Tag: CRYPTO INDUSTRY

Lightspeed Faction Unveils $285M Fund for Blockchain Innovation

by Blockchain News

Lightspeed Faction, a leading venture capital firm with a focus on blockchain, has announced the launch of a $285 million venture fund, according to PR Newswire. This fund is earmarked for early-stage blockchain projects, signaling a significant commitment to advancing crypto technologies.

The newly established fund by Lightspeed Faction is poised to play a pivotal role in the blockchain sector. It aims to invest primarily in early-stage projects, offering not only financial backing but also expert guidance in areas such as tokenomics and business scaling. This initiative comes at a time when the industry is experiencing a shift, with many investors withdrawing from the crypto space.

Lightspeed Faction’s team, composed of experts from Amber Group, Blockchain.com, and Coinbase, brings a wealth of experience to the venture. Their crypto-native insights are expected to be invaluable for the emerging blockchain entrepreneurs they will support.

This venture is a collaborative effort with Lightspeed Venture Partners, blending Faction’s exclusive focus on crypto with Lightspeed’s extensive experience in Silicon Valley and business scaling. Despite the collaboration, Faction maintains its independence, with its own dedicated LP base and complete control over the investment decisions for the $285 million fund.

Co-Founder and General Partner Banafsheh Fathieh emphasizes Faction’s deep belief in the transformative potential of crypto. The firm is set to invest in a wide array of blockchain projects that promise to revolutionize sectors like finance and telecommunications. Faction’s investment strategy extends beyond financial returns, including fostering projects with significant societal impacts.

Faction has a history of investing in diverse blockchain projects, even during market downturns. Its portfolio includes Crossmint, Lens, Narya.ai, and others. The founding partners, Samuel Harrison and Banafsheh Fathieh, have a combined experience of deploying over $500 million in the blockchain and venture capital space, backing major industry players.

Samuel Harrison, Co-Founder and Managing Partner, highlights Faction’s commitment to being a collaborative partner throughout a project’s lifecycle. He underscores the potential of blockchain to bring about positive societal changes, such as more efficient and transparent financial services.

As a leading blockchain-native venture capital firm, Lightspeed Faction is uniquely positioned at the intersection of Silicon Valley venture capital expertise and deep blockchain knowledge. The firm focuses on early-stage startups in their Seed or Series A funding rounds, with a strong commitment to advancing the crypto industry and society.

Lightspeed Venture Partners, a multi-stage venture capital firm, has been instrumental in fostering innovations across various sectors. With a global team and $25B in AUM, Lightspeed has been a key player in the growth of over 500 companies worldwide.

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ADGM Launches Pioneering DLT Foundations Regime

by Blockchain News

The Registration Authority (RA) of Abu Dhabi Global Market (ADGM) has pioneered the unveiling of the Distributed Ledger Technology (DLT) Foundations Regulations 2023, marking a crucial phase in the regulatory evolution of digital assets both regionally and internationally. This innovative regime, revealed a day ago, is tailored to address the unique legal requisites of Blockchain Foundations, Decentralised Autonomous Organisations (DAOs), and the encompassing crypto industry.

The establishment of this new regime showcases a progressive milestone, aligning with ADGM’s strategy of nurturing broader blockchain and digital asset initiatives. It’s aimed at fostering a transparent and efficient future across the blockchain and Web3 landscape. The DLT Foundations Regulations 2023 is perceived as a global benchmark being the world’s inaugural of its kind, setting a precedent for other regions to follow suit.

The legislation is meticulously crafted to provide a robust framework for DLT Foundations and DAOs, facilitating their operation and token issuance while recognizing the distinct needs of the Blockchain industry. It’s a testament to ADGM’s foresight in anticipating the industry’s trajectory towards a more decentralized governance structure. This regime is also deemed suitable for traditional Foundations aspiring to augment their operations via DLT, thereby offering a unified solution for digital asset-related activities.

His Excellency Ahmed Jasim Al Zaabi, Chairman of ADGM, accentuated that the DLT Foundations Regime is a monumental stride, echoing ADGM’s proactive approach ingrained in extensive cross-industry dialogue and collaboration with multiple stakeholders. By reshaping the blockchain and Web3 landscape, this initiative propels the industry towards a future defined by global benchmarks with heightened transparency and efficiency. The public consultation preceding the regime’s enactment garnered valuable insights from DLT industry participants, which was instrumental in refining the regulations.

The rapid advancement of Digital Ledger Technology in recent years has positioned it as the linchpin of the global digital assets sector. ADGM, standing as a prominent International Financial Centre (IFC), continues to champion technological innovation, thereby fostering a conducive environment for crypto initiatives to thrive.

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ZachXBT’s Defamation Lawsuit Receives Over $1 Million in Donations as Prominent Figures Rally Support

by Blockchain News

In a surprising turn of events, renowned on-chain analyst ZachXBT has exceeded his initial fundraising target, amassing a staggering $1,055,233 in donations, according to Nansen data. This remarkable achievement has been made possible through contributions from various entities and influential figures within the crypto industry.

Prominent supporters include Binance CEO Changpeng Zhao, Coinbase Cloud’s protocol lead Viktor Bunin, CertiK, Justin Sun, Kraken co-founder Jesse Powell, and Polygon’s founder Sandeep Nailwal.

Changpeng Zhao, in a tweet, expressed Binance’s commitment by pledging $50,000 to the cause, while urging ZachXBT to persevere in his fight and emphasizing the importance of transparency in the industry.

Jesse Powell also expressed gratitude for ZachXBT’s work and pledged a donation of 10 ETH.

Brown Rudnick partner Palley, along with Jess Meyers and the team at Brown Rudnick, expressed their honor in representing ZachXBT’s mission to speak truth to power.

Sandeep Nailwal, founder of Polygon, praised individuals like ZachXBT for their contributions and pledged 5 ETH to support the legal battle.

The lawsuit filed by Huang accuses ZachXBT of damaging his reputation through false allegations made in an article published by ZachXBT approximately a year ago. Huang vehemently denies the allegations and is determined to prove their falsity through the legal proceedings. In a recent tweet, Huang stated that he initially expected an apology and expressed his intention to donate any monetary compensation received to charity.

Huang Licheng（Jeffrey Huang)，known as MachiBigBrother on Twitter, a former American-Taiwanese musician and technology entrepreneur, had been involved in a controversial incident in 2018 when he allegedly misappropriated 22,000 ETH from Formosa Financial. Furthermore, over the past four years following the collapse of Formosa Financial, Huang has been associated with a series of unsuccessful token launches and NFT projects.

In response to the lawsuit, ZachXBT expressed disappointment and asserted that the legal action taken against him is an attempt to stifle free speech. He remains resolute in his commitment to fight back and defend the principles of free expression.

To cover the legal expenses and protect the freedom of speech, ZachXBT has set up a donation wallet address for his followers and the wider community.This legal dispute has garnered significant attention within the industry, with key players showing their support for ZachXBT’s cause. The influx of donations and the rallying behind the principle of free speech highlight the crypto community’s dedication to transparency, accountability, and the pursuit of truth.

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Crypto Hacks in Q1 2023

by Blockchain News

In the first quarter of 2023, hackers accessed over $320 million in the crypto industry through a variety of incidents, according to the quarterly report from blockchain security firm CertiK. While this amount is significantly lower than the $1.3 billion and $950 million lost in the first and fourth quarters of 2022 respectively, it is still a substantial sum.

CertiK notes that off-chain events may have played a role in the lower amount of losses seen in Q1 2023. For example, issues with Silvergate Bank and the depegging of USD Coin (USDC) may have had a broader impact on the crypto industry. However, despite these challenges, hackers still managed to exploit vulnerabilities in the system.

Out of the funds stolen within the quarter, over $31 million was lost to 90 exit scams, while more than $222 million was lost in 52 flash loan and oracle manipulation exploits. BNB Chain had the greatest number of incidents for the quarter, with 139 in total. Meanwhile, Ethereum had the most significant loss, with over $221 million lost.

Despite the lower numbers overall, Q1 2023 was still marked by substantial losses. 60% of the funds lost were due to the Euler Finance hack on March 13, where hackers exploited a flash loan to access over $195 million. However, negotiations with the hacker allowed Euler Finance to recover around 90% of the lost funds by April 4.

The trend of recovering funds through negotiations with hackers has become increasingly common in the crypto industry. Lending protocol Sentiment also recovered around $870,000 in April after giving a bounty of $95,000 to those responsible for taking almost a million dollars from the platform.

While it is encouraging to see funds being recovered in this way, it also highlights the need for continued vigilance in the industry. As long as there are vulnerabilities that can be exploited, hackers will continue to find ways to access funds. It is up to those in the industry to remain vigilant and take steps to ensure the safety and security of their platforms and assets.

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Singapore Regulators and Banks Develop Crypto Customer Screening Standards

by Blockchain News

Singapore regulators are taking proactive steps to address the challenges posed by the fast-evolving crypto industry. According to a report by Bloomberg on April 6, the Monetary Authority of Singapore (MAS) has been working closely with traditional banks to develop uniform standards for screening potential customers from the crypto industry.

The collaboration has been ongoing for the past six months and has involved the police forces as well. The aim is to help local banks optimize their procedures for opening accounts of digital asset service providers while mitigating risks associated with money laundering and terrorist financing. After six months of cooperation, the results and conclusions for risk management and due diligence will be published within the next two months.

The guidelines will not only address the screening of potential customers, but also cover other pertinent topics in the crypto industry. These include stablecoins, nonfungible tokens (NFTs), and transferable gaming or streaming credits. By setting standards for these issues, regulators hope to create a safer and more transparent environment for the use of cryptocurrencies.

However, it is important to note that the banks will still reserve the right to make decisions based on their own risk assessment, even after the guidelines are published. This flexibility will allow the banks to cater to their own specific circumstances while adhering to the general principles of the guidelines.

The move by Singapore regulators is not surprising, given the increasing prevalence of cryptocurrencies and the need for regulatory oversight. As cryptocurrencies become more mainstream, it is important to have a clear framework that can ensure their safe use while still fostering innovation and growth in the industry.

Singapore has been one of the more progressive countries in Asia when it comes to crypto regulation. In 2019, MAS issued guidelines on the regulation of digital token offerings, which helped to clarify the regulatory framework for initial coin offerings (ICOs) and security token offerings (STOs). This move helped to encourage the growth of the blockchain and crypto industry in Singapore.

Overall, the collaboration between Singapore regulators and traditional banks is a positive step towards establishing a more secure and trustworthy environment for the use of cryptocurrencies. With the guidelines set to be published in the coming months, it will be interesting to see how they shape the landscape of the crypto industry in Singapore and beyond.

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Animoca Brands Cuts Metaverse Fund Target to $800M

by Blockchain News

In recent news, Animoca Brands has reportedly reduced its target for its metaverse fund by a further 20% to $800 million, according to sources familiar with the matter. The company has scaled back on its billion-dollar goal due to the volatility in the crypto sector. Animoca Brands had previously announced in November 2022 that it was working on a new Animoca Capital fund with a target of $2 billion, but then halved that target to $1 billion in January 2023.

Two sources familiar with the matter disclosed that Animoca Brands’ market capitalization, which was previously valued at roughly $6 billion following a Temasek-led financing round in July 2022, has fallen to below $2 billion. The sources also shared that the company’s shares are trading at a considerably lower valuation in secondary markets. The decreased fundraising target and declining valuation signal a change in sentiment on the crypto industry, as excitement around such technologies has dwindled following scandals ranging from the collapse of FTX to the bankruptcy of several crypto lenders.

In 2022, Animoca Brands was named the most funded metaverse developer by Nasdaq, with Animoca having the most metaverse deals in 2022, closing 15 deals and receiving over $564 million in funding. As a prominent player in the metaverse industry, Animoca Brands holds a majority stake in The Sandbox, a leading metaverse platform. Apart from this investment, the company has actively participated in developing nonfungible tokens (NFTs) and GameFi.

Yat Siu, one of Animoca Brands’ co-founders, has stated that GameFi is expected to become one of the main gateways for the general public to access the metaverse. With the decreasing target for its metaverse fund and declining market capitalization, Animoca Brands’ focus may shift towards developing GameFi and other related projects.

It is worth noting that the metaverse has been a hot topic in the tech industry, with companies like Facebook and Roblox investing heavily in it. However, the hype around the metaverse has been tempered by concerns about its potential impact on privacy, security, and social inequality. As the metaverse industry evolves, it will be interesting to see how companies like Animoca Brands adapt and navigate the challenges and opportunities that lie ahead.

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US Fed denies Custodia Bank membership over crypto concerns

by Blockchain News

In its 86-page report released on March 24, the US Federal Reserve denied Custodia Bank’s application for membership citing concerns over the bank’s involvement in the crypto industry. The Fed has raised “concerns about banks with business plans focused on a narrow sector of the economy”, with a high concentration of activities related to the crypto industry. The report states that “Those concerns are further elevated with respect to Custodia because it is an uninsured depository institution seeking to focus almost exclusively on offering products and services related to the crypto-asset sector, which presents heightened illicit finance and safety and soundness risks.”

The Fed also noted that Custodia Bank had not yet developed a sufficient risk-management framework for its proposed cryptoasset-related activities, nor had it addressed the highly correlated risks associated with its undiversified business model. The report stated that Fed’s members must align their risk management systems and controls with the activities described in their business plans.

If Custodia Bank were to be accepted as a member of the System, it would be further prohibited from running crypto-related services “given the speculative and volatile nature of the crypto-asset ecosystem” that is not consistent with the purposes of the Federal Reserve Act. The report stated that “Further, if the Board were to approve Custodia’s membership application, it would prohibit Custodia from engaging in a number of the novel and unprecedented activities it proposes to conduct—at least until such time as the activities conducted as principal are permissible for national banks.”

In response, Custodia Bank criticized the Fed’s decision as shortsighted and an inability to adapt to changing markets. The bank claimed that perhaps more attention to areas of real risk would have prevented the bank closures that Custodia was created to avoid. The bank has vowed to turn to the courts to vindicate its rights and compel the Fed to comply with the law.

The Fed’s report on Custodia Bank’s membership application is 14 times longer than its previous longest denial order, and 41% longer than the Fed’s longest order on any subject, according to the bank. In late January, the Fed denied a membership request from Custodia Bank, as well as a second application in February, claiming that its application “was inconsistent with the required factors under the law.”

In conclusion, the US Federal Reserve has denied Custodia Bank’s membership application due to concerns over the bank’s involvement in the crypto industry. The bank’s proposed cryptoasset-related activities were deemed to present heightened illicit finance and safety and soundness risks, and the bank had not developed a sufficient risk-management framework. While Custodia Bank has criticized the Fed’s decision, the bank is now prohibited from running crypto-related services if accepted as a member.

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Silvergate Bank Voluntary Liquidation Sparks Controversy in Crypto Industry

by Blockchain News

The voluntary liquidation of Silvergate Bank, a crypto-friendly bank, has caused a stir in the crypto industry, with many sharing their thoughts about the bank’s troubles and the broader impact of its collapse on crypto. Some United States lawmakers have taken the opportunity to criticize the crypto industry, labeling it as a “risky, volatile sector” that “spreads risk across the financial system.” Senator Elizabeth Warren called for regulators to “step up against crypto risk,” while Senator Sherrod Brown expressed concern that banks that get involved with crypto are putting the financial system at risk.

However, these remarks have faced criticism from the community, with some arguing that it was not a crypto problem, but rather a fractional-reserve banking issue. Silvergate held far more in-demand deposits compared to cash on hand, which led to its collapse.

Several companies have used the recent announcement from Silvergate to reiterate their lack of or now-severed ties with the firm. Binance CEO Changpeng Zhao assured customers on Twitter that the crypto exchange does not have assets stored with Silvergate, while peer exchange Coinbase also assured its followers that no customer funds were held by the bank.

Nic Carter, co-founder of venture firm Castle Island and crypto intelligence firm Coin Metrics, suggested that the government was responsible for “hastening the collapse” of Silvergate by launching investigations and legal attacks on it. He referred to “Operation Choke Point 2.0,” which he claims is a sophisticated, widespread crackdown against the crypto industry. CEO of financial services firm Lumida, Ram Ahluwalia, had a similar take, arguing that Silvergate faced a bank run after a senator’s letter had undermined public trust in the firm. He claimed that “Silvergate was denied due process.”

Some believe that the collapse of Silvergate won’t necessarily hurt the crypto industry, but proposed changes to tax laws could exacerbate the exodus of crypto firms from the U.S. With Silvergate winding down, some have also asked where crypto firms will turn to now. Coinbase, which previously accepted payments via Silvergate, announced that it would facilitate institutional client cash transactions for its prime customers with its other banking partner, Signature Bank. However, Signature Bank announced in December that it intended to reduce its exposure to the crypto sector by reducing deposits from clients holding digital assets. To further reduce its crypto exposure, Signature Bank imposed a minimum transaction limit of $100,000 on transactions it would process through the SWIFT payment system on behalf of crypto exchange Binance.

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Ripple CEO Warns SEC’s “Enforcement” Approach May Hurt US Crypto Industry

by Blockchain News

The CEO of Ripple, Brad Garlinghouse, has warned that the US Securities and Exchange Commission’s (SEC) approach to regulation is putting the US at risk of missing out on being a global hub for the next evolution of blockchain and crypto innovation. In a recent Bloomberg interview, Garlinghouse suggested that the SEC’s enforcement-focused approach, as opposed to working collaboratively with the industry, is not a healthy way to regulate an industry.

Garlinghouse noted that the SEC’s case against Ripple is an example of the regulator simply playing “offense” and “attacking” the industry as a whole, rather than taking a constructive approach to regulation. He added that if the SEC is “able to prevail,” there will be “a lot of other cases.” 

Garlinghouse argued that the crypto industry has “already started moving outside” of the US given its crypto regulation process is “behind” other countries such as Australia, UK, Japan, Singapore, and Switzerland. He commended these countries for taking “the time and thoughtfulness” to create “clear rules of the road,” and suggested that the US should follow suit in order to remain competitive. 

Garlinghouse believes that the framework process should begin with outlining clear protections for consumers. He added that consumers are suffering from the “lag,” as they don’t have the “same protection” that the regulatory frameworks can provide. 

Meanwhile, John Deaton, founder of legal news outlet Crypto Law Lawyer, recently put a call-to-action to his 245,000 Twitter followers, stating that all companies in “active litigation” with the SEC should collaborate and develop “coordinated strategies,” adding that it is “war.” This comes after Blockchain Association CEO, Kristin Smith, told Bloomberg in a Feb. 22 interview that the crypto regulation process in the US is happening “behind closed doors,” and that more industry involvement is vital in an “open process.” 

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