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Private equity firm Thoma Bravo has led a $70 million Series B extension into TRM Labs, which provides risk management and compliance services for financial institutions, crypto companies and government agencies. 

Known for its bets on software, Thoma Bravo previously told The Block about its $100 billion allocated towards digital assets and has made investments in FalconX, Figment and Anchorage. 

Along with Thoma Bravo, the equity deal — which closed in October — sees institutional players, such as Goldman Sachs and the venture arms of PayPal, Amex and Citi Group. The company declined to share its new valuation with The Block but said it brought on Thoma Bravo for its track record of taking companies to IPO. 

TRM’s core product line includes software that allows for the tracing of cryptocurrency transactions, risk assessment of other crypto businesses and transaction monitoring for anti-money laundering compliance. 

“Demand has never been stronger for solutions that help protect crypto users, impede illicit actors, and support blockchain-based innovation,” said TRM CEO Esteban Castaño, “As the industry continues to mature, TRM is setting the standard for data, products, and training that equip enterprises and governments to combat fraud and financial crime, even as new threats emerge.”

Through this funding round, the company is looking to build out tools for helping law enforcement fight crypto-related financial crime. Citing its research that indicates over $3 billion was lost in crypto hacks this year, it’s looking to, in particular, target products for decentralized finance. Some of its own team are former law enforcement officers from Interpol, the IRS and the FBI, among others. 

The company claims that it has seen its revenue grow by 490% year-over-year since launching in 2018. 

As investors continue to fall back from the riskier bets they took during last year’s bear market, fraud and compliance firms continue to raise money from venture capital and private equity. In September, fraud detection platform Sardine raised $51.5 million in a Series B round from investors such as a16z, Visa and ConsenSys. This followed a $5.2 million seed round for web3 compliance company Satschel. 

Midstage deals, such as the rounds raised by TRM and Sardine, are also increasingly a rare occurrence in the current market. According to The Block Research, mid-stage deals fell approximately 63% from 30 deals in Q2 to just 11 last quarter. 

© 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.

Solana validators are scheduled to unlock 49.6 million SOL ($945 million) when the current epoch ends in less than 24 hours time. Representing 13% of the coin’s supply, it’s the second-largest volume of tokens to be unlocked in any Solana epoch and it is coming amid a time of considerable tumult in the crypto market.

An epoch refers to a number of slots (like blocks) on the chain and takes around two to three days. Data from Solana Compass shows that Epoch 370, the current Solana network epoch, is set to end at around 8.30 AM UTC on Nov. 10. Solana epochs refer to a time period, usually two days, when validators lock in their stake on the network. Validators can choose to unlock their stake at the end of each epoch.

The website’s dashboard currently shows over 47 million sol tokens scheduled to be unlocked by validators. This number has increased from 18 million in the space of a few hours. The increase likely indicates that more validators are choosing to remove their staked tokens from the network.

In contrast, only 1.8 million sol ($36 million) is scheduled to be staked at the end of the current epoch.

Solana (SOL) is down 36% today. Image: Coingecko.

The tokens scheduled for removal from the Solana stake represents 13% of the coin’s total supply. Solana’s token price is currently down 30% from $23 to $19 in the last 24-hour trading period. It remains to be seen what impact the token unlocks will have on the sol price action.

Solana’s current downward slide is part of a larger market selloff triggered by the FTX collapse. Bitcoin is currently down to its lowest price in two years with ether dropping 20% from $1,425 to $1,188 in the last 24 hours. The total crypto market capitalization has also slipped below the $1 trillion mark and is currently at $901 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.

FTX’s collapse was “sort of a shock,” that spoke to the lack of public visibility into the company’s balance sheet, said Circle CEO Jeremy Allaire during a Wednesday appearance on CNBC.

Asked what Binance backing out of a preliminary deal to acquire its troubled rival would do to crypto markets as a whole, Allaire said the possibility of no one buying FTX and its assets would leave a “giant hole” that would be “far worse” than what investors and markets are concerned about right now.

“We don’t know the details of a term sheet, is that something other potential firms could compete around?” Allaire said.

“There was a perception that FTX was one of the strongest firms in the space,” said Allaire, who added that the exchange’s rapid decline speaks to the “importance of having a clear regulatory structure” around digital assets in the U.S.

Allaire noted FTX’s base outside of the U.S. and its lack of financial transparency was, “at some level, not the visibility you would have in a regulated markets context.”

© 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.

Roblox reported a big miss on revenue, posting sales of $517.7 million for the third quarter compared to the average analyst estimate of $692 million, and reported a wider than expected loss in the period. Shares tumbled 14% in premarket trading. 

Bookings, or sales of the platform’s virtual currency “Robux,” totaled $701.7 million, versus second-quarter’s $640 million.

The company reported a net loss per share of $302 million versus the $204 million average analyst estimate. 

Roblox has 58.8 million daily active users and over 13.4 billion engagement hours, compared to 52.2 million daily active user and over 11.3 billion engagement hours in the prior period. 

While Roblox is widely considered a web2 game, it’s often included as one of the many metaverse platforms for its ability to allow simultaneous online experiences and chat functions in a virtual world. 

The company said personnel costs, excluding stock-based compensation, were up 56% year over year. It said that was teh result of hiring, and outlined plans to continue to hire “for the balance of this year and likely throughout 2023.”

Gaming companies have continue to attract funding amid the slump in crypto asset prices. The number of M&A transactions for NFTs/Gaming has increased for three consecutive quarters, according to The Block Research. Announcements just yesterday included sports fan-focused Eterlast’s $4.5 million raise and Ncsoft, maker of popular multiplayer online games such as Lineage and Guild Wars, contributing $15 million to Mysten Lab.

Unlike other metaverse platforms, however, Roblox does not sell land parcels that can be bought with cryptocurrency. The most expensive metaverse for land is currently Decentraland for a minimum of $3,120 per land parcel, according to The Block’s Data Dashboard.  

© 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.

Singapore government-owned investment firm Temasek said it’s monitoring the situation with crypto exchange FTX, one of its investments, according to Reuters. 

“We are aware of the developments between FTX and Binance, and are engaging FTX in our capacity as shareholder,” Temasek told Reuters.

Temasek participated in FTX’s $1 billion Series B funding round and its $420 million B-1 round in October 2021. It also participated in FTX’s $400 million Series C round in January 2022, which saw the exchange valued at $32 billion.

FTX shocked the world of crypto on Tuesday by announcing it would sell its non-U.S. assets to Binance. FTX’s FTT token had tumbled after Binance CEO Changpeng Zhao said it would begin selling off its holdings. He cited “recent revelations” for the decision to sell — in a seeming reference to a CoinDesk report that had revealed details of sister firm Alameda Research’s balance sheet.

Temasek didn’t immediately respond to a request for comment from The Block.

© 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 payments firm Ramp has raised $70 million in Series B funding as its valuation increases to at least $450 million. 

The equity round, which closed in early October, was co-led by the investment arm of Abu Dhabi-based sovereign wealth fund Mudabala Capital and venture firm Korelya Capital, according to Ramp. Cogito Capital and previous lead backer Balderton Capital also took part. 

While founder Szymon Sypniewicz declined to share the valuation during an interview with The Block, he underlined that it was a “very healthy, more than 50% up round” compared to its last raise. The Block previously reported that the startup hit a $300 million valuation at the time of its $52.7 million Series A, led by Balderton. 

Ramp’s core product is its software development kit for on- and off-ramp payment features where users can buy cryptocurrencies via debit and credit cards, bank transfers and Apple Pay. One of its competitors, Wyre, was subject to a failed acquisition deal by fintech firm Bolt, which backed out of its $1.5 billion deal in September. 

Sypniewicz said Ramp wasn’t interested in such a deal, citing the opportunity still at stake for the firm to build a payment bridge to the crypto world. 

The payment point 

Sypniewicz said Europe and the U.S. account for 70% of its volumes, which the company claims to have increased by 240% during the 2022 bear market compared to last year. Ramp is eying adding further local payment methods in Asia and Latin America such as Brazil’s Pix and India’s United Payments Interface (UPI). 

“We are incredibly excited about Mexico and Brazil because these are very big markets. But also because there’s very strong crypto literacy there,” said Sypniewicz. “But using products that have on-ramps built into them is still quite painful in these countries because card payments don’t work very well there. ” 

Along with product building, the round will also finance its expansion to other markets. Drawing on Korelya Capital’s strong links with the region, the firm is looking to soon enter Japan and Korea by procuring licenses in the two countries to operate in a regulated fashion. 

“To be globally available and locally connected will require us to get licensed in these countries and partner up with local financial institutions to get access to local fiat roles,” said Sypniewicz. 

Ramp also competes with other crypto payment players such as MoonPay, which launched its own in-house NFT minting service in June. For such products, Sypniewicz said that they already have a feature available with a partner and will be looking to pursue further partnerships to build out other offerings. 

With the extra dollars, he claims that the company now has close to three years of runway to push towards becoming the defacto crypto payment onramp. 

© 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.

Deribit, the leading crypto options exchange, said it does not have any “large and risky” positions with Alameda Research, the sister firm of embattled crypto exchange FTX.

The crypto exchange also noted that it neither has assets with FTX — which has frozen withdrawals and may be acquired by Binance — nor exposure to its exchange token, FTT, or Solana’s SOL, which is closely linked with FTX and Alameda Research.

“Deribit does not have any special terms for Alameda or large & risky positions,” it tweeted, adding: “Nor do we rely on their liquidity provision in any of our products. Furthermore Deribit or group companies do not have assets with FTX or other exposure to e.g. FTT or SOL.” Both FTX’s FTT token and Solana’s coin are down 72% and 30%, respectively, notably worse than the rest of the crypto market.

Furthermore, Deribit also reiterated that it does not have a trading desk or group company that clears markets or trades on its behalf.

Deribit also promised to publish a Merkle Tree proof-of-reserve for its reserve assets — something other crypto exchanges have also promised to do.

© 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 large lending position on Solana-based lending platform Solend is now underwater but infrastructure issues are preventing it from being properly liquidated. As a result, the protocol faces the risk of accruing bad debt.

The loan resides in Solend’s main lending pool. A sharp fall in the price of solana (SOL) — down about 50% in the last three days — has lowered the value of the collateral used for the loan. Under normal conditions, the loan would have been liquidated by other market participants. Yet the platform has faced oracle issues related to congestion on the network, frustrating these efforts.

This loan belongs to a large user who holds the biggest position on the main pool. The user owes the protocol $29.7 million in USDC at the time of writing against $32.6 million in SOL collateral. The position is above Solend’s liquidation threshold of 85%, which is $27.6 million. The protocol has to sell nearly $2 million in SOL collateral to bring back the loan under the liquidation threshold.

The project clarified the owner of the large loan is being liquidated slowly despite the technical challenges.“Congestion issues on Solend have improved and partial liquidations of the whale account have been occurring with no major issues,” Solend tweeted.

While the protocol has been liquidating collateral from the position to protect its assets, it’s struggling to finish due to Solana’s congestion issues. The lending platform itself displays a warning: “Solana is currently congested with oracle updates being intermittent, users might face issues withdrawing.”

© 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.

Galaxy Digital has a $76.8 million exposure to FTX, of which $47.5 million is currently “in the withdrawal process,” the company said in its third quarter earnings report.

In addition, co-President, Damien Vanderwilt will step down in mid-January and take a seat on the board. 

The company reported a net loss of $68 million in the third quarter, and assets under management of nearly $2 billion, up 17% from the previous period.

The company’s losses were driven by “reduced valuations on certain investments due to external market conditions,” and the increased operating expense for its mining business due to impairments in mining assets. The company retained $1.5 billion in liquidity and $1 billion in cash.

The results come on the heals of Binance’s expected purchase of FTX following the collapse of its native token FTT, and amid the year-long slump in crypto assets, as well as traditional ones. 

“The company continues to be in a position of strength for both organic and inorganic growth, as we focus on building for the future,” CEO Mike Novogratz said.

Losses had been offset by the profitability of the firm’s mining business in previously quarters. However, mining incurred a net comprehensive loss of $34.9 million in the quarter, largely due to non-cash operating impairments of mining assets that increased expenses, against the backdrop of its largest third-party hosting provider reducing capacity due to market conditions, rising energy prices and constrained access to capital markets.

Galaxy said its plan to reorganize, become a Delaware-incorporated company and subsequently list on the Nasdaq is still in SEC review and subject to stock exchange approval and it now expects the listing to happen next year. 

The company broke ground on its first proprietary mining site in Texas, which is expected to be fully operational by January, “enabling GM to scale its self-mining responsibly and in a tax-efficient structure.”
 
GM also announced an investment in Aspen Creek Digital Corporation and continues to host machines at their sustainably-focused facilities. 

Towards the end of the quarter, Galaxy Digital lost its co-head of trading Robert Bogucki, who left for Brevan Howard’s crypto arm BH Digital, according to an Axios report. In August, it was revealed that Michael Jordan — Galaxy’s co-head of investments — was setting up a new fund called DBA Crypto.

© 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.

Meta CEO Mark Zuckerberg said the social media giant has decided to cut more than 11,000 jobs, or about 13% of the workforce, while maintaining its “long-term vision for the metaverse.”

The layoffs are part of a drive to cut losses, just weeks after a punishing earnings report which showed a deficit for the year for its metaverse division topping $9.4 billion. In a letter to employees, Zuckerberg also said the social media company will cut spending and extend its hiring freeze into the next year. 

Zuckerberg blamed a macroeconomic downturn and losses in e-commerce which “caused our revenue to be much lower than I’d expected.” He said that to mitigate this, the company has shifted resources to a smaller number of high priority growth areas including its AI discovery engine, its ads platform and its push into the metaverse.

Meta has already removed access to systems for employees that have been let go but will keep email addresses active throughout the day “so everyone can say farewell.”

“I want to take accountability for these decisions and for how we got here,” he wrote. “I know this is tough for everyone, and I’m especially sorry to those impacted.”

The reduction in headcount is perhaps the largest round of layoffs in Meta’s nearly two-decade existence.

Meta is not the only big tech firm to report broad layoffs in recent weeks. Twitter’s new CEO Elon Musk announced that he would move to cut staff following his takeover. Other firms focused on the metaverse including Bitmex, Dapper Labs and Mythical Games have also laid off staff this month. 

© 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.