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Plaid, a firm that connects banks and fintech firms, laid off about 260 employees as it grapples with the slowing economy. 

“The simple reality is that due to these macroeconomic changes, our pace of cost growth outstripped our pace of revenue growth,” Plaid CEO Zach Perret said in a message to employees. “I made the decision to hire and invest ahead of revenue growth, and the current economic slowdown has meant that this revenue growth did not materialize as quickly as expected.”

Departing employees will receive 16 weeks of pay, six months of health care and career support as part of their severance packages. Plaid did not respond by time of publication to clarify which departments were most affected by layoffs. 

Plaid joins Koinly, GameStop, Bitso, Meta and numerous other web3 firms that are reducing headcount amid the market downturn, which began in May following the Terra ecosystem collapse. The firm, which focuses on providing open banking APIs, launched its first web3 product in October of this year. 

© 2022 The Block Crypto, Inc. All Rights Reserved. This article is provided for informational purposes only. It is not offered or intended to be used as legal, tax, investment, financial, or other advice.

Coinbase CEO Brian Armstrong said the crypto exchange’s revenue this year will likely be cut in half or more from 2021’s sales number, blaming the state of the industry and shaken investor confidence in the wake of the recent collapse of rival FTX in an interview with Bloomberg News. 

Armstrong noted that Coinbase posted $7 billion of revenue in 2021, but said “with everything coming down, it’s looking, you know, about roughly half that or less,” in a conversation with Bloomberg’s David Rubenstein Show. The loss is in line with analysts’ expectations.

Coinbase shares, which have already plunged more than 80% this year, were down 1% on the news. 

Analysts were already expecting the lower top-line number from the exchange. Prior to their most recent earnings report, analysts surveyed by Factset were expecting Coinbase to post annual revenue of $3.3 billion.

Coinbase already forecast a possible loss of no more than $500 million based on adjusted EBITDA. That compares to about $4 billion of positive EBITDA last year. 

© 2022 The Block Crypto, Inc. All Rights Reserved. This article is provided for informational purposes only. It is not offered or intended to be used as legal, tax, investment, financial, or other advice.

U.S. authorities have arrested the former chief technology officer and co-founder of Blockparty, a blockchain events startup, for allegedly stealing over $1 million of crypto and fiat from the firm. 

The Department of Justice unsealed wire fraud charges against Rikesh Thapa, alleging that he stole money held on his firm’s behalf in a personal bank account — a common set-up, given the difficulties crypto firms face getting access to traditional banking — while also embezzling upwards of 10 BTC from Blockparty’s holdings. 

The complaint says those funds went to Thapa’s personal expenses that included “nightclubs, travel, and clothing.”

“The defendant repeatedly stole from and defrauded the victim company — which he co-founded — in order to fund a luxurious personal lifestyle,” Michael Driscollaid, the FBI agent in charge, said in a statement. 

The FBI says those offenses lasted from December 2017 to September 2019. Thapa’s LinkedIn shows him leaving Blockparty in December 2019. He has subsequently founded VerdeBlocks, a company that promised the ability to switch energy sourcing to renewable using contracts on Hedera.

Thapa faces a single count of wire fraud, which carries a maximum penalty of 20 years in prison. 

© 2022 The Block Crypto, Inc. All Rights Reserved. This article is provided for informational purposes only. It is not offered or intended to be used as legal, tax, investment, financial, or other advice.

Kazakhstan is advancing new legislation to regulate local crypto miners. 

Kazakhstan’s Majalis, the federal parliamentary body, has approved the second reading of a bill “On the Digital Assets of the Republic of Kazakhstan.” The bill will now go to a third reading, which precedes a vote.

The new legislation would put in new licensing regimes for crypto miners based on whether or not they operate their own facilities or rent them from other suppliers. Miners would also have to purchase their electricity from the shared grid at market rates through energy provider Korem, which follows earlier specific taxes on miner electricity consumption. 

Awash with cheap electricity, Kazakhstan saw a flood of miners following China’s ban on crypto. Following widespread protests over high fuel prices that led to political crackdowns including an internet shutdown in January, Kazakhstan imposed a new reporting and taxation regime for crypto miners.

Cambridge releases the most authoritative data on Bitcoin’s global hashrate, which continues to show Kazakhstan as one of the leading sources, but has not been updated since January. 

© 2022 The Block Crypto, Inc. All Rights Reserved. This article is provided for informational purposes only. It is not offered or intended to be used as legal, tax, investment, financial, or other advice.

A new group called ConstitutionDAO2 is trying to buy a copy of the U.S. Constitution, a year after the original attempt by a different group. 

The original ConstitutionDAO shot to fame last year as it raised $47 million to buy a copy via auction house operator Sotheby’s. Yet it was outbid by Citadel CEO Ken Griffin, who was aware of how much money the DAO had raised for its bid. 

After the bid failed, the original team stepped down from the project and a separate team was voted in by token holders to take up the mantle. Called PeopleDAO, the new team is running the latest attempt. The group is crowdsourcing with NFTs instead of tokens this time around, with some of the fundraising amounts kept private in the hope that it can avoid another usurping.

“ConstitutionDAO2 wants to buy the printing from Sotheby’s so that it can start a collection of civic artifacts that are totally run by the people,” the project said on Twitter. “We are going to teach the world about democratic innovations found in history and on web3.” 

Replicating the last sale

This copy of the U.S. Constitution is also on sale at Sotheby’s. It’s one of only two first prints of the Constitution in private hands, according to the auction house, and one of only 13 copies to exist. The sale will take place on Dec. 13. The last copy of the Constitution sold for $43.2 million.

Working with PeopleDAO on this latest attempt are Nucleo, Juicebox and Aztec Network. Juicebox is the crowdfunding platform that was used by the original ConstitutionDAO and allows anyone to contribute funds to the project in cryptocurrency, rewarding them with the selected NFTs. 

The rare copy of the U.S. Constitution. Image: Sotheby’s.

Nucleo and Aztec Network are two privacy-focused crypto projects that are supporting the ability for people to fund the project privately. This should help to hide how much the project has raised in total, giving it a fairer chance at the auction.

A drastically different market

Yet while ConstitutionDAO has improved some aspects of its fundraising strategy, it’s raising funds in a drastically different market. Last time, the crypto market cap was near all-time highs of $2.9 trillion, tokens were at their peak overblown valuations and everyone was flush with cash. Between then and now, there’s been the implosion of Luna, the collapse of crypto exchange FTX and widespread bankruptcies.

“Given they’re required to raise a dollar amount in ETH and ETH is roughly a third of the value it was back then, they will need to raise more ETH,” said pseudonymous crypto trader Hedgedhog, founder of Fisher8 Capital and co-founder of eGirl Capital. They added that raising more ETH in this sort of market is fairly impossible.

“It’s also more likely that anyone holding ETH still is a long-term believer of ETH and less of a speculator of NFTs,” they said.

Hedgedhog said the use of NFTs instead of tokens shouldn’t matter, as the rise of NFT pools provides a level a liquidity that didn’t exist in the past.

Public contributions

“I think the number of contributors to the campaign could be similar as they have already built a community, however the dollar amount will be significantly smaller than the previous effort due to the market,” said James Ross, a managing director at Hype Partners who has worked on 20 KickStarter and equity campaigns.

So far, ConstitutionDAO2 has raised 14.9 ETH ($18,500) in public contributions, while the amount of private contributions is unknown. There have been 97 contributions so far, and the crowdfunding campaign ends on the day of the auction.

Following the announcement of ConstitutionDAO2 and news that it’s favoring NFTs instead of its token called PEOPLE, the price of the token dropped 4%. One token is currently worth $0.025, down from all-time highs of $0.16.

© 2022 The Block Crypto, Inc. All Rights Reserved. This article is provided for informational purposes only. It is not offered or intended to be used as legal, tax, investment, financial, or other advice.

Genesis said in a client letter Wednesday that work on a plan to address issues in its lending unit will take weeks rather than days. 

The crypto lender wrote that it was working “in consultation with highly experienced advisors and in close collaboration with our owner, DCG” as well as holding discussions with client representation groups, according to a copy of the letter obtained by The Block.

CoinDesk first reported on the letter Wednesday.

Genesis had to halt withdrawals and new loan originations last month amid the fallout from the collapse of the FTX crypto exchange. The company warned about a potential bankruptcy last month in the event it is unable to secure emergency funding. 

“As you know, these are extraordinary times in our industry, and, while we are working urgently, this is a comprehensive process that we expect will take some time,” Genesis wrote. “At this point, we anticipate that it will take additional weeks rather than days for us to arrive at a path forward.”

Frank Chaparro contributed reporting. 

© 2022 The Block Crypto, Inc. All Rights Reserved. This article is provided for informational purposes only. It is not offered or intended to be used as legal, tax, investment, financial, or other advice.

The Mirror, a game development platform that lets indie developers build virtual worlds, raised $2.3 million in pre-seed funding in a round led by Founders Found, the Silicon Valley venture fund that has backed Stripe, Airbnb and Lyft.

Founded in Miami by CEO Jared McCluskey, the startup currently has a team of 15 people. Additional participants in the round included Konvoy Ventures, Abstract Ventures, Florida Funders and Palm Tree Crew.

The Mirror expedites the creation of 3D multiplayer games set in virtual worlds and includes tools for real-time collaboration, which is one of the characteristics necessary for occupation in the metaverse, according to Matt Ball, the author of a recent book on the subject. The startup says that it will serve developers of all skill levels, including those with no coding experience. 

“The Mirror has a fundamentally different approach of using open-source software to bring real-time collaborative game development to a fragmented industry,” Founders Fund partner Keith Rabois said in a statement. 

Amid bear market woes, venture funding in NFT and web3 gaming projects jumped 66% in 2022 to become one of the bright spots in an industry facing declining crypto prices and layoffs. Advancements in technology, infrastructure and throughputs on first- and second-level chains have increased the chances for successful blockchain-based games.

© 2022 The Block Crypto, Inc. All Rights Reserved. This article is provided for informational purposes only. It is not offered or intended to be used as legal, tax, investment, financial, or other advice.

Crypto and related assets slumped alongside traditional markets. 

Bitcoin slid 1% below the $17,000 mark to $16,845 at 10:15 a.m. EST, according to data via TradingView. Ether slipped 1.4% in the past day, down to $1,235. 

BTCUSD chart by TradingView

Altcoins were down with Dogecoin dropping the most at 3.2%. Binance’s BNB fell 1.3%, Polkadot’s DOT slipped 2.5% and Polygon’s MATIC was down 1.9%.  

Crypto stocks and structured products

The S&P 500 was marginally lower, falling by 0.03%. Meanwhile, the Nasdaq 100 dropped more sharply, shedding 0.4%, by 10:15 a.m. EST. Stocks remain under pressure over fears of more restrictive Fed policy on the bank of positive economic data.

Ark Invest’s Cathie Wood said the bond market may signal that the Fed is making a “serious mistake” as U.S. Treasury yields rose.

“At -80 basis points (as measured by the 10-year vs. 2-year Treasury yields), the yield curve is more inverted now than at any time since the early ’80s when double-digit inflation was entrenched,” the CEO said. 

An inverted yield curve is typically a precursor of a recession or lower-than-expected inflation. “In our view, deflation is a much bigger risk than inflation,” Wood said, noting that commodity prices and massive retail discounts corroborate that point of view. 

© 2022 The Block Crypto, Inc. All Rights Reserved. This article is provided for informational purposes only. It is not offered or intended to be used as legal, tax, investment, financial, or other advice.

Quick Take

• Galaxy Digital agrees to purchase GK8 from Celsius for ~$44.0mm 
• Required escrow deposit of ~$5.4mm from November 3, 2022 agreement
• Celsius KERP approved in late November 2022 after being denied earlier this year 
• Part of Celsius’s ongoing Chapter 11 proceedings 

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Perennial, a decentralized finance protocol for trading derivatives, raised $12 million in a seed funding round.

Polychain Capital and Variant co-led the round, with Archetype, Coinbase Ventures, Scalar Capital, Robot Ventures and others participating, Perennial said. The project has launched its mainnet.

Perennial was co-founded by Kevin Britz and Arjun Rao. Before Perennial, the duo also co-founded Astro Wallet in 2017, which was acquired by Coinbase in 2019. Both are still working for Coinbase in an advisory capacity, Britz said.

“Perennial is a derivatives protocol that offers a super simple trading experience, a flexible and capital-efficient model for providing liquidity, and a developer primitive that makes composing DeFi derivatives easy,” Britz said. The company aims to become the foundational infrastructure in the DeFi derivatives stack.

With its mainnet launch, Perennial is initially offering three markets including long-ether, short-ether and long-squeeth.

“This is just the start,” Britz said. “Perennial has a packed roadmap planned out, including more tradable markets, an ecosystem buildout on L2s [Layer 2s], and mechanism design improvements.”

Project hiring

It wasn’t specified if the funding was raised via equity or token round, but Britz said the Perennial protocol doesn’t have a token at this time. The Perennial product was developed by Perennial Labs, whose parent company  Equilibria was co-founded in June last year by Britz and Rao.

Britz declined to comment on Perennial’s current headcount but said the project is hiring across all functions, including engineering, growth, community, and product.

DeFi-related projects have started to receive venture capital injections after a long hiatus. Earlier this week, Uniswap-based DeFi protocol Panoptic raised $4.5 million. Last month, Polkadot-based blockchain interoperability protocol t3rn raised $6.5 million, and Cosmos-based DeFi protocol Onomy raised $10 million in private token funding rounds.

© 2022 The Block Crypto, Inc. All Rights Reserved. This article is provided for informational purposes only. It is not offered or intended to be used as legal, tax, investment, financial, or other advice.