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Decentralized exchange Krypton has raised $7 million in a seed round led by Framework Ventures. 

Other investors include Samsung Next, GSR and Foresight Ventures, Krypton said in a release. 

Krypton won Chainlink’s fall 2021 hackathon with the goal of being the first exchange that fully protects market participants from predatory trading and cost inefficiency.  

The funds from the seed raise will be used to launch the decentralized exchange in the first quarter of 2023. 

A decentralized exchange enables parties to transact directly — without financial intermediaries — using blockchain technology.

The Krypton exchange leverages a continuous batch auction for price discovery, which aims to reduce slippage and protect against Maximal Extractable Value (MEV) and impermanent loss, which is when token price changes compared with when the token was placed in the liquidity pool. 

To power its matching engine, Krypton uses Chainlink’s Decentralized Oracle Network (DON). It can take complicated computations off-chain, lowering costs for traders. 

“We see Krypton as a platform for an entirely new format of crypto trading that could reach completely new institutional and retail user demographics” said Michael Anderson, co-founder of Framework Ventures. “For DeFi to mature, best execution needs to be a priority, and we think Krypton’s solution will play a major role in this transformation.” 

Krypton’s recent seed raise is in line with the average check size for a seed round, according to The Block Research’s August funding recap.

Blockchain seed and pre-Series A deal size

© 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.

Jamil Nazarali, the CEO of new institutional-focused crypto exchange EDX Markets, says the startup will learn from mistakes made by others who have tried to attract Wall Street to digital assets.  

“I think a few things set us apart, there’s been a number of firms that have tried to do pieces of this, but they’re missing key components,” Nazarali told The Block, later adding that “there seemed to be a void in the marketplace for a true exchange.”

EDX Markets launched in September, backed by Charles Schwab, Citadel Securities and Fidelity Digital Assets, among others. It comes amid an ongoing push by traditional financial institutions into digital assets, despite cryptocurrency prices sliding year-to-date. The exchange plans to enable safe and compliant trading of digital assets through trusted intermediaries.  

EDX Markets is set to become the latest firm with institutional backing to jump into crypto, hoping to offer what crypto exchanges can’t.  

Backed by Charles Schwab, Fidelity Digital Assets and Citadel Securities, EDX Markets announced its launch on Sept. 13. 

The firm’s CEO Jamil Nazarali sat down with The Block to discuss what’s next for the exchange and what sets it apart from previous institutional plays.  

The backers are going to drive the success 

EDX Markets is just the latest institutional play in crypto. Before this Bakkt and Cboe’s ErisX attempted to play similar roles, what makes EDX different? 

Nazarali began by saying the firm is “starting with solving a lot of our client’s headaches,” alluding to properly vetting cryptocurrencies and having stringent anti-money laundering processes in place. He went on to say the backers are going to drive the success of this project, namely the ones providing liquidity.   

People didn’t trade on ErisX because there wasn’t sufficient liquidity, according to Nazarali. “We started with two of the largest market makers in the world and we said, if we put this together, will you provide liquidity? And they said that they would.” 

Beyond this, the exchange also will offer periodic settlements, meaning trades on EDX Markets won’t need to be pre-funded, which avoids the need to trade throughout the day. Instead, there will be multiple multilateral settlements across counterparties, Nazarali said. The exchange’s custodian will do a delivery versus payment (DVP) settlement once all the tokens are received, ensuring every counterparty is paid. 

DVP is a type of settlement method, most common in securities trading, which guarantees the transfer of securities only happens after payment has been made.  

Finally, the firm’s partnership with a custodian will enable more firms to hold crypto on their balance sheets, the CEO said. Working with a custodian avoids issues for bank holding companies, which can’t hold crypto on their balance sheet. “By partnering with a custodian that will do that, we hope it will bring more customers into the market,” he said.  

EDX Markets has yet to announce its custodian, however. With plans to launch trading towards the end of 2022, the announcement should be coming down the line soon. 

From electronic trading to crypto 

Nazarali brings plenty of trading experience and business development expertise into his new role with EDX Markets.  

Before joining Citadel, Nazarali spent a little over a decade working in electronic trading at Knight Capital Group, a market maker which handled about 7% of U.S. equity volumes at its peak. He eventually headed up trading there.    

Following this, he joined Citadel in 2011, initially running client market making there. After taking time off a few years ago, and with every intention of retiring, Nazarali realized he wasn’t ready to leave just yet. After a conversation with Citadel CEO Peng Zhao, he came back as global head of business development.    

In this role, he worked on client relations as well as the firm’s investments and acquisitions, which led him to be a founding investor of MEMX, a market operator founded in 2019. MEMX will also provide the technology infrastructure for EDX Markets.    

Through his work as global head of business development, he then started to intersect with cryptocurrency. Nazarali said this is when the firm noticed there was a void in the marketplace for a true exchange.  

“There’s a lot of firms out there that we refer to as crypto exchanges, but they’re very different from exchanges,” he said.  

EDX Markets plans to begin trading in the first quarter of 2023, with some trades potentially taking place in the fourth quarter of 2022. 

© 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.

Tech venture studio MPCH Labs has announced it raised $40 million in a Series A round to develop the next generation of multi-party computation (MPC) technology. 

The fundraising round is led by Liberty City Ventures and includes other backers including trading firms QCP Capital and LedgerPrime, as well as VC players such as Animoca, Human Capital and Oak HC FT, according to a company release on Tuesday. 

What is MPC?

Multi-party computation (MPC) enables multiple parties to collectively come together to do a computation without ever revealing the private data each holds. The technology is often used in self-custody solutions where multiple devices can validate a transaction removing the potential for a single point of failure.  

MPCH’s co-founder and CEO Miles Parry came across MPC technology running an institutional custodial business called Vo1t. The company eventually got acquired by the trading firm Genesis and is now known today as Genesis custody. 

“I’ve gathered a lot of experience through the marketplace, especially in traditional as well as the crypto space and as I saw the pitfalls, [I] actually decided instead of trying to adapt the existing MPC solutions out there, I’m going to build it from the ground up,” said Parry, who co-founded MPCH alongside Cat Le-Huy, the startup’s chief technology and product officer. 

Emerging from stealth

MPCH emerges from stealth with a total of $50 million in funding and more than 80 employees. The studio has developed the MPC6 engine, which is a new MPC solution that is designed to be more secure than the traditional MPC architecture and can be adopted by multiple industries, Parry said. 

MPC6 is built not only for crypto, but also to be agile. It can be adopted by big institutions as well as by a small startup, Parry said. 

MPC6 contains six layers that work together. The layers are a hybrid of web2 and web3 technology stacks, which include distributed identities, hardware security modules (HSMs), public key infrastructure (PKIs), Intel Software Guard Extensions and zero-knowledge proofs. 

The layers mean that clients aren’t held hostage, Parry said. They can pick and choose which layers they want to host on. 

The Fraction app

Most of the new funding will go towards MPCH’s first product called Fraction, which will launch later this year. Fraction leverages the MPC6 engine to create a toolkit for institutions to self-manage digital assets, wallets and workflows, per the release. 

The Block Research’s August funding recap showed that infrastructure plays were the second most popular category for early-stage deals. The average Series A check size in August was $18 million, according to the report. 

“There’s no doubt in my mind that in five years more institutions will hold more tokens,” said Adam Winnick, founding partner of Medici Network and Finality Capital Partners, in the release. “Fraction has the best MPC-technology solution to help make that happen.” 

Percent of blockchain deals at Series A from The Block Research

Institutions can grant access to one or a set of wallets to multiple users, all while maintaining the security of their assets in a user-friendly environment, according to the release. 

The first customers for the product will be crypto native firms, market makers, funds and asset managers, Parry said. Eventually it should be accessible enough for even an everyday consumer. 

“We have zero knowledge and zero control of their assets,” Parry said. “We’ve built this carefully to ensure that the clients are completely covered and have control of assets.” 

The white paper for MPC6 is set to be released shortly after Fraction’s beta release, Parry 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.

Jerome Powell, chair of the Federal Reserve, shut down expectations for a U.S. central bank digital currency (CBDC) to be issued in the near future. 

The central bank leader said that the U.S. has “not decided to proceed” with the issuance of a CBDC for the time being.

“We do not see ourselves making that decision for some time,” he said Tuesday, speaking remotely on a panel about the role of central banks in digital markets during a conference in Paris.

Instead, the U.S. central bank will be working in collaboration with Congress and the executive branch to evaluate the policy and the technological issues. 

Powell went on to outline a multi-year period during which the Fed would focus on “building public confidence in our analysis and ultimate conclusions, which we certainly haven’t reached yet.”

Powell did elaborate that, if adopted, a U.S. CBDC would have several key characteristics: intermediated, privacy-protected, identity-verified, and interoperable.

“We would be looking to balance privacy protection with identity verification, which has to be done in today’s traditional banking system as well,” Powell said referring to the discussion paper issued in January this year, where the Federal Reserve took the first step towards a CBDC.

Earlier this month, Federal Reserve Vice Chair Lael Brainard said that the central bank was seeking answers to questions that would determine the need for a CBDC. 

At a New York conference hosted by the Bank Policy Institute, Brainard emphasized that the Fed’s investigation will determine the future financial system infrastructure, but said that a digital dollar  is not “particularly relevant today.”

© 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.

Brett Harrison, the former high-speed trading executive turned crypto exchange chief, is stepping down as president of FTX.US.

“I’m stepping down as President of @FTX_Official,” Harrison tweeted Tuesday. “Over the next few months I’ll be transferring my responsibilities and moving into an advisory role at the company.”

Harrison, who joined FTX.US as president in May 2021, oversaw the growth of the company as it clinched unicorn status and expanded outside of crypto into stock and non-fungible token trading. It is currently eyeing the launch of a new crypto derivatives product, pressing regulators in recent months and antagonizing incumbent players in the process.

FTX — which is reportedly raising at a $32 billion valuation and is a juggernaut in international crypto derivatives trading — launched FTX.US in May 2020.  

Harrison’s next moves are unclear at this time. “I can’t wait to share more about what I’m doing next. Until then, I’ll be assisting Sam and the team with this transition to ensure FTX ends the year with all its characteristic momentum,” he wrote.

Still, the news is striking given his public role at the company, which was founded by crypto entrepreneur Sam Bankman-Fried.

Up until last week, Harrison was appearing in the financial press and representing the firm at conferences, including Anthony Scaramucci’s SALT.

Indeed, the former trading technology executive at Citadel appeared on an episode of The Scoop released on September 16, in which he outlined the growth of FTX.US and his priorities for the future, noting specifically the importance of seeking clarity from U.S. regulators. FTX.US’s recent push with the Commodities Futures Trading Commission, if successful, would give it the ability to offer futures trading directly to clients, rather than through a brokerage firm. The proposal is pending regulatory approval. 

Harrison and Bankman-Fried overlapped at quantitative trading shop Jane Street, where Bankman-Fried said “he combined great technical skills (way better than mine!) with a clear view of the business needs and priorities.”

In August, FTX.US facilitated the trading of more than $6.6 billion in cryptocurrencies — an increase from nearly $2 billion in June 2021, but a far cry from larger rivals like Coinbase and Kraken.

© 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 price of celsius (CEL) fell below $1.40 today following the resignation of CEO Alex Mashinsky amid the crypto lender’s ongoing bankruptcy case.

CEL was trading at $1.37, down from $1.43 immediately before the announcement, according to data via TradingView. Today’s losses mean that CEL is down roughly 25% in the past week, having traded above $1.70 on Sept. 22. 

“I will continue to maintain my focus on working to help the community unite behind a plan that will provide the best outcome for all creditors – which is what I have been doing since the Company filed for bankruptcy,” Mashinsky wrote in his resignation letter. 

Celsius has struggled since the collapse of the crypto market earlier this year, with the firm freezing withdrawals before filing for bankruptcy.

Other crypto lending platforms have filed for bankruptcy over the past few months, with related tokens crashing in the process. Voyager, whose assets FTX won at auction, has seen its token VGX fall from $3 at the beginning of the year to below $0.70 today, amid the tumult. 

© 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.

Web3 data warehousing platform Space and Time raised $20 million in a strategic funding round led by M12, the venture arm of the startup’s new partner Microsoft. 

Other backers in the round include Framework Ventures, Polygon, Coin DCX and Hash Capital, according to an announcement on Tuesday. 

The new raise comes hot on the heels of a $10 million seed round announced in July of this year. The team started interacting with Microsoft and M12 during the seed raise, said Nate Holiday, CEO and co-founder of Space and Time.

“I think interest really grew on both sides and we saw that we can move faster together than us continuing to move without having their support,” Holiday said. “And so, in the summertime, it just became really exciting to really accelerate this and to put this together.” 

What is a decentralized data warehouse?

Co-founded by data industry veteran Nate Holiday, Teradata alum Scott Dykstra, and former assistant professor of mathematics at Dordt University Jay White, Space and Time is a decentralized data warehouse. 

The platform aims to combine on-chain and off-chain data in a single trustless environment that will enable companies to do enterprise-scale analytics and make fast transactions.  

Space and Time achieves this by indexing major blockchains to create a relational database, which is a type of database that makes it easy for enterprises and web3 businesses to interact with and gain insights from, said Holiday in an interview with The Block. 

What makes Space and Time particularly compelling is its proprietary technology Proof of SQL, which builds on the popular database programming language SQL. The technology enables businesses to run a SQL query on the blockchain data while also providing proof that the query and data hasn’t been tampered with, Holiday said. 

The patent for Proof of SQL is still pending, per the announcement release. 

“We are productizing Proof of SQL and the reason we’re doing it is because the vast majority of the world today may not understand the value of a decentralized network,” Holiday said. “And they may say, ‘It’s okay, if my data is being processed in a central environment, as long as in a sense, my query results can be tamper proof.’” 

Proof of SQL can turn any centralized database into a trustless database, Holiday said, while clarifying that this doesn’t make it a decentralized database.

“We really view the world as partnerships,” Holiday said. “Companies that are building API layers and data aggregation layers, we invite them to come use a decentralized data warehouse as your foundational data processing system.” 

Space and Time’s roadmap

At first, Space and Time is homing in on web3 gaming and DeFi protocols, Holiday said. 

The platform is already indexed the major EVM chains — such as Polygon, Avalanche and Ethereum — and the team is also “hard at work” on indexing Solana, he added. 

The selection of these protocols is based on their capabilities to support the games of the future. 

“Our focus right now is mainly on the development of the data services and the database, and making sure that it is a great experience, specifically for web3 games and web3 DeFi protocols to use Space and Time,” Holiday said. 

A key use case for Space and Time centers around the idea that decentralized applications will want to bring transaction and analytics data into a single data warehouse. 

Blockchain games often face this challenge as they have a database that tracks online transactions, but they also have database for game events, Holiday said. Games companies want to “bring the two together as close as possible” to find out what in-game events lead to online transactions, he added. 

The concepts behind Space and Time have been in the works for over a year, Holiday said. The startup aims to kick off alpha launch at the end of this year and then in the spring launch Proof of SQL, he added. 

Full production is set to go live in September 2023, Holiday said. 

An enterprise vision

The long-term vision isn’t to target only web3 native companies. Space and Time also wants to target web2 businesses that want to understand how their customers are engaging with blockchain technology or that want to experiment with so-called “trustless” environments. 

“Business today still runs on SQL, so we’re bringing familiar business tools to enterprise businesses as well to be able to interact with the blockchain,” Holiday said. 

Space and Time will also be integrating with Microsoft Azure to provide Azure customers with an on-ramp to access, manage and perform analytics on blockchain data, per Tuesday’s release. 

“We’re truly excited about the roadmap,” Holiday said. “We see a world where if you’re using Microsoft database services then we create this bridge to allow you to interact with the blockchain data more easily.” 

The new funding will be used for engineering and customer adoption, Holiday said, adding that the startup raised so soon after the recent seed round because he feels it’s important to be first to market. 

“We have a unique opportunity now to accelerate that adoption, to accelerate the delivery of this in the current market conditions,” Holiday said. “We wanted to pour gas on the engineering, we wanted to pour gas on the improved feature functionality, and it created a unique opportunity where we could do that.” 

© 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.

Payments firm Strike has raised $80 million in a Series B funding round led by Ten31, a venture capital firm that primarily invests in bitcoin-native companies.  

Strike is focused on Bitcoin’s Lightning network, a payments protocol intended to enable fast transactions that use smaller denominations of the cryptocurrency. 

The $80 million Series B round featured participation from institutions Washington University in St. Louis and the University of Wyoming, according to an announcement. With the funding, founder and CEO Jack Mallers is plotting integrations with the world’s largest merchants and marketplaces.

“Every company that’s in the business of moving money is interested in superior payments, and we’re in talks with many of them,” Mallers was quoted as saying. “It doesn’t get any bigger and more exciting than innovating in payments for the betterment of the world.” 

In particular, Strike plans to expand partnerships for its commerce API, which is already integrated by e-commerce platforms such as Blackhawk, NCR, and Shopify. It also is plotting the launch of a new API that would allow large financial institutions and businesses to receive and send payments over the Lightning network.

Currently, the Strike Wallet, its consumer offering, has more than two million downloads to date.

© 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.

Jihan Wu, chairman of bitcoin mining company Bitdeer, is launching an investment fund for bitcoin miners, Bloomberg has reported.

The fund will have an initial $50 million investment from Bitdeer itself as part of a junior tranche, with Wu then seeking to raise an additional $200 from venture capital firms and other mining companies. 

Bitcoin miners have struggled in the past few months with the decline of bitcoin’s price, coupled with other factors like a rise in global energy prices.

Last Thursday, bitcoin mining hosting provider Compute North filed for Chapter 11 bankruptcy, stating in a document that “after any administrative expenses are paid, no funds will be available for distribution to unsecured creditors.”

Compute North also claimed between $100 million-$500 million both in estimated liabilities and estimated assets, according to the initial bankruptcy filing.

Last week, Icebreaker Finance announced another lending fund for bitcoin miners ($300 million in capacity), targeting companies that have been able to keep “effective treasury management and prudent power strategies.”

“Recent market headwinds have caused lenders to pull back, while traditional financing vehicles have been slower to engage this sector,” said Sidney Powell, CEO and co-founder of Maple Finance.

Wu previously co-founded bitcoin mining manufacturer Bitmain and stepped down from the company in early 2021.

The firm has been aiming to go public since last year when it announced a $4 billion SPAC deal with blank-check firm Blue Safari Group Acquisition Corp. The deadline for the deal has been delayed three months from September 14 to December 14, according to a U.S. Securities and Exchange Commission filing from 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.

Alex Mashinsky, the founder and CEO of failed crypto lender Celsius, has resigned. 

“I will continue to maintain my focus on working to help the community unite behind a plan that will provide the best outcome for all creditors – which is what I have been doing since the Company filed for bankruptcy,”  Mashinsky said in a press release announcing the move. “I believe we all will get more if Celsians stay united and help the UCC with the best recovery plan. 

Mashinsky himself has long been a controversial and often combative figure within the crypto industry. The collapse of his firm earlier this year brought about heightened scrutiny of its business operations as well as Mashinsky’s leadership. 

One of the largest lenders in crypto, Celsius offered retail clients interest-bearing accounts. Celsius compared them to high-interest bank accounts, but in the absence of federal deposit insurance regulators have called those accounts unregistered securities. 

With the collapse of the crypto market earlier this year, Celsius cancelled client withdrawals and filed for bankruptcy, revealing massive disparities in the firm’s balance sheet. Despite ongoing legal proceedings to recoup creditors, the firm has been on the rocks for months. In a statement on his resignation, Mashinsky said “I will continue to maintain my focus on working to help the community unite behind a plan that will provide the best outcome for all creditors – which is what I have been doing since the Company filed for bankruptcy.”

© 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.