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Aptos has raised $200 million in a round led by a16z crypto, with other investors ranging from Multicoin Capital to Coinbase Ventures.

Aptos was founded by former Meta employees with the goal of building a scalable layer 1 blockchain able to reach a wider audience of “billions” of people. The technology is based on the Diem network, which the company’s founders worked on while at Meta (former Facebook). The company also announced in a blog post on Tuesday the launch of its “public Devnet.”

Aptos CEO Mo Shaikh said one of the company’s key features is the use of Move, an open-source programing language developed by Meta’s Novi, in the same post.

“Our goal is to work with some of the world’s largest brands and tech companies to really build a web3 ecosystem for the masses,” he told TechCrunch.

Other investors included in Aptos’s round of fundraising are Katie Haun, 3 Arrows Capital, ParaFi Capital, IRONGREY, Hashed, Variant, Tiger Global, BlockTower, FTX Ventures and Paxos.

While not disclosing numbers, Aptos founders told TechCrunch they were “well off into the unicorn territory,” indicating that the company was valued at a minimum of $1 billion.

A group of four other Meta alumni has also recently launched a similar project called Mysten Labs. 

“We decided to launch the company and try to launch products ourselves rather than waiting for a big company to come around and push a little bit harder,” one of the co-founders Evan Cheng told The Block last 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.

As of March 15, decentralized crypto exchange aggregator Matcha had begun blocking trades from Russia. 

Yearn core developer Banteg first spotted the change. Using a VPN, The Block was able to confirm that as of publication time, trading from a Russia-based server was not allowed, though the message appeared to have changed from earlier, saying “Region Unsupported” rather than “Russia Trading Unsupported,” as Banteg had screen-captured.

Source: Matcha

Despite referring to the more general “Region,” the new block does seem to target Russia specifically. Neighboring Belarus, which has been subject to heightened scrutiny and sanctions as well, still seems to have access to Matcha. Accessing Matcha from servers based in China — which has formally outlawed crypto — returned the same message.

A representative for 0x, the development team that maintains Matcha, did not respond to The Block’s request for comment by press time.

Matcha is the second-largest DEX aggregator by volume. The leading aggregator is 1inch, many of the developers for which are themselves Russian nationals. 1inch similarly geoblocks trades from the US. 

DEX aggregators seek to optimize trades by selecting from a range of possible exchanges.

The move follows a barrage of sanctions against Russia following its invasion of Ukraine. The aftermath of those sanctions has led to heightened public scrutiny of the potential role of cryptocurrency in sanctions evasion.

This is despite limited evidence that such evasion is happening using crypto and the fact that no current sanctions regime bars ordinary Russians from financial services writ large, though consumer-facing financial service providers like Visa and Mastercard have left Russia due to rising barriers to bringing in cash. 

US-based centralized exchanges like Coinbase and Kraken have been facing particular scrutiny for continuing to serve Russian users. Decentralized exchanges have traditionally been freer from regulatory oversight, but sanctions violations potentially carry significantly more serious legal consequences than the failure to report to anti-money laundering authorities.

© 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

• Andrew Yang has launched a new crypto policy lobbying effort in the form of a DAO called Lobby3.
• The DAO departs from a traditional structure in that some decisions will be abdicated to an outside advocacy organization.

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A bitcoin miner in Tennessee that has been in conflict with residents and local officials over noise complaints lost a battle in court on Tuesday.

A judge found that the mining operation, run by Red Dog Technologies, violates zoning rules, according to News Channel 11. A request for appeal, however, was granted.

The attorney for the company argued in court that Red Dog provided a public utility-type service, but ultimately the judge decided that bitcoin mining did not fall under this category.

“Instead of providing facilities that facilitate the transmission of data… they are a user,” said Chancellor John Rambo, according to News Channel 11.

Red Dog technologies leased facilities from power company BrightRidge, also named in the lawsuit filed by Washington County, Tennessee, in November of last year.

In February 2020, BrightRidge was granted a rezoning permit to move from “General Agriculture District” to “Agriculture Business District.” The petition called for “expanding Bright Ridge’s use on the property” and said “the immediate request is to allow for a blockchain data center,” according to minutes from the meeting.

It also stated: “While there are small fans on the data centers that generate noise, the petitioner has advised that the noise is considered small and will not impact or be heard from adjoining properties.”

An attorney representing Red Dog declined to comment on the case and the attorneys for the other two parties did not respond in time for publication.

Neighbors complain of noise

Another lawsuit against Red Dog Technologies was filed by a resident in August of last year. For months, people living close to the mining center have complained about the noise levels stemming from the fans cooling the hardware required for mining.

During a meeting that month, a representative of Red Dog told Washington County commissioners the company was looking for ways to reduce noise, which could have a “noticeable” impact.

“I realize there’s business, there’s money at risk and stuff like this, but quality of life is much more important than money,” said commissioned Bryan Davenport during the meeting.

Another commissioner, Freddie Malone, suggested until a permanent solution was found, the company should refrain from mining at night.

“This would give the residents some rest from the noise during the evening hours when they’re at home,” he said. “Even if it required an investment on Red Dog’s part to pay more for electrical and run it during the day.”

The Block reached out to Washington County planning director Angie Charles but has not heard back.

Bitcoin mining has expanded in the US over the past months, taking over as the number one nation in the ecosystem, after China cracked down on miners last year. Some operations have taken over old factories and power plants across the country.

© 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.

Coinbase revealed new details about its planned derivatives business during an event in Florida on Tuesday.

The presentation at FIA Boca, a futures industry conference, came months after Coinbase announced its planned acquisition of FairX, a CFTC-regulated derivatives exchange.

Appearing before the audience of traditional finance professionals were Vishal Gupta, Coinbase’s head of exchange, and Neal Brady, FairX’s co-founder and now a senior product director at Coinbase.

Brady is also leading the rebranded FairX, now known as Coinbase Derivatives.

During the presentation, the company outlined the three major aspects of its derivatives business.

The first is its planned futures commission merchant, dubbed Coinbase FCM. Last fall, Coinbase applied for membership in the National Futures Association, the premier US self-regulatory organization for such businesses. Coinbase’s membership is still pending, per the NFA’s website.

The second is Coinbase DCM, which is where the now-rebranded FairX’s registration with the Commodity Futures Trading Commission (CFTC) comes into play. In its presentation, Coinbase pitched an “[a]dvanced, low latency trading platform” and “connectivity to major retail brokers and market makers.”

Last is Nodal Clear, a derivatives clearing organization that functions as a third party to the offering and is owned by Deutsche Börse Group. In November 2020, Nodal Clear was granted approval by the CFTC to clear contracts for other DCMs.

Looking ahead, Coinbase said in its presentation that it is moving to onboard brokers, market makers and other FCMs to its platform as well as working with the CFTC on its planned offering. Coinbase is also “developing new crypto futures products to serve the needs of institutional and retail end users,” per the presentation.

According to a source with knowledge of the roadmap, FairX – now Coinbase Derivatives – will continue to operate and launch crypto derivatives for its clients directly. A broader launch of derivatives for Coinbase’s userbase is pending regulatory approval.

Tuesday’s developments perhaps add new fuel to the budding marketplace for crypto derivatives in the US, with FTX.US seeking a path of its own. As reported last week, the firm’s proposal to offer crypto derivatives trading is now subject to a CFTC public comment period. FTX recently debuted a new institutional-focused business unit called FTX Access.

© 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 attacker has siphoned over $11 million from Agave and Hundred Finance in what appears to be a flash loan reentrancy attack on both DeFi protocols on the Gnosis chain.

The DeFi platforms each confirmed the hacks in Twitter posts on Tuesday, stating that their contracts have been paused to forestall further damage. The attack marks the second flash loan exploit recorded today as Deus Finance DAO also lost $3 million.

Examining the transaction breakdown data for both exploits on Tenderly, the attacker exploited a reentrancy vulnerability in both protocols. Reentrancy is a Solidity programming language vulnerability that allows an attacker to trick a protocol’s contract into making an external call to an untrusted contract. Once this happens, the hacker can then use this untrusted contract to make repeated calls to the protocol to drain its funds.

In the case of Agave and Hundred Finance, the attacker introduced a reentrancy bug on both protocols paving the way for a flash loan exploit. The reentrancy vulnerability appears centered on the “callAfterTransfer” function, allowing the hackers to continue borrowing from the protocols — siphoning off massive swathes of liquidity.

In essence, the attacker was making recursive calls to siphon off user funds without having to put up additional collateral. Then the attacker terminated the exploit with a “liquidationCall,” paying back their initial flash loan while still holding significant liquidity from both projects.

The attacker has begun to launder the funds via Tornado Cash, but Etherscan hasn’t labeled their address as associated with a DeFi exploit as of the time of writing.

Flash loan attacks continue

Agave is a lending protocol on the Gnosis chain and is a fork of the popular Aave protocol. Hundred Finance is a multi-chain lending project and is a fork of Compound.

Cream Finance, a DeFi lending protocol that shares a similar codebase to Compound, also suffered a flash loan reentrancy attack last summer. The exploit led to the loss of $19 million in crypto tokens from the project.

© 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.

Yuga Labs, the business behind the heavily hyped Bored Ape Yacht Club NFT collection, is hoping to raise hundreds of millions of dollars by selling off virtual plots of land.

A pitch deck obtained by The Block outlines projections for the sales, as well as information about a sweeping new metaverse initiative, Yuga’s planned token, and key financial metrics.

According to the document, Yuga made a cool $127 million in net revenue last year, a figure it projects will reach $455 million in 2022 — chiefly through proceeds from the virtual land sales.

The deck, which was last updated in February, had been circulated to investors as part of an ongoing fundraising process. Yuga is looking to raise fresh funds at a valuation of as much as $5 billion, according to a report last month by the Financial Times.

The firm’s collection of cartoon primates has surged to prominence over the past year, thanks in part to high profile purchases by celebrities such as Serena Williams, Jimmy Fallon and Snoop Dogg. Including sales on the secondary market, BAYC NFTs have changed hands for more than $1 billion in total.

Now, Yuga plans to broaden its offering. The virtual land sales are the first phase of a metaverse initiative that aims to diversify revenue away from selling ape-based NFT images.

“We want to build something that expands the universe of the BAYC, but also invites the larger NFT community (and those priced out of BAYC membership) to join,” the company explained in its deck.

The MetaRPG

To that end, Yuga is planning to build a gaming-focused metaverse named MetaRPG that will be compatible with a host of NFTs.

There will be a system — described as an “in-game app store” — that will allow players to create characters using NFTs they own or from scratch, outfit them (again with NFTs), and use them in games, according to the deck. 

Another crucial component of the proposed world is currency, which Yuga will provide in the form of a much-rumoured token named APECoin.

The token will be used to make purchases in Yuga’s planned app store, and the company said in its deck that it will also encourage “trading and bartering.”

Land sales

Yuga’s grand metaverse plan will kick off with the sale of virtual land in the form of NFTs, which will be linked to plots in the metaverse game. These plots will contain distinct traits such as natural resources, artifacts, and in some cases rare characters.

In total, 200,000 plots will be distributed across two sales in March and August this year — and Yuga hopes to raise $178 million (in addition to secondary sale proceeds) from each sale. The company will retain a portion of the virtual land for itself. Animoca Brands, a digital studio that’s also building a racing game with Yuga, will be involved in the launch, per the document.

BAYC teased a new partnership with Animoca on March 11. No details were revealed, but interested parties were invited to complete identity checks to learn more at a later date. BAYC said in a tweet that the Animoca announcement had been in the works for seven months.

Yuga has had a busy start to the year. Last week, the company also announced it had acquired the intellectual property rights of CryptoPunks and Meebits, two prized NFT collections, from Larva Labs.

The Block reached out to Yuga Labs and Animoca for comment on this story but didn’t hear back by press time.

© 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.

Kazakhstan’s push to rein in its local crypto industry has seen significant escalations.

On March 15, Kazakhstan’s Financial Monitoring Agency reported on its overall work to bring the local mining industry to heel. Among its most striking figures is that the agency says it has confiscated mining equipment worth roughly 100 billion tenge, valued at $194 million USD. 

The Financial Monitoring Agency also reported that it had registered 25 previously illegal businesses. 55 mining companies have voluntarily closed down, while the agency has forced 51 more to end their activities. 

Those activities included failure to report the start of mining operations to government agencies, illegally connecting to the electrical grid, setting up shop in special economic zones, or failure to pay taxes and customs.

Kazakhstan’s struggle with its mining industry is a relatively recent phenomenon. A flood of miners entered the country starting early last year when China outlawed mining writ large.

While the Kazakh government has not followed suit with a full ban on mining, energy shortages late last year yet the country to implement new registration requirements on taxes on cryptocurrency miners.

© 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 trickle of talent from web2 to web3 continues, with five new hires for the gaming arm of Polygon.

Polygon Studios has named Michael Blank as COO and Young Ko as CFO, according to a statement on Tuesday from the company. The new hires join recently appointed CEO Ryan Wyatt, who previously headed up YouTube’s gaming arm.

Blank previously spent almost two decades with Electronic Arts (EA), serving as senior vice president of Player Network. In that capacity, he led global teams that drove EA’s direct-to-consumer digital gaming platform and social ecosystem. 

Young spent the past nine years as the VP of finance at Penske Media, whose brands include Rolling Stone, Billboard, Variety, and SXSW. He oversaw the finance, accounting, treasury and global tax teams. 

The firm also hired former Amazon executive Urvit Goel as VP of gaming business development. At Amazon, Goel launched the company’s cloud gaming business.

Charnjit Bansi is joining as VP of game design. His previous roles have included web2 game development Infinity Ward and Sledgehammer Games, creators of the Call of Duty franchise. 

Ben Watley also joins as senior director of strategy for gaming. Watley previously worked a three-year stint at EA.

The all-male group hire marks a push by the company to bolster its gaming initiative. Polygon Studio’s partners already include blockchain-based gaming figures such as Animoca Brands, a metaverse startup valued at over $5 billion spearheading the Bored Ape Yacht Club video game. 

© 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.

ConsenSys, one of the most well-known Ethereum-focused companies, has raised a new $450 million funding round.

The Series D funding round, led by ParaFi Capital, values the firm at $7 billion — representing a doubling of its valuation since the firm’s November 2021 Series C round, when it raised $200 million. The Block had previously reported on the then-pending round in January.

New investors in the Series D round include Temasek, SoftBank Vision Fund 2, Microsoft, Anthos Capital, Sound Ventures, and C Ventures. Participants from the Series C funding round, including Third Point, Marshall Wace, True Capital Management, and United Talent Agency’s venture fund UTA VC, also took part in the new round.

Notably, ConsenSys intends to convert the funding it received into ether (ETH), the native cryptocurrency of the Ethereum network.

“All proceeds from the round will be converted to ETH to further build ConsenSys’s ‘ultra sound money’ position as a rebalance to its ETH to fiat ratio in line with ConsenSys’ treasury strategy,” said a company statement.

In a separate statement, founder and CEO Joe Lubin indicated that this approach will inform ConsenSys’s future funding initiatives.

“This round takes in digital assets as well as fiat and concerts all immediately to ETH,” Lubin was quoted as saying. “Next round will be our ‘Series ETH’ where we will assist investors in getting fully crypto native and contributing ETH as a symbol of and commitment to the ongoing paradigm shift.”

The funding round is one of the most notable for 2022 thus far and represents a significant development for ConsenSys, which at the start of 2020 moved to reorganize its operation and trim its global staff. 

In a sign of the times, ConsenSys will be using the money to fuel an array of growth initiatives, including the hiring of more than 600 people. 

Funding will support a major redesign of MetaMask for a release later in 2022, as well as the integration with a wide range of blockchain protocols and account security schemes.  This effort will build on the company’s recent acquisition of MyCrypto.

The new resources will also encourage the adoption of Infura, the blockchain node infrastructure provider. 

ConsenSys said that it would also use the money to support the “continued reinvestment in development and tooling for the extended Ethereum ecosystem.”

“I think of ConsenSys as a broad and deep capabilities machine for the decentralized protocols ecosystem, able to rapidly capitalize at scale on fundamental new constructs that emerge, such as developer tooling, wallets, security audits, DeFi, NFTs, Layer-2 scaling, DAOs, and more,” said Lubin. “This view has resonated with our crypto native and growth investors in a Series D that will enable us to execute exciting growth strategies.”

© 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.