Down goes Silvergate Bank, up goes DeFi funding

Dear member,

Another one bites the dust as crypto-friendly bank Silvergate was forced into voluntary liquidation just days ago. The bank saw $8b in digital assets pulled out by customers in the wake of its biggest client FTX’s insolvency, which led to a delay in filing its annual report to the SEC.

It’s likely that the combination of these factors, including an announcement of their uncertainty to operate, a class action lawsuit alleging the bank violated securities law, and continued higher rate hikes accelerated their demise.

While the macroeconomic environment grows increasingly negative, regulatory uncertainty may also be causing institutional investors to pull money out from crypto to the tune of $17m last week. Despite this, crypto funding in DeFi rose by 190% compared to 2021, up by 65x since 2020.

Several projects have received large rounds of funding, a few of which were supported by the likes of Andreessen Horowitz and Lionel Messi. And some have made significant partnerships, such as Chinese messaging app giant WeChat integrating digital yuan for faster payments.

But the funding round that takes the cake is none other than the former founders of 3AC. While being able to raise funding in a bear market less than a year after losing $10b is a feat in itself, many may still wonder - is 3AC 2.0 in the cards for OPNX?

Meanwhile, ETHDenver ends memorably with a viral folk song rebuking Sam Bankman-Fried performed live and sold as an NFT. This event is proof in the pudding that despite the bear market and weeks of crypto-banking turmoil, builders are still building.

Best regards from the Future,
RFTF.ai 

Market Intel

Crypto-first bank Silvergate implodes, sees $8b in digital asset withdrawals by the end of 2022. The bank collapsed after months of struggling amidst a worsening macroeconomic picture.

$17m exited last week as institutional investors pulled out of crypto in its fourth consecutive week of outflows. Regulatory uncertainty may be the culprit.

MakerDAO looks to add $750m to invest in U.S. Treasurys to take advantage of a favorable yield environment, laddering over a 6-month period with biweekly maturities.

ARK Invest adds COIN and HOOD shares, the former being their 7th largest holding.

Funding Trends

Crypto funding in DeFi rose by 190% compared to 2021 despite rising bearish sentiment in the market. The DeFi sector is shaping up to be potentially a high-growth area, cited a report.

Matchday raised $21m in seed funding, supported by Lionel Messi’s venture capital firm and several other investors.

Singapore-based DEX, DigiFT, raises $10.5m in a funding round led by Shanda Group. With the Series A funds, DigiFT plans to expand in Asia, MENA, and Europe.

nealthy raises $1.3m in a pre-seed funding round to create solutions for common problems faced by crypto and NFT retail investors.

Former execs from League of Legends maker Riot Games have raised $55m in funding for The Believer Company, led by Lightspeed Ventures and supported by Andreesen Horowitz. Says no to NFTs.

Web2 → Web3 Immersion

Singapore-based real estate platform Fraxtor aims to launch in Australia by mid-2023, offering fractional investing in real estate projects via blockchain technology.

Popular gaming company Mineloader, creator of Last of Us, partners with Immutable Games Studio and signals its move from Web2 to Web3.

Chinese messaging app giant WeChat integrates digital yuan for faster payments with the CBDC, as part of China’s efforts to expand and accelerate payment avenues for the digital yuan.

Dubai-based crypto exchange Bybit introduces a Mastercard virtual and physical debit card as it stops accepting bank transactions in U.S. dollars.

The Louvre is to host an NFT collection exhibition by Claire Silver, an artist who utilizes AI across her NFT projects.

Members-only NFT club by Animoca Brands to launch in Los Angeles, in collaboration with Planet Hollywood Group.

Regulatory Round-up

APAC

Thailand waives tax for companies raising funds through initial coin offerings, as another Asian country steps up the ante in attracting Web3 investors.

Internal documents show Australia’s plans for crypto legislation could extend beyond 2024, with many waiting for the next steps from the new Labor government.

Crypto businesses in India to comply with Anti-Money Laundering laws for crypto transactions, obliging financial institutions to maintain records of up to 10 years.

International

Over 50% see merchants embracing crypto settlements within 3 years, according to a joint study by Ripple and the Faster Payments Council (FPC). Majority of the respondents believe crypto’s main merit is its low transaction costs.

US/LATAM

Tax loss harvesting on crypto transactions like wash trading to be trimmed, thanks to Biden’s proposed budget plan.

Accused of a $100m crypto fraud scheme, SEC cracks down on Miami investment manager BKCoin in its latest salvo against bad actors in crypto.

DAO granted legal recognition and limited liability protections in Utah, setting a significant precedent that recognizes DAOs as transnational entities.

Brazil launched an experimental CBDC project aiming to make it more secure and private, with plans to see adoption by the end of 2024.

The Raven Also Spotted

Tether refutes WSJ reports that Bitfinex and Tether falsified documents to obtain access and circumvent the banking system.

ETHDenver ends memorably, with a viral folk song rebuking SBF performed live and sold as an NFT, heated talks on ZK rollups, networking, and more.

Terraform Labs under investigation in Singapore, marketing the first time the country has taken action against Do Kwon, now wanted in 196 countries.

Ex-founders of now-bankrupt 3AC complete fundraising to launch OPNX exchange.

Embattled Alameda Research to sell $45m stake in Sequoia Capital to Abu Dhabi’s sovereign wealth fund, as part of its attempt to pay off creditor debt.