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StarkWare, an Ethereum Layer 2 developer that uses ZK-rollup technology for scaling, is reportedly raising funds at a $6 billion valuation.

Israeli newspaper Calcalist reported the news on Thursday, saying that StarkWare is raising at least $100 million, without citing a source. The newspaper didn’t give any details on who might be investing. 

The new funding round, which is yet to close, comes barely three months after StarkWare raised $50 million in a Series C round at a $2 billion valuation.

StarkWare declined to comment to The Block.

The company’s Series C round was led by Sequoia Capital, with participation from Paradigm, Three Arrows Capital, Alameda Research and others. At the time, StarkWare co-founder and CEO Uri Kolodny told The Block that the company would raise more money in the near future if opportunities arose.

Founded in 2017, Israel-based StarkWare provides two Ethereum scaling products: StarkEx and StarkNet. The former is a permissioned tailor-made Ethereum scaling engine, while the latter is a permissionless decentralized ZK-rollup network that was recently fully launched. StarkNet allows any developer to build decentralized applications on the network, like on Ethereum. Such scaling networks aim to reduce gas fees.

News of StarkWare’s latest raise comes as the crypto funding spree continues at a rapid pace and valuations are soaring. As The Block reported recently, the first two months of this year have seen record funding for startups in the space.

© 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

• In this weekly series, we dive into some of the most interesting data and developments across the Layer 1 blockchain landscape, from DeFi and bridges to network activity and funding
• Within L1 ecosystems with significant TVL, DeFi protocols continue to face the challenge of attracting and directing liquidity within their ecosystems
• As cross-chain infrastructure continues to be optimized, DeFi products like stablecoins and liquid-staked tokens may offer a chance for newly launched blockchains with smaller ecosystems to promote user activity and boost their connectivity with other networks
• This week, we take a look at Solana, NEAR, and Polkadot

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Consumer loan platform Lendable announced a $276 million (£210 million) funding round at a valuation of $4.6 billion on Thursday. The round was led by Ontario Teachers’ Pension Plan Board, through its Teachers’ Innovation Platform (TIP). 

“We are excited to partner with TIP as we accelerate our expansion across products and markets,” said Martin Kissinger, Lendable’s founder and CEO, in a statement. “Our DNA from day one has been to bring transparency and fairness to consumer finance, and we are proud of the fantastic feedback we consistently receive from our customers.”

Founded in 2014, Lendable is a London-based lending platform that connects institutional investors such as banks and family offices to consumers looking for loans. Lendable says its AI-powered platform makes the application process seamless for customers, while also allowing the company to offer financing at more attractive rates than incumbents.  

The company said in a statement that the extra financing will be used to develop new products and for expansion in new markets. 

© 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 constellation of crypto-focused venture capital funds grew this week with the launch of a dedicated team within Bain Capital Ventures. 

Bain Capital Crypto, which counts the $155 billion Bain Capital as its largest limited partner, is in the process of deploying $560 million across the crypto ecosystem with an emphasis on early-stage companies, according to a conversation with the team conducted Tuesday evening.

According to partner Stefan Cohen, Bain Capital Crypto has been in the works for about a year. Bain Capital Ventures is no stranger to crypto; among the industry’s firms in its portfolio are BlockFi, Zero Hash, Risk Harbor and CoinDCX.

But according to Cohen, who has been a partner at the firm since 2016, Bain Capital Ventures felt like it needed “a dedicated team” in order to compete in an increasingly active field. 

In a sense, the firm is following in the footsteps of a16z, which spun out its own dedicated unit. Elsewhere, BCV has to compete for space on cap tables with large crypto-native venture firms like Paradigm and Multicoin as well as VCs like Sequoia and Tiger. 

“A little more than a year ago we set out to design a founder-oriented fund to help them through inception to growth,” Cohen added. “Advising on key economics, interacting with on-chain governance, providing liquidity and staking.”

Alex Evans, the fund’s co-lead, said the team “gives us the structure to do this.” 

To that end, the fund hopes to embody more of a “mad scientist” culture versus traditional Silicon Valley given the added complexities of investing in the crypto market. 

“This isn’t traditional venture where you show up to a board meeting to approve some options,” said Cohen. 

“That is when we will participate in governance…this market has a need for long-term investors to take a long-term oriented approach.”

Thus far, large traditional venture shops have shied away from tokens that have already begun trading on exchanges. Bain also plans to back anonymous founders, according to a spokeswoman. The firm’s check sizes will range from $1 million to $30 million. 

The fund debut joins the ranks of other major funds raised in recent months, including those from Sequoia, Pantera, and exchanges like FTX. With each successive announcement, the amount of venture capital on the crypto sidelines continues to surge.

Yet Bain Capital Crypto’s announcement on Tuesday wasn’t without a dose of controversy. A team photo drew scorn and criticism for its all-male composition. Tuesday night, managing partner Stefan Cohen apologized and committed to “hiring women, investing in women-led projects” among other diversity-focused steps.

Focus on the DAO and now

One area in which Cohen and Evans expect to sign a lot of checks is in the ecosystem for decentralized autonomous organizations of DAOs.

While DAOs have been around for years, surged in mindshare during 2021 on the back of viral, community-led causes related to buying a rare copy of the US Constitution or paying for Wikileaks founder Julian Assange’s legal fees via the purchase of an NFT. On the development side, DAOs help manage a wide range of DeFi protocols from Compound to Uniswap. 

“As the Web3 narrative grew, a lot more inclusive DAOs came up. DAOs with culture, DAOs where people can hang out and it feels intuitive,” noted Darren Lau of the Daily Ape during a recent episode of The Scoop.”People just want a place to hang out with their friends and having a DAO seems like the cool way to do it right now.”

All the while, the proliferation of DAOs has created an investment opportunity, drawing the interest of firms like Bain Capital Crypto. 

The firm plans to invest in the companies that provide tools and services to DAOs related to governance, payments and launch-time marketing, among others. 

During the interview, Cohen pointed to Tarun Chitra’s Gauntlet as one example of a company in this space, highlighting the firm’s automated governance platform.

“The ways we live and work are going to continue to evolve and create a flywheel of economic growth that is purely crypto native,” Cohen said, adding:

“DAOs are starting to look like what B2B software looked like in the early 2000s.”

© 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.

Yoon Suk-yeol, a conservative South Korean presidential candidate, has prevailed in that country’s national election.

Yoon, representing the opposition People Power Party, won by a margin of less than 1%, according to the BBC’s election coverage. 

During the campaign, Yoon pledged to deregulate the country’s crypto industry. As reported by Yonhap News in January, Yoon declared that “we must overhaul regulations that are far from reality and unreasonable” during an event in Seoul.

“We must shift to a negative regulation system to ensure at least the virtual asset market has no worries,” he was quoted as saying at the time.

Among the specific measures he proposed was easing tax requirements on crypto investment profits, as Yonhap noted. 

As noted by CoinDesk, South Korea’s presidential election featured crypto as a notable policy topic. In what is perhaps a sign of the times, both Yoon and opponent Lee Jae-myung of the ruling Democratic Party both issued campaign-related non-fungible tokens during the campaign. 

© 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.

Spartan Group — an Asia-based consultancy and venture capital firm — is set to close a new $200 million fund aimed at the metaverse, according to Jason Choi, a general partner at the firm.

The new fund, which will close less than a year after Spartan announced its $110 million DeFi fund, will focus on projects building in the metaverse, specifically virtual worlds that support “digital ownership” as Choi described in an exclusive interview on The Scoop.

As Choi explained during the interview:

“We only care about the metaverse or games where the users are empowered through ownership so you can own the in-game assets. You can own your characters, you can own part of the game, you can share in part of the value that you create for the game. We pretty much spend most of our time studying protocols like that and investing in teams that are building into that vision.”

To be sure, Spartan is far from alone. A series of big-name investors have recently raised and deployed capital in this space, including a $100 million fund backed by Alan Howard and the Winklevoss twins.

The latest market entrance represents a shift for Choi, who was not always as focused on digital ownership. As a self-described fundamentalist investor, Choi wasn’t interested in metaverse projects until the fees generated by Axie Infinity caught his eye in late 2020.

“We were pretty skeptical of the sustainability of the game itself,” Choi said. “But the numbers were proving us wrong. And from that experience, it kind of taught us that there’s clearly a different type of user in this kind of NFT-metaverse gaming vertical versus the DeFi projects that we’re very used to.”

Building off its experience with Axie Infinity, Spartan Group’s new fund focuses on three different layers of the metaverse: the infrastructure layer, the experience layer, and the ‘value add layer,’ the latter of which Choi describes as “things that are outside of the metaverse” like guilds and NFT marketplaces.

Since Spartan Group’s new fund is designed to capture the value of a fully developed, populated metaverse, Choi believes it will take “at least five or ten years to play out.”

During this episode, Chaparro and Choi also discuss:

• E-commerce integration with the metaverse
• The intersection of the metaverse and DeFi
• What the metaverse ‘winners’ will get right

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About Chainalysis
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© 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.

Web traffic across cryptocurrency exchanges decreased by 20.6% month-over-month in February, according to data from SimilarWeb.

Monthly traffic has been on the decline since November 2021, when the total of visits was 546.6 million. Last month, that number fell to 339.4 million.

The numbers include both spot and derivative trading.

Binance saw the majority of February’s crypto exchange web traffic (31,5%), followed by Coinbase (17.9%), Bybit (8.7%), FTX (4.9%) and Gate.io (4.0%).

For more must-read figures from around the digital asset space, read the February by-the-numbers breakdown by The Block Research’s Lars Hoffmann (Research subscription required). 

© 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.

FTX, the crypto exchange founded by Sam Bankman-Fried, has launched a new business geared towards institutional clients to meet Wall Street’s growing interest in digital assets.

The new unit, known as FTX Access, will initially focus on service areas like index products, analytical tools and advisory services for institutional-grade clients, according to a statement on Wednesday.

FTX Access has plans to expand its service coverage to include exposure to crypto derivatives as well as other structured products for big-money clients. Virtual asset custody and asset management services are also on the horizon for the new business unit, the announcement added.

Gustavo Miguel will lead the US arm of the new business division with Jon Cheesman as the global chief of FTX Access. Miguel was formerly the head of global derivatives at Coinbase and has also worked for Morgan Stanley while Cheesman has spearheaded the expansion of the exchange’s over-the-counter client base.

FTX unveiling an institutional client-focused business unit is only the latest in a series of expansion pushes by the exchange giant. Earlier in the week, FTX announced that it will begin offering services to customers in Europe.

The exchange has also recently launched a new gaming business as has plans to make a splash in the $300 billion high-end fashion industry following the appointment of Lauren Remington Platt as its new head of global luxury partnerships.

© 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 White House has released the full text of its executive order on digital assets, laying out its policy objectives for managing the space. 

The publication follows a fact sheet also published this morning, which The Block obtained four hours ahead of time. It described the order as “outlining the first ever, whole-of-government approach to addressing the risks and harnessing the potential benefits of digital assets and their underlying technology.”

The order addresses hot-button issues, including a strategy to protect consumers, stability of the financial system, national security and climate risks. Alongside these elements, the White House laid out its plan for assessing the implementation of a central bank digital currencies (CBDC) and rooting out illegal activity. 

Per earlier reporting, the EO is fairly benign, despite early fears of a pending crypto crackdown.

It does, however, emphasize an all-of-government approach, calling on new work from the Treasury, Financial Stability Oversight Council, Federal Reserve and national security agencies on relevant portions of the ecosystem.

Over the course of the next four months, government agencies will feedback on what the government sees as the key issues surrounding the space. 

© 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.

BitMEX co-founder Samuel Reed has pleaded guilty to violating the US Bank Secrecy Act, according to the Department of Justice.

The news, revealed Wednesday morning, follows the announcement of guilty pleas from fellow co-founders Arthur Hayes and Ben Delo, as previously reported. 

Reed “pled guilty today to violating the Bank Secrecy Act (the “BSA”) by willfully failing to establish, implement, and maintain an anti-money laundering (“AML”) program at BitMEX.  Under the terms of his plea agreement, REED agreed to separately pay a $10 million criminal fine representing pecuniary gain derived from the offense,” the DOJ said. The fine and enforcement language mirror what was imposed by the DOJ on Hayes and Delo last month.

The BSA charges date back to October 2020, when the DOJ unveiled its criminal lawsuit alongside civil charges pursued against BitMEX by the Commodity Futures Trading Commission. 

© 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.