all “decentralized” finance products are, in fact, decentralized, and the usual admonition, “not your keys, not your crypto.” This story continues to unfold, stay tuned.

Go Deeper → Decrypt (9/25/20), BanklessRektCrypto Briefing

Kik’s 2017 token sale ruled a violation of U.S. securities law: In 2017 Kik sold $100MM worth of their Kin token. Last week, a judge held, “that undisputed facts show Kik offered and sold securities without a registration statement or exemption from registration, in violation of Section 5” of the Securities Act. This result was expected, yet serves as a fresh reminder that if it looks, swims, and quacks like a security, then it’s probably a security.

Go Deeper → Coindesk on the original suit, Coindesk on last week’s ruling, Reaction thread by attorney Stephen PalleyThe judgement in full

Eminence, an unreleased product, hacked: Eminence, an NFT-oriented product still under development, had $15MM drained by a hacker. This occurred after Eminence’s creator, DeFi star Andre Cronje, retweeted the Eminence account, which attracted millions of dollars to the unlaunched & unaudited contracts. Curiously, $8MM was returned by the hacker. Paired with the BitMEX crackdown, this could contribute to something of a cool down in the DeFi space.

Go Deeper → RektThe BlockAndre Cronje explanation

🌴Last Week in Crypto🍹10/12/20 - 10/18/20

Find the original & subscribe 👉  LWIC Newsletter LWIC is a weekly rundown posted on Mondays that covers the biggest news from the previ...