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Episode 104 of Season 4 of The Scoop was recorded at Circle’s Converge in San Francisco with The Block’s Frank Chaparro and Volt Capital Managing Partner Soona Amhaz.

Listen below, and subscribe to The Scoop on Apple, Spotify, Google Podcasts, Stitcher, or wherever you listen to podcasts. Email feedback and revision requests to podcast@theblockcrypto.com.

Volt Capital announced in May the launch of its second fund — with backing from the likes of Andreessen Howoritz’s Chris Dixon and Marc Andreessen — and despite the ongoing bear market for digital assets, founder Soona Amhaz says there’s an opportunity to invest in a new wave of entrepreneurs. 

Following the launch of a wide range of marketplaces tied to non-fungible tokens and decentralized finance, Amhaz said she is setting her sights on projects and companies that solve the problems facing such organizations, including the breaches and security issues that hang over the space like a cloud. 

“A trend I’m seeing is second order thinking to primitives that were finally established,” Amhaz noted. “So one anecdote of this is just being able to move NFTs between buyers and sellers: having marketplaces established was a huge win for the space this most recent cycle. But now we’re already seeing a wave of founders who are building with this second order thinking of, ‘Okay, now that NFTs are here and now that we have NFT marketplaces, how are we preventing fraud? How are we thinking about security? How are we thinking about content moderation?'”

Indeed, Volt’s strategy reflects a shift among venture capitalists in the market more generally, who are now focusing on infrastructure plays rather than token deals. 

“You’re now building where there is demand,” she said. “If you look at where the center of gravity is right now for crypto, because retail has largely evaporated… the center of gravity really and the attention and the spotlight are on other founders who are building crypto startups, they’re on builders that need developer tools to enhance the DX or developer experience.” 

During this episode, Chaparro and Amhaz also discuss:

• How Volt is allocating towards crypto gaming
• Why this crypto cycle is different than previous ones
• What it’s like to work in the crypto industry

This episode is brought to you by our sponsors Tron, Ledn

About Tron
TRON is dedicated to accelerating the decentralization of the internet via blockchain technology and decentralized applications (dApps). Founded in September 2017 by H.E. Justin Sun, the TRON network has continued to deliver impressive achievements since MainNet launch in May 2018. July 2018 also marked the ecosystem integration of BitTorrent, a pioneer in decentralized web3 services boasting over 100 million monthly active users. The TRON network completed full decentralization in December 2021 and is now a community-governed DAO. | TRONDAO | Twitter | Discord |

About Ledn
Ledn was founded on the unshakeable conviction that digital assets have the power to democratize access to the global economy. We help you to experience the real life benefits of your Bitcoin without having to sell it. Start a savings account, take out a loan, or double your Bitcoin. For more information visit Ledn.io

© 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 European Commission proposed a draft law on Wednesday obliging banks within the European Union’s member states to offer instant euro payments for the same (or lower) fee as existing credit transfers. 

“We would estimate that if we left it to the market, it might take a decade for instant payments to become the norm,” European Commissioner for finance Mairead McGuinness said in a press conference on Wednesday. “Therefore we are nudging this sector in this direction.”

Instant payments would release up to €200 billion that is locked in the financial system in a day, McGuiness explained.

The proposal aims to standardize and increase public trust in these types of transfers, as well as make sanctions screening more efficient.

In the United States, the Federal Reserve announced that a similar instant payment system, FedNow, will be live before the end of next summer. “My expectation is that FedNow addresses the issues that some have raised about the need for a CBDC,” Federal Reserve Governor Michelle Bowman said in a speech in August.

A digital euro prototype is in the works under the supervision of the European Central Bank. The evaluation and results of the project are expected in March 2023.

© 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 exchange operator Binance is now a confirmed equity investor in Elon Musk’s acquisition of Twitter, a Binance spokesperson told The Block in a statement.

“We’re excited to be able to help Elon realize a new vision for Twitter. We aim to play a role in bringing social media and web3 together in order to broaden the use and adoption of crypto and blockchain technology,” Binance founder and CEO Changpeng Zhao said in the statement.

After the $44 billion deal closed yesterday, Musk reportedly fired Twitter’s top executives, including CEO Parag Agarwal. Bloomberg reported today that Musk plans to assume the role of chief executive officer at Twitter and reverse lifetime account suspensions on the social media platform.

News of Binance’s investment comes after a months-long on-again, off-again saga between Musk and Twitter. In May, Binance had committed $500 million to invest in Twitter alongside Musk’s buyout of the social media service. “Our initial commitment remains the same and we look forward to exploring opportunities to grow the partnership in the future,” the Binance spokesperson told 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.

Yesterday, billionaire Elon Musk entered Twitter headquarters carrying what appeared to be a bathroom sink. Tonight, the Tesla and SpaceX CEO will leave with the keys, and with $44 billion less in his wallet.

The acquisition was expected to close tomorrow, but sources tell Business Insider, the Financial Times and CNBC that Musk and Twitter closed the deal today, and CEO Parag Agarwal and several top executives stood down. Neither Musk nor Twitter have yet made formal announcements on the matter.

The deal ends a months-long on-again, off-again saga that twisted its way through social media, thousands of newspaper pages, the Securities and Exchange Commission and the courts. After initially saying he would buy the social media platform earlier this year, Musk tried to back out of the deal, alleging Twitter had misrepresented the number of spam accounts on the platform. Twitter subsequently sued Musk, and earlier this month, the billionaire said the deal was back on.

The acquisition will end Twitter’s lawsuit against Musk to compel him to fulfill the deal.

It won’t be easy sailing for Musk, however. Earlier this week, Twitter reported it is struggling to keep its most active users, the 10% of users who are responsible for 90% of all tweets and half of the company’s global revenue. 

© 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.

Notebook Labs, a crypto identity startup, has raised a $3.3 million seed round led by Bain Capital Crypto.

Notebook was one of 240 startups that received funding out of Y Combinator’s latest summer cohort. Other notable investors include: Y Combinator itself, Soma Capital, Abstract Ventures, Pioneer Fund and NFX.

Notebook Labs originated from a group of Stanford undergraduates during Stanford’s TreeHacks hackathon event earlier this year. The goal of Notebook is to allow users to preserve their private data, information and online identity, while still being able to use crypto applications that would require disclosing and trusting a centralized party with important and sensitive information.

Amid concerns of regulation and privacy concerns which was spurred by Tornado Cash a few months back, Notebook aims to solve this issue by using zero-knowledge proofs.

Zero-knowledge proofs allow anyone to prove to another person that something is true, without actually revealing the specific information.

To better conceptualize this, take for example ordering a drink from a bar. For someone to prove they are over the age of 21, the bartender has to look at an ID, which discloses private information, such as an address and full name. Now imagine that there’s a technology that doesn’t show any of that information, but still can prove someone is legally allowed to drink.

This, at a high level, is what Notebook is attempting to enable for crypto applications using zero-knowledge proofs.

Blockchain protocols could use Notebook’s login technology for users to verify specific information about themselves, without them having to take custody or hold their actual data. Another key issue for protocols themselves is susceptibility to sybil attacks, which is when someone tries to game a token airdrop incentive program with multiple wallets. It could act as a safeguard against situations like these. 

Notebook could also enable novel on-chain functions like “credit scoring systems that offer lower-collateralized loans by allowing DAOs to check the identity of their users in a privacy preserving way,” said Notebook Labs co-founder Nathaniel Masfen-Yan. 

© 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.

Bye-bye, Twitter. The S&P 500 is exiting Twitter (TWTR) from its stock market index on Nov. 1, days after it’s being sold to billionaire Elon Musk.

Global insurance, reinsurance and mortgage insurance company Arch Capital Group (NASD:ACGL) will replace Twitter before the markets open that day, the ratings firm said. Musk’s acquisition of Twitter is set to close tomorrow after months of going back and forth on the purchase and finally being sued by the company.

“Changes to index composition are made on an as-needed basis,” an S&P 500 representative said, adding that there is no scheduled reconstitution.

The S&P 500 offers provisions in its methodology for the deletion of a stock from its index, stating that companies may be removed if they are involved in a merger, acquisition or significant restructuring criteria, and offers additional parameters for their specific removal or reinstatement per committee approval.

Twitter’s stock is also set to be temporarily suspended by the New York Stock Exchange ahead of the deal, according to the exchange’s website.

Yesterday, Musk visited Twitter headquarters, carrying in his arms what appeared to be a bathroom sink, announcing to the world, “let that sink in.” The joke is a glancing reference to Musk’s on-again, off-again, often tortured pursuit of Twitter, which some analysts did not expect the billionaire to complete.  

© 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.

Big Brain is rapidly gaining traction as one of the more active investment firms in the blockchain space, with more than $60 million deployed in more than 200 projects. All of this since last year, when early-stage investors and SolBigBrain started providing backing for protocols such as NEAR and Solana.

The firm is among the few to grow during the third quarter’s market tumult and has emerged as one of crypto’s top 10 most active investors.

In quarterly figures among top crypto investment firms, Big Brain is one of several companies to show an upward trajectory of investment trends, joined by FTX, Kucoin Ventures, and Hashkey Capital.

In addition, The Block Research showed Big Brain as one of the top 10 most active investors this year measured by deals, tied with Spartan and trailing closely behind Jump and Polygon Studios. Coinbase led in overall deals closed.

Big Brain team members Kasey, who goes by one name, and Sam Kim provided insight into where the venture capital firm anticipates potential growth in the crypto industry and what they hope to see from regulators.

Continuous and radical disruption

In terms of growth, the web3 space is still ripe for continuous and radical disruption, Kasey said.

“Many of the projects and technologies that were built in prior cycles have brought us to where we are today, but it’ll be new ideas and advancements in all layers of the technology stack that will lead the industry towards mass adoption,” Kasey said.

Acting on the foreseen potential in these industries, Crunchbase records showed that Big Brain deployed at least $31.9 million in seed and Series A funding rounds during September alone. The money went to startups focused on the NFT space, including Minteo, Sintra, Exchange Art, Dust Labs, B+J Studios, as well as the Algorand blockchain-facing DeFi platform Ultra. More recently, the firm also invested in the lifestyle exercise app SNKRZ, as well as Mysten Labs’ proof-of-stake blockchain, SUI.

“We anticipate that some of the most interesting and greatest upside potential exists in the application stack with gaming and social networks likely to be the first to reach 100 million active users within web3,” said Kim.

On regulation

Among the most active investors in the space, Big Brain has a vested interest in the outcome of ongoing regulatory debates over crypto-asset definitions, jurisdictions, and general guidance.

“We’d like to see clarity from regulators and remove the risk that hangs over the heads of all the builders in the space as a result of ambiguity,” Kim said.

In terms of welcome regulatory progress, Kasey pointed to Wyoming where there has been some progress on the establishment of legal structures for DAOs.

“That progress will empower people to organize and financialize initiatives in completely new ways whilst having certainty about tax jurisdictions and enable them to confidently transact with real-world counterparts,” Kasey said.

As Big Brain led a seed round for Magpie Protocol, a cross-chain liquidity aggregation bridge, it may make sense that the firm is also focused on the outcome of stipulatory guidance for digital assets related to DeFi-based infrastructures.

“We need similar regulation that can empower founders in the areas of DeFi, tokens and NFTs. We hope that regulation is founded with a clear understanding of the basis for blockchain technology, and that it doesn’t restrict innovation using old frameworks and laws created with analog technologies in mind,” Kim said.

On the horizon

Although Big Brain predominately supports Solana-based early-stage projects, it has also deployed capital to startups in ecosystems including Cosmos, Polygon, Avalanche, ZK, Arweave, and StarkNet.

“We have been investing in teams that are pushing boundaries in a broad range of areas including web3 gaming, DeFi and solving imminent issues arising from Ethereum’s PoS transition,” said Kasey.

“We want to build on our deep network and experience to not only continue to invest in the best and most impactful founders, but to help push the space forward. We’re always open to meeting with and supporting founders, even if it doesn’t lead to an investment,” Kim said.

© 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 court has approved Lucy Thomson as consumer privacy ombudsman to the Celsius bankruptcy case to protect customer data in the event of a sale. 

Thomson has acted as a consumer privacy ombudsman in 25 federal bankruptcy cases since 2008, according to her LinkedIn page. She has evaluated more than 250 million electronic consumer records in the sales of assets that include personal information, according to the LinkedIn page . She is a founding principal of Livingston PLLC, where she focuses her practice on cybersecurity among other intersections of tech and the law. 

Celsius received approval for its bidding at the start of this week, which set the dates and deadlines for a potential sale. That process could include the sale of customer lists and information. The government’s representative in the case, the U.S. Trustee, requested the court appoint a consumer privacy ombudsman to ensure customer information is adequately protected throughout the process. 

Celsius had initially pushed back on the request since it said its own privacy policy already covered the issue. 

Celsius entered the Chapter 11 bankruptcy process this July, and already some creditors have expressed concern over data protection. Recently published financial schedules included customer names and transactions, a normal stipulation of bankruptcy procedure that counsel for Celsius and the creditor committee objected to. 

© 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.

THORChain, a cross-chain platform for token swaps and bridging, has halted its chain.

Earlier Thursday, THORCHain tweeted that its developers are aware of the chain halt and have likely identified the source of the issue. No problems of stolen funds were brought up by the team, and it mentioned that the bug has “nothing to do with solvency,” it tweeted.

The cause of the chain halt is likely due to a “unique transaction type” error, THORChain wrote in its tweet. THORChain did not provide further clarification or details on what this means in its tweet.

Other protocols such as Lends, a lending protocol built using THORChain, tweeted a warning to users to avoid the platform until the situation is resolved.

This is a developing story.

© 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.

All bitcoin mining stocks tracked by The Block fell Thursday, while Core Scientific slumped almost 80% after announcing that it will not be able to make payments by the end of the month and might have to consider bankruptcy.

Bitcoin was trading at around $20,600 at market close but fell further afterward, according to data from TradingView. 

BTCUSD Chart by TradingView

Other companies falling by double digits included Argo Blockchain (-18.27% on the London Stock Exchange) and Terawulf (-10.71%).

Here’s how crypto mining companies performed on Thursday, Oct. 27:

© 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.