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Web3 gaming company Eterlast emerged from stealth having raised $4.5 million to bring web3 games to sports fans.

The seed round was led by Supernode Global. Other backers included Immutable X, Stake Capital and Founders Factory.

The London-headquartered startup was spun out of Founders Factory’s venture studio. It aims to make owning NFTs a more interactive experience for sports fans by enabling them to leverage the assets within gaming experiences.

It’s the latest in a string of raises for gaming companies. Other recently announced rounds include Arcade2Earn bringing in $3.2 million, Xternity netting $4.5 million and WeMade getting $46 million from Microsoft, among others. Despite the slump in both crypto and traditional markets, gaming and NFT companies continue to dominate capital raises, according to The Block Research.

Eterlast will first focus on boxing and rugby. It plans to launch House of Boxing next month, which will enable individuals to own key moments from top fights and reimagine them in a player vs player game format. The game is developed in partnership with boxing promoter Queensberry Promotions, which enabled Eterlast to secure a large  archive of boxing fights for the platform.

The startup’s tech stack is built on ImmutableX, a scaling solution that builds on StarkWare’s zero-knowledge proof technology.

“The team have done a fantastic job to date, securing impressive partnerships and IP to integrate with their platform,” Oli Strong, an investor at Supernode Global, said. “There is a huge opportunity at the intersection of Sport and Web3 and Eterlast are uniquely positioned to capitalize on this.”

© 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.

Germany’s financial supervisor, BaFin, has ordered the German branch of crypto exchange giant Coinbase to “ensure proper business organization,” the regulator wrote in an official statement published on Tuesday.

BaFin indicated violations of the German Banking Act, pointing at two particular sections. One section outlines requirements for sustainable development, risk strategy and protecting internal capital adequacy. 

The German regulator also expects Coinbase to “ensure ongoing appropriate and effective risk management that includes the outsourced activities and processes,” following the Banking Act. The order has been in effect since Oct. 27.

“Coinbase is committed to meeting all legal requirements under this regime. We are cooperating fully as we seek to address the findings of the annual audit report,” Coinbase said in a comment to The Block.

“Coinbase considers regulation a business enabler and the process to undertake the measures identified by BaFin has already begun,” it added. “We have developed a remediation plan fully addressing each finding of the audit report to address BaFin’s concerns. To date, we have made substantial progress on this plan.”

“An audit of the annual financial statements revealed organizational deficiencies at the institute,” BaFin’s statement said. “The regularity of the business organization was not given in all audited areas.”

Coinbase first secured a crypto custody and trading license from BaFin in July 2021, to legally provide its services to German customers.

© 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 markets continued to sell off on Tuesday as two of the industry’s biggest exchanges — FTX and Binance — have engaged in something of a public dispute. The global crypto market cap has come crashing back toward $1 trillion after bitcoin fell 5% to $19,705 and ether plunged 6.4% to $1,482 at 7:30 a.m. ET, according to CoinGecko data.

Since Sunday — when Binance’s CEO Changpeng “CZ” Zhao (CZ) said that the exchange would begin selling its FTT holdings — Binance has been at odds with Sam Bankman-Fried’s FTX. The exchange’s respective tokens have had varying reactions to the events. BNB is down 1.5% over the past 24 hours, trading at $327.39, while FTX’s FTT token is down over 24% in the same period, trading below $18. The majority of FTT’s losses came after 10:00 p.m. ET on Monday. 

Meanwhile, the global crypto market cap lost about 4% over the past day as the market tumult continued — falling to $1.02 trillion. 

Macro matters

Beyond the world of crypto, where billionaires’ bickering is taking center stage, traditional markets are trained on U.S. inflation data. The October Consumer Price Index (CPI) data will be released on Thursday. The pace of future Fed rate hikes might well hinge on these figures.

Jerome Powell continued his hawkish stance last week when the central bank raised rates by 75 basis points. A hot number on Thursday could mean another hefty interest rate hike in December. Interest rate traders are currently pricing in a 48% chance of a 75 basis point increase on Dec. 14, according to the CME’s FedWatch tool. 

Alas, despite the significance of inflation data in the broader economy, the spat between FTX and Binance might be the most important factor in crypto this week, according to B2C2. The market maker joined other firms in raising questions over the clash between CZ and SBF:

In broader financial markets, S&P 500 futures and Nasdaq 100 futures were up — gaining 0.41% and 0.67%, respectively. 

© 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.

Bebop, a decentralized finance (DeFi) aggregator, is set to launch services on the Polygon blockchain network.

Launched in June and incubated by leading crypto market maker Wintermute, Bebop currently boasts a 30,000 member strong Ethereum based token-trading platform.

With its new Polygon-based services, Bebop hopes to take advantage of lower transaction fees, greater scalability, and a sustainable proof-of-stake model, the company said in a press release shared with The Block.

“We believe that affordability on Polygon is essential for reaching a wider group of users who find Ethereum gas fees excessive,” the Bebop team told The Block in an email.

Initially, Bebop will only extend isolated support for Ethereum and Polygon, but the team said the platform’s “long-term vision is to enable transfers of value across the multi-chain world” and to “offer a seamless experience by abstracting blockchain complexities from the user and creating a product that is easy and fun to use.”

Swapping tools on Bebop’s trading platform allow users to avoid slippage and reduce the number of transactions needed to rebalance portfolios, consolidate funds, or exit positions — features which, according to Bebop head of product Katia Banina, will be enhanced by relatively low Polygon network fees.

“By DeFi standards, Polygon fees are negligible, which is paramount for delivering this efficiency to all users, for any transaction size,” Banina noted in the release.

Unveiled by Wintermute after a relatively stealthy incubation, Bebop launched with the goal of offering institutional trading tools to retail traders in crypto. Ultimately, Bebop will expand to become a cross chain DeFi trading platform, said Wintermute founder Evgeny Gaevoy, when the project first launched.

In order to realize Gaevoy’s ambitions, Bebop is first focused on integrating cross-chain swaps between Ethereum and Polygon. 

© 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’s footprint in Washington has been on the rise for years. But one year on from the infrastructure fight that brought massive industry attention and lobby funds to the U.S. Capital, the crypto industry’s influence spending is showing its first signs of flagging.

An analysis of the most recent quarterly lobbying findings shows a slight dip of 1% from in the second quarter of 2022 to $7.3 million in the most recent quarter, despite total market cap crashing to roughly a third of what it was a year ago.

Data from federal LDA disclosures; visualization by The Block.

While a relatively small decline as a percentage of the total, the recent shift breaks a yearslong trend of increases in lobbying spending by the digital asset industry. Lobbying for digital assets remains significantly elevated from where it stood at the beginning of 2021, when the total for the first quarter was just $2.2 million.

“When you have companies laying 10, 20% of their workforces off, government relations/policy is still part of that calculus,” says Kristin Smith, executive director of the Blockchain Association.

One recent example was the Celo Foundation. After enlisting a brand-new government relations wing early this year, it cut the department suddenly in October.

“Overall, where we were a year ago versus where we are today is dramatically stronger,” Smith added.

This time last year saw a surge in interest in Washington as a provision to define crypto network operators as brokers in the infrastructure bill provoked an outcry from stakeholders.

“The infrastructure bill was certainly an inflection point,” says Miller Whitehouse-Levine, director of policy for the DeFi Education Fund, which launched in 2021. He also noted that the market crash in May drew a lot of attention, but pointing to grim indicators for the overall economy, he predicted that “crypto is going to drop down the priority list.”

“Certainly, the macroeconomic conditions are top of mind for a lot of lawmakers” says Brett Quick, who recently left the banking trade association Financial Services Forum to become head of government affairs for the Crypto Council Innovation. But crypto, she cautions, “is not completely unrelated.”

All lobbyists contacted noted two core priorities right now: legislation on stablecoins in the House Financial Services Committee and on crypto spot market regulation in the Senate Agriculture Committee. With a dwindling number of days remaining on the legislative calendar, neither looks likely to become law this congressional session. But, as Whitehouse-Levine put it, “the DCCPA certainly has more chance of becoming law this year than the stablecoin bill does.”

The numbers

The Block assembled these lobbying disclosures from firms solely focused on crypto as well as three broader entities (Block, Robinhood and Electronic Transactions Association) whose ongoing political work is largely focused on cryptocurrencies. The three combined fell from $1.46 to $1.19 million in lobbying reported.

The numbers also included some third-party lobbying contracts by Paypal and Meta that solely focus on web3 issues, but they do not include the overall spending from either.

The largest lobbying programs tallied were Coinbase ($1,040,000), the Blockchain Association ($480,000), Block ($420,000), the Electronic Transactions Association ($410,000), Robinhood ($360,000), FTX ($330,000 between global and U.S. entities) and Crypto.com ($310,000).

Below is a breakdown of lobbying spending by sector within the crypto industry. The largest spenders were crypto exchanges like Coinbase and FTX, trade associations like Blockchain Association and Chamber of Digital Commerce, or DeFi developers like Uniswap Foundation and Stellar Development Foundation.

The full list of crypto-focused firms and organizations included that reported over $100,000 in lobbying spending last quarter are Stellar Development Foundation, Ripple Labs, Digital Currency Group, BAM Trading (Binance.US) , Coinbase, Chainalysis, DeFi Education Fund, Dapper Labs, Stellar Development Foundation, Chia Network, Digital Currency Group, FTX (under US business name West Realm Shires Services as well as its global branch), Crypto.com, Coin Center, Block, TaxBit, Electronic Transactions Association, Crypto Council for Innovation, and Robinhood.

Rebecca Stevens contributed analysis to this article.

© 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.

Archax, the UK’s only digital asset exchange to be licensed by the Financial Conduct Authority, has raised $28.5 million in a Series A fundraising round.

Investment firm Abrdn is the lead strategic investor in the round, according to a statement from the company. Other backers include Bitrock Capital, Blockchain Coinvestors and the Tezos Foundation.

Archax allows institutional investors to custody and trade a variety of digital assets as well as traditional securities. 

“We are extremely pleased to have been able to complete a round of this size during the turbulent crypto and traditional financial market conditions of the last few months,” Graham Rodford, CEO and co-founder of Archax, said in the release. “It is also fantastic to have such credible and strategic partner investors involved in the raise too – led by Abrdn.”

Abrdn, which oversees more than $619 billion in assets under management, become the biggest external shareholder in Archax earlier this year.

The startup previously closed an $8 million oversubscribed seed round in October 2020. It is currently working on rolling out a range of regulated exchange-traded products, the company said in the release.

“Closing this round and beating our soft-close target in the prevailing market conditions with such a stellar list of investors not only shows their faith in Archax and our strategy for the digital space, but also for the UK as a global centre for innovation, blockchain and digital financial markets too,” Rodford said in the release.

© 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.

LeadBlock Partners, a venture capital firm based in London and Paris, completed the first close of its new fund, which has a target value of $150 million (€150 million).

Founded only two years ago by former Goldman Sachs employees David Chreng-Messembourg and Baptiste Cota, this is the firm’s second fund, which it has so far raised capital in the tens of millions. With its first, it made bets on startups such as Yuga Labs, Bitpanda and BlockFi. 

“We’ve raised and deployed most of our first fund over the past two years,” said Chreng-Messembourg in an interview with The Block. “But we’ve been pushed by our LPs to launch fund two faster as we’re in a cooldown period where there’s a lot of value to be created.” 

The new fund, which will invest in both tokens and equity, is backed by family offices, hedge fund managers and financial institutions — as well as a who’s who of crypto market makers. These include GSR, the Coatue-backed Portofino Technologies, and Woorton among others. Wintermute co-founder Yoann Turpin is also investing in the fund, as is SwissBorg founder Cyrus Fazel. 

Making a market

Chreng-Messembourg says that part of the reason he roped in crypto market makers — many of whom usually prefer to invest directly via their venture arms — is so that they can get access to the tokens issued by LeadBlock-backed projects.

This also means that founders get access to a selection of investor-vetted market makers. 

“It’s already very difficult to find a co-founder [as a founder], recruit, raise capital, build the product, and scale,” said Chreng-Messembourg. “And within two years, on top of that, your investors are asking you to design the tokenomics, negotiate the market-making deal and the listing partners with the exchanges.” 

Instead, the LeadBlock team will handle the market makers and exchanges. For that reason, the firm aims to mostly invest in startups at Seed and Series A stages — those in a pre-token generation or pre-listing phase. 

Along with the fund, the firm has created a committee that looks to connect different corners of the industry. Members include Animoca Brands’ chief operating officer Arnold Concepcion, professor of economics and blockchain academic chair at Ecole Polytechnique Paris Julien Prat, and Horizen Labs founder Liat Aaronson, who was behind Yuga Lab’s ApeCoin launch.

LeadBlock is also looking to conduct office hours for venture firms curious about crypto but yet to fully take the plunge, such as Earlybird, Hedosophia, Alven and Cathay Capital, and concentrating particularly on firms with French connections. LeadBlock recently opened an office in Paris to make a strong push in the French ecosystem. 

© 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 Magic Internet Money (MIM), a stablecoin issued by Abracadabra Money, has slightly lost its parity with the US dollar. The MIM stablecoin fell to as low as $0.95 before rebounding to $0.98 as of 5:30 a.m. ET, according to data from CoinGecko.

While it’s not immediately clear why the stablecoin lost its dollar parity, fears that a portion of its value is backed by FTT, the native token of the pressured FTX exchange may be the likely catalyst. This token has become the subject of a controversy surrounding the finances of FTX’s sister firm Alameda Research. 

Abracadabra is a decentralized finance project that lets anyone deposit collateral to mint a dollar pegged MIM stablecoin in the form of an over-collateralized loan. It has an estimated market capitalization of $153 million, per CoinGecko data.

Abracadabra data shows that MIM is backed by a basket of different cryptocurrencies, with FTT collateral making up for $28 million (18%) of the total MIM supply borrowed from the protocol. This $28 million exists as MIM stablecoin borrowed by Alameda using FTT as collateral, on-chain data on various Alameda wallets shows. 

Total MIM borrowed | Source: Abracadabra

To ensure all stablecoins are overcollateralized, Abracadabra employs an on-chain liquidation mechanism. So any MIM loan on Abracadabra is liquidated should the price of the collateral fall below a certain level. 

Against its MIM loan, Alameda holds $126 million (in FTT tokens) as collateral on Abracadabra, which indicates the collateral far exceeds the borrowed stablecoin value. Hence it’s far from being liquidated given its over-collateralized position, a positive factor for MIM’s underlying value. Still, MIM stablecoin holders have reacted negatively to the fears surrounding financials of Alameda, FTX exchange’s sister firm, and, concerns around $500 million worth of FTT is being sold by Binance. 

Users may also be worried about FTT token’s liquidity, which may make it harder to perform liquidation and maintain MIM’s underlying value. This, analysts from The Block Research say, is another reason why MIM holders are panicked.

“Given the illiquid and volatile nature of FTT, there might not be sufficient liquidity in the market to facilitate the smooth liquidation of FTT-backed positions on Abracadabra that are about to become under-collateralized,” said Eden Au, Research Director at The Block. 

Amid the stablecoin volatility, MIM’s trading volume spiked to nearly $15 million on Curve exchange, 89% more than yesterday, according to Dune Analytics. Furthermore, the MIM liquidity on Curve is rapidly drying up with the liquidity pool becoming unbalanced. Here, 92% ($93 million) of the total $103 million size consists of MIM alone, data from Curve shows.

© 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.

Under pressure crypto trading firm Alameda Research provided proof it still holds 100 million bit tokens it received in a swap agreement with BitDAO after a request for clarification from the one of the world’s largest investment DAOs.

The tokens — worth about $39 million at current prices — have been moved to a designated wallet, BitDAO tweeted, backtracking from an earlier allegation that Alameda had sold in contravention of a three-year lock-up.

Alameda and FTX, a trading firm and crypto exchange both founded by Sam Bankman-Fried, have come under pressure this week after Binance CEO Changpeng Zhao tweeted that Binance would beginning selling its holdings of FTT, FTX’s token. Zhao cited “recent revelations” for the decision — seemingly a reference to a CoinDesk report that revealed details of Alameda’s balance sheet. 

The swap agreement from 2021 saw BitDAO receive almost 3.4 million FTT in exchange for 100 million of its bit tokens. Both parties agreed that they would not sell the tokens for three years.

BitDAO issued a proposal earlier on Tuesday asking that Alameda provide on-chain proof it had not sold the bit tokens. This request came after the price of bit declined by over 20% in less than an hour. BitDAO gave Alameda 24 hours to respond after which the DAO would decide what to do with the FTT tokens.

Alameda CEO Caroline Ellison responded to the query on Twitter, stating that Alameda was not responsible for the token sale and promising it would provide proof of funds to allay fears.

On-chain data from Etherscan show multiple bit token inflows from sources including FTX and Coinbase. These inflows are to a wallet address linked to Alameda and they total 100 million bit tokens.

“For community confidence, we recommend that the swapped bit and FTT remain held in our respective on-chain addresses until the end of the no-sale commitment period,” BitDAO tweeted today, while thanking Alameda for its “prompt response.”

© 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.

Decentralized search startup Sepana has announced today it has closed a $10 million funding round led by venture firms Hack VC and Pitango First.

Protocol Labs, Lattice Capital and Balaji Srinivasan also took part in the round for the startup according to an email shared with The Block. Sepana declined to share its valuation, and said that the deal closed this week.

Founded by two brothers, Daniel and David Keyes, Sepana seeks to make web3 content such as DAOs and NFTs more discoverable through its search tooling. One way it’s doing this is via a forthcoming web3 search API that aims to enable any decentralized application (dapp) to integrate with its search infrastructure. 

It claims that millions of search queries on blockchains and dapps like Lens and Mirror are powered by its tooling. 

The funding will be used to hire senior blockchain engineers and search experts and also launch a product to foster the “search community” around the product. 

In the long term, the company is looking to build a fully decentralized peer-to-peer search protocol. It says that this infrastructure will help create information bridges between decentralized applications and protocols to improve search outcomes with privacy at the forefront. 

“The algorithms that dictate our online lives should be open-source and community-governed,” said Daniel Keyes in a statement shared with The Block. 

This follows similar raises in the web3 search and indexing tooling space. Last month, Blockchain indexer Nxyz emerged from stealth to secure $40 million in a Series A round led by Paradigm. In May, Montreal-based crypto startup Lighthouse Labs raised $7 million in seed funding ahead of the launch of its metaverse search engine.

© 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.