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Injective, a DeFi-focused layer 1 blockchain, raised a $40 million round in a private token sale led by Jump Crypto.

Jump will also be acting as a market maker for Injective Pro, one of the ecosystem’s decentralized apps (dApps), according to an announcement this morning. 

BH Digital, the digital asset division of billionaire hedge fund manager Alan Howard’s Brevan Howard, also took part in the round, which closed in July. The valuation was not disclosed. 

Through Injective, founder Eric Chen’s aim is to create an Ethereum virtual machine-compatible blockchain specialized in decentralized finance use cases. Key features of the technology include its on-chain order book and incentives for reductions in gas fees, Chen adds. 

The deal also comes at a turbulent time in crypto markets, with the price of bitcoin slumped below $25,000 and startup valuations down across the board. According to The Block research, venture capital deals in the blockchain sector plunged in the second quarter of this year from $12.5 billion in Q1 to $9.8 billion. 

Despite this, Chen thinks now is the optimal time to raise. 

“We want to go against what the current trend is,” he says. “We want to be in the best position possible during a bear market to build and support new incoming developers and capture those opportunities.” 

Injective plans to do this by using the capital is just raised to create incentives for developers to migrate over to its network. Most recently, Aperture, a dApp previously native to Terra, made the leap to Injective. 

The capital will also be used to provide liquidity to existing Injective dApps and build out the utility of its native token INJ. 

© 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.

According to data released on Wednesday, inflation in the US during July came in at 8.5%.  

Wednesday’s Consumer Price Inflation (CPI) figures show inflation remained unchanged at 0.0% since June, however, it has increased 8.5% year-on-year. Today’s figures come in below expectations, which may well support the “peak inflation” narrative.

source: tradingeconomics.com

Analysts at Deutsche Bank said ahead of time, “we expect the headline year-on-year rate to finally dip after energy prices have fallen of late. We are looking for 8.8% (from 9.1%) with consensus a tenth lower.”

Fidelity Digital Assets director of research Chris Kuiper told The Block ahead of time that a “lower-than-expected inflation print or falling inflation will likely be viewed as positive for digital assets as it gives the Federal Reserve and other central banks a reason to pause or even reverse tightening the money supply.”

Bitcoin and ether saw major price swings last month as inflation in the US reached a 40-year high, jumping by 1.3% in June, an increase of 9.1% year-on-year. Bitcoin and ether spiked on the news of inflation remaining unchanged.

Kuiper expects macroeconomic conditions to continue to drive digital asset sentiment in the short-to-medium term, before going on to say “we think scarce digital assets like bitcoin will continue to provide an attractive alternative in a world of high leverage and financial repression in the longer term.”

© 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.

Software-as-a-Service startup Heirloom announced an $8 million raise to create tools that will help enterprise firms enter the web3 ecosystem. Ripple and Forte co-led the investment. 

Heirloom’s software currently enables enterprise firms to mint and track a variety of web3 assets, such as non-fungible tokens (NFTs) and verifiable credentials (VCs), according to a press release. 

Co-founders Nick Dazé and Julian Vergel de Dios have been building out the tools in stealth mode since the summer of 2021. 

The co-founders homed in on enterprise firms following market research. They found that mainstream consumers understood the value of the web3 vision, but that many would only find it practically useful if and when their favourite brands or services entered the ecosystem, Dazé told The Block. On the flip side, they found most enterprises were interested in experimenting with web3 opportunities but after some due diligence found the process to be too costly and time consuming, he added. 

Heirloom’s software is a no-code toolkit enabling enterprise firms to run web3 campaigns at ease. Primary stakeholders for Heirloom will be marketing and product executives, Dazé said. 

To make this possible Heirloom’s technology stack is built on the XRP Ledger (XRPL), which is the open source blockchain used by Ripple.

“When we looked at those three features: transaction time, stability and energy footprint, that shortlist was really, really short,” Dazé said. “And XRP Ledger was right at the top of that list.” 

The startup plans to announce partnerships for its software tools by the end of the year.  It’s seeing traction with surprising industries like academia and the food and beverage sector, Dazé said.

The funding from the raise will be used for building out the product and for hiring to grow what is currently a 12-person team. 

“I want to be very, very clear, we have no interest in spreading ourselves too thin,” Dazé said. “From a product platform standpoint, we are laser focused on building.”

© 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.

Quick Take

• Trading closed down  (11%) at $87.68 / share and slumped another (5%) to 82.90 / share in afterhours trading 

• Reported $808mm total revenue, ($4.95) EPS, $217bn Trading Volume and ($1.1bn) Net Income

  • Reflects a (7.5%), (100%) miss, +0.41% beat and (102%) miss respectively

• +48% rally last week from Coinbase x Blackrock partnership announcement 

• June 14, 2022 announced internal restructuring plan 

• 1,100 FTE dismissals, an (18%) company wide reduction in FTE count as of June 10, 2022

• June 2022 indictment against former Coinbase Product Manager Ishah Wahi and related parties for front running digital assets

• August 2022 lawsuits launched against Coinbase regarding business practices and disclosure surrounding digital assets requiring Security & Exchange Commission (SEC) registration as securities

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Web3 wallet firm Phantom clarified late on Tuesday that its systems were not compromised prior to a wallet exploit, in which hackers have so far drained $4.08 million from 9,230 wallets.

On Tuesday, Phantom said, after nearly a week-long investigation, security auditors have not uncovered any vulnerabilities that could potentially tie it to the exploit.

“After almost a week of investigation, our team has not found any evidence that Phantom’s systems were compromised during the August 2nd security incident,” the wallet provider said in a tweet.

Initially, it was believed that Solana wallet libraries linked to Phantom, Slope, Sollet and Solflare may have suffered a “supply chain attack” on the iOS mobile platform.

Later on, Solana developers traced the entire incident back solely to the Slope wallet application. The Solana team claimed all hacked addresses were at one point created, imported, or used in the Slope application.

This finding was also confirmed independently by security firm Otter, which reported that seed phrases generated by Slope wallet were being mistakenly sent to its server and saved in plain readable text. The low security standard likely led to the breach, giving hackers the ability to acquire the seed phrases and drain funds.

In a statement, Phantom has pointed to a non-Phantom source responsible for some of its affected users. “While some Phantom users were affected, in each case we have reviewed, we found that they had imported their seed phrases/private keys to or from a non-Phantom wallet,” it said.

On August 4, Slope made a statement that it didn’t have a firm answer to the cause of the breach. In its most recent update on Monday, Slope said it is finishing its investigation, working with blockchain intelligence firm TRM Labs as well as law enforcement agencies.

© 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 BitDAO community has voted in favor of a proposal to provide $20 million in funding to bootstrap a new decentralized autonomous organization called AfricaDAO.

BitDAO, formed in 2021, aims to promote global crypto adoption by providing grants to projects and also supporting web3-based research and development efforts. AfricaDAO is a new investment fund created to accelerate web3 development in Africa.

Data from the voting page shows the vote ended on Tuesday with unanimous approval from all participants. The vote saw participation from 38 wallet addresses that contributed 181 million BIT tokens (BitDAO’s native coin) in support of the proposal.

AfricaDAO’s venture investment strategy will focus on three main areas: funding rounds for African companies, investments in web3 talents on the continent and support for web3-based educational initiatives in Africa. According to the AfricaDAO proposal document, 90% of its funds will go toward investments in target companies while 5% will be used to support African web3 talents. The remaining 5% will be split between investments in web3 education and covering the DAO’s operational expenses.

AfricaDAO has already drawn $105 million in soft commitments from several partners. BitDAO’s $20 million of funding, which is subject to legal review, will see it become an anchor partner of AfricaDAO. Other partners include Polygon and Synthetix, among others.

© 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 independent review has upheld a UK Advertising Standards Authority (ASA) ruling against football club Arsenal, over online advertisements for its fan tokens following an appeal from the club.

In a statement on Wednesday, the watchdog said Arsenal had trivialized investment in cryptoassets and encouraged consumers to engage in high-risk investments without, in the case of one ad, mentioning the risks of paid-for fan tokens. 

The complaint relates to content published on Facebook and the club’s website in August 2021 promoting its fan token $AFC. The token, which granted holders voting rights for certain club decisions, could only be purchased on the Socios app using the company’s cryptocurrency Chiliz.

Several companies have attracted the attention of the ASA for their crypto-related ads over the last year, including Kraken and Coinbase. The growing number of cases prompted the ASA to published guidance on crypto advertising in March that recommends companies make clear certain points about crypto assets, including that they are unregulated.

Arsenal told The Telegraph that they were disappointed with the result and had complied with the ASA’s guidance since the original ruling.

“We have been clear throughout that we take our responsibilities with regard to marketing to our supporters very seriously. In this situation we carefully considered the communications to supporters regarding our promotions and provided information regarding financial risks,” said a spokesperson.

The price of Arsenal’s $AFC token has waned from highs of $6.07 in November last year to $1.89 as of today, according to CoinMarketCap data.

$AFC fan token price chart since debut. Credit: CoinMarketCap

© 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.

This research piece is available exclusively to
members of The Block Research.
You can continue reading
this Research content on The Block Research.

Episode 75 of Season 4 of The Scoop was recorded remotely with The Block’s Frank Chaparro and CoinShares Co-Founder and CEO Jean-Marie Mognetti.

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.

CoinShares — a London-based crypto firm whose operations include asset management, venture capital, and proprietary trading — had exposure to Terra’s “algorithmic” stablecoin UST, the collapse of which resulted in a loss of $21 million for the firm’s trading unit of the business.

In this episode of The Scoop, CoinShares CEO Jean-Marie Mognetti provides an inside look at how CoinShares navigated Terra’s collapse, and why crypto’s “private company environment” leads to marketplace uncertainty.

According to Mognetti, a lack of standardized disclosure requirements for crypto firms makes it difficult to verify balance sheet details.

“The opacity despite all the progress we’re doing is quite intense, so you don’t have as much information as you want.”

While Mognetti points to Voyager Digital as an example of a crypto company that has fully disclosed the state of its book, he acknowledges this is likely due to Voyager’s status as a publicly traded company — for private companies, the disclosure requirements aren’t nearly as robust and largely vary by jurisdiction.

This leads to uncertainty, Mognetti argued.

“Even if they tell you they’re good, you don’t know what they have in the book and against whom they are exposed.”

During this episode, Chaparro and Mognetti also discuss:

• Changes in institutional flow
• Changes in the crypto lending landscape
• The equilibrium between trading, compliance, and risk

This episode is brought to you by our sponsors Chainalysis & IWC Schaffhausen

About Chainalysis
Chainalysis is the leading blockchain data platform. We provide data, software, services, and research to government agencies, exchanges, financial institutions, and insurance and cybersecurity companies in over 60 countries. Backed by Accel, Addition, Benchmark, Coatue, Paradigm, Ribbit, and other leading firms in venture capital, Chainalysis builds trust in blockchains to promote more financial freedom with less risk. For more information, visit www.chainalysis.com.

About IWC Schaffhausen
IWC Schaffhausen is a Swiss luxury watch manufacturer based in Schaffhausen, Switzerland. Known for its unique engineering approach to watchmaking, IWC combines the best of human craftsmanship and creativity with cutting-edge technology and processes. With collections like the Portugieser and the Pilot’s Watches, the brand covers the whole spectrum from elegant timepieces to sports watches. For more information, visit IWC.com

© 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.

Checkout.com, the payments outfit that was valued at $40 billion in January, is exploring the launch of two new crypto products — doubling down on the sector even as it languishes in a bear market.

The London-based company is exploring a new product that would facilitate pay-outs in crypto — allowing workers receive remuneration in the form of crypto, directly to a digital wallet — and another that would give online merchants a way to accept crypto as a form of payment, according to Jess Houlgrave, crypto strategy lead at Checkout.com.

“We will have some merchants piloting at least one of those two by the end of the year,” she said.

Founded in 2012, Checkout.com processes payments on behalf of a wide range of tech firms. The startup’s profile and valuation have soared in the past few years thanks to several funding rounds — the most recent of which saw it bank $1 billion at a $40 billion valuation.

Since 2018, Checkout.com has been working with crypto firms to help them take payments in fiat currency. Houlgrave said the company works with 12 of the biggest 15 crypto exchanges.

The firm has doubled down on crypto this year. In June, it launched a new stablecoin settlement product, allowing merchant customers to have funds acquired through card payments settled in the form of stablecoin, with Checkout.com managing the mechanics. Such a tool could be particularly useful for crypto firms, which often manage their finances using stablecoins. Houlgrave said Checkout.com had recorded $300 million stablecoin settlements prior to announcing the product, and is at “multiples of that now.”

The company has also formed a dedicated crypto team with 30 staff. Houlgrave herself only took on the crypto strategy role in April, transitioning from chief of staff.

“We’re continuing the grow the team and really we’ve been doing that by focusing on people who have crypto experience and payments experience, which are hard to find,” she said. “I think we firmly believe in building sustainably in the long run and that means deeply understanding the industry and who we’re building for.”

Staying the course

Checkout.com’s rivals in the payment space have also been busy embedding themselves into the crypto industry. In October last year, Worldpay president Jim Johnson outlined a similar expansion of the firm’s crypto capabilities, in an interview with The Block. Stripe, too, has been working on the “the future of web3 payments.” The prevailing bear market — and the numerous crypto outfits that have collapsed during it, such as Celsius and Three Arrows Capital — does not seem to have deterred the payments pros.

Nor does continued regulatory uncertainty surrounding crypto. The US Treasury provided a reminder of that only yesterday by sanctioning Tornado Cash, a popular cryptocurrency mixing service that gave users a way to obscure transactions.  

Checkout.com was identified by the Financial Times as a payments processor for Binance in June last year, after the Financial Conduct Authority warned that the exchange was not authorized to operate in the UK. Checkout.com clarified at the time that it had no relationship with Binance Markets Limit, the UK subsidiary named in the FCA warning.

“Were we shaken? No. The reason being that although we process for a lot of the industry, we have developed pretty sophisticated onboarding processes and approaches to underwriting and legal,” said Houlgrave. “We continuously review our position with existing merchants.”

© 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.