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Luxury handbag maker Hermes won in court against the artist producing an NFT dupe of its flagship trademark Birkin. 

A nine-person jury in New York returned the verdict on Wednesday, ordering the artist of the “MetaBirkin,” Mason Rothschild, to pay $133,000 in damages. The jury also ruled that the NFTs are not protected under the First Amendment, which protects freedom of speech, according to media reports.

Rothschild had customized blockchain-based images of the iconic handbag, which has been featured in TV shows such as “Sex and the City” in its original form and can cost hundreds of thousands of dollars. The NFTs featured one bag with horns, and others swathed in fluffy material covered in emojis. 

Only 100 were released, of the 1,000 designs Rothschild had planned. The project launched in 2021.

This is the first time a case involving NFTs has been tried through the lens of intellectual property law and is therefore precedent-setting for the digital asset space. It tested whether NFTs are commodities or art, under law. 

Early last year there was a rush of brands trademarking their IP in the online realm. The volume of companies filing trademarks for the metaverse saw a parabolic decline after March 2022. 

© 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 investment firm Paradigm, one of most established and active players in the space, named general partners for the first time with the promotion of Charlie Noyes and Dan Robinson.

The company, which listed the changes on its website, had not previously had any investors with the title. The co-founders of Paradigm, Fred Ehrsam and Matt Huang, hold the titles of managing partner, while the rest of the investing team were either investment partners or associates.

A general partner is a manager of venture funds and typically responsible for raising funds, analyzing deals and making decisions on how capital is allocated. They also typically have skin in the game by investing their own money in the fund. Noyes and Robinson’s previous titles were venture partner and research partner, respectively, according to Paradigm’s website in December 2022.

Paradigm did not immediately respond to a request for comment.

Previous roles

Both Noyes and Robinson have been at Paradigm for over four years. Robinson will still remain as head of research. He focuses on investments and research into open-source protocols and, before joining Paradigm, was a  protocol researcher at Interstellar and a litigation attorney, according to Paradigm’s website.

Noyes dropped out of MIT after one year to join Pantera’s investment team where he co-led early-stage investments. His high school research on blockchain technology has been recognized by Nasa and Intel, Paradigm has said.

Paradigm, founded in 2018, launched a $2.5 billion fund alongside its existing flagship fund in November 2021. It recently had to mark down its investment in bankrupt crypto exchange FTX to zero but said it was only a small part of its total assets.

The firm has backed companies such as crypto unicorn Amber Group, DeFi wallet Argent and decentralized exchange Dydx.

© 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 was hovering around $23,000 as ether gained. The Sandbox token jumped on news of metaverse partnership talks with Saudi Arabia. Equities slipped.

The leading cryptocurrency by market capitalization was trading around $22,900 at 10:30 a.m. EST, down about 0.2% over the past day, according to TradingView data. It had risen on Tuesday ahead of U.S. Federal Reserve Chair Jerome Powell’s talk with Carlyle Group’s David Rubenstein.

BTCUSD chart by TradingView

Ether added 2% over the past day as it traded above $1,660. Binance’s BNB was flat, Ripple’s XRP gained 1.2%, and Solana’s SOL jumped 2%. Polygon’s MATIC soared almost 6%, trading above $1.30.

The Sandbox token price continues to soar after the metaverse game platform revealed discussions of a partnership with Saudi Arabia. SAND was trading around $0.84, up nearly 18% by 10:30 a.m. EST, according to TradingView data. The token began to climb following news of a memorandum of understanding with the Middle Eastern nation around 4 p.m. EST yesterday. 

Crypto Stocks

The Nasdaq 100 was down around 1.2%, while the S&P 500 dropped 0.7%. 

Earnings watch

CME Group said on its earnings call earlier that it remains confident in its reputation as the trusted regulated marketplace for digital assets.

The CME added over 700 new digital asset customers in January as trading volumes soared. Bitcoin options volume on the CME reached an all-time high of $1.1 billion in January, according to The Block data. 

The exchange also noted that 934 accounts were added in November, more than double the typical monthly figure, and said it was a sign of the marketplace broadly turning to CME during stress periods.

© 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.

Aptos Labs is attempting to make its mark in web3 social media with an equity investment in short video app Chingari.

Chingari is an on-chain social media app that was founded in 2018. It has five million daily active users and over 200 million videos are watched on the app on a daily basis, said a company release. Users upload and share video shorts on the platform similar to TikTok.

The Aptos blockchain

The social media app will now make Aptos its preferred Layer 1 blockchain. The chain launched late last year and uses Move, a programming language that builds on top of Rust — the language used on the Solana blockchain. Move was developed by Meta for the Diem project.

“Chingari was looking for the speed, safety and scalability of the Aptos network to support their millions of users – and to onboard millions more in the future,” said Mo Shaikh, co-founder and CEO of Aptos Labs, in the release.

The social media app started out as a web2 platform and has since adopted web3 technologies. The startup launched the GARI token on the Solana network, which enabled creators to be compensated and vote on governance, according to a Forbes interview in January. Several Solana developers have moved to Aptos due to technical challenges with the blockchain.

The move to Aptos will allow for creators to own their own content and be appropriately rewarded, the company said. It’s raised over $88 million from investors such as Kraken, Republic Crypto and Galaxy Digital, according to data from Crunchbase. Chingari’s CEO and co-founder Sumit Ghosh told Forbes the startup would also be ramping up hiring at a time when other web3 companies are pulling back.

“After intense months of technical due diligence and evaluation of the Aptos blockchain, we have chosen it as the rightful chain for the newer version of the Chingari App which will go live in early Q2 of 2023,” said Ghosh in the release.

The rise of decentralized social media

Decentralized social media allows creators to have more control over their data and means that users are not at mercy of decisions by one specific individual or company. This scenario was recently highlighted by Elon Musk’s takeover of Twitter where some users have been dissatisfied by decisions made by Musk on the platform.

Several decentralized social media solutions such as Lens Protocol and Damus are now gaining momentum with users.

The new partnership will allow for Chingari to strengthen its existing presence in India and expand to other markets, the company said in the release.

© 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.

Going broke isn’t cheap. 

Troubled crypto exchange FTX and its affiliated companies racked up more than $20 million in legal and consulting bills during the first several months of its bankruptcy case, according to overnight court filings.

The crypto exchange filed for bankruptcy protection in November. Since then, FTX installed a new CEO and retained three law firms and two consulting firms to unwind its massive bankruptcy case. 

The initial bills highlight how expensive the wind-down of the global crypto giant could be, and could diminish the amount of return creditors will see from the bankruptcy. According to FTX’s new leadership, the exchange and other entities put into Chapter 11 bankruptcy in the U.S. held approximately $1.4 billion as of Dec. 31, most of it with investment fund Alameda Research and holding company West Realm Shires. 

Lawyers and consultants billed the crypto exchange approximately $20.3 million, according to applications for compensation filed in the U.S. Bankruptcy Court for the District of Delaware. 

White shoe law firm Sullivan & Cromwell sent FTX the largest bill. The firm is charging FTX $9.5 million for 6,561 hours of work from Nov. 12 to Nov. 30, along with $105,000 for expenses. 

“The services performed by S&C during the fee period represent one of the most complicated, multi-disciplinary exercises by any law firm in any area of law,” Sullivan & Cromwell noted in its court filing. 

That work included coordinating filings for FTX’s more than 100 entities that filed for bankruptcy protection, responding to hacks, launching an investigation into the scope of customer entitlements on the day of the bankruptcy filing and coordinating with joint provisional liquidators hired to wind down operations in other countries, mainly Antigua and Barbuda and the Bahamas.  

The second most expensive bill came from the consulting firm Alvarez & Marsal. The company billed FTX $6.3 million for 7,925 hours of work from Nov. 11 to Nov. 30.

Meanwhile, law firm Quinn Emanuel Urquhart & Sullivan billed FTX $1.5 million for 1,111 hours from Nov. 11 to Dec. 31. Another law firm, Landis Rath & Cobb, billed FTX $1.2 million for 1,919 hours of work during the same period. Consulting firm AlixPartners said FTX’s bill for the period from Nov. 28 to Dec. 31 was $1.1 million for 1,340 hours of work.

The crypto exchange’s new boss also disclosed his fees in court filings. FTX CEO John Ray billed the company $694,000 for 538 hours of work during the period from Nov. 11 to Dec. 31 through his firm Owl Hill Advisory.

Disclaimer: Beginning in 2021, Michael McCaffrey, the former CEO and majority owner of The Block, took a series of loans from founder and former FTX and Alameda CEO Sam Bankman-Fried. McCaffrey resigned from the company in December 2022 after failing to disclose those transactions.

© 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.

VRRB (pronounced “verb”) Labs, a Miami-based crypto startup that is developing a Layer 1 blockchain network, raised $1.4 million in a pre-seed funding round.

Investors in the round included Jump Crypto, Big Brain Holdings and Taureon. It was an equity plus token warrant round, giving VRRB Labs a valuation of $20 million, Andrew Smith, founder of VRRB Labs, told The Block in an interview.

‘A roller coaster ride’

Smith first had an idea of a Layer 1 blockchain in late 2017. He was an early ether (ETH) investor. His dollar cost averaging for ETH was $8, and he sold most of his holdings at $300. ETH is currently trading at around $1,670.

Smith said he wasn’t a huge fan of Ethereum’s plan to move to a proof-of-stake consensus mechanism due to its drawbacks, including centralization, and that he had thought of building a new Layer 1 blockchain then. But at the time, he was focused on his first startup OWL ESG — a tech-driven environmental, social and governance (ESG) data provider — which he founded in 2012. He still serves as OWL ESG’s chief data scientist.

Smith formally established VRRB Labs in 2020 and has been working on the project since then. He first had some commitments for the pre-seed round in 2021 and then formally closed the round last December amid widespread crypto collapses. “It was a bit of a roller coaster ride. We kind of timed it perfectly wrong, but we ended up getting what we needed,” he said.

‘Developer-friendly blockchain’

When asked what motivated him to launch a new Layer 1 blockchain project in an already crowded sector, Smith said existing Layer 1s aren’t addressing the main problem, i.e., improving the developer experience. “You’re asking developers to learn a new language and that is a big problem,” he said.

VRRB Labs is building a language-agnostic platform to help developers “build, ship, run” applications faster, similar to Docker, Smith said. “We hear a lot about where the next billion users come from, but I think we are largely putting the cart before the horse there. What we need to be asking is, where do the first million developers come from,” he said.

Smith went on to say that even though there are competitive blockchain projects, the overall number of web3 developers remains tiny compared to web2 developers. VRRB aims to attract web2 developers on its platform, Smith said. As for its go-to-market strategy, Smith said part of the plan is to raise money and have a bigger war chest to provide grants and bounties to bring developers on board.

“We want to build infrastructure and platform so that we can be to web3 what Amazon Web Services is to web2,” Smith said.

VRRB is developing a proprietary consensus mechanism called “Proof of Claim,” which it says will help solve the blockchain trilemma of scalability, security and decentralization.

The first beta testnet of VRRB is scheduled for next month, according to Smith. The mainnet is still far off on the roadmap, he added.

There are currently five people working for VRRB Labs and Smith has no immediate plans to expand the team.

© 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 Sandbox token price continues to soar after the metaverse game platform revealed discussions of a partnership with Saudi Arabia. 

SANDUSDT chart by TradingView

SAND was trading around $0.887, up 22.8% by 7 a.m. EST, according to TradingView data. The token began to climb following news of a memorandum of understanding, around 4 p.m. EST. 

Metaverse tokens experienced a mysterious January bull run. SAND hit a January high of $0.84, climbing from $0.38 at the start of the year. 

Selling pressure could eclipse this most recent rally, with 12% of SAND supply set to be unlocked on Feb. 14. Roughly 50% of the unlock is allocated to investors and advisors. The last unlock in August could be a useful gauge, wrote Kaiko Research Analyst Conor Ryder.

“In August, we saw these investors sell en masse as soon as they had the chance, creating huge sell pressure for SAND, which underperformed ETH by 20% that month. Again, we look at the SAND-USDT pair on Binance, which is the highest-volume market. As we can see, the day after the unlock, August 14th, nearly 75% of all significant trades were sell orders as investors looked to cash out of SAND.”

The Sandbox x Saudi Arabia

The Sandbox co-founder and COO Sebastien Borget announced the news on LinkedIn.

“It was a true honor to sign our [memorandum of understanding] partnership … between The Sandbox and the Saudi Arabia Digital Government Authority (DGA),” he said. “We look forward to exploring, advising, and supporting mutually each other in activations of the Metaverse!”

The agreement was forged between Borget and Saudi Arabia’s DGA at the Leap Tech Conference in Riyadh. Borget told The Block that he could not reveal any further details, but they would be forthcoming in the weeks ahead.

© 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.

Blockbuster NFT collection Bored Ape Yacht Club is cracking down on cheaters playing its gamified mint Dookey Dash, as contestants look to the finish line later today. 

“We want Dookey Dash to be as fair as possible. As we’ve mentioned previously, we will not allow cheating,” wrote the blue chip collection on Twitter. “We’ve already noticed some Dookey Dash Sewer Passes associated with cheating. Those scores have now been removed from the leaderboard.”

The game, which launched in January, operates through a token-gated NFT called a Sewer Pass. These were awarded to holders of NFTs in the BAYC project and its counterpart Mutant Ape Yacht Club. These passes could then be sold on the secondary market, meaning anyone could buy into the game to claim a piece of the Dookey.

Later today, the scoreboard will be locked, and the highest-scoring player will be awarded the “ultimate” prize — one that’s not only crucial to the next chapter of BAYC’s story saga “The Trial of Jimmy the Monkey” but will also likely hold significant monetary value on the open market.

The rest of the Sewer Passes will be given an award based on the highest score attributed to each pass.

Delegated sewer passes

The way the NFT was created has meant that Sewer Pass holders can delegate their asset to another player to play the game in their stead. Bored Ape Yacht Club also urged those doing this to make sure the person they had delegated the pass to was playing fairly. 

“If you are delegating passes, do your due diligence,” the club wrote on Twitter. “Make sure the person you’re working with is playing fairly. If you have any concerns with how that person might have been using your pass while delegated, get your pass back and log a new score before the leaderboard locks.”

As of Feb. 4 a Fortnite player who goes by Mongraal was top of the leaderboard. 

1st dookeydash. pic.twitter.com/eu1sw1s6eX

— Mongraal (@Mongraal) February 4, 2023

© 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.

Argo Blockchain’s bitcoin mining production increased 14% in January, producing 168 BTC, compared to 147 BTC in December 2022.

“The increase in BTC mined was primarily due to fewer curtailment hours in January compared to December, when a severe winter storm impacted much of the United States,” Argo Blockchain said Wednesday in a filing to the London Stock Exchange.

In terms of dollars, Argo’s mining revenue increased to $3.42 million in January compared to $2.49 million in December 2022.

The company’s total bitcoin holdings stood at 115 BTC as of Jan. 31. Its total hashrate capacity, or computational power, continues to be 2.5 exa hashes per second (EH/s).

Argo will stop publishing monthly mining updates due to change in ownership of its Helios facility. Last month, Argo sold Helios to Galaxy Digital for $65 million. Argo said it will, however, continue to provide mining updates on a quarterly basis and in its financial statements.

In its January update, Argo also addressed the class action lawsuit — Murphy vs Argo Blockchain — it faced recently. The case, filed last month, alleges that Argo published inaccurate statements during its initial public offering. The company said it has hired McDermott, Will, and Emery, LLP as its defense counsel. Argo added that it “refutes all of the allegations and believes that this class action lawsuit is without merit.”

“Argo will vigorously defend itself against the action,” it added.

© 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.

Kyle Davies, the co-founder of collapsed crypto hedge fund Three Arrows Capital (3AC), is still stonewalling efforts by the firm’s liquidators to contact him, according to a court filing.

After 3AC’s liquidators subpoenaed Davies and fellow co-founder Su Zhu by tweet on Jan. 5, lawyers are yet to receive any response, according to a document filed late Tuesday with the U.S. Bankruptcy Court for the Southern District of New York. 

“He is, without question, aware of the Subpoena — having been tagged in 41 replies and 64 retweets — and has, once again, chosen to ignore his duties to Three Arrows,” wrote Russell Crumpler and Christopher Farmer, who are overseeing the bankrupt trading firm. 

Davies and Zhu have been on the run since their billion-dollar hedge fund collapsed in June last year, leaving a complicated bankruptcy process playing out in courtrooms from the U.S. to Singapore and the British Virgin Islands. The pair have been active on social media despite the ongoing legal proceedings and last month hit the headlines with a plan to raise $25 million to start a new crypto exchange. 

The liquidators are seeking access to 3AC’s offices and information on its bank accounts and digital wallets. Davies and Zhu had been due to respond to the Twitter-served subpoena by Jan. 26. With that deadline passed, the liquidators are now pressing the court to set a new deadline of March 16. 

Davies didn’t immediately respond to a request for comment. 

© 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.