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Superdao, which is developing a services suite for decentralized autonomous organizations (DAOs), just raised a $10.5 million seed round at a $160 million valuation led by SignalFire.

“The vision for the company is essentially Shopify for DAOS,” said Yury Lifshits, CEO and founder of Superdao to The Block. “It’s kind of an all-in-one DAO formation and operating tool, where in one-click you can start a DAO and grow it over time and explore.”

The 25-person team is building a member directory with tools for NFT and token airdrops, treasury dashboard, open ecosystem for third-party DAO apps, one-click DAO creation, and more. This is in contrast to how DAOs are started and operated currently, which require heavy engineering infrastructure.

Superdao is backed by Coinbase, OpenSea, Rainbow, Kraken, and Telegram and funds like Alliance, DIGITAL, Fika Ventures, and Pear Ventures.

DAOs grew in popularity in 2021 as a way for groups to decentralized decision-making and work toward common goals, such as fundraising. They use digital assets to vote on decisions and outcomes, versus having the hierarchical decision-making structure of traditional organizations.

More DAOs will likely pop up this year as ways to build web3 startups, investment groups, NFT and metaverse projects, and social clubs, said Lifshits.

“While at the start of the year there are 10 to 20 thousand operating DAOs, we expect up to 1 million new DAOs to be formed by the year’s end,” said the company.

SuperDao itself is currently operating as a traditional company but has ambitions to become a DAO itself. “It will take time to do it properly,” said Lifshits. It’s a similar path for many web3 startups, who start off with C-crop type private equity to win time to fully prepare for a token-based system, he 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.

ConsenSys, the Ethereum software company behind crypto wallet MetaMask, is poised to more than double its valuation with what will be a third fundraise in less than 12 months.

The firm has held talks with potential backers about investing at a valuation of roughly $6.5 billion, according to three people close to the discussions. While the size of the latest fundraise is unclear, several sources believe the company’s post-money valuation will be close to $7 billion.

ConsenSys declined to comment when reached.

The company last raised funds in November 2021, when it announced a $200 million round at a valuation of $3.2 billion. New investors in that round included British hedge fund Marshall Wace, Daniel Loeb’s Third Point Ventures and HSBC.

In April 2021, ConsenSys raised $65 million from backers including UBS, Mastercard and JPMorgan.

Ethereum in full gear

ConsenSys has developed half a dozen core products, all aimed at widening access to the Ethereum ecosystem. Crypto wallet MetaMask and Infura, the developer platform, are its flagship tools.

When announcing its $200 million raise in November, the company said in a blog post that Infura had increased its users from 100,000 to 350,000 in the previous year. At that time, MetaMask’s monthly user base numbered 21 million — up 38 times from 2020. The wallet also operates a service targeting institutional investors, giving them the means to interact with DeFi apps.

At the time of its last raise, ConsenSys said the $200 million would be used to rapidly expand both MetaMask and Infura, while also fuelling 400 new hires across the group.

“The paradigm shift to a world running on decentralized protocols is in full gear,” said ConsenSys’s founder and CEO Joseph Lubin in a statement.

© 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 House of Representatives will examine the outlook for stablecoin regulation early next month.

Per a January 25 announcement from Chairwoman Maxine Waters (D-CA), the House Financial Services Committee will hold a virtual hearing on February 8 entitled “Digital Assets and the Future of Finance: The President’s Working Group on Financial Markets’ Report on Stablecoins.”

No witness list is yet available. Largely spearheaded by the Treasury under Secretary Janet Yellen, the report in question came out at the beginning of November and urged Congress to restrict stablecoin issuance to insured depository institutions.

Accompanying that controversial proposal was the threat of the Financial Stability Oversight Council, whose membership largely overlaps with the PWG, designating stablecoins a systemic risk, given FSOC extensive emergency regulatory powers.

Ranking member Patrick McHenry (R-NC) wrote to Waters earlier this week asking for more clarity on cryptocurrency, in the absence of which he said regulators had been overstepping their bounds. However, very little in the way of legislation is likely to pass the Senate between now and midterm elections in November, and even before the current Congress, bills addressing cryptocurrency directly had faced a rough journey between chambers.

© 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.

Post-trade in capital markets today operates primarily based on provision of balance-sheet to off-set counterparty risk, either directly or indirectly, via settlement agents, CCPs and CSDs etc.  The issues with this ‘hub and spoke’ model are well known, including the resulting massive duplication of data, bifurcated processes, concentration of risk and subsequent deployment of capital and resources that could be better utilized.  Furthermore, the way many markets operate today is slow, and ‘markets’ are fixed to ‘business hours’ with significant constraints in terms of interoperability.  Consequently, the markets are ‘layered’ with many intermediaries commercialising operational inefficiencies that artificially constrain market access and operation.  We are entering a new era of Decentralised Financial Market Infrastructure (dFMI) for Digital Asset markets that provides modern infrastructure and post-trade capabilities utilizing the power of blockchain and avoiding the constraints of balance-sheet utilization-based systems, truly unlocking the potential of Digital Assets.

As part of this new era, the wider adoption of crypto currencies by institutional investors is also now entering a new and very relevant phase, especially as crypto currencies are more widely recognised as a suitable asset class to a range of investors from family offices to asset managers.  This further highlights the need for better post-trade services.  Post-trade is now widely recognized as the biggest pain point in Digital Assets.  Crypto currencies are in many ways, the MVP for the digitalization of capital markets, in that in time, all assets will be crypto assets, i.e., cryptographically provable and issued on-chain or tokenized onto a blockchain ledger.  Bonds, equities, loans, funds, commodities etc., will all be either digitally native (from issue) or tokenized (by agents) as Digital Assets.  As a consequence, the Digital Asset industry is rapidly evolving and benefiting from record levels of investment, including a range of new ‘institutional service providers.’  

A number of the largest TradFi and CeFi players are now building new Digital Asset and crypto capabilities as they enter or expand their footprint in the space.  However, not all service providers are equal, or perhaps more important, neutral.  Institutional investors need to ensure fiduciary certainty, as well as segregation of duties, and in general, self-custody or use of platforms that build up credit risk, fundamentally fails to achieve this.  Additionally, the new breed of ‘prime brokers’ are a mix of credit providers (against their own balance sheet), exchange and custodian all-in-one, a model that is significantly flawed for most serious institutional investors.  Insight into the size of balance sheet required to scale, such a business can be gleaned from looking at Credit Suisse, one of the largest Prime Brokers in traditional assets who is now exiting the Prime Brokerage business after a loss related to a single hedge fund client of $5.5 Billion – more than the entire balance sheet of Coinbase (total loss across all PBs was over $10 billion). 

The Bosonic Network™ is dFMI that connects clients, custodians, liquidity pools and is built on cryptographically provable asset ownership and value transfer leveraging programmable Layer-1 Smart Contracts coupled with the scalability of Layer-2 protocols that have much greater TPS, for greater inclusion, full interoperability and quality of service.  Furthermore, this enables the elimination of counterparty credit and settlement risk for both trade execution and post-trade net settlement movements using Atomic Exchange without dependency on the balance sheet.  The Bosonic Network is a dFMI and peer-to-peer network with members accessing in-built features and applications via nodes, applications or APIs.  At the core is an Atomic Exchange for transactions and settlements built on a Layer-2 blockchain that is fully interoperable with Layer-1 for final net settlement movements.  The Bosonic Network enhances the role of the Digital Asset Custodian (DAC) who can tokenize or ‘re-ledger’ assets, so assets need never leave the custodian.  Furthermore, with our network of DACs, the clients and the DACs benefit from cross-custodian net settlements.  As a best-in-class dFMI for institutional clients, this results in a better, more institutionally aligned model that:   

1. Does not touch client assets – i.e., the dFMI is not the custodian 
2. Does not rely on its own balance sheet to scale (nor its equity investors) 
3. Is custodian agnostic, multi-custodian and cross-custodian capable
4. Is Blockchain-based with L-1 and L-2 interoperability
5. Provides cross-custodian trading and net settlement (both “atomic” i.e., no risk)
6. Does not compete with its clients (like Prime Brokers do)

Fit for purpose dFMI is essential to safe institutional adoption and development of the Digital Asset markets.  The adoption of dFMI is part of the wider DeFi journey and the eventual digitalization of all assets and transactions.  The technology infrastructure that ensures resilient and safe transacting for all market participants is the fabric on which this is built.   

© 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 Binance has partnered with London-based payments company Paysafe to resume Single Euro Payments Area (SEPA) bank transfers for customers.

Binance temporarily suspended SEPA transfers in July of last year due to “events beyond our control.” Now the exchange has begun rolling out support for SEPA — a system that allows users to make cashless euro payments via bank accounts anywhere in the European Union, as well as several non-EU countries.

“There’s a small set of users who will have [SEPA] access today as part of testing before it rolls out to other users across the EEA (European Economic Area),” a Binance spokesperson told The Block.

Paysafe will essentially act as a fiat on-ramps partner for Binance in Europe. The Binance spokesperson said Paysafe has developed a platform for Binance, using both their digital wallet technology and their payment processing capabilities, which will support Binance’s fiat-to-crypto services for users in Europe.

© 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.

New research from blockchain forensics firm Chainalysis finds that money laundering in crypto grew from $6.6 billion to $8.6 billion between 2020 and 2021.

While centralized exchanges with weak know-your-customer controls still account for the lion’s share of wallet addresses used in illicit crypto, decentralized platforms shot up by almost 2,000% in terms of value received from illicit addresses.

Source: Chainalysis

“Undeniably the theme this year is the way that DeFi has become a space for criminals,” Kim Grauer, Chainalysis’ head of research, told The Block. Mostly, however, illicit money traveling through DeFi originated in DeFi hacks. Bad actors seldom used DeFi as a means for laundering external money; instead, they turned to Bitcoin.

The biggest source of illicit funding remained fairly typical scams aimed at collecting crypto.

“This dataset is very conservative, so these are all investigated crimes,” Grauer explained, detailing that it took more than general suspicion to be included in the report. It is perhaps for this reason that the firm identified money laundering as “just 0.05% of all cryptocurrency transaction volume in 2021.”

Moreover, almost all of the data related to “cryptocurrency-native” crime, rather than offline crime converted into cryptocurrency to be laundered. The dataset also did not include privacy tokens like Monero, which remain resistant to this sort of analysis.

Holding true throughout the years is that a surprising amount of illicit money still goes through a small roster of 5 major centralized crypto exchanges. Chainalysis’ most recent report did not name those exchanges, nor would Grauer, but a similar study in 2019 named Binance and Huobi. 

A major contractor for the U.S. government as well as for crypto platforms worldwide, Chainalysis saw its valuation exceed $4 billion in a 2021 funding round.

© 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’s American affiliate, FTX.US, has joined the crypto unicorn club after closing its first-ever fundraising round. 

The crypto exchange, which entered the US market in May 2020, announced Wednesday that it raised $400 million in outside capital at a valuation of $8 billion, making it one of the most valued companies in the frothy market for private crypto companies. FTX, which shares billionaire Sam Bankman-Fried as a key stakeholder, closed its own $420 million fundraise at a $25 billion valuation late last year. It is in the process of closing another round that could value the firm above $30 billion. 

A wide range of investors from crypto and traditional venture participated in the round including Paradigm, Multicoin Capital, SoftBank, Lightspeed Venture Partners, and Temasek. 

Led by former Citadel Securities executive and current FTX.US President Brett Harrison, FTX is among the several companies riding the retail trading wave to crypto riches. Since its inception, the firm has grown its user base to more than 1 million and saw volumes top $67 billion in 2021.

Still, FTX.US operates in a competitive field. Coinbase, the leading US crypto exchange, clocks in around $100 billion in volume on a monthly basis. 

Harrison hopes to eat into the volumes of rivals like Coinbase and grow FTX.US’s market share to a double-digit percentage by the end of 2022.

His bet is that the addition of stocks and crypto derivatives will buoy that growth. The firm acquired LedgerX to form FTX.US Derivatives and has publicly expressed its interest in offering stock trading—a business currently dominated by retail-focused Robinhood. 

“They have a huge user-base,” said Harrison, referring to Robinhood. He explained that the popular trading app company’s success shows that customers want a one-stop show for their trading needs. 

“No one wants to wire between accounts, dealing with different banks,” he said. “We don’t need it to be widely profitable in stocks for it to be worthwhile.”

The number of crypto unicorns has been growing at a fast clip, fueled in no small part by the venture capital eyeing opportunities in the industry. FTX itself launched a $2 billion venture fund at the start of 2022, following in the footsteps of a16z and Paradigm which both launched multi-billion venture investment vehicles in 2021.

© 2021 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 stablecoin project spearheaded by Meta—formerly known as Facebook—appears to be winding down for good.

The Diem Association, formerly known as Libra, is in talks to sell off its assets and return capital to investors, according to Bloomberg.

The project’s members include a few dozen of the world’s biggest tech companies and investors, including Uber, a16z, Temasek, Spotify, Coinbase and Ribbit Capital — although it’s unclear which of Diem’s members actually invested in the project.

The group has held discussions with investment bankers over how best to hawk its intellectual property, and to try to find new employment for its engineers, according to reports. The discussions are ongoing and there is no guarantee that Diem will find a buyer.

It is a muted end to a project that burst onto the scene in 2019 with a bold plan to create a new form of stablecoin destined for use within Meta’s family of apps and beyond.

Diem, then Libra, faced stern early opposition from regulators from the outset and was forced to rein in its ambitions. Instead of a stablecoin backed by a basket of global fiat currencies, the vision morphed into individual coins backed by single national currencies.

But the setbacks kept coming. In August last year, The Block reported that Meta’s crypto subsidiary Novi was planning to work with a stablecoin issuer other than Diem. A planned stablecoin partnership with crypto-friendly Silvergate Bank also drew regulatory opposition.

Meta’s crypto lead David Marcus—who is a co-founder of Diem—resigned from the social media company in November.

© 2021 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.

Distributed ledger tech company Ripple has nabbed a $15 billion valuation after a private stock buy-back, the company said Monday. 

The company is repurchasing equity shares from investors in its Series C, which includes Tetragon, a company that unsuccessfully sued Ripple last year. At the time of the previous raise, Ripple’s valuation stood at $10 billion. 

“The buyback places Ripple’s new valuation at $15B and reflects Ripple’s strong position in the market and global company momentum – Ripple’s global business has grown exponentially and 2021 was the company’s best year to date,” the company said. The company says that its RippleNet platform has seen transactions double in 2021. It also signed Bhutan and Palau as CBDC clients. 

The move comes amid Ripple’s ongoing legal battle with the SEC, which dates back to December 2020. The SEC accused Ripple of issuing and selling unregistered securities in the form of the digital asset XRP. 

© 2021 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.

Ryan Wyatt, who served as YouTube’s Head of Gaming for seven years, is leaving next month to become CEO of Polygon Studios. 

Polygon Studios is the gaming and NFT arm of Polygon, an Ethereum scaling project. In his new role, Wyatt will lead Polygon Studios across gaming, entertainment, fashion, news and sports and grow the developer ecosystem through investment, marketing and support, he wrote in a tweet. 

Wyatt started his career as an e-sports commentator before becoming Vice President of Programming at Major League Gaming (now owned by Activision Blizzard). 

Wyatt’s move Polygon Studio could hint at the company’s plans to bolster its blockchain-based 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. 

Interest in blockchain-based gaming grew in the latter half of 2021, as The Block’s Data Dashboard shows. While the NFT game Axie Infinity dominated the market, other contenders have popped up such as RPG-inspired DeFi Kingdoms and sports management game Sorare. 

© 2021 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.