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Nucleo, a company that aims to build on-chain privacy infrastructure for organizations, has raised $4 million in seed funding. 

The round, led by the crypto arm of investment firm Bain Capital and 6th Man Ventures, also featured participation from others in the privacy infrastructure sector including Aztec Network, Aleo, and Espresso Systems, a news release said. 

The company seeks to create a private multi-sig solution for organizations to transact on the Ethereum blockchain through zero-knowledge cryptography. Multi-sig, or multi-signature, is a digital signature arrangement used in crypto wallets that requires more than one user to authorize and send transactions. 

Companies building crypto infrastructure continue to be popular with crypto venture firms. According to The Block Research, infrastructure startups raised $313 million last month, second only to financial services. 

© 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.

Most major cryptocurrencies were lower on Tuesday morning, but some altcoins bucked the downward trend. 

Bitcoin was down 0.9% over the past 24 hours, trading at $16,003. Meanwhile, ether dropped 1.9% as it traded at $1,121. 

BTCUSD chart by TradingView

Binance’s BNB gained 0.4% over the last day. ADA, DOGE, AND DOT all fell, dropping 0.5%, 0.5%, and 1.1%, respectively. Curve DAO’s token CRV plunged, dipping up to 14% to 43 cents at one point thanks to pressure from a short seller. The price has since recovered; CRV was trading at 62 cents at 8:30 a.m. ET. 

Polygon’s MATIC and Ripple’s XRP bucked the downtrend, adding 4.8% and 4%, respectively. 

Grayscale’s GBTC discount was up from its latest all-time low of 45.2%. The bitcoin trust has been reaching new lows intermittently over the past two weeks as sentiment in crypto markets worsens. 

The firm’s sister company Genesis is facing increasing liquidity issues and there are reports that it may face a possible bankruptcy, adding to the downward pressure.

This his hasn’t dissuaded all investors. Ark Invest added over $1.4 million worth of GBTC shares on Monday, adding to the more than $5.4 million purchased last week.

Crypto stocks

Crypto-related stocks rebounded in pre-market trading. 

Block was up 0.44%, according to Nasdaq data via TradingView. Coinbase gained 3.7% to trade around $43, following yesterday’s sell-off when shares hit an all-time low under $42. 

Shares in crypto bank Silvergate also perked up, adding 3% to trade at $25. Crypto prime broker FalconX said it would resume using the Silvergate payments network today.

Michael Saylor’s MicroStrategy added 2.23% to trade back above $160.

© 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.

FTX executives made a splash during the 2022 midterm cycle, spending millions on political donations and funding for their super PACs 

But after the exchange filed for bankruptcy protection, some politicians are rushing to get rid of the crypto-linked cash.

Members of Congress have announced they’ll use campaign contributions from former FTX CEO Sam Bankman-Fried and FTX Digital Markets Co-CEO Ryan Salame for charity donations, in an effort to distance themselves from the disgraced crypto exchange. FTX spent heavily on lobbying efforts in Washington, along with backing dozens of candidates in the midterm elections. 

And they’re being encouraged to do so by crypto watchers and even other lawmakers, especially as the details of the FTX bankruptcy case become public. 

“I think the money ought to be given back. I mean, that money apparently came out of depositors’ pockets,” said Sen. John Kennedy, R-La. Kennedy sits on the Senate Banking Committee, which is working to schedule a hearing to investigate the FTX collapse.

Re-gifting damaged goods

It’s not uncommon for lawmakers to give campaign contributions from controversial donors to charity. The first lawmakers to donate Bankman-Fried’s cash were Reps. Chuy Garcia, D-Ill., and Kevin Hern, R-Okla. The pair gave their FTX-linked cash to charity. So has Sen. Kirsten Gillibrand, D-N.Y., the co-author of a sweeping crypto regulation bill, who donated a $5,800 contribution from Bankman-Fried to a charity in New York City.

Still, that’s a drop in the bucket compared to the overall political giving from the embattled FTX founder. Bankman-Fried gave more than $1 million to lawmakers during the 2022 cycle, and another $39 million to outside groups, including his super PAC, Protect Our Future. 

Salame, meanwhile, spent $23 million during the midterm cycle on campaign contributions and donations to his American Dream Federal Action super PAC and GMI PAC, another group funded by crypto executives. Super PACs can raise and spend unlimited funds, but cannot directly coordinate with campaigns.

Bankman-Fried’s giving also extends beyond campaigns. Campaign Legal Center, a nonprofit government watchdog group that typically comments on campaign finance issues, declined to comment for this story. When asked why, a spokesperson directed The Block to a list of its donors. Bankman-Fried is among those who have given more than $200 to Campaign Legal Center, illustrating the wide reach of his philanthropic efforts.

The former FTX boss’s financial donations also stretched to media organizations including Semafor, ProPublica, The Intercept and Vox.

Then again…

Several members of Congress aren’t rushing to redirect the FTX-related funds, including senior members of the House Financial Services Committee, which plans to hold a hearing on FTX and its broader impact on the crypto markets next month.

“Both sides have gotten contributions from crypto companies,” said Rep. Maxine Waters, D-Calif., the chair of the House Financial Services Committee. Waters announced a December hearing to investigate the FTX collapse and hear from those involved, including Bankman-Fried. 

Another lawmaker on the House Financial Services Committee is also reserving judgment. 

“We need facts, we need facts. I’m not going to judge anything. It doesn’t look good,” said Rep. Tom Emmer, R-Minn., who will serve as GOP whip next Congress. “There’s going to be a complete investigation.” 

Lawmakers should focus on what happened at FTX, Emmer said, when asked about whether members should focus on Bankman-Fried’s political giving. The Minnesota lawmaker was chair of the National Republican Congressional Committee during the 2020 and 2022 cycles and did not say whether he believes the group should return $134,000 in donations linked to FTX. 

“Let’s find out what happened with FTX instead of going down rabbit holes — you know, the important things are what did he do with the money?” Emmer said. 

What’s the big deal anyway?

Other lawmakers, neither of whom appear to have received donations from Bankman-Fried or Salame this cycle, downplayed whether donations from the company’s executives should be relinquished.

“I don’t know about that because I still believe that most people here don’t know who the hell gives them money,” said Sen. Jon Tester, D-Mont., a member of the Senate Banking Committee. “Truthfully, I mean, you gotta raise so much money if you tried to keep track of that it would drive you insane.”

The committee’s top Republican, retiring-Sen. Pat Toomey, R-Pa., didn’t feel passionately about what his colleagues do with the FTX-related donations.

“I don’t really have a strong opinion on that one way or the other,” Toomey said. 

Colin Wilhelm contributed additional 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.

Nasdaq-listed Eqonex Group has filed for judicial management with the Singapore high court after failing to plug a short-term funding gap, the firm said in a statement to shareholders. 

The court filing was made under provisions for insolvency, restructuring and dissolution, the firm said in a separate U.S. regulatory statement. Eqonex had been in negotiations with potential investors to obtain equity financing through the issuance of new shares, and had also been negotiating with Bifinity to extend a loan provision. ”Unfortunately, despite the group’s best efforts, these negotiations have not been successful,” the firm said. 

Eqonex’s Hong Kong units, Diginex Ltd. and Eqonex Capital Pte. Ltd., are in the process of being placed into voluntary liquidation.

The group’s Digivault Ltd. and Bletchley Park Asset Management were not involved in the insolvency proceedings. Digivault will commence a controlled voluntary wind-down with the view of finding an alternative solution, Eqonex said in the regulatory statement.

Eqonex was one of the first crypto exchange operators to publicly list, joining the stock market in 2020 via a SPAC deal with 8i Enterprises Acquisition Corp. The firm has struggled since, and last December replaced its CEO Richard Byworth and conducted a strategic review. The firm shut down its crypto exchange in September and said it would focus on asset management and custody.

Eqonex’s troubles come amid a wider reckoning for the crypto industry. FTX, once the world’s second-largest crypto exchange, filed for bankruptcy this month with billions of dollars missing from company accounts. Meanwhile, Genesis is struggling to raise cash for its lending unit, and has warned potential investors it could possibly file for bankruptcy, Bloomberg reported on Monday.

© 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.

Grand Theft Auto has followed Minecraft in banning NFTs from its third-party online servers. Developers cannot integrate cryptocurrencies or crypto assets such as NFTs, creator Rockstar Games confirmed in a statement last week.

The new rules are specifically aimed at role play servers. Think of them as spin-offs of the original GTA 5 created by people who aren’t Rockstar Games but instead fans and developers. They extend gameplay beyond what players can do in the standard game by allowing them to play as normally non-playable characters such as police, judges or taxi drivers. 

The company stressed that it still supports these servers despite the new restrictions. It also banned the importation or misuse of other IP in the project, including other Rockstar IP, real-world brands, characters, trademarks or music; and making new games, stories, missions or maps.

“Rockstar Games has always believed in reasonable fan creativity and wants creators to showcase their passion for our games. Third party ‘Roleplay’ servers are an extension of the rich array of community-created experiences within Grand Theft Auto that we hope will continue to thrive in a safe and friendly way for many years to come,” the company said.

What will happen to companies already running games including NFTs now isn’t clear. Among them, Australia-based MyMetaverse runs Grand Theft Auto V (GTA 5) servers that integrate tokens as well as NFTs in the form of cars and swords. It launched this in September in partnership with Enjin.

Rockstar Games is the latest U.S.-based top gaming company to ban NFTs. While some gaming giants elsewhere have started to explore NFT and web3 projects, in the U.S. gaming execs have taken a much more skeptical approach and have raised concerns that NFTs could be exploitative.

In July, Minecraft creators Mojang Studios banned NFTs from its servers, much to the chagrin of projects like NFT Worlds that had built its entire business on Minecraft. Valve, who runs gaming store Steam, has also criticised NFTs and said it doesn’t want them on its platform. 

Valve competitor Epic Games has been more neutral. The Fortnite creators have allowed several games using NFTs onto the Epic Games store, although it does not invest in these games or lend them any additional support.

MyMetaverse did not respond to a request for comment by the time of publication.

© 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.

An unknown trader borrowed 70 million Curve DAO tokens (CRV), worth around $28 million, from Aave and sold the majority of them to drop the token’s price.

The trader sold nearly all of the borrowed CRV tokens on centralized and decentralized spot exchanges, on-chain data shows. Typically short sellers will use a centralized perpetual trading platform, making this trader’s short play unique. 

The selling pressure triggered a sharp fall in price. The token crashed over 14% at one point, going from $0.52 to $0.43, according to CoinGecko. CRV was trading at $0.47 at 7:00 a.m. ET. 

CRV chart by TradingView

If the price of CRV falls below $0.242, a total of 185 million CRV tokens, or 10% of Curve’s circulating supply, would be liquidated on Aave, according to an estimate from DeFiLlama. If that happens, it may prove to be a catalyst that may further drive down the price of CRV. This could be part of the trader’s strategy.

Short sellers bet the token price will fall to make a profit. Borrowing on lending platforms and selling tokens is a manual way to take a short position on a particular asset.

Alternatively, as the price rises, the risk of the short seller being liquidated rises. This is known as a short squeeze and happens when short traders are forced to close their positions by buying back the underlying token. This poses some risk to the trader’s position.

© 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.

FTX, the now-bankrupt crypto exchange operator, its founder Sam Bankman-Fried’s parents and the firm’s senior executives bought at least 19 properties worth about $121 million in the Bahamas over the past two years, Reuters reported Tuesday, citing official property records.

The majority of the purchases — 15 properties worth about $100 million — were made by FTX’s unit FTX Property Holdings in 2021 and 2022, per the report. The most expensive property purchase was a $30 million penthouse at a resort called Albany. Its deed was reportedly signed by Ryan Salame, the president of FTX Property on March 17, and showed it was intended as a “residence for key personnel.”

Reuters said it could not determine who lived in the apartments. But last week, Bankman-Fried told Reuters he lived in a house with nine other colleagues and that FTX provided free meals and an “in-house Uber-like” service around the island.

Other high-end property purchases reportedly include three condominiums at One Cable Beach, costing between $950,000 and $2 million, and were bought by Bankman-Fried, Gary Wang, an FTX co-founder, and Nishad Singh, the former head of engineering at FTX, for residential use.

Another property is in Old Fort Bay, a former British colonial fort built in the 1700s, and its documents show Bankman-Fried’s parents, Stanford University law professors Joseph Bankman and Barbara Fried, as signatories. The property is for use as a “vacation home,” according to one of the documents dated June 15.

The parents have been trying to return the property to FTX, their spokesperson told Reuters. “Since before the bankruptcy proceedings, Mr. Bankman and Ms. Fried have been seeking to return the deed to the company and are awaiting further instructions,” the spokesperson said.

Two of FTX Property’s units were marked for commercial use. These were an $8.55 million cluster of houses that served as FTX’s headquarters and a 4.95-acre plot of land worth $4.5 million that was also meant to be developed into office space for the crypto exchange. The FTX headquarters is now unoccupied, its signage has been removed, and the plot of land also lies empty, per the report.

Reuters searched property records at the Bahamas Registrar General’s Department. A security guard told the news outlet that FTX employees did not return to the headquarters after leaving earlier this month.

FTX Group filed for Chapter 11 bankruptcy protection on Nov. 11 amid a sudden liquidity crisis. The crypto exchange operator reportedly tapped customer assets to fund risky bets by its affiliated trading firm Alameda Research, setting up its implosion. FTX Group owes $3.1 billion to its top 50 creditors and has cash balances of only $1.24 billion.

© 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 man in the Netherlands was arrested for allegedly laundering money using bitcoin. Prosecutors claim there were links to trading on the dark web.

The 42-year-old man, from the municipality of Midden-Groningen, was arrested on Nov. 16, according to a statement from the Fiscal Information and Investigation Service.

The investigation was started after the man used Bitcoin ATMs a few times. An investigation found that the man had been making large volumes of bitcoin trades through exchanges for a long time and that he owned a lot more bitcoin than he could have bought with his current income.

The man’s house in Veendam was searched and his computer equipment and cash were seized.

The investigation was led by the Dutch Public Prosecutor’s Office.

© 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 U.S. Department of Justice has arrested two Estonian citizens in Tallinn, Estonia for their alleged multi-layered scheme based on shell companies used to launder fraud proceeds. The 18-count indictment totals $575 million.

Sergei Potapenko and Ivan Turõgin, both 37, set up sham equipment-rental contracts for a crypto mining service called HashFlare and led victims to invest in a fake crypto bank called Polybius Bank which did not pay out customers’ dividends. Hundreds of thousands of people fell victim to the schemes, court documents show.

HashFlare was active between 2015 and 2019, and allegedly resulted in proceeds worth $550 million. The mining equipment apparently mined bitcoin at less than 1% of the computing power it claimed to have. Polybius was set up in 2017 and raised $25 million, which was sent to other bank accounts and crypto wallets the defendants owned.

“They tried to hide their ill-gotten gains in Estonian properties, luxury cars, and bank accounts and virtual currency wallets around the world,” said Assistant Attorney General Kenneth A. Polite, Jr. from the Criminal Division in the Department of Justice. “U.S. and Estonian authorities are working to seize and restrain these assets and take the profit out of these crimes.” 

The money laundering scheme involved 75 properties, six luxury vehicles and thousands of cryptocurrency mining machines, according to the statement.

Turõgin and Potapenko were arrested on Nov. 20 and charged with “conspiracy to commit wire fraud, 16 counts of wire fraud, and one count of conspiracy to commit money laundering,” according to the Justice Department. 

The FBI is currently investigating the case. If the duo is convicted, it may face a 20-year prison sentence. This will be up to a federal district court judge to rule. 

© 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.

European web3 firm Tioga Capital led a $5.1 million (€5 million) seed investment in NFT utility platform Tropee. 

Crypto founders such as The Sandbox’s Sébastien Borget, Exclusible’s Thibault Launay, Geometry’s Grégoire le Jeune, and Lorens Huculak, founder of the OpenSea-acquired Gem, also participated in the equity round, which closed in August. The startup declined to share its valuation. 

Startups simplifying the process of minting NFTs have been hot property among investors. Haun Ventures and OpenSea recently backed no-code NFT minting platforms Highlight and Fair.xyz, respectively. Rather than tackling the minting process directly, Tropee is focused on the ‘post-mint’ experience.

While its website indicates the users will need to know their way around a wallet, the startup allows its clients to create experiences around a brand’s NFTs with relatively little technical experience, said founder François Mahl in an interview. 

“It could be an event, it could be merchandise, a 1 to 1 with a celebrity, an exclusive video, or maybe even an audiobook,” he explained. 

Mahl said that the current post-mint process is complicated and full of holes in terms of user experience, such as a reliance on Google forms and Discord servers. 

Tropee was founded in May last year by a team of four, including the co-founder of French unicorn Meero, and has helped brands such as G-Star and Christian Lacroix build experiences to create utility for their NFT collections, said Mahl. 

Non-fungible utilities

Tropee is part of a troop of early-stage startups that have raised funding this year that aims to allow users to inject utility into an emerging asset class often associated with financial speculation. 

This year, Paradigm led a $16 million raise for NFT membership platform Hang, and digital ownership startup Arianee raised $21 million from Tiger Global and French sovereign wealth fund Bpifrance. Last month, Electric Capital led a $4.2 million investment into Lasso Labs, which allows NFT holders to track the utility of their assets. 

These raises came despite stuttering volumes on marketplaces and similarly suppressed floor prices for popular collections throughout this year.

According to The Block Research, while January this year saw volume on popular Ethereum NFT marketplace OpenSea hit close to $5 billion, that figure has trailed off to a mere $326.4 million last month. 

But Tropee’s Mahl isn’t necessarily worried about the floor price of popular collections tanking. He thinks the trend will help transform the technology into something more closely associated with utility.  

“A lot of people were buying not because they were passionate about the community or because they were passionate about their NFTs but because they wanted to make a quick buck,” he said. “The next phase will be about buying NFTs to enjoy value out of them whether that be real life or digital value.” 

© 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.