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Web3 gaming studio Unagi secured $5 million in a seed round led by Sisu Game Ventures.

The raise, which closed at the start of this year, comes only months after the startup secured $4.2 million from Binance Labs. The total amount raised by Unagi is $12.3 million.

Investors in the seed round also include Sfermion, Signum Capital and 2B Ventures, the company said in a statement. The new raise doubled the startup’s valuation, the company said without disclosing it. 

Founded in 2021, Unagi made a name for itself with the launch of its Ultimate Champions game, which is a free-to-play fantasy football game that’s reminiscent of old school football collectible card games from brands such as Topps or Panini. Unagi’s co-founders and co-CEOs, Remi Pellerin and Charlie Guillemot, are veterans of gaming studio Ubisoft.

Guillemot is the son of Yves Guillemot, the CEO and co-founder of Ubisoft and one of Unagi’s angel investors.

“We decided to go into fantasy sports gaming because it’s a relatively short time to produce such a game,” Guillemot said. “And we felt that going to the market quite quickly was a good idea to really get our hands dirty with all the blockchain elements, all the tokenomics.”

Ultimate Champions marketplace screenshot from Unagi

Scoring deals

Unagi has secured over 45 partnerships for Ultimate Champions including a long-term partnership with Arsenal, which is both a licensing and sponsorship deal.

“We also showed them the game and the accessibility that we tried to put in the game so that anyone could start playing without having any background in blockchain, without knowing what is an NFT,” Guillemot said. “I think that’s what helped a lot for us to become partners with Arsenal.”

Despite having a core focus on accessibility, the team has still been surprised with the number of non web3 people playing the game, Guillemot said.

“We see that they they’re interested in the game because it’s fun first and not because it’s a web3 game,” he added.

More than sports

The startup will also be rolling out a basketball version of Ultimate Champions through a partnership deal with EuroLeague Basketball in March. The game is now multichain, having launched on Polygon last year and on BNB chain a few weeks ago, he added.

With the new funds, Unagi is looking to almost double its team size from 25 people to 40, secure new partnerships and increase its marketing efforts. This recent fundraising round was mostly equity, compared to the prior round with Binance, which was a token round, Guillemot said.

“The ambition for the game studio  is really to offer free web3 experiences that allows anyone on the planet to obtain their first NFTs and their first tokens for free,” Guillemot said.  “We don’t want to limit ourselves to sports, and that’s why we’re going to start, now that we’ve accumulated a bit of experience on those two games, to work on new NFT experiences and on new web3 games that are not necessarily related to sports.”

© 2023 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 Gate.io is partnering with digital asset custody firm Copper.co to fully integrate with its ClearLoop solution in a move that will allow users to quickly execute trades while maintaining independent custody of their funds.

“Joining Copper’s ClearLoop network is part of our broader effort to enhance customer asset safety and provide institutional clients the support they need to succeed in their trading endeavors,” Gate.io founder and CEO Lin Han said in an emailed statement. 

The announcement comes rising interest in custody issues, with U.S. Securities and Exchange Commission Chair Gary Gensler arguing this week that many crypto firms are not in compliance with current rules around safeguarding digital assets.

“Copper is here to support the drive towards mitigation of counterparty risk and help institutions engage with crypto assets in a way that is secure, faster, and easier,” Copper CEO Dmitry Tokarev said in the statement.

Gate.io currently has around 12 million users worldwide, with billions of dollars in daily trading volume and 3,000 spot pairs. 

© 2023 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.

Binance.US, the U.S. affiliate of the world’s largest crypto exchange, acknowledged that a market making firm called Merit Peak, which is alleged to have secretly received $400 million from the exchange, operated on its platform. 

“While there was a market making firm named Merit Peak that operated on the Binance.US platform, it stopped all activity on the platform in 2021,” the company tweeted in response to a bombshell Reuters report earlier in the day that said the funds were withdrawn from the bank account of the exchange’s U.S. affiliate during the first three months of 2021. 

“Binance.US has never — and will never — trade nor lend out customer funds,” the statement adds.“Only Binance.US employees have access to Binance.US bank accounts. Period.”

The Reuters report said parent company Binance secretly transferred hundreds of millions in funds from a Binance.US account at California-based Silvergate Bank to Merit Peak, an investment firm also controlled by Binance CEO Changpeng Zhao.

Binance, which is not authorized to operate in the U.S., insists that Binance.US operates as a wholly independent affiliate.

“Our leadership team is staffed with former DOJ, SEC, FBI, and NYFed employees who are committed to operating a platform that is safe and abides by U.S. laws and regulations,” Binance.US said in its statement. The statement also claims that Binance.US fully reserves its assets, and is subject to “regular audits”.

© 2023 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.

Bankrupt hosting provider Compute North’s liquidation plan was approved by a judge with the U.S. Bankruptcy Court for the Southern District of Texas.

While the company has already sold a majority of its assets in the past few months, some are still leftover and proceeds will now be going mostly toward unsecured creditors.

“We had overwhelming support from our general unsecured creditors, well in excess of 90% in the amount of unsecured claims” and reached an agreement with those who filed objections, James Grogan, an attorney with law firm Paul Hastings, told The Block.

The company filed for Chapter 11 bankruptcy in September of last year and had about $400 million in debt, Grogan said. Since then, it has eliminated about $250 million in secured debt through the sale of assets, including all of its operating sites.

For instance, it sold its 50% share in a 280-megawatt wind power facility in Texas to US Bitcoin Corp, which recently announced a merger with miner Hut 8. Other buyers included Foundry, Crusoe Energy Systems and Generate Capital.

What’s left?

So what’s left the former hosting company to be sold? Mainly equipment purchased for project build-out, including a “substantial amount” of ASIC machines, a few containers and electrical equipment, Grogan said.

About $80 million worth of unsecured debt has been compromised through settlements and, at this point, there is about $130 million to $150 million of unsecured debt left, he added.

One of Compute North’s largest clients, Marathon, had also invested $10 million in convertible preferred stock of the company and $21.3 million in an unsecured senior promissory note, in addition to having $50 million in operating deposits. The company agreed to a settlement, stipulating it would “be allowed as a single general unsecured claim of Marathon Digital Holdings, Inc. against debtor Compute North LLC in the amount of $40,000,000.00.”

Core Scientific, the largest company in the mining space by hashrate, also filed for bankruptcy in December but has essentially gone the opposite route, securing additional financing to keep operations going.

However, it did recently agree to hand over 27,403 machines to lender NYDIG in order to pay down its outstanding debt of $38.6 million, while also stating it was “considering opportunities to sell certain of their mining facilities,” according to a filling from Feb. 2. 

© 2023 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.

Platypus USD (USP) lost its dollar parity on Thursday following an apparent exploit that allowed a wallet to siphon off about $8.5 million from the token’s liquidity pools, just weeks after Platypus DeFi issued the stablecoin.

The presumed hack was accomplished by means of a flash loan exploit, during which an attacker takes out an enormous loan and settles it in the same block, sandwiching transactions that use the capital to exploit other protocols in between. The Platypus swap function on the network has been disabled since the attack. 

“There has been a flash-loan attack on USP,” a pinned message in the official Platypus Telegram channel warns users. “We are currently trying to assess the situation and will communicate promptly on it. For now all operations are paused until we get more clarity.”

The alleged attacker appears to have taken out a $44 million flash loan from Aave V3, and in turn minted some 41 million US Platypus tokens. Next, the attacker cashed out some $8.5 million into other stablecoins, and paid back the flash loan. These actions all took place in the same block of transactions, on-chain data show.

“The vulnerability lies in the solvency checking in the function emergencyWithdraw of the MasterPlatypusV4 contract,” web3 security firm Certik told The Block.

“The solvency check doesn’t take into account the value of the user’s debt. It only checks whether the debt amount has reached the max limit,” Certik said. “After the solvency check passes, the contract allows the user to withdraw all deposited assets.”

The borrowing history of the attacker address.

With the pool’s liquidity drained in the previous block, the remaining 33 million tokens reside in attacker’s wallet, unable to be traded.

USP is now trading around $0.47 after dropping by just over 52%.

Chart data from CoinGecko.

PlatypusDefi did not immediately respond to a request for comment from The Block.

© 2023 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.

DeFi lender TrueFi’s token, TRU, jumped over 140% shortly after Binance minted $50 million worth of the TrueUSD stablecoin.  

Binance minted 49.99 million TRU at around 10 a.m. EST today, according to Etherscan data. The move comes just days after Paxos was ordered to stop issuing Binance USD, or BUSD. BUSD accounted for about 37% of the spot trading volume on the exchange in January.

TRU was trading around $0.10 by 5:30 p.m. EST, up around 142% in the past day, according to CoinGecko data.

TRU chart by CoinGecko

Paxos was ordered to stop issuing the stablecoin by the New York Department of Financial Services. Binance’s CEO Changpeng Zhao come said the exchange will continue to support BUSD for the “foreseeable future.”

“We do foresee users migrating to other stablecoins over time. And we will make product adjustments accordingly. eg, move away from using BUSD as the main pair for trading, etc.,” he said. When asked why the exchange wouldn’t consider another issuer, Zhao said, “we are exploring others and non-USD-based stablecoins.”

Cryptocurrencies were up across the board today, with bitcoin reaching its highest point since June.

© 2023 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 Securities and Exchange Commission charged Terraform Labs and its CEO Do Hyeong Kwon over its algorithmic stablecoin Terra USD, which collapsed dramatically last year.  

The agency said the Singapore-based company and Kwon raised billions from investors by “offering and selling an inter-connected suite of crypto asset securities, many in unregistered transactions.” That included “mAssets,” which the SEC said are security-based swaps designed to pay returns by mirroring the price of U.S. company stocks as well as the infamous Terra USD.  

“We allege that Terraform and Do Kwon failed to provide the public with full, fair, and truthful disclosure as required for a host of crypto asset securities, most notably for LUNA and Terra USD,” said SEC Chair Gary Gensler in a statement announcing the enforcement action. “We also allege that they committed fraud by repeating false and misleading statements to build trust before causing devastating losses for investors.”

Algorithmic stablecoins, like Terra USD, use market incentives via algorithms to maintain a stable price. Terra was linked to Luna, a governance token, to keep the prices stable. Terra USD crashed in May, wiping out billions.  

Terraform and Kwon marketed “crypto asset securities” to earn a profit, such as marketing Terra USD as a “yield-bearing” stablecoin.  

The SEC said “Terraform and Kwon repeatedly misled and deceived investors that a popular Korean mobile payment application used the Terra blockchain to settle transactions that would accrue value to LUNA. Meanwhile, Terraform and Kwon also allegedly misled investors about the stability of UST.” 

The agency filed a civil complaint in the U.S. District Court for the Southern District of New York.  

 “As alleged in our complaint, the Terraform ecosystem was neither decentralized, nor finance. It was simply a fraud propped up by a so-called algorithmic ‘stablecoin’ – the price of which was controlled by the defendants, not any code,” said Gurbir Grewal, director of the agency’s enforcement division.  

© 2023 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.

Bitcoin mining stocks tracked by The Block were mixed on Thursday, with eight gaining and the other 11 declining.

Bitcoin rose 1.6% to $24,477 by market close.

Here is a look at how the individual miners performed today:

© 2023 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.

Binance secretly had access to a bank account of its U.S.-based partner and transferred more than $400 million from that account to a trading firm managed by Chief Executive Officer Changpeng Zhao, Reuters reported.

The transfers happened over the first three months of 2021, with money moving from the Binance.US account at Silvergate Bank to trading firm Merit Peak Ltd., Reuters said, citing banking records and company messages. The transfers started in late 2020, the report said. 

Reuters said it couldn’t determine whether the transferred funds belonged to U.S. customers, or the reasons or the reasons the funds were moved. Executive at the U.S. firm were reportedly concerned about the moves because they didn’t know they were taking place, Reuters said.

A Binance spokesperson didn’t immediately respond to calls and email from The Block seeking comment.

In a statement to Reuters, Binance.US spokesperson Kimberly Soward said the outlet was reporting “outdated information,” but didn’t address questions about the transfers. Parent company Binance did not respond to Reuters, nor did Zhao or Prime Trust, a custodian firm that was also listed as holding customer funds for the U.S. exchange. Silvergate told Reuters it doesn’t comment on individual customers. 

© 2023 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.

Testing on Ethereum’s Zhejiang testnet ahead of the Shanghai-Capella update revealed some bugs, but nothing that will affect the timeline for the introduction of staking to the network. 

Developer Marius VanDerWijden documented a syncing bug encountered by other clients that developers are confident can be patched, according to a thread from the Ethereum Foundation’s Tim Beiko. The bug won’t affect any established timelines for the proposed upgrade set for the Sepolia testnet scheduled for Feb. 28, he noted.

The latest withdrawal devnet update detailed a stress test consisting of 600,000 validators, 360,000 of which performed withdrawal credential updates at the time of the fork. Client spikes in RAM and CPU occurred and developers will gauge the number of lost versus recorded credential update messages over the coming days, said Beiko.

The stress test also revealed a bug between a proof-of-stake client, Prysm, and the Besu client which is designed for permissioned use cases. To sync properly, Prysm client expects a certain number of responses; however, Besu imposes response limitations that bring it below the necessary syncing threshold, Beiko said. The Besu team is looking into the matter.

Blobless ban

After a discussion on how to best optimize initial client orientation, developers ultimately decided to completely ban blobless 4844 transactions, which would change client assumptions around the transactions and could complicate setup.

Developers also discussed how to move ahead with the deprecation of the SELFDESTRUCT keyword, which terminates a contract, removes the contract’s bytecode from the blockchain, and reroutes funds on the contact to a specified address.

While the path forward remains unclear, there are three current proposals on the subject in discussion as developers seek to find “deactivating options that don’t break things,” Beiko said.

“The challenge here is it opens up a nasty attack vector: deploy a contract, fill storage in a certain way, and when you redeploy the contract, the old storage is still there, and could be accessed in malicious ways,” Beiko said.

© 2023 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.