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Sam Bankman-Fried’s FTX has launched a new venture capital unit, adding billions of dollars in fresh capital to the already bloated private market for crypto investing. 

FTX — which has long made investments alongside its sister company Alameda — said in a press release that FTX Ventures aims to “advance global blockchain and web3 adoption, with a broad investment mandate across social, gaming, fintech, software, and healthcare.”

FTX has set aside $2 billion for the venture fund. It has also hired Amy Wu, a former partner at $10 billion venture capital firm Lightspeed, to lead the new business unit and fund.

In an interview with The Block, Wu said that the fund will make strategic, concentrated bets into companies in the crypto market. 

“It’s not necessarily tied to the strategy of FTX,” she said. “The objective is more to accelerate the adoption of blockchain technology.”

“We want to be known for the value add that we bring, leveraging the resources, the expertise and the global network of FTX,” she added. 

It’s not unusual for companies in the crypto space to make venture capital-like bets. Coinbase formed its own venture operation in 2018 and has invested in hundreds of early-stage crypto startups using money from its own balance sheet. More recently, NFT infrastructure provider Alchemy unveiled its venture arm at the end of last year. 

As previously reported by The Block, 2021 was a red-hot year for venture investing in the crypto space. 

Just over 1,700 venture capital deals focused on the crypto space occurred in 2021, netting these startups, projects and protocols some $25.1 billion in financing. Several venture firms—including Paradigm and a16z—launched new multi-billion venture funds last year. 

© 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.

Eduardo Paes, mayor of Rio de Janeiro, intends to invest 1% of the city’s treasury reserves in bitcoin.

Brazil’s top newspaper O Globo reported the news on Thursday, citing Paes’s comments made at the Rio Innovation Week event. Paes was speaking on a panel alongside Miami mayor Francis Suarez and said: “We are going to launch Crypto Rio and invest 1% of the treasury in cryptocurrency.”

Paes is also set to establish a working group in that regard, per the report.

Rio de Janeiro may also offer a discount on property taxes if paid with bitcoin.

Pedro Paulo, secretary of finance and planning of the city, at the event said: “We are studying the possibility of paying taxes with an additional discount if you pay with bitcoins. You take the discount of the single quota of 7% (of the IPTU) , it becomes 10% if you pay in bitcoin,” said Paulo. “Let’s study the legal framework to do this.”

IPTU is a property tax in Brazil charged by a local municipality. It is paid every year by the owner of a house, building, or land plot.

If Rio succeeds with its plan, it will become the first Brazilian city to hold bitcoin on its balance sheet.

Last year, the Miami mayor also announced his intention to invest the city’s treasury reserves in bitcoin. But he is yet to take a plunge. In October, Suarez said it is “a major priority” for the city to invest a portion of their funds in bitcoin.

Last year, El Salvador became the first nation to buy bitcoin on its balance sheet. The central American country currently holds around 1,390 bitcoins, worth over $58 million at current prices.

© 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.

A crypto-focused startup accelerator is becoming a decentralized autonomous organization (DAO) focused on web3 projects and initiatives. 

DeFi Alliance announced the transition on Thursday, rebranding to “AllianceDAO” with the backing of several hundred builders from across the crypto and tech spaces. 

“We will be building the infrastructure for an ecosystem that encourages the best Web3 founders to receive accelerator services and then remain as mentors to later founders,” said Dane Lund, Head of DAO Architect at DeFi Alliance in an email to The Block. “We also aim to attract other DAO Contributors (builders, subject matter experts, and service providers) to join to provide support for Web3 founders.”

More than 300 investors have joined the decentralized autonomous organization, or DAO, in its initial round, contributing around $50 million. Some of these include co-founders of Gemini Cameron and Tyler Winklevoss, co-founder of Crypto.com Bobby Bao, co-founder and CEO of OpenSea Devin Finzer. The list also includes hundreds more who’ve built Web1 and Web2’s most notable companies like Greg Sands, a first hire at Netscape.

Starting with providing cohort-based accelerator services, over time the goal is to grow the DAO to provide governance, recruiting, liquidity, marketing, advisory or other potential startup support services, said Lund.

As for the future arc of the project — including the release of a dedicated token — “documentation will be released in the near term to explain how the DAO will operate, what services it will provide, and the governance and economic models that will support it,” said Lund.

DAOs and protocol partners will contribute and collaborate on this process, the company tweeted, listing people like social media influencers Jake Paul and Bored Elon.

People outside the initial contributor group will have the chance to participate. “This will include Web3 founders who go through the accelerator as well as DAO Contributors who will help grow and operate the DAO and/or provide support to cohort founders,” said Lund. More details on how others can join and contribute are coming shortly, he said.

According to Lund, experience in Web3 or crypto isn’t required to take part. “Anyone who has founded or built a startup or who is interested in building a DAO or supporting founders will fit in,” said Lund.

© 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.

Quick Take

• Tornado Cash uses zero-knowledge proof to break linkages between fund sender and receivers.
• Token incentive was leveraged to attract liquidity as the total value locked in Tornado Cash increased tenfold in 2021.
• Tornado Cash Nova enables deposits and withdrawals of arbitrary amounts of Ether, as well as shielded transfers of deposited tokens within the pools.

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The Chinese state-backed blockchain deployment infrastructure platform Blockchain Services Network (BSN) is moving closer to supporting NFTS — under the condition that the NFTs aren’t connected to cryptocurrency or public blockchains. 

According to the South China Morning Post, the BSN will offer Chinese companies and individuals the infrastructure to implement NFTs into personal user interfaces such as apps in exchange for Chinese yuan. This infrastructure will be called the BSN Distributed Digital Certificate, or BSN-DDC, and is expected to roll out by the end of January 2022. 

Because of the regulatory restrictions on public networks within China, so the BSN is using “open permissioned blockchains” instead. Permissioned blockchains put governance in the hands of selected groups and actors.

Twenty partners have already signed on to the BSN-DDC, such as the Cosmos blockchain network and a digital invoice service provider Baiwang, as per the South China Morning Post. A developer working on the project added that China’s NFTs have use cases spanning diplomas and car license plates, and the industry could turn a profit if 10 million NFTs are bought and sold. 

While NFTs have gained popularity in the digital art world in 2021, the technology’s use cases have increasingly expanded to other areas such as fashion, journalism and gaming. It seems now that a historically crypto-adverse country will pilot further use for the technology in 2022.

© 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 Swiss National Bank (SNB) has successfully tested the integration of a wholesale central bank digital currency (CBDC) settlement with commercial banks.

According to an announcement by the Bank for International Settlements (BIS) on Thursday, the successful trial was a major part of the second phase of Project Helvetia that aims to integrate tokenized financial assets with mainstream markets.

The BIS joined five commercial banks — Goldman Sachs, Credit Suisse, Citi, UBS, and Hypothekarbank Lenzburg — as well as the Swiss stock exchange platform SIX to carry out the test. In December 2020, the SNB stated plans to expand its digital currency trials to include commercial lenders.

The trial test which took place in Q4 2021 involved issuance, redemption, and the use of CBDCs for securities settlements both within and outside Switzerland. “A wholesale central bank digital currency (wCBDC) can be integrated with existing core banking systems and processes of commercial and central banks,” the BIS report stated.

Despite the success of the trial phase, the SNB has maintained that Project Helvetia is only an experimental study and that the work done is not an indication of the central bank’s plans to float a wholesale CBDC.

Several central banks are currently studying or testing retail and wholesale CBDCs with global financial bodies like the BIS advocating for state-backed digital currencies as opposed to cryptocurrencies and privately-issued stablecoins.

© 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.

Electric carmaker Tesla is testing a previously teased Dogecoin (DOGE) payment option, according to its website’s source code.

The DOGE payment option was added for testing around three days ago, a software engineer who goes by “Tree of Alpha” on Twitter told The Block. The engineer analyzed Tesla’s source code in the backend and said that the company is “definitely” testing that option.

“Most of the code is already present in the latest Javascript files Tesla uses for processing payments, but the part about Dogecoin is forced to return null no matter what happens, thus never showing (basically a way to test code in production),” said Tree of Alpha in a direct Twitter message.

In other words, the DOGE payment option is currently “a hidden feature” most non-technical people cannot see it by themselves yet.

Here’s how the option showed for Tree of Alpha on Tesla’s checkout page when they were testing it:

Source: Tree of Alpha

They have also found out that Tesla has added the “crypto_continue.html” page in its source code, meant to handle crypto payments.

This is not the first time Tree of Alpha has analyzed Tesla’s source code. In November, they discovered that Tesla was testing payments for a coin called “SHIBA (SBA),” and that coin ended up being not SHIBA INU (SHIB) but DOGE.

The latest testing comes one month after Tesla Elon Musk said the company will accept DOGE payments for merchandise and “see how it goes.”

Musk has been a longtime fan of DOGE. He has also invested in the meme-themed cryptocurrency, along with bitcoin and ether.

In March last year, Tesla started supporting bitcoin for car payments. But soon after, in May, it stopped accepting bitcoin for vehicle purchases due to concerns over the environmental impact.

“We are concerned about the rapidly increasing use of fossil fuels for Bitcoin mining and transactions, especially coal, which has the worst emissions of any fuel,” Tesla said at the time.

Still, the company currently owns 48,000 bitcoin on its balance sheet, worth over $2 billion at current prices, according to CoinGecko.

A request for comment sent to Tesla on Thursday was not returned by press time.

© 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.

A legal fight has emerged between the Ethereum-focused company ConsenSys and a former venture executive.

The spat, first detailed by Business Insider on Thursday, broke into the open with a December 31 filing from Kavita Gupta, formerly founding managing partner for ConsenSys’s venture fund. In that filing, Gupta alleged that ConsenSys owes her a portion of the money generated by that fund, stating that the fund’s value has grown to more than $300 million since inception. Per Business Insider, ConsenSys has allegedly offered a fraction of the amount she seeks.

ConsenSys, in turn, unveiled a series of allegations in a 29-page court filing on January 10, alleging that Gupta engaged in resume fraud by lying about her professional credentials and then provided fabricated materials when her resume was called into question.

The filing also claimed that Gupta’s “toxic and abusive personality” resulted in a loss of employees and investment opportunities as well as “reputational harm.”

Per the filing, ConsenSys is now accusing Gupta of trying to “shake down” the company for “millions of dollars that she has no entitlement to by making false claims and unlawful threats.”

“ConsenSys seeks a declaratory judgment that Gupta is not entitled to any equity or other compensation from ConsenSys GP or the Fund,” the firm said in its filing.

Gupta, who according to Business Insider, is being represented by attorney Peter Cane. In an interview with The Block, Cane said that “Joe Lubin was praising Kavita well after she decided to leave Consensys and assured her in writing that she would be paid her carried interest well after she decided to leave ConsenSys.”

When asked about the allegations made by ConsenSys in its court filing from January 10, Cane said that “we look forward to the truth coming out.”

“There were definitely serious workplace concerns at ConsenSys, but they weren’t Kavita Gupta’s doing,” he continued. “She was a victim of them rather than a perpetrator.”

A request for comment sent to ConsenSys was not immediately returned. In a statement to Business Insider, a company representative said: “This is an ongoing legal matter and consistent with our practices, we will let ou formal filings and the result of litigation speak for themselves.”

As reported last September, Gupta announced at the time the close of a $50 million fund focused on the crypto space, for which she serves as founding managing partner.

© 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.

A Thursday report from the Russian cybersecurity firm Kaspersky Labs identified North Korean hackers behind sophisticated phishing and social engineering attacks targeting cryptocurrency startups.

Kaspersky internally identified the North Korean hackers as BlueNoroff, who have stolen over $1.1 billion from financial institutions worldwide, according to the US Treasury Department. BlueNoroff is believed to be a part of Lazarus, a larger group of cybercriminals seeking to finance the North Korean government hindered by international sanctions.

One scheme Kaspersky observed was BlueNoroff targeting successful crypto startups for social engineering and phishing attacks — identifying key people and conversations within the company to facilitate the attack. 

Another scheme involved BlueNoroff impersonating a person in the top management of Digital Currency Group (DCG), the crypto-focused firm that owns Grayscale Investments and media publication CoinDesk. BlueNoroff sent an email impersonating the DCG personnel to someone in the crypto startup in hopes that the target would click on an infected link, Kaspersky wrote in the report.

In addition to DCG, the hackers abused the names of 14 other companies in targeted phishing attacks. 

North Korean hackers stole nearly $400 million worth of digital assets alone in 2021 — an increase in 40% compared to the year prior, according to a report from the blockchain analytics firm Chainalysis. 

© 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.

Crypto exchange Gemini announced Thursday that it has acquired BITRIA (formerly Blockchange), a crypto portfolio management platform for financial advisors and asset managers.

The terms of the deal weren’t disclosed. The acquisition follows Gemini’s partnership with BITRIA in August 2020 that allowed registered investment advisors (RIAs) to buy, sell, and store crypto through Gemini.

The acquisition will now allow Gemini and BITRIA to combine their offerings to serve the RIA industry. That means Gemini’s exchange and custody capabilities will be integrated with BITRIA’s portfolio management platform that offers features such as rebalancing and tax-loss harvesting.

The RIA industry is enormous, with investment advisors managing over $110 trillion in client assets. Gemini believes billions of dollars could transfer into crypto in the coming years.

“The future of wealth management lies in digital assets and blockchain technology and the integration of BITRIA’s technology with Gemini provides a bridge to that future,” said Daniel Eyre, co-founder and CEO of BITRIA.

BITRIA’s team is joining Gemini as part of the acquisition.

This is Gemini’s fifth known acquisition to date. The company has previously acquired NFT marketplace Nifty Gateway, crypto credit card startup Blockrize, crypto custody technology developer ShardX, and decentralized predictions platform Guesser.

Gemini recently hit a valuation of $7.1 billion in its first-ever funding round worth $400 million. The company is also considering going public.

© 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.